EXHIBIT 10.23
First Amendment to Lease Agreement
This First Amendment to Lease Agreement (the “Amendment”) is made and entered
into as of August 28, 2000, by and between Principal Development Investors, LLC,
a Delaware limited liability company (“Landlord”) and Abaxis, Inc, a California
corporation (“Tenant”), with reference to the following facts.
Recitals

A.   Landlord and Tenant have entered into that certain Lease Agreement dated as
of June 21, 2000 (the “Lease”) for the leasing of certain premises consisting of
approximately 91,124 rentable square feet located at 3240 Whipple Road, Union
City, California (the “Premises”) as such Premises are more fully described in
the Lease.   B.   Tenant has informed Landlord that the terms of Tenant’s
current lease for the operations it intends to locate in the Premises expired as
of July 31, 2000 and Tenant thereafter will be holding over at such premises
without such landlord’s consent and at a rental rate greatly in excess of the
rent paid by Tenant at such premises during the term of such current lease.
Tenant has requested and Landlord has agreed, solely as an accommodation to
Tenant, to modify the process by which the Tenant Improvements are to be
constructed.   C.   Landlord and Tenant now wish to amend the Lease upon and
subject to each of the terms, conditions and provisions set forth herein.

NOW, THEREFORE, in consideration of the foregoing and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Landlord and Tenant agree as follows:
     1. Recitals: Landlord and Tenant agree that the above recitals are true and
correct and are hereby incorporated herein as though set forth in full.
     2. Modifications to Lease:
          2.1 Phase I and Phase II Tenant Improvements; Early Occupancy. The
Tenant Improvements shall be constructed in two phases, hereinafter referred to
as “Phase I” and “Phase II”, each a “Phase” and collectively the “Phases”. The
Phase I Tenant Improvements shall consist of the Tenant Improvements to be made
to the portion of the Premises intended to be used for office space, comprising
approximately 25,000 rentable square feet (the “Phase I Premises”). The Phase II
Tenant Improvements shall consist of the Tenant Improvements to be made to the
portion of the Premises intended to be used for manufacturing and warehousing,
comprising approximately 66,000 rentable square feet (the “Phase II Premises”).
The Phase I Tenant Improvements and the Phase II Tenant Improvements shall be
constructed in accordance with Exhibit B to the Lease, as amended by this
Amendment, by Technical Builders, as general contractor (the “General
Contractor”), under a contract between General Contractor and Landlord. During
the Early Occupancy Period (as defined in Section 2.3 below of this Amendment),
all terms and provisions of the Lease, as modified by this Amendment, shall
apply to the Phase I Premises.
          2.2 Exhibit B. Exhibit B attached to the Lease shall be deemed to be
amended to conform to the provisions of this Amendment. Without limiting the
generality of the foregoing, the following provisions of Exhibit B are hereby
amended as follows:
     Section 1. Tenant Improvements. Subject to the conditions set forth in
Exhibit B to the Lease as amended hereby, Landlord shall enter into a
construction contract with the General Contractor for the construction and
installation of the Tenant Improvements. The Tenant Improvements shall not
include any of Tenant’s personal property, trade fixtures, furnishings,
equipment or similar items. The “Phase I Tenant Improvements” shall consist of
the Tenant Improvements within the Phase I Premises, and all systems and
improvements within the Premises required for the use and occupancy of the Phase
I Premises. The remainder of the Tenant Improvements shall comprise the “Phase
II Tenant Improvements”.

1.

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     Section 3. Tenant’s Initial Plans; the Work. The Phase I Tenant
Improvements shall be built in substantial accordance with the plan(s) and scope
of work (collectively, the “Initial Phase I Plans”) dated July 19, 2000 prepared
by Legacy Partners CDS (“Architect”) and which have previously been approved by
Landlord and Tenant. The Phase II Tenant Improvements shall be built in
substantial accordance with the plan(s) and scope of work (collectively, the
“Initial Phase II Plans”) to be prepared by Architect and attached hereto as
Schedule 1, as soon as practicable, subject to approval by Landlord and Tenant.
The requirements and deadlines set forth in Exhibit B shall apply equally to the
Phase I Tenant Improvements and the Phase II Tenant Improvements, as though
stated separately in full for each of the Phase I Tenant Improvements and the
Phase II Tenant Improvements. Landlord hereby notifies Tenant that Landlord will
require Tenant to remove the Phase II Tenant Improvements from the Premises upon
the expiration or earlier termination of the Lease.
     Section 5. Performance of Work. As soon as practicable after Tenant and
Landlord initial and attach to the Lease as Exhibit B-2 a true and complete copy
of the Approved Final Drawings for each Phase, Landlord (acting on behalf of
Tenant) shall submit the Approved Final Drawings for such Phase to the
governmental authorities having rights of approval over the Work and shall apply
for the necessary approvals and building permits. Landlord and Tenant agree that
the Approved Final Drawings for the Phase I Tenant Improvements will not be put
out for bid to general contractors as was contemplated by the original Lease;
rather, as soon as practicable after Landlord or its representatives have
received all necessary approvals and building permits for the Phase I Tenant
Improvements, Landlord and Tenant will cause the General Contractor to award
subcontracts for the Phase I Tenant Improvements for the following trades on a
design/build basis: plumbing, mechanical, electrical and fire protection; and to
put the Approved Final Drawings for the Phase I Tenant Improvements out for bid
to several licensed, bonded and insured subcontractors for the remaining trades.
Both Landlord and Tenant shall have the right to approve the selected
subcontractors for the Phase I Tenant Improvements, which may or may not be the
lowest bidders. Landlord shall cause the commencement of construction by the
General Contractor of the Phase I Tenant Improvements as soon as practicable
after: (1) roof and sprinklers are completed in the shell construction and a
signed-off permit is received for the shell sprinkler work; (2) receipt of the
signed construction contract between the General Contractor and the Tenant; and
(3) receipt of a building permit for the Phase I Tenant Improvements. Except as
hereinafter expressly provided to the contrary, Landlord shall cause the
performance of the Work using (except as may be stated or otherwise shown in the
Approved Final Drawings) building standard materials, quantities and procedures
then in use by Landlord (“Building Standards”). The Phase II Tenant Improvements
shall also not be put out for bid to general contractors as was contemplated by
the original Lease, but shall be contracted on a design/build basis as described
above for the Phase I Tenant Improvements, unless otherwise mutually agreed by
Landlord and Tenant. Landlord, on behalf of and for the account of Tenant, shall
maintain, and cause to be maintained, during the construction of the Tenant
Improvements, to the extent that Tenant has not procured such insurance,
insurance of the types and in the amounts specified in Exhibit B-1 attached
hereto and in Section 12 of the Lease, together with builders’ risk insurance
for the amount of the completed value of the Tenant Improvements on an all-risk
non-reporting form covering all improvements under construction, including
building materials, and other insurance in amounts and against such risks as the
Landlord shall reasonably require in connection with the Tenant Improvements.
     Section 9. Tenant Improvement Costs. Landlord will make payments to General
Contractor from the Tenant Improvement Allowance to pay for Tenant Improvement
Costs in accordance with Exhibit B. Payment of the construction management fee
(the “CM Fee”) shall be made monthly to Legacy Partners Commercial CDS, subject
to a 5% retention until completion of the punchlist items. All other payments of
the Tenant Improvement Allowance shall be by progress payments to the General
Contractor not more frequently than once per month and only after satisfaction
of Landlord’s standard tenant improvement allowance disbursement requirements.

2.

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     Section 10. Excess Tenant Improvement Costs. All of the Tenant Improvement
Allowance (including the Amortized Excess TI Costs) is being allocated to the
Phase I Tenant Improvements. The portion of the Excess Tenant Improvement Costs
in excess of the Amortized Excess TI Costs allocable to the Phase I Tenant
Improvements shall be paid by Tenant, in cash, to Landlord together with
Tenant’s delivery of its signed counterpart of this Amendment. The portion of
the Excess Tenant Improvement Costs in excess of the Amortized Excess TI Costs
allocable to the Phase II Tenant Improvements shall be paid by Tenant, in cash,
to Landlord on or before October 1, 2000. Interest on these funds will be paid
to the Tenant at a standard market interest rate upon Substantial Completion of
the Phase II Tenant Improvements and disbursement of all funds. Landlord shall
have no obligation to proceed with the respective Phase of the Tenant
Improvements unless and until Tenant shall have so paid the applicable portion
of the Excess Tenant Improvement Costs. Any delay in making the payments
required under this Section 10 shall be deemed to be “Tenant Delays”.
          2.3 Rent. The following is added to Section 3 of the Lease:
     3.1 Phase I Premises Rent Commencement Date: Notwithstanding the foregoing
provisions of this Section 3, Tenant’s obligation to pay Rent for the Phase I
Premises shall commence on the earlier to occur of (i) substantial completion of
the Phase I Tenant Improvements in accordance with the terms and provisions of
Exhibit B, or (ii) January 1, 2001 (the “Phase I Premises Rent Commencement
Date”). For the period commencing on the Phase I Premises Rent Commencement Date
and continuing up to the Phase II Premises Commencement Date (defined in
Section 3.2 below) (the “Early Occupancy Period”), Tenant shall pay a percentage
of all Rent (excluding any utilities separately metered to the Phase I Premises)
based upon the proportion that the area of the Phase I Premises bears to the
total area of the Premises.
     3.2 Phase II Premises Rent Commencement Date: Notwithstanding the foregoing
provisions of this Section 3, Tenant’s obligation to pay Rent for the Phase II
Premises shall commence on the earlier to occur of (i) substantial completion of
the Phase II Tenant Improvements in accordance with the terms and provisions of
Exhibit B, or (ii) January 1, 2001 (the “Phase II Premises Rent Commencement
Date”). From and after the Phase II Premises Commencement Date, Tenant shall pay
one hundred percent (100%) of all Rent as specified in the Basic Lease
Information.”
     3. Effect of Amendment: Except as modified herein, the terms and conditions
of the Lease shall remain unmodified and continue in full force and effect. In
the event of any conflict between the terms and conditions of the Lease and this
Amendment, the terms and conditions of this Amendment shall prevail. Tenant
hereby renews its obligations to Landlord for the full, prompt and timely
payment of all rents and other sums required to be paid by Tenant during the
term of the Lease as herein modified, and for the full, prompt and timely
performance of, compliance with and observation of all the terms contained in
the Lease as herein modified.
     4. Definitions: Unless otherwise defined in this Amendment, all terms not
defined in this Amendment shall have the meaning set forth in the Lease.
     5. Authority: Subject to the provisions of the Lease, this Amendment shall
be binding upon and inure to the benefit of the parties hereto, their respective
heirs, legal representatives, successors and assigns. Each party hereto and the
persons signing below warrant that the person signing below on such party’s
behalf is authorized to do so and to bind such party to the terms of this
Amendment.

3.

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IN WITNESS WHEREOF, the parties have executed this Amendment as of the date and
year first above written.

          Tenant:

ABAXIS, INC.,
a California corporation
      By:   /s/ Robert Milder         Name:   Robert Milder        Title:   COO 
      By:   /s/ Donald J. Stewart         Name:   Donald J. Stewart       
Title:   CFO        Landlord:

PRINCIPAL DEVELOPMENT INVESTORS, LLC,
a Delaware limited liability company
      By:   PRINCIPAL LIFE INSURANCE COMPANY,
an Iowa corporation, its member             By:   /s/ Doug Kintzie        
Name:   Doug Kintzie      Title:   Assistant Director, Commercial Real Estate   
        By:   /s/ Rod Vogel         Name:   Rod Vogel        Title:   Director,
Commercial Real Estate     

4.

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EXHIBIT B-1
CONSTRUCTION INSURANCE REQUIREMENTS
Before commencing work, the General Contractor shall procure and maintain at its
sole cost and expense until completion and final acceptance of the work, at
least the following minimum levels of insurance.

A.   Workers’ Compensation in statutory amounts and Employers Liability
Insurance in the minimum amounts of $100,000 each accident for bodily injury by
accident and $100,000 each employee for bodily injury by disease with a $500,000
policy limit, covering each and every worker used in connection with the
contract work.   B.   Comprehensive General Liability Insurance on an occurrence
basis including, but not limited to, protection for Premises/Operations
Liability, Broad Form Contractual Liability, Owner’s and Contractor’s
Protective, and Products/Completed Operations Liability*, in the following
minimum limits of liability.

     
Bodily Injury, Property Damage, and
  $2,000,000/each occurrence
Personal Injury Liability
  $3,000,000/aggregate

 

*   Products/Completed Operations Liability Insurance is to be provided for a
period of at least one (1) year after completion of work.

    Coverage should include protection for Explosion, Collapse and Underground
Damage.   C.   Comprehensive Automobile Liability Insurance with the following
minimum limits of liability.

     
Bodily Injury and Property
  $1,000,000/each occurrence
Damage Liability
  $2,000,000/aggregate

    This insurance will apply to all owned, non-owned or hired automobiles to be
used by the General Contractor in the completion of the work.   D.   Umbrella
Liability Insurance in a minimum amount of five million dollars ($5,000,000),
providing excess coverage on a following-form basis over the Employer’s
Liability limit in Paragraph A and the liability coverages outlined in
Paragraphs B and C.   E.   Equipment and Installation coverages in the broadest
form available covering General Contractor’s tools and equipment and material
not accepted by Tenant. Tenant will provide Builders Risk Insurance on all
accepted and installed materials.

All policies of insurance, duplicates thereof or certificates evidencing
coverage shall be delivered to Landlord prior to commencement of any work and
shall name Landlord, and its partners and lenders as additional insureds as
their interests may appear. All insurance policies shall (1) be issued by a
company or companies licensed to be business in the state of California,
(2) provide that no cancellation, non-renewal or material modification shall be
effective without thirty (30) days prior written notice provided to Landlord,
(3) provide no deductible greater than $15,000 per occurrence, (4) contain a
waiver to subrogation clause in favor of Landlord, and its partners and lenders,
and (5) comply with the requirements of Sections 12 of the Lease to the extent
such requirements are applicable.