<PAGE>
Exhibit 10.8(i)
MARINA VILLAGE
NET OFFICE - TECH LEASE
BASIC LEASE INFORMATION
-----------------------
<TABLE>
<S> <C> <C>
Date: January 15, 1998
Landlord: ALAMEDA REAL ESTATE INVESTMENTS,
a California limited partnership
Tenant: XENOGEN CORPORATION Lease Reference
---------------
Premises and Building: 860 Atlantic Avenue Paragraph 1
Alameda, CA 94501
Term Commencement: February 1, 1998 Paragraph 2
Term Expiration: January 31, 2003 Paragraph 2
Base Rent: 2/1/98 - 1/31/99: $38,394 Paragraph 3(a)
2/1/99 - 1/31/00: $39,546
2/1/00 - 1/31/01: $40,732
2/1/01 - 1/31/02: $41,954
2/1/02 - 1/31/03: $43,213
Tenant's Percentage Share: 100% Paragraph 4(a)
Use: Office, biotechnology/pharmaceutical research and Paragraph 6
development including small live animal storage,
and related manufacturing and warehousing
Security Deposit: $38,394.00 Paragraph 15
Tenant's Address for Notices: Prior to Commencement Date:
c/o Pamala Contag
P.O. Box 9497
Stanford, CA 94309
Following Commencement Date:
860 Atlantic Avenue Paragraph 19
Alameda, CA 94501
Attn: President
Landlord's Address for Notices: Paragraph 19
Alameda Real Estate Investments With a Copy To:
---------------
c/o Vintage Properties Marina Village
Attn: Joseph R. Seiger 1150 Marina Village Pkwy, Suite 100
314 Lytton Avenue, Suite 200 Alameda, CA 94501
Palo Alto, CA 94301 Attn: Property Manager
Exhibit(s) and Addendum(s): Paragraph 21
</TABLE>
Exhibit A: Diagram of Premises
Exhibit B: Tenant Improvements
Addendum
Form of Subordination, Non-Disturbance and Attornment Agreement
The provisions of the Lease identified above in the margin are those provisions
where references to particular Basic Lease Information appear. Each such
reference shall incorporate the applicable Basic Lease Information. In the event
of any conflict between any Basic Lease Information and the Lease, the latter
shall control.
TENANT: LANDLORD:
XENOGEN CORPORATION, ALAMEDA REAL ESTATE INVESTMENTS,
a California corporation a California limited partnership
By: Vintage Alameda Investments, LP
a California limited partnership,
operating general partner
<TABLE>
By: /s/ Pamela Reilly Contag
---------------------------
<S> <C>
By: Vintage Properties - Alameda Commercial,
Title: CEO & President a California corporation,
----------------------- managing general partner
By: /s/ Joseph Seiger
-------------------------
Title: President
----------------------
</TABLE>
1
<PAGE>
AMENDMENT NO. 1
TO
MARINA VILLAGE
NET OFFICE - TECH LEASE
THIS AMENDMENT NO. 1 TO MARINA VILLAGE NET OFFICE-TECH LEASE is made and entered
into as of July 16, 1998, by and between ALAMEDA REAL ESTATE INVESTMENTS, a
California limited partnership ("Landlord") and XENOGEN CORPORATION, a
California corporation, ("Tenant").
Landlord and Tenant have previously entered into that certain Marina Village Net
Office-Tech Lease dated January 15, 1998, (the "Lease") with respect to certain
premises located in 860 Atlantic Avenue, Alameda, California. Landlord and
Tenant now desire to amend the lease as hereinafter provided and, accordingly,
Landlord and Tenant hereby agree as follows (unless otherwise defined, all
capitalized terms used in this Amendment shall have the same meanings as set
forth in the Lease):
1. Amendment of Paragraph 20 of Addendum. Subparagraph 20(b)(iii) of the
--------------------------------------
Addendum to the Marina Village Net Office-Tech Lease is hereby deleted and
restated in its entirety as follows:
"20(c). Pursuant to the terms of subparagraph 20(b)(i) above, Tenant has
requested the Additional TI Allowance. Landlord shall pay such
Additional TI Allowance on or before August 1, 1998 provided that
(i) no portion of the Additional TI Allowance is applied to pay
for the cost of millwork or cabinetry which may be removed by
Tenant at the end of the term, furniture or trade equipment or
trade fixtures and (ii) Tenant complies with the provisions of
subparagraph 20(b)(ii) above."
2. Amendment of Paragraph 3. Rent subparagraph 3(c) of the Addendum to the
-------------------------
Marina Village Net Office-Tech Lease is revised to read as follows:
"3(c). If and to the extent Landlord advances the Additional TI Allowance
under paragraph 20 of the Addendum to Lease, Base Rent shall be
increased by the amount each month necessary to amortize the
amount so advanced by Landlord as the Additional TI Allowance over
the remaining term of the Lease together with interest at the rate
of 10% per annum."
3. Amendment of Basic Lease Information.
-------------------------------------
1. In the event Landlord delivers the entire additional TI Allowance to
Tenant allowance on or before August 1, 1998, the Basic Lease
Information shall be amended to read as follows:
"Base Rent: 2/1/98 - 7/31/98 $38,394.00/month
8/1/98 - 1/31/99 $40,165.68/month
2/1/99 - 1/31/00 $41,317.68/month
2/1/00 - 1/31/01 $42,732.68/month
2/1/01 - 1/31/02 $43,954.68/month
2/1/02 - 1/31/03 $44,213.68/month"
"The payment of such Base Rent shall satisfy the provisions of
paragraph 3(c) of the Addendum to the Marina Village Net Office-Tech
Lease."
b. In the event Landlord does not deliver the entire Additional TI
Allowance to Tenant on or before August 1, 1998, paragraph 3(a) of
this Amendment shall be deleted in its entirety, and Base Rent shall
be adjusted in compliance with the provisions of paragraph 3(c) of the
Addendum to the Marina Village Net Office-Tech Lease.
4. Ratification. Landlord and Tenant hereby ratify and confirm all of the
-------------
terms of the Lease as modified by paragraphs 1 thru 3 above. Except as
expressly set forth to the contrary in this Amendment, the Lease, as
amended, remains unmodified and in full force and effect. To the extent of
any conflict between the term of this Amendment and terms of the Lease, the
terms of this Amendment shall control.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Amendment No. 1 as of
the date first set forth above.
TENANT: LANDLORD:
XENOGEN CORPORATION, ALAMEDA REAL ESTATE INVESTMENTS,
a California corporation a California limited partnership
<PAGE>
By: Vintage Alameda Investments, LP
a California limited partnership,
operating general partner
By: Vintage Properties - Alameda Commercial,
a California corporation,
managing general partner
By: /s/ Pamela Reilly contag By: _______________________________
------------------------
Title: President
--------------------- Title:_____________________________
<PAGE>
MARINA VILLAGE
NET OFFICE-TECH LEASE
---------------------
THIS LEASE, dated as of January 15, 1998, for purposes of reference only, is
made and entered into by and between ALAMEDA REAL ESTATE INVESTMENTS, a
California limited partnership ("Landlord"), and XENOGEN CORPORATION, a
California corporation ("Tenant").
WITNESSETH
1. Premises. Landlord hereby leases to Tenant, and Tenant hereby leases from
--------
Landlord for the term of this Lease and at the rental and upon the
conditions set forth below, the premises described in the Basic Lease
Information and identified on the diagram attached hereto as Exhibit A.
Landlord and Tenant agree that the amount of rentable square feet as set
forth in the Basic Lease Information or, if such amount is an
approximation, the final rentable square feet as determined upon completion
of working drawings, shall be binding and conclusive for all purposes of
this Lease. Subject to any obligations of Landlord as set forth in an
exhibit to this Lease relating to initial improvement of the premises,
Tenant shall accept the premises in its "as-is" condition at the
commencement of the term. The premises are located within the building (the
"Building") commonly known as described in the Basic Lease Information.
2. Term.
----
a. The term of this Lease shall commence and, unless sooner terminated as
hereinafter provided, shall end on the dates respectively specified in the
Basic Lease Information. If Landlord, tow any reason whatsoever, cannot
deliver possession of the premises to Tenant at the commencement of the
term, this Lease shall not be void or voidable, nor shall Landlord be
liable to Tenant for any loss or damage resulting therefrom, but in that
event, subject to any contrary provisions in any agreement with Landlord
related to the initial improvement of the premises, rental shall be waived
for the period between commencement of the term and the time when Landlord
can deliver possession. If, for any reason beyond Landlord's reasonable
control, Landlord is unable to obtain necessary governmental approvals to
complete and deliver possession of the premises to Tenant, then Landlord
may, upon notice to Tenant, terminate this Lease and both parties shall be
relieved of any and all obligations hereunder.
b. Prior to the commencement of the term, Landlord shall complete the
Tenant Improvements to be constructed or installed in the premises pursuant
to Exhibit B attached hereto. The Tenant Improvements shall be deemed
completed and possession of the premises delivered when Landlord has
substantially completed the Tenant Improvements, subject only to the
completion of minor items which do not materially impair the usability of
the Tenant Improvements by Tenant, and Tenant shall accept the premises
upon notice from Landlord that the Tenant Improvements have been so
completed.
3. Rent.
----
a. Tenant shall pay to Landlord as rental the amount specified in the Basic
Lease Information as the Base Rent, payable in advance on the commencement
of the term and on or before the first day of each and every successive
calendar month during the term. If the term commences on other than the
first day of a calendar month, the first payment of rent shall be
appropriately prorated on the basis of a 30-day month. The anniversary date
for rental increases as set forth in the Basic Lease Information shall be
the first calendar day of the month in which the Lease term commenced. If
the last day of the term falls on a date other than die last day of the
month, then the term shall be extended so that the last day of the term
shall be the last calendar day of the month in which the term would
otherwise end.
b. Tenant shall pay, as additional rent, all amounts of money required to
be paid to Landlord by Tenant under this Lease in addition to monthly rent,
whether or not the same be designated "additional n nt". If such amounts
are not paid at the time provided in this Lease, they shall nevertheless be
a collectable as additional rent with the next installment of monthly rent
thereafter falling due, but nothing herein contained shall be deemed to
suspend or delay the payment of any amount of money at the time the same
becomes due and payable hereunder, or limit any other remedy of Landlord.
c. Tenant hereby acknowledges that late payment by the Tenant to Landlord
of rent and other amounts due hereunder will cause Landlord to incur costs
not contemplated by this Lease, the exact amount of which will be extremely
difficult to ascertain. Such costs include, but are not limited to,
processing and accounting charges, and late charges which may be imposed on
Landlord by the terms of any trust deed covering the premises. Accordingly,
if any installments of rent or any other sums due from Tenant shall not be
received by Landlord when due, then Tenant shall pay to Landlord a late
charge equal to six percent (6%) of such overdue amount. The parties hereby
agree that such late charges represent a fair and reasonable estimate of
the costs Landlord will incur by reason of late payment by Tenant.
Acceptance of such late charge by Landlord shall in no event constitute a
waiver of Tenant's default with respect to such overdue amount, nor prevent
Landlord from exercising any of the other rights and remedies granted
hereunder
d. Any amount due to Landlord, if not paid when due, shall bear interest
from the date due until the date paid at the rate of ten percent (10%) per
annum or, if a higher rate is legally permissible, at the highest rate
legally permitted, provided that interest shall not be payable on late
charges incurred by Tenant nor on any amounts upon which late charges are
paid by Tenant to the extent such interest would cause the total interest
to be in excess of that legally permitted. Payment of interest shall not
excuse or cure any default hereunder by Tenant.
e. All payments due from Tenant to Landlord hereunder shall be made to
Landlord without deduction or offset in lawful money of the United States
of America at Landlord's address for notices hereunder, or to such other
person or at such other place as Landlord may from time to time designate
in writing to Tenant.
4. Taxes and Operating Expenses.
----------------------------
a. Tenant shall pay its percentage share, as specified in the Basic Lease
Information, of all Property Taxes assessed with respect to the Building
during the Lease term and its percentage share of all Operating Expenses
paid or incurred by Landlord during the Lease term. For the purposes
hereof, "Property Taxes" shall mean all real property taxes and assessments
or governmentally imposed fees or charges (and any tax levied wholly or
partly in lieu thereof) levied, assessed, confirmed, imposed or which have
become a lien against the Building (which for the purposes of defining
"Property Taxes" shall include the land underlying the Building), and
"Operating Expenses" shall mean: (I) all costs of
2
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management, operation, maintenance, and repair of the Building, (2) the
cost of all insurance maintained by Landlord with respect to the Building
and (3) the share allocable to the Building of dues and assessments payable
under any reciprocal easement or common area maintenance agreements or
declaration or by any owners' associations affecting the Building. Landlord
shall credit against Taxes otherwise payable by Tenant during any tax
fiscal year any tax increment reimbursements from the West End Community
Improvement District received by Landlord for the same period from secured
roll real property taxes attributable to the Building.
b. In the event the Building is not separately assessed for tax purposes,
then the Property Taxes to be paid by Tenant shall be Tenant's percentage
share of the product obtained by multiplying the total of the real property
taxes and assessments levied against the tax parcel of which the Building
is a part, less the credit for tax increment reimbursements described
above, by a fraction, the numerator of which is the rentable area of the
Building and the denominator of which is total rentable area of all
improvements located within the tax parcel of which the Building is a part.
c. Tenant shall pay to Landlord each month at the same time and in the same
manner as monthly Base Rent 1/12th of Landlord's estimate of Property Taxes
and Operating Expenses for the then current calendar year. Within 90 days
after the close of each calendar year, or as soon after such 90-day period
as practicable, Landlord shall deliver to Tenant a statement of actual
Property Taxes and Operating Expenses for such calendar year. If on the
basis of such statement Tenant owes an amount that is less than the
estimated payments for such calendar year previously made by Tenant,
Landlord shall refund such excess to Tenant. If on the basis of such
statement Tenant owes an amount that is more than the estimated payments
for such calendar year previously made by Tenant, Tenant shall pay the
deficiency to Landlord within 30 days after delivery of the statement. The
obligations of Landlord and Tenant under this subparagraph with respect to
the reconciliation between estimated payments and actual Property Taxes and
Operating Expenses for the last year of the term shall survive the
termination of the Lease.
5. Other Taxes. Tenant shall pay or reimburse Landlord for any taxes upon,
-----------
measured by or reasonably attributable to the cost or value of Tenant's
equipment, furniture, fixtures, and other personal property located in the
premises or leasehold improvements made in or to the premises at Tenant's
expense; for any taxes, if any, measured by or reasonably attributable to
Tenant Improvements paid for by Landlord or Tenant in excess of $30.00 per
square foot; for any taxes, assessments, fees, or charges imposed by any
public authority or private community maintenance association upon or by
reason of the development, possession, use or occupancy of the premises or
the parking facilities used by Tenant in connection with the premises; and
for any gross receipts tax imposed with respect to the rental payable
hereunder.
6. Use.
---
a. The premises shall be used and occupied by Tenant solely for the use set
forth in the Basic Lease Information. Tenant shall, at Tenant's expense,
comply promptly with all applicable statutes, ordinances, rules,
regulations, orders, and requirements in effect during the term regulating
Tenant's activities or the use by Tenant of the premises. Tenant shall not
use or permit the use of the premises in any manner that will tend to
create waste or a nuisance, or which shall tend unreasonably to disturb
other tenants of the Building or adjacent buildings, nor shall Tenant place
or maintain any signs on or visible from the exterior of the premises
without Landlord's written consent, or use any corridors, sidewalks, or
other areas outside of the premises for storage or any purpose other than
access to the premises. Except as provided in paragraph 6(b) below, Tenant
shall not use, keep, or permit to be used or kept on the premises any foul
or noxious gas or substance, nor shall Tenant do or permit to be done
anything in and about the premises, either in connection with activities
hereunder expressly permitted or otherwise, which would cause a
cancellation of any policy of insurance (including fire insurance)
maintained by Landlord in connection with the premises or the Building or
which would violate the terms of any covenants, conditions, or restrictions
affecting the Building or the land on which it is located.
b. Tenant shall strictly comply with all statutes, laws, ordinances, rules,
regulations, and precautions now or hereafter mandated or advised by any
federal, state, local or other governmental agency with respect to the use,
generation, storage, or disposal of hazardous, toxic, or radioactive
materials (collectively, "Hazardous Materials"). As herein used, Hazardous
Materials shall include, but not be limited to, those materials identified
in Sections 66680 through 66685 of Title 22 of the California Code of
Regulations, Division 4, Chapter 30, as amended from time to time, and
those substances defined as "hazardous substances," "hazardous materials,"
"hazardous wastes," "chemicals known to cause cancer or reproductive
toxicity," "radioactive materials," or other similar designations in the
Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended, 42 U.S.C. Section 9601 et seq., the Resource Conservation
and Recovery Act, 42 U.S.C. Section 6901 et seq., the Hazardous Materials
Transportation Act, 49 U.S.C. Section 1801 et seq., 33 U.S.C. Section 1251
et seq., 42 U.S.C. Section 300(f) et seq., 42 U.S.C. 7401 et seq.,
California Health and Safety code Section 25249.5 et seq., California Water
Code Section 13000 et seq., California Health and Safety Code Section 39000
et seq. and any other governmental statutes, ordinances, rules,
regulations, and precautions adopted pursuant to the preceding laws or
other similar laws, regulations and guidelines now or hereafter in effect.
Tenant shall not cause, or allow anyone else to cause, any Hazardous
Materials to be used, generated. stored, or disposed of on or about the
premises or the Building other than reasonable quantities of office and
cleaning supplies in their retail containers. Tenant shall defend (with
counsel approved by Landlord), indemnify and hold Landlord, its trustees,
employees and agents, any entity having a security interest in the premises
or the Building, and its and their employees and agents (collectively,
"Indemnities") harmless from and against, and reimburse the Indemnities
for, all liabilities, claims, costs, damages, and depreciation of property
value, including all foreseeable and unforeseeable consequential damages,
directly or indirectly arising out of the use, generation, storage, or
disposal of Hazardous Materials by Tenant or any person claiming under
Tenant, including, without limitation, the cost of any required or
necessary investigation, monitoring, repair, cleanup, or detoxification and
the preparation of any closure or other required plans, whether such action
is required or necessary prior to or following the termination of this
Lease, as well as penalties, fines and claims for contribution to the full
extent that such action is attributable, directly or indirectly, to the
use, generation, storage, or disposal of Hazardous Materials by Tenant or
any person claiming under Tenant. Neither the consent by Landlord to the
use, generation, storage, or disposal of Hazardous Materials nor the strict
compliance by Tenant with all statutes, laws, ordinances, rules,
regulations, and precautions pertaining to Hazardous Materials shall excuse
Tenant from Tenant's obligation of indemnification set forth above.
Tenant's obligations under this paragraph 6 shall survive the expiration or
termination of this Lease.
7. Utilities.
---------
a. Tenant shall pay for all water, sewer, gas, electricity, heat, cooling,
energy, telephone, refuse collection, alarm monitoring services, and other
utility-type services furnished to Tenant or the premises, together with
all related installation or connection charges or deposits. Wherever it is
practical to do so such services shall be separately metered or charged to
Tenant by the provider thereof and paid for directly by Tenant. To the
extent any of the foregoing services are provided by Landlord, Tenant shall
reimburse Landlord for all actual out-of-pocket costs incurred by Landlord
in connection with the provision of such services as billed by the provider
thereof based on Landlord's reasonable estimate of the level of
3
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Tenant's use or consumption of such services. Landlord shall bill Tenant
for such services as incurred and payment shall be made by Tenant within
ten (10) days after submittal of Landlord's statement.
b. Landlord shall not be in default hereunder or be liable for any damages
directly or indirectly resulting therefrom, and there shall not be any rent
abatement, by reason of any interruption or curtailment whatsoever in
utility services which is due to fire, accident, strike, governmental
authority, act of God or other causes beyond the reasonable control of
Landlord or any temporary interruption in such service which is necessary
to the making of alterations, repairs or improvements to the Buildings or
any part of it.
8. Maintenance, Repairs and Alterations.
------------------------------------
a. Subject to the provisions of paragraph 10 below, and except for damages
caused by Tenant, its agents or invitees, Landlord shall keep in good
condition and repair the foundations and exterior walls and roof of the
Building and all common areas within the Building not leased to tenants.
Tenant expressly waives the benefits of any statute which would otherwise
afford Tenant the right to make repairs at Landlord's expense or to
terminate this Lease because of Landlord's failure to keep the premises or
the Building in good order, condition, and repair.
b. Tenant shall, at Tenant's expense, maintain the interior portion of the
premises (including, but not limited to, all plumbing and electrical
connections, outlets and lightbulbs) in good condition and repair. If
Tenant fails to do so, Landlord may, but shall not be required to, enter
the premises and put them in the same condition as upon the commencement of
the Lease term, and Landlord's out-of-pocket costs thereof shall
automatically become due and payable as additional rent. Tenant shall be
responsible for the provision, at its own expense, of appropriate
janitorial service for the premises. Tenant shall also cause to be
maintained, at its expense and in good operating condition and repair, all
heat, ventilating, and air conditioning equipment installed in the
premises. If Landlord so elects, Tenant shall retain the services of
Landlord or a maintenance company retained by it to perform maintenance of
Tenant's heating, ventilating and air conditioning equipment and shall
reimburse Landlord for the cost thereof upon demand. At the expiration of
the term Tenant shall deliver up possession of the premises in good
condition and repair, only ordinary wear and tear excepted.
c. Tenant shall not, without Landlord's prior consent, make any
alterations, improvements, or additions in or about the premises. In
requesting Landlord's consent, Tenant shall submit to Landlord complete
drawings and specifications describing such work and the identity of the
proposed contractor. As a condition to giving such consent, Landlord may,
among other things, require that Tenant remove any such alterations,
improvements or additions at the expiration of the term, and restore the
premises to their prior condition. Before commencing any work relating to
alterations, additions, or improvements affecting the premises, Tenant
shall notify Landlord of the expected date of commencement thereof and of
the anticipated cost thereof, and shall furnish such information as shall
reasonably be requested by Landlord substantiating Tenant's ability to pay
for such work. Landlord shall then have the right at any time and from time
to time to post and maintain on the premises such notices as Landlord
reasonably deems necessary to protect the premises and Landlord from
mechanics' liens or any other liens. In any event, Tenant shall pay when
due all claims for labor or materials furnished to or for Tenant at or for
use in the premises. Tenant shall not permit any mechanics' liens to be
levied against the premises for any labor or materials furnished to Tenant
or claimed to have been furnished to Tenant or to Tenant's agents or
contractors in connection with work of any character performed or claimed
to have been performed on the premises by or at the direction of Tenant.
All alterations, improvements, or additions in or about the premises
performed by or on behalf of Tenant shall be done in a first-class,
workmanlike manner, shall not unreasonably lessen the value of the
leasehold improvements in the premises, and shall be completed in
compliance with all applicable laws, ordinances, regulations, and orders of
any governmental authority having jurisdiction thereover, as well as the
requirements of insurers of the premises and the Building. Upon Landlord's
request, Tenant shall remove any contractor, subcontractor, or material
supplier from the premises and the Building if the work or presence of such
person or entity results in labor disputes in or about the Building or the
Marina Village Project, or damage to the premises, Building or Project.
Unless Landlord requires their removal as set forth above, all alterations,
improvements or additions which may be made on the premises shall become
the property of Landlord and remain upon and be surrendered with the
premises at the expiration of the term; provided, however, that Tenant's
machinery, equipment and trade fixtures, other than any which may be
affixed to the premises so that they cannot be removed without material
damage to the premises, shall remain the property of Tenant and may be
removed by Tenant provided further Tenant shall be responsible for
repairing all damage to the premises caused by such removal.
9. Insurance and Indemnity.
-----------------------
a. Tenant shall obtain and maintain during the term of this Lease
comprehensive general liability insurance with combined single limit for
personal injury and property damage in a form and with carriers acceptable
to Landlord in an amount not less than $1,000,000, and employer's liability
and workers' compensation insurance as required by law. Tenant's
comprehensive general liability insurance policy shall be endorsed to
provide that (i) it may not be cancelled or altered in such a manner as
adversely to affect the coverage afforded thereby without 30 days' prior
written notice to Landlord, (ii) Landlord is named as additional insured,
(iii) the insurer acknowledges acceptance of the mutual waiver of claims by
Landlord and Tenant pursuant to subparagraph (b) below, and (iv) such
insurance is primary with respect to Landlord and that any other insurance
maintained by Landlord is excess and noncontributing with such insurance.
If, in the opinion of Landlord's insurance adviser, based on a substantial
increase in recovered liability claims generally, the specified amounts of
coverage are no longer adequate, such coverage shall be appropriately
increased. Prior to the commencement of the term, Tenant shall deliver to
Landlord a duplicate of such policy or a certificate thereof to Landlord
for retention by it, with endorsements, and at least 30 days prior to the
expiration of such policy or any renewal thereof, Tenant shall deliver to
Landlord a replacement or renewal binder, followed by duplicate policy or
certificate within a reasonable time thereafter. If Tenant fails to obtain
such insurance or to furnish Landlord any such duplicate policy or
certificate as herein required, Landlord may, at its election, without
notice to Tenant and without any obligation to do so, procure and maintain
such coverage and Tenant shall reimburse Landlord on demand as additional
rent for any premium so paid by Landlord.
b. Landlord hereby waives all claims against Tenant, and Tenant's officers,
directors, partners, employees, agents and representatives for loss or
damage to the extent that such loss or damage is insured against under any
valid and collectible insurance policy insuring Landlord or would have been
insured against but for any deductible amount under any such policy, and
Tenant waives all claims against Landlord including Landlord's officers,
directors, partners, employees, agents, and representatives for loss or
damage to the extent such loss or damage is insured against under any valid
and collectible insurance policy insuring Tenant or required to be
maintained by Tenant under this Lease, or would have been insured against
but for any deductible amount under any such policy.
c. As this Lease does not involve the public interest and insurance is
available to Tenant which will protect it against such claims, damage,
injury or death, Tenant hereby waives all claims against Landlord for
damage to any property or injury to or death of any person in, upon or
about the premises or the Building arising at any time and from any cause.
Tenant
4
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shall hold Landlord harmless from and defend Landlord against all claims
(except such as arises from the sole negligence or willful misconduct of
Landlord, its agents, employees or contractors) (i) for damage to any
property or injury to or death of any person arising from the use of the
premises by Tenant, or (ii) arising from the negligence or willful
misconduct of Tenant, its employees, agents, or contractors in, upon or
about those portions of the Building, other than the premises. The
foregoing indemnity obligation of Tenant shall include reasonable
attorneys' fees, investigation costs, and all other reasonable costs and
expenses incurred by Landlord from the first notice that any claim or
demand is to be made or may be made. The provisions of this paragraph 9
shall survive the termination of this Lease with respect to any damage,
injury, or death occurring prior to such termination.
10. Damage or Destruction.
---------------------
a. If during the term the premises are totally or partially destroyed, or
any other portion of the Building is damaged in such a way that Tenant's
use of the premises is materially interfered with, from a risk which is
wholly covered by insurance, subject to the availability of insurance
proceeds, Landlord shall proceed with reasonable diligence to repair the
damage or destruction and this Lease shall not be terminated; provided,
however, that if in the opinion of Landlord's architect the work of repair
cannot be completed in 90 days Landlord may at its election terminate the
Lease by notice given to Tenant.
b. If curing the term the premises are totally or partially destroyed, or
any other portion of the Building is damaged in such away that Tenant's use
of the premises is materially interfered with, from a risk which is not
wholly covered by insurance, Landlord may at its election by notice given
to Tenant restore the premises or terminate this Lease.
c. In case of destruction or damage which materially interferes with
Tenant's use of the premises, if this Lease is not terminated as above
provided, rent shall be abated during the period required for the work of
repair based upon the degree of interference with Tenant's use of the
premises. Except for abatement of rent, Tenant shall have no claim against
Landlord for any loss suffered by Tenant due to damage or destruction of
the premises or any work of repair undertaken as herein provided. Tenant
expressly waives the provisions of Sections 1932 and 1933(4) of the
California Civil Code.
11. Eminent Domain. If all or any part of the premises shall be taken as a
--------------
result of the exercise of power of eminent domain, this Lease shall
terminate as to the part so taken as of the date of taking, and in the case
of a partial taking, either Landlord or Tenant shall have the right to
terminate this Lease as to the balance of the premises by notice to the
other within thirty (30) days after such date if the portion of the
premises taken shall be of such extent and nature as substantially to
handicap, impede or impair Tenant's use of the balance of the premises for
Tenant's purposes. In the event of any taking, Landlord shall be entitled
to any and all compensation, damages, income, rent, awards, or any interest
therein whatsoever which may be paid or made in connection therewith, and
Tenant shall have no claim against Landlord for the value of any unexpired
term of this Lease or otherwise. In the event of a partial taking of the
premises which does not result in a termination of this Lease, the monthly
rental thereafter to be paid shall be equitably reduced on a square footage
basis.
12. Assignment and Subletting.
-------------------------
a. Tenant shall not assign this Lease or any interest herein or sublet the
premises or any part thereof without the prior consent of Landlord, which
consent shall not be unreasonably withheld; Tenant shall not hypothecate
this Lease or any interest herein or permit the use of the premises by any
party other than Tenant without the prior consent of Landlord, which
consent may be withheld by Landlord in its absolute discretion. This Lease
shall not, nor shall any interest herein, be assignable as to the interest
of Tenant by operation of law without the consent of Landlord. Any of the
foregoing acts without such consent shall be void and shall, at the option
of Landlord, terminate this Lease. In connection with each consent
requested by Tenant, Tenant shall submit to Landlord the terms of the
proposed transaction, the identity of the parties to the transaction, the
proposed documentation for the transaction, current financial statements of
any proposed assignee or sublessee and all other information reasonably
requested by Landlord concerning the proposed transaction and the parties
involved therein.
b. Without limiting the other instances in which it may be reasonable for:
Landlord to withhold its consent to an assignment or subletting, Landlord
and Tenant acknowledge that it shall be reasonable for Landlord to withhold
its consent in the following instances:
1. if the proposed assignee or sublessee is a governmental agency;
2. if, in Landlord's reasonable judgment, the use of the premises by the
proposed assignee or sublessee would entail any alterations which
would lessen the value of the leasehold improvements in the premises,
or would require increased services by Landlord:
3. if, in Landlord's reasonable judgment, the financial worth of the
proposed assignee or sublessee does not meet the credit standards
applied by Landlord for other tenants under leases with comparable
terms, or the character, reputation or business of the proposed
assignee or sublessee is not consistent with the quality of the other
tenancies in the Building;
4. in the case of a subletting of less than the entire premises, if the
subletting would result in the division of the premises into more than
two subparcels, would create a subparcel of a configuration that is
not suitable for normal leasing purposes, or would require access to
be provided through space leased or held for lease to another tenant
or improvements to be made outside of the premises; or
5. if, at the time consent is requested or at any time prior to the
granting of consent, Tenant is in default under the Lease or would be
in default under the Lease but for the pendency of any grace or cure
period under paragraph 13 below.
c. If at any time or from time to time during the term of this Lease Tenant
desires to sublet all or any part of the premises, Tenant shall give
notice to Landlord setting forth the terms of the proposed subletting
and the space so proposed to be sublet. Landlord shall have the
option, exercisable by notice given to Tenant within 20 days after
Tenant's notice is given, either to sublet from Tenant such space at
the rental and other terms set forth in Tenant's notice, or, if the
proposed subletting is for the entire premises for a sublet term
ending within the last year of the term of this Lease, to terminate
this Lease. If Landlord does not exercise such option, Tenant shall be
free to sublet such space to any third party on the same terms set
forth in the notice given to Landlord, subject to obtaining Landlord's
prior consent as herein above provided.
5
<PAGE>
d. As used in this paragraph 12, the term, "assign" or "assignment" shall
include, without limitation, any sale, transfer, or other disposition
of all or any position of Tenant's estate under this Lease, whether
voluntary or involuntary, and whether by operation of law or otherwise
including, any of the following:
1. If Tenant is a corporation: (i) any dissolution, merger, consolidation,
or other reorganization of Tenant or (ii) a sale of more than 50% of
the value of the assets of Tenant or (iii) if Tenant is a corporation
with fewer than 500 shareholders, sale or other transfer of a
controlling percentage of the capital stock of Tenant. The phrase
"controlling percentage" means the ownership of, and the right to
vote, stocks possessing at least 50% of the total combined voting
power of all classes of Tenant's stock issues, outstanding and
permitted to vote for the election of directors;
2. If Tenant is a trust the transfer of more than 50% of the beneficial
interest of Tenant, or the dissolution of the trust;
3. If Tenant is a partnership or joint venture, the withdrawal, or the
transfer of the interest of any general partner or joint venturer or
the dissolution of the partnership or joint venture;
4. If Tenant is composed of tenants-in-common, the transfer of interest of
any cotenants or the partition or dissolution of the cotenancy.
e. No sublessee (other than Landlord if it exercises its option pursuant to
subparagraph (c) above) shall have a right further to sublet, and any
assignment by a sublessee of its sublease shall be subject to
Landlord's prior consent in the same manner as if Tenant were entering
into a new sublease.
f. In the case of an assignment, one half of all sums or other economic
consideration received by Tenant as a result of such assignment shall
be paid to Landlord. In the event such consideration is received by
Tenant in installments, the portion of each installment to be paid to
Landlord shall be determined by multiplying the installment by a
fraction, the numerator of which is the total amount of the foregoing
permitted deductions and the denominator of which is the total
consideration receivable by Tenant as a result of such assignment.
g. In the case of a subletting, one half of all sums or economic
consideration received by Tenant as a result of such subletting shall
be paid to Landlord after first deducting (i) the rental due
hereunder, prorated to reflect only rental allocable to the sublet
portion of the premises, (ii) the cost of leasehold improvements made
to the sublet portion of the premises at Tenant's cost, amortized over
the term of this Lease except for leasehold improvements made for the
specific benefit of the sublessee, which shall be amortized over the
term of the sublease, and (iii) the cost of any real estate
commissions incurred in connection with such subletting, amortized
over the term of the sublease.
h. Regardless of Landlord's consent, no subletting or assignment shall
release Tenant of Tenant's obligation or alter the primary liability
of Tenant to pay the rental and to perform all other obligations to be
performed by Tenant hereunder. The acceptance of rental by Landlord
from any other person shall not be deemed to be a waiver by Landlord
of any provision hereof Consent to one assignment or subletting shall
not be deemed consent to any subsequent assignment or subletting. In
the event of default by any assignee of Tenant or any successor of
Tenant in the performance of any of the teems hereof, Landlord may
proceed directly against Tenant without the necessity of exhausting
remedies against such assignee or successor. Landlord may consent to
subsequent assignments or subletting of this Lease or amendments or
modifications to this Lease with assignees of Tenant, without
notifying Tenant, or any successor of Tenant, and without obtaining
its or their consent thereto and such action shall not relieve Tenant
of liability under this Lease.
i. In the event Tenant shall assign or sublet the premises or request the
consent of Landlord to any assignment or subletting or if Tenant shall
request the consent of Landlord for any act that Tenant proposes to
do, then Tenant shall pay Landlord's reasonable attorneys" fees
incurred in connection therewith.
13. Default by Tenant.
-----------------
a. The following events shall constitute events of default under this
Lease:
1. a default by Tenant in the payment of any rent or other sum payable
hereunder for a period of 3 days after the same is due;
2. a default by Tenant in the performance of any of the other terms,
covenants, agreements, or conditions contained herein and, if the
default is curable, the continuation of such default for a period of
10 days after notice by Landlord or beyond the time reasonably
necessary for cure if the default is of the nature to require more
than 10 days to remedy, provided that if Tenant has defaulted in the
performance of the same obligation one or more times in any twelve-
month period and notice of such default has been given by Landlord in
each instance, no cure period shall thereafter be applicable
hereunder;
3. the bankruptcy or insolvency of Tenant, any transfer by Tenant in fraud
of creditors, assignment by Tenant for the benefit of creditors, or
the commencement of any proceedings of any kind by or against Tenant
under any provision of the Federal Bankruptcy Act or under any other
insolvency, bankruptcy or reorganization act unless, in the event any
such proceedings are involuntary, Tenant is discharged from the same
within 60 days thereafter; the appointment of a receiver for a
substantial part of the assets of Tenant; or the levy upon this Lease
or any estate of Tenant hereunder by any attachment or execution; and
4. the abandonment of the premises
b. Upon the occurrence of any event of default by Tenant hereunder,
Landlord may, at its option and without any further notice or demand.
in addition to any other rights and remedies given hereunder or by
law, do any of the following:
1. Landlord shall have the right, so long as such default continues, to
give notice of termination to Tenant, and on the date specified in
such notice this Lease shall terminate.
2. In the event of any such termination of this Lease, Landlord may then or
at any time thereafter, reenter the premises and remove therefrom all
persons and property and again repossess and enjoy the premises,
without prejudice to any other remedies that Landlord may have by
reason of Tenant's default or of such termination.
3. In the event of any such termination of this Lease, and in addition to
any other rights and remedies Landlord may have, Landlord shall have
all of the rights and remedies of a landlord provided by Section
1951.2 of the California Civil
6
<PAGE>
Code. The amount of damages which Landlord may recover in event of
such termination shall include, without limitation, (i) the worth at
the time of award (computed by discounting such amount at the discount
rate of the Federal Reserve Bank of San Francisco at the time of award
plus one percent) of the amount by which the unpaid rent for balance
of the term after the time of award exceeds the amount of rental loss
that Tenant proves could be reasonably avoided, (ii) all reasonable
legal expenses and other related costs incurred by Landlord following
Tenant's default, (iii) all costs incurred by Landlord in restoring
the premises to good order and condition, or in remodeling, renovating
or otherwise preparing the premises for reletting, and (iv) all costs
(including, without limitation, any brokerage commissions) incurred by
Landlord in reletting the premises.
4. For the purpose of determining the unpaid rent in the event of a
termination of this Lease, or the rent due hereunder in the event of a
reletting of the premises, the monthly rent reserved in this Lease
shall be deemed to be the sum of the rental due under paragraph 3
above and the amounts last payable by Tenant pursuant to paragraph 4
above.
5. After terminating this Lease, Landlord may remove any and all personal
property located in the premises and place such property in a public
or private warehouse or elsewhere at the sole cost and expense of
Tenant.
c. Even though Tenant has breached this Lease and abandoned the premises,
this Lease shall continue in effect for so long as Landlord does not
terminate Tenant's right to possession, and Landlord may enforce all
its rights and remedies under this Lease, including the right to
recover rental as it becomes due under this Lease. Acts of maintenance
or preservation, efforts to relet the premises, or the appointment of
a receiver upon initiative of Landlord to protect Landlord's interest
under this Lease, shall not constitute a termination of Tenant's right
to possession.
d. The remedies provided for in this Lease are in addition to any other
remedies available to Landlord at law or in equity, by statute or
otherwise.
14. Default by Landlord. Landlord shall not be in default unless Landlord
-------------------
fails to perform obligations required of Landlord hereunder within a
reasonable time, but in no event later than 30 days after notice by Tenant
to Landlord specifying wherein Landlord has failed to perform such
obligation; provided, however, that if the nature of Landlord's obligation
is such that more than 30 days are required for performance, then Landlord
shall not be in default if Landlord commences performance within such 30
day period and thereafter diligently prosecutes the same to completion.
15. Security Deposit. On execution of this Lease Tenant shall deposit with
----------------
Landlord the sum specified in the Basic Lease Information (the "Deposit").
The Deposit shall be held by Landlord as security for the performance by
Tenant of all of the provisions of this Lease. If Tenant fails to pay rent
or other charges due hereunder, or otherwise defaults with respect to any
provisions of this Lease, Landlord may use, apply, or retain all or any
portion of the Deposit for the payment of any rent or other charge in
default, or the payment of any other sum to which Landlord may become
obligated by reason of Tenant's default, or to compensate Landlord for any
loss or damage which Landlord may suffer thereby. If Landlord so uses or
applies all or any portion of the Deposit, then within 10 days after demand
therefor Tenant shall Deposit cash with Landlord in an amount sufficient to
restore the Deposit to the full amount thereof, and Tenant's failure to do
so shall be a material breach of this Lease. Landlord shall not be required
to keep the Deposit separate from its general accounts. If Tenant performs
all of Tenant's obligations hereunder, the Deposit, or so much thereof as
has not theretofore been applied by Landlord, shall be returned, without
payment of interest for its use, to Tenant (or, at Landlord's option, to
the last assignee, if any, of Tenant's interest hereunder) at the
expiration of the term hereof, and after Tenant has vacated the premises.
No trust relationship is created herein between Landlord and Tenant with
respect to the Deposit.
16. Estoppel Certificate.
--------------------
a Tenant shall at any time upon not more than 10 days' prior notice from
Landlord execute, acknowledge and deliver to Landlord a statement
certifying (i) that this Lease is unmodified and in full force and
effect (or, if modified, stating the nature of such modification and
certifying that this Lease, as so modified, is in full force and
effect) (ii) the date to which the rent, security deposit, and other
sums payable hereunder have been paid, (iii) acknowledging that there
are not, to Tenant's knowledge, any uncured defaults on the part of
Landlord hereunder, or specifying such defaults, if any, which are
claimed, and (iv) such other matters as may reasonably be requested by
Landlord. Any such statement may be conclusively relied upon by any
prospective purchaser or encumbrancer of the Building.
b Tenant's failure to deliver such statement within such time shall be
conclusive upon Tenant, (i) that this Lease is in full force and
effect, without modification except as may be represented by Landlord,
(ii) that there are no uncured defaults in Landlord's performance, and
(iii) that not more than one month's rent has been paid in advance.
c If the Landlord desires to finance or refinance the Building, Tenant
agrees to deliver to any lender designated by Landlord such financial
statements of Tenant as may be reasonably required by such lender. All
such financial statements shall be received by Landlord in confidence
and shall be used for the purposes herein set forth.
17. Subordination. This Lease, at Landlord's option, shall subordinate to any
-------------
ground lease, first mortgage, deed of trust, or any other hypothecation for
security now or hereafter placed upon the Building and to any and all
advances made on the security thereof and to all renewals, modifications,
consolidations, replacements and extensions thereof. Notwithstanding such
subordination, Tenant's right to quiet possession of the premises shall not
be disturbed if Tenant is not in default and so long as Tenant shall pay
the rent and observe and perform all of the provisions of this Lease,
unless this Lease is otherwise terminated pursuant to its terms. If any
first mortgagee, trustee, or ground lessor shall elect to have this Lease
prior to the lien of its first mortgage, deed of trust or ground lease, and
shall give notice thereof to Tenant, this Lease shall be deemed prior to
such first mortgage, deed of trust, or ground lease, whether this Lease is
dated prior to or subsequent to the date of said first mortgage, deed of
trust or ground lease or the date of recording thereof If any first
mortgage or deed of trust to which this Lease is subordinate is foreclosed
or a deed in lieu of foreclosure is given to the first mortgagee or
beneficiary, Tenant shall attorn to the purchaser at the foreclosure sale
or to the grantee under the deed in lieu of foreclosure; if any ground
lease to which this Lease is subordinate is terminated, Tenant shall attorn
to the ground lessor. Tenant agrees to execute any documents required to
effectuate such subordination or to make this Lease prior to the lien of
any first mortgage, deed of trust or ground lease, as the case may be, or
to evidence such attornment.
18. Attorneys' Fees. If, as a result of any breach or default in the
---------------
performance of any of the provisions of this Lease, Landlord uses the
services of any attorney in order to secure compliance with such provisions
or recovered damages therefor, or to terminate this Lease or evict Tenant,
Tenant shall reimburse Landlord for any and all attorneys' fees and
expenses in such amount as the court may adjudge reasonable, provided that
if Tenant shall be the prevailing party in any legal action brought by
Landlord against Tenant, Tenant will be entitled to recover any and all
attorneys' fees and expenses in such amount as the court may adjudge
reasonable.
7
<PAGE>
19. Non-Discrimination. Tenant covenants for itself; its heirs, executors,
------------------
administrators, and assigns, and all persons claiming under or through it,
and this Lease is made and accepted upon it subject to the condition that
there shall be no discrimination against or segregation of any person or
group of persons, on account of race. color, creed. religion, sex, marital
status, national origin, or ancestry in the leasing, subleasing,
transferring, use, occupancy, tenure, or enjoyment of the premises herein
leased nor shall the Tenant itself, or any person claiming under or through
it, establish or permit any such practice or practices of discrimination or
segregation with reference to the selection, location, number, use, or
occupancy of tenants, subtenants, or vendees in the premises.
20. Notices. All notices, consents, demands, and other communications from one
-------
party to the other given pursuant to the terms of this Lease shall be in
writing and shall be deemed to have been fully given when deposited in the
United States mail, certified or registered, postage prepaid, and addressed
as follows: to Tenant at the address specified in the Basic Lease
Information or to such other place as Tenant may from time to time
designate in a notice to Landlord: or, to Landlord at the address specified
in the Basic Lease Information, or to such other place and with such other
copies as Landlord may from time to time designate in a notice to Tenant.
21. General Provisions.
------------------
a. This Lease shall be governed by and construed in accordance with the
laws of the state of California.
b. The invalidity of any provision of this Lease, as determined by a
court of competent jurisdiction, shall in no way affect the validity
of any other provision hereof
c. This Lease contains all agreements of the parties with respect to any
matter mentioned herein and only may be modified in writing signed by
the parties.
d. No waiver by Landlord of any provision hereof shall be deemed a waiver
of any other provision or of any subsequent breach by Tenant of the
same or any other provision. Landlord's consent to or approval of any
act shall not be deemed to render unnecessary the obtaining of
Landlord's consent to or approval of any subsequent act by Tenant. The
acceptance of rent hereunder by Landlord shall not be a waiver of any
preceding breach by Tenant of any provision hereof, other than the
failure of Tenant to pay the particular rent accepted, regardless of
Landlord's knowledge of such preceding breach at the time of
acceptance of such rent.
e. If Tenant remains in possession of the premises or any part thereof
after the expiration of the term with the consent of Landlord, such
occupancy shall be a tenancy from month to month at a rental in the
amount of two times the last month's rental during the term, plus all
other charges payable hereunder, and upon all of the terms hereof.
f. Subject to the provisions of this Lease restricting assignment or
subletting by Tenant, this Lease shall bind the parties, their
personal representatives, successors, and assigns.
g. Landlord and Landlord's agents shall have the right to enter the
premises at reasonable times for the purpose of inspecting the same,
showing the same to prospective purchasers, tenants, lenders and other
interested parties, and making such alterations, repairs,
improvements, or additions to the premises or to the Building as
Landlord may deem necessary or desirable. Landlord may at any time
during the last 120 days of the term place on or about the premises
any ordinary "For Lease" sign.
h. Tenant shall not conduct any auction at the premises without
Landlord's prior consent.
i. The voluntary or other surrender of this Lease by Tenant, the mutual
cancellation thereof or the termination of this Lease by Landlord as a
result of Tenant's default shall, at the option of Landlord, terminate
all or any existing subtenancies or may, at the option of Landlord,
operate as an assignment to Landlord of any or all of such
subtenancies.
j. If Tenant is a corporation, each individual executing this Lease on
behalf of Tenant represents and warrants that he is duly, authorized
to execute and deliver this Lease on behalf of the corporation in
accordance with a duly adopted resolution of the Board of Directors
and that this Lease is binding upon the corporation in accordance with
its terms.
k. The term "Landlord" as used herein means the then owner of the
Building and in the event of a sale of the Building the selling owner
shall be automatically relieved of all obligations of Landlord
hereunder, except for acts or omissions of Landlord theretofore
occurring.
l. The term "day" as used herein means a calendar day.
m. The obligations of Landlord under this Lease do not constitute
personal obligations of the partners, directors, officers,
shareholders, or trustees of Landlord, Tenant shall look solely to
Landlord and its assets for the realization of any claims against
Landlord and not to the assets of any of the partners of Landlord, and
Tenant expressly waives any and all right to proceed against any of
its partners or the officers, directors, trustees, shareholders,
agents, or employees of any of such partners, except to the extent of
their interest in Landlord.
n. On request by Landlord, Tenant shall furnish Landlord with
satisfactory evidence of payment of Tenant's business personal
property taxes pertaining to the premises and deliver copies of such
business personal property tax bills to Landlord.
8
<PAGE>
22. Exhibits. The exhibits and addendum, if any, specified in the Basic Lease
--------
Information are attached to this Lease and by this reference made a part
hereof.
IN WITNESS WHEREOF, the parties have executed this Lease on the respective dates
indicated below.
<TABLE>
<CAPTION>
TENANT: LANDLORD:
<S> <C>
XENOGEN CORPORATION, ALAMEDA REAL ESTATE INVESTMENTS, a California limited
a California corporation partnership
By: Vintage Alameda Investments, LP
a California limited partnership
operating general partner
By:________________________________________________________
By: Vintage Properties - Alameda Commercial,
a California corporation,
Title:_____________________________________________________
managing general partner
Date of Execution
by Tenant:_________________________________________________ By:__
Title:_______________________________
Date of Execution
by Landlord:______________________
</TABLE>
9
<PAGE>
ADDENDUM TO
MARINA VILLAGE
NET OFFICE - TECH LEASE
THIS ADDENDUM TO MARINA VILLAGE NET OFFICE - TECH LEASE shall constitute part of
that certain Marina Village Net Office - Tech Lease dated as of January 15, 1998
("Lease") by and between ALAMEDA REAL ESTATE INVESTMENTS, a California limited
partnership ("Landlord") and XENOGEN CORPORATION, a California corporation
("Tenant"), for Premises identified as 860 Atlantic Avenue, Alameda, California,
and the terms hereof shall for all purposes be considered part of the Lease and
supersede any provisions of the Lease to the contrary.
1. Amendment of Paragraph 1: Premises. The following language is hereby
-----------------------------------
added to Paragraph 1 of the Lease, to read as follows:
During the term, Tenant shall have the right to use, on a non-exclusive
basis and at no additional charge, automobile parking at the rate of a
minimum of 3.4 spaces per 1,000 square feet of net rentable area of the
premises. In addition, Tenant may install at Tenants' expense exterior
signage identifying Tenant on the Building and on the monument sign related
to the Building in compliance with the Marina Village signage program.
2. Amendment of Paragraph 2: Term. Paragraph 2b. of the Lease is hereby
-------------------------------
deleted and replaced with the following:
b. If Landlord does not deliver possession of the premises to Tenant on
or before March 31,1998, as such date may be extended due to causes not
under Landlord's reasonble control, including Tenant's acts, then by notice
to Landlord given following such date but before Landlord does so deliver
possession, Tenant may terminate this Lease.
3. Amendment of Paragraph 3: Rent.
-------------------------------
a. The third sentence of paragraph 3c. of the Lease is hereby amended to
read as follows:
Accordingly, if any installments of rent or any other sums due from
Tenant shall not be received by Landlord within five (5) days
following the date due, then Tenant shall pay to Landlord a late
charge equal to six percent (6%) of such overdue amount.
b. The first sentence of paragraph 3d. of the Lease is hereby amended to
read as follows:
d. Any amount due to Landlord, if not paid when due, shall bear
interest from the date due until the date paid at the rate of ten
percent (10%) per annum.
c. The following language is hereby added to paragraph 3 of the Lease to
read as follows:
If and to the extent Landlord advances the Additional TI Allowance
under paragraph 8 of the Addendum to Lease, Base Rent shall be
increased by the amount each month necessary to amortize the amount so
advanced by Landlord as the Additional TI Allowance over the remaining
term of the Lease together with interest at the rate of 10.5% per
annum.
4. Amendment of Paragraph 4: Taxes and Operating Expenses.
-------------------------------------------------------
a. The following language is hereby added to paragraph 4a of the Lease to
read as follows:
Notwithstanding the foregoing, "Property Taxes" shall not include and
Tenant shall not be required to pay any portion of any tax or
assessment expense or any increase therein: (a) in excess of any
installment of an assessment which otherwise would be required to be
paid at such time; (b) attributable to Landlord's net income,
inheritance, gift, transfer, estate or estate income taxes; or (c) the
improvement of any portion of the Building for the sole use of other
occupants not claiming under Tenant. "Operating Expenses" shall not
include and Tenant shall not have any obligation to perform or to pay
for any of the following: (a) costs to operate, maintain or repair
occasioned by the willful misconduct, gross negligence or action in
violation of law by Landlord, its agents, employees or contractors;
(b) costs of repair or replacement occasioned by casualty, other than
deductibles for insured casualties other than earthquakes, or by the
exercise of the power of eminent domain; (c) costs to correct any
1
<PAGE>
construction defect in the Building or law applicable to the Building
as of the commencement of the term other than as occasioned by
alterations or improvements made by or for Tenant; (d) costs incurred
in connection with the presence of any Hazardous Materials as of the
commencement of the term; (e) interest, charges and fees incurred on
debts, other than assessments, or debt incurred in connection with the
financing of Items which are permitted to be charged as Operating
Expenses; and (f) costs which could properly be capitalized under
generally-accepted accounting principles, except to the extent
amortized over the useful life of the Item in question. Operating
Costs shall only include the deductible amount for the repair or
reconstruction of casualties covered by earthquake insurance in an
amount not to exceed $50,000 (the "Earthquake Limit"), if the casualty
occurs during the first 12 months of the term or during the first 12
months of an Option Period (as defined in paragraph 18 of the Addendum
to this Lease), with the Earthquake Limit being reduced by $5,000
during each 12-month period thereafter. Operating Costs shall only
include the deductible amount for the repair or reconstruction of
casualties covered by earthquake insurance in an amount not to exceed
$50,000 (the "Earthquake Limit"), if the casualty occurs during the
first 12 months of the term or during the first 12 months of an Option
Period (as defined in paragraph 18 of the Addendum to this Lease),
with the Earthquake Limit being reduced by $5,000 during each 12-month
period thereafter. In addition, Operating Costs shall only include
premiums for earthquake insurance in an amount not in excess of four
(4) times the then-market rate premium for standard all-risk casualty
insurance on the same property. In addition, "Property Taxes" and
"Operating Expenses" shall be pro rated for any partial year in which
the term shall commence or end. Any annual increase in property
management fees which are included as Operating Expenses shall be
limited to three percent (3%) of the amount incurred in the prior
year.
b. The third sentence of paragraph 4c. of the Lease is hereby amended to
read as follows:
If on the basis of such statement, Tenant owes an amount that is less
than the estimated payments for such calendar year previously made by
Tenant, within thirty (30) days following delivery of such statement
to Tenant Landlord shall refund such excess to Tenant.
5. Amendment of Paragraph 6: Use.
------------------------------
a. The second and third sentences of paragraph 6b. of the Lease are
hereby amended to read as follows:
Tenant shall not cause, or allow anyone else to cause, any Hazardous
Materials to be used, generated, stored or disposed of on or about the
Premises or the Building in violation of any laws or regulations
related to Hazardous Materials. Tenant shall defend (with counsel
approved by Landlord) indemnify and hold Landlord, its and their
partners, employees and agents and any entity having a security
interest in the premises or the Building and its and their employees
and agents (collectively, "Indemnitees") harmless from and against,
and reimburse the Indemnitees for, all liabilities, claims, costs,
damages, and depreciation of property value, including foreseeable and
unforeseeable consequential damages, directly or indirectly arising
out of the use, generation, storage or disposal of Hazardous Materials
by Tenant or any person employed by or under the control of Tenant,
including without limitation, the cost of any required or necessary
investigation, monitoring, repair, clean-up or detoxification and the
preparation of any closure or other required plans, whether such
action is required or necessary prior to or following termination or
expiration of this Lease, as well as penalties, fines and claims for
contribution to the full extent that such action is attributable,
directly or indirectly, to the use, generation, storage or disposal of
Hazardous Materials by Tenant or any person employed by or under the
control of Tenant. In no event shall Tenant be liable to any of the
Indemnities for the use, generation, storage or disposal of Hazardous
Materials not caused by or resulting from Tenant or any person
employed by or under the control of Tenant.
b. A new subparagraph c. is hereby added to paragraph 6 of the Lease, to
read as follows:
c. i. Notwithstanding anything in this paragraph 6 to the
contrary, Landlord acknowledges that Tenant's permitted use under
this Lease includes the handling, storage and disposal of
Hazardous Materials. Tenant hereby acknowledges receipt from
Landlord of a copy of that certain Exit Assessment prepared by
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ERM-West dated January, 1998 for Brobeck, Phleger & Harrison
regarding the condition of the premises immediately prior to the
commencement of the term. Landlord has also provided Tenant an
opportunity to inspect and test the premises prior to the
commencement of the term. Promptly following the commencement
date and within fifteen (15) days following any change in the
required information and/or documentation, Tenant shall deliver
to Landlord the following information:
A. A list of all Hazardous Materials that Tenant uses, handles,
generates, transports, stores, treats or disposes in
connection with its operations at the premises;
B. Copies of all Material Safety Data Sheets required to be
maintained with respect to operations of Tenant at the
premises in accordance with Title 8, California Code of
Regulations, (S) 5194 or 42 U.S.C. (S) 11021, or any
amendments thereto.
C. Copies of all Hazardous Waste Manifests, as defined in
California Code of Regulations Title 22, Section 66481, that
Tenant is required to complete in connection with its
operations at premises; any Hazardous Materials Management
Plans; any Contingency Plans and Emergency Procedures
required under Title 22, Chapter 30, Article 20, California
Code of Regulations, as amended; any reports required to be
furnished periodically to the California Department of Toxic
Substances Control or any local agency relating to Hazardous
Materials at the premises; all industrial wastewater
discharge permits, if any; any reports, notices or other
communications made to or received by any governmental
agency arising out of or in connection with any Hazardous
Materials in, on, under or about the premises; any claim
made or threatened by any person against Tenant, Landlord or
the premises received by Tenant relating to damage,
contribution, clean-up, removal, cost recovery,
compensation, loss or injury resulting from or claimed to
result from any Hazardous Materials.
D. Tenant shall cooperate with Landlord and Landlord's agents
and contractors in providing full access at reasonable times
and subject to reasonable conditions to all the Tenant's
operations at the premises to review and observe Tenant's
receipt, handling, use, storage, transportation, generation,
treatment and/or disposal of Hazardous Materials or to
conduct tests and inspections including, without limitation,
sampling the soil and groundwater under the Building and
sampling and testing for contamination of the premises,
Tenant's furnishings, fixtures and equipment therein,
building, plumbing and mechanical systems and the soil,
surface and groundwater around the premises. If, upon any
such reviews, tests or inspections, Landlord's contractor
determines that any Hazardous Materials are being handled in
violation of applicable law or permits, and the Alameda Fire
Department or the City of Alameda concur with such
determination, then in addition to immediately correcting
such violation, Tenant shall reimburse Landlord for its out-
of-pocket costs incurred in connection with such reviews,
tests and inspections within thirty (30) days of Landlord's
request therefor.
E. Upon the expiration or earlier termination of the term,
Tenant shall cause all Hazardous Materials handled by Tenant
within the premises properly to be removed from the
premises, including, as necessary, the de-contamination of
all plumbing, mechanical systems and any fixtures and
equipment then-existing in the premises. Tenant shall also
cause a thorough program of testing and inspection to be
conducted by a reputable and experienced professional
consultant approved by
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Landlord, which approval shall not unreasonably be withheld,
and a report prepared which confirms that all Hazardous
Materials have properly been removed and transported from
the premises as required above. The report shall be prepared
at Tenant's expense and delivered to Landlord within thirty
(30) days following the expiration or earlier termination of
the term.
c. A new subparagraph d. is hereby added to paragraph 6 of the Lease to
read as follows:
d. Notwithstanding anything in this Lease to the contrary, Tenant
shall not be required to comply with or cause the premises to comply
with any laws, rules or regulations regarding alterations or
improvements unless compliance with any of the foregoing is
necessitated solely due to the particular nature of Tenant's occupancy
or Tenant's particular use of the Premises or in connection with any
improvements or alterations to the Premises made by or for Tenant or
those under its control.
6. Amendment of Paragraph 8: Maintenance, Repairs and Alterations. The
---------------------------------------------------------------
following language is hereby added to subparagraph 8b of the Lease to read as
follows:
Tenant's obligations with respect to the maintenance of all heat,
ventilating and air conditioning equipment installed in the premises
shall extend to all trade fixtures and equipment which exist in the
premises as of the commencement of the term. Tenant shall only pay
for the costs of replacement of all or portions of the heating,
ventilating and air conditioning system serving the premises or
capital expenditures which are otherwise properly included as
Operating Expenses and are amortized over the useful life of the Item
in question, together with interest at the prime or reference rate
announced from time-to-time in the Wall Street Journal for short-term
commercial loans, plus two percent (2%) per annum. Tenant's
obligation to maintain trade fixtures and equipment in the premises as
of the commencement of the term shall be limited to maintaining such
trade fixtures and equipment in their condition and repair as of the
commencement of the term. Further, Tenant's obligations with respect
to the surrender of the Premises shall be fulfilled if Tenant
surrenders possession of the premises in the condition existing as of
the commencement of the term, acts of God, casualties, condemnation,
Hazardous Materials (other than those released, stored, emitted by
Tenant), and alterations or other interior improvements which may be
surrendered as of the end of the Lease, excepted.
7. Amendment of Paragraph 9: Insurance and Indemnity.
--------------------------------------------------
a. The following language is hereby added to paragraph 9a. of the Lease
to read as follows:
a. Landlord shall maintain "all risk," property insurance insuring
against risk of loss or damage to the Building for the full
replacement cost thereof.
b. The first clause of the first sentence of paragraph 9b. of the Lease
is hereby amended to read as follows:
b. Notwithstanding anything in the Lease and without regard to the
negligence or misconduct of the party to be released, Landlord hereby
waives all claims against Tenant and Tenant's officers, directors,
partners, employees, agents and representatives, for loss or damage to
the extent that such loss or damage is insured against under any valid
and collectible insurance policy insuring Landlord or required to be
maintained by Landlord under this Lease, or would have been insured
against but for any deductible amount under any such policy, and
c. The first phrase of the second sentence of paragraph 9c. of the Lease
is hereby amended to read as follows:
c. Tenant shall hold Landlord harmless from and defend Landlord
against all claims (except such as arise from the negligence or
willful misconduct of Landlord, its agents, employees or contractors)
8. Amendment of Paragraph 10: Damage or Destruction.
-------------------------------------------------
a. The final clause of paragraph 10a. of the Lease is hereby amended to
read as follows:
provided, however, that if in the opinion of Landlord's architect the
work of
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repair cannot be completed within one hundred and twenty (120) days,
Landlord may at its election, terminate the Lease by notice given to
Tenant.
b. The following language is hereby added to paragraph 10b. of the Lease,
to read as follows:
If the premises are totally or partially destroyed and Landlord does
not elect to terminate the Lease or is not entitled to terminate the
Lease pursuant to its terms, then Tenant shall have the option to
terminate the Lease if the premises cannot be restored within three
hundred and sixty (360) days after the damage, by notice to Landlord
given within fifteen (15) days following Landlord's notice to Tenant
regarding the estimated time of repair. In addition, Tenant may
terminate the Lease if such restoration or repair is not, in fact,
substantially completed within three hundred and sixty (360) days
following the event, by notice given to Landlord within fifteen (15)
days after the end of such 360-day period but prior to such
substantial completion. Notwithstanding anything in this paragraph 10
to the contrary, Landlord shall not have the right to terminate the
Lease if the total cost of repair or restoration is estimated to cost
less than five percent (5%) of the replacement cost of the Building,
excluding trade fixtures installed by Tenant.
9. Amendment of Paragraph 11: Eminent Domain. The following language is
------------------------------------------
hereby added at the end of paragraph 11 of the Lease, to read as follows:
Notwithstanding the foregoing, Tenant shall be entitled to separately
claim and prove, but not at the expense of the award otherwise payable
to Landlord, for: (a) the unamortized value, allocable to the
remainder of the term, of any improvements installed at Tenant's
expense which are not removable; (b) Tenant's moving costs; (c) loss
to Tenant's goodwill as a consequence of the condemnation; and (d)
Tenant's trade fixtures.
10. Amendment of Paragraph 12: Assignment and Subletting.
-----------------------------------------------------
a. The second clause of paragraph 12a. of the Lease is hereby amended to
read as follows:
Tenant shall not hypothecate this Lease or any interest herein or
permit the use of the Premises by any party other than Tenant without
the prior consent of Landlord, which consent may be withheld by
Landlord in its reasonable discretion.
b. The following language is hereby added to the end of paragraph 12a. of
the Lease to read as follows:
Notwithstanding the foregoing, Tenant may, upon prior notice to
Landlord accompanied by an explicit assumption of the Tenant's
obligations under this Lease for the benefit of Landlord, but without
Landlord's prior consent, sublet the premises or assign its interest
in this Lease to (i) a subsidiary affiliate, division, or corporation
controlling, controlled by or under common control with Tenant, (ii) a
successor corporation related to Tenant by merger, consolidation, non-
bankruptcy reorganization or government action, or (iii) a purchaser
of substantially all of Tenant's assets as a going concern. A sale or
transfer of Tenant's capital stock shall not be deemed an assignment,
subletting or any other transfer of its interest in the Lease or in
the premises; provided, however, that in the case of such purchase of
Tenant's assets, the assignee has a tangible net worth at least equal
to that of Tenant as of the commencement of the term.
c. Subparagraph 12b.4. of the Lease is hereby deleted.
d. Paragraph 12c. of the Lease is hereby deleted.
e. Subparagraph 12d.1. of the Lease is hereby deleted.
f. The first sentence of paragraph 12f. of the Lease is hereby amended to
read as follows:
f. In the case of an assignment, one-half (1/2) of all sums or other
economic consideration received by Tenant for its leasehold interest
in the premises as a result of such assignment shall be paid to
Landlord.
g. Paragraph 12g. of the Lease is hereby amended to read as follows:
g. In the case of a subletting, one-half (1/2) of all sums or
economic consideration received by Tenant as a result of such
subletting shall be
5
<PAGE>
paid to Landlord after first deducting (i) the rental due hereunder
(including, without limitation, amounts payable under paragraph 4 of
the Lease), prorated to reflect only rental allocable to the sublet
portion of the Premises, (ii) the cost of leasehold improvements made
to the sublet portion of the premises at Tenant's expense, amortized
over the term of this Lease except for Leasehold improvements made for
the specific benefit of the sublessee, which shall be amortized over
the term of the sublease, and (iii) the cost of any real estate
commissions and other reasonable costs (including attorneys' fees)
incurred in connection with such subletting, amortized over the term
of the sublease.
11. Amendment of Paragraph 13: Default by Tenant. Subparagraph 13a.2. of the
---------------------------------------------
Lease is hereby amended to read as follows:
2. A default by Tenant in the performance of any of the other terms,
covenants, agreements or conditions contained herein and, if the
default is curable, the continuation of such default for a period of
10 days after notice by Landlord or beyond the time reasonably
necessary for cure if the default is of the nature to require more
than 10 days to remedy;
12. Amendment of Paragraph 14: Default by Landlord. The following language is
-----------------------------------------------
hereby added to paragraph 14 of the Lease, to read as follows:
Following any such default by Landlord in its obligations to maintain
the Building or the premises under this Lease, upon prior notice to
Landlord, Tenant may perform such obligations and Landlord shall
reimburse Tenant for Tenant's reasonable out-of-pocket costs incurred
in connection with such performance.
13. Amendment of Paragraph 15: Security Deposit. The sixth sentence of
--------------------------------------------
paragraph 15 of the Lease is hereby amended to read as follows:
The Deposit, or so much thereof as has not theretofore been applied by
Landlord, shall be returned, without payment of interest for its use,
to Tenant (or, at Landlord's option, to the last assignee, if any, of
Tenant's interest hereunder) at the expiration of the term hereof, and
after Tenant has vacated the premises.
14. Amendment of Paragraph 16: Estoppel Certificate. The first clause of
------------------------------------------------
paragraph 16a. of the Lease is hereby amended to read as follows:
a. Tenant shall, at any time within twenty (20) days after receiving
notice from Landlord, execute, acknowledge and deliver to Landlord a
statement certifying
15. Amendment of Paragraph 17: Subordination. The following language is
-----------------------------------------
hereby added to paragraph 17 of the Lease, to read as follows:
Notwithstanding the foregoing, within ninety (90) days following the
date of this Lease, Landlord shall cause Connecticut General Life
Insurance Corporation, or its successor, as beneficiary of the Deed of
Trust presently encumbering the Building, to execute and deliver a
counterpart of a Subordination, Non-disturbance and Attornment
Agreement in the form attached to the Addendum to this Lease, with
such revisions as Tenant reasonably may request, which Agreement shall
promptly be executed and delivered by Tenant. Tenant shall reimburse
Landlord within 30 days following Landlord's request for any out-of-
pocket costs incurred by Landlord in connection with Tenant's
negotiation of the form of such Subordination, Non-disturbance and
Attornment Agreement.
16. Amendment of Paragraph 20: Notices. The first phrase of paragraph 20 of
-----------------------------------
the Lease is hereby amended to read as follows:
20. Notices. All notices, consents, demands and other communications
-------
from one party to the other given pursuant to the terms of this Lease
shall be in writing and shall be deemed
6
<PAGE>
to have been fully given two business days following deposit in the
United States mail, certified or registered, postage prepaid and
addressed as follows:
17. Amendment of Paragraph 21: General Provisions.
----------------------------------------------
a. Paragraph 21e. of the Lease is hereby amended to read as follows:
e. If Tenant remains in possession of the Premises or any part
thereof after the expiration of the term with the consent of
Landlord, such occupancy shall be at a tenancy from month to
month at a rental in the amount of 150% of the last month's
rental during the term, plus all other charges payable hereunder
and upon all of the terms of the Lease.
b. The first sentence of paragraph 21g. of the Lease is hereby amended to
read as follows:
g. Landlord and Landlord's agents shall have the right to enter the
premises at reasonable times upon at least 24 hours' prior
notice, except in emergencies, for the purpose of inspecting the
same, showing the same to prospective purchasers, tenants,
lenders and other interested parties, and making such
alterations, repairs, improvements or additions to the premises
or to the Building as Landlord may deem necessary or desirable.
c. The following language is hereby added to the end of paragraph 21k. of
the Lease, to read as follows:
and liabilities accruing prior to such sale.
d. A new subparagraph o. is hereby added to paragraph 21 of the Lease, to
read as follows:
o. Except as otherwise set forth, whenever this Lease requires an
approval, consent, designation, determination, selection or
judgment by either Landlord or Tenant, such approval, consent,
designation, determination, selection or judgment and any
conditions imposed thereby shall be reasonable and shall not be
unreasonably withheld or delayed and, in exercising any right or
remedy hereunder, each party shall at all times act reasonably
and in good faith.
e. A new subparagraph p. is hereby added to paragraph 21 of the Lease, to
read as follows:
p. Landlord and Tenant represent to each other that except for Rico
Cheung of Vertex Real Estate Group ("Broker"), they have had no
contacts in connection with this Lease with any broker, agent or
finder. Landlord shall be responsible for any compensation
payable to Broker in connection with this Lease and Landlord and
Tenant shall each indemnify, defend and hold harmless the other
from commissions or other compensation claimed by any other
broker, finder and/or agent in connection with this Lease based
upon contacts with the indemnifying party.
18. Options to Extend Term:
----------------------
a. Tenant shall have two options to extend the term of the Lease each for
a three-year period (an "Option Period") with the first Option Period
commencing upon the expiration of the initial term of the Lease;
provided, however, such options shall be subject to the following
conditions:
i. At the time each option is exercised, this Lease shall be in full
force and effect, Tenant shall not be in default hereunder and, as to
the second Option Period, Tenant shall have validly exercised its
option with respect to the first Option Period.
ii. Each option must be exercised by notice given to Landlord not
earlier than 12 months and not later than 6 months prior to the then-
scheduled expiration of the term of this Lease.
b. In the event an option is timely and effectively exercised, the term
shall be extended for three additional years, upon all of the terms
and conditions of the Lease; provided, however, that the Base Rent
shall be the then fair market rental value of the Premises.
i. For the purposes hereof, the fair market rental value of the
Premises shall be the
7
<PAGE>
monthly rental rate per square foot of rentable area then prevailing
for comparable improved space (without taking into account the value
of improvements made by Tenant at its cost) in Northwestern Alameda
County, multiplied by the rentable area of the Premises. If Tenant in
good faith disputes Landlord's determination of fair market rental
value, Tenant shall so notify Landlord and the parties shall negotiate
in good faith to resolve the dispute. If such dispute is not resolved
by negotiation between the parties within 30 days, then fair market
rental value shall be determined by appraisal. Tenant shall pay Base
Rent when due based upon Landlord's determination of fair market
rental value, subject to retroactive adjustment between the parties if
the determination by appraisal is different from Landlord's
determination.
ii. When fair market rental value is to be determined by appraisal,
within 10 days after the expiration of the 30-day negotiation period,
Landlord and Tenant shall each appoint as an appraiser, a real estate
appraiser with at least ten years of experience in appraising
commercial real property in Alameda County, and give notice of such
appointment to the other. If either Landlord or Tenant shall fail to
appoint an appraiser within 10 days after receiving notice of the
identity of the other party's appointed appraiser, then the single
appraiser appointed shall be the sole appraiser and determine the fair
market rental value of the Premises. In the event each party appoints
an appraiser, such appraisers shall, within 30 days after the
appointment of the last of them to be appointed, complete their
determinations of fair market rental value and furnish the same to
Landlord and Tenant. If the low appraisal varies from the higher
appraisal by 5% or less, the fair market rental value shall be the
average of the two valuations. If the low appraisal varies from the
high appraisal by more than 5%, the two appraisers shall, within 10
days after submission of the last appraisal report, appoint a third
appraiser who shall meet the qualifications set forth in this
paragraph. If the two appraisers shall be unable to agree on the
selection of a third appraiser in a timely manner then either Landlord
or Tenant may request such appointment by the presiding judge of the
Superior Court of Alameda County. The third appraiser, however
selected, shall be a person who has not previously acted in any
capacity for or against either party. Such third appraiser shall,
within 30 days after appointment, make a determination of fair market
rental value and submit an appraisal report to Landlord and Tenant.
The fair market rental value of the Premises shall be as determined by
the third appraiser, unless it is less than the valuation set forth in
the lower appraisal previously obtained, in which case the valuation
set forth in the lower prior appraisal shall be controlling, or unless
it is greater than the valuation set forth in the higher appraisal
previously obtained, in which case the valuation set forth in the
higher prior appraisal shall be controlling. All fees and costs
incurred in connection with the determination of fair market rental
value by appraisal shall be paid one-half by Landlord and one-half by
Tenant. Prior to the commencement of the option period, Tenant and
Landlord shall execute an amendment to this Lease setting forth the
option period and revised Base Rent.
iii. Even though Tenant has exercised its option, Tenant may rescind
its exercise at any time at least six (6) months prior to the then-
scheduled expiration of the term provided that Tenant shall pay within
30 days following Landlord's request for all expenses incurred by
Landlord in connection with the appraisal process.
19. Right of First Offer. Tenant shall have a right of first offer to lease
--------------------
any space (the "Offered Space") which becomes available in the building
commonly identified as 960 Atlantic Avenue if and when such space becomes
available. Tenant's rights under this paragraph shall be conditioned upon:
(a) 960 Atlantic Avenue continuing to be owned by the same entity which is
the Landlord under this Lease, (b) the absence of any prior rights in favor
of the present and any future tenants in 960 Atlantic Avenue, as such
rights may exist or be granted in the future; and (c) Tenant not being in
default under this Lease. Subject to the foregoing, if and when any space
does become available for lease in 960 Atlantic Avenue, Landlord shall give
notice to Tenant of the availability of the Offered Space and the terms on
which Landlord would be willing to enter into a lease for such space with
Tenant. If Tenant, by notice to Landlord given within five (5) business
days following the giving of Landlord's notice, so elects, the parties
shall thereafter negotiate in good faith for ten (10) business days with
respect to the potential of leasing the Offered Space to Tenant. If by the
end of such ten-day period, Landlord and Tenant have not entered into a
binding agreement with respect to the lease of the Offered Space to Tenant,
or if Tenant initially does not give Landlord notice of its desire to enter
into such negotiations within the five-day business period set forth above,
Landlord shall thereafter be free to deal with the Offered Space without
further reference to Tenant, unless and until one (1) year or more
thereafter the Offered Space again becomes available.
20. Initial Improvement of the Premises.
-----------------------------------
a. If, within sixty (60) days following the commencement of the term,
Tenant discovers that any portion of the plumbing, heating,
ventilating and air-conditioning system serving the Premises which
plumbing and other systems are necessary for the occupancy of the
Premises for normal office (as opposed to fume hoods, animal storage,
manufacturing or other special purposes) are not in good working order
and condition, it may so notify Landlord and Landlord shall thereafter
promptly cause such plumbing and other systems to be placed in good
operating condition and repair.
8
<PAGE>
b. i. Landlord shall reimburse Tenant for up to $93,350 (the "TI
Allowance") for its out-of-pocket costs incurred in replacing existing
carpeting in the Premises, painting the interior of the Premises and
for making other alterations and improvements within the Premises (the
"Tenant Improvements"). In addition, at Tenant's request Landlord
shall reimburse Tenant for up to an additional $76,788 (the
"Additional TI Allowance") for out-of-pocket costs incurred by Tenant
in connection with additional alterations to and improvements within
the Premises. No portion of the TI Allowance may be applied to pay
for the costs of millwork or cabinetry which may be removed by Tenant
at the end of the term, furniture or trade equipment or trade
fixtures. All alterations and improvements within the Premises shall
be subject to the requirements of subparagraph 8c. of Lease. Landlord
shall also reimburse Tenant, and not as part of the TI Allowance for
costs incurred by Tenant in connection with the Tenant Improvements to
remove Hazardous Materials from the premises existing as of the
commencement of the term.
ii. Landlord shall reimburse Tenant for its out-of-pocket costs
incurred in connection with Tenant Improvements within thirty (30)
days of Tenant's request provided that at the time of such payment:
A. Tenant has delivered to Landlord copies of building permits
issued in connection with the Tenant Improvements indicating
final inspection has been approved;
B. Tenant has delivered to Landlord unconditional waivers and
releases of lien from all parties have established a right to
lien, or evidence that all applicable limitation periods for the
filing of mechanics liens have expired without any such liens
having been filed;
C. Tenant not then being in default under the Lease; and
D. Tenant delivering copies of invoices and other evidence,
reasonably acceptable to Landlord of costs incurred by Tenant.
iii. Any amounts paid to Tenant as the Additional TI Allowance shall
be re-paid by Tenant to Landlord as an increase in Base Rent as
described in paragraph 2 of this Addendum.
21. Commencement of the lease shall be contingent upon full funding of $(6) six
million dollars to Xenogen by investors no later than February 6, 1998.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Addendum as of the
date of the Lease.
LANDLORD: TENANT:
ALAMEDA REAL ESTATE INVESTMENTS, XENOGEN CORPORATION,
a California limited partnership a California corporation
By: Vintage Alameda Investments, LP
a California limited partnership
general partner By: /s/ Pamela Reilly Contog
------------------------
By: Vintage Properties - Alameda Title: CEO & President
Commercial, a California ---------------------
corporation, general partner
By: /s/ Joseph Seiger
----------------------
Title: President
-------------------
9
