Exhibit 10.17

 

SUBLEASE TERMINATION AGREEMENT

 

This Sublease Termination Agreement (“Agreement”) is entered into as of the 31st
day of July, 2020, by and between NOVABAY PHARMACEUTICALS, INC., a Delaware
corporation (“Sublandlord”), and ZYMERGEN INC., a Delaware corporation
(“Subtenant”), with reference to the following:

 

A.     Sublandlord and Emery Station Office II, LLC, a California limited
liability company (“Landlord”), are party to that certain Office Lease dated as
of June 3, 2004 (as amended, the “Master Lease”), pursuant to which Sublandlord
leases from Landlord premises comprised of certain office and laboratory space
containing approximately 16,465 rentable square feet (as more particularly
described in the Master Lease, the “Master Premises”) and located at
EmeryStation North, 5980 Horton Street, Emeryville, California (the “Project” or
“Building”).

 

B.     The term of the Master Lease is scheduled to expire on October 31, 2020
(“Scheduled Master Lease Termination Date”), and Landlord desires to enter into
an amendment to the Master Lease with Sublandlord (the “Master Lease Early
Termination Amendment”), pursuant to which Landlord may terminate the Master
Lease prior to the Scheduled Master Lease Termination Date by the delivery of
written notice to Sublandlord in accordance with the Master Lease Early
Termination Amendment.

 

C.     Sublandlord and Subtenant are parties to that certain Sublease, dated as
of July 11, 2016 (the “Sublease”), pursuant to which Subtenant subleases from
Sublandlord the Master Premises (hereinafter referred to as, the “Sublease
Premises”). Capitalized terms used herein but not otherwise defined shall have
the meanings ascribed thereto in the Sublease.

 

D.     The Term of the Sublease is scheduled to expire on October 21, 2020 (the
“Scheduled Sublease Termination Date”), and Sublessee desires to terminate the
Sublease prior to the Scheduled Sublease Termination Date and contemporaneously
with the Master Lease pursuant to the Master Lease Early Termination Amendment.

 

E.     Landlord and Subtenant are parties to a lease (as amended, the “Zymergen
Direct Lease”), pursuant to which Subtenant leases from Landlord certain
premises within the Building as of the date hereof (the “Zymergen Direct Lease
Premises”) which are adjacent to the Sublease Premises.

 

F.     Subtenant desires to enter into an amendment to the Zymergen Direct Lease
with Landlord (the “Zymergen Direct Lease Amendment”), pursuant to which
Subtenant shall (i) perform the scope of restoration work generally described on
Exhibit A attached hereto (the “Restoration Work”), (ii) surrender the Sublease
Premises as of the Termination Date (defined below), except for the
approximately 325 rentable square foot portion of the Sublease Premises located
on the 3rd floor of the Building (the “3rd Floor Retained Premises”) and a 3,133
rentable square foot portion of the Sublease Premises located on the 5th floor
of the Building (the “5th Floor Retained Premises, and collectively with the 3rd
Floor Retained Premises, the “Retained Premises”, as generally shown on Exhibit
B attached hereto), and (iii) directly lease the Retained Premises from Landlord
effective as of the day after the Termination Date. The portion of the Sublease
Premises which does not include the Retained Premises hereinafter shall be
referred to as the “Surrender Premises”.

 

G.     Accordingly, the parties wish to memorialize their agreement regarding
the termination of the Sublease described above on the terms and conditions set
forth below.

 

NOW, THEREFORE, in consideration of the foregoing recitals, the mutual promises
set forth herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby agree as
follows:

 

 

1.

Termination of Sublease. Effective as of August 31, 2020 (the “Termination
Date”), the Sublease, and the rights and obligations of Sublandlord and
Subtenant thereunder, shall be fully and finally terminated, subject to Section
2, Section 4, and Section 5 below. For the avoidance of doubt, Sublandlord and
Subtenant acknowledge and agree all of the terms and conditions of the Sublease
shall remain in full force and effect up to and including the Termination Date.

 

 

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2.

Restoration Work. On or before the Termination Date, Subtenant shall perform the
Restoration Work set forth on Exhibit A. The release of Sublandlord under
Section 7(a) of the Sublease (by incorporation of Section 17.1 of the original
Master Lease), and the indemnification of Sublandlord under Section 15 of the
Sublease shall apply to Subtenant’s performance of such Restoration Work.

 

 

3.

Surrender of Sublease Premises. Notwithstanding anything to the contrary set
forth in the Sublease or otherwise, Subtenant shall completely vacate and
surrender possession of the Surrender Premises to Landlord and Sublandlord on or
before the Termination Date with the Restoration Work completed. Provided that
Subtenant so surrenders and vacates the Surrender Premises, Subtenant shall be
deemed to have completely vacated and surrendered possession of the entire
Sublease Premises in accordance with the Sublease.

 

 

4.

Expenses. As soon as practicable after the Termination Date, Sublandlord shall
reconcile (a) Subtenant’s total payments of Expenses under the Sublease for the
current year through the Termination Date (“Estimated Expenses”) against (b)
Sublandlord’s actual liability for “Operating Expenses” and “Taxes” under the
Master Lease for such period, as set forth in the applicable Landlord’s
Statement (defined in Section 4.2 of the Master Lease) (“Actual Expenses”). If
Subtenant’s payments of Estimated Expenses are less than Actual Expenses, then
Subtenant shall pay the difference to Sublandlord within thirty (30) days after
Subtenant’s receipt of Sublandlord’s invoice therefor. If Subtenant’s payments
of Estimated Expenses are greater than Actual Expenses, then Sublandlord shall
pay the difference to Subtenant within thirty (30) days after Sublandlord’s
receipt of the applicable Landlord’s Statement.

 

 

5.

Security Deposit. Sublandlord currently holds a security deposit under the
Sublease in the amount of $197,580.00 (“Security Deposit”). Sublandlord shall
return the Security Deposit to Subtenant within ten (10) days after the date
that Landlord return to Sublandlord its security deposit under the Master Lease.

 

 

6.

Release. As of the Termination Date:

 

 

a.

Except with respect to the respective obligations of the parties under Section
2, Section 4, and Section 5 above which shall survive the termination of the
Sublease as provided herein, each party, for itself and on behalf of its
officers, directors, affiliates, successors and assigns, hereby relieves,
releases, and discharges the other party from any and all claims, debts,
liabilities, demands, obligations, promises, acts, agreements, costs, expenses,
(including but not limited to attorneys' fees), damages, actions and causes of
action, of whatsoever kind or nature, whether now known or unknown, suspected or
unsuspected, disclosed or undisclosed, based on, arising out of, or in
connection with the Sublease Premises, the Sublease, or the Master Lease, or any
acts, conduct, or omissions prior to the Termination Date; and

 

 

b.

Each Party has been fully advised by its respective attorney of the contents of
section 1542 of the Civil Code of the State of California, and that section and
the benefits thereof are hereby expressly waived, except with respect to the
respective obligations of the parties under Section 2, Section 4, and Section 5
above.  Section 1542 reads as follows:

 

“Section 1542.  (General Release - Claims Extinguished.)  A general release does
not extend to claims which the creditor does not know or suspect to exist in his
or her favor at the time of executing the release, which if known by him or her
must have materially affected his or her settlement with the debtor.”

 

 

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7.

Notices. Any notices in connection with the Sublease or this Agreement shall be
delivered in accordance with the terms of the Sublease, as if integrated into
this Agreement mutatis mutandis, to the addresses of the parties hereto as
follows:

 

Subtenant:

 

Zymergen Inc.

5980 Horton Street, Suite 105

Emeryville, California 94608

Attn: VP Real Estate

 

with a copy to:

 

Zymergen Inc.

5980 Horton Street, Suite 105

Emeryville, California 94608

Attn: General Counsel

Sublandlord:

 

2000 Powell Street, Suite 1150

Emeryville, CA 94608

Attn: CEO and General Counsel

   

 

8.

Time of Essence. Time is of the essence of this Agreement.

 

 

9.

Heirs, Successors and Assigns. This Agreement shall inure to the benefit of, and
shall be binding upon, the heirs, successors and assigns of the parties hereto,
and each of them.

 

 

10.

Integration. This Agreement constitutes a single, integrated written
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expressing the entire agreement of the parties hereto relative to the subject
matter hereof. Except as otherwise provided herein, no covenants, agreements,
representations, or warranties of any kind whatsoever have been made by any
party hereto. All prior discussions and negotiations have been and are merged
and integrated into, and are superseded by, this Agreement. This Agreement shall
not be amended except by the written agreement of all parties hereto.

 

 

11.

Severability. In the event that any provision of this Agreement should be held
to be void, voidable, or unenforceable, the remaining portions hereof shall
remain in full force and effect.

 

 

12.

Attorneys' Fees. In the event that any legal action, suit or other proceeding is
instituted to remedy, prevent or obtain relief from a breach of this Agreement,
or if any legal action, suit or proceeding is instituted which arises out of a
breach of this Agreement, the prevailing party shall recover all of such party's
costs and attorneys' fees incurred in each and every such action, suit or other
proceeding, including any and all appeals or petitions therefrom.

 

 

13.

Execution in Counterparts. This Agreement may be executed and delivered in two
or more counterparts, each of which, when so executed and delivered, shall be an
original but such counterparts shall together constitute but one and the same
instrument and Agreement. This Agreement may be executed in so-called “pdf”
format and each party has the right to rely upon a pdf counterpart of this
Agreement signed by the other party to the same extent as if such party had
received an original counterpart.

 

 

14.

Representative Capacity. Each party executing this Agreement hereby represents
and warrants that the individual executing this Agreement on behalf of such
party has full power and authority to bind such party to the terms hereof.

 

 

15.

Interpretation. The parties have been represented by counsel in the preparation
and negotiation of this Agreement, and this Agreement shall be construed
according to the fair meaning of its language. The rule of construction to the
effect that ambiguities are to be resolved against the drafting party shall not
be employed in interpreting this Agreement. Unless the context clearly requires
otherwise, (i) the plural and singular numbers shall each be deemed to include
the other; (ii) the masculine, feminine, and neuter genders shall each be deemed
to include the others; (iii) “shall,” “will,” or “agrees” are mandatory, and
“may” is permissive; (iv) “or” is not exclusive; (v) “includes” and “including”
are not limiting; and (vi) “days” means calendar days unless specifically
provided otherwise.

 

 

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16.

Contingencies. This Agreement is contingent upon (i) Landlord and Sublandlord
contemporaneously herewith entering into the Master Lease Early Termination
Amendment, (ii) Landlord terminating the Master Lease pursuant to the Master
Lease Early Termination Amendment, and (iii) Landlord and Subtenant
contemporaneously herewith entering into the Zymergen Direct Lease Amendment.
Either party may terminate this Agreement by providing written notice thereof to
the other party on or before the date that is thirty (30) days after the date of
mutual execution and delivery of this Agreement if (a) Landlord and Sublandlord
fail to enter into the Master Lease Early Termination Amendment
contemporaneously herewith, (b) Landlord fails to terminate the Master Lease
pursuant to the Master Lease Early Termination Amendment, and (c) Landlord and
Subtenant fail to enter into the Zymergen Direct Lease Amendment
contemporaneously herewith. If this Agreement is terminated as provided above in
this Section 16, this Agreement shall be null and void and of no force or effect
and the Master Lease and the Sublease shall continue in full force and effect as
if this Agreement had not been executed. 

 

 

[Signature page follows.]

 

 

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In witness whereof, Sublandlord and Subtenant have executed this Agreement as of
the date first set forth above.

 

 

 

SUBLANDLORD:

 

NOVABAY PHARMACEUTICALS, INC.,

a Delaware corporation

 

 

By: ___/s/ Justin Hall_______________

Name: Justin Hall

Title: CEO

Date: July 30, 2020

 

 

 

SUBTENANT:

 

ZYMERGEN INC.,

a Delaware corporation

 

By: __/s/ Enakshhi Singh____________

Name: Enakshi Singh

Title: CFO

Date: July 30, 2020

 

 

CONSENT OF LANDLORD

 

The Landlord of the Master Lease, by signing below, consents to this
modification of the Sublease.

 

EMERY STATION OFFICE II, LLC,

a California limited liability company

 

By:

EMERY STATION ASSOCIATES II, LLC,

a California limited liability company

Its:

Managing Member

 

By:         Wareham – NZL,

a California limited liability

company

 

Its:         Managing Member

 

By: ___/s/ Richard K Robbins________

Richard K. Robbins, Manager

 

Date:       August 4, 2020

 

 

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EXHIBIT A

 

RESTORATION WORK

 

 

1.

Demise the Surrender Premises from (a) the Retained Premises, and (b) other
adjacent space within the Zymergen Direct Lease Premises, all as generally shown
on Schedule 1 attached hereto, such demising to be constructed so as to comply
with applicable Law and match existing building finishes in the Sublease
Premises.

 

 

2.

In lieu of replacing affixed lab benches, sink and shelving that were removed
from the original Surrender Premises, leave in place the fifty-five (55)
unaffixed lab benches within the hatched portion of the Surrender Premises shown
on Schedule 2 attached hereto, which benches are highlighted and further
described thereon. For the avoidance of doubt, the units of casework within the
Surrender Premises shown on Schedule 2 and highlighted thereon are the property
of Landlord and shall remain in place.

 

 

3.

Install an emon demon measuring device (reasonably similar to those existing
elsewhere in the Building) at the subpanel L530S served by the existing backup
generator that serves the Surrender Premises.

 

 

4.

Disconnect from the air compressor in the Retained Premises the compressed air
piping currently located within the Surrender Premises. Such piping shall be
disconnected at a point within the Surrender Premises in a way reasonably
acceptable to Landlord such that Landlord may, in its sole and absolute
discretion, elect to connect said piping to another source of compressed air.

 

 

5.

Remove data/telecommunications cabling installed within the Surrender Premises,
provided that Landlord notifies Subtenant at least fifteen (15) days prior to
the Termination Date that Subtenant shall be required to remove same.

 

 

6.

Leave in place (a) the affixed electrical distribution poles within the office
portion of the Surrender Premises, and (b) the affixed server racks within the
IT closet within the Surrender Premises.

 

 

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SCHEDULE 1

 

DEMISING PLAN

 

 

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SCHEDULE 2

 

FURNITURE PLAN

 

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EXHIBIT B

 

RETAINED PREMISES

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