Document:

Exhibit 10.12

 

OFFICE LEASE

 

This OFFICE LEASE (the “Lease”), dated March 17, 2003, for reference purposes only, is by and between Marvin L. Oates, Trustee of the Marvin L. Oates Trust, dated March 7, 1995, as Amended and Restated December 20, 2001 and Frank C. Ramos and Joanne M. Ramos as husband and wife (“Landlord”), and Arcadia Biosciences, Inc., an Arizona Corporation (“Tenant”).

 

1.                                      LEASE OF PREMISES. In consideration of the Rent (as defined at Section 6) and the provisions of this Lease, Landlord leases to Tenant and Tenant leases from Landlord the Premises shown on the floor plan attached hereto as Exhibit “A” (the “Floor Plan”) and further described in Section 2(a). The Premises are located within the Building and Project described in Section 2(b). Tenant shall have the non-exclusive right (unless otherwise provided herein) in common with Landlord, other tenants, subtenants and invitees, to use of the Common Areas (as defined at Section 2(n)).

 

2.                                      DEFINITIONS. As used in this Lease, the following terms shall have the following meanings:

 

(a)                                 Premises: That portion of the Building containing approximately 8,512 square feet of Rentable Area and approximately 7,600 square feet of Usable Area (as may be adjusted pursuant to Section 6(a)(i) below), as shown on the Floor Plan, located on the second floor of the Building and known as Suite 200.

 

(b)                                 Project: The building of which the Premises are a part (the “Building”) and any other buildings or improvements on the real property (the “Property”) located at 202 Cousteau Place, Davis, California and further described as: two (2) story freestanding building containing a total Rentable Area of approximately 105,307 rentable square feet. The Project is known as Mace Ranch Corporate Center.

 

(c)                                  Rentable Area: As to both the Premises and the Project, the respective measurements of floor area as may from time to time be subject to lease by Tenant and all tenants of the Project, respectively, as determined by Landlord and applied on a consistent basis throughout the Project.

 

(d)                                 Tenant’s Proportionate Share: eight and nine one hundredths (8.09%). Such share is a fraction, the numerator of which is the Rentable Area of the Premises, and the denominator of which is the Rentable Area of the Project.

 

(e)                                  Commencement Date: The anticipated Commencement Date shall be ninety (90) days after issuance of building permit as determined pursuant to Section 3 below.

 

(f)                                   Term: sixty (60) months, (as may be adjusted pursuant to Section 3), commencing on the Commencement Date and expiring at midnight on the Expiration Date, except where Tenant has extended the Lease according to the terms set forth in Section 3 below. The expiration date of the initial term shall be established on commencement. The Expiration Date shall be sixty (60) months after the Commencement Date (as may be adjusted pursuant to Section 3). The initial term may be extended at Tenant’s election for up to three (3) additional three (3) year periods as specified in section 45.

 

(g)                                  Base Rent: Base Rent shall be payable as follows:÷

 

Months 01 — 24                          $15,321.60 per month ($1.80 per Rentable square foot per month)

Months 25 — 36                          $15,747.20 per month ($1.85 per Rentable square foot per month)

Months 37 — 48                          $16,172.80 per month ($1.90 per Rentable square foot per month)

Months 49 — 60                          $16,598.40 per month ($1.95 per Rentable square foot per month)

 

(h)                                 Security Deposit (Section 7): See Addendum #47.

 

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(i)                                     Tenant’s First Adjustment Date: The first day of the calendar month following the Commencement Date plus twenty-four (24) months.

 

(j)                                    Index (Section 5(a) (ii)): United State Department of Labor, Bureau of Labor Statistics Consumer Price Index, Subgroup “All Items,” for All Urban Consumers - San Francisco / Oakland, (1982-84 = 100).

 

(k)                                 Base Year: 2003

 

(1)                                 Expense Stop: N/A

 

(m)                             Tenant’s Use Clause (Section 9): general office/plant genetics laboratory

 

(n)                                 Common Areas: The building lobbies, common corridors and hallways, restrooms, garage and parking areas, stairways, elevators and other generally understood public or common areas. Landlord shall have the right, in Landlord’s sole discretion, from time to time, except where such action would affect tenant’s reasonable use and enjoyment of the property, common areas or premises:

 

(i)                                     To make changes to the Common Areas, including, without limitation, changes in the location, size, shape and number of driveways, entrances, parking spaces, parking areas, loading and unloading areas, ingress, egress, direction of traffic, landscaped areas, walkways and utility raceways;

 

(ii)                                  To regulate or restrict the use of the Common Areas;

 

(iii)                               To close temporarily any of the Common Areas for maintenance purposes so long as reasonable access to the Premises remains available;

 

(iv)                              To designate other land outside the boundaries of the Project to be a part of the Common Areas;

 

(v)                                 To add additional buildings and improvements to the Common Areas;

 

(vi)                              To use the Common Areas while engaged in making additional improvements, repairs or alterations to the Project, or any portion thereof, and

 

(vii)                           To do and perform such other acts and make such other changes in, to or with respect to the Common Areas and Project as Landlord may, in the exercise of sound business judgment, deem to be appropriate.

 

(o)                                 Parking (Section 33): Tenant shall be permitted to park up to 20 cars on a non-exclusive basis in the area(s) designated by Landlord for parking. Tenant shall abide by any and all parking regulations and rules established from time to time by Landlord or Landlord’s parking operator.

 

(p)                                 Broker(s):

 

	
Landlord’s:
    	
 
    	
BUZZ OATES REAL ESTATE
    
	
 
    	
 
    	
 
    
	
Tenant’s:
    	
 
    	
SAM HARRISON — REMAX DAVIS
    
	
 
    	
 
    	
 
    
	
(q)                                 Landlord’s   Mailing Address:
    	
 
    	
C/O Buzz Oates Management Services
    
	
 
    	
 
    	
8615 Elder Creek Road
    
	
 
    	
 
    	
Sacramento, CA 95828
    
	
 
    	
 
    	
(916) 381-3843 (telephone) (916) 381-7826 facsimile)
    
	
 
    	
 
    	
 
    
	
(r)                                    Tenant’s   Mailing Address:
    	
 
    	
4455 East Camelback Rd, Suite B-200
    

 

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Phoenix, AZ 85018
    
	
 
    	
 
    	
(602)-474-(3789 (telephone) (602)-474-3799 (facsimile)
    

 

3.                  TERM. The term of this Lease shall commence on the Commencement Date and shall run for 60 (sixty) months. The “Commencement Date” shall mean the day upon which the Leasehold Improvements have been Substantially Completed as that term is defined below). Leasehold Improvements will be constructed according to the terms and conditions listed on Exhibit A, which is attached and incorporated into this Lease. If requested by Landlord, Tenant shall execute an amendment to this Lease memorializing the Commencement Date once such date has occurred. The Leasehold Improvements shall be deemed to be “Substantially Completed” when Tenant has received a Certificate of Occupancy or Temporary Certificate of Occupancy for the Premises. (The foregoing definition of Substantially Completed shall also define the terms “Substantial Completion” and “Substantially Complete.”).

 

4.                  DELIVERY OF POSSESSION. Landlord shall use commercially reasonable efforts to deliver the Premises to Tenant immediately upon execution of this agreement. .If for any reason Landlord cannot deliver possession of the Premises to Tenant, Landlord shall not be subject to any liability therefor, nor shall such failure affect the validity of this Lease, or the obligations of Tenant hereunder, but in such case, Tenant shall not, except as otherwise provided herein, be obligated to pay rent or perform any other obligation of Tenant under the terms of this Lease until the Commencement Date.

 

5.                  TENANT IMPROVEMENTS.

 

(a)                                 On or before February 15, 2003, Tenant shall prepare or cause to be prepared and delivered to Landlord detailed final plans and specifications showing all improvements and alterations which Tenant desires to make to the Premises. Landlord shall approve or disapprove said plans and specifications within fifteen (15) business days of the receipt thereof, stating the reason for any disapproval in writing. If Tenant has not received comment within said fifteen (15) day period from Landlord in writing, Landlord’s approval shall be deemed granted. Once approved by Landlord and Tenant, the aforesaid final plans and specifications shall be deemed to be “Tenant Plans”.

 

(b)                                 So long as Tenant is not in default hereunder, Landlord agrees to pay to Tenant’s contractor as designated in writing by tenant (“Contractor”) an allowance of twenty seven dollars ($27) per square foot of usable Square Feet or two hundred five thousand and two hundred Dollars ($205,200.00) (“Allowance”) to be applied to the costs and expenses incurred in connection with the completion of the Tenant Plans. Tenant shall submit Contractor’s bills to Landlord at the completion of every calendar month and Landlord shall make payments of the Allowance to Contractor within ten (10) days thereafter. .

 

(c)                                  Tenant shall submit said Tenant Plans to the City of Davis within ten (10) days after Landlord’s approval, and shall use all reasonable efforts to obtain all necessary permits from the City of Davis. Tenant shall cause the tenant improvement work in the Premises to be completed promptly after the issuance of a permit of Tenant Improvements at Tenant’s expense in accordance with Tenant’s Plans. The Lease will commence upon the earlier of the completion of tenant improvements or June 17, 2003 subject only to delays caused by events of force majeure. In the performance of such work, Tenant shall be governed by Article 12 of the Lease, and all work shall be performed in compliance with all governmental building codes in an acceptable workmanlike manner.

 

6.                                      RENT.

 

(a)                                 Payment of Base Rent.

 

(i)                                     Tenant agrees to pay the Base Rent for the Premises as shown in Section 2(g) above. Base Rent, however, shall be calculated based upon the Rentable square feet within the Premises, determined in accordance with the following: within sixty (60) days after completion of construction of the Premises, Landlord’s architect shall calculate the Rentable Area and Useable Area of the Premises by application of the standard method for measuring floor area in office buildings (ANSI/BOMA Z65.1-1996). Such architect shall notify Landlord and Tenant of the results of such calculation and the Lease shall be amended to reflect the actual Rentable Area and

 

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Useable Area of the Premises and the resulting changes in Base Rent. In the event that one or more rental payments become due prior to determination of Rentable Area of the Premises pursuant to the above procedures, Tenant shall pay Base Rent based upon the schedule stated above. Upon final determination of Rentable Area of the Premises, the estimated Base Rent paid by Tenant shall be compared to the actual Base Rent due for such period and, within thirty (30) days, Tenant shall pay Landlord any deficiency or Landlord shall credit any excess payment against Tenant’s next installment of Base Rent. Monthly Installments of Base Rent shall be payable in advance on the first day of each calendar month of the Term. If the Term begins (or ends) on other than the first (or last) day of a calendar month, the Base Rent for the partial month shall be prorated on a per diem basis. Tenant shall pay Landlord the first monthly installment of Base Rent when Tenant executes the Lease.

 

(ii)                                  The Base Rent for the option periods shall be adjusted annually (the Adjustment Date”) pursuant to Addendum #45, commencing on Tenant’s First Adjustment Date.

 

(b)                                 Project Operating Costs.

 

(i)                                     In order that the Rent payable during the Term reflects any increase in Project Operating Costs, Tenant agrees to pay to Landlord as Rent, Tenant’s Proportionate Share of all reasonable increases in costs, expenses and obligations attributable to the Project and its operation, all as provided below.

 

(ii)                                  If, during any calendar year during the Term, Project Operating Costs exceed the Project Operating Costs for the Base Year, Tenant shall pay to Landlord, in addition to the Base Rent and all other payments due under this Lease, an amount equal to Tenant’s Proportionate Share of such excess Project Operating Costs in accordance with the provisions of this Section 5(b) (ii).

 

(iii)                               The term “Project Operating Costs” shall mean all commercially reasonable direct costs and expenses incurred by Landlord for the ownership, operation, repair, maintenance, replacement, and insurance of the Building and Project including, without limitation, all those items described in the following subparagraphs (a) and (b).

 

(A)                               All taxes, assessments, and other similar governmental charges levied on or attributable to the Building or Project or their operation, including without limitation, (i) real property taxes or assessments levied or assessed against the Building or Project, (ii) assessments or charges levied or assessed against the Building or Project by any redevelopment agency, (iii) any tax measured by gross rentals received from the leasing of the Premises, Building or Project, excluding any net income, franchise, capital stock, estate or inheritance taxes imposed by the State or Federal government or their agencies, branches or departments; provided that if at any time during the Term any governmental entity levies, assesses or imposes on Landlord any (1) general or special, ad valorem or specific, excise, capital levy or other tax, assessment, levy or charge directly on the Rent received under this Lease or on the rent received under any other leases of space in the Building or Project, or (2) any license fee, excise or franchise tax, assessment, levy or charge measured by or based, in whole or in part, upon such rent, or (3) any transfer, transaction, or similar tax, assessment, levy or charge based directly or indirectly upon the transaction represented by this Lease or such other leases, or (4) any occupancy, use, per capita or other tax, assessment, levy or charge based directly or indirectly upon the use or occupancy of the Premises or other premises within the Building or Project, then any such taxes, assessments, levies and charges shall be deemed to be included in the term Project Operating Costs. If at any time during the Term, the assessed valuation of, or taxes on, the Project are not based on a completed Project having at least ninety percent (90%) of the Rentable Area occupied, then the “taxes” component of Project Operating Costs shall be adjusted by Landlord to reasonably approximate the taxes which would have been payable if the Project were completed and at least ninety percent (90%) occupied.

 

(B)                               Operating costs incurred by Landlord in maintaining and operating the Building and Project, including without limitation the following: costs of (1) utilities, including, without limitation, water, electricity, gas, heating, lighting, sewer, fire system utilities, elevator utilities, storm, drainage, waste disposal; (2) supplies, (3) insurance (including public liability, property damage, earthquake, and fire and flood, loss of rents and extended coverage insurance for the full replacement cost of the Building and Project as required by Landlord or its lenders for the Project; (4) services of independent contractors; (5) compensation

 

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(including employment taxes and fringe benefits) of all persons who perform duties connected with the operation, maintenance, repair or overhaul of the Building or Project, and equipment, improvements and facilities located within the Project including without limitation engineers, janitors, painters, floor waxers, window washers, security (if any, it being agreed that Landlord has no obligation to provide security service to the building) and parking personnel and gardeners (but excluding persons performing services not uniformly available to or performed for substantially all Building or Project tenants); (6) operation and maintenance of a room for delivery and distribution of mail to tenants of the Building or Project as required by the U.S. Postal Service (including, without limitation, an amount equal to the fair market rental value of the mail room premises); (7) management of the Building or Project, whether managed by Landlord or an independent contractor (including, without limitation, an amount equal to the fair market value of any on-site manager’s office); (8) rental expenses for (or a reasonable, depreciation allowance on) personal property used in the maintenance, operation or repair of the Building or Project; (9) costs, expenditures or charges (whether capitalized or not) required by any governmental or quasi-governmental authority; (10) amortization of capital expenses (including financing costs) (i) required by a governmental entity for energy conservation or life safety purposes, or (ii) made by Landlord to reduce Project Operating Costs; and (11) any other costs or expenses incurred by Landlord under this Lease and not otherwise reimbursed by tenants of the Project. If at any time during the Term, less than ninety percent (90%) of the Rentable Area of the Project is occupied, the “operating costs” component of Project Operating Costs shall be adjusted by Landlord to reasonably approximate the operating costs which would have been incurred if the Project had been at least ninety percent (90%) occupied.

 

Notwithstanding the foregoing, the costs and expenses relating to ownership, maintenance and operation of the Premises shall not include the following: the cost of removing any violation of any present laws, ordinances, orders, rules, regulations or requirements of federal, state, municipal and other governmental bodies having jurisdiction over the Property; the cost of tenant installations, and decorations incurred in connection with preparing space for a new tenant (including Tenant); salaries of personnel above the level of building manager; any cost for which Landlord is reimbursed by a tenant in the Building; any cost for which Landlord is reimbursed by insurance proceeds; any costs incurred by Landlord as a result of the employment of entities affiliated with Landlord in excess of the cost Landlord would have incurred had unaffiliated entities been employed by Landlord; and costs incurred in connection with the transfer or other disposition of the Building and/or the Property (not including any increase in any taxes due to such transfer), including legal fees. If the Lease shall terminate or the lease Term shall expire before the amount of any credit due to Tenant for Reimbursable Expenses shall be expended, Landlord shall promptly reimburse such amount to Tenant.

 

(c)                                  Tenant’s Proportionate Share of Project Operating Costs shall be payable by Tenant to Landlord as follows:

 

(i)                                     Beginning with the calendar year following the Base Year and for each calendar year thereafter (“Comparison Year”), Tenant shall pay Landlord an amount equal to Tenant’s Proportionate Share of the Project Operating Costs Incurred by Landlord in the Comparison Year which exceeds the total amount of Project Operating Costs payable by Landlord for the Base Year. This excess is referred to as the “Excess Expenses.”

 

(ii)                                  To provide for current payments of Excess Expenses, Tenant shall, at Landlord’s request, pay as additional rent during each Comparison Year, an amount equal to Tenant’s Proportionate Share of the Excess Expenses payable during such Comparison Year, as estimated by Landlord from time to time. Such payments shall be made in monthly installments, commencing on the first day of the month following the month in which Landlord notifies Tenant of the amount it is to pay hereunder and continuing until the first day of the month following the month in which Landlord gives Tenant a new notice of estimated Excess Expenses. It is the Landlord’s obligation hereunder to estimate from time to time the amount of the Excess Expenses for each Comparison Year and Tenant’s Proportionate Share thereof, and then to make an adjustment in the following year based on the actual Excess Expenses incurred for that Comparison Year.

 

(iii)                               On or before April 1 of each Comparison Year after the first Comparison Year (or as soon thereafter as is practical), Landlord shall deliver to Tenant a statement setting forth Tenant’s Proportionate Share of the Excess Expenses for the preceding Comparison Year. If Tenant’s Proportionate Share of the actual Excess Expenses for the previous Comparison Year exceeds the total of the estimated monthly payments made by Tenant for such year, Tenant shall pay Landlord the amount of the deficiency within ten (30) days of the

 

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receipt of the statement. If such total exceeds Tenant’s Proportionate Share of the actual Excess Expenses for such Comparison Year, then Landlord shall credit against Tenant’s next ensuing monthly installment(s) of additional rent an amount equal to the difference until the credit is exhausted. If a credit is due from Landlord on the Expiration Date, Landlord shall pay Tenant the amount of the credit. The obligations of Tenant and Landlord to make payments required under this Section 5(b) (ii) (C) shall survive the Expiration Date.

 

(iv)                              Tenant’s Proportionate Share of Excess Expenses in any Comparison Year having less than 365 days shall be appropriately prorated.

 

(d)                                 If any dispute arises as to the amount of any additional rent due hereunder, Tenant or Tenant’s representative shall have the right after reasonable notice and at reasonable times to inspect Landlord’s accounting records at Landlord’s accounting office and, if after such inspection Tenant still disputes the amount of additional rent owed, a certification as to the proper amount shall be made by an independent certified public accountant mutually accepted by Landlord and Tenant, which certification shall be final and conclusive. Tenant agrees to pay the reasonable cost of such certification unless it is determined that Landlord’s original statement overstated Project Operating Costs by more than ten percent (10%), in which case Landlord shall pay the costs. Tenant’s right to inspect Landlord’s books and records shall be limited to not more than once each calendar year and for the period one year immediately preceding the calendar year in which Tenant’s inspection occurs.

 

(e)                                  Definition of Rent. All costs and expenses which Tenant assumes or agrees to pay to Landlord under this Lease shall be deemed additional rent (which, together with the Base Rent is referred to herein as the “Rent”). The Rent shall be paid to the building manager (or other person) and at such place, as Landlord may from time to time designate in writing, without any prior demand therefor and without deduction or offset, in lawful money of the United States of America. Landlord shall inform Tenant 30 days in advance of any change to whom or to where payment is to be made, or Late Charges reference in Item 6 shall be waived.

 

(f)                                   Rent Control. If the amount of Rent or any other payment due under this Lease violates the terms of any governmental restrictions on such Rent or payment, then the Rent or payment due during the period of such restrictions shall be the maximum amount allowable under those restrictions. Upon termination of the restrictions, Landlord shall, to the extent it is legally permitted, recover from Tenant the difference between the amounts received during the period of the restrictions and the amounts Landlord would have received had there been no restrictions.

 

(g)                                  Taxes Payable by Tenant. In addition to the Rent and any other charges to be paid by Tenant hereunder, Tenant shall reimburse Landlord upon demand for any and all taxes payable by Landlord (other than net income taxes) which are not otherwise reimbursable under this Lease, whether or not now customary or within the contemplation of the parties, where such taxes are upon, measured by or reasonably attributable to (a) the cost or value of Tenant’s equipment, furniture, fixtures and other personal property located in the Premises, or the cost or value of any leasehold improvements made in or to the Premises by or for Tenant, other than Building Standard Work made by Landlord, regardless of whether title to such improvements is held by Tenant or Landlord; (b) the gross or net Rent payable under this Lease, including, without limitation any rental or gross receipts tax levied by any taxing authority with respect to the receipt of the Rent hereunder; (c) the possession, leasing, operation, management, maintenance, alteration, repair, use or occupancy by Tenant of the Premises or any portion thereof; or (d) this transaction or any document to which Tenant is a party creating or transferring an interest or an estate in the Premises. If it becomes unlawful for Tenant to reimburse Landlord for any costs as required under this Lease, the Base Rent shall be revised to net Landlord the same net Rent after imposition of any tax or other charge upon Landlord as would have been payable to Landlord but for the reimbursement being unlawful. Notwithstanding the foregoing, “taxes” shall not include any franchise, excise, corporate, succession, capital, or levy tax imposed on Landlord, or any income or any other tax, charge or levy (excluding any rental tax or sales tax which is payable to Tenant) upon the Base Rent and/or the Additional Rent reserved under the Lease or any tax, charge or levy not commonly deemed to be a real estate tax.

 

7.                                      INTEREST AND LATE CHARGES. If Tenant fails to pay when due any Rent or other amounts or charges which Tenant is obligated to pay under the terms of this Lease then commencing fifteen (15) calendar

 

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days after such amount was due, the unpaid amounts shall bear interest at the prime commercial rate then being charged by Bank of America NT & SA in effect at that time. Tenant acknowledges that the late payment of any Monthly Installment of Base Rent will cause Landlord to lose the use of that money and incur costs and expenses not contemplated under this Lease, including without limitation, administrative and collection costs and processing and accounting expenses, the exact amount of which is extremely difficult to ascertain. Therefore, in addition to interest, if any such installment is not received by Landlord within fifteen (15) days from the date it is due, Tenant shall pay Landlord a late charge of $500.00. Landlord and Tenant agree that this late charge, along with interest indicated above, represents a reasonable estimate of such costs and expenses and is fair compensation to Landlord for the loss suffered from such nonpayment by Tenant. Acceptance of any interest or late charge shall not constitute a waiver of Tenant’s default with respect to such nonpayment by Tenant nor prevent Landlord from exercising any other rights or remedies available to Landlord under this Lease.

 

8.                                      SECURITY DEPOSIT.

 

(a)                                 Tenant shall deposit with Landlord the Security Deposit set forth at Section 2(h) above, within five (5) business days of the full execution of this Lease, as security for Tenant’s faithful performance of its obligations under this Lease. If the Base Rent shall increase during the initial term of this Lease or during any extensions or renewals thereof, Tenant shall at the time of such increase, deposit with Landlord funds as an additional Security Deposit so that the total amount of the Security Deposit held by Landlord shall at all times be equal to the then current Base Rent. Landlord and Tenant agree that the Security Deposit may be commingled with funds of Landlord and Landlord shall have no obligation or liability for payment of interest on such deposit. Tenant shall not mortgage, assign, transfer or encumber the Security Deposit without the prior written consent of Landlord and any attempt by Tenant to do so shall be void, without force or effect and shall not be binding upon Landlord.

 

(b)                                 If Tenant fails to pay any Rent or other amount when due and payable under this Lease, or fails to perform any of the terms hereof, Landlord may appropriate and apply or use all or any portion of the Security Deposit for Rent payments or any other amount then due and unpaid, for payment of any amount for which Landlord has become obligated as a result of Tenant’s default or breach, and for any loss or damage sustained by Landlord as a result of Tenant’s default or breach, and Landlord may so apply or use the Security Deposit without prejudice to any other remedy Landlord may have by reason of Tenant’s default or breach. If Landlord so uses any of the Security Deposit, Tenant shall, within ten (10) days after written demand therefor, restore the Security Deposit to the full amount previously deposited; Tenant’s failure to do so shall constitute an act of default hereunder and Landlord shall have the right to exercise any remedy provided for at Section 27 hereof. Within thirty (30) days after the Term (or any extension thereof) has expired or Tenant has vacated the Premises, whichever shall last occur, and provided Tenant is not then in default on any of its obligations hereunder, Landlord shall return the Security Deposit to Tenant, or, if Tenant has assigned its interest under this Lease, to the last assignee of Tenant. If Landlord sells its interest in the Premises, Landlord may deliver the Security Deposit to the purchaser of Landlord’s interest and thereupon be relieved of any further liability or obligation with respect to the Security Deposit.

 

9.                                                      TENANT’S USE OF THE PREMISES. Tenant shall use the Premises solely for the purposes set forth in Tenant’s Use Clause. Tenant shall not use or occupy the Premises in violation of law or any covenant, condition or restriction affecting the Building or Project or the certificate of occupancy issued for the Building or Project, and shall, upon notice from Landlord, immediately discontinue any use of the Premises which is declared by any governmental authority having jurisdiction to be a violation of law or the certificate of occupancy. Tenant, at Tenant’s own cost and expense, shall comply with all laws, ordinances, regulations, rules and/or any directions of any governmental agencies or authorities having jurisdiction which shall, by reason of the nature of Tenant’s use or occupancy of the Premises, impose any duty upon Tenant or Landlord with respect to the Premises or its use or occupation. A judgment of any court of competent jurisdiction or the admission by Tenant in any action or proceeding against Tenant that Tenant has violated any such laws, ordinances, regulations, rules and/or directions in the use of the Premises shall be deemed to be a conclusive determination of that fact as between Landlord and Tenant. Tenant shall not do or permit to be done anything which will invalidate or increase the cost of any fire, extended coverage or other insurance policy covering the Building or Project and/or property located therein, and shall comply with all rules, orders, regulations, requirements and recommendations of the Insurance Services Office or any other organization performing a similar function. Tenant shall promptly upon demand reimburse Landlord for any additional premium charged for such policy by reason of Tenant’s failure to comply with the provisions of this

 

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Section. Tenant shall not do or permit anything to be done in or about the Premises which will in any way obstruct or interfere with the rights of other tenants or occupants of the Building or Project, or injure or unreasonably annoy them, or use or allow the Premises to be used for any or unlawful purpose, nor shall Tenant cause, maintain or permit any nuisance in, on or about the Premises. Tenant shall not commit or suffer to be committed any waste in or upon the Premises. The parties agree that this Lease is subject to the effect of (i) any covenants, conditions, restrictions, easements, mortgages or deeds of trust, ground leases, rights of way of record, and any other matters or documents of record; (ii) any zoning laws, environmental impact report mitigation monitoring plan, or planned unit development guidelines of the city, county and state where the Building is situated; and (iii) general and special taxes not delinquent. Tenant agrees that as to its leasehold estate, Tenant and all persons in possession or holding under Tenant, will conform to and will not violate the terms of any covenants, conditions or restrictions of record which may now or hereafter encumber the Property (hereinafter the “restrictions”). This Lease is subordinate to the restrictions and any amendments or modifications thereto.

 

10.                               SERVICES AND UTILITIES. Landlord shall furnish all normal services and utilities such as elevator service, lighting replacement for building standard lights, restroom supplies, window washing, janitorial services, heating, ventilation and air conditioning (“HVAC”) maintenance, landscape maintenance, parking lot sweeping, pest control services, and fire alarm monitoring (if installed and required) in a manner that such services are customarily furnished to comparable office buildings in the area. Landlord shall also provide water, sewer, electric, gas and trash removal services to the building as required.

 

Provided that Tenant is not in default hereunder, Landlord agrees to furnish to the Premises at all times , electricity for normal desk top office equipment, .normal copying equipment, technical equipment, and “HVAC” as is reasonably required for the comfortable use and occupancy of the Premises. The normally recognized business hours for the Building are as follows: 7:00 am to 6:00 pm Monday through Friday (except Holidays), and 8:00 am to 1:00 p.m. on Saturdays. If Tenant desires HVAC and/or electricity at any other time, Tenant may override the HVAC and/or electricity system for additional heating, cooling or electricity outside of the normal business hours. Such additional HVAC and/or electricity usage shall be electronically monitored, and Tenant shall pay Landlord’s direct charges therefore on demand. Landlord shall also maintain and keep lighted the common stairs, common entries and restrooms in the Building. Landlord shall not be in default hereunder or be liable for any damages directly or indirectly resulting from, nor shall the Rent be abated by reason of (i) the installation, use or interruption of use of any equipment in connection with the furnishing of any of the foregoing services, (ii) failure to furnish or delay in furnishing any such services where such failure or delay is caused by accident or any condition or event beyond the reasonable control of Landlord, or by the making of necessary repairs or improvements to the Premises, Building or Project, or (iii) the limitation, curtailment or rationing of, or restrictions on, use of water, electricity, gas or any other form of energy serving the Premises, Building or Project, which has been imposed upon the Landlord. Landlord shall not be liable except where Landlord is found to be grossly negligent for a loss of or injury to property or business, however occurring, through or in connection with or incidental to failure to furnish any such services. If Tenant uses heat generating machines or equipment in the Premises which affect the temperature otherwise maintained by the HVAC system, Landlord reserves the right to install supplementary air conditioning units in the Premises and the cost thereof, including the cost of installation, operation and maintenance thereof, shall be paid by Tenant to Landlord upon demand by Landlord.

 

Should Tenant consume water or electric current in excess of that usually furnished or supplied for the use of premises as general office space Landlord may have installed a water meter or electrical current meter in the Premises to measure the amount of water or electric current consumed. The cost of any such meter and its installation, maintenance and repair shall be paid for by the Tenant and Tenant agrees to pay to Landlord promptly upon demand for all such water and electric current consumed as shown by said meters, at the rates charged for such services by the local public utility. If a separate meter is not installed, the excess cost for such water and electric current shall be established by an estimate made by a utility company or an electrical engineer hired jointly by Landlord and Tenant and at Tenant’s expense.

 

Nothing contained in this Section shall restrict Landlord’s right to require at any time separate metering of utilities furnished to the Premises. In the event utilities are separately metered, Tenant shall pay promptly upon demand for all utilities consumed at utility rates charged by the local public utility plus any additional expense incurred by Landlord in

 

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keeping account of the utilities so consumed. Tenant shall be responsible for the maintenance and repair of any such meters at its sole cost.

 

11.                                               CONDITION OF THE PREMISES. Tenant’s taking possession of the Premises shall be deemed conclusive evidence that as of the date of taking possession the Premises are in good order and satisfactory condition, except for such matters as to which Tenant gave Landlord notice on or before the Commencement Date. No promise of Landlord to alter, remodel, repair or improve the Premises, the Building or the Project and no representation, express or implied, respecting any matter or thing relating to the Premises, Building, Project or this Lease (including, without limitation, the condition of the Premises, the Building or the Project) have been made to Tenant by Landlord or its Broker or Sales Agent, other than as may be contained herein or in a separate exhibit or addendum, attached hereto, signed by Landlord and Tenant.

 

12.                                       CONSTRUCTION, REPAIRS AND MAINTENANCE.

 

(a)                                 Landlord’s Obligations.

 

(i)                                     Subject to reimbursement in accordance with Section 5(b), (except as otherwise provided herein), Landlord shall maintain, repair, and replace in a commercially reasonable manner as quickly as reasonably possible and as necessary the plumbing, heating, ventilating and air conditioning, lighting and other electrical and mechanical equipment, sprinkler system, elevators, and glass (unless broken or damaged due to the negligence or willful misconduct of Tenant) within the Property, and make all other repairs or replacements to the Property which Tenant is not hereby required to make. Landlord shall maintain, repair and replace as necessary the exterior of the Building, including the roof, exterior walls, drains, downspouts, and gutters. Landlord shall maintain, repair, and replace as necessary the driveways, sidewalks, parking areas, lighting, landscaping and fencing located outside of and serving the Building. Landlord’s obligations regarding any heating, ventilation and air conditioning (“HVAC”) and electrical systems shall be limited to the Building’s standard central HVAC and electrical systems, and Landlord shall have no obligation to maintain or repair any HVAC or electrical system that has been installed to accommodate Tenant’s specific use of the Premises including, without limitation, any HVAC units which control the temperature in Tenant’s computer server room (provided, however, that any contractor retained by Tenant to maintain or repair any such HVAC or electrical system shall be subject to Landlord’s reasonable approval). Landlord shall not be obligated to service, maintain, repair or replace any system or improvement in the Premises that has not been installed by Landlord at Landlord’s expense, or which is a specialized improvement requiring additional or extraordinary maintenance or repair (by way of example only, if the standard premises in the Building contain fluorescent light fixtures, Landlord’s obligation shall be limited to the replacement of Building standard fluorescent light tubes, irrespective of any incandescent fixtures that may have been installed in the Premises at Tenant’s expense). Landlord shall not be liable for, and Tenant shall not be entitled to any abatement or reduction of rent by reason of Landlord’s failure to furnish, or an interruption in, any services or utilities (including, without limitation, any interruption in telephone service caused by a failure of the cabling) when such failure is caused by accident, breakage, repairs, strikes, lockouts or other labor disturbances or labor disputes of any character or for any other causes. Tenant hereby waives the provisions of California Civil Code Section 1932(1) or any other applicable existing or future law, ordinance or governmental regulation permitting the termination of this Lease due to the interruption or failure of any services or utilities to be provided under this Lease, except to the extent such interruption or failure is caused by Landlord’s grossly negligent act or omission or willful misconduct.

 

(b)                                 Tenant’s Obligations.

 

(i)                                     Tenant shall exercise good judgment in their use of the premises and common areas so as to not damage the property or cause unnecessary wear and tear. Tenant shall be financially responsible for all maintenance and repairs caused by the negligence or willful misconduct of itself, its employees, vendors, and invitees.

 

(ii)                                  Tenant shall be responsible for all repairs and alterations in and to the Premises, Building and Project and the facilities and systems thereof, the need for which arises out of (i) Tenant’s use or occupancy of the Premises, (ii) the installation, removal, use or operation of Tenant’s Property (as defined in Section 13) in the Premises, (iii) the moving of Tenant’s Property into or out of the Building, or (iv) the negligence or

 

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willful misconduct of Tenant, its agents, contractors, employees or invitees. Tenant shall complete all repairs in full compliance with all applicable laws including, but not limited to, the Americans with Disabilities Act of 1990 and all regulations issued thereunder.

 

(iii)                               If Tenant fails to maintain the Premises in good order, condition and repair, Landlord shall give Tenant notice to do such acts as are reasonably required to so maintain the Premises. If Tenant fails to promptly commence such work and diligently prosecute it to completion, then Landlord shall have the right to do such acts and expend such funds at the expense of Tenant as are reasonably required to perform such work. Any amount so expended by Landlord shall be paid by Tenant promptly after demand with interest at the prime commercial rate then being charged by Bank of America NT & SA plus two percent (2%) per annum, from the date of such work, but not to exceed the maximum rate then allowed by law. Landlord shall have no liability to Tenant for any damage, inconvenience, or interference with the use of the Premises by Tenant as a result of performing any such work.

 

(c)                                  Compliance with Law. Landlord and Tenant shall each do all acts required to comply with all applicable laws, ordinances, and rules of any public authority relating to their respective maintenance and repair obligations as set forth herein.

 

(d)                                 Waiver by Tenant. Tenant expressly waives the benefits of any statute now or hereafter in effect which would otherwise afford the Tenant the right to make repairs at Landlord’s expense or to terminate this Lease because of Landlord’s failure to keep the Premises in good order, condition and repair.

 

(e)                                  Load and Equipment Limits. Tenant shall not place a load upon any floor of the Premises which exceeds the load per square foot which such floor was designed to carry, as determined by Landlord or Landlord’s structural engineer. The cost of any such determination made by Landlord’s structural engineer shall be paid for by Tenant upon demand. Tenant shall not install business machines or mechanical equipment which cause noise or vibration to such a degree as to cause unreasonable distress to Landlord or other Building tenants. Landlord has reviewed and approved the mechanical plan for Tenant’s leasehold improvements which are attached as Exhibit A-4.

 

(f)                                   Except as otherwise expressly provided in this Lease, Landlord shall have no liability to Tenant nor shall Tenant’s obligations under this Lease be reduced or abated in any manner whatsoever by reason of any inconvenience, annoyance, interruption or injury to business arising from Landlord’s making reasonable repairs or changes which Landlord is required or permitted by this Lease or by any other tenant’s lease or required by law to make in or to any portion of the Project, Building or the Premises. Landlord shall nevertheless use reasonable efforts to complete repairs in a timely manner and to minimize any interference with Tenant’s business in the Premises.

 

(g)                                  Tenant shall give Landlord prompt notice of any damage to or defective condition in any part or appurtenance of the Building’s mechanical, electrical, plumbing, HVAC or other systems serving, located in, or passing through the Premises.

 

(g)                                  Upon the expiration or earlier termination of this Lease, Tenant shall return the Premises, as modified by the Leasehold Improvements to Landlord clean except for normal wear and tear. Any damage to the Premises, including any structural damage, resulting from Tenant’s use or from the removal of Tenant’s fixtures, furnishings and equipment pursuant to Section 13 shall be repaired by Tenant at Tenant’s expense.

 

13.                                       ALTERATIONS AND ADDITIONS. After completion of the Leasehold Improvements Tenant shall not make any additions, alterations or improvements to the Premises without obtaining the prior written consent of Landlord, which shall not be unreasonably withheld. Landlord’s consent may be conditioned on Tenant’s removing any such additions, alterations or improvements upon the expiration of the Term and restoring the Premises to the same condition as on the date Tenant took possession. All work with respect to any addition, alteration or improvement shall be done in a good and workmanlike manner by properly qualified and licensed personnel approved by Landlord, and such work shall be diligently prosecuted to completion. Landlord may withhold its approval of any alteration, addition, or improvement that requires work which does not comply with any

 

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applicable laws (including, without limitation, the Americans with Disabilities Act of 1990 and all regulations issued thereunder) or requires other alterations, additions, or improvements of the Premises or common areas in order to comply with applicable laws.

 

(i)                                     Tenant shall pay the costs of any work done on the Premises pursuant to this Section 12, and shall keep the Premises, Building and Project free and clear of liens of any kind. Tenant shall indemnify, defend against and keep Landlord free and harmless from all liability, loss, damage, costs, attorneys’ fees and any other expense incurred on account of claims by any person performing work or furnishing materials or supplies for Tenant or any person claiming under Tenant.

 

(ii)                                  Tenant shall keep Tenant’s leasehold interest, and any additions or improvements which are or become the property of Landlord under this Lease, free and clear of all attachment or judgment liens. Before the actual commencement of any work for which a claim or lien may be filed, Tenant shall give Landlord notice of the intended commencement date a sufficient time before that date to enable Landlord to post notices of non-responsibility or any other notices which Landlord deems necessary for the proper protection of Landlord’s interest in the Premises, Building or the Project, and Landlord shall have the right to enter the Premises and post such notices at any reasonable time..

 

(iii)                               Unless their removal is required by Landlord as provided in Section 13, all additions, alterations and improvements made to the Premises shall become the property of Landlord and be surrendered with the Premises upon the expiration of the Term; provided, however, Tenant’s equipment, machinery and trade fixtures which can be removed without damage to the Premises shall remain the property of Tenant and may be removed, subject to the provisions of Section 13.

 

14.                               LEASEHOLD IMPROVEMENTS; TENANT’S PROPERTY.

 

(i)                                     All fixtures, equipment, improvements and appurtenances attached to or built into the Premises at the commencement of or during the Term, whether or not by or at the expense of Tenant (“Leasehold Improvements”), shall be and remain a part of the Premises, shall be the property of Landlord and shall not be removed by Tenant, except as expressly provided in Section 14.

 

(ii)                                  All movable partitions, business and trade fixtures, machinery and communications equipment and office equipment located in the Premises and acquired by or for the account of Tenant, without expense to Landlord, which can be removed without structural damage to the Building, and all furniture, furnishings and other sections of movable personal property owned by Tenant and located in the Premises (collectively “Tenant’s Property”) shall be and shall remain the property of Tenant and may be removed by Tenant at any time during the Term; provided that if any of Tenant’s Property is removed, Tenant shall promptly repair any damage to the Premises or to the Building resulting from such removal.

 

15.                               RULES AND REGULATIONS. Tenant agrees to comply with (and cause its agents, contractors, employees and invitees to comply with) the rules and regulations attached hereto as Exhibit “C” and with such reasonable modifications thereof and additions thereto as Landlord may from time to time make. Notwithstanding the foregoing, any rule or regulation that requires Tenant to shut off utilities such as electricity before Tenant leaves the Premises and where such utilities are required to maintain Tenant’s equipment and experiments conducted on the Premises shall not be applicable to Tenant. Landlord shall not be responsible for any violation of said rules and regulations by other tenants or occupants of the Building or Project.

 

16.                               CERTAIN RIGHTS RESERVED BY LANDLORD. Landlord reserves the following rights, exercisable without liability to Tenant for (a) damage or injury to property, person, or business, (b) causing an actual or constructive eviction from the Premises, or (c) disturbing Tenant’s use or possession of the Premises:

 

(a)                                 To name the Building and Project and to change the name or street address of the Building or Project;

 

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(b)                                 To install and maintain all signs on the exterior and interior of the Building and Project;

 

(c)                                  To have pass keys to the Premises and all doors within the Premises, excluding Tenant’s vaults and safes which shall be utilized only after providing advance notice to Tenant of such intention;

 

(d)                                 At any time during the Term, and on reasonable prior notice to Tenant, to inspect the Premises, and to show the Premises to any prospective purchaser or mortgagee of the Project, or to any assignee of any mortgage on the Project, or to others having an interest in the Project or Landlord, and during the last six months of the Term, to show the Premises to prospective tenants thereof; and

 

(e)                                  With reasonable prior notice to enter the Premises for the purpose of making inspections, repairs, alterations, additions or improvements to the Premises or the Building (including, without limitation, checking, calibrating, adjusting or balancing controls and other parts of the HVAC system), and to take all steps as may be necessary or desirable for the safety, protection, maintenance or preservation of the Premises or the Building or Landlord’s interest therein, or as may be necessary or desirable for the operation or improvement of the Building or in order to comply with laws, orders or requirements of governmental or other authorities. Landlord agrees to use its best efforts (except in an emergency) to minimize interference with Tenant’s business in the Premises in the course of any such entry Because of the confidential and proprietary nature of the Tenant’s business, at the Tenant’s sole discretion Tenant may require completion of a Confidentiality and Non-Disclosure Agreement prior to granting access to an individual.

 

17.                                       ASSIGNMENT AND SUBLETTING. No assignment of this Lease or sublease of all or any part of the Premises shall be permitted, except as provided in this Section 16.

 

(a)                                 Tenant shall not, without the prior written consent of Landlord, which shall not be unreasonably withheld, assign or hypothecate this Lease or any interest herein or sublet the Premises or any part thereof, or permit the use of the Premises by any party other than Tenant. Any of the foregoing acts without such consent shall be void and shall, at the option of Landlord, terminate this Lease. This Lease shall not, nor shall any interest of Tenant herein, be assignable by operation of law without the written consent of Landlord, which shall not be unreasonably withheld.

 

(b)                                 If at any time or from time to time during the Term Tenant desires to assign this Lease or sublet all or any part of the Premises, Tenant shall give notice to Landlord setting forth the terms and provisions of the proposed assignment or sublease, and the identity of the proposed assignee or subtenant. Tenant shall promptly supply Landlord with such information concerning the business background and financial condition of such proposed assignee or subtenant as Landlord may reasonably request. Landlord shall have the option, exercisable by notice given to Tenant within twenty (20) days after Tenant’s notice is given, either to sublet such space from Tenant at the rental and on the other terms set forth in this Lease for the term set forth in Tenant’s notice, or, in the case of an assignment, to terminate this Lease. If Landlord does not exercise such option, Tenant may assign the Lease or sublet such space to such proposed assignee or subtenant on the following further conditions:

 

(i)                                     Landlord shall have the right to approve such proposed assignee or subtenant, and will not unreasonably withhold approval;

 

(ii)                                  The assignment or sublease shall be on the same terms as this lease. No assignment or sublease shall be valid and no assignee or subtenant shall take possession of the Premises until an executed counterpart of such assignment or sublease has been delivered to Landlord;

 

(iii)                               No assignee or subtenant shall have a further right to assign or sublet except on the terms herein contained;

 

(c)                                          Notwithstanding the provisions of paragraphs a and b above, Tenant, upon written notice to Landlord, may assign this Lease or sublet the Premises or any portion thereof, without Landlord’s consent and

 

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without extending any recapture or termination option to Landlord, to any corporation which controls, is controlled by or is under common control with Tenant, or to any corporation resulting from a merger or consolidation with Tenant, or to any person or entity which acquires assets of Tenant’s business as a going concern, provided that (i) the assignee or subtenant assumes, in full, the obligations of Tenant under this Lease, (ii) Tenant remains fully liable under this Lease, and (iii) the use of the Premises under Section 9 remains unchanged.

 

(d)                                 No subletting or assignment shall release Tenant of Tenant’s obligations under this Lease or alter the primary liability of Tenant to pay the Rent and to perform all other obligations to be performed by Tenant hereunder. The acceptance of Rent by Landlord from any other person shall not be deemed to be a waiver by Landlord of any provision herein. Consent to one assignment or subletting shall not be deemed consent to any subsequent assignment or subletting. In the event of default by an assignee or subtenant of Tenant or any successor of Tenant in the performance of any of the terms hereof, Landlord may proceed directly against Tenant without the necessity of exhausting remedies against such assignee, subtenant or successor. Landlord may not consent to subsequent assignments of the Lease or subletting or amendments or modifications to the Lease with assignees of Tenant, without notifying Tenant, or any successor of Tenant, and without obtaining its or their consent thereto and any such actions shall not relieve Tenant of liability under this Lease.

 

(e)                                  If Tenant assigns the Lease or sublets the Premises or requests the consent of Landlord to any assignment or subletting or if Tenant requests the consent of Landlord for any act that Tenant proposes to do, then Tenant shall, upon demand, pay Landlord an administrative fee of One Hundred Fifty and No/100 Dollars ($150.00) plus any attorneys’ fees reasonably incurred by Landlord in connection with such act or request.

 

18.                               HOLDING OVER. Tenant has no right to retain possession of the Premises or any part thereof beyond the expiration or earlier termination of this Lease. In the event that Tenant holds over in violation of this Paragraph 17 then the Base Rent payable from and after the time of the expiration or earlier termination of this Lease shall be increased to one hundred ten percent (110%) of the Base Rent applicable during the month immediately preceding such expiration or earlier termination. Nothing contained herein shall be construed as a consent by Landlord to any holding over by Tenant.

 

19.                               SURRENDER OF PREMISES.

 

(a)                                 Tenant shall peaceably surrender the Premises to Landlord on the Expiration Date, in broom-clean condition and in as good condition as when Tenant took possession, except for (i) reasonable wear and tear, (ii) loss by fire or other casualty, and (iii) loss by condemnation. Tenant shall, on Landlord’s request, remove Tenant’s Property on or before the Expiration Date and promptly repair all damage to the Premises or Building caused by such removal.

 

(b)                                 If Tenant abandons or surrenders the Premises, or is dispossessed by process of law or otherwise, any of Tenant’s Property left on the Premises shall be deemed to be abandoned, and, at Landlord’s option, title shall pass to Landlord under this Lease as by a bill of sale. If Landlord elects to remove all or any part of such Tenant’s Property, the cost of removal, including repairing any damage to the Premises or Building caused by such removal, shall be paid by Tenant. On the Expiration Date Tenant shall surrender all keys to the Premises.

 

20.                               DESTRUCTION OR DAMAGE.

 

(a)                                 If the Premises or the portion of the Building necessary for Tenant’s occupancy is damaged by fire, earthquake, act of God, the elements of other casualty, Landlord shall, subject to the provisions of this Section, promptly repair the damage, if such repairs can, in Landlord’s opinion, be completed within (90) ninety days. If Landlord determines that repairs can be completed within ninety (90) days, this Lease shall remain in full force and effect, except that if such damage is not the result of misconduct or willful misconduct of Tenant or Tenant’s agents, employees, contractors, licensees or invitees, the Base Rent shall be abated to the extent Tenant’s use of the Premises is impaired, commencing with the date of damage and continuing until completion of the repairs required of Landlord under Section 19.

 

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(b)                                 If in Landlord’s opinion, such repairs to the Premises or portion of the Building necessary for Tenant’s occupancy cannot be completed within ninety (90) days, Landlord may elect, upon notice to Tenant given within thirty (30) days after the date of such fire or other casualty, to repair such damage, in which event this Lease shall continue in full force and effect, but the Base Rent shall be partially abated as provided in Section 19. If Landlord does not so elect to make such repairs, this Lease shall terminate as to the date of such fire or other casualty.

 

(c)                                  If any other portion of the Building or Project is totally destroyed or damaged to the extent that in Landlord’s opinion repair thereof cannot be completed within ninety (90) days, Landlord may elect upon notice to Tenant given within thirty (30) days after the date of such fire or other casualty, to repair such damage, in which event this Lease shall continue in full force and effect, but the Base Rent shall be partially abated as provided in Section 19. If Landlord does not elect to make such repairs, this Lease shall terminate as of the date of such fire or other casualty.

 

(d)                                 If the Premises are to be repaired under this Section, Landlord shall repair at its cost any injury or damage to the Building and Building Standard Work in the Premises. Tenant shall be responsible at its sole cost and expense for the repair, restoration and replacement of any other Leasehold Improvements and Tenant’s Property unless damage was a result of Landlord’s willful negligence. Landlord shall not be liable for any loss of business, inconvenience or annoyance arising from any repair or restoration of any portion of the Premises, Building or Project as a result of any damage from fire or other casualty.

 

(e)                                  This Lease shall be considered an express agreement governing any case of damage to or destruction of the Premises, Building or Project by fire or other casualty, and any present or future law which purports to govern the rights of Landlord and Tenant in such circumstances in the absence of express agreement, shall have no application.

 

21.                               EMINENT DOMAIN.

 

(a)                                 If the whole of the Building or Premises is lawfully taken by condemnation or in any other manner for any public or quasi-public purpose, this Lease shall terminate as of the date of such taking, and Rent shall be prorated to such date. If less than the whole of the Building or Premises is so taken, this Lease shall be unaffected by such taking, provided that (i) Tenant shall have the right to terminate this Lease by notice to Landlord given within thirty (30) days after the date of such taking if twenty percent (20%) or more of the Premises is taken and the remaining area of the Premises is not reasonably sufficient for Tenant to continue operation of its business, and (ii) Landlord shall have the right to terminate this Lease by notice to Tenant given within ninety (90) days after the date of such taking. If either Landlord or Tenant so elects to terminate this Lease, the Lease shall terminate on the thirtieth (30th) day after either such notice. The Rent shall be prorated to the date of termination. If this Lease continues in force upon such partial taking, the Base Rent and Tenant’s Proportionate Share shall be equitably adjusted according to the remaining Rentable Area of the Premises and Project.

 

(b)         In the event of any taking, partial or whole, all of the proceeds of any lawful judgment or settlement payable by the condemning authority shall be the exclusive property of Landlord, and Tenant hereby assigns to Landlord all of its rights, title and interest in any award, judgment or settlement from the condemning authority. Tenant, however, shall have the right, to the extent that Landlord’s award is not reduced or prejudiced, to claim from the condemning authority (but not from Landlord) such compensation as may be recoverable by Tenant in its own right for relocation expenses and damage to Tenant’s personal property, fixtures and tenant improvements.

 

(c)          In the event of a partial taking of the Premises which does not result in a termination of this Lease, Landlord shall restore the remaining portion of the Premises as nearly as practicable to its condition prior to the condemnation or taking, but only to the extent of Building Standard Work, Tenant shall be responsible at its sole cost and expense for the repair, restoration and replacement of any other Leasehold Improvements and Tenant’s Property.

 

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22.                                               INDEMNIFICATION.

 

(a)                                 Tenant’s Indemnification: Except for Landlord’s gross negligence or intentional misconduct, Tenant shall defend, indemnify and hold harmless Landlord from and against any and all claims arising out of or related to Tenant’s use or occupancy of the Premises, or arising out of or related to the conduct of Tenant’s business or arising out of or related to any activity, work or things done, or permitted by Tenant, or its employees contractors or agents, in or about the Premises and shall further indemnify and hold harmless Landlord from and against all costs, reasonable attorney’s fees, expenses and liabilities incurred in the defense of any such claim or any action or proceeding brought thereon. If Landlord shall, without fault on its part, be made a party to any litigation commenced by or against Tenant, then Tenant shall pay all costs and reasonable attorney’s fees incurred by such litigation.

 

(b)         Landlord’s Indemnification: Landlord shall defend, indemnify and hold harmless Tenant from and against any and all claims arising out of any activity, work or things done, or permitted by Landlord in or about the Common Areas of the Building or the Common Areas of the Project and shall further indemnify and hold harmless Tenant from and against all costs, reasonable attorney’s fees, expenses and liabilities incurred in the defense of any such claim or any action or proceeding brought thereon.

 

(c)          Either party shall retain the right to reject defense counsel appointed by the other party or its agents, and to appoint other counsel, if such party believes that such counsel as appointed by the other party or its agents will not adequately represent their interests in the case.

 

(d)         Tenant, as a material part of the consideration to Landlord, hereby assumes all risk, of damage to property of Tenant or injury to persons, in, upon or about the Premises arising from any cause and Tenant hereby waives all claims in respect thereof against Landlord. Tenant, as a material part of the consideration to Landlord, hereby acknowledges that there is a risk of harm to Tenant’s property and injury to the persons in, upon or about the Premises arising from any cause or event and Tenant agrees to assume all such risks of harm and Tenant hereby waives all claims in respect thereof against Landlord. Tenant hereby agrees that Landlord shall not be liable for injury to Tenant’s business or any loss of income therefrom or for damage to the goods, wares, merchandise or other property of Tenant, Tenant’s employees, invitees, customers, or any other persons in or about the Premises, Landlord shall not be liable for injury to Tenant, Tenant’s employees, agents or contractors, whether such damage or injury is caused by or results from fire, steam, electricity, gas, water or rain, or from the breakage, leakage, obstruction or other defects of pipes, sprinklers, wires, appliances, plumbing, air conditioning or lighting fixtures, or from any other cause of such damages or injury, or for loss or damage to Tenant’s business or other economic loss (whether direct or consequential), and for the injury or death to any persons in, on or about the Premises, except for damage or loss directly caused by Landlord’s gross negligence or willful misconduct. Tenant agrees that in no case shall Landlord ever be responsible or liable on any theory for any injury to Tenant’s business, loss of profits, loss of income or any other form of consequential damage. Landlord shall not be liable for any damages arising from any act or omission of any other Tenant, occupant or use of the building and parcel of which the Premises are a part, nor from the failure of Landlord to enforce the provision of any other lease of the Building, or the rules of the Building and parcel of which the Premises are a part.

 

23.                               TENANT’S INSURANCE.

 

(a)                                 Insurance required hereunder shall be issued by companies duly licensed to transact business in the State of California, and maintaining during the policy term a “General Policyholders Rating” of at least B+, V, or such other rating as may be required by a Lender having a lien on the Premises, as set forth in the most current issue of “Best’s Insurance Guide”. Tenant shall not do or permit to be done anything which shall invalidate the insurance policies referred to in this Section 22. Tenant shall cause to be delivered to Landlord certified copies of policies of such insurance or certificates evidencing the existence and amounts of such insurance with the insured and loss payable clauses as required by this Lease. No such policy shall be cancelable or subject to modification except after thirty (30) days prior written notice to Landlord. Tenant shall at least thirty (30) days prior to the expiration of such policies, furnish Landlord with evidence of renewals or “insurance binders” evidencing renewal thereof, or Landlord may order such insurance and charge the cost thereof to Tenant, which amount shall be payable by Tenant to Landlord upon demand. If Tenant shall fail to procure and maintain the insurance required under this Section 22, Landlord may, but shall not be required to, procure and maintain the same, but at Tenant’s expense.

 

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(i)                                     Beginning on the date Tenant is given access to the Premises for any purpose and continuing until expiration of the Term, Tenant shall procure, pay for and maintain in effect policies of casualty insurance covering (i) all Leasehold Improvements (including any alterations, additions or improvements as may be made by Tenant pursuant to the provisions of Section 12 hereof), and (ii) trade fixtures, merchandise and other personal property from time to time in, on or about the Premises, in and amount not less than one hundred percent (100%) of their actual replacement cost from time to time, providing protection against any peril included within the classification “Fire and Extended Coverage” together with insurance against sprinkler damage, vandalism and malicious mischief. The proceeds of such insurance shall be used for the repair or replacement of the property so insured. Upon termination of this lease following a casualty as set forth herein, the proceeds under Section (i) above shall be paid to Landlord and the proceeds under Section (ii) above shall be paid to Tenant.

 

(ii)                                  Commercial General Liability policy of insurance protecting the following as Additionally insureds Marvin L. Oates, Trustee of the Marvin L. Oates Trust, dated March 7, 1995, as Amended and Restated December 20, 2001 and Frank C. Ramos and Joanne M. Ramos as husband and wife (Landlord), Buzz Oates Management Services, Inc. (the “Property Manager”), against claims for bodily injury, personal injury and property damage based upon, involving or arising out of the ownership, use, occupancy or maintenance of the Premises and all areas appurtenant thereto. Such insurance shall be on an occurrence basis providing single limit coverage in an amount not less than $2,000,000 per occurrence with an “Additional Insured-Managers or Landlords of Premises” Endorsement and contain the “Amendment of the Pollution Exclusion” for damage caused by heat, smoke or fumes from a hostile fire. The policy shall not contain any intra-insured exclusions as between insured persons or organizations, but shall include coverage for liability assumed under this Lease as an “insured contract” for the performance of Tenant’s indemnity obligations under this Lease. The limits of said insurance required by this Lease or as carried by Tenant shall not, however, limit the liability of Tenant nor relieve Tenant of any obligation hereunder. All insurance to be carried by Tenant shall be primary to and not contributory with any similar insurance carried by Landlord, whose insurance shall be considered excess insurance only.

 

(iii)                               Not less than every three (3) years during the Term, Landlord and Tenant shall mutually agree to increases in all of Tenant’s insurance policy limits for all insurance to be carried by Tenant as set forth in this Section, if required.

 

24.                                               WAIVER OF SUBROGATION. Tenant and Landlord each hereby release and relieve the other, and waive their entire right of recovery against the other for loss or damage arising out of or incident to the perils insured against which perils occur in, on or about the Premises and/or the Building, whether due to the negligence of Landlord or Tenant or their agents, employers, contractors and/or invitees. Tenant and Landlord shall, upon obtaining the policies of insurance required give notice to the insurance carrier or carriers that the foregoing mutual waiver of subrogation is contained in this Lease.

 

25.                                               SUBORDINATION AND ATTORNMENT. Upon written request of Landlord, or any first mortgagee or first deed of trust beneficiary of Landlord, or ground landlord of Landlord, Tenant shall, in writing, subordinate its rights under this Lease to the lien of any first mortgage or first deed of trust or to the interest of any lease in which Landlord is Tenant, and to all advances made or hereafter to be made thereunder. However, before signing any subordination agreement, Tenant shall have the right to obtain from any lender or Landlord or ground landlord requesting such subordination, an agreement in writing providing that, as long as Tenant is not in default hereunder, this Lease shall remain in effect for the full Term. The holder of any security interest may, upon written notice to Tenant, elect to have this Lease prior to its security interest regardless of the time of the granting or recording of such security interest. In the event of any foreclosure sale, transfer in lieu of foreclosure or termination of the lease in which Landlord is Tenant, Tenant shall attorn to the purchaser, transferee or Landlord as the case may be, and recognize that party as Landlord under this Lease provided such party acquires and accepts the Premises subject to this Lease.

 

26.                                               TENANT ESTOPPEL CERTIFICATES. Within fifteen (15) days after written request from Landlord, Tenant shall execute and deliver to Landlord or Landlord’s designee, a written statement certifying (a) that this Lease is unmodified and in full force and effect, or is in full force and effect as modified and stating the modifications; (b) the amount of Base Rent and the date to which Base Rent and additional rent have been paid in

 

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advance; (c) the amount of any security deposited with Landlord; and (d) that Landlord is not in default hereunder or, if Landlord is claimed to be in default, stating the nature of any claimed default. Any such statement may be relied upon by a purchaser, assignee or lender. Tenant’s failure to execute and deliver such statement within the time required shall at Landlord’s election be a default under this Lease and shall also be conclusive upon Tenant that: (1) this Lease is in full force and effect and has not been modified except as represented by Landlord; (2) there are no uncured defaults in Landlord’s performance and that Tenant has no right of offset, counter-claim or deduction against Rent; and (3) not more than one month’s Rent has been paid in advance.

 

27.                                               TRANSFER OF LANDLORD’S INTEREST. In the event of any sale or transfer by Landlord of the Premises, Building or Project, and assignment of this Lease by Landlord, Landlord shall be and is hereby entirely freed and relieved of any and all liability and obligations contained in or derived from this Lease arising out of any act, occurrence or omission relating to the Premises, Building, Project or Lease occurring after the consummation of such sale or transfer, providing the purchaser shall expressly assume all of the covenants and obligations of Landlord under this Lease. If any security deposit or prepaid Rent has been paid by Tenant, Landlord shall transfer the security deposit or prepaid Rent to Landlord’s successor and upon such transfer, Landlord shall be relieved of any and all further liability with respect thereto.

 

28.                                       DEFAULT.

 

(a)                                 Tenant’s Default. The occurrence of any one or more of the following events shall constitute a default and breach of this Lease by Tenant:

 

(i)                                     If Tenant abandons or vacates the Premises; or

 

(ii)                                  If Tenant fails to pay any Rent or any other charges required to be paid by Tenant under this Lease and such failure continues for ten (10) days after notice of such failure to pay rent such payment is due and payable; or

 

(iii)                               If Tenant fails to promptly and fully perform any other covenant, condition or agreement contained in this Lease and such failure continues for thirty (30) days after written notice thereof from Landlord to Tenant unless such breach cannot be remedied within thirty (30) days in which case, if Tenant has begun such remedy within the thirty (30) day period and diligently proceeds to its completion, the continuation of the breach after thirty (30) days shall not be a default under this Lease; or

 

(iv)                              If a writ of attachment or execution is levied on this Lease or on any of Tenant’s Property; or

 

(v)                                 If Tenant makes a general assignment for the benefit of creditors, or provides for an arrangement, composition, extension or adjustment with its creditors; or

 

(vi)                              If Tenant files a voluntary petition for relief or if a petition against Tenant in a proceeding under the federal bankruptcy laws or other insolvency laws is filed and not withdrawn or dismissed within forty-five (45) days thereafter, or if under the provisions of any law providing for reorganization or winding up of corporations, any court of competent jurisdiction assumes jurisdiction, custody or control of Tenant or any substantial part of its property and such jurisdiction, custody or control remains in force unrelinquished, unstayed or unterminated for a period of forty-five (45) days; or

 

(vii)                           If in any proceeding or action in which Tenant is a party, a trustee, receiver, agent or custodian is appointed to take charge of the Premises or Tenant’s Property (or has the authority to do so) for the purpose of enforcing a lien against the Premises or Tenant’s Property; or

 

(viii)                        If Tenant is a partnership or consists of more than one (1) person or entity, if any partner of the partnership or other person or entity is involved in any of the acts or events described in subparagraphs

 

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d through g above.

 

(b)         Remedies. In the event of Tenant’s default hereunder, then in addition to any other rights or remedies Landlord may have under any law, Landlord shall have the right, at Landlord’s option, without further notice or demand of any kind to do the following:

 

(i)                                     Terminate this Lease and Tenant’s light to possession of the Premises and reenter the Premises and take possession thereof, and Tenant shall have no further claim to the Premises or under this Lease; or

 

(ii)                                  Continue this Lease in effect, reenter and occupy the Premises for the account of Tenant, and collect any unpaid Rent or other charges which have or thereafter become due and payable; or

 

(iii)                               Reenter the Premises under the provisions of subparagraph 28(b) (ii), above, and thereafter elect to terminate this Lease and Tenant’s right to possession of the Premises.

 

If Landlord reenters the Premises, under the provisions of subparagraphs 28(b)(ii) or 28(b)(iii) above, Landlord shall not be deemed to have terminated this Lease or the obligation of Tenant to pay any Rent or other charges thereafter accruing, unless Landlord notifies Tenant in writing of Landlord’s election to terminate this Lease (it is the intention of the parties that Landlord shall have the remedy described in California Civil Code Section 1951.4, which provides that a Landlord may continue the lease in effect after a Tenant’s breach and abandonment and recover rent as it becomes due, if Tenant has the right to sublet or assign, subject only to reasonable limitations). In the event of any reentry or retaking of possession by Landlord, Landlord shall have the right, but not the obligation, to remove all or any part of Tenant’s Property in the Premises and to place such property in storage at a public warehouse at the expense and risk of Tenant. If Landlord elects to relet the Premises for the account of Tenant, the rent received by Landlord from such reletting shall be applied as follows: first, to the payment of any indebtedness other than Rent due hereunder from Tenant to Landlord; second, to the payment of any costs of such reletting; third, to the payment of the cost of any alterations or repairs to the Premises; fourth to the payment of Rent due and unpaid hereunder, and the balance, if any, shall be held by Landlord and applied in payment of future Rent as it becomes due. If that portion of rent received from the reletting which is applied against the Rent due hereunder is less than the amount of the Rent due, Tenant shall pay the deficiency to Landlord promptly upon demand by Landlord. Such deficiency shall be calculated and paid monthly. Tenant shall also pay to Landlord, as soon as determined, any costs and expenses incurred by Landlord in connection with such reletting or in making alterations and repairs to the Premises, which are not covered by the rent received from the reletting.

 

If Landlord terminates this Lease or Tenant’s right to possession of the Premises, Landlord shall have no obligation to mitigate Landlord’s damages except to the extent required by applicable law. If Landlord has not terminated this Lease or Tenant’s right to possession of the Premises, Landlord shall have no obligation to mitigate under any circumstances and may permit the Premises to remain vacant or abandoned. If Landlord is required to mitigate damages as provided herein: (i) Landlord shall be required only to use reasonable efforts to mitigate, which shall not exceed such efforts as Landlord generally uses to lease other space in the Building, (ii) Landlord will not be deemed to have failed to mitigate if Landlord or its affiliates lease any other portions of the Building or other projects owned by Landlord or its affiliates in the same geographic area, before reletting all or any portion of the Premises, and (iii) any failure to mitigate as described herein with respect to any period of time shall only reduce the Rent and other amounts to which Landlord is entitled to seek from Tenant hereunder by the reasonable rental value of the Premises during such period. In recognition that the value of the Building depends on the rental rates and terms of leases therein, Landlord’s rejection of a prospective replacement tenant based on an offer of rentals below Landlord’s published rates for new leases of comparable space at the Building at the time in question, or at Landlord’s option, below the rates provided in this Lease, or containing terms less favorable than those contained herein, shall not give rise to a claim by Tenant that Landlord failed to mitigate Landlord’s damages.

 

Should Landlord elect to terminate this Lease under the provisions of subparagraph 28(b)(i) or 28(b)(ii) above, Landlord may recover as damages from Tenant the following:

 

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(1)                                 Past Rent. The worth at the time of the award of any unpaid Rent which had been earned at the time of termination; plus

 

(2)                                 Rent Prior to Award. The worth at the time of the award of the amount by which the unpaid Rent which would have been earned after termination until the time of award exceeds the amount of such rental loss that Tenant proves could have been reasonably avoided; plus

 

(3)                                 Rent After Award. The worth at the time of the award of the amount by which the unpaid Rent for the balance of the Term after the time of award exceeds the amount of the rental loss that Tenant proves could be reasonably avoided; plus

 

(4)                                 Proximately Caused Damages. Any other amount necessary to compensate Landlord for all detriment proximately caused by Tenant’s failure to perform its obligations under this Lease or which in the ordinary course of things would be likely to result therefrom, including, but not limited to, any costs or expenses (including reasonable attorneys’ fees), incurred by Landlord in (a) retaking possession of the Premises, (b) maintaining the Premises after Tenant’s default, (c) preparing the Premises for reletting to a new tenant, including any repairs or alterations resulting from damage to the premises caused by tenant, and (d) reletting the Premises, including broker’s commissions.

 

“The worth at the time of the award” as used in subparagraphs (1) and (2) above, is to be computed by allowing interest at the prime commercial rate then being charged by Bank of America NT & SA in effect at that time. “The worth at the time of the award” as used in subparagraph (3) above, is to be computed by discounting the amount at the discount rate of the Federal Reserve Bank situated nearest to the Premises at the time of the award plus one percent (1%).

 

The waiver by any party of any breach of any term, covenant or condition of this Lease shall not be deemed a waiver of such term, covenant or condition or of any subsequent breach of the same or any other term, covenant or condition. Acceptance of Rent by Landlord subsequent to any breach hereof shall not be deemed a waiver of any preceding breach other than the failure to pay the particular Rent so accepted, regardless of Landlord’s knowledge of any breach at the time of such acceptance of Rent. Landlord shall not be deemed to have waived any term, covenant or condition unless Landlord gives Tenant written notice of such waiver. Acceptance of a partial payment shall not constitute a waiver under this Lease or at law or equity, including, without limitation, the right to recover possession of the Premises.

 

(c)                                  Landlord’s Default. If Landlord fails to perform any covenant, condition or agreement contained in this Lease within thirty (30) days after receipt of written notice from Tenant specifying such default, or if such default cannot reasonably be cured within thirty (30) days, if Landlord fails to commence to cure within that thirty (30) day period, then Landlord shall be liable to Tenant for any damages sustained by Tenant as a result of Landlord’s breach; provided, however, it is expressly understood and agreed that if Tenant obtains a money judgment against Landlord resulting from any default or other claim arising under this Lease, that judgment shall be satisfied only out of the rents, issues, profits, and other income actually received on account of Landlord’s right, title and interest in the Premises, Building or Project, and no other real, personal or mixed property of Landlord (or of any of the partners which comprise Landlord, if any) wherever situated, shall be subject to levy to satisfy such judgment. If, after notice to Landlord of default, Landlord (or any first mortgagee or first deed of trust beneficiary of Landlord) fails to cure the default as provided herein, then Tenant shall have the right to cure that default at Landlord’s expense. Tenant shall not have the right to terminate this Lease or to withhold, reduce or offset any amount against any payments of Rent or any other charges due and payable under this Lease except as otherwise specifically provided herein.

 

29.                               BROKERAGE FEES. Landlord and Tenant each represents and warrants to the other party that it has not authorized or employed, or acted by implication to authorize or employ, any real estate broker or salesman to act for it in connection with this Lease, except for the brokers listed in Section 2 above and no other broker is in any way entitled to any broker’s fee or other payment in connection with this Lease. Landlord is solely responsible for payment of any broker’s fee or other payment owed to the brokers listed in Section 2 above. Landlord and Tenant

 

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shall each indemnify, defend and hold the other party harmless from and against any and all claims by any real estate broker or salesman whom the indemnifying party authorized or employed, or acted by implication to authorize or employ, to act for the indemnifying party in connection with this Lease.

 

30.                               NOTICES. All notices, approvals and demands permitted or required to be given under this Lease shall be in writing and deemed duly served or given if personally delivered or sent by certified or registered U.S. mail, postage prepaid, and addressed as follows: (a) if to Landlord, to Landlord’s Mailing Address and to the building manager, and (b) if to Tenant, to Tenant’s Mailing Address; provided, however, notices to Tenant shall be deemed duly served or given if delivered or mailed to Tenant at the Premises. Landlord and Tenant may from time to time by notice to the other designate another place for receipt of future notices.

 

31.                               GOVERNMENT ENERGY OR UTILITYCONTROLS. In the event of imposition of federal, state or local government controls, rules, regulations, or restrictions on the use or consumption of energy or other utilities during the Term, both Landlord and Tenant shall be bound thereby. In the event of a difference in interpretation by Landlord and Tenant of any such controls, the interpretation of Landlord shall prevail, and Landlord shall have the right to enforce compliance therewith, including the right of entry into the Premises to effect compliance.

 

32.                               RELOCATION OF PREMISES. Landlord shall have the right to relocate the Premises to another part of the Building in accordance with the following:

 

(a)                                 The new premises shall be substantially the same in size, dimensions, construction, decor and nature as the Premises described in this Lease, and the relocation occurs after the Commencement Date, shall be placed in that condition by Landlord at its cost, including Tenant Improvements made by Tenant as of the date of relocation.

 

(b)                                 Landlord shall give Tenant at least sixty (60) days written notice of Landlord’s intention to relocate the Premises.

 

(c)                                  As nearly as practicable, the physical relocation of the Premises shall take place on a weekend and shall be complete before the following Monday. If the physical relocation has not been completed in that time, Base Rent shall abate in full from the time the physical relocation commences to the time it is completed. Upon completion of such relocation, the new premises shall become the “Premises” under this Lease,

 

(d)                                 All reasonable costs incurred by Tenant as a result of the relocation shall be paid by Landlord. Landlord will cause to be constructed, in the space where Tenant is to be relocated and prior to Tenant’s actual relocation, improvements substantially equivalent to the tenant improvements made by Tenant as of the date of Tenant’s relocation

 

(e)                                  If Tenant, in its sole discretion, has agreed to reduction in the size of the Premises, base Rent shall be reduced proportionately.

 

(f)                                   The parties hereto shall immediately execute an amendment to this Lease setting forth the relocation of the Premises and the reduction of Base Rent, if any.

 

33.                                               PARKING. Tenant shall be allocated the number of parking spaces identified in Section 2(o). Tenant shall use the Building’s parking facilities in common with other tenants of the Building upon terms and conditions as may from time to time be established by Landlord. Tenant agrees not to overburden the parking facilities and agrees to cooperate with Landlord and other Tenants in the use of the parking facilities. Landlord reserves the right in its absolute discretion to determine whether the parking facilities are becoming crowded and to reallocate and assign parking spaces among Tenant and the other tenants, to assign spaces for vanpool and carpool vehicles, and to alter, relocate, reduce or otherwise change the parking facilities and to take measures with respect to the parking area from time to time in order to comply with any applicable governmental ordinance, law or regulation. Landlord shall have the right, in addition to pursuing any other legal remedy available, to tow any vehicle belonging to Tenant or Tenant’s employees which is not in compliance with the published regulations for the parking facility

 

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then in effect if a violation continues after the first notice of such violation, at the expense of Tenant; nothing in this Lease, however, shall require Landlord to tow parked cars or take other actions to free occupied spaces for Tenant’s use. Landlord shall not be liable for any claims, losses, damages, expenses or demands with respect to injury or damage to the vehicles of Tenant or Tenant’s customers or employees that park in the parking areas of the Property, except for such loss or damage as may be caused by Landlord’s gross negligence or willful misconduct, and Tenant agrees to indemnify, defend, protect and hold harmless Landlord from and against any such claim, loss, damage, demand, cost or expense, including without limitation, reasonable attorneys’ fees and legal expenses.

 

34.                               QUIET ENJOYMENT. Tenant, upon paying the Rent and performing all of its obligations under this Lease, shall peaceably and quietly enjoy the Premises, subject to the terms of this Lease and to any mortgage, lease, or other agreement to which this Lease may be subordinate.

 

35.                               OBSERVANCE OF LAW. Tenant shall not use the Premises or permit anything to be done in or about the Premises which will in any way conflict with any law, statute, ordinance or governmental rule or regulation now in force or which may hereafter be enacted or promulgated. Tenant shall, at its sole cost and expense, promptly comply with all laws, statutes, ordinances and governmental rules, regulations or requirements now in force or which may hereafter be in force, and with the requirements of any board of fire insurance underwriters or other similar bodies now or hereafter constituted, relating to, or affecting the condition, use or occupancy of the Premises, excluding structural changes not related to or affected by Tenant’s improvements or acts. The judgment of any court of competent jurisdiction or the admission of Tenant in any action against Tenant, whether Landlord is a party thereto or not, that Tenant has violated any law, ordinance or governmental rule, regulation or requirement, shall be conclusive of that fact as between Landlord and Tenant.

 

36.                               BANKRUPTCY. If Tenant shall file a petition in bankruptcy under any Chapter of the Bankruptcy Act as then in effect, or if Tenant be adjudicated a bankrupt in involuntary bankruptcy proceedings and such adjudication shall not have been vacated within sixty (60) days from the date thereof, or if a receiver or trustee be appointed of Tenant’s property and the order appointing such receiver or trustee not be set aside or vacated within thirty (30) days after the entry thereof, or if the Tenant shall assign Tenant’s estate or effects for the benefit of creditors, or if this Lease shall otherwise by operation of law devolve or pass to any person or persons other than Tenant, then and in any such event Landlord may, if Landlord so elects, with notice of such election, forthwith terminate this Lease, and notwithstanding any other provisions of this Lease, Landlord, in addition to any and all rights and remedies allowed by law or equity, shall upon such termination be entitled to recover damages in the amount provided in Section 27(b) above and neither Tenant nor any person claiming through or under Tenant or by virtue of any statute or order of any court shall be entitled to possession of the Premises but shall forthwith quit and surrender the Premises to Landlord. Nothing herein contained shall limit or prejudice the right of Landlord to prove and obtain as damages by reason of any such termination an amount equal to the maximum allowed by any statute or rule of law in effect at the time when, and governing the proceedings in which, such damages are to be proved, whether or not such amount be greater, equal to, or less than the amount of damages recoverable under the provisions of this Section 36.

 

37.                               FORCE MAJEURE. Any prevention, delay or stoppage of work to be performed by Landlord or Tenant which is due to strikes, labor disputes, inability to obtain labor, materials, equipment or reasonable substitutes therefor, acts of God, governmental restrictions or regulations or controls, judicial orders, enemy or hostile government actions, civil commotion, fire or other casualty, or other causes beyond the reasonable control of the party obligated to perform hereunder, shall excuse performance of the work by that party for a period equal to the duration of that prevention, delay or stoppage. Nothing in this Section 37 shall excuse or delay Tenant’s obligation to pay Rent or other charges under this Lease.

 

38.                               LIMITATION ON LIABILITY. In consideration of the benefits accruing hereunder, Tenant and all successors and assigns covenant and agree that, in the event of any actual or alleged failure, breach or default hereunder by Landlord:

 

(a)         Notwithstanding anything to the contrary contained in this Lease or in any exhibits, Riders or addenda hereto attached (collectively the “Lease Documents”), it is expressly understood and agreed by and between

 

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the parties hereto that: (i) the recourse of Tenant or its successors or assigns against Landlord with respect to the alleged breach by or on the part of Landlord of any representation, warranty, covenant, undertaking or agreement contained in any of the Lease Documents or otherwise arising out of Tenant’s use of the Premises or the Building (collectively, “Landlord’s Lease Undertakings”) shall extend only to Landlord’s interest in the real estate of which the Premises demised under the Lease Documents are a part (“Landlord’s Real Estate”) and not to any other assets of Landlord or its constituent members; (ii) except to the extent of Landlord’s interest in Landlord’s Real Estate, no personal liability or personal responsibility of any sort with respect to any of Landlord’s Lease Undertakings or any alleged breach thereof is assumed by, or shall at any time be asserted or enforceable against, Landlord, its constituent members, or against any of their respective directors, officers, employees, agents, constituent members, beneficiaries, trustees or representatives; and (iii) in no event shall Landlord be liable to Tenant for special, indirect or consequential damages, including gross profits, arising hereunder.

 

(b)         No member, partner, stockholder, director, officer, employee or beneficiary or trustee (collectively, “Member”) of Landlord shall be sued or named as a party in any suit or action (except as may be necessary to secure jurisdiction over Landlord);

 

(c)          No service of process shall be made against any Member of Landlord (except as may be necessary to secure jurisdiction over Landlord);

 

(d)         No Member of Landlord shall be required to answer or otherwise plead to any service of process;

 

(e)          No judgment will be taken against any Member of Landlord;

 

(f)           Any judgment taken against any Member of Landlord may be vacated and set aside at any time nunc pro tunc;

 

(g)          Except for the Building, no writ of execution will ever be levied against the assets of any Member of Landlord;

 

(h)         These covenants and agreements are enforceable both by Landlord and also by any Member of Landlord.

 

39.                               CURING TENANT’S DEFAULTS. If Tenant defaults in the performance of any of its obligations under this Lease, Landlord may (but shall not be obligated to) without waiving such default, perform the same for the account at the expense of Tenant. Tenant shall pay Landlord all reasonable direct costs of such performance promptly upon receipt of a bill therefor.

 

40.                               SIGN CONTROL. Tenant shall not affix, paint, erect or inscribe any sign, projection, awning, signal or advertisement of any kind to any part of the Premises, Building or Project, including without limitation, the inside or outside of windows or doors, without the written consent of Landlord. Landlord shall have the right to remove any signs or other matter, installed without Landlord’s permission, without being liable to Tenant by reason of such removal, and to charge the cost of removal to Tenant as additional rent hereunder, payable within ten (10) days of written demand by Landlord.

 

41.                               MISCELLANEOUS.

 

(a)         Accord and Satisfaction, Allocation of Payments. No payment by Tenant or receipt by Landlord of a lesser amount than the Rent provided for in this Lease shall be deemed to be other than on account of the earliest due Rent, nor shall any endorsement or statement on any check or letter accompanying any check or payment as Rent be deemed an accord and satisfaction, and Landlord may accept such check or payment without prejudice to Landlord’s right to recover the balance of the Rent or pursue any other remedy provided for in this Lease. In connection with the foregoing, Landlord shall have the absolute right in its sole discretion to apply any payment received from Tenant to any account or other payment of Tenant then not current and due or delinquent.

 

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(b)         Addenda. If any provision contained in an addendum to this Lease is inconsistent with any other provision herein, the provision contained in the addendum shall control, unless otherwise provided in the addendum.

 

(c)          Attorneys’ Fees. If any action or proceeding is brought by either party against the other pertaining to or arising out of this Lease, the finally prevailing party shall be entitled to recover all costs and expenses, including reasonable attorneys’ fees, incurred on account of such action or proceeding.

 

(d)         Captions, Sections and Section Numbers. The captions appearing within the body of this Lease have been inserted as a matter of convenience and for reference only and in no way define, limit or enlarge the scope or meaning of this Lease. All references to Section and Section Numbers refer to sections and Section Numbers in this Lease.

 

(e)          Changes Requested by Lender. Neither Landlord or Tenant shall unreasonably withhold its consent to changes or amendments to this Lease requested by the lender on Landlord’s interest, so long as these changes do not alter the basic business terms of this Lease or otherwise materially diminish any rights or materially increase any obligations of the party from whom consent to such charge or amendment is requested.

 

(f)           Choice of Law. This Lease shall be construed and enforced in accordance with the laws of the State of California.

 

(g)          Consent. Notwithstanding anything contained in this Lease to the contrary, Tenant shall have no claim, and hereby waives the right to any claim against Landlord for money damages by reason of any reasonable refusal, withholding or delaying by Landlord of any consent, approval or statement of satisfaction, in circumstances where Landlord is entitled to refuse, withhold or delay its consent or approval and in such event, Tenant’s only remedies therefor shall be an action for specific performance, injunction or declaratory judgment to enforce any right to such consent, etc.

 

(h)         Corporate Authority. If Tenant is a corporation, each individual signing 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, and that this Lease is binding on Tenant in accordance with its terms. Tenant shall, at Landlord’s request, deliver a certified copy of a resolution of its board of directors authorizing such execution.

 

(i)             Counterparts. This Lease may be executed in multiple counterparts, all of which shall constitute one and the same Lease.

 

(j)            Execution of Lease; No Option. The submission of this Lease to Tenant shall be for examination purposes only, and does not and shall not constitute a reservation of or option for Tenant to lease, or otherwise create any interest of Tenant in the Premises or any other premises within the Building or Project. Execution of this Lease by Tenant and its return to Landlord shall not be binding on Landlord notwithstanding any time interval, until Landlord has in fact signed and delivered this Lease to Tenant.

 

(k)         Furnishing of Financial Statements; Tenant’s Representations. In order to induce Landlord to enter into this Lease Tenant agrees that it shall promptly furnish Landlord, from time to time but no more than annually, upon Landlord’s written request, with an audited financial statement reflecting Tenant’s current financial condition. Tenant represents and warrants that all financial statements, records and information furnished by Tenant to Landlord in connection with this Lease are true, correct and complete in all respects, to the best of its knowledge.

 

(l)             Further Assurances. The parties agree to promptly sign all documents reasonably requested to give effect to the provisions of this Lease.

 

(m)     Mortgagee Protection. Tenant agrees to send by certified or registered mail to any first mortgagee or first deed of trust beneficiary of Landlord whose address has been furnished to Tenant, a copy of any notice of default served by Tenant on Landlord. If Landlord fails to cure such default within the time provided for in

 

23

 

this Lease, such mortgagee or beneficiary shall have an additional thirty (30) days to cure such default; provided that if such default cannot reasonably be cured within that thirty (30) day period, then such mortgagee or beneficiary shall have such additional time to cure the default as is reasonably necessary under the circumstances.

 

(n)         Prior Agreements; Amendments. This Lease contains all of the agreements of the parties with respect to any matter covered or mentioned in this Lease, and no prior agreement or understanding pertaining to any such matter shall be effective for any purpose. No provisions of this Lease may be amended or added to except by an agreement in writing signed by the parties or their respective successors in interest.

 

(o)         Recording. Tenant shall not record this Lease without the prior written consent of Landlord. Tenant, upon the request of Landlord, shall execute and acknowledge a “short form” memorandum of this Lease for recording purposes.

 

(p)         Severability. A final determination by a court of competent jurisdiction that any provision of this Lease is invalid shall not affect the validity of any other provision, and any provision so determined to be invalid shall, to the extent possible, be construed to accomplish its intended effect.

 

(q)         Successors and Assigns. This Lease shall apply to and bind the heirs, personal representatives, and permitted successors and assigns of the parties.

 

(r)            Time of the Essence. Time is of the essence of this Lease.

 

(s)           No Construction Against Drafter. The provisions of this Lease shall be construed in accordance with the fair meaning of the language used and shall not be strictly construed against either party. If the parties delete any provision appearing in the original draft of this Lease, this Lease will be interpreted as if the deleted language were never a part of this Lease.

 

(t)            Waiver. No delay or omission in the exercise of any right or remedy of Landlord upon any default by Tenant shall impair such right or remedy or be construed as a waiver of such default.

 

(u)         Compliance. The parties hereto agree to comply with all applicable federal, state and local laws, regulations, code ordinances and administrative orders having jurisdiction over the parties, property or the subject matter of this agreement including, but not limited to, the 1964 Civil Rights Act and all amendments thereto, the Foreign Investment In Real Property Tax Act, the Comprehensive Environmental Response Compensation and Liability Act, and The Americans With Disabilities Act.

 

The receipt and acceptance by Landlord of delinquent Rent shall not constitute a waiver of any other default; it shall constitute only a waiver of timely payment for the particular Rent payment involved.

 

No act or conduct of Landlord, including, without limitation, the acceptance of keys to the Premises, shall constitute an acceptance of the surrender of the Premises by Tenant before the expiration of the Term. Only a written notice from Landlord to Tenant shall constitute acceptance of the surrender of the Premises and accomplish a termination of the Lease.

 

Landlord’s consent to or approval of any act by Tenant requiring Landlord’s consent or approval shall not be deemed to waive or render unnecessary Landlord’s consent to or approval of any subsequent act by Tenant.

 

Any waiver by Landlord of any default must be in writing and shall not be a waiver of any other default concerning the same or any other provision of the Lease.

 

42.                               EXHIBITS AND ADDENDA. The exhibits and addenda listed below are incorporated by reference in this Lease:

 

	
Exhibit A
    	
—
    	
Floor Plan showing the Premises.
    

 

24

 

 

	
Exhibit A-1
    	
 —
    	
 Space Plan.
    
	
Exhibit A-2
    	
 —
    	
 Site Plan of the Project.
    
	
Exhibit A-3
    	
 —
    	
 Building Shell.
    
	
Exhibit A-4
    	
 —
    	
 Improvement Specifications.
    
	
Exhibit B
    	
 —
    	
 Work Letter Agreement.
    
	
Exhibit C
    	
 —
    	
 Rules and Regulations.
    
	
Exhibit D
    	
 —
    	
 Janitorial Specifications.
    
	
Addenda
    	
 —
    	
 Paragraphs 42 – 47
    

 

The parties hereto have executed this Lease as of the dates set forth below.

 

	
Landlord:
    	
 
    	
Tenant:
    
	
Marvin L. Oates, Trustee of the Marvin L. Oates
    	
 
    	
Arcadia Biosciences, Inc., an Arizona   Corporation
    
	
Trust, dated March 7, 1995, as Amended and
    	
 
    	
 
    
	
Restated December 20, 2001 and Frank C.   Ramos
    	
 
    	
 
    
	
and Joanne M. Ramos as husband and wife
    	
 
    	
By:
    	
/s/
    
	
 
    	
 
    	
Roy Hodges, President
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Date:
    	
 
    
	
Marvin L. Oates, Trustee of the Marvin L. Oates
    	
 
    	
 
    
	
Trust, dated March 7, 1995, as Amended and
    	
 
    	
 
    
	
Restated December 20, 2001
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/
    	
 
    	
 
    
	
Frank C. Ramos, husband
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:
    	
/s/
    	
 
    	
 
    
	
Joanne M. Ramos, wife
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Date:
    	
 
    	
 
    	
 
    
							

 

25

 

LEASE ADDENDUM

 

To that certain Office Lease

 

Dated as of January 31, 2003

 

Marvin L. Oates, Trustee of the Marvin L. Oates Trust, dated March 7, 1995, as Amended and Restated

December 20, 2001 and Frank C. Ramos and Joanne M. Ramos as husband and wife, as Landlord

 

and

 

Arcadia Biosciences, Inc. as Tenant

 

42.                               ARBITRATION. Any controversy or claim arising out of or relating to the tenant improvements contemplated by this Lease shall be settled by three arbitrators in accordance with the commercial rules of the American Arbitration Association. Judgement on the award rendered by the arbitrators may be entered in any court having jurisdiction over the dispute. The cost of the arbitration shall be paid by the losing party.

 

The arbitrator’s authority to grant remedies shall be limited to those remedies that could be granted or awarded by a judge of the superior court of the state of California, applying California law to the claims asserted. The arbitrator shall prepare and provide to the parties a written decision on all matters subject to the arbitration, including factual findings and the reasons that form the basis of the arbitrator’s decision. The arbitrator shall not have the power to commit errors of law, and the award of the arbitrator shall be vacated or corrected for any such error or any other grounds specified in California Code of Civil Procedure Section 1286.2 or Section 1286.6. The award of the arbitrator shall be mailed to the parties no later than thirty (30) days after the close of the arbitration hearing. The arbitration proceedings shall be reported by a certified shorthand court reporter. Written transcripts of the proceedings shall be prepared and made available to the parties.

 

The parties shall each have the right to file with a court of competent jurisdiction an application for temporary or preliminary injunctive relief, writ of attachment, unlawful detainer, writ of possession, temporary protective order, or appointment of a receiver if the arbitration award to which the applicant may be entitled may be rendered ineffectual in the absence of such relief or if there is no other adequate remedy. This application shall not waive a party’s arbitration rights under this Lease.

 

43.                               DISCLOSURES. The United States Congress has enacted the Americans with Disabilities Act. Among other things, this act is intended to make many business establishments equally accessible to persons with a variety of disabilities; modifications to real property may be required. State and local laws also may mandate changes. The real estate brokers in this transaction are not qualified to advise you as to what, if any, changes may be required now, or in the future. Owner and Tenant should consult the attorneys and qualified design professionals of their choice for information regarding these matters. Real estate brokers cannot determine which attorneys or design professionals have the appropriate expertise in this area. Various construction materials may contain items that have been or may, in the future, be determined to be hazardous (toxic) or undesirable and may need to be specifically treated/handled or removed. For example, some transformers and other electrical components contain PCB’s and asbestos has been used in components such as fireproofing, heating, and cooling systems, air duct insulation, spray-on and tile acoustical materials, linoleum, floor tiles, roofing dry wall and plaster. Due to prior or current uses of the Property or in the area, the Property may have hazardous or undesirable metals, minerals, chemicals, hydrocarbons, or biological or radioactive items (including electric and magnetic fields) in soil, water, building components, above or below-ground containers or elsewhere in areas that may or may not be accessible or noticeable. Such items may not leak or otherwise be released. Real estate agents have no expertise in the detection or correction of hazardous or undesirable items. Expert inspections are necessary. Current or future laws may require clean up by past, present and/or future owners and/or operators. It is the responsibility of the Landlord and Tenant to retain qualified experts to detect and correct such matters and to consult with legal counsel of their choice to determine what provision, if any, they may wish to include in transaction documents regarding the Property.

 

26

 

Landlords are required under California Health and Safety Code Section 25915 at seq. to disclose reports and surveys regarding asbestos to certain persons, including their employees, contractors, co-owners, purchasers and tenants. Tenants have similar disclosure obligations. Landlords and Tenants have additional hazardous materials disclosure responsibilities to each other under California Health and Safety Code Section 25359.7 and other California laws. Consult your attorney regarding this matter.

 

44.                               FLOOD. Tenant expressly acknowledges and assumes the risk that the Premises and improvements may be subject to flooding due to their location in a flood plain. Tenant unconditionally waives any flood-related property damage claim asserting liability on the part of the Landlord, Landlord’s predecessors and successors-in-interest, the County of Sacramento or its officers, agents, or employees premised on the issuance of a permit for construction of the improvements, whether or not the issuance of this permit is due to the negligence of Landlord, Landlord’s predecessors or successors, the City or its officers, agents or employees.

 

45.                               OPTION TO RENEW. Lessor hereby grants to Lessee the option to renew this lease agreement and all the provisions, conditions and terms contained therein, except monthly base rent, for up to three (3) three (3) year terms immediately following the expiration of this initial term, subject to the following:

 

a.                                           This lease shall be in full force and effect at the time notice of exercise option is given.

 

b.                                           Lessee shall not be in default under any provision of this lease at the time notice of exercise is given, or any time during the term of lease for a consecutive period of more than thirty (30) days.

 

c.                                            Lessee shall give Lessor a written notice irrevocably exercising the option at least one hundred twenty (120) days prior to the last day of the current lease term. If Lessee does not exercise this option in the time period provided, the option shall become null and void and be of no further effect.

 

d.                                           The monthly base rent for the option period shall be based upon the currently prevailing rent for comparable space at the time this option to extend is exercised except that the maximum per square foot amount shall not increase by more than five (5) cents per rentable square foot over the proceeding year. Base Rent shall not be increased more than once per year of each year of any renewal Term and only as set forth in this subsection.

 

46.                       RIGHT OF FIRST REFUSAL.  With the exception of lease renewals by existing tenants, the Lessee is hereby granted, by the Lessor, the right of first refusal to lease the ± 2,500 usable square feet of space immediately adjacent to the West Side of Lessee’s demised premises. See Exhibit A. This right of first refusal to lease is in effect beginning with the commencement of the Lease and will expire after the first year of the Lease, provided:

 

a.                                           The Lessee is not in default under any of the conditions and provisions of this lease. Lessee shall not be in default under any provision of this lease at the time notice of exercise is given, or any time during the term of lease for a consecutive period of more than thirty (30) days.

 

b.                                           The length of time left on Lessee’s then current lease term shall not be less than the longer of: (1) two (2) years; or (2) equal to the lease term proposed in the third party offer.

 

c.                                            The Lessee agrees to lease said adjacent space in its entirety. The Lessor shall not be required to make any adjustments in the demising walls, or other tenant improvements unless by separate agreement between the parties at such time.

 

d.                                           Lessor hereby agrees to provide written notice defining the terms and conditions of the proposed lease.

 

The Lessee shall, within five (5) days after receipt of the Lessor’s notice that a third party offer has been received for the space, indicate, in writing, its agreement to lease said space pursuant to the terms and conditions of Lessee’s existing lease. If Lessee does not give notice in writing to Lessor within five (5) days of its intent to lease the

 

27

 

adjacent space, Lessor thereafter shall have the right to lease said space to a third party at the rent rate stated in the notice and Lessee’s right of first refusal shall then become null and void.

 

47.                               SECURITY DEPOSIT/LETTER OF CREDIT. At Tenant’s election, in lieu of delivering cash for the Security Deposit pursuant to Section 8 of the Lease, Tenant may elect to deliver simultaneously with the execution of the Lease, to Landlord (as Beneficiary) an irrevocable, unconditional and transferable letter of credit (the “Letter of Credit”). The Letter of Credit shall be issued by and drawn upon a commercial bank or trust company with which Tenant has a business relationship (hereinafter referred to as the “Issuing Bank”) and which Issuing Bank is reasonably acceptable to Landlord and which has a banking office in which the Letter of Credit may be drawn upon in Sacramento, California. The Letter of Credit shall have a term of not less than one year, be in form and content reasonably satisfactory to Landlord, be subject to the International Standby Practices 1998, International Chamber of Commerce Publication No. 590, be for the account of Landlord and be in the initial amount of $161,598.40 and shall reduce annually as hereafter provided. The Letter of Credit shall provide that:

 

a.                                           The Issuing Bank shall pay to Landlord or its duly authorized representative an amount up to the face amount of the Letter of Credit conditioned solely upon presentation of the Letter of Credit and a sight draft in the amount to be drawn;

 

b.                                           The Letter of Credit shall be automatically renewed, without amendment except for the reduction in the amount thereof as hereafter expressly set forth, for consecutive periods of one year each during the term of this Lease or any extensions thereof and extending ninety days beyond any such expiration, unless the Issuing Bank sends written notice (hereinafter referred to as the “Non-Renewal Notice”) to Landlord by certified mail, return receipt requested, not less than thirty (30) days next preceding the then expiration date of the Letter of Credit, that it shall not renew such Letter of Credit;

 

c.                                            Landlord, upon receipt of the Non-Renewal Notice, shall have the right, exercisable by a sight draft, to receive the moneys represented by the Letter of Credit-which moneys shall be held by Landlord as a cash security deposit pursuant to the provisions of Section 8 of the Lease; and

 

d.                                           Upon Landlord’s sale or transfer of all or any portion of Landlord’s interest in the Property, the Letter of Credit shall be transferable one or more times by Landlord as provided herein.

 

In the event of a sale of Landlord’s interest in the Property, Landlord shall have the right to transfer the Letter of Credit deposited hereunder to the purchaser and Landlord shall thereupon be released by Tenant from all liability for the return of such Letter of Credit. In such event, Tenant agrees to look solely to the new landlord for the return of said Letter of Credit. It is agreed that the provisions hereof shall apply to every transfer or assignment made of said Letter of Credit to a new Landlord. Tenant further agrees and acknowledges that it shall pay upon Landlord’s demand, as Additional Rent, any and all costs or fees charged in connection with the Letter of Credit that arise due to (i) Landlord’s sale or transfer of all or a portion of the Building; or (ii) the addition, deletion, or modification of any beneficiaries under the Letter of Credit.

 

Tenant covenants that it will not assign or encumber, or attempt to assign or encumber, the Letter of Credit deposited hereunder as security, and that neither Landlord nor its successors or assigns shall be bound by any such assignment, encumbrance, attempted assignment, or attempted encumbrance.

 

Landlord agrees that it will not draw down the proceeds of the Letter of Credit except in the event of a default by Tenant hereunder which continues after any required notice and the expiration of any applicable cure period or the receipt of notice of non-renewal of such Letter of Credit by the Issuing Bank without the Tenant having provided a substitute Letter of Credit at least seven (7) business days prior to the expiration date of the Letter of Credit meeting all requirements set forth in this Section..

 

The Tenant shall be obligated to maintain a Letter of Credit meeting the requirements of Section 8 during the Term of this Lease, provided, however, the amount available to be drawn under such Letter of Credit shall reduce as follows:

 

28

 

	
Beginning of Month
    	
 
    	
Amount of Reduction
    	
 
    	
Balance of Letter of Credit
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
$
    	
161,598.40
    	
 
    
	
13
    	
 
    	
$
    	
32,319.68
    	
 
    	
$
    	
129,278.72
    	
 
    
	
25
    	
 
    	
$
    	
32,319.68
    	
 
    	
$
    	
96,959.04
    	
 
    
	
37
    	
 
    	
$
    	
32,319.68
    	
 
    	
$
    	
64,639.36
    	
 
    
	
49
    	
 
    	
$
    	
32,319.68
    	
 
    	
$
    	
32,319.68
    	
 
    
	
61
    	
 
    	
$
    	
32,319.68
    	
 
    	
$
    	
0.00
    	
 
    

 

In the event of an occurrence of a default under this Lease which is not cured or waived, the amount available to be drawn under the Letter of Credit shall not be reduced further and the Landlord shall have the right to draw upon the Letter of Credit as provided herein. Landlord may use, apply, or retain the proceeds of the Letter of Credit to the same extent that Landlord may use, apply, or retain the cash security deposit as set forth in Section 8 of the Lease. Landlord may draw on the Letter of Credit in whole or in part, from time to time, at Landlord’s election. If Landlord partially draws down the Letter of Credit, Tenant shall, within ten (10) days after Landlord gives Tenant notice thereof, restore all amounts drawn by Landlord or substitute cash security instead. If Landlord elects to draw the full amount, but the full amount of the Letter of Credit is not required for the payment of any sum to which Landlord may become obligated by Tenant’s default, or to compensate Landlord for any loss or damage which Landlord may suffer as a consequence of any default by Tenant, the balance of the proceeds drawn under the Letter of Credit shall be held by Landlord (together with any sums required to restore the amount held by Landlord to the total amount required above) as a cash security deposit and shall be treated in accordance with the provisions of Section 8 of the Lease.

 

Tenant hereby agrees to cooperate, at its expense, with Landlord to promptly execute and deliver to Landlord any and all modifications, amendments and replacements of the Letter of Credit, as Landlord may reasonably request to carry out the terms and conditions of Section 8.

 

Nothing in Section 8 shall in any manner limit the liability of Tenant under this Lease, and Landlord is reserving all rights and remedies against Tenant in the event of a default by Tenant.

 

	
Landlord:
    	
 
    	
Tenant:
    
	
Marvin L. Oates, Trustee of the Marvin L. Oates
    	
 
    	
Arcadia Biosciences, Inc., an Arizona   Corporation
    
	
Trust, dated March 7, 1995, as Amended and
    	
 
    	
 
    
	
Restated December 20, 2001 and Frank C.   Ramos
    	
 
    	
 
    
	
and Joanne M. Ramos as husband and wife
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:
    	
/s/ Roy Hodges
    
	
 
    	
 
    	
Roy Hodges, President
    
	
 
    	
 
    	
 
    	
 
    
	
Marvin L. Oates, Trustee of the Marvin L. Oates
    	
 
    	
 
    	
 
    
	
Trust, dated March 7, 1995, as Amended and
    	
 
    	
 
    	
 
    
	
Restated December 20, 2001
    	
 
    	
Date:
    	
3.17.03
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/
    	
 
    	
 
    	
 
    
	
Frank C. Ramos, husband
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/
    	
 
    	
 
    	
 
    	
/s/ 
    
	
Joanne M. Ramos, wife
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Date:
    	
 
    	
 
    	
 
    	
 
    	
Approved as to form:
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Office of the General   Counsel
    	
 
    	
Date
    
	
 
    	
 
    	
 
    	
 
    	
Approved as to financial terms:
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
/s/ 
    	
 
    	
3-17-03
    
	
 
    	
 
    	
 
    	
 
    	
Finance
    	
 
    	
Date
    
	
 
    	
 
    	
 
    	
 
    	
No changes may be made   after signatures above
    
											

 

29

 

 

 

 

 

 

 

 

EXHIBIT A-3

 

DEFINITION OF “CORE AND SHELL” CONSTRUCTION

 

1.                                      Building. All areas of the premises and all common areas shall be fully permitted by Landlord and in complete compliance with all local, state and federal building codes and regulations including the Americans with Disabilities Act necessary for occupancy as evidenced by the procurement of a Certificate of Occupancy. All areas within the Premises shall be broom clean and all systems serving and/or within the Premises shall be in good working order prior to the installation of Tenant’s improvements.

 

2.                                      Foundation and Steel Frame. The foundation and steel frame are typical for a building of this size and character and have been designed in accordance with the soil and geological conditions of the site. The steel frame of the building has been professionally engineered consistent with all current codes, regulations and engineering practices. The concrete floors of the Premises are finished in accordance with the plans and specifications for the building. Slab will need to be tested for moisture content prior to installation of flooring material. Depending on the specific flooring manufacturer’s requirement for moisture content, the slab may have to be treated. The floor area of the premises is designed to accommodate a combined weight load of 80 lbs. per square foot on the second floor and 250 lb. per square foot on the ground floor. The building has been designed to accommodate a typical finished ceiling height of 9’ above the finished concrete floor.

 

3.                                      Window Blinds. Landlord will require an interior window blind system installed at all exterior windows which shall conform to the specified standard for the building. Window blinds are not included in the Building shell definition.

 

4.                                      Perimeter Walls. The interior side of all perimeter exterior walls shall be unframed and uninsulated, in an “AS IS” condition. All columns and intermediate locations throughout the perimeter of the building and including all intermediate columns within the Premises shall not be improved.

 

5.                                      Building Core. Vertical shaft space shall be provided and identified, for the use of Tenant within the core to accommodate riser requirements for Tenant’s private telephone, electrical, data and CTV systems. Existing risers consist of one (1) 4” diameter telephone and two (2) 11⁄2” diameter CTV conduits have been stubbed from the property line into the first floor electrical room.

 

Typical floor passenger elevator lobbies shall have walls taped, sanded, textured and painted. Elevator lobbies also include fire rated doors and smoke detectors, (strobe lighting if required) and general lighting as required by code and otherwise designed and constructed to comply with 1994 Uniform Building Code and Uniform Fire Code. Utility room walls are fire taped and have VCT or concrete floors. The underside of the roof deck is not insulated.

 

All core walls facing Tenant areas shall be framed and ready to accept drywall. The building core of the Premises includes 7’ height solid core birch wood veneer or metal doors, frames and hardware. Doors, frames and hardware are provided to all stairwells, toilet rooms and service lobbies (all doors which open to the exterior of the building core). All other doors are hollow metal or as designed.

 

Vertical stairwell exit shafts shall be constructed as required by building code and all surfaces are to be painted.

 

6.                                      Toilet Rooms

 

Landlord shall provide women’s and men’s toilet rooms in compliance with all code requirements and recommendations for size and quantity including the Americans with Disabilities Act and consistent with details of

 

34

 

design and finish developed by Landlord’s architect. Men’s and women’s toilet room facilities are located on each floor of the building as follows.

 

(b)         First Floor — Men

 

Three (3) urinals

Two (2) standard water closet stalls

One (1) handicap accessible water closet stall

One (1) handicap accessible shower

Four (4) lavatories (all handicap accessible)

 

(c)          First Floor — Women

 

Five (5) standard water closet stalls

One (1) handicap water closet stall

One (1) handicap accessible shower

Four (4) lavatories (all handicap accessible)

 

(d)         Second Floor — Men

 

Three (3) urinals

Two (2) standard water closet stalls

One (I) handicap accessible water closet stall

Four (4) lavatories (all handicap accessible)

 

(e)          Second Floor — Women

 

Five (5) water closet stalls

One (1) handicap water closet stall

Four (4) lavatories (all handicap accessible)

 

Fixture count has been sized for an overall office employee building of 670 based on the 1994 Uniform Plumbing Code.

 

7.                                      HVAC System. Landlord shall provide and operate a first class quality heating, ventilating and air conditioning system with service available on a year round basis in all occupied areas of the building. Fan rooms shall be located on each floor of the building, permitting Tenant to utilize after hours HVAC service on a floor by floor basis. All HVAC units shall be equipped with after hours control and monitoring equipment.

 

The building is designed for a water source heat pump system to heat and cool the occupied space. Individual zones will be served by horizontally mounted heat pump units located in the ceiling space. Since these units vary in size from 6.7 MBH cooling output to 120 MBH, the tenant improvement design has a high degree of flexibility in zone sizing.

 

The horizontal heat pumps are served by a condenser water loop connected to a 250 ton cooling tower and an 1825 MBH input hot water boiler located in the mechanical enclosure, with two (2) 15 HP pumps supplying the loop. These variable speed pumps supply condenser water to the heat pumps as called for by the direct digital control system.

 

Ventilation air is supplied through a variable speed pressurized duct system with roof mounted fans.

 

Landlord will provide the condenser water loop, cooling tower, boiler and pumps, only as a shell specification. All costs associated with installation of horizontal mounted heat pump units, after hours control devices and connection to water loop and duct system will be part of tenant improvement work.

 

35

 

The entire system is designed for the utmost in flexibility, allowing zones as small as 1000 square feet and a very high degree of energy efficiency.

 

8.              Lighting System. Common areas, mechanical, electrical rooms are lighted as specified and installed by Landlord.

 

9.              Electrical and Power Systems. The main power service to the building is as follows.

 

2500 amp, 277/480 volt, 3-phase, 4 wire, single meter with main circuit breaker and GFP protection. Two (2) 200 amp, 277/480 volt panels, and one (1) 200 amp 120/208 volt panel. Two (2) 40 HP elevators.

 

Connected Loads:

 

	
Mechanical Equipment
    	
 
    	
175kVA
    	
 
    	
 
    
	
Elevators
    	
 
    	
86kVA
    	
 
    	
 
    
	
Lighting
    	
 
    	
42kVA
    	
 
    	
 
    
	
Miscellaneous
    	
 
    	
12kVA
    	
 
    	
 
    
	
TOTAL
    	
 
    	
315kVA
    	
=
    	
380 amps
    

 

10.       Fire and Life Safety Systems. Base building fire and life safety systems meet all local codes and regulations and all requirements of Title 24 and the Americans with Disabilities Act and is capable of being extended beyond the core to the Premises with adequate capacity to accommodate standard tenant improvements.

 

The shell and core building improvements include a fire sprinkler system, main loop and branch distribution piping, including mains. All laterals drops and heads as required by local code and Tenant’s final layout is not included in the shell. Fire sprinkler system completed in core and stairwells as required by the 1994 Uniform Fire Code and the Sacramento County Fire Authority.

 

11.       Security Systems. The building shall have a fully operable security system with card readers at stairwell, selected interior doors and all selected perimeter door monitoring and alarm annunciation.

 

12.       Elevators. Two (2) hydraulic elevators each with a 2,500 lb. capacity are complete and operating. Elevators are manufactured by Dover and have an approximate speed of 125 feet per minute under full loading.

 

All elevator cabs are in compliance with the Americans with Disabilities Act.

 

13.       Parking. The parking area shall be fully illuminated and shall be operated fully illuminated after dark.

 

36

 

EXHIBIT A-4

 

Tenant Improvement Specifications

General Requirements

 

1.                                      The work under this Contract is to include all labor, materials transportation, equipment, supervision, and services necessary for and reasonably incidental to the completion of all construction work in connection with the Drawings and Specifications.

 

2.                                      Applicable Codes: All materials and workmanship shall conform to the Uniform Building Code, applicable State and Federal safety orders.

 

3.                                      Security of the project shall be the responsibility of the contractors during the construction period. Contractor shall maintain the construction site in a clean and orderly condition at all times.

 

4.                                      Use dimensions shown rather than scale drawings.

 

5.                                      In all construction areas, new and adjacent surface of gypsum board and acoustical ceiling shall be dry, free of dirt, grease, wax, polish and dust to a like-new appearance.

 

6.                                      All products specified shall be installed as per manufacturer’s recommendations and requirements. If there are any discrepancies, architect should be notified immediately.

 

7.                                      Contractor shall field verify all existing conditions and dimensions before proceeding with work.

 

8.                                      Contractor shall coordinate timing of construction and work with client to create the least amount of disturbance to the facility and its staff, as possible.

 

9.                                      Upon discovery of any discrepancies, the contractor is to notify the architect at once and not proceed with work in that area until direction is given by the architect. Architect will review and give direction in expedient manner.

 

10.                               Clean-Up:

a.                                      Keep areas of work free from debris as work progresses.

b.                                      Protect work and materials of this Section prior to and during installation, and protect the installed work and materials of other trades.

 

I.                                        PARTITIONS

 

A.                                    Demising Wall

 

1.                                      3 5/8” x 25 gauge (unless 6” is required) metal studs at 16” on center. Full height to structure above.

2.                                      5/8” type “X” gypsum board tenant side of wall full height to structure above.

3.                                      R-11 3 1⁄2 “batt insulation to ceiling height.

 

37

 

B.                                    Interior Wall

 

1                                         3 5/8” x 25 gauge (unless 6” is required) metal studs with seismic bracing per local Building Department.

2.                                      5/8” type “X” gypsum board, both sides, taped top extended.

3.                                      Acoustical insulation provided only if shown on floor plan (extra).

 

C.                                    1-Hour Partition Where Required by UBC

 

1 .                                   3 5/8” x 25 gauge (unless 6” is required) metal studs full height to structure above or to 1 hour ceiling as allowed by UBC. 16” o.c. to 15’0” maximum height, 16” o.c. to 20’0” maximum height.

2.                                      5/8” gypsum board, type “X” both sides of wall to structure above, taped top textured.

 

II. DOORS, FRAMES AND HARDWARE

 

A.                                    Corridor Doors and Frames (Entrance to Suite)

 

1.                                      Wood Door: Weyerhaeuser, DPC-1, 1-3⁄4” thick 3’0” x 8’10” or equal except Davis 8’ 8”.

 

a. Face Veneer; Plain sliced Clear Birch.

b. Core: Timblend, Particle Board Core which complies ANSI A208. 1.

c. Side Edges: Two-ply 1-1/2” laminated outer strip, match face veneer.

d. Top and Bottom Edges: Factory sealed, poly wrapped; vertical edges to be mill option hardwood.

e. Face Assembly: Type I.

f. Core Assembly: Type II.

g. Cut Out Size: As indicated or required. Doors are to be factory machined for hardware.

 

2.                                      Frame: Titan Metal Products, Inc., or equal Sacramento, California. 3’0”x 8’10”x 1-3⁄4” 16 ga. Furniture steel, with fire rating and UL or FM label as required with if specified, 2’6” wide full height sidelight.

 

3.                                      Hardware:

 

	
a.
    	
 
    	
2 pr.
    	
 
    	
Butts
    	
BB1279 4-1⁄2” “x 4-1⁄2”x NPR x 625 (H)
    
	
b.
    	
 
    	
1 ea.
    	
 
    	
Lockset
    	
Schlage A Series or Cal Royal L-Series
    
	
c.
    	
 
    	
1 ea.
    	
 
    	
Closer
    	
900 Cal Royal
    
	
d.
    	
 
    	
1 ea.
    	
 
    	
Door Bumper
    	
W302-S x SS 629 (Q)
    
	
e.
    	
 
    	
Smoke seal set as required.
    

 

4.                                      Wire glass: Hardis Bros. or approved equal 1⁄4” thick with 0201 wire mesh on 1⁄2” square grid “Baroque”.

 

B.                                    Interior Doors and Frame:

 

1.                                      Wood Door:                               3’0” x 7’0”

 

a.                                      Face for transparent finish: Natural rotary cut birch veneer, book matched for transparent finish. End match transoms.

b.                                      Core: Timbled, particle board core which complies ANSI A208. 1.

c.                                       Side Edges: Two-ply-1-1⁄2” laminated outer strip, match face veneer.

 

38

 

d.                                      Top and Bottom Edges: Factory sealed, poly wrapped; vertical edges to be mill option hardwood.

e.                                       Face Assembly: Type I.

f.                                        Core Assembly: Type II.

g.                                       Cut Out Size: As indicated or required. Doors are to be factory machined for hardware.

 

2.                                      Hardware:

 

	
a.
    	
 
    	
2 pr.
    	
 
    	
Butts
    	
 
    	
BB1279 4-1⁄2”x4-1⁄2”x 625
    	
 
    	
(H)
    
	
b.
    	
 
    	
1 ea.
    	
 
    	
Latchset Schlage A Series or Cal Royal L-Series
    
	
c.
    	
 
    	
1 ea.
    	
 
    	
Closer
    	
 
    	
900 Cal Royal
    	
 
    	
 
    
	
d.
    	
 
    	
1 ea.
    	
 
    	
Lockset
    	
 
    	
Schlage A Series or Cal Royal L-Series
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
(tenant upgrade)
    	
 
    	
 
    

 

3.                                      Frame: Timely metal frame 3’ 0” x 7’  0” Brown Sugar 1-3⁄4” 16 GA. Furniture steel, with fire rating and UL or FM label as required.

 

As Required at Pairs of Doors:

 

4.                                      Manual Flush Bolt: BBW 5021-24” x 5021-12”.

5.                                      Automatic Flush Bolt: Glynn-Johnson FB10 x US 26.

6.                                      Coordinator: Glynn-Johnson COR-2 XFB-2 prime coat.

 

III.                              CEILING

 

A.                                    Suspended Ceiling System - T-Bar Donn or equal

 

1.                                      Acoustical panels, exposed suspension: 5/8'' thick, molded, Armstrong Cortega #769 or approved equal.

 

a.              Panel size: per drawings, color white

b.              Panel edge: Square edge @ 24'' x 48'' panels; flush mount with grid;

c.               Align pattern in same direction.

 

2.              Height: 10’-2” unless otherwise specified.

 

IV.                               FLOOR COVERING

 

A.            Carpet Standard

 

A.            CARPET 1- Tenant Space: Manufacturer and Style: Designweave Carpet Mills Quality, Montara, 26 ounce. Color chosen by Tenant

B.            CARPET 2- Corridor and Lobbies: Manufacturer and Style: Designweave “Ravella” 260z, color; 00268 Regal Bronze

 

1.              Installation: Direct Glue U.O.N.

2.              Roppe 4” rubber coved base.

3.              Color as shown on finish schedule.

 

B.            Vinyl Flooring

 

1.              Vinyl composition tile: 12” by 12” by 1/8”; Colors Plus by American Bilrite, or approved equal.

2.              Self-coved base: 4” high, rubber, Roppe or approved equal.

A. Corners: Field-formed.

 

39

 

3.              Adhesive: Waterproof.

4.              Colors as shown on finish schedule or chosen by tenant.

 

V.            WALL TREATMENTS 

 

A.            Paint

 

1.              Apply texturing compound by machine to achieve medium knock down texture matching approved sample.

2.              One (1) coat PVAC Sealant, one (1) coat flat latex paint or eggshell on walls, U.O.N. finish to be smooth of bubbles, roll  marks and brush marks. (one (1) color throughout).

 

VI.       WINDOW COVERINGS

 

A.            Exterior Windows- “Hunter Douglas” vertical blinds. Quality: 3 1/2” wide louvers or equal commercial track, inside ceiling mount. Color: building standard.

 

B.            Interior Windows- “Hunter Douglas” 1” aluminum mini blinds, or equal. Color: chosen by tenant.

 

VII.                          ELECTRICAL

 

A.            Lighting

 

1.              Troffer fixture with acrylic lense  2’x 4’3” lamp fluorescent light fixture with cool white Super Saver lamps and energy saving ballasts.

 

B.            Electrical Receptacles

 

1.              “Decora” duplex receptacle and cover plate; Color: White or Ivory.

2.              “Decora” dedicated duplex receptacle.

 

C.            Switches

 

1.              “Decora” switch and cover plate; Color: White or Ivory.

 

D.            Telephone and Data Lines (extra)

 

1.              Telephone conduit from Electrical Room to Tenant Suite.

2.              Junction box with pull string to above suspended ceiling.

 

VIII.                     FIRE PREVENTION

 

A.            Automatic Sprinklers: Semi-recessed with polished chrome escutcheon.

 

1.              Distribution as required by NFPA and Fire Marshall.

 

B.            Fire extinguishers, surface mounted.

 

1.              One (1) per suite (minimum as required by UFC).

 

IX.      HEATING, VENTILATING AND AIR CONDITIONING

 

1.              Mechanical system to be design by Sigma Engineering (916) 483-7343.

 

40

 

2.              HVAC contractor to coordinate unit layout with furniture placement.

 

3.              Provide adequate service access to unit.

 

4.              Provide fire rated hose kits with flow valves, Y strainers and ball valves.

 

5.              Coordinate with plumber to flush supply and return water lines connected to each water source heart pump prior to start up.

 

6.              Motorized outside air dampers tied into existing system are to be installed for each unit.

 

7.              HVAC contractor to water balance system as required.

 

8.              HVAC contractor to provide air balance report to building owner.

 

9.              HVAC contractor to subcontract with Performance Controls for control integration into existing direct digital control system. (530) 672-2318

 

10.       Provide building owner with “as built” mechanical plans.

 

TENANT IMPROVEMENT UPGRADES

 

I.                FINISH CARPENTRY

 

A.            General

 

1.              Material Grades: WIC Premium “A” Grade complying with “Manual of Millwork” of the Wood Institute of California, unless otherwise noted.

2.              Lumber and plywood shall be kiln-dried to equilibrium moisture content suitable for fabrication in shop and suitable for use intended.

3.              Trim, Ledges, Edge Pieces and Exposed Items: Size and profiles shown in drawings.

 

a.              Specie: Mahogany, White Ash or White Birch, as noted on drawings.

 

4.              Particle Board: Stamped, suitable to receive plastic laminate finish, wood veneer or paint as noted.

5.              Adhesives: Type as recommended by manufacturer for locations and materials shown.

6.              Plastic Laminate: Nevamar or Wilson-Art, and shall comply with the requirements of LD-3 by NEMA.

 

B.            Fabrication

 

1.              Verify measurements at job site.

2.              Verify details and dimension of equipment and fixtures integral with finish carpentry for proper fit and accurate alignment.

3.              Coordinate details with other work supporting, adjoining, or fastening to finish carpentry items.

4.              Fabricate finish carpentry in accordance with WIC Custom Grade unless otherwise noted.

5.              Shop fabricate and assemble work in complete units insofar as dimensions permit shipment and installation.

6.              Conceal nailing where possible and set nail heads for putty in exposed portions.

7.              Thoroughly hand sand wood surfaces. Take care that cross sanding is removed by final sanding in direction of grain; ease “knife-edge” comers by sanding. Wood surface shall be free from dust, glue, stains, and other foreign matter and in proper condition to receive finish.

8.              Perform corrective measures necessitated by non-conformance with WIC standards. The Architect’s opinion will govern discrepancies.

 

41

 

C.            Casework

 

1.                Exposed and semi-exposed surfaces, wood veneer Rift Cut-Transparent (Stain) finish.

2.                Color of transparent (stain) finish as selected by Owner and/or Architect.

3.                Refer above for construction materials not otherwise noted.

4.              All shelves to 32” long shall be 3⁄4” thick minimum and all shelves 33” and longer shall be 1” thick minimum. Edge band full perimeter of all shelves.

5.              Counter tops shall be a one piece 3⁄4” thick particle board with plastic laminate overlay with 4” high top mount splash and self edge front, unless otherwise indicated. Shall comply with WIC Premium Grade construction, refer to WIC Manual of Millwork, Section 26.

 

D.            Casework Hardware

 

1.                Hardware shall be furnished and installed as required to provide a complete casework installation.

2.                Hardware shall be 626 finish unless specified otherwise.

3.              The following hardware is listed to establish quality of product, the substitutions shall be submitted to Architect for approval before casework construction.

 

a.              Hinges: Grass American, Inc., 1006 System concealed, for Overlay and Half Overlay construction. Self-closing, screw-on, center to center placement not to exceed 24”.

b.              Door & Drawer Pulls: HAFELE, Wire Pulls, 5/16” diameter x 1-5/16” projection No. WP4 with 4” centers and 26D finish.

c.               Magnetic Catches: AMEROCK, No. BPQ793PT, holding power to 12 lbs. 2”L x 3⁄4”W x 1⁄2”H.

d.              Drawer Slides: GRANT No. 329 full extension slide, load capacity 100 lbs. per pair, with steel ball bearings.

e.               Pilaster Standards: KV no. KV255ALBR2.

f.                Adjustable Shelf Clip Supports: KV No. KV256WAL.

g.               Locks: National Lock Hardware No. C8062-14A with reversible key. Keyed the same or differently as noted on submittals. Drawers and doors shall be lockable as noted on drawings by Architect.

 

E.            Execution

 

1.                Installation General Requirements

 

a.              Do not install casework or millwork until wet operations are completed and concrete, work has thoroughly dried out, and millwork has been primed or sealed under “Painting Work”. Reseal cut edges, surfaces and end in approved manner.

b.              Trim members: Install level, plumb and true, with members neatly and accurately scribed in place. Install standing trim and single lengths, running trim in as long lengths as practicable for species specified. Butt joints beveled together, exterior angles coped.

c.                Nailing: Set nails (countersink) and fill with matching filler.

d.              Workmanship: Exposed surfaces of finish carpentry shall be free from tool marks, torn grain, cross sanding, or any workmanship defects that cannot be concealed by specified painter’s finish.

 

2.              Install Casework

 

a.              Install casework securely, plumb, level, true and straight with no distortions. Shim as required using concealed shims.

b.              Where casework abuts other finished work, scribe and cut for accurate fit. Before making cutouts, drill pilot holes at corner.

c.                Install finish hardware in accordance with its manufacturer printed instructions.

d.               Repair damages or defective work as directed. Adjust and lubricate hardware for proper operation.

 

42

 

II.           PARTITIONS

 

A.              Restroom Wall

 

1.               3-5/8”x 25 gauge metal studs to 6” above suspended ceiling height with seismic bracing.

2.              5/8” gypsum board both sides, water resistant type where required by Section 510(b)4712 of UBC, taped with smooth finish.

3.               R-11 glass fiber batt insulating to full height of partition.

 

B.              Acoustical Partitions

 

1.               3-5/8” x 25 gauge metal studs to 6” above suspended ceiling height with seismic bracing.

2.               5/8” gypsum board both sides, taped with smooth finish.

3.               R-11 glass fiber batt insulation for full height of partition.

 

III.      CEILING

 

A.              Suspended Ceiling System Upgrade

 

1.               Ceiling Tile: USG 2310 24”x 48”x 5/8”; Color: White.

2.              Ceiling Grid: Donn DX Double Webb intermediate duty grid; Color: Flat White. Class “A” suspension system shall be installed per recommendation.

 

B.              Gypsum Board

 

1.               5/8” type gypsum board, taped with medium knock down finish.

2.               6”x 20 gauge steel joists at 24” o.c.

3.               R-l1 fiberglass batt insulation laid above ceiling unless otherwise noted. (In restroom area only).

 

IV.       FLOOR COVERING

 

A.              Carpet Upgrade

 

1.               Designweave ''Council'', 40 oz. Precision Cut and Loop, color selected by tenant.

2.               Installation: Over Pad.

3.               Carpet Pad: Hartex contract heavy traffic M.R. 1049.

 

B.              Vinyl Flooring

 

1.               Armstrong Classic Corlon commercial sheet flooring. Quality: Seagate.

2.               Self-coved base.

3.            Color as shown on finish schedule.

 

V.            WALL TREATMENTS

 

A.              Wallcovering - location and type as shown on drawings.

 

B.              Paint - More than one (1) color or color other than building standard.

 

** Note:                           The Owner has the right to substitute product if unavailable to a equal or greater quality.

 

43

 

EXHIBIT B

 

WORK LETTER AGREEMENT

 

You (hereinafter called “Tenant”) and we (hereinafter called “Landlord”) are executing simultaneously with this Work Letter Agreement (the “Work Letter Agreement”), a written Office Lease (the “Lease”) covering those certain Premises more particularly described in the Lease, in the building addressed at 202 Cousteau Place, Davis, California.

 

For and in consideration of the agreement to lease the Premises and the mutual covenants contained herein and in the Lease, Landlord and Tenant hereby agree as follows:

 

1.                                     Lease Provisions. Unless otherwise defined in this Work Letter Agreement, the capitalized terms used herein shall have the meaning assigned to them in the Lease. The terms and provisions of the Lease, insofar as they are applicable to this Work Letter Agreement are hereby incorporated herein by reference.

 

2.                                     Representatives. Landlord hereby appoints Kevin F. Ramos as Landlord’s representatives to act for Landlord in all matters covered by this Work Letter Agreement. Tenant hereby appoints Steve Harrison as Tenant’s representatives to act for Tenant in all matters covered by this Work Letter Agreement. Notices under this Work Letter Agreement shall be given to the parties’ representatives in the same manner as under the Lease. All inquiries, requests, instructions, authorizations and other communications with respect to the matters covered by this Work Letter Agreement shall be related to Landlord’s representatives or Tenant’s representatives, as the case may be. Tenant will not make any inquiries of or request to, and will not give any instructions or authorizations to, any other employee or agent of Landlord, including Landlord’s architects, engineers, and contractors or any of their agents or employees, with regard to matters covered by this Work Letter Agreement. Either Landlord or Tenant may change its representatives at any time by written notice to the other.

 

3.                                     Work. Tenant, at its sole cost and expense, shall perform, or cause to be performed, the work (the “Work”) in the Premises provided for in the Approved Plans (as defined in Section 4 hereof). Subject to Tenant’s satisfaction of the conditions specified in this Work Letter Agreement, Tenant shall be entitled to Landlord’s Contribution (as defined in Section 9(b) below.

 

4.                                      Pre-Construction Activities.

 

(a)                                  Prior to Tenant’s commencement of the Work, Tenant shall submit the following information and items to Landlord for Landlord’s review and approval:

 

(i)                                     The names and addresses of Tenant’s contractors (and said contractor’s subcontractors) and materialmen to be engaged by Tenant for the Work (individually, a “Tenant Contractor,” and collectively, “Tenant’s Contractors”). Landlord has the right to reasonably approve or disapprove all or any one or more of Tenant’s Contractors. Landlord may, at its election, designate a list of approved contractors for performance of those portions of work involving electrical, mechanical, plumbing, heating, air conditioning or life safety systems, from which Tenant must select its contractors for such designated portions of work.

 

(ii)                                  Certificates of insurance as hereinafter described. Tenant shall not permit Tenant’s Contractors to commence work until the required insurance has been obtained and certified copies of policies or certificates have been delivered to Landlord.

 

(iii)                               The Plans (as hereinafter defined) for the Work, which Plans shall be subject to Landlord’s approval in accordance with Section 4(b) below.

 

Tenant will update such information and items by notice to Landlord of any changes.

 

44

 

(b)                             As used herein the term “Approved Plans” shall mean the Plans (as hereinafter defined), as and when approved in writing by Landlord. As used herein, the term “Plans” shall mean the full and detailed architectural and engineering plans and specifications covering the Work (including, without limitation, architectural, mechanical and electrical working drawings for the Work). The Plans shall be subject to Landlord’s approval and the approval of all local governmental authorities requiring approval of the work and/or the Approved Plan. Landlord shall give its approval or disapproval (giving general reasons in case of disapproval) of the Plans within ten (10) business days after their delivery to Landlord. Landlord agrees not to unreasonably withhold its approval of said Plans; provided, however, that Landlord shall not be deemed to have acted unreasonably if it withholds its approval of the Plans because, in Landlord’s reasonable opinion: the Work as shown in the Plans is likely to adversely affect Building systems, the structure of the Building or the safety of the Building and/or its occupants; the Work as shown on the Plans might impair Landlord’s ability to furnish services to Tenant or other tenants; the Work would increase the cost of operating the Building; the Work would violate any governmental laws, rules or ordinances (or interpretations thereof); the Work contains or uses hazardous or toxic materials or substances which are not customarily used in the building trade; the Work would adversely affect the appearance of the Building; the Work might materially adversely affect another tenant’s premises; or the Work is prohibited by any mortgage or trust deed encumbering the Building. The foregoing reasons, however, shall not be exclusive of the reasons for which Landlord may withhold consent, whether or not such other reasons are similar or dissimilar to the foregoing. If Landlord notifies Tenant that changes are required to the final Plans submitted by Tenant, Tenant shall submit to Landlord, for its approval, the Plans amended in accordance with the changes so required. The Plans shall also be revised, and the Work shall be changed, all at Tenant’s cost and expense, to incorporate any work required in the Premises by any local governmental field inspector. Landlord’s approval of the Plans shall in no way be deemed to be (i) an acceptance or approval of any element therein contained which is in violation of any applicable laws, ordinances, regulations or other governmental requirements, or (ii) an assurance that work done pursuant to the Approved Plans will comply with all applicable laws (or with the interpretations thereof) or satisfy Tenant’s objectives and needs.

 

(c)                              No Work shall be undertaken or commenced by Tenant in the Premises until (i) Tenant has delivered, and Landlord has approved, all items set forth in Section 4(a) above, (ii) all necessary building permits have been applied for and obtained by Tenant.

 

5.                                                          Delays. In the event Tenant fails to deliver or deliver in sufficient and accurate detail the information required under Section 4 above, or in the event Tenant, for any reason, fails to complete the Work on or before the Commencement Date, Tenant shall be responsible for Rent and all other obligations set forth in the Lease from the Commencement Date regardless of the degree of completion of the Work on such date, and no such delay in completion of the Work shall relieve Tenant of any of its obligations under the Lease.

 

6.                                                          Change Orders. All changes to the Approved Plans requested by Tenant must be approved by Landlord in advance of the implementation of such changes as part of the Work, which approval shall not be unreasonably conditioned or withheld and shall be delivered as soon as reasonably possible, but in no event later than five (5) business days after Tenant’s request therefor. All delays caused by Tenant-initiated change orders, including, without limitation, any stoppage of work during the change order review process, are solely the responsibility of Tenant and shall cause no delay in the commencement of the Lease or the Rent and other obligations therein set forth. All increases in the cost of the Work resulting from such change orders shall be borne by Tenant.

 

7.                                                          Standards Of Design And Construction And Conditions Of Tenant’s Performance. All work done in or upon the Premises by Tenant shall be done according to the standards set forth in this Section 7, except as the same may be modified in the Approved Plans approved by or on behalf of Landlord and Tenant.

 

(a)                             Tenant’s Approved Plans and all design and construction of the Work shall comply with all applicable statutes, ordinances, regulations, laws, codes and industry standards, including, but not limited to, requirements of Landlord’s fire insurance underwriters.

 

45

 

(b)                             Tenant shall, at its own cost and expense, obtain all required building permits and occupancy permits. Tenant’s failure to obtain such permits shall not cause a delay in the commencement of the Lease Term or the obligation to pay Rent or any other obligations set forth in the Lease.

 

(c)                              Tenant’s Contractors shall be licensed contractors, possessing good labor relations, capable of performing quality workmanship and working in harmony with Landlord’s contractors and subcontractors and with other contractors and subcontractors in the Building. All work shall be coordinated with any other construction or other work in the Building in order not to adversely affect construction work being performed by or for Landlord or its tenants.

 

(d)                             Tenant shall use only new, first-class materials in the Work, except where explicitly shown in the Approved Plans, All Work shall be done in a good and workmanlike manner. Tenant shall obtain contractors’ warranties of at least one (1) year duration from the completion of the Work against defects in workmanship and materials on all work performed and equipment installed in the Premises as part of the Work.

 

(e)                              Tenant and Tenant’s Contractors shall make all reasonable efforts and take all steps appropriate to assure that all construction activities undertaken comport with the reasonable expectations of all tenants and other occupants of a fully-occupied (or substantially fully occupied) first-class office building and do not unreasonably interfere with the operation of the Building or with other tenants and occupants of the Building. In any event, Tenant shall comply with all reasonable rules and regulations existing from time to time at the Building. Tenant and Tenant’s Contractors shall take all precautionary steps to minimize dust, noise and construction traffic, and to protect their facilities and the facilities of others affected by the Work and to properly police same. Construction equipment and materials are to be kept within the Premises and delivery and loading of equipment and materials shall be done at such locations and at such time as Landlord shall direct so as not to burden the construction or operation of the Building. If and as required by Landlord, the Premises shall be sealed off from the balance of the office space on the floor(s) containing the Premises so as to minimize the dispersement of dirt, debris and noise.

 

(f)                               Landlord shall have the right to order Tenant or any of Tenant’s Contractors who violate the requirements imposed on Tenant or Tenant’s Contractors in performing work to cease work and remove its equipment and employees from the Building. No such action by Landlord shall delay the commencement of the Lease or the obligation to pay Rent or any other obligations therein set forth.

 

(g)                              Utility costs or charges for any service (including HVAC, hoisting or freight elevator and the like) to the Premises shall be the responsibility of Tenant from and after the Commencement Date. Tenant shall pay for all support services provided by Landlord’s contractors at Tenant’s written request or at Landlord’s discretion resulting from breaches or defaults by Tenant under this Work Letter Agreement. All use of freight elevators is subject to scheduling by Landlord and the rules and regulations of the Building. Tenant shall arrange and pay for removal of construction debris and shall not place debris in the Building’s waste containers. If required by Applicable Law, Tenant shall sort and separate its waste and debris for recycling and/or environmental law compliance purposes.

 

(h)                             Tenant shall permit access to the Premises, and the Work shall be subject to inspection, by Landlord and Landlord’s architects, engineers, contractors and other representatives, at all times during the period in which the Work is being constructed and installed and following completion of the Work.

 

(i)                                 Tenant shall proceed with its work expeditiously, continuously and efficiently.

 

(j)                                Tenant shall have no authority to deviate from the Approved Plans in performance of the Work, except as authorized by Landlord and its designated representative in writing (which shall not be unreasonably conditioned, withheld or delayed). Tenant shall furnish to Landlord “as-built” drawings of the Work within thirty (30) days after completion of the Work.

 

(k)                             Landlord shall have the right to run utility lines, pipes, conduits, duct work and component parts of all mechanical and electrical systems where necessary or desirable through the Premises, to

 

46

 

repair, alter, replace or remove the same, and to require Tenant to install and maintain proper access panels thereto, provided such work shall be performed at such times in such manner so as to minimize disruption to the conduct of Tenant’s business in the Premises and the construction of Tenant’s Work.

 

(l)                                 Tenant shall impose on and enforce all applicable terms of this Work Letter Agreement against Tenant’s architect and Tenant’s Contractors.

 

8.                                                          Insurance And Indemnification.

 

(a)                             In addition to any insurance which may be required under the Lease, Tenant shall secure, pay for and maintain or cause Tenant’s Contractors to secure, pay for and maintain during the continuance of the Work within the Building or Premises, insurance in the following minimum coverages and the following minimum limits of liability:

 

(i)                                      Worker’s Compensation and Employer’s Liability Insurance with limits of not less than $500,000.00, or such higher amounts as may be required from time to time by any Employee Benefit Acts or other statutes applicable where the work is to be performed, and in any event sufficient to protect Tenant’s Contractors from liability under the aforementioned acts.

 

(ii)                                   Comprehensive General Liability Insurance (including Contractors’ Protective Liability) in an amount not less than $1,000,000.00 per occurrence, whether involving bodily injury liability (or death resulting therefrom) or property damage liability or a combination thereof with a minimum aggregate limit of $2,000,000.00, and with umbrella coverage with limits not less than $5,000,000.00. Such insurance shall provide for explosion and collapse, completed operations coverage and broad form blanket contractual liability coverage and shall insure Tenant’s Contractors against any and all claims for bodily injury, including death resulting therefrom, and damage to the property of others and arising from its operations under the contracts whether such operations are performed by Tenant’s Contractors or by anyone directly or indirectly employed by any of them.

 

(iii)                                Comprehensive Automobile Liability Insurance, including the ownership, maintenance and operation of any automotive equipment, owned, hired, or non-owned in an amount not less than $500,000.00 for each person in one accident, and $1,000,000.00 for injuries sustained by two or more persons in any one accident and property damage liability in an amount not less than $1,000,000.00 for each accident. Such insurance shall insure Tenant’s Contractors against any and all claims for bodily injury, including death resulting therefrom, and damage to the property of others arising from its operations under the contracts, whether such operations are performed by Tenant’s Contractors, or by anyone directly or indirectly employed by any of them.

 

(iv)                               “All-risk” builder’s risk insurance upon the entire Work to the full insurable value thereof. This insurance shall include the interests of Landlord and Tenant (and their respective contractors and subcontractors of any tier to the extent of any insurable interest therein) in the Work and shall insure against the perils of fire and extended coverage and shall include “all-risk” builder’s risk insurance for physical loss or damage including, without duplication of coverage, theft vandalism and malicious mischief. If portions of the Work are stored off the site of the Building or in transit to said site are not covered under said “all-risk” builder’s risk insurance, then Tenant shall effect and maintain similar property insurance on such portions of the Work. Any loss insured under said “all-risk” builder’s risk insurance is to be adjusted with Landlord and Tenant.

 

(v)                                  All policies (except the worker’s compensation policy) shall be endorsed to include as additional insured parties the parties listed on, or required by, the Lease, Landlord’s contractors, Landlord’s architects, and their respective beneficiaries, partners, directors, officers, employees and agents, and such additional persons as Landlord may designate. The waiver of subrogation provisions contained in the Lease shall apply to all insurance policies (except the worker’s compensation policy) to be obtained by Tenant pursuant to this Section. The insurance policy endorsements shall also provide that all additional insured parties shall be given thirty (30) days’ prior written notice of any reduction, cancellation or non-renewal of coverage (except that ten (10) days’ notice shall be sufficient in the case of cancellation for non-payment of premium) and shall provide that the insurance coverage afforded to the additional insured parties thereunder shall be primary to any insurance carried

 

47

 

independently by said additional insured parties. Additionally, where applicable, each policy shall contain a cross-liability and severability of interest clause.

 

(b)                             Without limitation of the indemnification provisions contained in the Lease, to the fullest extent permitted by law Tenant agrees to indemnify, protect, defend and hold harmless Landlord, the parties listed, or required by, the Lease to be named as additional insureds, Landlord’s contractors, Landlord’s architects, and their respective beneficiaries, partners, directors, officers, employees and agents (“Landlord’s Parties”), from and against all claims, liabilities, losses, damages and expenses of whatever nature to the extent arising out of or in connection with the Work or the entry of Tenant or Tenant’s Contractors into the Building and the Premises, including, without limitation, mechanic’s liens, the cost of any repairs to the Premises or Building necessitated by activities of Tenant or Tenant’s Contractors, bodily injury to persons (including, to the maximum extent provided by law, claims arising under the California Structural Work Act) or damage to the property of Tenant, its employees, agents, invitees, licenses or others. It is understood and agreed that the foregoing indemnity shall be in addition to the insurance requirements set forth above and shall not be in discharge of or in substitution for same or any other indemnity or insurance provision of the Lease. The foregoing indemnity shall not apply to the extent such matter arises out of or results from the negligence or willful misconduct of Landlord or Landlord’s Parties or a breach of the Lease by Landlord.

 

9.                                                          Landlord’s Contribution.

 

(a)                             Contribution Amount. Landlord shall make a dollar contribution (“Landlord’s Contribution”) in the amount of Two hundred five thousand two hundred Dollars ($205,200.00) (which is Twenty-seven Dollars ($27.00) per square foot of Rentable Area of the Premises) for application to the extent thereof to the cost of the Work. If the cost of the Work exceeds Landlord’s Contribution, Tenant shall have sole responsibility for the payment of such excess cost except that Landlord shall be responsible for any such excess costs to the extent caused by negligence or willful misconduct of the Landlord Parties or breach of this Lease by Landlord. If the cost of the Work is less than Landlord’s Contribution, Tenant shall not be entitled to any payment or credit for such excess amount. Notwithstanding anything herein to the contrary, Landlord may deduct from Landlord’s Contribution any amounts due Landlord or its architects or engineers under this Work Letter Agreement before disbursing any other portion of Landlord’s Contribution.

 

(b)                             Payment of Contribution. Landlord shall make periodic disbursements of Landlord’s Contribution for the benefit of Tenant, not more often than once per month. Landlord shall authorize and make payment or release of monies for the benefit of Tenant to Tenant and/or the party designated by Tenant within five (5) days after receipt of a request for payment approved by Tenant and any supporting information reasonably required in good faith by Landlord.

 

Tenant must, in order to receive a disbursement of the Landlord’s Contribution, meet all of the following criteria:

 

(i)                                      Tenant or Tenant’s contractors shall submit for Landlord’s approval copies of plans and specifications for Tenant’s proposed improvements;

 

(ii)                                   Prior to commencement of actual construction, Tenant must submit to Landlord a copy of the approved building permit(s) from the appropriate governmental authority; and

 

(iii)                                Prior to receiving progress payments for the tenant improvements (subject to a 10% retention), Tenant shall submit to Landlord a statement of Tenant’s contractor or architect that the work is complete to the extent that payment is requested.

 

Upon completion of the Work, and in order to receive the final amounts owed (including the ten percent (10%) retention amount from Landlord, Tenant shall provide Landlord with the following:

 

48

 

(i)                                      Written proof (a fully signed “Certificate of Occupancy”, “Certificate of Completion” or other document authorizing Tenant’s occupancy of the Premises from the appropriate governmental authority) that the improvements were substantially completed to the satisfaction of the local building department;

 

(ii)                                   Complete original As-Built plans and specifications;

 

(iii)                                A detailed breakdown of the total costs of the Work;

 

(iv)                               Tenant’s written acknowledgment that the Work is substantially complete and Tenant is reasonably satisfied with the completion of the Work, except for any punchlist items;

 

(v)                                  Full and final waivers of liens and contractors’ affidavits and statements, in such form as may be reasonably required by Landlord, Landlord’s title insurance company and Landlord’s construction or permanent lender, if any, from all parties performing labor or supplying materials or services in connection with the Work showing that all of said parties have been compensated in full and waiving all liens in connection with the Premises and Building.

 

(vi)                               The parties will mutually cooperate to enforce any contractor warranties issued in connection with the tenant improvement work.

 

If Landlord fails to fulfill its obligation to disburse Landlord’s Contribution following five (5) business days’ notice from Tenant and Landlord’s failure to cure within such period, Tenant shall have the following rights, which rights shall be cumulative and in addition to any rights or remedies available to Tenant under the Lease, at law or in equity; (i) to cease performance of all or any portion of the Work, or (ii) continue to perform the Work, and offset any outstanding sums plus interest at ten percent (10%) per annum against Tenant’s obligation to pay Rent next coming due under this Lease.

 

10.                                                   Intentionally Omitted.

 

11.                                                   On-Site Project Manager. As a condition of Tenant’s right to commence and perform the Work, Tenant shall engage the services of an on-site project manager approved in advance by and reasonably acceptable to Landlord, who will be charged with the task of performing daily supervision of the Work. Such on-site manager shall be familiar with all rules and regulations and procedures of the Building and all personnel of the Building engaged directly or indirectly in the management, operation and construction of the Building. Such on-site project manager shall be accountable and responsible to Tenant and to Landlord and, where necessary, shall serve as a liaison between Landlord and Tenant with respect to the Work. The entire cost and expense of the on-site project manager shall be borne and paid for by Tenant (subject to Tenant’s right to use all or any part of Landlord’s Contribution to reimburse Tenant for the same.)

 

12.                                                   Construction Dispute Resolution.

 

(a)                             If any dispute arises between Landlord and Tenant, solely with respect to any matter relating to the Work or the initial construction or buildout of the Building or the Premises, the parties shall attempt in good faith to settle the dispute by mediation under the Construction Industry Mediation Rules of the American Arbitration Association. If such dispute is not resolved by mediation within thirty (30) days of the first written request for mediation, then such dispute shall be resolved by arbitration. Landlord and Tenant each hereby waive its right to seek a judicial determination of whether either party is in breach of, or default under, any of the terms or provisions of this Work Letter Agreement, or under the Lease, to the extent that the alleged breach or default under the Lease relates to the initial construction or buildout of the Building or the Premises. The venue for any mediation or arbitration proceedings under this Work Letter Agreement shall be in Sacramento County, California. The requirement that all disputes be resolved through mediation and then arbitration pursuant to this Section shall constitute an absolute defense to any court action filed by one of the parties hereto against the other, and shall enable the party against whom such action is filed to cause such action to be dismissed or set aside at any time.

 

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(b)                             If a right to arbitration arises pursuant to Section 12(a), either party may serve upon the other party and file with the American Arbitration Association San Francisco Office a written notice demanding that such dispute be resolved by arbitration pursuant to this Section 12(b). Within five (5) days following such request for arbitration, the parties shall exchange a list of acceptable arbitrators and select one from those lists. If they are unable to agree on an arbitrator, an arbitrator shall be appointed within the shortest possible period by the assigned Case Administrator in the American Arbitration Association San Francisco Office or any successor association or body of comparable standing if the American Arbitration Association is not then in existence. Any controversy or claim arising out of or relating to this Work Letter Agreement or the breach of this Work Letter Agreement shall be settled by one arbitrator in accordance with the commercial rules of the American Arbitration Association. Judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction over the dispute. The arbitrator shall assess its fee, all other fees and costs of any such arbitration proceeding and reasonable attorneys’ fees, against the party to whom, in the arbitrator’s opinion, is not the prevailing party.

 

(c)                              Notwithstanding anything to the contrary contained in this Work Letter Agreement, the parties shall each have the right to file with a court of competent jurisdiction an application for temporary or preliminary injunctive relief, writ of attachment, writ of possession, temporary protective order, or appointment of a receiver if the arbitration award to which the applicant may be entitled may be rendered ineffectual in the absence of such relief or if there is no other adequate remedy. Such application shall not waive a party’s arbitration rights under this Work Letter Agreement.

 

(d)                             Notwithstanding anything to the contrary contained in this Work Letter Agreement, if Landlord fails to pay Tenant any amount due under the terms of this Work Letter Agreement, Tenant may record a mechanic’s lien against the Property and may commence an action to foreclose such mechanic’s lien in accordance with State of California law; however, if arbitration has been commenced and an award issued prior to the date Tenant commences an action to foreclose any mechanic’s lien recorded against the Property, Tenant agrees to be bound by such arbitration award and shall waive any right to foreclose its mechanic’s lien for an amount in excess of the arbitration award.

 

(e)                              During any mediation or arbitration proceedings, Landlord and Tenant shall continue to carry out their responsibilities under this Work Letter Agreement. The parties’ respective obligations contained in this Section 12(e) shall be specifically enforceable under applicable law in any court having jurisdiction thereof.

 

13.                                                   Additional Provisions.

 

(a)                             Time is of the essence of this Work Letter Agreement.

 

(b)                             If the Plans for the Work require the construction and installation of more fire hose cabinets or telephone/electrical closets than the number regularly provided by Landlord in the core of the Building in which the Premises are located, Tenant agrees to pay all costs and expenses arising from the construction and installation of such additional fire hose cabinets or telephone/electrical closets.

 

(c)                              Tenant agrees that unless otherwise expressly provided in the Lease, neither this Agreement nor the Lease grants Tenant any right of access to the roof of the Building. Should Landlord, in connection with this Agreement or the Lease, agree to mount equipment of any nature on the Building roof, such equipment shall, at Landlord’s option, either be maintained and installed by Landlord, or maintained and installed under Landlord’s direction, unless this Agreement expressly provides otherwise, all at Tenant’s expense. Should this Agreement or the Lease permit Tenant to install any equipment on the roof, any modifications to the roof or the roofs structure to accommodate that equipment shall be made at Tenant’s sole cost and expense.

 

(d)                             Tenant agrees that should the nature of its layout or any of its equipment, fixtures or furnishings to be placed in the Premises place a burden in excess of the Building’s designed load, which is 100 pounds per square foot, Tenant agrees to pay Landlord the cost of any modifications to the Building necessary to accommodate Tenant’s furniture, furnishings or layout, as well as any design, engineering or other professional fees incurred by Landlord in connection with such modifications.

 

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(e)                              Any person signing this Work Letter Agreement on behalf of Landlord and Tenant warrants and represents he has authority to sign and deliver this Work Letter Agreement and bind the party on behalf of which he has signed.

 

(f)                               If Tenant fails to make any payment relating to the Work as required hereunder within fifteen (15) days after written notice from Landlord specifying that such amount is due and payable, Landlord, at its option, may complete the Work pursuant to the Approved Plans and continue to hold Tenant liable for the costs thereof and all other costs due to Landlord. All amounts due from Tenant hereunder shall be deemed to be Rent due under the Lease. Tenant’s failure to pay any amounts owed by Tenant hereunder when due or Tenant’s failure to perform its obligations hereunder shall also constitute a default under the Lease (subject to the notice and cure provisions referenced in Section 27 of the Lease) and Landlord shall have all the rights and remedies granted to Landlord under the Lease for nonpayment of any amounts owed thereunder or failure by Tenant to perform its obligations thereunder.

 

(g)                              This Work Letter Agreement sets forth the entire agreement of Tenant and Landlord regarding the Work. This Work Letter Agreement may only be amended if in writing, duly executed by both Landlord and Tenant.

 

14.                                                   Alterations. Any alterations or improvements desired by Tenant after the completion of the Work shall be subject to the provisions of Section 12 (entitled “Alterations and Additions”) of the Lease.

 

If the foregoing correctly sets forth our understanding, please sign this Agreement where indicated below.

 

	
Landlord:
    	
 
    	
Tenant:
    
	
Marvin L. Oates, Trustee of the Marvin L. Oates
    	
 
    	
Arcadia Biosciences, Inc., an Arizona   Corporation
    
	
Trust, dated March 7, 1995, as Amended and
    	
 
    	
 
    
	
Restated December 20, 2001 and Frank C. Ramos
    	
 
    	
 
    
	
and Joanne M. Ramos as husband and wife
    	
 
    	
By:
    	
/s/ Roy Hodges
    
	
 
    	
 
    	
Roy Hodges, President
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
Date:
    	
3.17.03
    
	
Marvin L. Oates, Trustee of the Marvin L. Oates
    	
 
    	
 
    
	
Trust, dated March 7, 1995, as Amended and
    	
 
    	
 
    
	
Restated December 20, 2001
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Approved as to form:
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/
    	
 
    	
 
    	
 
    	
Office of the General   Counsel
    	
 
    	
Date
    
	
Frank C.   Ramos, husband
    	
 
    	
 
    	
 
    	
Approved as to financial terms:
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
/s/ 
    	
 
    	
3-17-03
    
	
 
    	
 
    	
 
    	
 
    	
Finance
    	
 
    	
Date
    
	
By:
    	
/s/
    	
 
    	
 
    	
 
    	
No Changes may be made after signatures   above
    
	
Joanne M.   Ramos, wife
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
/s/ 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Date:
    	
 
    	
 
    	
 
    	
 
    	
 
    
									

 

51

 

EXHIBIT C

 

Rules and Regulations

 

1.                                     No sign, placard, advertisement, name or notice shall be installed or displayed on any part of the outside or inside of the building without the prior written consent of Landlord. Landlord shall have the right to remove, at Tenant’s expense and without notice, any sign installed or displayed in violation of this rule. All approved signs or lettering on doors and walls shall be printed, painted, affixed, or inscribed at the expense of Tenant by a licensed and insured sign company approved by Landlord.

 

2.                                     If Landlord objects in writing to any curtains, blinds, shades, screens or hanging plants or other similar objects attached to or used in connection with any window or door of the Premises, Tenant shall immediately discontinue such use. No awning shall be permitted on any part of the Premises. Tenant shall not place anything against or near glass partitions or doors or windows that may appear unsightly from outside of the Premises.

 

3.                                     Tenant shall not obstruct any sidewalks, halls, passages, exits, entrances, elevators or stairways of the Building. The halls, passages, exits, entrances, elevators and stairways are not for the general public, and Landlord shall in all cases retain the right to control and prevent access thereto of all persons whose presence in the judgment of Landlord would be prejudicial to the safety, character, reputation and interests of the Building and its tenants; provided that nothing herein contained shall be construed to prevent such access to persons with whom any tenant normally deals in the ordinary course of its business, unless such persons are engaged in illegal activities. No tenant and  no employee or invitee of any tenant shall go upon the roof of the Building.

 

4.                                     Landlord will provide a central directory for the Building. Each tenant’s name and suite number shall be printed on an equally sized strip in the directory. The directory of the Building will be provided exclusively for the display of the name and location of tenants only, and Landlord reserves the right to exclude any other names therefrom.

 

5.                                     All cleaning and janitorial services for the Building and the Premises shall be provided exclusively through Landlord, except with the written consent of Landlord, no person or persons other than those approved by Landlord shall be employed by Tenant or permitted to enter the Building for the purpose of cleaning the same. Tenant shall not cause any unnecessary labor by carelessness or indifference to the good order and cleanliness of the Premises. Landlord shall not in any way be responsible to any Tenant for any loss of property on the Premises, however occurring or for any damage to any tenant’s property by the janitor or any other employee or any other person.

 

6.                                     Landlord will furnish Tenant, free of charge, with two keys to each door lock in the Premises. Landlord may make a reasonable charge for any additional keys. Tenant shall not make or have made additional keys, and Tenant shall not alter any lock or install a new additional lock or bolt on any door of its Premises. Tenant, upon the termination of its tenancy, shall deliver to Landlord the keys of all doors which have been furnished to Tenant, and in the event of loss of any keys so furnished, shall pay Landlord therefor.

 

7.                                     Landlord will furnish Tenant, free of charge, with four card reader access cards per thousand usable feet leased. Additional or replacement cards may be purchased from the Landlord for $10.00 per card. Tenant shall provide Landlord with the name of each employee issued an access card prior to delivery of the card. Tenant shall notify Landlord immediately of any lost or stolen access card so that the access privileges to that card may be deleted from the system. Tenant shall return to Landlord all access cards upon the earlier of the termination of the Lease or vacating the Premises.

 

8.                                     If Tenant requires telegraphic, telephonic, burglar alarm, antenna, satellite dish or similar services, it shall first obtain, and comply with, Landlord’s instructions in their installation. Tenant shall supply Landlord with specifications and drawings of the item to be installed and the manner in which it will be installed and any other documentation Landlord may require. Landlord reserves the right to prohibit the installation of any such item at Landlord’s sole discretion.

 

9.                                     Tenant shall not place a load upon any floor of the Premises which exceeds the load per square foot which such floor was designed to carry and which is allowed by law. Landlord shall have the right to prescribe the weight, size and position of all equipment, materials, furniture and other property brought into the Building. Heavy objects

 

52

 

shall, if considered necessary by Landlord, stand on such platforms as determined by Landlord to be necessary to properly distribute the weight. Business machines and mechanical equipment belonging to Tenant, which cause noise or vibration that may be transmitted to the structure of the Building or to any space therein to such a degree as to be objectionable to Landlord or to any tenants in the Building, shall be placed and maintained by Tenant, at Tenant’s expense, on vibration eliminators or other devices sufficient to eliminate noise or vibration. The persons employed to move such equipment in or out of the Building must be acceptable to Landlord. Landlord will not be responsible for loss of, or damage to, any such equipment or other property from any cause, and all damage done to the Building by maintaining or moving such equipment or other property shall be repaired at the expense of Tenant.

 

10.                                Tenant shall not use or keep in the Premises any kerosene, gasoline or inflammable or combustible fluid or materials other than those limited quantities necessary for the operations or maintenance of office equipment. Tenant shall not use or permit to be used in the Premises any foul or noxious gas or substance, or permit or allow the Premises to be occupied or used in a manner offensive or objectionable to Landlord or other occupants of the Building by reason of noise, odors, vibrations, nor shall Tenant bring into or keep on or about the Premises any birds or animals.

 

11.                                Tenant shall not use any method of heating or air-conditioning other than supplied by Landlord. Heating and air conditioning shall be supplied by Landlord between 7:00 AM and 6:00 PM Monday through Friday and 8:00 AM through 1:00 PM on Saturday, holidays excluded. Tenant may override the HVAC system for additional heating and cooling outside of the established hours. This usage is electronically monitored and will be billed to the tenant at a reasonable cost.

 

12.                                Tenant shall not waste electricity, water or air-conditioning and agrees to cooperate fully with Landlord to assure the most effective operation of the Building’s heating and air-conditioning and to comply with any governmental energy-saving rules, laws or regulations of which Tenant has actual notice, and shall refrain from attempting to adjust controls other than room thermostats installed for Tenant’s use. Tenant shall keep corridor and exterior doors closed and shall close window coverings at the end of each business day.

 

13.                                Landlord reserves the right, exercisable without notices and without liability to Tenant, to change the name and street address of the Building.

 

14.                                Landlord reserves the right to exclude from the Building between the hours of 6:00 pm and 7:00 am the following day, or such other hours as may be established from time to time by Landlord, and on Sundays and legal holidays, any person unless that person is known to the person or employee in charge of the Building and has a pass or is properly identified. Tenant shall be responsible for all persons for whom it requests passes and shall be liable to Landlord for all acts of such persons. Landlord shall not be liable for damages for any error with regard to the admission to or exclusion from the Building of any person. Landlord reserves the right to prevent access, to the Building in case of invasion, mob, riot, public excitement or other commotion by closing the floors or by other appropriate action.

 

15.                                Tenant shall close and lock the doors of the Premises and entirely shut off all water facets or other water apparatus, the electricity, gas or air outlets before Tenant and its employees leave the Premises. Tenant shall be responsible for any damage or injuries sustained by other tenants or occupants of the Building or by Landlord for non-compliance with this rule.

 

16.                                The toilet rooms, toilets, urinals, wash bowls and other apparatus shall not be used for any purpose other than that for which they were constructed and no foreign substance of any kind whatsoever shall be thrown therein. The expense of any breakage, stoppage or damage resulting from the violation of this rule shall be borne by the tenant who, or whose employees or invitees shall have caused it.

 

17.                                Tenant shall not sell, or permit the sale at retail, of newspaper, magazines, periodicals, theater tickets or any other goods or merchandise to the general public in or on the Premises. No door-to-door soliciting, including soliciting by tenants, is permitted within the Building. Tenant shall not use the Premises for any business or activity other than that specifically provided for in Tenant’s lease.

 

53

 

18.                                Tenant shall not install any radio or television antenna, loudspeaker or other devise on the roof or exterior walls of the Building. Tenant shall not interfere with radio or television broadcasting or reception from or in the Building or elsewhere.

 

19.                                Landlord reserves the right to direct electricians as to where and how telephone and telegraph wires are to be introduced to the Premises. Tenant shall not cut or bore holes for wires. Tenant shall not affix any floor covering to the floor of the Premises in any manner except as approved by Landlord. Tenant shall repair any damage resulting from noncompliance with this rule.

 

20.                                Tenant shall not install, maintain or operate upon the Premises any vending machine without written consent of Landlord.

 

21.                                Canvassing, soliciting and distribution of handbills or any other materials, and peddling in the Building, Project, and Parking Lots are prohibited and each tenant shall cooperate to prevent it.

 

22.                                Landlord reserves the right to exclude or expel from the Building any person who, in the Landlord’s judgment, is intoxicated or under the influence of liquor or drugs or who is in violation of any of the Rules and Regulations of the Building.

 

23.                                Tenant shall store all its trash and garbage within the Premises. Tenant shall not place in any trash box or receptacle any material that cannot be disposed of in the ordinary and customary manner of trash and garbage disposal. All garbage and refuse disposal shall be made in accordance with directions issued from time to time by Landlord.

 

24.                                The Premises shall not be used for storage of merchandise held for sale to the general public, or for lodging or for manufacturing of any kind, nor shall the Premises be used for any improper, immoral or objectionable purpose. No cooking shall be done or permitted by any tenant on the Premises, except that use by Tenant of Underwriter’s Laboratory approved microwave ovens and equipment or brewing coffee, tea, hot chocolate and similar beverages shall be permitted, provided that such equipment and use in accordance will all applicable federal, state, county and city laws, codes, ordinances, rules and regulations.

 

25.                                Tenant shall not use in any space or in the public halls of the Building any hand trucks except those equipped with rubber tires and side guards or such other materials handling equipment as Landlord any approve. Tenant shall not bring any other vehicles of any kind into the Building.

 

26.                                Without the written consent of Landlord, Tenant shall not use the name of the Building in connection with or in promoting or advertising the business of Tenant except as Tenant’s address.

 

27.                                Tenant shall comply with all safety, fire protection and evacuation procedures and regulations established by Landlord or any governmental agency.

 

28.                                Tenant assumes any and all responsibility for protecting its Premises from theft, robbery and pilferage, which includes keeping doors locked and other means of entry to the Premises closed.

 

29.                                The requirements of tenant will be attended to only upon appropriate application to the owner’s designated representative by an authorized individual. Employees of Landlord shall not perform any work or do anything outside of their regular duties unless under special instructions from Landlord, and no employee of Landlord will admit any person (Tenant or otherwise) to any office without specific instructions from Landlord.

 

30.                                Tenant shall not park its vehicles in any parking areas designated by Landlord as areas for parking by visitors to the Building. Tenant shall not park its vehicles in any parking space marked for short term parking for longer than the designated time restriction. Tenant shall abide by any parking program which the Landlord may from time to time institute. Except while using the Premises, Tenant shall not leave vehicles in the Building parking areas overnight nor park any vehicles in the Building parking areas other than automobiles, motorcycles, motor driven or

 

54

 

no-motor driven bicycles or four-wheeled trucks.

 

31.                                Landlord may waive any one or more of these Rules and Regulations for the benefit of Tenant or any other Tenant, but no such waiver by Landlord shall be construed as a waiver of such Rules & Regulations in favor of Tenant or any other tenant, nor prevent Landlord from thereafter enforcing any such Rules and Regulations against any or all of the tenants of the Building.

 

32.                                These Rules and Regulations are in addition to, and shall not be construed to or in any way modify or amend, in whole or in part, the terms, covenants, agreements and conditions of any lease of premises in the Building.

 

33.                                Landlord reserves the right to make such other and reasonable Rules and Regulations as, in its judgment, may from time to time be needed for safety and security, for care and cleanliness of the Building and for the preservation of good order therein. Tenant agrees to abide by all such Rules and Regulations herein stated and any additional rules and regulations which are adopted.

 

34.                                Tenant shall be responsible for the observances of all of the foregoing rules by Tenant’s employees, agents, clients, customers, invitees and guests.

 

55

 

EXHIBIT D

 

Janitorial Specifications

Contract Specifications

 

Daily:

 

1.              Empty and clean all trash containers and dispose of all trash and rubbish.

2.              Clean and maintain in a sanitary and odor-free condition all floors, wash mirrors, basins, toilet bowls, and urinals.

3.              Furnish and replenish all toilet room supplies (including soap, towels, seat covers, toilet tissue, and sanitary napkins).

4.              Change light bulbs and tubes as necessary (owner to furnish and replenish).

5.              Sweep or dust-mop all hard surface floors, and carpet sweep all carpeted areas, including stairways and halls. (Offices with hard surface floors in a public lobby area shall be damp-mopped daily).

6.              Remove finger marks and smudges from all glass doors.

7.              Specifically check, and if needed, then:

·                Dust the tops of all furniture, counters, cabinets, and windowsills, (which are free of interfering objects).

·                Remove spots and / or spills from the carpets, floors, and stairways.

·                Change all inoperative light bulbs.

 

Twice Weekly: Vacuum all carpets.

 

Weekly:

 

1.              Damp-mop all hard surface floors.

2.              Dust all window blinds.

3.              Treat stainless steel fountains and sinks to eliminate stains and mineral deposits.

4.              Spot clean the walls.

 

56

 

 

September 13, 2004

 

Mr. Eric J. Rey

President

Arcadia Biosciences

202 Cousteau Place

Suite 200

Davis, CA 95616

 

RE: Executed Lease Amendment

 

Dear Eric:

 

Enclosed, please find a fully executed Lease Amendment #1 for the additional space adjacent to your existing leased space.

 

If you have any questions, please feel free to call me.

 

	
Sincerely,
    	
 
    
	
 
    	
 
    
	
/s/ Dave Edwards
    	
 
    
	
Dave Edwards
    	
 
    
	
Vice President
    	
 
    
	
Buzz Oates Real Estate
    	
 
    
	
 
    	
 
    
	
DE:mjf
    	
 
    
	
 
    	
 
    
	
Enclosures
    	
 
    

 

	
 
    	
DEVELOPMENT · CONSTRUCTION   · REAL ESTATE · PROPERTY MANAGEMENT
    
	
Established 1951
    	
8615 Elder Creek   Road · Sacramento, CA 95828 · 916.381.0609 · 916.381.8671 fax · www.buzzoates.com
    

 

 

LEASE AMENDMENT #1

 

This Lease Amendment #1 (“Amendment”), dated for reference purposes only June 30, 2004, is entered into by and between Marvin L. Oates, as co-Trustee of the Marvin L. Oates Trust, and Frank C. Ramos (collectively “Landlord”), and Arcadia Biosciences, Inc., an Arizona Corporation (“Tenant”). Landlord and Tenant are collectively referred to herein as the “Parties”.

 

RECITALS

 

1.              The Parties entered into that certain Lease (“Lease”) dated May 17, 2003, regarding premises described therein as 202 Cousteau Place, Suite 200, Davis, California 95616 consisting of approximately 8,512 rentable square feet (the “Premises”).

 

2.              Pursuant to Paragraph 46 of the Lease, Landlord granted to Tenant a right of first refusal to lease the 3,039 rentable square feet (2,713 usable square feet) of space adjacent to the west of the Premises (the “Expansion Space”). On March 25, 2004, Tenant exercised its right of first refusal. As a result of Tenant’s exercise of its right of first refusal, the Parties now desire to amend the Lease to memorialize the expansion of the Premises, an extension of the Lease term, and the granting of an additional tenant improvement allowance to Tenant.

 

AGREEMENT

 

The Parties agree as follows:

 

1.                                      SIZE: Effective as of mutual execution of this Amendment, the size of the Premises shall be +3,039 OR 36 increased by 3,039 rentable square feet (2,713 usable square feet) from 8,512 rentable square feet (7,600 usable square feet) to a new total of 11,551 rentable square feet (10,313 usable square feet). The original Premises and Expansion Space are depicted on Exhibit “A” attached hereto. Tenant shall have no further right of first refusal.

 

2.                                      RENT: Commencing upon issuance of a temporary or final certificate of occupancy for the Expansion Space following improvements to be constructed by Tenant’s contractor in accordance with the Work Letter attached hereto as Exhibit B, Base Rent shall increase by $5,470.20 per month, from $15,321.60 per month to a new total of $20,791.80 per month and Tenant’s schedule of Base Rent shall be is as follows:

 

	
 
    	
 
    	
Current Base
    	
 
    	
Expansion Base
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Rent
    	
 
    	
Rent
    	
 
    	
Total Base Rent
    	
 
    
	
Upon Commencement, to June 30, 2005
    	
 
    	
$
    	
15,321.60
    	
 
    	
$
    	
5,470.20
    	
 
    	
$20,791.80 per month
    	
 
    
	
July 1, 2005 — June 30, 2006
    	
 
    	
$
    	
15,747.20
    	
 
    	
$
    	
5,622.15
    	
 
    	
$21,369.35 per month
    	
 
    
	
July 1, 2006 — June 30, 2007
    	
 
    	
$
    	
16,172.80
    	
 
    	
$
    	
5,774.10
    	
 
    	
$21,946.90 per month
    	
 
    
	
July 1, 2007 — June 30, 2008
    	
 
    	
$
    	
16,598.40
    	
 
    	
$
    	
5,926.05
    	
 
    	
$22,524.45 per month
    	
 
    
	
July 1, 2008 — June 30, 2009
    	
 
    	
$
    	
17,024.00
    	
 
    	
$
    	
6,078.00
    	
 
    	
$23,102.00 per month
    	
 
    

 

3.                                      TENANT IMPROVEMENTS/ALLOWANCE: The Expansion Space shall be delivered to Tenant in “As Is” condition and Tenant shall be solely responsible for furnishing its own improvements for the Expansion Space in accordance with the terms and conditions of the Work Letter attached hereto as “Exhibit “B” at Tenant’s sole cost, subject to Landlord’s obligation to provide an allowance of $27.00 per usable square foot as more particularly set forth in Exhibit B. HVAC and electricity monitoring equipment shall be installed by Tenant’s Contractor (Harrison Construction) at Tenant’s cost. Tenant shall use its best efforts to complete its improvements and obtain a temporary or final certificate of occupancy as soon as reasonably possible.

 

4.                                      PRIOR ALLOWANCE. Tenant acknowledges that Landlord has fulfilled all of its obligations with respect to payment of any allowance for improvements for the original Premises.

 

5.                                      EXTENSION OF LEASE TERM: The Term of the Lease shall be extended for an additional period of one (1) year. The term of the lease for the Expansion Space shall commence on the earlier of A.) substantial completion of the improvements by Tenant or B.) March 1, 2005. The Expiration Date of the Lease (formerly June 30, 2008) shall now be June 30, 2009.

 

6,                                      BASE YEAR: The Expansion Space shall have a 2003 base year as described in Paragraph 46 of the Lease (Right of First Refusal).

 

March 2003

 

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7.                                      LETTER OF CREDIT: Tenant shall cause to be issued and delivered to Landlord within two weeks of mutual execution of this Amendment a revised Letter of Credit with the correct names, dates and dollar amounts as required by the Lease. The amount on the Letter of Credit will not be increased due to the Expansion Space.

 

All other terms and conditions of the Lease shall remain the same in full force and effect.

 

IN WITNESS WHEREOF, the Parties hereto have caused this Amendment to be executed as of the day and year written below.

 

	
Lessor:
    	
 
    	
Lessee:
    
	
Marvin L. Oates, as co-Trustee of the Marvin L.   Oates Trust, and Frank C. Ramos
    	
 
    	
Arcadia Biosciences, Inc., an Arizona Corporation
    
	
 
    	
 
    	
 
    
	
/s/ Marvin L. Oates
    	
 
    	
By:
    	
/s/ Eric J. Rey
    
	
Marvin L. Oates, as co-Trustee of the Marvin L.   Oates Trust
    	
 
    	
Eric J. Rey, President
    
	
 
    	
 
    	
 
    
	
/s/ Frank C. Ramos
    	
 
    	
Date:
    	
8/25/04
    
	
Frank C. Ramos
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
Date:
    	
9/3/04
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Approved as to form:
    
	
 
    	
 
    	
/s/ 
    	
 
    	
8/27/04
    
	
 
    	
 
    	
Office of the General   Counsel
    	
 
    	
Date
    
	
 
    	
 
    	
Approved as to financial terms:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
/s/ 
    	
 
    	
9-1-04
    
	
 
    	
 
    	
Finance
    	
 
    	
Date
    
	
 
    	
 
    	
No Changes may be made after signatures   above
    
							

 

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EXHIBIT B

 

WORK LETTER AGREEMENT

 

You (hereinafter called “Tenant”) and we (hereinafter called “Landlord”) are executing simultaneously with this Work Letter Agreement (the “Work Letter Agreement”), a written Lease Amendment #1 (the “Amendment”) with respect to that certain Office Lease dated May 17, 2003 (“Lease”) for certain Premises more particularly described in the Lease, in the building addressed at 202 Cousteau Place, Davis, California.

 

For and in consideration of the agreement to lease the Premises and the mutual covenants contained herein and in the Amendment, Landlord and Tenant hereby agree as follows:

 

1.                                   Lease Provisions. Unless otherwise defined in this Work Letter Agreement, the capitalized terms used herein shall have the meaning assigned to them in the Lease. The terms and provisions of the Lease, insofar as they are applicable to this Work Letter Agreement are hereby incorporated herein by reference.

 

2.                                   Representatives. Landlord hereby appoints Kevin F. Ramos as Landlord’s representatives to act for Landlord in all matters covered by this Work Letter Agreement. Tenant hereby appoints Steve Harrison as Tenant’s representatives to act for Tenant in all matters covered by this Work Letter Agreement. Notices under this Work Letter Agreement shall be given to the parties’ representatives in the same manner as under the Lease. All inquiries, requests, instructions, authorizations and other communications with respect to the matters covered by this Work Letter Agreement shall be related to Landlord’s representatives or Tenant’s representatives, as the case may be. Tenant will not make any inquiries of or request to, and will not give any instructions or authorizations to, any other employee or agent of Landlord, including Landlord’s architects, engineers, and contractors or any of their agents or employees, with regard to matters covered by this Work Letter Agreement. Either Landlord or Tenant may change its representatives at any time by written notice to the other.

 

3.                                   Work. Tenant, at its sole cost and expense, shall perform, or cause to be performed, the work (the “Work”) in the Expansion Space of the Premises provided for in the Approved Plans (as defined in Section 4 hereof). Subject to Tenant’s satisfaction of the conditions specified in this Work Letter Agreement, Tenant shall be entitled to Landlord’s Contribution (as defined in Section 9(b) below).

 

4.                                   Pre-Construction Activities.

 

(a)                            Prior to Tenant’s commencement of the Work, Tenant shall submit the following information and items to Landlord for Landlord’s review and approval:

 

(i)                            The names and addresses of Tenant’s contractors (and said contractor’s subcontractors) and materialmen to be engaged by Tenant for the Work (individually, a “Tenant Contractor,” and collectively, “Tenant’s Contractors”). Landlord has the right to reasonably approve or disapprove all or any one or more of Tenant’s Contractors. Landlord may, at its election, designate a list of approved contractors for performance of those portions of work involving electrical, mechanical, plumbing, heating, air conditioning or life safety systems, from which Tenant must select its contractors for such designated portions of work.

 

(ii)                         Certificates of insurance as hereinafter described. Tenant shall not permit Tenant’s Contractors to commence work until the required insurance has been obtained and certified copies of policies or certificates have been delivered to Landlord.

 

(iii)                      The Plans (as hereinafter defined) for the Work, which Plans shall be subject to Landlord’s approval in accordance with Section 4(b) below.

 

Tenant will update such information and items by notice to Landlord of any changes.

 

(b)                         As used herein the term “Approved Plans” shall mean the Plans (as hereinafter defined), as and when approved in writing by Landlord. As used herein, the term “Plans” shall mean the full and detailed architectural and engineering plans and specifications covering the Work (including, without limitation, architectural, mechanical and electrical working drawings for the Work). The Plans shall be subject to Landlord’s approval and the approval of all local governmental authorities requiring approval of the work and/or the Approved Plan. Landlord shall give its approval or disapproval (giving general reasons in case of disapproval) of the Plans within ten (10) business days after their delivery to Landlord. Landlord agrees not to unreasonably withhold its approval of said Plans; provided, however, that Landlord shall not be deemed to have acted unreasonably if it withholds its approval of the Plans because, in Landlord’s reasonable opinion: the Work as shown in the Plans is likely to adversely affect Building systems, the structure of the Building or the safety of the Building and/or its occupants; the Work as shown on the Plans might impair Landlord’s ability to furnish services to Tenant or other tenants; the Work would increase the cost of operating the Building; the Work would violate any governmental laws, rules or ordinances (or interpretations thereof); the Work contains or uses hazardous or toxic materials or substances which are not customarily used in the building trade; the Work would adversely affect the appearance of the Building; the Work might materially adversely affect another tenant’s premises; or the Work is prohibited by any mortgage or trust deed encumbering the Building. The foregoing reasons, however, shall not be exclusive of the reasons, for which Landlord may withhold consent, whether or not such other reasons are similar or dissimilar to the foregoing. If Landlord notifies Tenant that changes are required to the final Plans submitted by Tenant, Tenant

 

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shall submit to Landlord, for its approval, the Plans amended in accordance with the changes so required. The Plans shall also be revised, and the Work shall be changed, all at Tenant’s cost and expense, to incorporate any work required in the Premises by any local governmental field inspector. Landlord’s approval of the Plans shall in no way be deemed to be (i) an acceptance or approval of any element therein contained which is in violation of any applicable laws, ordinances, regulations or other governmental requirements, or (ii) an assurance that work done pursuant to the Approved Plans will comply with all applicable laws (or with the interpretations thereof) or satisfy Tenant’s objectives and needs.

 

(c)                                   No Work shall be undertaken or commenced by Tenant in the Premises until (i) Tenant has delivered, and Landlord has approved, all items set forth in Section 4(a) above, (ii) all necessary building permits have been applied for and obtained by Tenant.

 

5.                              Delays. In the event Tenant fails to deliver or deliver in sufficient and accurate detail the information required under Section 4 above, or in the event Tenant, for any reason, fails to complete the Work on or before the Commencement Date, Tenant shall be responsible for Rent and all other obligations set forth in the Lease from the Commencement Date regardless of the degree of completion of the Work on such date, and no such delay in completion of the Work shall relieve Tenant of any of its obligations under the Lease.

 

6.                              Change Orders. All changes to the Approved Plans requested by Tenant must be approved by Landlord in advance of the implementation of such changes as part of the Work, which approval shall not be unreasonably conditioned or withheld and shall be delivered as soon as reasonably possible, but in no event later than five (5) business days after Tenant’s request therefor. All delays caused by Tenant-initiated change orders, including, without limitation, any stoppage of work during the change order review process, are solely the responsibility of Tenant and shall cause no delay in the commencement of the Lease or the Rent and other obligations therein set forth. All increases in the cost of the Work resulting from such change orders shall be borne by Tenant.

 

7.                              Standards Of Design And Construction And Conditions Of Tenant’s Performance. All work done in or upon the Premises by Tenant shall be done according to the standards set forth in this Section 7, except as the same may be modified in the Approved Plans approved by or on behalf of Landlord and Tenant.

 

(a)                     Tenant’s Approved Plans and all design and construction of the Work shall comply with all applicable statutes, ordinances, regulations, laws, codes and industry standards, including, but not limited to, requirements of Landlord’s fire insurance underwriters.

 

(b)                     Tenant shall, at its own cost and expense, obtain all required building permits and occupancy permits. Tenant’s failure to obtain such permits shall not cause a delay in the commencement of the Lease Term or the obligation to pay Rent or any other obligations set forth in the Lease.

 

(c)                      Tenant’s Contractors shall be licensed contractors, possessing good labor relations, capable of performing quality workmanship and working in harmony with Landlord’s contractors and subcontractors and with other contractors and subcontractors in the Building. All work shall be coordinated with any other construction or other work in the Building in order not to adversely affect construction work being performed by or for Landlord or its tenants.

 

(d)                     Tenant shall use only new, first-class materials in the Work, except where explicitly shown in the Approved Plans, All Work shall be done in a good and workmanlike manner. Tenant shall obtain contractors’ warranties of at least one (1) year duration from the completion of the Work against defects in workmanship and materials on all work performed and equipment installed in the Premises as part of the Work.

 

(e)                      Tenant and Tenant’s Contractors shall make all reasonable efforts and take all steps appropriate to assure that all construction activities undertaken comport with the reasonable expectations of all tenants and other occupants of a fully-occupied (or substantially fully occupied) first-class office building and do not unreasonably interfere with the operation of the Building or with other tenants and occupants of the Building. In any event, Tenant shall comply with all reasonable rules and regulations existing from time to time at the Building. Tenant and Tenant’s Contractors shall take all precautionary steps to minimize dust, noise and construction traffic, and to protect their facilities and the facilities of others affected by the Work and to properly police same. Construction equipment and materials are to be kept within the Premises and delivery and loading of equipment and materials shall be done at such locations and at such time as Landlord shall direct so as not to burden the construction or operation of the Building. If and as required by Landlord, the Premises shall be sealed off from the balance of the office space on the floor(s) containing the Premises so as to minimize the dispersement of dirt, debris and noise.

 

(f)                       Landlord shall have the right to order Tenant or any of Tenant’s Contractors who violate the requirements imposed on Tenant or Tenant’s Contractors in performing work to cease work and remove its equipment and employees from the Building. No such action by Landlord shall delay the commencement of the Lease or the obligation to pay Rent or any other obligations therein set forth.

 

(g)                      Utility costs or charges for any service (including HVAC, hoisting or freight elevator and the like) to the Premises shall be the responsibility of Tenant from and after the Commencement Date. Tenant shall pay for all support services provided by Landlord’s contractors at Tenant’s written request or at Landlord’s discretion resulting from breaches or defaults by Tenant under this Work Letter Agreement. All use of freight

 

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elevators is subject to scheduling by Landlord and the rules and regulations of the Building. Tenant shall arrange and pay for removal of construction debris and shall not place debris in the Building’s waste containers. If required by Applicable Law, Tenant shall sort and separate its waste and debris for recycling and/or environmental law compliance purposes.

 

(h)                           Tenant shall permit access to the Premises, and the Work shall be subject to inspection, by Landlord and Landlord’s architects, engineers, contractors and other representatives, at all times during the period in which the Work is being constructed and installed and following completion of the Work.

 

(i)                               Tenant shall proceed with its work expeditiously, continuously and efficiently.

 

(j)                              Tenant shall have no authority to deviate from the Approved Plans in performance of the Work, except as authorized by Landlord and its designated representative in writing (which shall not be unreasonably conditioned, withheld or delayed). Tenant shall furnish to Landlord “as-built” drawings of the Work within thirty (30) days after completion of the Work.

 

(k)                           Landlord shall have the right to run utility lines, pipes, conduits, duct work and component parts of all mechanical and electrical systems where necessary or desirable through the Premises, to repair, alter, replace or remove the same, and to require Tenant to install and maintain proper access panels thereto, provided such work shall be performed at such times in such manner so as to minimize disruption to the conduct of Tenant’s business in the Premises and the construction of Tenant’s Work.

 

(1)                           Tenant shall impose on and enforce all applicable terms of this Work Letter Agreement against Tenant’s architect and Tenant’s Contractors.

 

8.                              Insurance And Indemnification.

 

(a)                           In addition to any insurance which may be required under the Lease, Tenant shall secure, pay for and maintain or cause Tenant’s Contractors to secure, pay for and maintain during the continuance of the Work within the Building or Premises, insurance in the following minimum coverages and the following minimum limits of liability:

 

(i)                           Worker’s Compensation and Employer’s Liability Insurance with limits of not less than $500,000.00, or such higher amounts as may be required from time to time by any Employee Benefit Acts or other statutes applicable where the work is to be performed, and in any event sufficient to protect Tenant’s Contractors from liability under the aforementioned acts.

 

(ii)                        Comprehensive General Liability Insurance (including Contractors’ Protective Liability) in an amount not less than $1,000,000.00 per occurrence, whether involving bodily injury liability (or death resulting therefrom) or property damage liability or a combination thereof with a minimum aggregate limit of $2,000,000.00, and with umbrella coverage with limits not less than $5,000,000.00. Such insurance shall provide for explosion and collapse, completed operations coverage and broad form blanket contractual liability coverage and shall insure Tenant’s Contractors against any and all claims for bodily injury, including death resulting therefrom, and damage to the property of others and arising from its operations under the contracts whether such operations are performed by Tenant’s Contractors or by anyone directly or indirectly employed by any of them.

 

(iii)                     Comprehensive Automobile Liability Insurance, including the ownership, maintenance and operation of any automotive equipment, owned, hired, or non-owned in an amount not less than $500,000.00 for each person in one accident, and $1,000,000.00 for injuries sustained by two or more persons in any one accident and property damage liability in an amount not less than $1,000,000.00 for each accident. Such insurance shall insure Tenant’s Contractors against any and all claims for bodily injury, including death resulting therefrom, and damage to the property of others arising from its operations under the contracts, whether such operations are performed by Tenant’s Contractors, or by anyone directly or indirectly employed by any of them.

 

(iv)                    “All-risk” builder’s risk insurance upon the entire Work to the full insurable value thereof. This insurance shall include the interests of Landlord and Tenant (and their respective contractors and subcontractors of any tier to the extent of any insurable interest therein) in the Work and shall insure against the perils of fire and extended coverage and shall include “all-risk” builder’s risk insurance for physical loss or damage including, without duplication of coverage, theft vandalism and malicious mischief. If portions of the Work are stored off the site of the Building or in transit to said site are not covered under said “all-risk” builder’s risk insurance, then Tenant shall effect and maintain similar property insurance on such portions of the Work. Any loss insured under said “all-risk” builder’s risk insurance is to be adjusted with Landlord and Tenant.

 

(v)                       All policies (except the worker’s compensation policy) shall be endorsed to include as additional insured parties the parties listed on, or required by, the Lease, Landlord’s contractors, Landlord’s architects, and their respective beneficiaries, partners, directors, officers, employees and agents, and such additional persons as Landlord may designate. The waiver of subrogation provisions contained in the Lease shall apply to all insurance policies (except the worker’s compensation policy) to be obtained by Tenant pursuant to this Section. The insurance policy endorsements shall also provide that all additional insured parties shall be given thirty (30) days’ prior written notice of any reduction, cancellation or non-renewal of coverage (except that ten (10) days’ notice shall be sufficient in the case of cancellation for non-payment of premium) and shall provide that the insurance coverage afforded to the additional insured parties thereunder shall be primary to any insurance carried

 

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independently by said additional insured parties. Additionally, where applicable, each policy shall contain a cross-liability and severability of interest clause.

 

(b)                        Without limitation of the indemnification provisions contained in the Lease, to the fullest extent permitted by law Tenant agrees to indemnify, protect, defend and hold harmless Landlord, the parties listed, or required by, the Lease to be named as additional insureds, Landlord’s contractors, Landlord’s architects, and their respective beneficiaries, partners, directors, officers, employees and agents (“Landlord’s Parties”), from and against all claims, liabilities, losses, damages and expenses of whatever nature to the extent arising out of or in connection with the Work or the entry of Tenant or Tenant’s Contractors into the Building and the Premises, including, without limitation, mechanic’s liens, the cost of any repairs to the Premises or Building necessitated by activities of Tenant or Tenant’s Contractors, bodily injury to persons (including, to the maximum extent provided by law, claims arising under the California Structural Work Act) or damage to the property of Tenant, its employees, agents, invitees, licenses or others. It is understood and agreed that the foregoing indemnity shall be in addition to the insurance requirements set forth above and shall not be in discharge of or in substitution for same or any other indemnity or insurance provision of the Lease. The foregoing indemnity shall not apply to the extent such matter arises out of or results from the negligence or willful misconduct of Landlord or Landlord’s Parties or a breach of the Lease by Landlord.

 

9.                             Landlord’s Contribution.

 

(a)                        Contribution Amount. Landlord shall make a dollar contribution (“Landlord’s Contribution”) in the amount of Seventy-Three Thousand, Two Hundred fifty-one Dollars ($73,251.00) (which is Twenty-Seven Dollars ($27.00) per square foot of Usable Area of the of the Expansion Space) for application to the extent thereof to the cost of the Work. If the cost of the Work exceeds Landlord’s Contribution, Tenant shall have sole responsibility for the payment of such excess cost except that Landlord shall be responsible for any such excess costs to the extent caused by negligence or willful misconduct of the Landlord Parties or breach of this Lease by Landlord. If the cost of the Work is less than Landlord’s Contribution, Tenant shall not be entitled to any payment or credit for such excess amount. Notwithstanding anything herein to the contrary, Landlord may deduct from Landlord’s Contribution any amounts due Landlord or its architects or engineers under this Work Letter Agreement before disbursing any other portion of Landlord’s Contribution. Tenant to be responsible for the installation of HVAC monitoring equipment at their sole cost.

 

(b)                        Payment of Contribution. Landlord shall make periodic disbursements of Landlord’s Contribution for the benefit of Tenant, not more often than once per month. Landlord shall authorize and make payment or release of monies for the benefit of Tenant to Tenant and/or the party designated by Tenant within five (5) days after receipt of a request for payment approved by Tenant and any supporting information reasonably required in good faith by Landlord.

 

Tenant must, in order to receive a disbursement of the Landlord’s Contribution, meet all of the following criteria:

 

(i)                         Tenant or Tenant’s contractors shall submit for Landlord’s approval copies of plans and specifications for Tenant’s proposed improvements;

 

(ii)                      Prior to commencement of actual construction, Tenant must submit to Landlord a copy of the approved building permit(s) from the appropriate governmental authority; and

 

(iii)                   Prior to receiving progress payments for the tenant improvements (subject to a 10% retention), Tenant shall submit to Landlord a statement of Tenant’s contractor or architect that the work is complete to the extent that payment is requested.

 

Upon completion of the Work, and in order to receive the final amounts owed (including the ten percent (10%) retention amount from Landlord, Tenant shall provide Landlord with the following:

 

(i)                         Written proof (a fully signed “Certificate of Occupancy”, “Certificate of Completion” or other document authorizing Tenant’s occupancy of the Premises from the appropriate governmental authority) that the improvements were substantially completed to the satisfaction of the local building department;

 

(ii)                        Complete original As-Built plans and specifications;

 

(iii)                        A detailed breakdown of the total costs of the Work;

 

(iv)                       Tenant’s written acknowledgment that the Work is substantially complete and Tenant is reasonably satisfied with the completion of the Work, except for any punchlist items;

 

(v)                        Full and final waivers of liens and contractors’ affidavits and statements, in such form as may be reasonably required by Landlord, Landlord’s title insurance company and Landlord’s construction or permanent lender, if any, from all parties performing labor or supplying materials or services in connection with the Work showing that all of said parties have been compensated in full and waiving all liens in connection with the Premises and Building.

 

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(vi)                          The parties will mutually cooperate to enforce any contractor warranties issued in connection with the tenant improvement work.

 

If Landlord fails to fulfill its obligation to disburse Landlord’s Contribution following five (5) business days’ notice from Tenant and Landlord’s failure to cure within such period, Tenant shall have the following rights, which rights shall be cumulative and in addition to any rights or remedies available to Tenant under the Lease, at law or in equity; (i) to cease performance of all or any portion of the Work, or (ii) continue to perform the Work, and offset any outstanding sums plus interest at ten percent (10%) per annum against Tenant’s obligation to pay Rent next coming due under this Lease.

 

10.                     Intentionally Omitted.

 

11.                     On-Site Project Manager. As a condition of Tenant’s right to commence and perform the Work, Tenant shall engage the services of an on-site project manager approved in advance by and reasonably acceptable to Landlord, who will be charged with the task of performing daily supervision of the Work. Such on-site manager shall be familiar with all rules and regulations and procedures of the Building and all personnel of the Building engaged directly or indirectly in the management, operation and construction of the Building. Such on-site project manager shall be accountable and responsible to Tenant and to Landlord and, where necessary, shall serve as a liaison between Landlord and Tenant with respect to the Work. The entire cost and expense of the on-site project manager shall be borne and paid for by Tenant (subject to Tenant’s right to use all or any part of Landlord’s Contribution to reimburse Tenant for the same.)

 

12.                     Construction Dispute Resolution.

 

(a)                     If any dispute arises between Landlord and Tenant, solely with respect to any matter relating to the Work or the initial construction or buildout of the Building or the Premises, the parties shall attempt in good faith to settle the dispute by mediation under the Construction Industry Mediation Rules of the American Arbitration Association. If such dispute is not resolved by mediation within thirty (30) days of the first written request for mediation, then such dispute shall be resolved by arbitration. Landlord and Tenant each hereby waive its right to seek a judicial determination of whether either party is in breach of, or default under, any of the terms or provisions of this Work Letter Agreement, or under the Lease, to the extent that the alleged breach or default under the Lease relates to the initial construction or buildout of the Building or the Premises. The venue for any mediation or arbitration proceedings under this Work Letter Agreement shall be in Sacramento County, California. The requirement that all disputes be resolved through mediation and then arbitration pursuant to this Section shall constitute an absolute defense to any court action filed by one of the parties hereto against the other, and shall enable the party against whom such action is filed to cause such action to be dismissed or set aside at any time.

 

(b)                     If a right to arbitration arises pursuant to Section 12(a), either party may serve upon the other party and file with the American Arbitration Association San Francisco Office a written notice demanding that such dispute be resolved by arbitration pursuant to this Section 12(b). Within five (5) days following such request for arbitration, the parties shall exchange a list of acceptable arbitrators and select one from those lists. If they are unable to agree on an arbitrator, an arbitrator shall be appointed within the shortest possible period by the assigned Case Administrator in the American Arbitration Association San Francisco Office or any successor association or body of comparable standing if the American Arbitration Association is not then in existence. Any controversy or claim arising out of or relating to this Work Letter Agreement or the breach of this Work Letter Agreement shall be settled by one arbitrator in accordance with the commercial rules of the American Arbitration Association, Judgment on the award rendered by the arbitrator may be entered in any court having jurisdiction over the dispute. The arbitrator shall assess its fee, all other fees and costs of any such arbitration proceeding and reasonable attorneys’ fees, against the party to whom, in the arbitrator’s opinion, is not the prevailing party.

 

(c)                      Notwithstanding anything to the contrary contained in this Work Letter Agreement, the parties shall each have the right to file with a court of competent jurisdiction an application for temporary or preliminary injunctive relief, writ of attachment, writ of possession, temporary protective order, or appointment of a receiver if the arbitration award to which the applicant may be entitled may be rendered ineffectual in the absence of such relief or if there is no other adequate remedy. Such application shall not waive a party’s arbitration rights under this Work Letter Agreement.

 

(d)                     Notwithstanding anything to the contrary contained in this Work Letter Agreement, if Landlord fails to pay Tenant any amount due under the terms of this Work Letter Agreement, Tenant may record a mechanic’s lien against the Property and may commence an action to foreclose such mechanic’s lien in accordance with State of California law; however, if arbitration has been commenced and an award issued prior to the date Tenant commences an action to foreclose any mechanic’s lien recorded against the Property, Tenant agrees to be bound by such arbitration award and shall waive any right to foreclose its mechanic’s lien for an amount in excess of the arbitration award.

 

(e)                      During any mediation or arbitration proceedings, Landlord and Tenant shall continue to carry out their responsibilities under this Work Letter Agreement. The parties’ respective obligations contained in this Section 12(e) shall be specifically enforceable under applicable law in any court having jurisdiction thereof.

 

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13.                       Additional Provisions.

 

(a)                     Time is of the essence of this Work Letter Agreement.

 

(b)                     If the Plans for the Work require the construction and installation of more fire hose cabinets or telephone/electrical closets than the number regularly provided by Landlord in the core of the Building in which the Premises are located, Tenant agrees to pay all costs and expenses arising from the construction and installation of such additional fire hose cabinets or telephone/electrical closets.

 

(c)                      Tenant agrees that unless otherwise expressly provided in the Lease, neither this Agreement nor the Lease grants Tenant any right of access to the roof of the Building. Should Landlord, in connection with this Agreement or the Lease, agree to mount equipment of any nature on the Building roof, such equipment shall, at Landlord’s option, either be maintained and installed by Landlord, or maintained and installed under Landlord’s direction, unless this Agreement expressly provides otherwise, all at Tenant’s expense. Should this Agreement or the Lease permit Tenant to install any equipment on the roof, any modifications to the roof or the roof’s structure to accommodate that equipment shall be made at Tenant’s sole cost and expense.

 

(d)                     Tenant agrees that should the nature of its layout or any of its equipment, fixtures or furnishings to be placed in the Premises place a burden in excess of the Building’s designed load, which is 100 pounds per square foot, Tenant agrees to pay Landlord the cost of any modifications to the Building necessary to accommodate Tenant’s furniture, furnishings or layout, as well as any design, engineering or other professional fees incurred by Landlord in connection with such modifications.

 

(e)                      Any person signing this Work Letter Agreement on behalf of Landlord and Tenant warrants and represents he has authority to sign and deliver this Work Letter Agreement and bind the party on behalf of which he has signed.

 

(f)                       If Tenant fails to make any payment relating to the Work as required hereunder within fifteen (15) days after written notice from Landlord specifying that such amount is due and payable, Landlord, at its option, may complete the Work pursuant to the Approved Plans and continue to hold Tenant liable for the costs thereof and all other costs due to Landlord. All amounts due from Tenant hereunder shall be deemed to be Rent due under the Lease. Tenant’s failure to pay any amounts owed by Tenant hereunder when due or Tenant’s failure to perform its obligations hereunder shall also constitute a default under the Lease (subject to the notice and cure provisions referenced in Section 27 of the Lease) and Landlord shall have all the rights and remedies granted to Landlord under the Lease for nonpayment of any amounts owed thereunder or failure by Tenant to perform its obligations thereunder.

 

(g)                      This Work Letter Agreement sets forth the entire agreement of Tenant and Landlord regarding the Work. This Work Letter Agreement may only be amended if in writing, duly executed by both Landlord and Tenant.

 

14.                       Alterations. Any alterations or improvements desired by Tenant after the completion of the Work shall be subject to the provisions of Section 12 (entitled “Alterations and Additions”) of the Lease.

 

If the foregoing correctly sets forth our understanding, please sign this Agreement where indicated below.

 

 

	
Landlord:
    	
 
    	
 
    	
Tenant:
    
	
 
    	
 
    	
 
    	
 
    
	
Marvin L. Oates, as co-Trustee of the Marvin L.
    	
 
    	
 
    	
Arcadia Biosciences, Inc., an Arizona
    
	
Oates Trust, and Frank C. Ramos
    	
 
    	
 
    	
Corporation
    
	
 
    	
 
    	
 
    	
 
    
	
/s/ Marvin L. Oates
    	
 
    	
 
    	
 
    
	
Marvin L. Oates, as co-Trustee of the Marvin L.
    	
 
    	
 
    	
By: 
    	
/s/ Eric J. Rey
    
	
Oates Trust
    	
 
    	
 
    	
Eric J. Rey, President
    
	
 
    	
 
    	
 
    	
 
    
	
/s/ Frank C. Ramos
    	
 
    	
 
    	
 
    
	
Frank C. Ramos
    	
 
    	
 
    	
Date:
    	
8/25/04
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
Date:
    	
9/3/04
    	
 
    	
Approved as to form
    
	
 
    	
 
    	
/s/ 
    	
8/27/04
    
	
 
    	
 
    	
office   of the General Counsel
    	
Date
    
	
 
    	
 
    	
Approved as to financial terms:
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
/s/ 
    	
9-1-04
    
	
 
    	
 
    	
Finance
    	
Date:
    
	
 
    	
 
    	
No change may be made after signatures above
    
									

 

6

 

 

COMMENCEMENT OF AMENDMENT #1

 

Date: January 28, 2005

 

This lease commencement agreement pertains to Amendment #1 dated June 30, 2004, by and between Marvin L. Oates, as co-Trustee of the Marvin L. Oates Trust and Frank C. Ramos (Lessor) and Arcadia Biosciences, Inc., an Arizona Corporation (Lessee) for the premises located at 202 Cousteau Place, Suite 200, Davis, California 95616 and consisting of approximately 3,039 rentable square feet within a multi tenant office building of approximately 105,307 square feet.

 

Whereas, said Lessee’s 53 month lease term is to commence on the date indicated below, in which the Lessee has substantially completed all work required, if any, to be performed by it under the terms and conditions of the lease agreement.

 

In accordance with the above, the parties hereto agree that the term of the lease shall commence on February 1, 2005, and expire on June 30, 2009.

 

All other terms and conditions of said Lease are hereby reaffirmed as being in full force and effect.

 

	
Lessor:
    	
 
    	
Lessee:
    
	
Marvin L. Oates, as co-Trustee of the Marvin
    	
 
    	
Arcadia Biosciences, Inc., an Arizona   Corporation
    
	
L. Oates Trust, and Frank C. Ramos
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
/s/ Marvin L. Oates
    	
 
    	
By:
    	
/s/ Eric J. Rey
    
	
Marvin L. Oates, as co-Trustee of the Marvin
    	
 
    	
Eric J. Rey, President & Chief Operating   Officer
    
	
L. Oates Trust
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
/s/ Frank C. Ramos
    	
 
    	
Date:
    	
2-4-05
    
	
Frank C. Ramos
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Date:
    	
2/10/05
    	
 
    	
 
    
								

 

March 2003

 

 

Page 1 of 2

 

Pam Haley

 

From:             Drew.W.Keilen@ wellsfargo.com 

Sent:                Thursday, March 23, 2006 2:35PM 

To:                   Pam Haley

Subject: RE: Letter of Credit Fees - Marvin L. Oates Beneficiary, L/C  #NZS478986

 

Hello Pam,

 

The presentation dates are different from the expiration dates.  The letter of credit states “Notwithstanding any other provision of this Letter of Credit, this Letter of Credit expires at our above office on March 7, 2005, but shall be automatically extended, without written amendment, to March 7 in each succeeding calendar year up to March 7, 2008, and then to , but not beyond, June 30, 2008.

 

The letter of credit was recently extended on March 7, 2006 for one year. We are currently in the presentation period after June 30, 2005 and before June 30, 2006 which is $96,959.04.  I hope this clarifies any confusion.  If you would like me to fax you a copy of the L/C I would be more than willing to do so.

 

Thanks,

 

Drew W. Keilen 

Private Banker 

Wells Fargo PCS 

(480) 348-4305 P 

(480) 348-4848 F

drew.w.keilen@wellsfargo.com

	
 
    	
 
    

From: Pam Haley [mailto:pam.haley@arcadiabio.com] 

Sent: Thursday, March 23, 2006 12:49 PM

To: Keilen, Drew w.

Subject: Letter of Credit Fees - Marvin L. Oates Beneficiary, L/C #NZS478986

 

Hi Drew,

 

Thanks for your time on the phone earlier today.  I started to write an email, explaining to my supervisor why it is correct that the $1,474 fee is calculated on the Maximum Amount of $96,600 for the Presentation Period After March 7, 2005 and on or before March 7, 2006 instead of the $64,400 for the period After March 7, 2006 and on or before March 7, 2007...but I couldn’t make sense of it again! The invoice states the amount is calculated in advance on $96,959.04 from 3/8/06 - 3/7/07.  Could you please email me a brief explanation?

 

Thanks a lot, 

Pam

 

Pam Haley

Accounting Manager

Arcadia Biosciences, Inc.

2390 E. Camelback Road

Suite 440

Phoenix, AZ   85016

602.474.3782 Direct Line

602.474.3789 Main Line

928.441.1582 Fax

www.arcadiabio.com

 

3/23/2006

 

 

	
Operations Group
   Northern California
   One Front Street, 21st Floor

San Francisco, CA 94111
    	

    
	
WELLS FARGO BANK
    

 

	
DEBIT INVOICE
    	
 
    
	
*************
    	
DATE: MARCH 10, 2006
    
	
 
    	
OUR L/C NO. NZS478986
    

 

MAIL TO:

 

EXETER LIFE SCIENCES, INC.,

4455 E CAMEL BACK ROAD, SUITE B200

PHOENIX, AZ 85018

 

BENEFICIARY: MARVIN L. OATES, AS CO-TRUSTEE OF THE MARVIN OATES

 

AMOUNT REPRESENTS STANDBY PERIODIC COMMISSION TO BE COLLECTED IN ADVANCE ON USD96,959.04 FROM 03/08/2006 THROUGH 03/07/2007 AT 1.50% P.A. FOR 365 DAYS ON 360 DAY BASIS.

 

	
TOTAL:
    	
 
    	
USD
    	
1, 474.59
    	
 
    

 

WE ARE REQUESTING PAYMENT FOR THE TOTAL AMOUNT.

 

PLEASE CONTACT OUR HELPLINE BY TELEPHONE AT (800) 798-2815 OPTION NO. 1 OR BY FAX AT (415) 296-8905 REGARDING ANY INQUIRIES.

 

CC:         PRIVATE BKG SCOTTSDALE (W) (ATTN: JOHN C PARRILLI TEL: 480-348-4396)

MAC:     S4035-012

AU:         4398

 

Original

 

 

This is an integral part of Letter of Credit No. NZS478986

 

As used below, the term “Conforming Draft” means a draft presented to us under and in compliance with the terms of this Letter of Credit, and the term “Business Day” means a day on which we are open at our above address in San Francisco, California to conduct our Letter of Credit business. Notwithstanding any provision to the contrary in the Uniform Customs and Practice For Documentary Credits (1993 Revision), International Chamber of Commerce Publication No. 500, if March 7, 2004 or any other date specified below under the column titled “Presentation Periods” is not a Business Day then such date shall be automatically extended to the next succeeding date which is a Business Day.

 

Only one Conforming Draft may be presented to us, and the amount of the Conforming Draft may not exceed the amount set forth below under the column titled “Maximum Amount” directly opposite the time period specified below under the column titled “Presentation Periods” during which the Conforming Draft is presented;

 

 

	
Presentation Period
    	
 
    	
Maximum Amount
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
On or before March 7, 2004
    	
 
    	
US$
    	
161,000.00
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
After March 7, 2004 and on or before March 7, 2005
    	
 
    	
US$
    	
128,800.00
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
After March 7, 2005 and on or before March 7,   2006
    	
 
    	
US$
    	
96,600.00
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
After March 7, 2006 and on or before March 7,   2007
    	
 
    	
US$
    	
64,400.00
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
After March 7, 2007 and on or before the Expiration   Date 
    	
 
    	
US$
    	
32,200.00
    	
 
    	
 
    

 

Your failure to present to us a conforming draft during any of the presentation periods listed above shall not affect your right to present a conforming draft hereunder during any or each subsequent presentation period listed above.

 

This Letter of Credit is subject to the Uniform Customs and Practice For Documentary Credits (1993 Revision), International Chamber of Commerce Publication No. 500, and engages us in accordance with the terms thereof.

 

We hereby engage with you that each draft drawn and presented to us in compliance with the terms and provisions of this Letter of Credit will be duly honored by payment to you of the amount requested.

 

2

 

This is an integral part of Letter of Credit No. NZS478986

 

	
 
    	
Very truly yours,
    
	
 
    	
 
    
	
 
    	
WELLS FARGO BANK, N. A.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/ 
    
	
 
    	
 
    	
Authorized Signature
    
	
 
    	
 
    	
SOCCT LOZANO
    

 

3

 

 

WELLS FARGO BANK, N.A.

TRADE SERVICES DIVISION, NORTHERN CALIFORNIA

525 Market Street, 25th Floor

San Francisco, California 94105

Contact Phones: 1(800) 798-2815

Email: sftrade@wellsfargo.com

 

IRREVOCABLE LETTER OF CREDIT

 

BENEFICIARY:

 

	
Buzz Oates Management Services
    	
Letter of Credit No.: NZS478986
    
	
8615 Elder Creek Road
    	
Date: April 10, 2003
    
	
Sacramento, CA 95828
    	
 
    

 

At the request and for the account of Exeter Life Sciences, Inc. 4455 Camelback, Road, Suite B200, Phoenix, AZ 85018, we hereby establish our irrevocable Letter of Credit in your favor in the amount of One Hundred Sixty One Thousand and NO/100 United States Dollars (US$161,000.00). This Letter of Credit is available with us at our above office by payment of your draft drawn on us at sight.

 

Only one draft may be drawn and presented under the Letter of Credit and the amount of such draft may be less than the full amount of the Letter of Credit.

 

Such draft must also be accompanied by the original of this Letter of Credit for our endorsement on this Letter of Credit of our payment of such draft.

 

The draft must be marked “DRAWN UNDER WELLS FARGO BANK, N. A. LETTER OF CREDIT NO. NZS478986.”

 

This Letter of Credit expires at our above office on March 7, 2004, but shall be automatically extended, without written amendment, to March 7 in each succeeding calendar year up to, but not beyond, March, 7, 2008 unless we have sent written notice to you at your address above by registered mail or express courier that we elect not to renew this Letter of Credit beyond the date specified in such notice (the “Expiration Date”) which Expiration Date will be March 7, 2004 or any subsequent March 7 occurring before March 7, 2008 and be at least 30 calendar days after the date we send you such notice.

 

1

 

LEASE AMENDMENT NO. 2

 

This Lease Amendment No. 2 (the “Amendment”), dated for reference purposes only, August 22, 2007 entered into by and between MARVIN L. OATES, AS CO-TRUSTEE OF THE MARVIN L. OATES TRUST, AND FRANK C. RAMOS AND JOANNE M. RAMOS FAMILY TRUST DATED SEPTEMBER 22, 2005 (collectively “Landlord”), and ARCADIA BIOSCIENCES, INC., AN ARIZONA CORPORATION (“Tenant”). Landlord and Tenant are collectively referred to herein as the “Parties”.

 

RECITALS

 

1.          Landlord (or their predecessors in interest) and Tenant entered into that certain lease dated May 17, 2003 (the “Lease”) with respect to the premises described therein as 202 Cousteau Place, Suite 200, Davis, CA, and consisting of approximately 8,512 rentable square feet of office space (“Original Premises”);

 

2.          Landlord (or their predecessors in interest) and Tenant subsequently entered into that certain Lease Amendment #1 dated June 30, 2004 (“Lease Amendment #1”) in which Tenant exercised its Right of First Refusal, as described in Section 46 of the Lease, and expanded the Original Premises by approximately 3,039 rentable square feet adjacent to the west of the Original Premises (“Expansion Premises #1”). The Original Premise sand Expansion Premises #1 shall collectively be referred to as the “Premises”

 

3.          The Parties now desire to amend the Lease to further increase the rentable square feet of the Premises, modify the Base Rent and Tenant’s Share of the Premises, extend the term of the Lease, and to agree on certain other matters pertaining to the Lease and the Premises.

 

4.          Any capitalized term used in this Amendment but not defined in this Amendment shall have the meaning assigned to it under the Lease.

 

AGREEMENT

 

THEREFORE, in consideration of the covenants and agreements contained herein, the parties hereby mutually agree as follows:

 

1.          Expansion of Premises. Effective on the “Effective Date” (defined below), the Premises shall be expanded to include the approximately 9,224 rentable square feet (8,236 usf) area described as Suite 105 located on the first floor of the Building and depicted on Exhibit A attached hereto as “Expansion Premises #2”. Therefore, hereinafter the Premises and Expansion Premises #2 shall collectively be referred to as the “Premises”.

 

As a result of the expansion, the Premises shall consist of approximately 20,775 rentable square feet (18,550 usf). For purposes of this Amendment, the Effective Date shall be September 1, 2007, provided that the effectiveness of this Amendment is conditioned on Landlord obtaining possession of Expansion Premises #2 from the existing Tenant, Granite Construction, prior to the Effective Date. If Landlord cannot obtain possession prior to such date, Landlord will use reasonable efforts to obtain possession as soon thereafter as possible, and the Effective Date will be modified as agreed by the Parties. In no event will Tenant be bound to lease Expansion Premises #2 if Landlord is unable to obtain possession by September 30, 2007. Tenant’s obligation to lease Expansion Premises #2 under this Amendment is subject to the condition precedent of City of Davis approval of alterations as stipulated in Section 8 below, or alternative arrangements to accommodate the Tenant’s HVAC requirements as further described in paragraph 9 below.

 

2.          Tenant’s Share. As of the Effective Date, Tenant’s Share of Operating Costs and Taxes for the Premises shall increase from 10.97 to 19.66%.

 

3.          Delivery of Expansion Premises #2. Landlord shall deliver possession of the Expansion Premises #2 in good order and satisfactory condition.

 

1

 

4.          Expiration Date. The Expiration Date of the Lease shall be extended for an additional thirty six (36) months, from June 30, 2009 to June 30, 2012.

 

5.          Adjustment of Rent. As the Effective Date, the Current Monthly Full Service Gross Base Rent for the Premises shall be adjusted as follows:

 

	
 
    	
 
    	
 
    	
 
    	
Expansion
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Premises #2
    	
 
    	
 
    	
 
    
	
Base Rental Period
    	
 
    	
Current Base Rent
    	
 
    	
Base Rent
    	
 
    	
Total Base Rent
    	
 
    
	
09/01/07 – 10/31/07:
    	
 
    	
$
    	
22,524.45
    	
 
    	
None
    	
 
    	
$
    	
22,524.45
    	
 
    
	
11/01/07 – 12/31/07:
    	
 
    	
$
    	
22,524.45
    	
 
    	
$
    	
9,224.00
    	
 
    	
$
    	
31,748.45
    	
 
    
	
01/01/08 – 06/30/08:
    	
 
    	
$
    	
22,524.45
    	
 
    	
$
    	
18,448.00
    	
 
    	
$
    	
40,972.45
    	
 
    
	
07/01/08 – 06/30/09:
    	
 
    	
$
    	
23,102.00
    	
 
    	
$
    	
18,909.20
    	
 
    	
$
    	
42,011.20
    	
 
    
	
07/01/09 – 06/30/10:
    	
 
    	
$
    	
23,679.55
    	
 
    	
$
    	
19,370.40
    	
 
    	
$
    	
43,049.95
    	
 
    
	
07/01/10 – 06/30/11:
    	
 
    	
$
    	
24,257.10
    	
 
    	
$
    	
19,831.60
    	
 
    	
$
    	
44,088.70
    	
 
    
	
07/01/11 – 06/30/12:
    	
 
    	
$
    	
24,834.65
    	
 
    	
$
    	
20,292.80
    	
 
    	
$
    	
45,127.45
    	
 
    

 

6.          Right of First Refusal. The Parties hereby agree that Tenant has exercised its Right of First Refusal as described in Section 46 of the Lease and that such right is now void and of no further effect.

 

7.          Option to Renew. The Parties hereby agree that Tenant has exercised the first of three options to extend the Term of the Lease as described in Section 45 of the Lease and Tenant shall hereby retain two (2) remaining Options to Renew as described therein.

 

8.          Alterations. Notwithstanding Section 13 of the Lease, Tenant shall have the right to install, at Tenant’s sole cost, a block wall, concrete pad and walkway and gate entrance outside of the Premises on the southern portion of the Building adjacent to Suite 105 to create a visual barrier of Tenant’s HVAC equipment, subject to the City of Davis approvals and Landlord’s reasonable approval of Tenant’s design drawings. Such wall shall integrate plant material to grow up the wall and be fed by the Building irrigation system. Any and all additional Alterations shall be made in accordance with Section 13 of the Lease.

 

9.          Tenant HVAC. Notwithstanding Section 13 of the Lease, Tenant shall be permitted to install supplemental HVAC equipment located within the Premises and outside and adjacent to the Premises as described above, subject to Landlord’s written review and approval of Tenant’s electrical, mechanical and design drawings prior to any such installation. Such HVAC equipment shall be maintained and repaired by Tenant throughout the term of the Lease at Tenant’s sole cost and shall be separately metered by Tenant, at Tenant’s sole cost, and any and all utility charges and fees applicable thereto shall be contracted for and payable by Tenant. Landlord, at Landlord’s sole option, shall have the right to require Tenant to remove such HVAC equipment immediately prior to the end of the term of the Lease at Tenant’s sole cost. In the event that Landlord’s waives the requirement for Tenant to remove such HVAC equipment, such equipment shall become the sole property of Landlord.

 

10.   Subleasing. Notwithstanding the provisions of Section 17 of the Lease, Tenant shall be permitted to sublease the Original Premises, Expansion Premises #1 and/or Expansion Premises #2 pursuant to the terms and conditions contained in Section 17, with the sole exception that Landlord hereby agrees that it shall not exercise its said right to sublet such space or terminate the Lease as described in the third sentence of Section 17 (b) thereto. In addition, Tenant shall not be required to sublease such space at the same terms as the Lease as required in the first sentence of Section 17 (b) (ii) provided therein.

 

11.   Tenant Parking. Notwithstanding the terms and conditions contained in Section 2 (o) of the Lease, Landlord and Tenant hereby agree that Tenant be permitted to use up to eighty (80) parking spaces at the Building on a non-exclusive basis during the term of this Lease and any extensions thereto.

 

2

 

12.   Lease Status. Tenant represents and certifies to Landlord that, to the best of Tenant’s actual knowledge, as of the date of this Amendment: (a) Landlord is not in default under the Lease; and (b); Tenant does not have any defenses or offsets to payment of rent and performance of its obligations under the Lease as and when same becomes due; and (c) no actions, whether voluntary or otherwise, are pending against Tenant under the bankruptcy laws of the United States or any state thereof.

 

13.   Leasing Commissions. Tenant represents that no brokerage commissions or consulting fees shall be payable on behalf of Tenant and each party agrees to indemnify the other against any.

 

14.   Counterparts. This Amendment may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together constitute one and the same instrument.

 

All other terms and conditions of the Lease shall remain the same in full force and effect.

 

IN WITNESS WHEREOF, the Parties hereto have caused this Amendment to be executed as of the day and year written below.

 

 

	
LANDLORD:
    	
TENANT:
    
	
 
    	
 
    
	
 
    	
ARCADIA BIOSCIENCES, INC.
    
	
 
    	
an Arizona corporation
    
	
 
    	
 
    	
 
    
	
/s/ MARVIN L. OATES
    	
 
    	
By:
    	
/s/ Eric J. Rey
    
	
MARVIN L. OATES, AS CO-TRUSTEE
    	
 
    	
 
    	
Eric J. Rey
    
	
OF THE MARVIN L. OATES TRUST
    	
 
    
	
 
    	
 
    
	
 
    	
Title: President & Chief Executive Officer
    
	
 
    	
 
    
	
THE FRANK C. RAMOS AND JOANNE
    	
 
    
	
M. RAMOS FAMILY TRUST DATED
    	
Dated: August 24, 2007
    
	
SEPTEMBER 22, 2005
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/ Frank C. Ramos
    	
 
    	
 
    
	
 
    	
Frank C. Ramos, Trustee
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/ Joanne M. Ramos
    	
 
    	
 
    
	
 
    	
Joanne M. Ramos, Trustee
    	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
Date: September 4, 2007
    	
 
    

 

3

 

EXHIBIT A

 

EXPANSION PREMISES #2

 

 

4

 

LEASE AMENDMENT NO. 3

 

This Lease Amendment No. 3 (the “Third Amendment”), dated for reference purposes only May 16, 2012, is entered into by and between Buzz Oates LLC, a California limited liability company (successor-in-interest to The Marvin L. Oates Trust), and The Frank C. Ramos and Joanne M. Ramos Family Trust, dated September 22, 2005 (collectively “Landlord”), and Arcadia Biosciences, Inc., an Arizona corporation (“Tenant”). Landlord and Tenant are collectively referred to herein as the “Parties” or individually a “Party”.

 

RECITALS

 

1.          Landlord and Tenant entered into that certain lease dated for reference purposes only May 17, 2003, as amended by those certain amendments dated for reference purposes only June 30, 2004 and August 22, 2007 (collectively, the “Lease”) with respect to the premises described therein as Suite 200 containing approximately 11,551 rentable square feet (10,313 usable square feet) and Suite 105 containing approximately 9,224 rentable square feet (8,237 usable square feet), for approximately a combined 20,775 rentable square feet (18,550 usable square feet), which Suites are a portion of the “Building” containing approximately 105,307 rentable square feet commonly known by the street address of 202 Cousteau Place, located in the City of Davis, County of Yolo, State of California, with zip code 95616 (the “Premises”).

 

2.          The Parties now desire to amend the Lease to extend the Term of the Lease upon the terms and conditions set forth in this Third Amendment.

 

AGREEMENT

 

THEREFORE, in consideration of the covenants and agreements contained herein, the Parties hereby mutually agree as follows:

 

1.          Modification of Lease Term. The Parties agree that the existing Term of the Lease shall be extended by thirty six (36) months. The Expiration Date of the Lease (formerly June 30, 2012) shall now be June 30, 2015.

 

2.          Adjustment of Base Rent. Effective July 1, 2012, Base Rent shall be in accordance with the Rent Schedule set forth below:

 

	
7/1/12 – 6/30/13
    	
 
    	
$
    	
38,433.75 per month
    	
 
    
	
7/1/13 – 6/30/14
    	
 
    	
$
    	
39,472.50 per month
    	
 
    
	
7/1/14 – 6/30/15
    	
 
    	
$
    	
40,511.25 per month
    	
 
    

 

3.          Option to Renew. The Parties hereby acknowledge and agree that, upon the terms and conditions set forth in this Third Amendment, Tenant has exercised the second of its three (3) options to renew provided for in Paragraph 45 of the Lease.

 

4.          Brokers. Landlord and Tenant each represent to the other that they have had no dealings with any real estate broker or agent in connection with the negotiation of this Third Amendment, except for Buzz Oates Real Estate (Landlord’s Broker) and that no other real estate broker or agent is entitled to a commission or finder’s fee in connection with this Third Amendment. Each Party shall indemnify, protect, defend, and hold harmless the other Party against all claims or liability for any commission, finder’s fee, or equivalent compensation alleged to be owing on account of the indemnifying Party’s dealings with any real estate broker or agent other than Landlord’s Broker. In connection with this Third Amendment, Landlord agrees to pay a commission to Landlord’s Broker pursuant to the terms of a separate agreement and Tenant shall have no liability for payment of any commission to Landlord’s Broker. The terms of this Paragraph shall survive the expiration or earlier termination of the Lease.

 

5.          Lease Status. Tenant warrants, represents and certifies to Landlord that, to the best of Tenant’s actual knowledge, as of the date of this Third Amendment: (a) Landlord is not in default under the Lease; (b) Tenant has accepted possession and now occupies the Premises and is currently open for business; (c) Tenant does not have any defenses or offsets to payment of rent and performance of its obligations under the Lease as and when same becomes due; (d) Tenant has not made any assignment, sublease, transfer, or conveyance of the Lease or any interest therein or in the Premises; (e) no actions, whether voluntary of otherwise, are pending against Tenant under the bankruptcy laws of the United States or any state thereof; and (f) except as otherwise specifically provided for in Paragraph 45 of the Lease and Paragraph 3 of this Third Amendment, the Lease does not gram Tenant any right or option to extend the term of the Lease, to further expand the Premises or to terminate the Lease.

 

6.          Counterparts. This Third Amendment may be executed in two or more counterparts, each of which

 

1

 

shall be deemed an original, but all of which together constitute one and the same instrument

 

7.          All other terms and conditions of the Lease shall remain the same in full force and effect.

 

IN WITNESS WHEREOF, the Parties hereto have caused this Third Amendment to be executed as of the day and year written below.

 

	
LANDLORD:
    	
TENANT:
    
	
 
    	
 
    
	
The Frank C. Ramos and Joanne M. Ramos
    	
Arcadia Biosciences, Inc., an Arizona   corporation
    
	
Family Trust, dated September 22,   2005
    	
 
    
	
 
    	
 
    
	
 
    	
 
    	
 
    	
By:
    	
/s/ Eric J. Rey
    
	
By:
    	
/s/ Frank C. Ramos
    	
 
    	
 
    	
Eric J. Rey,   President & CEO
    
	
 
    	
Frank C. Ramos, Trustee
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
Dated: May 15, 2012
    
	
By:
    	
/s/ Joanne M. Ramos
    	
 
    	
 
    
	
 
    	
Joanne M. Ramos, Trustee
    	
 
    	
 
    
	
 
    	
 
    
	
Buzz Oates LLC, a California limited   liability company
    	
 
    
	
 
    	
 
    
	
By: Oates Advisors LLC, a California limited liability company,   Manager
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
By:
    	
/s/ Larry E. Allbaugh
    	
 
    	
 
    
	
 
    	
Larry E. Allbaugh, Manager
    	
 
    	
 
    
	
 
    	
 
    
	
Dated: May 24, 2012
    	
 
    
						

 

2Exhibit 10.13

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

[USAID FROM THE AMERICAN PEOPLE LOGO]

 

September 30, 2008

 

Mr. Eric J. Rey, President and CEO

Arcadia Biosciences, Inc.

202 Cousteau Place, Suite 105

Davis, CA 95618

 

Subject:                             Cooperative Agreement No. AEG-A-00-08-00009-00

 

Dear Mr. Rey:

 

Pursuant to the authority contained in the Foreign Assistance Act of 1961, as amended, the U.S. Agency for International Development (USAID) hereby awards to Arcadia Biosciences, Inc., hereinafter referred to as the “Recipient”, the sum of $3,631,056.00 to provide support for a program “Abiotic stress tolerant rice and wheat for India” as described in the Schedule of this award and in Attachment B, entitled “Program Description.”

 

This Cooperative Agreement is effective and obligation is made as of the date of this letter and shall apply to expenditures made by the Recipient in furtherance of program objectives during the period beginning with the effective date 9/30/2008 and ending 9/29/2011. USAID will not be liable for reimbursing the Recipient for any costs in excess of the obligated amount.

 

This Cooperative Agreement is made to the Recipient on condition that the funds will be administered in accordance with the terms and conditions as set forth in Attachment A (the Schedule), Attachment B (the Program Description), and Attachment C (the Standard Provisions), all of which have been agreed to by your organization.

 

Please sign the original and all enclosed copies of this letter to acknowledge your receipt of the Cooperative Agreement, and return the original and all but one copy to the Agreement Officer.

 

 

	
Sincerely yours,
    	
 
    
	
 
    	
 
    
	
/s/ Kenneth E. Stein
    	
 
    
	
Kenneth E. Stein
    	
 
    
	
Agreement Officer
    	
 
    

 

1

 

Attachments:

A.                    Schedule

B.                    Program Description

C.                    Standard Provisions

 

	
ACKNOWLEDGED:
    	
 
    
	
 
    	
 
    
	
BY:
    	
/s/
    	
 
    
	
TITLE:
    	
 
    	
 
    
	
DATE:
    	
 
    	
 
    

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

2

 

A.                          GENERAL

 

	
1.
    	
 
    	
Amount Obligated this Action:
    	
 
    	
$2,162,023.00
    
	
2.
    	
 
    	
Total Estimated USAID Amount:
    	
 
    	
$3,631,056.00
    
	
3.
    	
 
    	
Total Obligated USAID Amount:
    	
 
    	
$2,162,023.00
    
	
4.
    	
 
    	
Cost-Sharing Amount (Non-Federal):
    	
 
    	
$18,593,366.00
    
	
5.
    	
 
    	
Activity Title:
    	
 
    	
ESP/Arcadia/Rice and Wheat
    
	
6.
    	
 
    	
USAID Technical Office:
    	
 
    	
EGAT/ESP
    
	
7.
    	
 
    	
Tax I.D. Number:
    	
 
    	
81-0571538
    
	
8.
    	
 
    	
DUNS No.:
    	
 
    	
135964760
    
	
9.
    	
 
    	
LOC Number:
    	
 
    	
N/A
    
	
10.
    	
 
    	
NMS Number:
    	
 
    	
2100/376
    

 

B.                  SPECIFIC

 

Commitment Doc Type:                                         PR

Commitment Nbr.:                                EGAT/ESP/IRBI(BIO)-0376

Line number:                                       1

BBFY:                                 2007

EBFY:                                  2008

Fund:                                       DV

Operating Unit:                           EGAT/ESP

Strategic Objective:                        A18

Distribution:                                  936-4235

Management:                               A074

BGA:                      997

SOC:                                   4100202

Amount:                                         $2,162,023.00

 

C.                     PAYMENT OFFICE

 

USAID

Office of the Chief Financial Officer

M/CFO/CMP, RRB 7th floor

1300 Pennsylvania Ave, NW

Washington, DC 20523

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

3

 

	
TABLE OF CONTENTS
    	
 
    
	
 
    	
 
    
	
Attachment A
    	
6
    
	
 
    	
 
    
	
SCHEDULE
    	
6
    
	
 
    	
 
    
	
A.1
    	
PURPOSE   OF COOPERATIVE AGREEMENT
    	
6
    
	
A.2
    	
PERIOD   OF COOPERATIVE AGREEMENT
    	
6
    
	
A.3
    	
AMOUNT   OF COOPERATIVE AGREEMENT AND PAYMENT
    	
6
    
	
A.4
    	
COOPERATIVE   AGREEMENT BUDGET
    	
6
    
	
A.5
    	
REPORTING   AND EVALUATION
    	
7
    
	
A.6
    	
INDIRECT   COST RATE
    	
8
    
	
A.7
    	
TITLE   TO PROPERTY
    	
8
    
	
A.8
    	
AUTHORIZED   GEOGRAPHIC CODE
    	
8
    
	
A.9
    	
COST   SHARING
    	
9
    
	
A.10
    	
SUBSTANTIAL   INVOLVEMENT
    	
9
    
	
A.11
    	
PROGRAM   INCOME
    	
10
    
	
A.12
    	
COUNTRY-BY-COUNTRY   BREAKDOWN OF EXPENDITURES
    	
10
    
	
 
    	
 
    
	
Attachment B
    	
ii
    
	
 
    	
 
    
	
MANDATORY STANDARD PROVISIONS FOR U.S.,   NONGOVERNMENTAL ORGANIZATIONS
    	
26
    
	
 
    	
 
    
	
 
    	
1.
    	
APPLICABILITY OF 22 CFR PART 226 (May 2005)
    	
26
    
	
 
    	
2.
    	
INELIGIBLE COUNTRIES (MAY 1986)
    	
26
    
	
 
    	
3.
    	
NONDISCRIMINATION (MAY 1986)
    	
26
    
	
 
    	
4.
    	
NONLIABILITY (NOVEMBER 1985)
    	
26
    
	
 
    	
5.
    	
AMENDMENT (NOVEMBER 1985)
    	
27
    
	
 
    	
6.
    	
NOTICES (NOVEMBER 1985)
    	
27
    
	
 
    	
7.
    	
SUBAGREEMENTS (June 1999)
    	
27
    
	
 
    	
8.
    	
OMB APPROVAL UNDER THE PAPERWORK REDUCTION ACT (December   2003)
    	
27
    
	
 
    	
9.
    	
USAID ELIGIBILITY RULES FOR GOODS AND SERVICES   (April 1998)
    	
28
    
	
 
    	
10.
    	
DEBARMENT, SUSPENSION, AND OTHER RESPONSIBILITY MATTERS   (January 2004)
    	
31
    
	
 
    	
11.
    	
DRUG-FREE WORKPLACE (January 2004)
    	
32
    
	
 
    	
12.
    	
EQUAL PROTECTION OF THE LAWS FOR FAITH-BASED AND COMMUNITY   ORGANIZATIONS (February 2004)
    	
33
    
	
 
    	
13.
    	
IMPLEMENTATION OF E.O. 13224 — EXECUTIVE ORDER ON   TERRORIST FINANCING (March 2002)
    	
34
    
	
 
    	
14.
    	
MARKING UNDER USAID-FUNDED ASSISTANCE INSTRUMENTS   (December 2005)
    	
34
    
	
 
    	
15.
    	
REGULATIONS GOVERNING EMPLOYEES (AUGUST 1992)
    	
39
    
	
 
    	
16.
    	
CONVERSION OF UNITED STATES DOLLARS TO LOCAL CURRENCY   (NOVEMBER 1985)
    	
40
    
	
 
    	
17.
    	
USE OF POUCH FACILITIES (AUGUST 1992)
    	
40
    
	
 
    	
18.
    	
INTERNATIONAL AIR TRAVEL AND TRANSPORTATION (JUNE 1999)
    	
42
    
	
 
    	
19.
    	
OCEAN SHIPMENT OF GOODS (JUNE 1999)
    	
44
    
	
 
    	
20.
    	
LOCAL PROCUREMENT (April 1998)
    	
45
    
	
 
    	
21.
    	
VOLUNTARY POPULATION PLANNING ACTIVITIES - MANDATORY   REQUIREMENTS (MAY 2006)
    	
46
    
					

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

4

 

	
II. 
    	
REQUIRED   AS APPLICABLE STANDARD PROVISIONS FOR U.S., NONGOVERNMENTAL RECIPIENTS
    	
48
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
1.
    	
NEGOTIATED INDIRECT COST RATES (1998)
    	
48
    
	
 
    	
2.
    	
PUBLICATIONS AND MEDIA RELEASES (MARCH 2006)
    	
49
    
	
 
    	
3.
    	
PARTICIPANT TRAINING (April 1998)
    	
50
    
	
 
    	
4.
    	
VOLUNTARY POPULATION PLANNING ACTIVITIES - SUPPLEMENTAL   REQUIREMENTS (MAY 2006)
    	
50
    
	
 
    	
5.
    	
TITLE TO AND CARE OF PROPERTY (COOPERATING COUNTRY TITLE)   (NOVEMBER 1985)
    	
65
    
	
 
    	
6.
    	
PUBLIC NOTICES (MARCH 2004)
    	
70
    
	
 
    	
7.
    	
COST SHARING (MATCHING) (July 2002)
    	
70
    
	
 
    	
8.
    	
PROHIBITION ON ASSISTANCE TO DRUG TRAFFICKERS (1999)
    	
70
    
	
 
    	
9.
    	
REPORTING OF FOREIGN TAXES (March 2006)
    	
71
    
	
 
    	
10.
    	
FOREIGN   GOVERNMENT DELEGATIONS TO INTERNATIONAL CONFERENCES (January 2002)
    	
72
    
	
 
    	
11.
    	
USAID DISABILITY POLICY - ASSISTANCE (DECEMBER 2004)
    	
73
    
	
 
    	
12.
    	
HOMELAND SECURITY PRESIDENTIAL DIRECTIVE - 12 (HSPD- 12)   (SEPTEMBER 2006)
    	
73
    
	
 
    	
13.
    	
PROHIBITION   ON THE PROMOTION OR ADVOCACY OF THE LEGALIZATION OR PRACTICE OF PROSTITUTION OR SEX TRAFFICKING (JUNE 2005)
    	
74
    
	
 
    	
 
    
	
Attachment D
    	
76
    
	
 
    	
 
    
	
Attachment B-1
    	
v
    
	
 
    	
 
    
	
Attachment B-2
    	
25
    

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

5

 

Attachment A

 

SCHEDULE

 

A.1               PURPOSE OF COOPERATIVE AGREEMENT

 

The purpose of this Cooperative Agreement is to provide support for Arcadia Biosciences, Inc.’s program “Abiotic stress tolerant rice and wheat for India.”

 

A.2               PERIOD OF COOPERATIVE AGREEMENT

 

1.              The effective date of this Cooperative Agreement is 9/30/2008. The estimated completion date of this Cooperative Agreement is 9/29/2011.

 

2.              Funds obligated hereunder are available for program expenditures for the estimated period September 30, 2008 to September 30, 2010, subject to approval of performance through September 30, 2009 (See A.3.4 below).

 

A.3                 AMOUNT OF COOPERATIVE AGREEMENT AND PAYMENT

 

1.                 The total estimated amount of this Cooperative Agreement for the period shown in A.2 above is $3,631,056.00.

 

2.                 USAID hereby obligates the amount of $2,162,023.00 for program expenditures during the period set forth in A.2 above and as shown in the Budget below. The Recipient will be given written notice by the Agreement Officer if additional funds will be added. USAID is not obligated to reimburse the Recipient for the expenditure of amounts in excess of the total obligated amount.

 

3.                 Payment will be made to the Recipient by Letter of Credit in accordance with procedures set forth in 22 CFR 226.22.

 

4.                 Incremental funds up to the total amount of the Agreement shown in A.3.1 above may be obligated by USAID subject to the availability of funds, satisfactory progress of the program, and continued relevance to USAID program objectives.

 

A.4              COOPERATIVE AGREEMENT BUDGET

 

The following is the Agreement Budget. Revisions to this budget shall be made in accordance with 22 CFR 226. Each amount listed below is considered a ceiling amount for that particular Agreement Year:

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

6

 

Budget

9/30/2008-9/29/2011

 

	
Year 1
    	
 
    	
 
    	
 
    	
Year 2
    	
 
    	
 
    	
 
    	
Year 3
    	
 
    	
 
    	
 
    
	
Construction
    	
 
    	
$
    	
0
    	
 
    	
Construction
    	
 
    	
$
    	
0
    	
 
    	
Construction
    	
 
    	
$
    	
0
    	
 
    
	
Contractual
    	
 
    	
$
    	
407,569
    	
 
    	
Contractual
    	
 
    	
$
    	
618,468
    	
 
    	
Contractual
    	
 
    	
$
    	
601,747
    	
 
    
	
Indirect Costs
    	
 
    	
$
    	
201,986
    	
 
    	
Indirect   Costs
    	
 
    	
$
    	
307,697
    	
 
    	
Indirect   Costs
    	
 
    	
$
    	
247,443
    	
 
    
	
All other Costs
    	
 
    	
$
    	
390,445
    	
 
    	
All   other Costs
    	
 
    	
$
    	
484,090
    	
 
    	
All   other Costs
    	
 
    	
$
    	
369,320
    	
 
    
	
Total
    	
 
    	
$
    	
1,000,000
    	
 
    	
Total
    	
 
    	
$
    	
1,410,255
    	
 
    	
Total
    	
 
    	
$
    	
1,218,510
    	
 
    

 

A. 5            REPORTING AND EVALUATION

 

1.                          Financial Reporting

 

In accordance with 22 CFR 226.52, the SF 269 and SF 272 will be required on a quarterly basis. The recipient shall submit these forms in the following manner:

 

a)             The SF 272 and 272a (if necessary) must be submitted via electronic format to the U.S. Department of Health and Human Services (http://www.dpm.psc.gov). A copy of this form shall also be submitted at the same time to the Cognizant Technical Officer (CTO).

b)             The SF 269 or 269a (as appropriate) shall be submitted to the CTO.

c)              In accordance with 22 CFR 226.70-72, the original and two copies of all final financial reports shall be submitted to M/CFO and the CTO. The electronic version of the final SF 272 or 272a shall be submitted to HHS in accordance with paragraph (1) above.

 

2.                           Program Reporting

 

a)               Detailed Implementation Plan (DIP):

The recipient shall follow the Evaluation Plan content and the schedule presented in the approved Detailed Implementation Plan (DIP), which shall be incorporated annually in the agreement by modification upon approval by the Cognizant Technical Officer (CTO).

 

b)               Mid-term evaluations:

The Recipient shall submit within 30 days after the project year (by October 31) the original report and one copy to the USAID CTO, and one copy to the USAID Development Experience Clearinghouse, 8403 Colesville Road, Suite 210, Silver Spring, MD 20910, USA (or email: docsubmit@dec.cdie.org)

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

7

 

c)              Annual Report:

The format, content and time schedule of the Annual Report shall be submitted in a format and on a time schedule agreed to between the CTO and the recipient. Annual Reports are not required for those years when mid-term or final evaluations are submitted. The Annual Report shall contain the information as set forth in 22 CFR 226.51(d). The recipient shall submit an original and one copy of a performance report to the CTO. The performance reports are required to be submitted annually to the CTO within 90 days after the end of each project year.

 

d)             Final Evaluation:

The final performance evaluation shall briefly contain information set forth in 22 CFR 226.51(d). The Recipient shall submit within 90 days after the expiration or termination of the award, the original and one copy of the final evaluation, to the USAID CTO, the Agreement Officer, and one copy to the USAID Development Experience Clearinghouse, 8403 Colesville Road, Suite 210, Silver Spring, MD 20910, USA (or email: docsubmit@dec.cdie.org).

 

A.6                INDIRECT COST RATE

 

Within 90 days from the Award, the recipient shall submit a formal Indirect Cost Rate Proposal to their cognizant U.S. Government agency. In section A.4 each year has a ceiling dollar amount for all indirect costs for the given year. Pending establishment of revised provisional or final indirect cost rates, allowable indirect costs shall be reimbursed on the basis of the following negotiated provisional or predetermined rates and the appropriate bases:

 

	
Description
    	
 
    	
Rate
    	
 
    	
Base
    	
 
    	
Type
    	
 
    	
Period
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Overhead
    	
 
    	
52.5
    	
%
    	
(1/)
    	
 
    	
(1/)
    	
 
    	
(1/)
    	
 
    

 

	
(1/)
    	
Base of Application: Total Direct Costs
    
	
 
    	
Type of Rate: Provisional
    
	
 
    	
Period: until Amended
    

 

A.7                 TITLE TO PROPERTY

 

Property Title will be vested with the Recipient.

 

A.8                 AUTHORIZED GEOGRAPHIC CODE

 

The authorized geographic code for procurement of goods and services under this award is 000.

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

8

 

A.9                  COST SHARING

 

The Recipient agrees to expend the cost share amount listed in the agreement on page 3. Guidance on Cost Sharing can be found in ADS 303.3.10 and 22 CFR 226.23.

 

A.10           SUBSTANTIAL INVOLVEMENT

 

Substantial involvement during the implementation of this Agreement shall be limited to approval of the elements listed below. The Agreement Officer may delegate the following approvals to the CTO, except for changes to the Program Description or the approved budget. Only the Agreement Officer may approve those changes, after review by the CTO.

 

a)             Approval of the Detailed Implementation Plan (DIP), submitted to USAID/EGAT/ESP, and any subsequent revisions. EGAT/ESP staff and technical specialists will review the DIP and meet with the recipient to discuss strengths and weaknesses. The DIP will provide a plan for the program, including plans for baseline and final surveys and collection of required indicators. Substantial changes resulting in any revisions to specific activities, locations, beneficiary population, international training costs, international travel, indirect cost elements, or the procurement plan may require a formal modification to the Agreement by the Agreement Officer. The approved DIP will supplement the initial Program Description in the Agreement and form part of the official documentation.

 

b)             Approval of key personnel to include the following positions:

 

	
Project   Director
    	
Vic Knauf, (Arcadia Biosciences)
    
	
 
    	
 
    
	
Project   Director
    	
Usha Zehr, (Mahyco)
    

 

c)              USAID involvement in monitoring progress toward the achievement of program objectives during the performance of this Agreement, include written guidelines for the contents of annual reports, and mid-term and final evaluations in accordance with 22 CFR 226.51.

 

d)             Agency and Recipient Collaboration or Joint Participation.

 

1.                        Collaborative involvement in selection of advisory committee members. (If the program will establish an advisory committee that will provide advice to the recipient).

 

2.                        USAID concurrence on the substantive provisions of the subawards.

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

9

 

3.                      Approval of the recipient’s monitoring and evaluation plans.

 

4.                      Agency monitoring to permit specified kinds of direction or redirection because of interrelationships with other projects.

 

A.11                              PROGRAM INCOME

 

The Recipient shall account for Program Income in accordance with 22 CFR 226.24. Program Income earned under this award shall be added to the project.

 

A.12                              COUNTRY-BY-COUNTRY BREAKDOWN OF EXPENDITURES

 

Recipient shall list each country included in the program and the total amount expended for each country under the award for the reporting period in the “Remarks” block on the “Financial Status Report” SF 269 or SF 269A, or on a separate sheet of paper with the “Request for Advance or Reimbursement” SF 270.

 

-End of Schedule-

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

10

 

Attachment B

 

PROGRAM DESCRIPTION

 

Productivity of rice wheat systems in South Asia

 

Increasing the productivity and sustainability of rice and wheat systems in South Asia is critical for the poor inhabitants of the region and a high priority for the U.S. Agency for International Development. South Asia is home to almost 1.5 billion people, including over 30 percent of the world’s malnourished people. Essentially all of the arable land is already under cultivation, therefore expansion in crop area is no longer possible and meeting future cereal demand will require higher rates of improvement in cereal yields. Declining agricultural productivity in South Asia would have far reaching consequences. The importance of rice and wheat yields for food security for producers and consumers alike, both rural and urban, cannot be overstated, and with more than 70 percent of the population living in rural areas, increases in agricultural productivity would have a large impact on livelihoods of the poor.

 

USAID intends to support a range of interventions to increase farmer incomes and make agricultural systems more productive and resilient to climate change and to reduce their environmental impact. These interventions include the dissemination of resource conservation technologies, the deployment of new rice and wheat varieties bred with advanced molecular techniques, and the harnessing of public private partnerships to develop and deliver abiotic stress tolerant transgenic varieties.

 

Abiotic stress and climate change

 

Abiotic stresses such as drought, salinity, heat or soil nutrient deficiencies are a constraint to rice and wheat production in South Asia. The region is also significantly impacted by climate variability even though some areas have a relatively high level of irrigation. Under most projected climate change scenarios for South Asia, heat stress and water availability will emerge as major constraints, with floods and drought both increasing in frequency and severity. The introduction of crops with enhanced tolerance to abiotic stresses will be an important strategy to increasing agricultural productivity, and hence farmer livelihoods and regional food security, under these anticipated impacts of climate change.

 

Additionally, many farmers do not have access to affordable nitrogen fertilizers. Where nitrogen fertilizers are used, much of the applied nitrogen is lost to the environment, contributing to greenhouse gases and aquatic pollution. Rice and wheat varieties with enhanced nitrogen use efficiency would allow farmers to obtain greater yields and reduce input costs while reducing water pollution and greenhouse gas emissions through more efficient fertilizer use.

 

Public-private partnerships to develop biotech crop solutions

 

The private sector can play an important role in improving cereal productivity for South Asia; it has developed promising technologies and has expertise in product development and delivery. However at the present time, the large number of poor farmers, high cost of cultivar development, and uncertainty over regulatory frameworks, market acceptance and product stewardship argue for effective public-private partnerships so that increases in yield occur concurrently with the development of a robust commercial sector to address the needs of the poor. Partnerships with the public sector can increase the chance of success by helping to allay financial and management risks of the companies involved, and by promoting broader distribution and increased market access for the technology. The public sector can additionally provide funding for the development of improved seed for those farmers who lack adequate resources to participate in developing markets. Public sector investments ensure that biotechnology products reach disadvantaged and smallholder farmers sooner. USAID takes a broad view of the role of the public sector in increasing access to biotechnology and envisions supporting interventions ranging from technology development to capacity building for enhanced product distribution and delivery.

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

ii

 

USAID’s agricultural biotechnology program

 

USAID views biotechnology as a valuable tool for increasing the productivity, environmental sustainability and economic viability of agricultural systems and works to provide access to these tools to scientists around the world. These tools can then be used to provide improved crop varieties to smallholder farmers. USAID has implemented projects to develop new crop varieties using the tools of biotechnology and has assisted in developing associated biosafety frameworks in many countries since the early 1990s. Working through innovative partnerships involving partner country governments and US and partner country public sector research institutions, universities, private firms and foundations, USAID intends to maximize local ownership and support of technology development projects. USAID’s biotechnology program supports crop improvement at all stages of the pipeline from laboratory research to field trials to commercialization and delivery of technology, thereby ensuring that research investments lead to new crops in farmers’ fields. Parallel investments in partner countries assist in building effective regulatory systems to ensure that appropriate safety measures are taken while moving bioengineered crops through the development process. Assistance is also provided to build public sector capacity to access and manage proprietary technologies.

 

Biotech crop development in South Asia

 

India will be the initial partner country for development and deployment of new biotech rice and wheat varieties. India currently has the most advanced biosafety regulatory system in South Asia and leads the region in the adoption of biotech crop varieties. India also has a growing level of public and private biotechnology investment and a high level of technical and institutional capacity among potential partners, both public and private. As program goals are achieved in India, it is expected that there will be important spillover benefits to South Asian countries as well as to other developing countries with similar abiotic constraints on agricultural productivity. Technologies with demonstrated potential in India can, for example, be extended to Bangladesh and Pakistan at reduced cost and effort.

 

Program Description

 

Program Goals and Objectives

 

This Annual Program Statement (APS) outlines the intent to establish public-partnerships to evaluate, develop, and/or broaden deployment of transgenic technologies conferring tolerance to abiotic stresses such as drought, salinity, heat and for improving nitrogen use efficiency in rice and wheat. Through this APS, USAID will facilitate the evaluation of selected technologies under field conditions in India, the most promising of which may be selected for further development and delivery to Indian farmers, and, eventually South Asian farmers. Private-sector firms are especially encouraged to apply, though all technology developers will be considered, including public and private universities and research institutions. This project will focus on advanced stages of the product development process, beginning with the evaluation of a range of promising trait-crop combinations in field trials under local conditions and continuing with the development of a regulatory package and deployment strategy for selected technologies.

 

For each technology selected, USAID intends to support partnerships that may include any combination of the technology provider, an Indian public sector institution and/or an Indian private sector partner. Through this APS USAID will provide initial grants to technology providers and their partners for the purpose of evaluating selected technologies under field conditions in India, and where results are sufficiently promising, develop a plan to commercialize the technology. After a period of 2-3 years, USAID expects to select several of these technologies for further field testing, product development, biosafety data package assembly and eventual delivery of improved varieties to farmers. Technology providers may build on existing collaborations and establish partnerships themselves or request USAID assistance in identifying appropriate public and/or private partners in India. Future support for this program is subject to the availability of funding, and USAID may choose to support all, some or none of the selected technologies in future funding cycles through other mechanisms.

 

In addition to providing grants, USAID may leverage additional contributions, both financial and in-kind, from other donors. USAID may provide assistance, if needed, in selecting partners and/or developing a commercialization strategy for each technology. USAID may also provide assistance, if needed, with

 

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meeting biosafety requirements in India by mobilizing resources through related USAID programs. Grant recipients and their partners, however, will ultimately be responsible for obtaining all required permits related to the transport, importation, environmental release and commercialization of transgenic materials. Grantees may also provide additional resources in the form of equipment, facilities, and technical expertise.

 

Technologies

 

Eligible technologies will be those that use bioengineering (transgenic, biotech) methods to confer abiotic stress tolerance to rice and wheat. Targeted traits include drought tolerance, salinity tolerance, heat tolerance, and nitrogen use efficiency. Strong preference will be given to technologies that have been field tested in a monocot crop plant; demonstrated effectiveness in rice and/or wheat would be desirable.

 

USAID is particularly interested in technologies that address projected climate change scenarios, such as reduced grain yield due to higher temperatures and variable or reduced water supply. Technologies that reduce the environmental impact of agriculture, such as by limiting greenhouse gas emissions, fertilizer applications or energy inputs, or that reduce farmer risk, by increasing crop resilience, are also of significant interest. This APS will not support evaluation or development of traits that do not directly confer abiotic stress tolerance, such as pest or disease resistance, nutritional enhancement or herbicide tolerance, except as additional stacked traits.

 

Technical Application

 

The Recipient’s Technical Application Submission entitled “Development and Commercialization of Nitrogen Use Efficient, Salt-Tolerant and Drought-Tolerant Rice and Wheat for India,” dated 9/24/08 and submitted in response to APS M-OAA—EGAT-08-1108, is hereby incorporated as attachment (B-1). Further, the Branding Strategy, and Marking Plan will be incorporated as Attachment B-2 to this award within 45 days of award per provision 14 (c)(2).

 

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Attachment B-1

 

Technical Proposal dated 9/24/08

 

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Cover Page

 

Full Proposal

 

Development and Commercialization of Nitrogen Use Efficient, Salt-Tolerant and Drought-Tolerant

Rice and Wheat for India

 

USAID’s Office of Environment and Science Policy

Annual Program Statement on

Abiotic Stress Tolerant Bioengineered Rice and Wheat

 

APS Number: M-OAA-EGAT-08-1108

 

Applicant Information

 

	
Name and Address of Organization
    	
 
    	
Arcadia Biosciences, Inc.
    
	
 
    	
 
    	
202 Cousteau Place, Suite 105
    
	
 
    	
 
    	
Davis, CA 95618
    
	
 
    	
 
    	
 
    
	
Type of Organization
    	
 
    	
For-profit
    
	
 
    	
 
    	
 
    
	
Contact Point
    	
 
    	
Dr. Vic Knauf
    
	
 
    	
 
    	
Chief Scientific Officer
    
	
 
    	
 
    	
Telephone:
    	
530-756-7077
    
	
 
    	
 
    	
Fax:
    	
530-756-7027
    
	
 
    	
 
    	
Email:
    	
vic.knauf@arcadiabio.com
    
	
 
    	
 
    	
 
    
	
Names of other organizations applied to and/or funding the proposed   activity
    	
 
    	
None
    
	
 
    	
 
    	
 
    
	
Signature of Authorized Representative
    	
 
    	
 
    
	
 
    	
 
    	
/s/ Eric J. Rey
    
	
 
    	
 
    	
Eric J. Rey
    
	
 
    	
 
    	
President and CEO
    

 

This application includes data that shall not be disclosed outside the U.S. Government and shall not be duplicated, used, or disclosed — in whole or in part — for any purpose other than to evaluate this application. If, however, a cooperative agreement is awarded to this applicant as a result of, or in connection with, the submission of this data, the U.S. Government shall have the right to duplicate, use, or disclose the data to the extent provided in the resulting cooperative agreement. This restriction does not limit the U.S. Government’s right to use information contained in this data if it is obtained from another source without restriction. The data subject to this restriction are contained.

 

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Executive Summary

 

Drought, salinity, and low nitrogen fertilizer inputs present significant hurdles to agricultural productivity in India. Arcadia Biosciences, Inc. (Arcadia) has demonstrated and is further developing technologies for nitrogen use efficiency, salt-tolerance, and drought-tolerance in crops in the field. Arcadia and Maharashtra Hybrid Seeds Company Ltd. (Mahyco), a leading developer and seller of crop seeds in India, have an existing agreement to co-develop nitrogen use efficient rice & wheat varieties and, separately, salt-tolerant rice and wheat varieties for India. Arcadia, in cooperation with Mahyco, seeks funding from USAID to develop and commercialize rice and wheat plants incorporating all three traits (nitrogen efficiency, salt-tolerance, and drought tolerance) in Indian rice and wheat varieties.

 

Program Description

 

A three year major program is proposed here as an active and committed effort by grant applicant Arcadia and Indian commercial partner Mahyco. Arcadia and Mahyco will meet with representatives of the USAID sponsoring program at the outset to define priorities for targeted growing areas within India; priorities for traits and varietal types of rice and wheat; and to plan and lay out the steps to achieve regulatory approvals and grower acceptance of novel technologies. Arcadia and Mahyco will regularly report progress to the USAID and will host scheduled meetings, lab visits, and field trips on a regular basis to keep the USAID fully up to date.

 

Gene constructs, appropriate specific methodology associated with the target traits, the NUE wheat event, conduct of the greenhouse gas impact studies, and an active role in reviewing findings at each step will be directly provided by Arcadia. Mahyco will undertake the wheat (other than NUE wheat) and rice transformation work and all transgenic field trials in India as a subcontractor to Arcadia. The partners will work together closely to maximize progress.

 

As the sole Indian licensee of the Arcadia technology described here, Mahyco will determine the commercialization paths of varieties developed under the auspices of this research program. The program will significantly reduce risk and the time to develop technology and products that are needed now.

 

Goals and Objectives

 

The goals are to develop and test high yielding varieties of rice and wheat specifically adapted to agriculture in India that contain introduced genes conferring significantly increased nitrogen use efficiency (NUE), water use efficiency (WUE), tolerance to short periods of drought (DT), and salinity tolerance (ST). These lines of rice and wheat should be constructed such that regulatory approvals by the Indian government will be straightforward. In each case, the yield demonstrated in the field at multiple locations under limiting conditions of nitrogen, water, or water quality shall be at least ten per cent higher than the corresponding control variety lacking the introduced gene. The ultimate goal is to commercialize planting seed to be available broadly to Indian farmers.

 

The objectives of the three year program are to have by the end of 2011:

 

1.              Two years of field trial data from multiple locations in India for lines of indica rice with enhanced NUE and ST;

2.              Breeding and variety development well underway and targeted for all key rice and wheat growing areas where the technology will make a significant impact;

3.              Initial field trial evaluation data in hand for rice containing all three technologies combined;

4.              Initial field trial results for NUE wheat lines and for ST wheat lines;

5.              T2 generation seed in hand for DT wheat;

6.              T1 generation seed in hand for wheat with all three technologies combined.

 

Nitrogen Use Efficiency—Background

 

Nitrogen fertilizer enables farmers to achieve the high yields that drive modern agriculture and fertilizer use is increasing substantially as the global population and food requirements continue to grow. While nitrogen fertilizer is effective in driving crop yields, most crop plants absorb less than 50% of the nitrogen applied to the fields. Nitrogen fertilizer is manufactured from natural gas and as a result the current high prices for oil and gas are driving an increased cost of fertilizer for the farmer. In addition much of the unabsorbed nitrogen escapes into the air and waterways, thereby polluting the environment.

 

Agriculture is the second largest industry contributor to greenhouse gas (GHG) emissions that lead to Global

 

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Warming (Figure 1). These agricultural emissions are largely driven by the use of nitrogen fertilizer, which naturally converts to nitrous oxide in the soil and is released into the air. Nitrous oxide is 300 times more powerful than carbon dioxide (C02) as a greenhouse gas; agriculture emits 84% of global nitrous oxide. Each metric ton of nitrogen applied as fertilizer to fields results in 6-15 metric tons of GHG emissions.

 

Figure 1. Greenhouse gas emissions by sector.

 

Nitrogen Use Efficiency—Technical Approach

 

Engineering of plants to be more nitrogen efficient would both increase farmer’s productivity and decrease the environmental impact of nitrogen applications. The Nitrogen Use Efficiency (NUE) technology developed at Arcadia is based on modulating the expression of an aminotransferase gene. While the GS/GOGAT cycle is the major route of nitrogen (N) assimilation in plants, altering the expression of enzymes directly involved in this cycle has not led to reproducible, field-demonstrated NUE. Aminotransferases are integral to N assimilation for the production of amino acids and N allocation in plants. Alanine aminotransferase enzymes catalyze the reversible formation of alanine and 2-oxoglutarate from glutamate and pyruvate. Increased NUE in transgenic plants expressing an alanine aminotransferase (AlaAT) from Hordeum vulgare under the control of a stress-inducible promoter from the Brassica napus turgor-responsive gene (btg26) was first demonstrated in canola (Good et al., 2007).

 

Arcadia’s NUE technology enables plants to absorb and utilize nitrogen fertilizer much more efficiently than their non-transgenic controls. This results in the same high yields as conventional crops while using half as much nitrogen fertilizer, or higher yields if using the same amount of fertilizer. In either case, less nitrogen escapes into the water and air. Arcadia has granted licenses to multiple commercial seed companies for development and commercialization of this technology in crops, including: Monsanto (canola), DuPont/Pioneer (corn), Scott’s Company (turf), SES Vanderhave Seeds (sugar beets), Mahyco (multiple crops), and CSIRO/ACPFG (wheat and barley).

 

Nitrogen Use Efficiency Technology—Efficacy Data in Canola

 

Canola expressing btg-AlaAT has been extensively field tested for NUE by Arcadia since 2002. This work has progressed over 7 field seasons in the Imperial Valley of California and throughout the upper Midwestern United States. Typical results from application of urea fertilizer are shown in Figure 2A. Both the transgenic line and control plants respond to the application of N. Similar seed yields were achieved in the transgenic line using 66% less nitrogen than the control, Westar. In addition, seed yield was increased in the transgenic line by as much as 33% over the control at conventionally applied nitrogen levels.

 

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Figure 2. Seed yield of field grown NUE canola (A) and biomass accumulation (B).

 

The transgenic plants accumulated significantly more biomass before bolting (Figure 2B) and the primary increase was in shoot biomass (data not shown). Extensive analyses on btg-AlaAT transgenic canola plants and seeds did not show any significant compositional differences at maturity. The plants showed no differences in nitrogen, phosphorus or potassium content. In addition, the seeds contained no differences in moisture content, size, protein content, amino acid composition, oil percentage or fatty acid composition.

 

In addition to field studies, a greenhouse test system for biomass accumulation in the NUE transgenic plants has been established. The system is used to study the time course of biomass accumulation, the molecular and biochemical basis for the accumulation and for preliminary screening of new transgenic events.

 

Nitrogen Use Efficiency Technology—Efficacy Data in Rice

 

In addition to demonstrated field success in canola, Arcadia has promising NUE results in several varieties of japonica rice. In these experiments AlaAT is expressed under the control of the rice homologue of the btg related promoter OsAnt1. Both greenhouse and preliminary field trial results from Brawley, CA have shown increases in seed yield, panicle number and biomass in the transgenic lines as compared to controls under various nitrogen treatments. Figure 3A shows the grain yield differences of the transgenic lines (N4-13 and N4-15) as compared to the Nipponbare control under different applied nitrogen rates. Figure 3B shows that the increase seed yield is due to an increase in panicle number. These data are consistent with early generation data on these plants published recently by Shrawat et al (2008).

 

 

Figure 3. Transgenic rice lines outperform the parental variety control (Nipponbare).

 

Our field results, though promising, come from a nontypical rice growing region (too hot and too dry). The OsAnt1-AlaAT rice plants are currently being tested a replicated field trial that was planted on May 22, 2008 in Fresno, CA (a rice growing region). In addition to regulations imposed by the USDA, this trial is being conducted under additional regulations set by the California Rice Commission. Multiple lines from five events

 

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of the variety Nipponbare and 2 events of the variety Taipei are included along with the parental varieties and null sibling controls. The plants are being grown under four different nitrogen regimes and will be scored for tiller number, shoot biomass, panicle number and grain yield. Results from this field trial are expected in November 2008.

 

Salt Tolerance, Drought Tolerance and Water Use Efficiency Technologies—Background

 

Approximately 234 million hectares of irrigated cropland provides about 40 percent of the world’s food supply. Approximately 25-30% of this area is impacted by salinity, and continued irrigation leads inexorably to increasing salinization (Figure 4). These lands are either in production with suboptimal yields, or they have been taken out of production entirely. The cost of yield losses associated with salinity is estimated to be in excess on $20 billion annually. Rice is an especially salt-sensitive crop, with yield losses of 25% on water with E.C.W of about 4.6 (Grattan et al, 2002). However, accumulation of salts in the soil has a much stronger impact on yield, with 50% yield losses seen with E.C.e of 3.6 approaching 50% (Maas, 1986). In India, 7MHa of irrigated land (17% of the total irrigated land) is salt-affected (Ghassemi et al, 1995), but 21MHa of all land, including rain fed land is salt affected (FAO TERRASTAT).

 

 

Figure 4. Percent of Agricultural Land that is Saline

 

Modern agriculture is also highly water intensive, using approximately 80 percent of world water withdrawals. The UNESCO World Water Assessment Program forecasts a 40 percent increase in global freshwater demand and a corresponding 35 percent decrease in per capita supply by the year 2025. In India, sources of irrigation water are being increasingly used for industrial and urban sectors. Water scarcity, drought stresses, and declining irrigation combine to reduce yields and increase the risk of production. This becomes a challenge to resource-poor farmers who may not then invest in the infrastructure and technologies needed to bring cultural practices to a level of sophistication required to mitigate the poor water supply (Rosegrant et al., 2008). While the monsoon provides ample water to sustain soil moisture in the northeast and southwest, more than two thirds of cropped lands are vulnerable to droughts of different magnitude and duration as a result of variability in monsoon onset, withdrawal, and interruption (Prabhakar and Shaw, 2008). The ability to productively manage crops in saline environments and reduce reliance on fresh water is critical for food security and water availability. Equally important is the need to provide crops that can reduce the risk of water availability while maintaining or improving yields.

 

Salt Tolerance Technology—Technical Approach

 

Arcadia’s salinity-tolerance technology is based on the overexpression of plant vacuolar Na+/H+ antiporter(s) (NHXs) (Apse et al., 1999, Zhang and Blumwald, 2001). Vacuolar NHXs catalyze the electroneutral exchange of cytoplasmic sodium (and potassium) with vacuolar protons. NHX overexpression promotes the sequestering of sodium ions into the vacuoles of the cells, where it is not toxic and contributes favorably to the osmotic balance of the cells and plant tissues. This strategy, which is based on the characteristic high activity of vacuolar NHX activity observed in salt tolerant halophytes, promotes the tolerance of shoot tissues to sodium. There is also evidence that the overexpression of NHX in roots promotes K+ homeostasis under saline conditions (see below). It permits the growth and production of seed under salinity stress levels that would otherwise have a negative impact on yield. The technology is applicable to a wide range of crops,

 

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including corn, rice, soybeans, wheat, and vegetables. Arcadia’s salt-tolerance technology can improve farming efficiencies and reduce the need to expand agricultural activities into new areas. In addition, this technology can reduce the need for fresh water by allowing increased use of lower quality (brackish) water.

 

Salt Tolerance Technology—Efficacy Data in Rice and Wheat

 

Arcadia’s salinity tolerance technology has been demonstrated in multiple model and agricultural crops, including Arabidopsis, tomato, canola, wheat, cotton and rice. The technology has been validated by many academic researchers (Fukuda et al., 2004, Verma et al., 2007, and references therein). Arcadia is testing two transgenic rice events in field tests in California (planted May 22, 2008), and 12 lines which are in greenhouse tests. The lines currently being field tested performed very well in greenhouse trials. On chronic exposure to high salinity stress (E.C.W=6.7), independent transgenic rice lines over-expressing AtNHX1 (G5 and G6) retained 40% of their yield, while the controls (Null and WT) retained only 20% (Figure 5). While the salinity treatments in the greenhouse experiments are much higher than those of agronomic relevance, the 2008 field trials will impose two stress levels (E.C.W=3.1 and 5.6) that typically lead to yield losses of 25% and 50% respectively in rice. Parallel experiments that implement these more moderate stress treatments are being performed in the greenhouse this year.

 

 

Figure 5. Relative yields of transgenic (NHX) and control rice lines in greenhouse.

 

Arcadia and Mahyco seek to test and develop the NHX technology in wheat. There are some encouraging results in wheat reported by Xue et al. (2004) using NHX overexpression in wheat in laboratory and field tests. Transgenic wheat, expressing AtNHX1 under the control of a 35S CaMV promoter, showed a much smaller reduction in grain yield under very high salinity (soil E.C.=10.6 dS m-1). Root ion homeostasis was improved in the transgenic wheat lines, as they retained more potassium under saline treatment (Xue et al., 2004). The retention of potassium in the roots is consistent with the transport properties of AtNHX1 (and other vacuolar NHX antiporters). This antiporter has selectivity for potassium that is up to twice that of sodium (Yamaguchi et al., 2003). A high level of expression in the roots would promote potassium accumulation in the vacuoles of root cells. Moreover, the ability to maintain potassium concentrations in the root has been correlated to salinity tolerance in wheat (Cuin et al., 2008).

 

Drought Tolerance and Water Use Efficiency Technology—Technical Approach

 

The technology being developed at Arcadia to address water deficit stress is based on the production of cytokinins under stress conditions. This approach has been shown in tobacco to be effective at preserving yields under chronic deficit irrigation and at mitigating yield loss under extended periods of soil drying. The transgenic construct (pSARK-IPT) contains a maturation-induced promoter (SARK) that controls the expression of isopentenyltransferase (IPT), which is the rate-limiting enzyme in cytokinin biosynthesis. Plants typically respond to water stress by reducing transpiration. Initially this will induce stomatal closing. Senescence and abscission of leaves for the recovery of nitrogen and photoassimilates and the reduction of canopy size are typical adaptive responses which allow plants to set seed under prolonged or severe stress. However, the yield is greatly reduced. In crop plants, a severe yield reduction is considered crop failure.

 

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Better control over senescence initiation provides protection against yield losses in pSARK-IPT transgenic plants subjected to limiting water conditions.

 

Drought Tolerance Technology—Efficacy Data in Tobacco

 

This technology has been successfully tested in tobacco, both in greenhouse (Rivero et al., 2007) and under field conditions. Rivero et al. (2007) reported that the pSARK-IPT transgenic tobacco recovered from extreme drought (Figure 6). Biomass and seed yields from wild type plants were dramatically reduced (due to senescence and leaf death), while the transgenic plants recovered from wilting and continued to complete their life cycle with good seed yields.

 

	
 

 

 

 

WT

 

 

 

 

 

 

 

 

 

pSARK-IPT
    	
 
    	

    

 

Figure 6. Recovery from soil drying in pSARK-IPT transgenic tobacco and wild type control plants.

 

In separate experiments in which plants were watered regularly but at reduced rates, the transgenic pSARK-IPT lines lost only 10% in biomass and seed yield, while the wild type controls suffered a 60% loss. The response of the transgenic tobacco to these greenhouse treatments suggests that the technology is appropriate for addressing crop performance during either short term drought, which can lead to crop failure, or prolonged water stresses which reduce yields dramatically in the non-transgenic control. Under conditions of chronic deficit irrigation in the greenhouse, transgenic tobacco plants continued to show little reduction in rates of photosynthetic carbon assimilation, while untransformed controls showed a reduction of up to 50% (Blumwald, unpublished).

 

Use or disclosure of data contained on this sheet is subject to the restriction on the title page of this application

 

Preliminary data from testing in the field, although under conditions of heat stress in addition to prolonged water deficit stress, are consistent with the results from greenhouse testing. Under reduced watering, the pSARK-IPT transgenic lines (T2-36 and T4-24) produced greater biomass (Figure 7A) and seed yield, estimated from capsule numbers (Figure 7B). No yield penalty was observed under control treatments.

 

	
A.
    	
Biomass weight [FW, g/plant]
    	
B. 
    	
Capsule number per plant
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	

    	

    	
 
    

 

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Figure 7. Field biomass and seed yield of pSARK-IPT tobacco and control (SR-1) line.

 

Drought Tolerance and Water Use Efficiency Technology—Application to Rice and Wheat

 

The transformation of both indica and japonica rice with pSARK-IPT at Arcadia, to test the efficacy of this technology in monocots, is underway. Since the trait is untested in monocots, there are two significant questions that need to be resolved. First, does cytokinin production in monocots inappropriately inhibit the rapid remobilization of nitrogen and photoassimilates from leaves and stems to the grain? Second, is the pSARK promoter, isolated from pea, appropriately activated in response to stress and senescence stimuli in monocots? We expect data in a monocot in 2008 (in experimental transgenic lines of japonica rice) that will determine if cytokinins can be produced in monocots under the control of a pea senescence-sensitive promoter without yield penalty. Arcadia is currently funding a four-year research program at the University of California at Davis to further study and optimize this drought tolerance trait in both dicotyledonous and monocotyledonous crops.

 

Combined Technologies—Description

 

Rice and wheat crops are often affected by different abiotic stresses during a single growing season. Therefore, combining NUE and drought and salinity tolerance technologies into a single construct is technically and strategically advantageous even without considering the potential synergies between the technologies. NUE promotes more vigorous growth and yield, which in itself is a positive effect on absolute yields under abiotic stress. Vigor in the absence of stress is a selected trait in breeding for yields under stress. Early vigorous growth in NUE plants will improve yields in the face of salinity and/or water deficit stresses that may occur over the growing season. Ion homeostasis in NHX transgenics is biochemically less expensive than the increased synthesis of compatible solutes alone (which consume valuable nitrogen and photoassimilates). This less expensive osmotic adjustment in NHX transgenic plants should promote shorter periods of stomatal closing and therefore improve water (and nutrient) acquisition. Arcadia’s drought tolerance technology, while untested in monocots, holds great promise because of its potential contribution not only to drought tolerance, but to tolerance of other stresses that might promote early senescence and the consequent loss of yield. Such stresses include salinity, heat, and other abiotic stresses that induce oxidative damage. Like NHX transgenics, pSARK-IPT transgenic plants show some evidence for improved yield even under “control” treatments. The combination of all these traits into a single construct should speed the production of wheat and rice lines carrying all three traits.

 

Use or disclosure of data contained on this sheet is subject to the restriction on the title page of this application

 

However, synergies are expected between the NUE and abiotic stress tolerance technologies. While over expression of NHX promotes ion homeostasis, the dramatic upregulation of antioxidant enzyme activities and the dramatically reduced redox state of the antioxidant pools pSARK-IPT plants suggest that the combined NHX/pSARK-IPT plants will be better equipped to handle oxidative stress. For example, as soil moisture decreases during a dry episode, or if soil moisture is chronically reduced over a season because of water scarcity, the plants will face salinity stress (higher concentration of dissolved solutes in the soil) and water deficit stress, as well as temperature stress. As stomatal apertures decrease, transpirational cooling capacity is reduced. Here, a combination of NHX and pSARK-IPT technologies is complementary.

 

The pSARK-IPT technology may have a very dramatic effect on NUE, even in transgenic NUE plants. The pSARK-IPT plants promote a stay-green phenotype in tobacco. Stay-green phenotypes in sorghum and maize retain photosynthetic competence late in the season as well as under conditions of water deficit stress; this translates into superior yields (Thomas and Howarth, 2000). The combination of improved nitrogen uptake in NUE transgenics with an extension of source leaf longevity in pSARK-IPT plants may predict even greater rice and wheat yields.

 

Because of the risks for the drought tolerance technology outlined above, we consider the possibility that pSARK-IPT will not be optimally expressed in wheat and/or rice. Proof of concept rice and wheat lines are currently being advanced and will be available for characterization of expression of IPT in the late summer and fall of 2008. Should the data suggest that the pSARK promoter is not appropriate for IPT expression in either rice or wheat, we anticipate modifying a combined construct to NHX plus NUE, rather than a combination of the three technologies, as planned. We would make this determination in review with USAID as soon as the data become available.

 

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While Arcadia proposes here to combine NUE, salt tolerance and drought tolerance technologies into both rice and wheat, development and testing of each of these technologies (NUE and NHX) is already a commitment undertaken by Arcadia and its Indian commercial partner, Mahyco, the development of commercial lines containing all three traits within a single construct has the potential to speed deployment and consequent benefits in India. Testing of the combined traits will occur in parallel with the individual traits at field testing sites in India.

 

Expected Impact

 

Potential Economic Impacts of Arcadia Traits on Rice Production

 

India has over 46 million hectares of rice under cultivation and is the single largest rice producer in the world (China is a distant second at 29 million hectares). Rice is farmed throughout the subcontinent and is an essential staple in India’s culture and economy. However, despite the importance of rice in Indian agriculture, India’s average rice yields (1.69 tons/hectare) lag well behind those of other important rice growing regions such as China (3.54 tons/hectare), Indonesia (2.28 tons/hectare), Vietnam (2.47 tons/hectare) and Bangladesh (2.11 tons/hectare). India’s low rice yields can be attributed to many factors, including poor soils and soil management, low levels of agricultural inputs (high-yielding varieties, water, fertilizer and chemicals), and poor agricultural practices. However, this also means that there is an opportunity for significant improvement before the maximum yield potential of Indian rice varieties is likely to be reached.

 

The introduction of abiotic stress tolerance traits like NUE, salt-tolerance, and drought-tolerance in rice is expected to have a positive impact on yields and significantly improve the economics of Indian growers. The impact will, of course, vary from region to region and will depend on many factors, but assuming a 10% yield increase in rice from salt-tolerance and drought-tolerance technologies, the range of value creation on the farm is expected to be between $16.73/hectare in low yielding regions such as Madhya Pradesh, and $100.43/hectare in high yielding regions such as Punjab. Similarly, assuming a 15% yield increase and 20% nitrogen cost savings from NUE technology, the range of value creation on the farm is expected to be between $31.11/hectare in Madhya Pradesh, and $144.04/hectare in Punjab (Table 1 below). If these technologies are implemented on 30% of India’s rice acres, these traits could result in about $1.75 billion of added value on the farm annually.

 

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Table 1. Potential Range of Economic Impacts of Arcadia Traits in Rice

 

	
 
    	
 
    	
Yield Increase
    	
 
    	
Incremental Crop Value
    	
 
    
	
 
    	
 
    	
(MT/ha)(1)
    	
 
    	
($/ha)
    	
 
    
	
Madhya Pradesh (avg. yield   0.62 MT/ha)
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
· NUE
    	
 
    	
0.09
    	
 
    	
$
    	
31.11
    	
 
    
	
·   Drought-tolerance
    	
 
    	
0.07
    	
 
    	
$
    	
16.73
    	
(2)
    
	
·   Salt-tolerance
    	
 
    	
0.07
    	
 
    	
$
    	
16.73
    	
 
    
	
Punjab (avg. yield   3.51 MT/ha)
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
· NUE
    	
 
    	
0.53
    	
 
    	
$
    	
144.04
    	
 
    
	
·   Drought-tolerance
    	
 
    	
0.42
    	
 
    	
$
    	
100.43
    	
 
    
	
·   Salt-tolerance
    	
 
    	
0.42
    	
 
    	
$
    	
100.43
    	
 
    

 

Potential Economic Impacts of Arcadia Traits on Wheat Production

 

India has over 27 million hectares of wheat under cultivation and is the single largest wheat producer in the world (more than the annual planted acreage of the EU 25). Wheat is farmed throughout the subcontinent and is an essential staple in India’s culture and economy. However, despite the importance of wheat in Indian agriculture, India’s average wheat yields (2.74 tons/hectare) lag well behind those of other important wheat growing regions such as the EU 25 (5.51 tons/hectare) and China (4.36 tons/hectare). India’s low wheat yields can be attributed to many factors, including poor soils and soil management, low levels of agricultural inputs (high-yielding varieties, water, fertilizer and chemicals), and poor agricultural practices. However, this also means that there is an opportunity for significant improvement before the maximum yield potential of Indian wheat varieties is likely to be reached.

 

The introduction of abiotic stress traits like NUE, salt-tolerance and drought-tolerance in wheat is expected to have a positive impact on yields and significantly improve the economics of Indian growers. The impact will of course vary from region to region and will depend on many factors, but assuming a 10% yield increase in wheat from salt-tolerance and drought-tolerance technologies, the range of value creation on the farm is expected to be between $33.57/hectare in low yielding regions such as Maharashtra, and $109.54/hectare in high yielding regions such as Punjab. Similarly, assuming a 15% yield increase and 20% nitrogen cost savings from NUE, the range of value creation on the farm is expected to be between $49.36/hectare in Maharashtra, and $135.20/hectare in Punjab (Table 2 below). If these technologies are implemented on 30% of India’s wheat acres, these traits could result in about $1.25 billion of added value on the farm annually.

 

(1) Assumes a crop base price $239.14 per metric ton.

(2) Drought-tolerance and salt-tolerance economic values are based on 25% yield reduction due to abiotic stress and that the Arcadia technologies will result in a 15% yield recovery (effectively getting the crop to 90% of its yield potential).

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

15

 

Table 2. Potential Range of Economic Impacts of Arcadia Traits in Wheat

 

	
 
    	
 
    	
Yield Increase
    	
 
    	
Incremental Crop Value
    	
 
    
	
 
    	
 
    	
(MT/ha)(3)
    	
 
    	
($/ha)
    	
 
    
	
Maharashtra (avg. yield   1.29 MT/Ha)
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
· NUE
    	
 
    	
0.19
    	
 
    	
$
    	
49.36
    	
 
    
	
·   Drought-tolerance
    	
 
    	
0.15
    	
 
    	
$
    	
33.57
    	
(4)
    
	
·   Salt-tolerance
    	
 
    	
0.15
    	
 
    	
$
    	
33.57
    	
 
    
	
Punjab (avg. yield   4.20 MT/Ha)
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
· NUE
    	
 
    	
0.63
    	
 
    	
$
    	
135.20
    	
 
    
	
·   Drought-tolerance
    	
 
    	
0.47
    	
 
    	
$
    	
109.54
    	
 
    
	
·   Salt-tolerance
    	
 
    	
0.47
    	
 
    	
$
    	
109.54
    	
 
    

 

Expected Environmental Impacts of Arcadia Traits

 

Field results from NUE technology in canola have been used to demonstrate the potential environmental benefits of this technology. A partial life-cycle assessment adapted to crop production was used to assess the potential environmental impacts of growing genetically-modified NUE canola in North Dakota and Minnesota (Strange et al., 2007). The study concluded that there are a number of potential environmental benefits associated with growing NUE canola. In order to obtain yields in NUE canola equivalent those with conventional canola, the use of the NUE technology results in one third less total energy consumption and one third less C02 emissions equivalents. Other benefits include reduced impacts on freshwater ecotoxicity, eutrophication, and acidification.

 

NUE technology in rice and wheat is expected to have multiple impacts on the environment. First, NUE in rice and wheat will increase the efficiency of production on existing rice and wheat acres and reduce the need to expand into additional and sometimes marginal acres (a significant issue in India). Second, NUE in rice and wheat will reduce the amount of “free” nitrogen in soils, thereby reducing the leaching potential into waterways and marine systems, as well as volatilization of harmful nitrous oxide from soils (a greenhouse gas 296 times more harmful than carbon dioxide). Salt-tolerant and drought-tolerant rice and wheat will also reduce the need for expansion into additional acreage, and at the same time reduce the need for fresh water, a critical and scarce resource in India.

 

(3) Assumes a crop base price $179.50 per metric ton.

(4) Drought-tolerance and salt-tolerance economic values are based on 25% yield reduction due to abiotic stress and that the Arcadia technologies will result in a 15% yield recovery (effectively getting the crop to 90% of its yield potential).

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

16

 

Proposed Product Development and Commercialization Approach

 

Arcadia and Mahyco believe that the critical need to maintain and improve crop yields under increasingly stressful environmental conditions argue strongly for a focus on the rapid development and deployment of hybrids. Due to strict stewardship requirements for transgenic plants, Arcadia and Mahyco have, and continue to have, concerns about potential programs that would make transgenic events broadly available to unmonitored breeding programs. Thus hybrid seed were originally viewed as a best mode for this technology to benefit Indian agriculture. Mahyco has made the commitment to make hybrid seed available to distributors throughout India, and both Mahyco and Arcadia have made significant investments in developing and delivering these technologies in hybrid lines to Indian growers.

 

In response to a specific USAID query, the program provides for a concurrent “push” strategy to develop open pollinated varieties of rice and wheat that have increased salinity tolerance. These varieties would be made available through the USAID and Indian public sector agencies to seed distributors broadly throughout India at pricing similar to comparable OP varieties. As this component of the program, develops, Mahyco and Arcadia will make the commitment to regularly revisit with USAID the prospects for a similar shadowing path of OP varieties for each of NUE and DT/WUE in rice and wheat.

 

In addition, Arcadia will commit to collaborating with appropriate public sector agencies in India to conduct field work to assess the potential of these gene technologies to create incremental value to farmers through the earning and trading of carbon credits, should such schemes develop for Indian agriculture. Arcadia is in the second year of such a program in Ningxia, China and would apply our knowledge to similar work in India. Should such a carbon credit and trading scheme develop for Indian agriculture, some of the resulting incremental value received by farmers could be pledged against the cost of hybrid seed. This would help poorer growers access not only the NUE and other technologies, but also the superior agronomic properties inherent in hybrid seed.

 

The product development plan is built on the following elements:

[...*...]

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

17

 

Duration of Activity

 

The scope of the sponsored work described is three years. At the end of that time much will remain to be done to develop reliable products with significant overall performance. However, within three years, the potential country-wide impact of the NUE, ST, and DT/WUE traits for indica rice will be well-demonstrated. Within three years the prototypes for NUE, ST, and DT/WUE traits for Indian wheat will be in hand. Additionally, there will be a data-driven base to evaluate the premise of carbon credit trading to address greenhouse gas issues and to enable a broader range of Indian farmers to access the best technology to feed India’s population.

 

Role of USAID

 

Mahyco is a highly successful Indian seed company known for reliability and quality of its seed across a broad range of crops. While likely possessing the best transgenic trait development program in India, Mahyco still has to carefully plan for the resources it can invest in transgenic traits. Arcadia is a relatively young California-based technology company that has promising technology for crop yields; however, Arcadia has yet to reach a break-even point as a company.

 

The role of USAID is basically two-fold.

 

1.              The funding requested is critical to accelerate trait development for India. This funding is critical to shaping the impact as broadly and as quickly as possible to protect crop yields under the increasingly difficult conditions faced by Indian agriculture.

2.              The structure of the program is meant to keep USAID involved in decisions about where and how to implement the technology in rice and wheat. It is anticipated that Indian public sector agencies will be increasingly and necessarily involved in this work in coming years. As an active player in the development of these technologies and in shaping the product development paths taken, the USAID will hopefully also be a key intermediary in productive and efficient interactions with the appropriate public sector agencies in India.

 

Project Management

 

Relevant Organizational Experiences

 

Arcadia Biosciences, Inc was founded in 2003 and is a privately held biotechnology company incorporated in Arizona, with administrative offices in Phoenix and its main lab facility and operation headquartered in Davis, California. Arcadia’s mission statement is to develop plants that improve the environment and human health by 1) identifying technologies that have achieved proof of concept and that fit our mission, 2) developing technologies by investing in optimization and validating performance and 3) commercialization through strategic partnerships with seed companies or selling directly into the target market.

 

Both Arcadia and Mahyco have experience and infrastructure to do field trials of genetically modified (GM) rice. Arcadia has a record of cooperation with the California Rice Commission doing field trials for salt tolerance and nitrogen use efficiency in multiple locations. Mahyco currently has transgenic rice lines with other traits under evaluation. Mahyco is currently an active participant in field tests of Bt eggplant and has been a leader in the testing, commercial launch, and current sales of Bt cotton seeds in India.

 

Both partners have experience and infrastructure for the transformation of indica varieties of rice. Arcadia has a license for the Japan Tobacco methodology and currently works with transformation of japonica, indica and Nerica rice types. Mahyco has invested and has in place the infrastructure and expertise to develop and launch commercial GM hybrid indica rice. In addition, Mahyco has proprietary access to a wide range of superior germplasm adapted to India in which to express transgenes affecting stress tolerance.

 

Both Arcadia and Mahyco have in place and available the necessary personnel, labs, tissue culture facilities, growth chambers, and greenhouses adapted for rice available to execute the proposed work. Mahyco additionally has multiple field locations geographically distributed across the main rice cultivation areas in India. Mahyco is actively introgressing transgenes from prototype lines into elite germplasm and has all the necessary tools and expertise operational on the ground in India.

 

Both partners have experience and a positive reputation regarding the processes to obtain regulatory approval. While working at Calgene, Arcadia staff obtained FDA and USDA approvals for GM tomato, cotton, and canola products and are actively pursuing similar approvals now for Arcadia safflower lines. Mahyco has

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

18

 

GM products in the market in India; is an active partner in the Bt eggplant development collaboration and maintains a proactive relationship with the regulatory agencies and public approval issues in India.

 

Arcadia is a leader in the establishment of a framework for rice growers to collect revenue based on carbon credits earned by use of NUE technologies that decrease amounts of greenhouse gases generated by rice production. Arcadia is reviewing the expansion of its current activities in China to India under the auspices of this proposal and in collaboration with Mahyco.

 

Arcadia and Mahyco already have a commercial agreement in place for NUE and salt tolerance technologies in rice for India and, under the auspices of this proposal, a commitment to reach similar agreement on commercial development of the drought tolerance trait. Arcadia and Mahyco researchers are in regular contact including exchange visits for face to face meetings. Both partners are highly motivated to get actual product events and lines into field testing and into the market. Mahyco’s plans are to make planting seed of hybrid rice varieties widely available to distributors throughout India. Arcadia is a privately-owned US company while Mahyco is an established well-known and profitable Indian seed company. The proposed work here would accelerate the introduction and the breadth of a comprehensive solution to salt, drought & NUE for rice grown in India, and its success would also affect the implementation of the same traits in wheat for which ABS and Mahyco are also contractual and committed partners.

 

Explanation of Partners

 

It is important to note that Arcadia is funding salt, NUE and drought research using its own resources. In addition Mahyco is funding salt tolerance and NUE traits for application in India. By working with funding from USAID there is an opportunity to accelerate and enhance the research and product development phases of the project to have a more broad impact on agriculture. Arcadia is seeking only partial funding of a multi-year research and development program.

 

Arcadia currently operates three research facilities. The Davis, CA (202 Cousteau Place Suite 200) facility occupies 10,000 square feet and houses approximately 50 full time employees. The facility is fully equipped for growing, cataloging and sampling plants. In addition, the facility is also a fully operational molecular biology lab. The Woodland, CA greenhouse facility contains 16 computer-controlled greenhouses with 22,000 square feet, 10 acres of field, and currently houses 6 full time employees. A seed processing lab and environmentally regulated seed storage units are on site. The Seattle, WA (410 West Harrison, Suite 150) facility occupies 4,300 square feet and houses eleven full time employees. The facility is a fully operational molecular biology lab.

 

Mahyco operates from 50+ locations around India with a staff of 900+ full time employees. With research and testing farms spread around the country, Mahyco tests all its pipeline products in the agroclimatic zones where the products are to be sold and is able to address potentially all rice markets. The rice breeding stations at Hyderabad and Karnal are supported with significant greenhouse and other resources. The biotechnology facilities located at Dawalwadi also have greenhouse facilities which grow rice as well as molecular breeding support for rapid introgression of given trait.

 

Budget Narrative

 

Arcadia requests a grant of 1 million US dollars to partially cover the cost for project year one. The estimated requests for year 2 and year 3 of the project are 1.4 and 1.1 million US dollars, respectively. This funding will help support the proposed work plan, which is designed to accelerate a timely and broad introduction of these productivity traits into Indian varieties of rice and wheat. These funds will be shared by Arcadia and Mahyco in proportion to the costs incurred in pursuit of the USAID program objectives. The costs will correspond to the following division of tasks with partner primarily responsible indicated.

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

19

 

[...*...]

 

Arcadia and Mahyco have already made investments to date in developing these traits in rice for India. As the proposed work proceeds, Arcadia and Mahyco will make ongoing significant investments in project management and commercialization. Costs of these efforts are not captured in the funding request. [...*...] The curriculum vitae of all key scientific managers are included in the appendix.

 

Implementation Plan

 

Description

 

As much development work, greenhouse staging, field work, and regulatory data collection as possible is planned to occur in India. Mahyco is uniquely able to carry out this work. Arcadia proposes to subcontract directly to Mahyco sets of tasks. As transgenic materials progress, Mahyco will be able to redeploy appropriately skilled and experienced staff rather than recruiting and training new staff specifically to work on this project. Mahyco will be responsible for the execution of the subcontracted work; however, the close working relationship with Arcadia (across multiple crops beyond just rice and wheat) will bring the combined experience of the researchers and directors of both companies to bear on the project.

 

Headcount

 

Five senior scientists (CVs attached) will lead the project research components:

[...*...]

 

Cross-project issues and research overall will be managed cooperatively by [...*...] and [...*...], research directors of Mahyco and Arcadia, respectively. In addition, Arcadia will make available as needed:

 

1.              [...*...] field trial experience with all three traits in rice, and also greenhouse gas emissions measurements from rice fields in China.

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

20

 

2.              [...*...]

3.              [...*...] In collaboration with [...*...] will maintain project awareness and direction regarding developing market forces in Indian agriculture as they affect the implementation of the targeted crop traits.

4.              [...*...] extensive experience with international regulatory approval requirements.

5.              [...*...] responsible for facilitating the Arcadia components of collaboration with Mahyco.

 

Other than the possible assignment of time by [...*...] and [...*...] to Mahyco subcontracts, the above professional work is only partially captured in overhead costs and not directly budgeted. In addition, the costs of ongoing work to date by both companies is contributed, as well as the continuing costs of transgenic NUE wheat lines developed under contract by Arcadia. The proposed budget consists of basically two types of items:

 

[...*...]

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

21

 

[...*...]

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

22

 

[...*...]

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

23

 

References

 

Apse, M.P., Aharon, G.S., Snedden, W.A., and Blumwald, E. 1999. Salt tolerance conferred by overexpression of a vacuolar Na+/H+ antiporter in Arabidopsis. Science 285: 1256-1258.

 

Cuin, T.A., Betts, S.A., Chalmandrier, R., and Shabala, S. 2008. A root’s ability to retain K+ correlates with salt tolerance in wheat. J. Exp. Bot. 59: 2697-2706.

 

Fukuda, A., Nakamura, A., Tagiri, A., Tanaka, H., Miyao, A., Hirochika, H., and Tanaka, Y. 2004. Function, intracellular localization and the importance in salt tolerance of a vacuolar Na+/H+ antiporter from rice. Plant Cell Physiol. 45:146-59.

 

Good, A.G., Johnson, S.J., DePauw, M.D., Carroll, R.T., Savidov, N., Vidamir, J., Lu, Z., Taylor, G. and Stroeher, V. 2007. Engineering nitrogen use efficiency with alanine aminotransferase. Can. J. Bot. 85: 52—262.

 

Grattan, S., Zeng, L., Shannon, M.C., and Roberts, S.R. 2002. Rice is more sensitive than previously thought. California Agriculture 56: 189-195.

 

Maas E.V. 1986. Salt tolerance of plants. Applied Agricultural Research 1: 12-26.

 

Prabhakar, S.V.R.K., and Shaw, R. 2008. Climate change adaptation implications for drought risk mitigation: a perspective for India. Climatic Change 88:113-130.

 

Rivero, R.M., Kojima, M., Gepstein, A., Sakakibara, H., Mittler, R., Gepstein, S., and Blumwald, E. 2007. Delayed leaf senescence induces extreme drought tolerance in a flowering plant. PNAS 104: 19631-19636.

 

Rosegrant, M.W., Ringler, C., Suslser, T.B., Msangi, S., Zhu, T., Valmonte-Santos, R., and Wood, S. 2008. Reducing poverty and hunger in Asia. Agriculture in Asia: challenges and opportunities. IFPRI brief: March 2008 (http://www.ifpri.org/2020/focus/focus15/focus15_06. pdf)

 

Shrawat, A.K., Carroll, R.T., DePauw, M, Taylor, G.T, and Good, A.G. 2008. Genetic engineering of improved nitrogen use efficiency in rice by the tissue-specific expression of alanine aminotransferase. Plant Biotech. J. doi: 10.1111/j. 1467-7652.2008.00351.x

 

Strange, A., Park, J., Bennett, R., and Phipps, R. 2008. The use of life-cycle assessment to evaluate the environmental imipacts of growing genetically modified, nitrogen use-efficient canola. Plant Biotech. J. 6: 337-345.

 

Thomas, H., and Howarth, C.J. 2000. Five ways to stay green. J.Exp.Bot. 51: 329-337.

 

Verma, D., Singla-Pareek, S.L., Rajagopal, D., Reddy, M.K., and Sopory, S.K. 2007. Functional validation of a novel isoforms of Na+/H+ antiporter from Pennisetum glaucum for enhancing salinity tolerance in rice. J. Biosci. 31:621-628.

 

Xue, Z.-Y., Zhi, D.-Y., Xue, G.-P., Zhang, H., Zhao, Y.-X., and Xia, G.-M. 2004. Enhanced salt tolerance of transgenic wheat (Triticum aestivum L.) expressing a vacuolar Na+/H+ antiporter gene with improved grain yields in saline soils in the filed and a reduced level of leaf Na+. Plant Science 167: 849-859.

 

Yamaguchi, T., Apse, M.P., Shi, H., and Blumwald, E. 2003. Topological analysis of a plant vacuolar Na+/H+ antiporter reveals a luminal C terminus that regulates antiporter cation selectivity. PNAS 100:12510-12515.

 

Zhang, H.X., and Blumwald, E. 2001. Transgenic salt-tolerant tomato plants accumulate salt in foliage but not in fruit. Nature Biotechnology 19: 765-768.

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

24

 

Attachment B-2

BRANDING STRATEGY AND MARKING PLAN

 

To be Submitted for Agreement Officer Approval, 

within 45 Days from Award

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

25

 

Attachment C

 

MANDATORY STANDARD PROVISIONS FOR U.S., NONGOVERNMENTAL ORGANIZATIONS

 

1.                                      APPLICABILITY OF 22 CFR PART 226 (May 2005)

 

a.                                      All provisions of 22 CFR Part 226 and all Standard Provisions attached to this agreement are applicable to the recipient and to subrecipients which meet the definition of “Recipient” in Part 226, unless a section specifically excludes a subrecipient from coverage. The recipient shall assure that subrecipients have copies of all the attached standard provisions.

 

b.                                      For any subawards made with Non-US subrecipients the Recipient shall include the applicable “Standard Provisions for Non-US Nongovernmental Recipients.” Recipients are required to ensure compliance with monitoring procedures in accordance with OMB Circular A-133.

 

[END OF PROVISION]

 

2.                                      INELIGIBLE COUNTRIES (MAY 1986)

 

Unless otherwise approved by the USAID Agreement Officer, funds will only be expended for assistance to countries eligible for assistance under the Foreign Assistance Act of 1961, as amended, or under acts appropriating funds for foreign assistance.

 

[END OF PROVISION]

 

3.                                      NONDISCRIMINATION (MAY 1986)

 

No U.S. citizen or legal resident shall be excluded from participation in, be denied the benefits of, or be otherwise subjected to discrimination under any program or activity funded by this award on the basis of race, color, national origin, age, handicap, or sex.

 

[END OF PROVISION]

 

4.                                      NONLIABILITY (NOVEMBER 1985)

 

USAID does not assume liability for any third party claims for damages arising out of this award.

 

[END OF PROVISION]

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

26

 

5.                                      AMENDMENT (NOVEMBER 1985)

 

The award may be amended by formal modifications to the basic award document or by means of an exchange of letters between the Agreement Officer and an appropriate official of the recipient.

 

[END OF PROVISION]

 

6.                                      NOTICES (NOVEMBER 1985)

 

Any notice given by USAID or the recipient shall be sufficient only if in writing and delivered in person, mailed, or cabled as follows:

 

To the USAID Agreement Officer, at the address specified in the award.

 

To recipient, at recipient’s address shown in the award or to such other address designated within the award.

 

Notices shall be effective when delivered in accordance with this provision, or on the effective date of the notice, whichever is later.

 

[END OF PROVISION]

 

7.                                      SUBAGREEMENTS (June 1999)

 

Subrecipients, subawardees, and contractors have no relationship with USAID under the terms of this agreement. All required USAID approvals must be directed through the recipient to USAID.

 

[END OF PROVISION]

 

8.                                      OMB APPROVAL UNDER THE PAPERWORK REDUCTION ACT (December 2003)

 

*lnformation collection requirements imposed by this cooperative agreement are covered by OMB approval number 0412-0510; the current expiration date is 04/30/2005. The Standard Provisions containing the requirement and an estimate of the public reporting burden (including time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information) are

 

	
Standard Provision
    	
 
    	
Burden Estimate
    	
 
    
	
Air Travel and   Transportation
    	
 
    	
1(hour)
    	
 
    
	
Ocean Shipment of Goods
    	
 
    	
.5
    	
 
    
	
Patent Rights
    	
 
    	
.5
    	
 
    
	
Publications
    	
 
    	
.5
    	
 
    
	
Negotiated Indirect Cost   Rates - (Predetermined and Provisional)
    	
 
    	
1
    	
 
    
	
Voluntary Population   Planning
    	
 
    	
.5
    	
 
    
	
Protection of the   Individual as a Research Subject
    	
 
    	
1
    	
 
    

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

27

 

	
22 CFR 226 
    	
 
    	
Burden Estimate
    	
 
    
	
22 CFR 226.40-.49   Procurement of Goods and Services
    	
 
    	
1
    	
 
    
	
22 CFR 226.30 - .36 Property   Standards
    	
 
    	
1.5
    	
 
    

 

Comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden, may be sent to the Office of Procurement, Policy Division (M/OP/P) U.S. Agency for International Development, Washington, DC 20523-7801 and to the Office of Management and Budget, Paperwork Reduction Project (0412-0510), Washington, D.C 20503.

 

[END OF PROVISION]

 

9.                                      USAID ELIGIBILITY RULES FOR GOODS AND SERVICES (April 1998)

 

(This provision is not applicable to goods or services which the recipient provides with private funds as part of a cost-sharing requirement, or with Program Income generated under the award.)

 

a.                                     Ineligible and Restricted Goods and Services: USAID’s policy on ineligible and restricted goods and services is contained in ADS Chapter 312.

 

(1)                                 Ineligible Goods and Services. Under no circumstances shall the recipient procure any of the following under this award:

 

(i)                                     Military equipment,

(ii)                                  Surveillance equipment,

(iii)                               Commodities and services for support of police or other law enforcement activities,

(iv)                              Abortion equipment and services,

(v)                                 Luxury goods and gambling equipment, or

(vi)                              Weather modification equipment.

 

(2)                                 Ineligible Suppliers. Funds provided under this award shall not be used to procure any goods or services furnished by any firms or individuals whose name appears on the “Lists of Parties Excluded from Federal Procurement and Nonprocurement Programs.” USAID will provide the recipient with a copy of these lists upon request.

 

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(3)                                 Restricted Goods. The recipient shall not procure any of the following goods and services without the prior approval of the Agreement Officer:

 

(i)                                     Agricultural commodities,

(ii)                                  Motor vehicles,

(iii)                               Pharmaceuticals,

(iv)                              Pesticides,

(v)                                 Used equipment,

(vi)                              U.S. Government-owned excess property, or

(vii)                           Fertilizer.

 

Prior approval will be deemed to have been met when:

 

(i) the item is of U.S. source/origin;

 

(ii) the item has been identified and incorporated in the program description or schedule of the award (initial or revisions), or amendments to the award; and

 

(iii) the costs related to the item are incorporated in the approved budget of the award.

 

Where the item has not been incorporated into the award as described above, a separate written authorization from the Agreement Officer must be provided before the item is procured.

 

b.                                      Source and Nationality: The eligibility rules for goods and services based on source and nationality are divided into two categories. One applies when the total procurement element during the life of the award is over $250,000, and the other applies when the total procurement element during the life of the award is not over $250,000, or the award is funded under the Development Fund for Africa (DFA) regardless of the amount. The total procurement element includes procurement of all goods (e.g., equipment, materials, supplies) and services. Guidance on the eligibility of specific goods or services may be obtained from the Agreement Officer. USAID policies and definitions on source, origin and nationality are contained in 22 CFR Part 228, Rules on Source, Origin and Nationality for Commodities and Services Financed by the Agency for International Development, which is incorporated into this Award in its entirety.

 

(1)                                 For DFA funded awards or when the total procurement element during the life of this award is valued at $250,000 or less, the following rules apply:

 

(i)                                     The authorized source for procurement of all goods and services to be reimbursed under the award is USAID Geographic Code 935, “Special Free World,” and such goods and services must meet the source, origin

 

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and nationality requirements set forth in 22 CFR Part 228 in accordance with the following order of preference:

 

(A)                               The United States (USAID Geographic Code 000),

(B)                               The Cooperating Country,

(C)                               USAID Geographic Code 941, and

(D)                               USAID Geographic Code 935.

 

(ii)                                  Application of order of preference: When the recipient procures goods and services from other than U.S. sources, under the order of preference in paragraph (b)(1)(i) above, the recipient shall document its files to justify each such instance. The documentation shall set forth the circumstances surrounding the procurement and shall be based on one or more of the following reasons, which will be set forth in the Recipient’s documentation:

 

(A)                               The procurement was of an emergency nature, which would not allow for the delay attendant to soliciting U.S. sources,

 

(B)                               The price differential for procurement from U.S. sources exceeded by 50% or more the delivered price from the non-U.S. source,

 

(C)                               Compelling local political considerations precluded consideration of U.S. sources,

 

(D)                               The goods or services were not available from U.S. sources, or

 

(E)                                Procurement of locally available goods and services, as opposed to procurement of U.S. goods and services, would best promote the objectives of the Foreign Assistance program under the award.

 

(2)                                 When the total procurement element exceeds $250,000 (unless funded by DFA), the following applies: Except as may be specifically approved or directed in advance by the Agreement Officer, all goods and services financed with U.S. dollars, which will be reimbursed under this award must meet the source, origin and nationality requirements set forth in 22 CFR Part 228 for the authorized geographic code specified in the schedule of this award. If none is specified, the authorized source is Code 000, the United States.

 

c.                                       Printed or Audio-Visual Teaching Materials: If the effective use of printed or audio-visual teaching materials depends upon their being in the local language and if such materials are intended for technical assistance projects or activities

 

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financed by USAID in whole or in part and if other funds including U.S.-owned or U.S.-controlled local currencies are not readily available to finance the procurement of such materials, local language versions may be procured from the following sources, in order of preference:

 

(1)                                 The United States (USAID Geographic Code 000),

(2)                                 The Cooperating Country,

(3)                                 “Selected Free World” countries (USAID Geographic Code 941), and

(4)                                 “Special Free World” countries (USAID Geographic Code 899).

 

d.                                      If USAID determines that the recipient has procured any of these goods or services under this award contrary to the requirements of this provision, and has received payment for such purposes, the Agreement Officer may require the recipient to refund the entire amount of the purchase.

 

This provision must be included in all subagreements which include procurement of goods or services which total over $5,000.

 

[END OF PROVISION]

 

10.                               DEBARMENT, SUSPENSION, AND OTHER RESPONSIBILITY MATTERS (January 2004)

 

a.                      The recipient agrees to notify the Agreement Officer immediately upon learning that it or any of its principals:

 

(1)                                 Are presently excluded or disqualified from covered transactions by any Federal department or agency;

 

(2)                                 Have been convicted within the preceding three-year period preceding this proposal been convicted of or had a civil judgment rendered against them for commission of fraud or a criminal offense in connection with obtaining, attempting to obtain, or performing a public (Federal, State, or local) transaction or contract under a public transaction; violation of Federal or State antitrust statutes or commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, tax evasion, receiving stolen property, making false claims, or obstruction of justice; commission of any other offense indicating a lack of business integrity or business honesty that seriously and directly affects your present responsibility;

 

(3)                                 Are presently indicted for or otherwise criminally or civilly charged by a governmental entity (Federal, State, or local) with commission of any of the offenses enumerated in paragraph (1)(b); and

 

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(4)                                 Have had one or more public transactions (Federal, State, or local) terminated for cause or default within the preceding three years.

 

b.                                      The recipient agrees that, unless authorized by the Agreement Officer, it will not knowingly enter into any subagreements or contracts under this cooperative agreement with a person or entity that is included on the Excluded Parties List System (http://epls.arnet.gov). The recipient further agrees to include the following provision in any subagreements or contracts entered into under this award:

 

DEBARMENT, SUSPENSION, INELIGIBILITY, AND VOLUNTARY EXCLUSION (DECEMBER 2003)

 

The recipient/contractor certifies that neither it nor its principals is presently excluded or disqualified from participation in this transaction by any Federal department or agency.

 

c.                                      The policies and procedures applicable to debarment, suspension, and ineligibility under USAID-financed transactions are set forth in 22 CFR Part 208.

 

[END OF PROVISION]

 

11.                               DRUG-FREE WORKPLACE (January 2004)

 

a.                                      The recipient agrees that it will publish a drug-free workplace statement and provide a copy to each employee who will be engaged in the performance of any Federal award. The statement must

 

(1)                                 Tell the employees that the unlawful manufacture, distribution, dispensing, possession, or use of a controlled substance is prohibited in its workplace;

 

(2)                                 Specify the actions the recipient will take against employees for violating that prohibition; and

 

(3)                                 Let each employee know that, as a condition of employment under any award, he or she

 

(i)                                     Must abide by the terms of the statement, and

(ii)                                  Must notify you in writing if he or she is convicted for a violation of a criminal drug statute occurring in the workplace, and must do so no more than five calendar days after the conviction.

 

b.                                      The recipient agrees that it will establish an ongoing drug-free awareness program to inform employees about

 

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(i)                                     The dangers of drug abuse in the workplace;

 

(ii)                                  Your policy of maintaining a drug-free workplace;

 

(iii)                               Any available drug counseling, rehabilitation and employee assistance programs; and

 

(iv)                              The penalties that you may impose upon them for drug abuse violations occurring in the workplace.

 

c.                                       Without the Agreement Officer’s expressed written approval, the policy statement and program must be in place as soon as possible, no later than the 30 days after the effective date of this award or the completion date of this award, whichever occurs first.

 

d.                                      The recipient agrees to immediately notify the Agreement Officer if an employee is convicted of a drug violation in the workplace. The notification must be in writing, identify the employee’s position title, the number of each award on which the employee worked. The notification must be sent to the Agreement Officer within ten calendar days after the recipient learns of the conviction.

 

e.                                       Within 30 calendar days of learning about an employee’s conviction, the recipient must either

 

(1)                                 Take appropriate personnel action against the employee, up to and including termination, consistent with the requirements of the Rehabilitation Act of 1973 (29 USC 794), as amended, or

 

(2)                                 Require the employee to participate satisfactorily in a drug abuse assistance or rehabilitation program approved for these purposes by a Federal, State or local health, law enforcement, or other appropriate agency.

 

f.                                       The policies and procedures applicable to violations of these requirements are set forth in 22 CFR Part 210.

 

[END OF PROVISION]

 

12.                               EQUAL PROTECTION OF THE LAWS FOR FAITH-BASED AND COMMUNITY ORGANIZATIONS (February 2004)

 

a.                                      The recipient may not discriminate against any beneficiary or potential beneficiary under this award on the basis of religion or religious belief. Accordingly, in providing services supported in whole or in part by this agreement or in its outreach activities related to such services, the recipient may not discriminate against current or prospective program beneficiaries on the basis of

 

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religion, a religious belief, a refusal to hold a religious belief, or a refusal to actively participate in a religious practice;

 

b.                                      The Federal Government must implement Federal programs in accordance with the Establishment Clause and the Free Exercise Clause of the First Amendment to the Constitution. Therefore, if the recipient engages in inherently religious activities, such as worship, religious instruction, and proselytization, it must offer those services at a different time or location from any programs or services directly funded by this award, and participation by beneficiaries in any such inherently religious activities must be voluntary.

 

c.                                       If the recipient makes subawards under this agreement, faith-based organizations should be eligible to participate on the same basis as other organizations, and should not be discriminated against on the basis of their religious character or affiliation.

 

[END OF PROVISION]

 

13.                               IMPLEMENTATION OF E.O. 13224 — EXECUTIVE ORDER ON TERRORIST FINANCING (March 2002)

 

The Recipient is reminded that U.S. Executive Orders and U.S. law prohibits transactions with, and the provision of resources and support to, individuals and organizations associated with terrorism. It is the legal responsibility of the recipient to ensure compliance with these Executive Orders and laws. This provision must be included in all contracts/subawards issued under this agreement.

 

[END OF PROVISION]

 

14.                               MARKING UNDER USAID-FUNDED ASSISTANCE INSTRUMENTS (December 2005)

 

(a) Definitions

 

Commodities mean any material, article, supply, goods or equipment, excluding recipient offices, vehicles, and non-deliverable items for recipient’s internal use, in administration of the USAID funded grant, cooperative agreement, or other agreement or subagreement.

 

Principal Officer means the most senior officer in a USAID Operating Unit in the field, e.g., USAID Mission Director or USAID Representative. For global programs managed from Washington but executed across many countries, such as disaster relief and assistance to internally displaced persons, humanitarian emergencies or immediate post conflict and political crisis response, the cognizant Principal Officer may be an Office Director, for example, the Directors of USAID/W/Office of Foreign Disaster Assistance and Office of Transition Initiatives. For non-presence countries, the cognizant Principal Officer is the Senior USAID officer in a regional USAID Operating

 

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Unit responsible for the non-presence country, or in the absence of such a responsible operating unit, the Principal U.S Diplomatic Officer in the non-presence country exercising delegated authority from USAID.

 

Programs mean an organized set of activities and allocation of resources directed toward a common purpose, objective, or goal undertaken or proposed by an organization to carry out the responsibilities assigned to it.

 

Projects include all the marginal costs of inputs (including the proposed investment) technically required to produce a discrete marketable output or a desired result (for example, services from a fully functional water/sewage treatment facility).

 

Public communications are documents and messages intended for distribution to audiences external to the recipient’s organization. They include, but are not limited to, correspondence, publications, studies, reports, audio visual productions, and other informational products; applications, forms, press and promotional materials used in connection with USAID funded programs, projects or activities, including signage and plaques; Web sites/Internet activities; and events such as training courses, conferences, seminars, press conferences and so forth.

 

Subrecipient means any person or government (including cooperating country government) department, agency, establishment, or for profit or nonprofit organization that receives a USAID subaward, as defined in 22 C.F.R. 226.2.

 

Technical Assistance means the provision of funds, goods, services, or other foreign assistance, such as loan guarantees or food for work, to developing countries and other USAID recipients, and through such recipients to subrecipients, in direct support of a development objective - as opposed to the internal management of the foreign assistance program.

 

USAID Identity (Identity) means the official marking for the United States Agency for International Development (USAID), comprised of the USAID logo or seal and new brandmark, with the tagline that clearly communicates that our assistance is “from the American people.” The USAID Identity is available on the USAID website at www.usaid.gov/branding and USAID provides it without royalty, license, or other fee to recipients of USAID-funded grants, or cooperative agreements, or other assistance awards

 

(b)                                 Marking of Program Deliverables

 

(1)                                 All recipients must mark appropriately all overseas programs, projects, activities, public communications, and commodities partially or fully funded by a USAID grant or cooperative agreement or other assistance award or subaward with the USAID Identity, of a size and prominence equivalent to or greater than the recipient’s, other donor’s, or any other third party’s identity or logo.

 

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(2)                                 The Recipient will mark all program, project, or activity sites funded by USAID, including visible infrastructure projects (for example, roads, bridges, buildings) or other programs, projects, or activities that are physical in nature (for example, agriculture, forestry, water management) with the USAID Identity. The Recipient should erect temporary signs or plaques early in the construction or implementation phase. When construction or implementation is complete, the Recipient must install a permanent, durable sign, plaque or other marking.

 

(3)                                 The Recipient will mark technical assistance, studies, reports, papers, publications, audio-visual productions, public service announcements, Web sites/Internet activities and other promotional, informational, media, or communications products funded by USAID with the USAID Identity.

 

(4)                                 The Recipient will appropriately mark events financed by USAID, such as training courses, conferences, seminars, exhibitions, fairs, workshops, press conferences and other public activities, with the USAID Identity. Unless directly prohibited and as appropriate to the surroundings, recipients should display additional materials, such as signs and banners, with the USAID Identity. In circumstances in which the USAID Identity cannot be displayed visually, the recipient is encouraged otherwise to acknowledge USAID and the American people’s support.

 

(5)                                 The Recipient will mark all commodities financed by USAID, including commodities or equipment provided under humanitarian assistance or disaster relief programs, and all other equipment, supplies, and other materials funded by USAID, and their export packaging with the USAID Identity.

 

(6)                                 The Agreement Officer may require the USAID Identity to be larger and more prominent if it is the majority donor, or to require that a cooperating country government’s identity be larger and more prominent if circumstances warrant, and as appropriate depending on the audience, program goals, and materials produced.

 

(7)                                 The Agreement Officer may require marking with the USAID Identity in the event that the recipient does not choose to mark with its own identity or logo.

 

(8)                                 The Agreement Officer may require a pre-production review of USAID-funded public communications and program materials for compliance with the approved Marking Plan.

 

(9)                                 Subrecipients. To ensure that the marking requirements “flow down” to subrecipients of subawards, recipients of USAID funded grants and cooperative agreements or other assistance awards will include the USAID-approved marking provision in any USAID funded subaward, as follows:

 

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“As a condition of receipt of this subaward, marking with the USAID Identity of a size and prominence equivalent to or greater than the recipient’s, subrecipient’s, other donor’s or third party’s is required. In the event the recipient chooses not to require marking with its own identity or logo by the subrecipient, USAID may, at its discretion, require marking by the subrecipient with the USAID Identity.”

 

(10)                          Any ‘public communications’, as defined in 22 C.F.R. 226.2, funded by USAID, in which the content has not been approved by USAID, must contain the following disclaimer:

 

“This study/report/audio/visual/other information/media product (specify) is made possible by the generous support of the American people through the United States Agency for International Development (USAID). The contents are the responsibility of [insert recipient name] and do not necessarily reflect the views of USAID or the United States Government.”

 

(11)                          The recipient will provide the Cognizant Technical Officer (CTO) or other USAID personnel designated in the grant or cooperative agreement with two copies of all program and communications materials produced under the award. In addition, the recipient will submit one electronic or one hard copy of all final documents to USAID’s Development Experience Clearinghouse.

 

(c)                                  Implementation of marking requirements.

 

(1)                                 When the grant or cooperative agreement contains an approved Marking Plan, the recipient will implement the requirements of this provision following the approved Marking Plan.

 

(2)                                 When the grant or cooperative agreement does not contain an approved Marking Plan, the recipient will propose and submit a plan for implementing the requirements of this provision within 45 days after the effective date of this provision. The plan will include:

 

(i)                                     A description of the program deliverables specified in paragraph (b) of this provision that the recipient will produce as a part of the grant or cooperative agreement and which will visibly bear the USAID Identity.

 

(ii)                                  the type of marking and what materials the applicant uses to mark the program deliverables with the USAID Identity,

 

(iii)                               when in the performance period the applicant will mark the program deliverables, and where the applicant will place the marking,

 

(3)                                 The recipient may request program deliverables not be marked with the USAID Identity by identifying the program deliverables and providing a rationale

 

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for not marking these program deliverables. Program deliverables may be exempted from USAID marking requirements when:

 

(i)                                     USAID marking requirements would compromise the intrinsic independence or neutrality of a program or materials where independence or neutrality is an inherent aspect of the program and materials;

 

(ii)                                  USAID marking requirements would diminish the credibility of audits, reports, analyses, studies, or policy recommendations whose data or findings must be seen as independent;

 

(iii)                               USAID marking requirements would undercut host-country government “ownership” of constitutions, laws, regulations, policies, studies, assessments, reports, publications, surveys or audits, public service announcements, or other communications better positioned as “by” or “from” a cooperating country ministry or government official;

 

(iv)                              USAID marking requirements would impair the functionality of an item;

 

(v)                                 USAID marking requirements would incur substantial costs or be impractical;

 

(vi)                              USAID marking requirements would offend local cultural or social norms, or be considered inappropriate;

 

(vii)                           USAID marking requirements would conflict with international law.

 

(4)                                 The proposed plan for implementing the requirements of this provision, including any proposed exemptions, will be negotiated within the time specified by the Agreement Officer after receipt of the proposed plan. Failure to negotiate an approved plan with the time specified by the Agreement Officer may be considered as noncompliance with the requirements is provision.

 

(d)                                 Waivers.

 

(1)                                 The recipient may request a waiver of the Marking Plan or of the marking requirements of this provision, in whole or in part, for each program, project, activity, public communication or commodity, or, in exceptional circumstances, for a region or country, when USAID required marking would pose compelling political, safety, or security concerns, or when marking would have an adverse impact in the cooperating country. The recipient will submit the request through the Cognizant Technical Officer. The Principal Officer is responsible for approvals or disapprovals of waiver requests.

 

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(2)                                 The request will describe the compelling political, safety, security concerns, or adverse impact that require a waiver, detail the circumstances and rationale for the waiver, detail the specific requirements to be waived, the specific portion of the Marking Plan to be waived, or specific marking to be waived, and include a description of how program materials will be marked (if at all) if the USAID Identity is removed. The request should also provide a rationale for any use of recipient’s own identity/logo or that of a third party on materials that will be subject to the waiver.

 

(3)                                 Approved waivers are not limited in duration but are subject to Principal Officer review at any time, due to changed circumstances.

 

(4)                                 Approved waivers “flow down” to recipients of subawards unless specified otherwise. The waiver may also include the removal of USAID markings already affixed, if circumstances warrant.

 

(5)                                 Determinations regarding waiver requests are subject to appeal to the Principal Officer’s cognizant Assistant Administrator. The recipient may appeal by submitting a written request to reconsider the Principal Officer’s waiver determination to the cognizant Assistant Administrator.

 

(e)                                  Non-retroactivity. The requirements of this provision do not apply to any materials, events, or commodities produced prior to January 2, 2006. The requirements of this provision do not apply to program, project, or activity sites funded by USAID, including visible infrastructure projects (for example, roads, bridges, buildings) or other programs, projects, or activities that are physical in nature (for example, agriculture, forestry, water management) where the construction and implementation of these are complete prior to January 2, 2006 and the period of the cooperative agreement does not extend past January 2, 2006.

 

[END OF PROVISION]

 

15.                               REGULATIONS GOVERNING EMPLOYEES (AUGUST 1992)

 

a.                                      The recipient’s employees shall maintain private status and may not rely on local U.S. Government offices or facilities for support while under this cooperative agreement.

 

b.                                      The sale of personal property or automobiles by recipient employees and their dependents in the foreign country to which they are assigned shall be subject to the same limitations and prohibitions which apply to direct-hire USAID personnel employed by the Mission, including the rules contained in 22 CFR Part 136, except as this may conflict with host government regulations.

 

c.                                       Other than work to be performed under this award for which an employee is assigned by the recipient, no employee of the recipient shall engage directly or

 

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indirectly, either in the individual’s own name or in the name or through an agency of another person, in any business, profession, or occupation in the foreign countries to which the individual is assigned, nor shall the individual make loans or investments to or in any business, profession or occupation in the foreign countries to which the individual is assigned.

 

d.                                      The recipient’s employees, while in a foreign country, are expected to show respect for its conventions, customs, and institutions, to abide by its applicable laws and regulations, and not to interfere in its internal political affairs.

 

e.                                       In the event the conduct of any recipient employee is not in accordance with the preceding paragraphs, the recipient’s chief of party shall consult with the USAID Mission Director and the employee involved and shall recommend to the recipient a course of action with regard to such employee.

 

f.                                        The parties recognize the rights of the U.S. Ambassador to direct the removal from a country of any U.S. citizen or the discharge from this cooperative agreement award of any third country national when, in the discretion of the Ambassador, the interests of the United States so require.

 

g.                                       If it is determined, either under (e) or (f) above, that the services of such employee should be terminated, the recipient shall use its best efforts to cause the return of such employee to the United States, or point of origin, as appropriate.

 

[END OF PROVISION]

 

16.                               CONVERSION OF UNITED STATES DOLLARS TO LOCAL CURRENCY (NOVEMBER 1985)

 

Upon arrival in the Cooperating Country, and from time to time as appropriate, the recipient’s chief of party shall consult with the Mission Director who shall provide, in writing, the procedure the recipient and its employees shall follow in the conversion of United States dollars to local currency. This may include, but is not limited to, the conversion of currency through the cognizant United States Disbursing Officer or Mission Controller, as appropriate.

 

[END OF PROVISION]

 

17.                               USE OF POUCH FACILITIES (AUGUST 1992)

 

a.                                      Use of diplomatic pouch is controlled by the Department of State. The Department of State has authorized the use of pouch facilities for USAID recipients and their employees as a general policy, as detailed in items (1) through (6) below. However, the final decision regarding use of pouch facilities rest with the Embassy or USAID Mission. In consideration of the use of pouch facilities, the recipient and its employees agree to indemnify and hold harmless,

 

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the Department of State and USAID for loss or damage occurring in pouch transmission:

 

(1)                                 Recipients and their employees are authorized use of the pouch for transmission and receipt of up to a maximum of .9 kgs per shipment of correspondence and documents needed in the administration of assistance programs.

 

(2)                                 U.S. citizen employees are authorized use of the pouch for personal mail up to a maximum of .45 kgs per shipment (but see (a)(3) below).

 

(3)                                 Merchandise, parcels, magazines, or newspapers are not considered to be personal mail for purposes of this standard provision and are not authorized to be sent or received by pouch.

 

(4)                                 Official and personal mail pursuant to a.1. and 2. above sent by pouch should be addressed as follows:

 

Name of individual or organization (followed by letter symbol “G”)

City Name of post (USAID/        )

Agency for International Development

Washington, D.C. 20523-0001

 

(5)                                 Mail sent via the diplomatic pouch may not be in violation of U.S. Postal laws and may not contain material ineligible for pouch transmission.

 

(6)                                 Recipient personnel are NOT authorized use of military postal facilities (APO/FPO). This is an Adjutant General’s decision based on existing laws and regulations governing military postal facilities and is being enforced worldwide.

 

b.                                      The recipient shall be responsible for advising its employees of this authorization, these guidelines, and limitations on use of pouch facilities.

 

c.                                       Specific additional guidance on Recipient use of pouch facilities in accordance with this standard provision is available from the Post Communication Center at the Embassy or USAID Mission.

 

[END OF PROVISION]

 

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18.                               INTERNATIONAL AIR TRAVEL AND TRANSPORTATION (JUNE 1999)

 

a.                                      PRIOR BUDGET APPROVAL

 

In accordance with OMB Cost Principles, direct charges for foreign travel costs are allowable only when each foreign trip has received prior budget approval. Such approval will be deemed to have been met when:

 

(1)                                 the trip is identified. Identification is accomplished by providing the following information: the number of trips, the number of individuals per trip, and the destination country(s).

 

(2)                                 the information noted at (a)(1) above is incorporated in: the proposal, the program description or schedule of the award, the implementation plan (initial or revisions), or amendments to the award; and

 

(3)                                 the costs related to the travel are incorporated in the approved budget of the award.

 

The Agreement Officer may approve travel which has not been incorporated in writing as required by paragraph (a)(2). In such case, a copy of the Agreement Officer’s approval must be included in the agreement file.

 

b.                                      NOTIFICATION

 

(1)                                 As long as prior budget approval has been met in accordance with paragraph (a) above, a separate Notification will not be necessary unless:

 

(i)                                     the primary purpose of the trip is to work with USAID Mission personnel, or

 

(ii)                                  the recipient expects significant administrative or substantive programmatic support from the Mission.

 

Neither the USAID Mission nor the Embassy will require Country Clearance of employees or contractors of USAID Recipients.

 

(2) Where notification is required in accordance with paragraph (1)(i) or (ii) above, the recipient will observe the following standards:

 

(i)                                     Send a written notice to the cognizant USAID Technical Office in the Mission. If the recipient’s primary point of contact is a Technical Officer in USAID/W, the recipient may send the notice to that person. It will be the responsibility of the USAID/W Technical Officer to forward the notice to the field.

 

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(ii)                                  The notice should be sent as far in advance as possible, but at least 14 calendar days in advance of the proposed travel. This notice may be sent by fax or e-mail. The recipient should retain proof that notification was made.

 

(iii)                               The notification shall contain the following information: the award number, the cognizant Technical Officer, the traveler’s name (if known), date of arrival, and the purpose of the trip.

 

(iv)                              The USAID Mission will respond only if travel has been denied. It will be the responsibility of the Technical Officer in the Mission to contact the recipient within 5 working days of having received the notice if the travel is denied. If the recipient has not received a response within the time frame, the recipient will be considered to have met these standards for notification, and may travel.

 

(v)                                 If a subrecipient is required to issue a Notification, as per this section, the subrecipient may contact the USAID Technical Officer directly, or the prime may contact USAID on the subrecipient’s behalf.

 

c.                                       SECURITY ISSUES

 

Recipients are encouraged to obtain the latest Department of State Travel Advisory Notices before travelling. These Notices are available to the general public and may be obtained directly from the State Department, or via Internet.

 

Where security is a concern in a specific region, recipients may choose to notify the US Embassy of their presence when they have entered the country. This may be especially important for long-term posting.

 

d.                                      USE OF U.S.-OWNED LOCAL CURRENCY

 

Travel to certain countries shall, at USAID’s option, be funded from U.S.-owned local currency. When USAID intends to exercise this option, USAID will either issue a U.S. Government S.F. 1169, Transportation Request (GTR) which the Recipient may exchange for tickets, or issue the tickets directly. Use of such U.S.-owned currencies will constitute a dollar charge to this cooperative agreement.

 

e.                                       THE FLY AMERICA ACT

 

The Fly America Act (49 U.S.C. 40118) requires that all air travel and shipments under this award must be made on U.S. flag air carriers to the extent service by such carriers is available. The Administrator of General Services Administration (GSA) is authorized to issue regulations for purposes of implementation. Those regulations may be found at 41 CFR part 301, and are hereby incorporated by reference into this award.

 

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f.                                        COST PRINCIPLES

 

The recipient will be reimbursed for travel and the reasonable cost of subsistence, post differentials and other allowances paid to employees in international travel status in accordance with the recipient’s applicable cost principles and established policies and practices which are uniformly applied to federally financed and other activities of the Recipient.

 

If the recipient does not have written established policies regarding travel costs, the standard for determining the reasonableness of reimbursement for overseas allowance will be the Standardized Regulations (Government Civilians, Foreign Areas), published by the U.S. Department of State, as from time to time amended. The most current subsistence, post differentials, and other allowances may be obtained from the Agreement Officer.

 

g.                                       SUBAWARDS.

 

This provision will be included in all subawards and contracts which require international air travel and transportation under this award.

 

[END OF PROVISION]

 

19.                               OCEAN SHIPMENT OF GOODS (JUNE 1999)

 

a.                                      At least 50% of the gross tonnage of all goods purchased under this agreement and transported to the cooperating countries shall be made on privately owned U.S. flag commercial ocean vessels, to the extent such vessels are available at fair and reasonable rates for such vessels.

 

b.                                      At least 50% of the gross freight revenue generated by shipments of goods purchased under this agreement and transported to the cooperating countries on dry cargo liners shall be paid to or for the benefit of privately owned U.S. flag commercial ocean vessels to the extent such vessels are available at fair and reasonable rates for such vessels.

 

c.                                       When U.S. flag vessels are not available, or their use would result in a significant delay, the Recipient may request a determination of non-availability from the USAID Transportation Division, Office of Procurement, Washington, D.C. 20523, giving the basis for the request which will relieve the Recipient of the requirement to use U.S. flag vessels for the amount of tonnage included in the determination. Shipments made on non-free world ocean vessels are not reimbursable under this cooperative agreement.

 

d.                                      The recipient shall send a copy of each ocean bill of lading, stating all of the carrier’s charges including the basis for calculation such as weight or cubic measurement, covering a shipment under this agreement to:

 

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U.S. Department of Transportation,

Maritime Administration, Division of National Cargo,

400 7th Street, S.W.,

Washington, DC 20590, and

 

U.S. Agency for International Development,

Office of Procurement, Transportation Division

1300 Pennsylvania Avenue, N.W.

Washington, DC 20523-7900

 

e.                                       Shipments by voluntary nonprofit relief agencies (i.e., PVOs) shall be governed by this standard provision and by USAID Regulation 2, “Overseas Shipments of Supplies by Voluntary Nonprofit Relief Agencies” (22 CFR Part 202).

 

f.                                        Shipments financed under this cooperative agreement must meet applicable eligibility requirements set out in 22 CFR 228.21.

 

[END OF PROVISION]

 

20.                               LOCAL PROCUREMENT (April 1998)

 

a.                                      Financing local procurement involves the use of appropriated funds to finance the procurement of goods and services supplied by local businesses, dealers or producers, with payment normally being in the currency of the cooperating country.

 

b.                                      Locally financed procurements must be covered by source and nationality waivers as set forth in 22 CFR 228, Subpart F, except as provided for in mandatory standard provision, “USAID Eligibility Rules for Goods and Services,” or when one of the following exceptions applies:

 

(1)                                 Locally available commodities of U.S. origin, which are otherwise eligible for financing, if the value of the transaction is estimated not to exceed $100,000 exclusive of transportation costs.

 

(2)                                 Commodities of geographic code 935 origin if the value of the transaction does not exceed the local currency equivalent of $5,000.

 

(3)                                 Professional Services Contracts estimated not to exceed $250,000.

 

(4)                                 Construction Services Contracts estimated not to exceed $5,000,000.

 

(5)                                 Commodities and services available only in the local economy (no specific per transaction value applies to this category). This category includes the following items:

 

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(i)                                     Utilities including fuel for heating and cooking, waste disposal and trash collection;

 

(ii)                                  Communications - telephone, telex, fax, postal and courier services;

 

(iii)                               Rental costs for housing and office space;

 

(iv)                              Petroleum, oils and lubricants for operating vehicles and equipment;

 

(v)                                 Newspapers, periodicals and books published in the cooperating country;

 

(vi)                              Other commodities and services and related expenses that, by their nature or as a practical matter, can only be acquired, performed, or incurred in the cooperating country, e.g., vehicle maintenance, hotel accommodations, etc.

 

c.                                       The coverage on ineligible and restricted goods and services in the mandatory standard provision entitled, “USAID Eligibility Rules for Goods and Services,” also apply to local procurement.

 

d.                                      This provision will be included in all subagreements where local procurement of goods or services is a supported element.

 

[END OF PROVISION]

 

21.                               VOLUNTARY POPULATION PLANNING ACTIVITIES - MANDATORY REQUIREMENTS (MAY 2006)

 

Requirements for Voluntary Sterilization Programs

 

(1)                                 None of the funds made available under this award shall be used to pay for the performance of involuntary sterilization as a method of family planning or to coerce or provide any financial incentive to any individual to practice sterilization.

 

Prohibition on Abortion-Related Activities:

 

(1)                                 No funds made available under this award will be used to finance, support, or be attributed to the following activities: (i) procurement or distribution of equipment intended to be used for the purpose of inducing abortions as a method of family planning; (ii) special fees or incentives to any person to coerce or motivate them to have abortions; (iii) payments to persons to perform abortions or to solicit persons to undergo abortions; (iv) information, education, training, or communication programs that seek to promote abortion as a method of family

 

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planning; and (v) lobbying for or against abortion. The term “motivate”, as it relates to family planning assistance, shall not be construed to prohibit the provision, consistent with local law, of information or counseling about all pregnancy options.

 

(2)                                 No funds made available under this award will be used to pay for any biomedical research which relates, in whole or in part, to methods of, or the performance of, abortions or involuntary sterilizations as a means of family planning. Epidemiologic or descriptive research to assess the incidence, extent or consequences of abortions is not precluded.

 

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II.                                   REQUIRED AS APPLICABLE STANDARD PROVISIONS FOR U.S., NONGOVERNMENTAL RECIPIENTS

 

1.           NEGOTIATED INDIRECT COST RATE - PROVISIONAL (Profit) (April 1998)

 

NEGOTIATED INDIRECT COST RATE - PROVISIONAL (Profit) (April 1998)

 

a. Provisional indirect cost rates shall be established for the recipient’s accounting periods during the term of this award. Pending establishment of revised provisional or final rates, allowable indirect costs shall be reimbursed at the rates, on the bases, and for the periods shown in the schedule of this award. Indirect cost rates and the appropriate bases shall be established in accordance with FAR Subpart 42.7.

 

b. Within six months after the close of the recipient’s fiscal year, the recipient shall submit to the cognizant agency for audit the proposed final indirect cost rates and supporting cost data. If USAID is the cognizant agency or no cognizant agency has been designated, the recipient shall submit three copies of the proposed final indirect cost rates and supporting cost data, to the Overhead, Special Costs, and Closeout Branch, Office or Procurement, USAID, Washington, DC 20523-7802. The proposed rates shall be based on the recipient’s actual cost experience during that fiscal year. Negotiations of final indirect cost rates shall begin soon after receipt of the recipient’s proposal.

 

c. Allowability of costs and acceptability of cost allocation methods shall be determined in accordance with the applicable cost principles.

 

d. The results of each negotiation shall be set forth in an indirect cost rate agreement signed by both parties. Such agreement is automatically incorporated into this award and shall specify (1) the agreed upon final rates, (2) the bases to which the rates apply, (3) the fiscal year for which the rates apply, and (4) the items treated as direct costs. The agreement shall not change any monetary ceiling, award obligation, or specific cost allowance or disallowance provided for in this award.

 

e. Pending establishment of final indirect cost rates for any fiscal year, the recipient shall be reimbursed either at negotiated provisional rates or at billing rates acceptable to the Agreement Officer, subject to appropriate adjustment when the final rates for the fiscal year are established. To prevent substantial overpayment or underpayment, the provisional or billing rates may be prospectively or retroactively revised by mutual agreement.

 

f. Failure by the parties to agree on final rates is a 22 CFR 226.90 dispute.

 

[END OF PROVISION]

 

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2.                                      PUBLICATIONS AND MEDIA RELEASES (MARCH 2006)

 

PUBLICATIONS AND MEDIA RELEASES (MARCH 2006)

 

a.                                      The recipient shall provide the USAID Cognizant Technical Officer one copy of all published works developed under the award with lists of other written work produced under the award. In addition, the recipient shall submit final documents in electronic format unless no electronic version exists at the following address:

 

Online (preferred)

http://www.dec.org/submit.cfm

 

Mailing address:

Document Acquisitions

USAID Development Experience Clearinghouse (DEC)

8403 Colesville Road Suite 210

Silver Spring, MD 20910-6368

Contract Information

Telephone (301) 562-0641

Fax (301) 588-7787

E-mail: docsubmit@dec.cdie.org

 

Electronic documents must consist of only one electronic file that comprises the complete and final equivalent of a hard copy. They may be submitted online (preferred); on 3.5” diskettes, a Zip disk, CD-R, or by e-mail. Electronic documents should be in PDF (Portable Document Format). Submission in other formats is acceptable but discouraged.

 

Each document submitted should contain essential bibliographic elements, such as 1) descriptive title; 2) author(s) name; 3) award number; 4) sponsoring USAID office; 5) strategic objective; and 6) date of publication;:

 

b.                                      In the event award funds are used to underwrite the cost of publishing, in lieu of the publisher assuming this cost as is the normal practice, any profits or royalties up to the amount of such cost shall be credited to the award unless the schedule of the award has identified the profits or royalties as program income.

 

c.                                       Except as otherwise provided in the terms and conditions of the award, the author or the recipient is free to copyright any books, publications, or other copyrightable materials developed in the course of or under this award, but USAID reserves a royalty-free nonexclusive and irrevocable right to reproduce, publish, or otherwise use, and to authorize others to use the work for Government purposes.

 

[END OF PROVISION]

 

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3.                            PARTICIPANT TRAINING (April 1998)

 

PARTICIPANT TRAINING (April 1998)

 

a.                                      Definition: A participant is any non-U.S. individual being trained under this award outside of that individual’s home country.

 

b.                                      Application of ADS Chapter 253: Participant training under this award shall comply with the policies established in ADS Chapter 253, Participant Training, except to the extent that specific exceptions to ADS 253 have been provided in this award with the concurrence of the Office of International Training.

 

c.                                       Orientation: In addition to the mandatory requirements in ADS 253, recipients are strongly encouraged to provide, in collaboration with the Mission training officer, predeparture orientation and orientation in Washington at the Washington International Center. The latter orientation program also provides the opportunity to arrange for home hospitality in Washington and elsewhere in the United States through liaison with the National Council for International Visitors (NCIV). If the Washington orientation is determined not to be feasible, home hospitality can be arranged in most U.S. cities if a request for such is directed to the Agreement Officer, who will transmit the request to NCIV through EGAT/ED/PT.

 

[END OF PROVISION]

 

4.                            VOLUNTARY POPULATION PLANNING ACTIVITIES - SUPPLEMENTAL REQUIREMENTS (MAY 2006)

 

VOLUNTARY POPULATION PLANNING ACTIVITIES - SUPPLEMENTAL REQUIREMENTS (MAY 2006)

 

a.                                      Voluntary Participation and Family Planning Methods:

 

(1)                                 The recipient agrees to take any steps necessary to ensure that funds made available under this award will not be used to coerce any individual to practice methods of family planning inconsistent with such individual’s moral, philosophical, or religious beliefs. Further, the recipient agrees to conduct its activities in a manner which safeguards the rights, health and welfare of all individuals who take part in the program.

 

(2)                                 Activities which provide family planning services or information to individuals, financed in whole or in part under this agreement, shall provide a broad range of family planning methods and services available in the country in which the activity is conducted or shall provide information to such individuals regarding where such methods and services may be obtained.

 

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b.                                      Requirements for Voluntary Family Planning Projects

 

(1)                                 A Family planning project must comply with the requirements of this paragraph.

 

(2)                                 A project is a discrete activity through which a governmental or nongovernmental organization or public international organization provides family planning services to people and for which funds obligated under this award, or goods or services financed with such funds, are provided under this award, except funds solely for the participation of personnel in short-term, widely attended training conferences or programs.

 

(3)                                 Service providers and referral agents in the project shall not implement or be subject to quotas or other numerical targets of total number of births, number of family planning acceptors, or acceptors of a particular method of family planning. Quantitative estimates or indicators of the number of births, acceptors, and acceptors of a particular method that are used for the purpose of budgeting, planning, or reporting with respect to the project are not quotas or targets under this paragraph, unless service providers or referral agents in the project are required to achieve the estimates or indicators.

 

(4)                                 The project shall not include the payment of incentives, bribes, gratuities or financial rewards to (i) any individual in exchange for becoming a family planning acceptor or (ii) any personnel performing functions under the project for achieving a numerical quota or target of total number of births, number of family planning acceptors, or acceptors of a particular method of contraception. This restriction applies to salaries or payments paid or made to personnel performing functions under the project if the amount of the salary or payment increases or decreases based on a predetermined number of births, number of family planning acceptors, or number of acceptors of a particular method of contraception that the personnel affect or achieve.

 

(5)                                 No person shall be denied any right or benefit, including the right of access to participate in any program of general welfare or health care, based on the person’s decision not to accept family planning services offered by the project.

 

(6)                                 The project shall provide family planning acceptors comprehensible information about the health benefits and risks of the method chosen, including those conditions that might render the use of the method inadvisable and those adverse side effects known to be consequent to the use of the method. This requirement may be satisfied by providing information in accordance with the medical practices and standards and

 

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health conditions in the country where the project is conducted through counseling, brochures, posters, or package inserts.

 

(7)                                 The project shall ensure that experimental contraceptive drugs and devices and medical procedures are provided only in the context of a scientific study in which participants are advised of potential risks and benefits.

 

(8)                                 With respect to projects for which USAID provides, or finances the contribution of, contraceptive commodities or technical services and for which there is no subaward or contract under this award, the organization implementing a project for which such assistance is provided shall agree that the project will comply with the requirements of this paragraph while using such commodities or receiving such services.

 

(9)

i)                                         The recipient shall notify USAID when it learns about an alleged violation in a project of the requirements of subparagraphs (3), (4), (5) or (7) of this paragraph;

ii)                                      the recipient shall investigate and take appropriate corrective action, if necessary, when it learns about an alleged violation in a project of subparagraph (6) of this paragraph and shall notify USAID about violations in a project affecting a number of people over a period of time that indicate there is a systemic problem in the project.

iii)                                   The recipient shall provide USAID such additional information about violations as USAID may request.

 

c.                                       Additional Requirements for Voluntary Sterilization Programs

 

(1)                                 None of the funds made available under this award shall be used to pay for the performance of involuntary sterilization as a method of family planning or to coerce or provide any financial incentive to any individual to practice sterilization.

 

(2)                                 The recipient shall ensure that any surgical sterilization procedures supported in whole or in part by funds from this award are performed only after the individual has voluntarily appeared at the treatment facility and has given informed consent to the sterilization procedure. Informed consent means the voluntary, knowing assent from the individual after being advised of the surgical procedures to be followed, the attendant discomforts and risks, the benefits to be expected, the availability of alternative methods of family planning, the purpose of the operation and its irreversibility, and the option to withdraw consent anytime prior to the operation. An individual’s consent is considered voluntary if it is based upon the exercise of free choice and is not obtained by any special

 

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inducement or any element of force, fraud, deceit, duress, or other forms of coercion or misrepresentation.

 

(3)                                 Further, the recipient shall document the patient’s informed consent by (i) a written consent document in a language the patient understands and speaks, which explains the basic elements of informed consent, as set out above, and which is signed by the individual and by the attending physician or by the authorized assistant of the attending physician; or (ii) when a patient is unable to read adequately a written certification by the attending physician or by the authorized assistant of the attending physician that the basic elements of informed consent above were orally presented to the patient, and that the patient thereafter consented to the performance of the operation. The receipt of this oral explanation shall be acknowledged by the patient’s mark on the certification and by the signature or mark of a witness who shall speak the same language as the patient.

 

(4)                                 The recipient must retain copies of informed consent forms and certification documents for each voluntary sterilization procedure for a period of three years after performance of the sterilization procedure.

 

d.                                      Prohibition on Abortion-Related Activities:

 

(1)                                 No funds made available under this award will be used to finance, support, or be attributed to the following activities: (i) procurement or distribution of equipment intended to be used for the purpose of inducing abortions as a method of family planning; (ii) special fees or incentives to any person to coerce or motivate them to have abortions; (iii) payments to persons to perform abortions or to solicit persons to undergo abortions; (iv) information, education, training, or communication programs that seek to promote abortion as a method of family planning; and (v) lobbying for or against abortion. The term “motivate”, as it relates to family planning assistance, shall not be construed to prohibit the provision, consistent with local law, of information or counseling about all pregnancy options.

 

(2)                                 No funds made available under this award will be used to pay for any biomedical research which relates, in whole or in part, to methods of, or the performance of, abortions or involuntary sterilizations as a means of family planning. Epidemiologic or descriptive research to assess the incidence, extent or consequences of abortions is not precluded.

 

*e.                                Ineligibility of Foreign Nongovernmental Organizations that Perform or Actively Promote Abortion as a Method of Family Planning.

 

I.           Grants and Cooperative Agreements with U.S. Nongovernmental Organizations

 

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(1)                                 The recipient agrees that it will not furnish assistance for family planning under this award to any foreign nongovernmental organization that performs or actively promotes abortion as a method of family planning in USAID-recipient countries or that provides financial support to any other foreign nongovernmental organization that conducts such activities. For purposes of this paragraph (e), a foreign nongovernmental organization is a nongovernmental organization that is not organized under the laws of any State of the United States, the District of Columbia or the Commonwealth of Puerto Rico.

 

(2)                                 Prior to furnishing funds provided under this award to another nongovernmental organization organized under the laws of any State of the United States, the District of Columbia, or the Commonwealth of Puerto Rico, the recipient shall obtain the written agreement of such organization that the organization shall not furnish assistance for family planning under this award to any foreign nongovernmental organization except under the conditions and requirements that are applicable to the recipient as set forth in this paragraph (e).

 

(3)                                 The recipient may not furnish assistance for family planning under this award to a foreign nongovernmental organization (the subrecipient) unless:

 

(i)                                     The subrecipient certifies in writing that it does not perform or actively promote abortion as a method of family planning in USAID-recipient countries and does not provide financial support to any other foreign nongovernmental organization that conducts such activities; and

 

(ii)                                  The recipient obtains the written agreement of the subrecipient containing the undertakings described in subparagraph (4) below.

 

(4)                                 Prior to furnishing assistance for family planning under this award to a subrecipient, the subrecipient must agree in writing that:

 

(i)                                     The subrecipient will not, while receiving assistance under this award, perform or actively promote abortion as a method of family planning in USAID-recipient countries or provide financial support to other foreign nongovernmental organizations that conduct such activities;

 

(ii)                                  The recipient and authorized representatives of USAID may, at any reasonable time: (A) inspect the documents and materials maintained or prepared by the subrecipient in the usual course of its operations that describe the family planning activities of the subrecipient, including reports, brochures and service statistics; (B)

 

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observe the family planning activity conducted by the subrecipient; (C) consult with family planning personnel of the subrecipient; and (D) obtain a copy of the audited financial statement or report of the subrecipient, if there is one;

 

(iii)                               In the event that the recipient or USAID has reasonable cause to believe that a subrecipient may have violated its undertaking not to perform or actively promote abortion as a method of family planning, the recipient shall review the family planning program of the subrecipient to determine whether a violation of the undertaking has occurred. The subrecipient shall make available to the recipient such books and records and other information as may be reasonably requested in order to conduct the review. USAID may also review the family planning program of the subrecipient under these circumstances, and USAID shall have access to such books and records and information for inspection upon request;

 

(iv)                              The subrecipient shall refund to the recipient the entire amount of assistance for family planning furnished to the subrecipient under this award in the event it is determined that the certification provided by the subrecipient under subparagraph (3), above, is false;

 

(v)                                 Assistance for family planning provided to the subrecipient under this award shall be terminated if the subrecipient violates any undertaking in the agreement required by subparagraphs (3) and (4), and the subrecipient shall refund to the recipient the value of any assistance furnished under this award that is used to perform or actively promote abortion as a method of family planning; and

 

(vi)                              The subrecipient may furnish assistance for family planning under this award to another foreign nongovernmental organization (the subsubrecipient) only if: (A) the sub-subrecipient certifies in writing that it does not perform or actively promote abortion as a method of family planning in USAID-recipient countries and does not provide financial support to any other foreign nongovernmental organization that conducts such activities; and (B) the subrecipient obtains the written agreement of the sub-subrecipient that contains the same undertakings and obligations to the subrecipient as those provided by the subrecipient to the recipient as described in subparagraphs (4)(i)-(v) above.

 

(5)                                 Agreements with subrecipients and sub-subrecipients required under subparagraphs (3) and (4) shall contain the definitions set forth in subparagraph (10) of this paragraph (e).

 

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(6)                                 The recipient shall be liable to USAID for a refund for a violation of any requirement of this paragraph (e) only if: (i) the recipient knowingly furnishes assistance for family planning to a subrecipient who performs or actively promotes abortion as a method of family planning; or (ii) the certification provided by a subrecipient is false and the recipient failed to make reasonable efforts to verify the validity of the certification prior to furnishing assistance to the subrecipient; or (iii) the recipient knows or has reason to know, by virtue of the monitoring which the recipient is required to perform under the terms of this award, that a subrecipient has violated any of the undertakings required under subparagraph (4) and the recipient fails to terminate assistance for family planning to the subrecipient, or fails to require the subrecipient to terminate assistance to a sub-subrecipient that violates any undertaking of the agreement required under subparagraph 4(vi), above. If the recipient finds, in exercising its monitoring responsibility under this award, that a subrecipient or sub-subrecipient receives frequent requests for the information described in subparagraph (10)(iii)(A)(II), below, the recipient shall verify that this information is being provided properly in accordance with subparagraph (10)(iii)(A)(II) and shall describe to USAID the reasons for reaching its conclusion.

 

(7)                                 In submitting a request to USAID for approval of a recipient’s decision to furnish assistance for family planning to a subrecipient, the recipient shall include a description of the efforts made by the recipient to verify the validity of the certification provided by the subrecipient. USAID may request the recipient to make additional efforts to verify the validity of the certification. USAID will inform the recipient in writing when USAID is satisfied that reasonable efforts have been made. If USAID concludes that these efforts are reasonable within the meaning of subparagraph (6) above, the recipient shall not be liable to USAID for a refund in the event the subrecipient’s certification is false unless the recipient knew the certification to be false or misrepresented to USAID the efforts made by the recipient to verify the validity of the certification.

 

(8)                                 It is understood that USAID may make independent inquiries, in the community served by a subrecipient or sub-subrecipient, regarding whether it performs or actively promotes abortion as a method of family planning.

 

(9)                                 A subrecipient must provide the certification required under subparagraph (3) and a sub-subrecipient must provide the certification required under subparagraph (4)(vi) each time a new agreement is executed with the subrecipient or sub-subrecipient in furnishing assistance for family planning under the award.

 

(10)                          The following definitions apply for purposes of this paragraph (e):

 

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(i)                                     Abortion is a method of family planning when it is for the purpose of spacing births. This includes, but is not limited to, abortions performed for the physical or mental health of the mother, but does not include abortions performed if the life of the mother would be endangered if the fetus were carried to term or abortions performed following rape or incest (since abortion under these circumstances is not a family planning act).

 

(ii)                                  To perform abortions means to operate a facility where abortions are performed as a method of family planning. Excluded from this definition are clinics or hospitals that do not include abortion in their family planning programs. Also excluded from this definition is the treatment of injuries or illnesses caused by legal or illegal abortions, for example, postabortion care.

 

(iii)                               To actively promote abortion means for an organization to commit resources, financial or other, in a substantial or continuing effort to increase the availability or use of abortion as a method of family planning.

 

(A)                               This includes, but is not limited to, the following:

 

(I)                                   Operating a family planning counseling service that includes, as part of the regular program, providing advice and information regarding the benefits and availability of abortion as a method of family planning;

 

(II)                              Providing advice that abortion is an available option in the event other methods of family planning are not used or are not successful or encouraging women to consider abortion (passively responding to a question regarding where a safe, legal abortion may be obtained is not considered active promotion if the question is specifically asked by a woman who is already pregnant, the woman clearly states that she has already decided to have a legal abortion, and the family planning counselor reasonably believes that the ethics of the medical profession in the country requires a response regarding where it may be obtained safely);

 

(III)                         Lobbying a foreign government to legalize or make available abortion as a method of family planning or lobbying such a government to continue the legality of abortion as a method of family planning; and

 

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(IV)                          Conducting a public information campaign in USAID-recipient countries regarding the benefits and/or availability of abortion as a method of family planning.

 

(B)                               Excluded from the definition of active promotion of abortion as a method of family planning are referrals for abortion as a result of rape or incest, or if the life of the mother would be endangered if the fetus were carried to term. Also excluded from this definition is the treatment of injuries or illnesses caused by legal or illegal abortions, for example, post-abortion care.

 

(C)                               Action by an individual acting in the individual’s capacity shall not be attributed to an organization with which the individual is associated, provided that the organization neither endorses nor provides financial support for the action and takes reasonable steps to ensure that the individual does not improperly represent that the individual is acting on behalf of the organization.

 

(iv)                              To furnish assistance for family planning to a foreign nongovernmental organization means to provide financial support under this award to the family planning program of the organization, and includes the transfer of funds made available under this award or goods or services financed with such funds, but does not include the purchase of goods or services from an organization or the participation of an individual in the general training programs of the recipient, subrecipient or sub-subrecipient.

 

(v)                                 To control an organization means the possession of the power to direct or cause the direction of the management and policies of an organization.

 

(11)                          In determining whether a foreign nongovernmental organization is eligible to be a subrecipient or sub-subrecipient of assistance for family planning under this award, the action of separate nongovernmental organizations shall not be imputed to the subrecipient or sub-subrecipient, unless, in the judgment of USAID, a separate nongovernmental organization is being used as a sham to avoid the restrictions of this paragraph (e). Separate nongovernmental organizations are those that have distinct legal existence in accordance with the laws of the countries in which they are organized. Foreign organizations that are separately organized shall not be considered separate, however, if one is controlled by the other. The recipient may request USAID’s approval to treat as separate the family planning activities of two or more organizations, that would not be considered separate under the preceding sentence, if the recipient believes, and provides a written justification to USAID therefore, that the family planning activities of the organizations are sufficiently distinct so as to warrant not imputing the activity of one to the other.

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

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(12) Assistance for family planning may be furnished under this award by a recipient, subrecipient or sub-subrecipient to a foreign government event though the government includes abortion in its family planning program, provided that no assistance may be furnished in support of the abortion activity of the government and any funds transferred to the government shall be placed in a segregated account to ensure that such funds may not be used to support the abortion activity of the government.

 

(13) The requirements of this paragraph are not applicable to child spacing assistance furnished to a foreign nongovernmental organization that is engaged primarily in providing health services if the objective of the assistance is to finance integrated health care services to mothers and children and child spacing is one of several health care services being provided by the organization as part of a larger child survival effort with the objective of reducing infant and child mortality.

 

II.      Grants and Cooperative Agreements with Non-U.S., Nongovernmental Organizations

 

(1)                                 The recipient certifies that it does not now and will not during the term of this award perform or actively promote abortion as a method of family planning in USAID-recipient countries or provide financial support to any other foreign nongovernmental organization that conducts such activities. For purposes of this paragraph (e), a foreign nongovernmental organization is a nongovernmental organization that is not organized under the laws of any State of the United States, the District of Columbia or the Commonwealth of Puerto Rico.

 

(2)                                 The recipient agrees that the authorized representative of USAID may, at any reasonable time: (i) inspect the documents and materials maintained or prepared by the recipient in the usual course of its operations that describe the family planning activities of the recipient, including reports, brochures and service statistics; (ii) observe the family planning activity conducted by the recipient, (iii) consult with the family planning personnel of the recipient; and (iv) obtain a copy of the audited financial statement or report of the recipient, if there is one.

 

(3)                                 In the event USAID has reasonable cause to believe that the recipient may have violated its undertaking not to perform or actively promote abortion as a method of family planning, the recipient shall make available to USAID such books and records and other information as USAID may reasonably request in order to determine whether a violation of the undertaking has occurred.

 

(4)                                 The recipient shall refund to USAID the entire amount of assistance for family planning furnished under this award in the event it is determined that the certification provided by the recipient under subparagraph (1), above, is false.

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

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(5)                                 Assistance for family planning to the recipient under this award shall be terminated if the recipient violates any undertaking required by this paragraph (e), and the recipient shall refund to USAID the value of any assistance furnished under this award that is used to perform or actively promote abortion as a method of family planning.

 

(6)                                 The recipient may not furnish assistance for family planning under this award to a foreign nongovernmental organization (the subrecipient) unless: (i) the subrecipient certifies in writing that it does not perform or actively promote abortion as a method of family planning in USAID-recipient countries and does not provide financial support to any other foreign nongovernmental organization that conducts such activities; and (ii) the recipient obtains the written agreement of the subrecipient containing the undertakings described in subparagraph (7), below.

 

(7)                                 Prior to furnishing assistance for family planning under this award to a subrecipient, the subrecipient must agree in writing that:

 

(i)                                     The subrecipient will not, while receiving assistance under this award, perform or actively promote abortion as a method of family planning in USAID-recipient countries or provide financial support to other nongovernmental organizations that conduct such activities.

 

(ii)                                  The recipient and authorized representatives of USAID may, at any reasonable time: (A) inspect the documents and materials maintained or prepared by the subrecipient in the usual course of its operations that describe the family planning activities of the subrecipient, including reports, brochures and service statistics; (B) observe the family planning activity conducted by the subrecipient; (C) consult with family planning personnel of the subrecipient; and (D) obtain a copy of the audited financial statement or report of the subrecipient, if there is one.

 

(iii)                               In the event the recipient or USAID has reasonable cause to believe that a subrecipient may have violated its undertaking not to perform or actively promote abortion as a method of family planning, the recipient shall review the family planning program of the subrecipient to determine whether a violation of the undertaking has occurred. The subrecipient shall make available to the recipient such books and records and other information as may be reasonably requested in order to conduct the review. USAID may also review the family planning program of the subrecipient under these circumstances, and USAID shall have access to such books and records and information for inspection upon request.

 

(iv)                              The subrecipient shall refund to the recipient the entire amount of assistance for family planning furnished to the subrecipient under this

 

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award in the event it is determined that the certification provided by the subrecipient under subparagraph (6), above, is false.

 

(v)                                 Assistance for family planning to the subrecipient under this award shall be terminated if the subrecipient violates any undertaking required by this paragraph (e), and the subrecipient shall refund to the recipient the value of any assistance furnished under this award that is used to perform or actively promote abortion as a method of family planning.

 

(vi)                              The subrecipient may furnish assistance for family planning under this award to another foreign nongovernmental organization (the subsubrecipient) only if: (A) the sub-subrecipient certifies in writing that it does not perform or actively promote abortion as a method of family planning in USAID-recipient countries and does not provide financial support to any other foreign nongovernmental organization that conducts such activities; and (B) the subrecipient obtains the written agreement of the sub-subrecipient that contains the same undertakings and obligations to the subrecipient as those provided by the subrecipient to the recipient as described in subparagraphs (7)(i)-(v), above.

 

(8)                                 Agreements with subrecipients and sub-subrecipients required under subparagraphs (6) and (7) shall contain the definitions set forth in subparagraph (13) of this paragraph (e).

 

(9)                                 The recipient shall be liable to USAID for a refund for a violation by a subrecipient relating to its certification required under subparagraph (6) or by a subrecipient or a sub-subrecipient relating to its undertakings in the agreement required under subparagraphs (6) and (7) only if: (i) the recipient knowingly furnishes assistance for family planning to a subrecipient that performs or actively promotes abortion as a method of family planning; or (ii) the certification provided by a subrecipient is false and the recipient failed to make reasonable efforts to verify the validity of the certification prior to furnishing assistance to the subrecipient; or (iii) the recipient knows or has reason to know, by virtue of the monitoring that the recipient is required to perform under the terms of this award, that a subrecipient has violated any of the undertakings required under subparagraph (7) and the recipient fails to terminate assistance for family planning to the subrecipient, or fails to require the subrecipient to terminate assistance to a sub-subrecipient that violates any undertaking of the agreement required under subparagraph 7(vi), above. If the recipient finds, in exercising its monitoring responsibility under this award, that a subrecipient or sub-subrecipient receives frequent requests for the information described in subparagraph (13)(iii)(A)(II), below, the recipient shall verify that this information is being provided properly in accordance with subparagraph 13(iii)(A)(II) and shall describe to USAID the reasons for reaching its conclusion.

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

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(10)                          In submitting a request to USAID for approval of a recipient’s decision to furnish assistance for family planning to a subrecipient, the recipient shall include a description of the efforts made by the recipient to verify the validity of the certification provided by the subrecipient. USAID may request the recipient to make additional efforts to verify the validity of the certification. USAID will inform the recipient in writing when USAID is satisfied that reasonable efforts have been made. If USAID concludes that these efforts are reasonable within the meaning of subparagraph (9) above, the recipient shall not be liable to USAID for a refund in the event the subrecipient’s certification is false unless the recipient knew the certification to be false or misrepresented to USAID the efforts made by the recipient to verify the validity of the certification.

 

(11)                          It is understood that USAID may make independent inquiries, in the community served by a subrecipient or sub-subrecipient, regarding whether it performs or actively promotes abortion as a method of family planning.

 

(12)                          A subrecipient must provide the certification required under subparagraph (6) and a sub-subrecipient must provide the certification required under subparagraph (7)(vi) each time a new agreement is executed with the subrecipient or sub-subrecipient in furnishing assistance for family planning under this award.

 

(13)                          The following definitions apply for purposes of paragraph (e):

 

(i)                                     Abortion is a method of family planning when it is for the purpose of spacing births. This includes, but is not limited to, abortions performed for the physical or mental health of the mother but does not include abortions performed if the life of the mother would be endangered if the fetus were carried to term or abortions performed following rape or incest (since abortion under these circumstances is not a family planning act).

 

(ii)                                  To perform abortions means to operate a facility where abortions are performed as a method of family planning. Excluded from this definition are clinics or hospitals that do not include abortion in their family planning programs. Also excluded from this definition is the treatment of injuries or illnesses caused by legal or illegal abortions, for example, post-abortion care.

 

(iii)                               To actively promote abortion means for an organization to commit resources, financial or other, in a substantial or continuing effort to increase the availability or use of abortion as a method of family planning.

 

(A)                               This includes, but is not limited to, the following:

 

(I)                                   Operating a family planning counseling service that includes, as part of the regular program, providing advice

 

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and information regarding the benefits and availability of abortion as a method of family planning;

 

(II)                              Providing advice that abortion is an available option in the event other methods of family planning are not used or are not successful or encouraging women to consider abortion (passively responding to a question regarding where a safe, legal abortion may be obtained is not considered active promotion if the question is specifically asked by a woman who is already pregnant, the woman clearly states that she has already decided to have a legal abortion, and the family planning counselor reasonably believes that the ethics of the medical profession in the country requires a response regarding where it may be obtained safely);

 

(III)                         Lobbying a foreign government to legalize or make available abortion as a method of family planning or lobbying such a government to continue the legality of abortion as a method of family planning; and

 

(IV)                          Conducting a public information campaign in USAID-recipient countries regarding the benefits and/or availability of abortion as a method of family planning.

 

(B)                               Excluded from the definition of active promotion of abortion as a method of family planning are referrals for abortion as a result of rape or incest or if the life of the mother would be endangered if the fetus were carried to term. Also excluded from this definition is the treatment of injuries or illnesses caused by legal or illegal abortions, for example, post-abortion care.

 

(C)                               Action by an individual acting in the individual’s own capacity shall not be attributed to an organization with which the individual is associated, provided that the organization neither endorses nor provides financial support for the action and takes reasonable steps to ensure that the individual does not improperly represent the individual is acting on behalf of the organization.

 

(iv)                              To furnish assistance for family planning to a foreign nongovernmental organization means to provide financial support under this award to the family planning program of the organization, and includes the transfer of funds made available under this award or goods or services financed with such funds, but does not include the purchase of goods or services from an organization or the participation of an individual in the

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

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general training programs of the recipient, subrecipient or sub-subrecipient.

 

(v)                                 To control an organization means the possession of the power to direct or cause the direction of the management and policies of an organization.

 

(14)                          In determining whether a foreign nongovernmental organization is eligible to be a recipient, subrecipient or sub-subrecipient of assistance for family planning under this award, the action of separate nongovernmental organizations shall not be imputed to the recipient, subrecipient or subsubrecipient, unless, in the judgment of USAID, a separate nongovernmental organization is being used as a sham to avoid the restrictions of this paragraph (e). Separate nongovernmental organizations are those that have distinct legal existence in accordance with the laws of the countries in which they are organized. Foreign organizations that are separately organized shall not be considered separate, however, if one is controlled by the other. The recipient may request USAID’s approval to treat as separate the family planning activities of two or more organizations, which would not be considered separate under the preceding sentence, if the recipient believes, and provides a written justification to USAID therefore, that the family planning activities of the organizations are sufficiently distinct so as to warrant not imputing the activity of one of the other.

 

(15)                          Assistance for family planning may be furnished under this award by a recipient, subrecipient or sub-subrecipient to a foreign government even though the government includes abortion in its family planning program, provided that no assistance may be furnished in support of the abortion activity of the government and any funds transferred to the government shall be placed in a segregated account to ensure that such funds may not be used to support the abortion activity of the government.

 

(16)                          The requirements of this paragraph are not applicable to child spacing assistance furnished to a foreign nongovernmental organization that is engaged primarily in providing health services if the objective of the assistance is to finance integrated health care services to mothers and children and child spacing is one of several health care services being provided by the organization as part of a larger child survival effort with the objective of reducing infant and child mortality.

 

III. Exceptions

 

The paragraphs set forth in sections (I) and (II) above are not applicable in the situations described below:

 

(1)                                 While the paragraphs are to be used in grants and cooperative agreements (and assistance subagreements) that provide financing for family planning activity or activities, if family planning is a component of an activity

 

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involving assistance or other purposes, such as food and nutrition, health for education, paragraph (e), “Ineligibility of Foreign Nongovernmental Organizations that Perform or Actively Promote Abortion as a Method of Family Planning,” applies only to the family planning component.

 

(2)                                 When health or child survival funds are used to provide assistance for child spacing as well as health purposes, these paragraphs are applicable to such assistance unless: (a) the foreign nongovernmental organization is one that primarily provides health services; (b) the objective of the assistance is to finance integrated health care services to mothers and children; and (c) child spacing is one of several health care services being provided as part of a larger child survival effort with the objective of reducing infant and child mortality. These paragraphs need not be included in the assistance agreement if it indicates that assistance for child spacing will be provided only in this way. USAID support under these circumstances is considered a contribution to a health service delivery program and not to a family planning program. In such a case, these paragraphs need not be included in an assistance agreement.

 

(3)                                 These paragraphs need not be included in assistance agreements with United States nongovernmental organizations for family planning purposes if implementation of the activity does not involve assistance to foreign nongovernmental organizations.

 

*f.                                 The recipient shall insert paragraphs (a), (b), (c), (d), and (f) of this provision in all subsequent subagreements and contracts involving family planning or population activities that will be supported in whole or in part from funds under this award. Paragraph (e) shall be inserted in subagreements and sub-subagreements in accordance with the terms of paragraph (e). The term subagreement means subgrants and subcooperative agreements.

 

[END OF PROVISION]

 

5.                                      TITLE TO AND CARE OF PROPERTY (COOPERATING COUNTRY TITLE) (NOVEMBER 1985)

 

TITLE TO AND CARE OF PROPERTY (COOPERATING COUNTRY TITLE)

(NOVEMBER 1985)

 

a.                                      Except as modified by the schedule of this cooperative agreement, title to all equipment, materials and supplies, the cost of which is reimbursable to the recipient by USAID or by the cooperating country, shall at all times be in the name of the cooperating country or such public or private agency as the cooperating country may designate, unless title to specified types or classes of equipment is reserved to USAID under provisions set forth in the schedule of this award. All such property shall be under the custody and control of recipient until

 

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the owner of title directs otherwise or completion of work under this award or its termination, at which time custody and control shall be turned over to the owner of title or disposed of in accordance with its instructions. All performance guarantees and warranties obtained from suppliers shall be taken in the name of the title owner.

 

b.                                      The recipient shall maintain and administer in accordance with sound business practice a program for the maintenance, repair, protection, and preservation of Government property so as to assure its full availability and usefulness for the performance of this cooperative agreement. The recipient shall take all reasonable steps to comply with all appropriate directions or instructions which the Agreement Officer may prescribe as reasonably necessary for the protection of the Government property.

 

c.                                       The recipient shall prepare and establish a program, to be approved by the appropriate USAID Mission, for the receipt, use, maintenance, protection, custody and care of equipment, materials and supplies for which it has custodial responsibility, including the establishment of reasonable controls to enforce such program. The recipient shall be guided by the following requirements:

 

(1)                                 Property Control: The property control system shall include but not be limited to the following:

 

(i)                                     Identification of each item of cooperating country property acquired or furnished under the award by a serially controlled identification number and by description of item. Each item must be clearly marked “Property of (insert name of cooperating country).”

 

(ii)                                  The price of each item of property acquired or furnished under this award.

 

(iii)                               The location of each item of property acquired or furnished under this award.

 

(iv)                              A record of any usable components which are permanently removed from items of cooperating country property as a result of modification or otherwise.

 

(v)                                 A record of disposition of each item acquired or furnished under the award.

 

(vi)                              Date of order and receipt of any item acquired or furnished under the award.

 

(vii)        The official property control records shall be kept in such condition that at any stage of completion of the work under this award, the status of

 

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property acquired or furnished under this award may be readily ascertained. A report of current status of all items of property acquired or furnished under the award shall be submitted yearly concurrently with the annual report.

 

(2)                                 Maintenance Program: The recipient’s maintenance program shall be consistent with sound business practice, the terms of the award, and provide for:

 

(i)                                     disclosure of need for and the performance of preventive maintenance,

 

(ii)                                  disclosure and reporting of need for capital type rehabilitation, and

 

(iii)                               recording of work accomplished under the program:

 

(A)                               Preventive maintenance - Preventive maintenance is maintenance generally performed on a regularly scheduled basis to prevent the occurrence of defects and to detect and correct minor defects before they result in serious consequences.

 

(B)                               Records of maintenance - The recipient’s maintenance program shall provide for records sufficient to disclose the maintenance actions performed and deficiencies discovered as a result of inspections.

 

(C)                               A report of status of maintenance of cooperating country property shall be submitted annually concurrently with the annual report.

 

d.                                      Risk of Loss:

 

(1)                                 The recipient shall not be liable for any loss of or damage to the cooperating country property, or for expenses incidental to such loss or damage except that the recipient shall be responsible for any such loss or damage (including expenses incidental thereto):

 

(i)                                     Which results from willful misconduct or lack of good faith on the part of any of the recipient’s directors or officers, or on the part of any of its managers, superintendents, or other equivalent representatives, who have supervision or direction of all or substantially all of the recipient’s business, or all or substantially all of the recipient’s operation at anyone plant, laboratory, or separate location in which this award is being performed;

 

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(ii)                                  Which results from a failure on the part of the recipient, due to the willful misconduct or lack of good faith on the part of any of its directors, officers, or other representatives mentioned in (i) above:

 

(A)                               to maintain and administer, in accordance with sound business practice, the program for maintenance, repair, protection, and preservation of cooperating country property as required by (i) above, or

 

(B)                               to take all reasonable steps to comply with any appropriate written directions of the Agreement Officer under (b) above;

 

(iii)                               For which the recipient is otherwise responsible under the express terms designated in the schedule of this award;

 

(vi)                              Which results from a risk expressly required to be insured under some other provision of this award, but only to the extent of the insurance so required to be procured and maintained, or to the extent of insurance actually procured and maintained, whichever is greater; or

 

(v)                                 Which results from a risk which is in fact covered by insurance or for which the Recipient is otherwise reimbursed, but only to the extent of such insurance or reimbursement;

 

(vi)                              Provided, that, if more than one of the above exceptions shall be applicable in any case, the recipient’s liability under anyone exception shall not be limited by any other exception.

 

(2)                                 The recipient shall not be reimbursed for, and shall not include as an item of overhead, the cost of insurance, or any provision for a reserve, covering the risk of loss of or damage to the cooperating country property, except to the extent that USAID may have required the recipient to carry such insurance under any other provision of this award.

 

(3)                                 Upon the happening of loss or destruction of or damage to the cooperating country property, the recipient shall notify the Agreement Officer thereof, shall take all reasonable steps to protect the cooperating country property from further damage, separate the damaged and undamaged cooperating country property, put all the cooperating country property in the best possible order, and furnish to the Agreement Officer a statement of:

 

(i)                                     The lost, destroyed, or damaged cooperating country property;

 

(ii)                                  The time and origin of the loss, destruction, or damage;

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

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(iii)                               All known interests in commingled property of which the cooperating country property is a part; and

 

(iv)                              The insurance, if any, covering any part of or interest in such commingled property.

 

(4)                                 The recipient shall make repairs and renovations of the damaged cooperating country property or take such other action as the Agreement Officer directs.

 

(5)                                 In the event the recipient is indemnified, reimbursed, or otherwise compensated for any loss or destruction of or damage to the cooperating country property, it shall use the proceeds to repair, renovate or replace the cooperating country property involved, or shall credit such proceeds against the cost of the work covered by the award, or shall otherwise reimburse USAID, as directed by the Agreement Officer. The recipient shall do nothing to prejudice USAID’s right to recover against third parties for any such loss, destruction, or damage, and upon the request of the Agreement Officer, shall, at the Governments expense, furnish to USAID all reasonable assistance and cooperation (including assistance in the prosecution of suits and the execution of instruments or assignments in favor of the Government) in obtaining recovery.

 

e.                                       Access: USAID, and any persons designated by it, shall at all reasonable times have access to the premises wherein any cooperating country property is located, for the purpose of inspecting the cooperating country property.

 

f.                                        Final Accounting and Disposition of Cooperating Country Property: Within 90 days after completion of this award, or at such other date as may be fixed by the Agreement Officer, the recipient shall submit to the Agreement Officer an inventory schedule covering all items of equipment, materials and supplies under the recipient’s custody, title to which is in the cooperating country or public or private agency designated by the cooperating country, which have not been consumed in the performance of this award. The recipient shall also indicate what disposition has been made of such property.

 

g.                                       Communications: All communications issued pursuant to this provision shall be in writing.

 

[END OF PROVISION]

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

69

 

6.                                      PUBLIC NOTICES (MARCH 2004)

 

PUBLIC NOTICES (MARCH 2004)

 

It is USAID’s policy to inform the public as fully as possible of its programs and activities. The recipient is encouraged to give public notice of the receipt of this award and, from time to time, to announce progress and accomplishments. Press releases or other public notices should include a statement substantially as follows:

 

“The U.S. Agency for International Development administers the U.S. foreign assistance program providing economic and humanitarian assistance in more than 120 countries worldwide.”

 

The recipient may call on USAID’s Bureau for Legislative and Public Affairs for advice regarding public notices. The recipient is requested to provide copies of notices or announcements to the cognizant technical officer and to USAID’s Bureau for Legislative and Public Affairs as far in advance of release as possible.

 

[END OF PROVISION]

 

7.                                      COST SHARING (MATCHING) (July 2002)

 

COST SHARING (MATCHING) (July 2002)

 

a.                                      If at the end of any funding period, the recipient has expended an amount of non-Federal funds less than the agreed upon amount or percentage of total expenditures, the Agreement Officer may apply the difference to reduce the amount of USAID incremental funding in the following funding period. If the award has expired or has been terminated, the Agreement Officer may require the recipient to refund the difference to USAID.

 

b.                                      The source, origin and nationality requirements and the restricted goods provision established in the Standard Provision entitled “USAID Eligibility Rules for Goods and Services” do not apply to cost sharing (matching) expenditures.

 

[END OF PROVISION]

 

8.              PROHIBITION OF ASSISTANCE TO DRUG TRAFFICKERS (JUNE 1999)

 

PROHIBITION OF ASSISTANCE TO DRUG TRAFFICKERS (JUNE 1999)

 

a.         USAID reserves the right to terminate assistance to, or take other appropriate measures with respect to, any participant approved by USAID who is found to have been convicted of a narcotics offense or to have been engaged in drug trafficking as defined in 22 CFR Part 140.

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

70

 

b.         (1) For any loan over $1000 made under this agreement, the recipient shall insert a clause in the loan agreement stating that the loan is subject to immediate cancellation, acceleration, recall or refund by the recipient if the borrower or a key individual of a borrower is found to have been convicted of a narcotics offense or to have been engaged in drug trafficking as defined in 22 CFR Part

 

9.                                      REPORTING OF FOREIGN TAXES (March 2006)

 

REPORTING OF FOREIGN TAXES (March 2006)

 

a.                                      The recipient must annually submit a report by April 16 of the next year.

 

b.                                      Contents of Report. The report must contain: 

 

(i)                                     Contractor/recipient name.

 

(ii)                                  Contact name with phone, fax and email.

 

(iii)                               Agreement number(s).

 

(iv)                              Amount of foreign taxes assessed by a foreign government [each foreign government must be listed separately] on commodity purchase transactions valued at $500 or more financed with U.S. foreign assistance funds under this agreement during the prior U.S. fiscal year.

 

(v)                                 Only foreign taxes assessed by the foreign government in the country receiving U.S. assistance is to be reported. Foreign taxes by a third party foreign government are not to be reported. For example, if an assistance program for Lesotho involves the purchase of commodities in South Africa using foreign assistance funds, any taxes imposed by South Africa would not be reported in the report for Lesotho (or South Africa).

 

(vi)                              Any reimbursements received by the Recipient during the period in (iv) regardless of when the foreign tax was assessed and any reimbursements on the taxes reported in (iv) received through March 31.

 

(vii)                           Report is required even if the recipient did not pay any taxes during the report period.

 

(viii)                        Cumulative reports may be provided if the recipient is implementing more than one program in a foreign country.

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

71

 

c.                                       Definitions. For purposes of this clause:

 

(i)                                     “Agreement” includes USAID direct and country contracts, grants, cooperative agreements and interagency agreements.

 

(ii)                                  “Commodity” means any material, article, supply, goods, or equipment.

 

(iii)                               “Foreign government” includes any foreign governmental entity.

 

(iv)                              “Foreign taxes” means value-added taxes and custom duties assessed by a foreign government on a commodity. It does not include foreign sales taxes.

 

d.                                      Where. Submit the reports to: [insert address and point of contact at the Embassy, Mission or FM/CMP as appropriate. see b. below] [optional with a copy to]

 

e.                                       Subagreements. The recipient must include this reporting requirement in all applicable subcontracts, subgrants and other subagreements.

 

f.                                        For further information see http://www.state.gov/m/rm/c10443.htm.

 

[END OF PROVISION]

 

10.                               FOREIGN GOVERNMENT DELEGATIONS TO INTERNATIONAL CONFERENCES (January 2002)

 

FOREIGN GOVERNMENT DELEGATIONS TO INTERNATIONAL CONFERENCES (January 2002)

 

Funds in this agreement may not be used to finance the travel, per diem, hotel expenses, meals, conference fees or other conference costs for any member of a foreign government’s delegation to an international conference sponsored by a public international organization, except as provided in ADS Mandatory Reference “Guidance on Funding Foreign Government Delegations to International Conferences or as approved by the Agreement Officer.

 

These provisions also must be included in the Standard Provisions of any new grant or cooperative agreement to a public international organization or a U.S. or non-U.S. non-governmental organization financed with FY04 HIV/AIDS funds or modification to an existing grant or cooperative agreement that adds FY04 HIV/AIDS.

 

[END OF PROVISION]

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

72

 

11.                               USAID DISABILITY POLICY - ASSISTANCE (DECEMBER 2004)

 

USAID DISABILITY POLICY - ASSISTANCE (DECEMBER 2004)

 

a.                                      The objectives of the USAID Disability Policy are (1) to enhance the attainment of United States foreign assistance program goals by promoting the participation and equalization of opportunities of individuals with disabilities in USAID policy, country and sector strategies, activity designs and implementation; (2) to increase awareness of issues of people with disabilities both within USAID programs and in host countries; (3) to engage other U.S. government agencies, host country counterparts, governments, implementing organizations and other donors in fostering a climate of nondiscrimination against people with disabilities; and (4) to support international advocacy for people with disabilities. The full text of the policy paper can be found at the following website: http://www.usaid.gov/about/disability/DISABPOL.FlN.html

 

b.                                      USAID therefore requires that the recipient not discriminate against people with disabilities in the implementation of USAID funded programs and that it make every effort to comply with the objectives of the USAID Disability Policy in performing the program under this grant or cooperative agreement. To that end and to the extent it can accomplish this goal within the scope of the program objectives, the recipient should demonstrate a comprehensive and consistent approach for including men, women and children with disabilities.

 

[END OF PROVISION]

 

12.                               HOMELAND SECURITY PRESIDENTIAL DIRECTIVE - 12 (HSPD-12) (SEPTEMBER 2006)

 

In response to the general threat of unauthorized access to federal facilities and information systems, the President issued Homeland Security Presidential Directive-12. HSPD-12 requires all Federal agencies to use a common Personal Identity Verification (PIV) standard when identifying and issuing access rights to users of Federally-controlled facilities and/or Federal Information Systems.

USAID is applying the requirements of HSPD-12 to applicable assistance awards. USAID will begin issuing HSPD-12 “smart card” IDs to applicable recipients (and recipient employees), using a phased approach. Effective October 27, 2006, USAID will begin issuing new “smart card” IDs to new recipients (and recipient employees) requiring routine access to USAID controlled facilities and/or access to USAID’s information systems. USAID will begin issuance of the new smart card IDs to existing recipients (and existing recipient employees) on October 27, 2007. (Exceptions would include those situations where an existing recipient (or recipient employee) loses or damages his/her existing ID and would need a replacement ID prior to Oct 27, 2007. In those situations, the existing recipient (or recipient employee) would need to follow the PIV processes described below, and be issued one of the new smart cards.)

 

Accordingly, before a recipient (including a recipient employee) may obtain a USAID ID (new or replacement) authorizing him/her routine access to USAID facilities, or logical access to USAID’s information systems, the individual must provide two forms of

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

73

 

identity source documents in original form and a passport size photo. One identity source document must be a valid Federal or state government-issued picture ID. (Overseas foreign nationals must comply with the requirements of the Regional Security Office.) USAID/W recipients (and recipient employee) must contact the USAID Security Office to obtain the list of acceptable forms of documentation, and recipients working in overseas Missions must obtain the acceptable documentation list from the Regional Security Officer. Submission of these documents, and related background checks, are mandatory in order for the recipient (or employee) to receive a building access ID, and before access will be granted to any of USAID’s information systems. All recipients (or employees) must physically present these two source documents for identity proofing at their USAID/W or Mission Security Briefing. The recipient (or employee) must return any issued building access ID and remote authentication token to USAID custody upon termination of the individual’s employment with the recipient or completion of the award, whichever occurs first.

 

The recipient must comply with all applicable HSPD-12 and PIV procedures, as described above, as well as any subsequent USAID or government-wide HSPD-12 and PIV procedures/policies, including any subsequent applicable USAID General Notices, Office of Security Directives and/or Automated Directives System (ADS) policy directives and required procedures. This includes HSPD-12 procedures established in USAID/Washington and those procedures established by the overseas Regional Security Office. In the event of inconsistencies between this clause and later issued Agency or government-wide HSPD-12 guidance, the most recent issued guidance should take precedence, unless otherwise instructed by the Agreement Officer.

 

The recipient is required to include this clause in any subawards (including subcontracts) that require the subawardee or subawardee employee to have routine physical access to USAID space or logical access to USAID’s information systems.

 

[END OF STANDARD PROVISIONS]

 

13.                               PROHIBITION ON THE PROMOTION OR ADVOCACY OF THE LEGALIZATION OR PRACTICE OF PROSTITUTION OR SEX TRAFFICKING (JUNE 2005)

 

PROHIBITION ON THE PROMOTION OR ADVOCACY OF THE LEGALIZATION OR PRACTICE OF PROSTITUTION OR SEX TRAFFICKING (JUNE 2005)

 

a.                                      The U.S. Government is opposed to prostitution and related activities, which are inherently harmful and dehumanizing, and contribute to the phenomenon of trafficking in persons. None of the funds made available under this agreement may be used to promote or advocate the legalization or practice of prostitution or sex trafficking. Nothing in the preceding sentence shall be construed to preclude the provision to individuals of palliative care, treatment, or post-exposure pharmaceutical prophylaxis, and necessary

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

74

 

pharmaceuticals and commodities, including test kits, condoms, and, when proven effective, microbicides.

 

b.                                      Except as noted in the second sentence of this paragraph, as a condition of entering into this agreement or any subagreement, a non-governmental organization or public international organization recipient/subrecipient must have a policy explicitly opposing prostitution and sex trafficking. The following organizations are exempt from this paragraph: the Global Fund to Fight AIDS, Tuberculosis and Malaria; the World Health Organization; the International AIDS Vaccine Initiative; and any United Nations agency.

 

c.                                       The following definition applies for purposes of this provision:

 

Sex trafficking means the recruitment, harboring, transportation, provision, or obtaining of a person for the purpose of a commercial sex act. 22 U.S.C. 7102(9).

 

d.                                      The recipient shall insert this provision, which is a standard provision, in all subagreements.

 

e.                                       This provision includes express terms and conditions of the agreement and any violation of it shall be grounds for unilateral termination of the agreement by USAID prior to the end of its term.

 

[END OF PROVISION]

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

75

 

Attachment D

 

DETAILED IMPLEMENTATION PLAN

 

To be submitted post award for CTO approval.

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

76

 

	
MODIFICATION OF ASSISTANCE
    	
 
    
	
1. MODIFICATION
    	
2.   EFFECTIVE DATE OF
    	
3.   AWARD NUMBER:
    	
4.   EFFECTIVE DATE OF
    
	
NUMBER
    	
MODIFICATION
    	
 
    	
AWARD :
    
	
03
    	
September 28, 2011
    	
AEG-A-00-08-00009
    	
09/30/2008
    
	
 
    
	
5. GRANTEE:
    	
6. ADMINISTERED BY:
    
	
 
    	
 
    
	
Arcadia   Biosciences, Inc.
    	
U.S.   Agency for International Development
    
	
202   Cousteau Place, Suite 105
    	
Office   of Acquisition and Assistance
    
	
Davis,   CA 95618
    	
M/OAA/BFS   - SA-44
    
	
 
    	
1300   Pennsylvania Avenue, NW
    
	
 
    	
Washington,   DC 20523
    
	
DUNS NO.: 135964760
    	
 
    
	
TIN NO.: 81-0571538 
    	
      LOC   NO.: N/A
    	
 
    
	
 
    
	
7. FISCAL DATA:
    	
Amount Obligated: 
    	
8. TECHNICAL OFFICE:
    
	
 
    	
 
    
	
Budget Fiscal Year: 
    	
See Fiscal Data on page 2
    	
USAID,   BFS, Saharah Moon Chapotin, AOTR
    
	
Operating Unit:
    	
 
    
	
Strategic Objective:
    	
9. PAYMENT OFFICE:
    
	
Team/Division:
    	
 
    
	
Benefiting Geo Area:
    	
US   Agency for International Development
    
	
Object Class:
    	
Office   of Financial Management, SA-44
    
	
 
    	
1300   Pennsylvania Ave., NW
    
	
 
    	
Washington,   DC 20523
    
	
 
    	
obldocCMP@usaid.gov
    
	
 
    
	
10. FUNDING SUMMARY:
    
					

 

	
 
    	
 
    	
Obligated   Amount
    	
 
    	
 
    	
Total   Est. Amt.
    	
 
    
	
Amount Prior to this Modification:
    	
$
    	
3,381,056.00
    	
 
    	
$
    	
3,631,056.00
    	
 
    
	
Change Made by this Modification:
    	
$
    	
750,000.00
    	
 
    	
$
    	
4,544,331.00
    	
 
    
	
New/Current Total:
    	
$
    	
4,131,056.00
    	
 
    	
$
    	
8,175,387.00
    	
 
    

 

	
 
    
	
11.   DESCRIPTION OF MODIFICATION:
    
	
 
    
	
The   purposes of this Modification are to:
    

 

	
1.
    	
Extend   the period of performance by 5 years from September 29, 2011 through   September 30, 2016;
    
	
2.
    	
Provide   $750,000 in incremental funding as identified on page 2;
    
	
3.
    	
Increase   the Total Estimated Amount and Total Obligated Amount by $4,544,331 from $3,631,056   to $8,175,387 as shown in block 10 of this modification; and
    
	
4.
    	
Revise   the budget; and
    
	
5.
    	
Provide   Additional Program Description as Attachment I.
    

 

	
 
    
	
See   page 2 and attachment for items 3, 4 and 5 listed above.
    
	
 
    

 

	
12.
    	
THIS MODIFICATION IS ENTERED INTO PURSUANT TO THE AUTHORITY   OF THE FOREIGN ASSISTANCE ACT OF 1961 AS AMENDED. EXCEPT AS SPECIFICALLY HEREIN AMENDED, ALL TERMS AND   CONDITIONS OF THE GRANT REFERENCED IN BLOCK #3 ABOVE, AS IT MAY HAVE   HERETOFORE BEEN AMENDED, REMAIN UNCHANGED AND IN FULL FORCE AND EFFECT.
    
	
 
    	
 
    
	
13.
    	
GRANTEE     x      IS        o         IS NOT REQUIRED TO SIGN THIS DOCUMENT TO RECONFIRM ITS AGREEMENT WITH THE   CHANGES EFFECTED HEREIN
    

 

	
 
    
	
14. GRANTEE: Arcadia   Biosciences, Inc.
    	
15. THE UNITED STATES OF AMERICA
    
	
 
    	
 
    
	
 
    	
U.S. AGENCY FOR INTERNATIONAL DEVELOPMENT
    

 

	
 
    	
 
    

 

	
BY:
    	
/s/ Eric J. Rey
    	
 
    	
BY:
    	
/s/ Natalie J. Thunberg
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Eric J. Rey
    	
 
    	
 
    	
Natalie J. Thunberg
    
	
 
    	
(Name Typed or Printed)
    	
 
    	
 
    	
(Name Typed or Printed)
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
TITLE:
    	
President & CEO
    	
 
    	
TITLE:
    	
Agreement Officer
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
DATE:
    	
09/30/2011
    	
 
    	
DATE:
    	
09/30/2011
    

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

1

 

3.                                      Fiscal Data

 

REQM-BFS-11-000063

BBFY: 2011 EBFY: 2012 Fund: DV-GFSI OP: BFS/ART

Prog Area: A18 Dist Code: BFS-CRC Prog Elem: A074

Team/Div: M/MPBP BGA: 997 SOC: 4100201

 

Funded: $750,000.00

 

4.                       BUDGET

 

	
 
    	
 
    	
Year 1
    	
 
    	
Year 2
    	
 
    	
Year 3
    	
 
    	
Year 4
    	
 
    	
Year 5
    	
 
    	
Year 6
    	
 
    	
Year 7
    	
 
    	
Year 8
    	
 
    	
Total
    	
 
    
	
India*
    	
 
    	
$
    	
1,000,000
    	
 
    	
$
    	
1,410,255
    	
 
    	
$
    	
970,801
    	
 
    	
$
    	
250,000
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
$
    	
3,631,056
    	
 
    
	
Indonesia
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
$
    	
255,012
    	
 
    	
$
    	
324,473
    	
 
    	
$
    	
103,440
    	
 
    	
$
    	
97,474
    	
 
    	
$
    	
0
    	
 
    	
$
    	
780,400
    	
 
    
	
GHG
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
$
    	
33,507
    	
 
    	
$
    	
185,255
    	
 
    	
$
    	
41,505
    	
 
    	
$
    	
50,279
    	
 
    	
$
    	
0
    	
 
    	
$
    	
310,546
    	
 
    
	
NUE
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
$
    	
61,410
    	
 
    	
$
    	
106,375
    	
 
    	
$
    	
46,000
    	
 
    	
$
    	
46,000
    	
 
    	
$
    	
0
    	
 
    	
$
    	
259,785
    	
 
    
	
Capacity
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Building
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
$
    	
160,094
    	
 
    	
$
    	
32,843
    	
 
    	
$
    	
15,935
    	
 
    	
$
    	
1,196
    	
 
    	
$
    	
0
    	
 
    	
$
    	
210,068
    	
 
    
	
Bangladesh
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
$
    	
497,805
    	
 
    	
$
    	
870,322
    	
 
    	
$
    	
644,558
    	
 
    	
$
    	
400,198
    	
 
    	
$
    	
82,263
    	
 
    	
$
    	
2,495,146
    	
 
    
	
Salt   II
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
$
    	
497,805
    	
 
    	
$
    	
535,595
    	
 
    	
$
    	
529,656
    	
 
    	
$
    	
288,228
    	
 
    	
$
    	
72,957
    	
 
    	
$
    	
1,924,240
    	
 
    
	
GHG
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
$
    	
0
    	
 
    	
$
    	
223,126
    	
 
    	
$
    	
79,376
    	
 
    	
$
    	
79,376
    	
 
    	
$
    	
0
    	
 
    	
$
    	
381,877
    	
 
    
	
Capacity
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Building
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
$
    	
0
    	
 
    	
$
    	
111,602
    	
 
    	
$
    	
35,526
    	
 
    	
$
    	
32,595
    	
 
    	
$
    	
9,306
    	
 
    	
$
    	
189,029
    	
 
    
	
Arcadia**
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
$
    	
115,580
    	
 
    	
$
    	
464,761
    	
 
    	
$
    	
454,535
    	
 
    	
$
    	
174,768
    	
 
    	
$
    	
59,142
    	
 
    	
$
    	
1,268,785
    	
 
    
	
NHX
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Protein
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Safety
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
$
    	
0
    	
 
    	
$
    	
325,353
    	
 
    	
$
    	
313,035
    	
 
    	
$
    	
31,146
    	
 
    	
$
    	
0
    	
 
    	
$
    	
669,534
    	
 
    
	
GHG
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
oversight
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
$
    	
86,665
    	
 
    	
$
    	
110,059
    	
 
    	
$
    	
111,710
    	
 
    	
$
    	
113,386
    	
 
    	
$
    	
28,452
    	
 
    	
$
    	
450,272
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Management
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
$
    	
28,915
    	
 
    	
$
    	
29,349
    	
 
    	
$
    	
29,789
    	
 
    	
$
    	
30,236
    	
 
    	
$
    	
30,690
    	
 
    	
$
    	
148,979
    	
 
    
	
Total
    	
 
    	
$
    	
1,000,000
    	
 
    	
$
    	
1,410,255
    	
 
    	
$
    	
970,801
    	
 
    	
$
    	
1,118,397
    	
 
    	
$
    	
1,659,556
    	
 
    	
$
    	
1,202,533
    	
 
    	
$
    	
672,440
    	
 
    	
$
    	
141,405
    	
 
    	
$
    	
8,175,387
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
Arcadia   Cost Share
    	
 
    	
$
    	
6,047,597
    	
 
    	
$
    	
5,066,146
    	
 
    	
$
    	
5,503,502
    	
 
    	
$
    	
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Attachment I

Additional Program Description

Accelerating Development of Abiotic Stress Tolerant Rice and Wheat

 

BUILDING ON THE INITIAL GRANT

 

The goal of this grant has been to develop and test in India high yielding varieties of rice and wheat with increased Nitrogen Use Efficiency (NUE), Water Use Efficiency (WUE) and salt tolerance (NHX). In collaboration with Mahyco, we have made significant progress towards this goal. [...*...] These are all commercial quality events, thus positioning these lines for advancement through the Indian regulatory system. [...*...]

 

Arcadia Biosciences and Mahyco have entered into commercial agreements to continue the development of these technologies for a number of Asian markets. This played a catalytic role in advancing the commercial development of these products — defraying some of the risk in bringing a transgenic rice and wheat forward in light of significant market uncertainties and accelerating the timeframe for commercial introduction. Through the continued commercial investment by both Arcadia and Mahyco, [...*...] The only funding sought related to the continued advancement of these products is the analysis of the protein safety for the NHX salt tolerance product. This will provide the partner countries with experience in generating food safety data and expanding their knowledge of product development beyond the transformation and field-testing steps familiar to public researchers. Gaining experience with the type of data generated to demonstrate food safety will also strengthen host country capacity related to regulatory reviews and implementation.

 

Building on the success of the first grant, Arcadia proposes to expand the collaboration to include public sector research institutions in Bangladesh and Indonesia. The goals are to accelerate the commercial introduction of transgenic rice, to advance the development of second-generation salt tolerance traits that can be used in combination with the existing technologies under development, and to strengthen a range of skills among public sector research institutions in transgenic crop development. Thus there is both a global component to the proposed extension — beginning regulatory work on NUE and new salt tolerance trait development — and country-specific components that include capacity building of the public sector. Both rice and wheat remain the primary targets for salt tolerant trait development. Given that the work proposed here is still in the research phase rather than product development, we will focus on screening targets in rice initially.

 

The additional genes that we will test for salt tolerance, outlined later in the proposal, are, to the best of our knowledge, in the public domain. BRRI will be free to commercialize any of the proposed technologies and Arcadia will make available materials from those genes available to BRRI. Those materials could include a non-proprietary selectable marker. [...*...] Should BRRI have an interest in commercializing a rice event with the selectable marker, Arcadia would like to be consulted to ensure that regulatory and stewardship concerns are adequately addressed. Should any new intellectual property be developed in the course of this collaboration, Arcadia will provide BRRI with commercial rights in Bangladesh as well.

 

After the launch of the initial grant, Arcadia Biosciences and the International Rice Research Institute (IRRI) established a collaboration to measure the greenhouse gas emissions from rice and wheat production. Agriculture is the second largest industrial sector in terms of greenhouse gas emissions. Nitrous oxide, a product of fertilizer, is three hundred times more potent a greenhouse gas than carbon dioxide. Globally, the annual manufacturing and use of fertilizer just in rice production emits an estimated

 

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100 million metric tons of carbon dioxide equivalent. The greenhouse gas measurement program in India under the first grant is providing a baseline for comparison against the potential carbon footprint of NUE crops versus current production practices. This research has also enabled the comparison of different sampling and measurement techniques. Finally, along with data from Arcadia collaborators in China, the data from the first phase is being applied to the development of a methodology that we intend to register with the Clean Development Mechanism (CDM). This would pave the way for projects to access Certified Emissions Reduction credits under the CDM or carbon offsets on voluntary carbon markets.

 

Also included in this extension are the completion of activities that were deferred from the timeline of the first grant per the request of USAID/Washington. Those are outlined briefly and included in the budget ($250,000). Further detail is available in the first proposal and work plans.

 

GOALS

 

Accelerating the Path for Technology Introduction

 

Rice and wheat productivity gains in Asia through the Green Revolution played a central role in advancing food security, both through increasing the availability of these staple foods and through increasing small farmer incomes. As we look at the remaining global challenge of food security, South Asia remains a center of attention, representing the largest number of food insecure people in the world, and sustainable productivity gains in rice and wheat remain critical components of the solution. Arcadia technologies offer tools to increase productivity of these crops, particularly in light of increasing resource constraints and climate change.

 

Nitrogen fertilizer drives crop productivity. While adoption levels in Asia are high, they come at significant costs in the form of government subsidies and environmental impacts including water contamination and greenhouse gas emissions. As outlined in the first grant, Arcadia’s NUE technology represents a significant opportunity to improve both crop productivity and environmental sustainability. Through a combination of climate change and growth in urban and industrials sectors, water resources in Asia are under growing constraint. Development of drought and water stress tolerance crops will be important to sustaining yields and particularly critical in the case of rice where a shift towards reduced flooding and even direct seeded rice is underway. Through our commercial partnership, Arcadia and Mahyco are committed to the continued development of these technologies for commercialization in Asia.

 

The potential value of these traits to farmers in Asia are substantial. [...*...]

 

To accelerate the introduction of these technologies, we will begin development of the regulatory work that is common across all countries and initiate collaborations in Bangladesh and Indonesia. Increasing the familiarity among the scientists and policy makers who will determine the path for transgenic crop introduction will build the foundation for introduction of NUE and WUE rice and wheat. As we have seen in India, the commercialization of transgenic food crops such as brinjal has been more difficult than predicted and commercialization of transgenic rice in China has stalled due to opposition to biotechnology. As the timeline stretches out the number of years before a GM product reaches the market, it significantly increases the risk to commercial companies. By initiating collaborations with public research institutions in two important markets outside of India, Arcadia will enhance the technical expertise and understanding of transgenic rice among the scientists, regulators, and policy makers who will play leading roles in making decisions about the commercialization of the technologies funded under the current grant.

 

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Bangladesh and Indonesia represent a strategic overlap in the goals of both Arcadia and USAID. As one of the major food security focus countries for the U.S. government’s food security initiative, Bangladesh is also likely one of the first markets for commercialization of the current generation of Arcadia technologies for NUE, WUE, and salt. Importantly, Bangladesh provides a valuable real world environment for testing salt tolerance traits in rice. Much of the academic research on salt tolerance has been with simulating conditions that likely do not replicate the type of salt stresses experienced in farmers’ fields. [...*...] A collaboration with the Bangladesh Rice Research Institute will allow us to harness BRRI’s expertise in testing rice under natural salt stress to more accurately screen for commercially viable levels of salt tolerance.

 

While Indonesia is not a food security focus country, an estimated 87 million people remain food insecure and rice prices impact this number. Climate change models predict decreases in rice harvests due to changes in rainfall patterns, pointing to the need to increase the drought tolerance of rice and deploy other technologies to sustain yields. As an important member of ASEAN, Indonesia is a likely leader in the advancement of transgenic crops within South East Asia. Indeed it was the leadership of Indonesian scientists to reach out to Arcadia following a presentation at an APEC meeting that sparked our proposed collaboration. The proposed partner, the Indonesian Center for Agricultural Biotechnology and Genetic Resources Research and Development (ICABIOGRAD), plays a central role in evaluating transgenic crop applications under the Indonesian regulatory system. Collaborative research between Arcadia and ICABIOGRAD will allow field evaluations that will accelerate introduction of NUE rice.

 

Salinity Constraints — Global & Bangladesh

 

Globally, an estimated $15-20 billion in crop yields are lost annually due to salinity. Irrigation is the primary source of salinization outside of coastal production areas and thus salinity is a significant factor in some of the most important crop production systems, from the U.S., Argentina, and Australia in the developed world, to India, Pakistan, Egypt, Ethiopia and South Africa where intensification of agriculture is central to food security. Breeding for salt tolerance in crops has shown that it is a complex trait, involving several different physiological mechanisms, from regulation of uptake, osmotic adjustments that regulate sodium concentrations, to compartmentalization within the plant and within cells. [...*...] A fuller discussion of potential candidate genes is provided below.

 

Salinity impacts crop productivity on an estimated 1 million hectares along the coastal areas of Bangladesh, where salt water intrusion is a growing problem. An estimated 53 percent of the coastal areas are affected by salinity. Salinity is particularly acute during the dry season, when it becomes the largest constraint to productivity of rice and wheat. The lack of fresh water flushing from rivers during the dry season and the concentration of salts on soil surfaces through evaporation account for the rise of salinity build up during the dry season. Tidal flooding during the wet season further expands the problem in coastal areas. In addition to the direct impact of salinity of plant growth, saline soils also show high levels of nutrient deficiency. Research on wheat in Bangladesh demonstrated that the uptake of nitrogen was lower in salt-affected soils.

 

Under current conditions, average rice yields in salt affected areas of Bangladesh are estimated at 2.5 to 3.0 tons per hectare. [...*...]

 

Researchers in Bangladesh have increased attention to development of salt tolerant crops and agricultural management practices to reduce soil salinity levels. The Bangladesh Rice Research Institute’s release of a salt tolerant variety, BRRI Dhan 47, in recent years represent an advancement in tackling this problem and demonstrates BRRI’s capacity to screen for salt tolerance in the field. It is this field expertise and the ability to test for tolerance under real soil and irrigation conditions that is makes BRRI and attractive research partner to Arcadia in developing a second generation of salt genes for

 

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application in rice and wheat. Interestingly, researchers at the University of Dhaka and Jahangirnagar University, have also shown that transformation of rice with the NHX gene increases salt tolerance. This is the same technology Arcadia and Mahyco are advancing commercially under the current grant.

 

Reducing Greenhouse Gas Emissions

 

Both Bangladesh and Indonesia are key countries for USAID’s global climate change program. We propose to extend the baseline measurement of greenhouse gases (GHG) to include these two countries. In the case of Bangladesh, this will be lead by IRRI and linked to the CSISA program. We will also collaborate with the International Fertilizer Development Center to measure the impact of Urea Deep Placement (UDP) on greenhouse gas emissions and look for synergies between Arcadia’s NUE technology and UDP as tools for mitigating greenhouse gas emissions. In the future, when NUE rice and wheat are introduced to Bangladesh, it is possible that the combination of UDP and NUE provide a strategic policy opportunity to reducing the heavy drain that fertilizer subsidies have on the government’s agricultural budget.

 

In Indonesia, ICABIOGRAD will collaborate with the Indonesian Center for Land Resources Research and Climate Change, also part of the Ministry of Agriculture, to conduct greenhouse gas emissions. Arcadia has japonica varieties of rice that have been transformed with NUE. As tropical varieties of japonica are produced in Indonesia, the field trials of these will provide one of the first opportunities to measure greenhouse gas emissions directly on NUE rice and compare the carbon footprint to current agricultural practices.

 

TECHNICAL OBJECTIVES & SPECIFIC ACTIVITIES

 

Activities Deferred

 

These include the following: (more detail is provided in the original work plan)

·                  [...*...]

·                  [...*...]

·                  [...*...]

 

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Strengthening Local Capacity — Bangladesh & Indonesia

 

To increase local technical capacity and to support decision-making about the safety of transgenic rice, Arcadia will host researchers from each of the target countries. This will also provide the opportunity to expose public sector institutions to how industry approaches product development versus research. Training could include cloning and construction of vectors, molecular characterization of gene inserts, rice transformation, protocols for greenhouse screening and event selection, and field trail design. Arcadia is conducting rice transgenic trials in California, offering an opportunity to provide training in both the product development and biosafety components of conducting field trials in the private sector.

 

Additional valuable training will be provided in the area of biosafety, allowing public researchers to build the knowledge and skills required to take a transgenic crop through regulatory systems. This component will be coordinated with USAID’s biosafety programs currently working in both countries. Arcadia is one of only a handful of institutions in the U.S. that is participating in the USDA’s Biotechnology Quality Management System (BQMS). This USDA-initiated program aims to enhance quality stewardship of transgenic crops throughout the research and product development cycles based on standard quality management principles. Arcadia’s regulatory team will provide training in quality management systems to both ICABIOGRAD and BRRI to strengthen the stewardship of these public research institutions to ensure the safe management of these regulated crops. In addition, we will provide the opportunity for researchers to learn how to conduct the initial food safety assessment of transgenic protein products, working with Arcadia’s regulatory and analytical teams. This knowledge will also strengthen the role of these researchers in informing national biosafety review committees. The proposed protein safety studies are required by CODEX and by all countries (namely, stability and digestibility) and will be done on the NHX salt tolerance gene under development in the first grant as the life of the extension will not span this stage of development for the additional salt gene targets.

 

The length and type of training will be determined jointly by BRRI (Bangladesh), ICABIOGRAD (Indonesia), and Arcadia to ensure we address the priorities and capacities of the partners. We could host scientists for six to twelve months each for training in the cloning, transformation, molecular characterization and greenhouse screening, with shorter visits to Arcadia laboratories for training in areas such as quality management systems and initial food safety assessment. Over the life of the grant, this would provide the opportunity for a number of sequential visiting scientists, and with placements at our laboratories in Davis, California and Seattle, Washington.

 

As field evaluation of candidate genes is central to the collaboration with BRRI in Bangladesh, we propose to fund some infrastructure and additional training to ensure trials are conducted under biosafety containment conditions at one or two BRRI field stations in the coastal areas. This may include security fencing for a portion of the experiment station fields to control access to the field, guards, and additional field space to provide for required separation distances from other rice production plots. While Arcadia will provide training of lead scientists at our facilities, we propose to hire short-term consultants, in consultation with USAID’s biosafety programs, to provide field-based training of staff who will manage the field trials in Bangladesh and to inspect the field trials for compliance with safety measures.

 

Identification of Additional Salt Tolerance Genes

 

Genetic engineering of salt tolerant rice shows considerable promise, [...*...]

 

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Should any new intellectual property be developed as a result of this collaboration, Arcadia will likewise provide BRRI the right to commercialize that technology(ies) in Bangladesh.

 

[...*...]

 

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Conducting Initial Food Safety Assessment

 

CODEX outlines the data needed for the initial assessment of food safety of new biotechnology products and these standards have been the basis for the draft food safety guidelines in Bangladesh. While most of the data are dependent on a specific transgenic event, a portion is focused on the transgene itself. Sought here are the funds to pursue the protein safety analysis for the NHX salt tolerance gene. It is expected that the new targets identified in the research outlined above will be stacked in combination with NHX to give robust salt tolerance. As such, engaging Bangladeshi scientists in this work on NHX will build their familiarity with this first component of the food safety assessment. As Bangladesh has recently drafted new food safety guidelines, providing experience with how the data is generated will be timely in

 

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providing one of the first tangible products by which to understand implementation of these new guidelines.

 

The initial food safety assessment requires that the protein be purified, preferably isolated from the plant or alternatively from a bacterial host. Because NHX is a transmembrane antiporter, the inherent process of purifying a membrane-bound protein is substantial. The proposed approach is discussed later.

 

The safety assessment process includes:

1.              Description of the recombinant-DNA plant;

2.              Description of the host plant and it’s use as a food;

3.              Description of the donor organism(s);

4.              Description of the genetic modification(s);

5.              Characterization of the genetic modification(s);

6.              Safety assessment of the protein product;

7.              Other considerations.

 

The timeline and employee investment to complete the above process is discussed in the project management section. In total, it takes [...*...] to complete the process, including time to optimize expression and purification of the protein to conduct the experiments that characterize the transgenic product, independent of the plant.

 

[...*...]

 

[...*...]

 

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This is included in Arcadia’s cost-share contribution to the partnership.

 

Field Trails of NUE Rice in Indonesia

 

Lead by ICABIOGRAD, we will conduct field trials of NUE rice in Indonesia to both look at performance, to provide training in field evaluation of the trait, and as the basis for measuring differences in greenhouse gas emissions. Arcadia will make available NUE japonica rice on a research basis. ICABIOGRAD will cross this into locally adapted japonica rice (javonica) on a research basis for evaluation in both the greenhouse and field, all under biosafety regulation. Arcadia has already licensed this technology to a commercial partner for Asian markets including Indonesia, thus the avenue for introduction will be through private seed companies. But, by making this technology available to ICABIOGRAD for research, they will gain additional familiarity and collect data that will speed the commercial introduction. ICABIOGRAD currently tests all GM crop material as part of the Indonesian government’s regulatory procedures. In addition, as outlined below, these field trials will provide the opportunity to conduct GHG measurements that compare NUE rice to conventional rice and fertilizer application systems.

 

Greenhouse Gas Emissions

 

The results of the research conducted in India under the first grant will lead to the standardization of methodologies and analysis of data for GHG emissions. [...*...]

 

It is expected that this baseline work will provide the basis for recommendations on alternative policies and production practices and technologies to reduce GHG emissions from rice production. Through links to CSISA and IFPRI in Bangladesh, and the Ministry of Agriculture in Indonesia, we will explore how to promote such policy and production changes.

 

In Bangladesh, this component will be lead by IRRI as part of the CSISA platforms with additional collaboration with IFDC on UDP. In Indonesia, this will be lead by a local institution, the Indonesian Center for Land Resources Research and Climate Change, with training by Arcadia. To ensure

 

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coordination and training across the work being conducted in India, Bangladesh, and Indonesia, Arcadia will hire a post-doctoral fellow to provide technical support and oversight.

 

PROGRAM MANAGEMENT

 

A program committee will be established with 1-2 representatives from each of the partner institutions. The program committee will serve to make decisions about the program and to coordinate implementation. The committee will hold meetings quarterly to discuss work plan development and implementation and share technical progress. It is expected that the committee will meet in person at least once a year with the other meetings being arranged by conference call. From Arcadia, the representatives will be [...*...] the lead on new salt gene identification, and a post-doctoral fellow who will oversee the greenhouse gas emissions component.

 

As the grantee to USAID, Arcadia Biosciences will be responsible for reporting to USAID and will ensure both country-specific reporting as well as progress on global activities undertaken by Arcadia and its partners.

 

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REFERENCES

 

Apse, M.P., G.S. Aharon, W.A. Snedden, andE. Blumwald. 1999. Salt tolerance conferred by overexpression of a vacuolar Na+/H+ antiporter in Arabidopsis. Science 285: 1256-1258.

 

Abrol, I.P., J.S.P. Yadav, and F.I. Massoud. 1988. FAO Soils Bulletin 39. http://www.fao.org/docrep/x5871e/x5871e03.htm

 

Flowers, T.J. and S.A. Flowers. 2005. Why does salinity pose such a difficult problem for plant breeders. Agricultural Water Management 78: 15-24.

 

Kalifa, Y., Perlson, E., Gilad, A., Konrad, Z., Scolnik, P. A., & Bar-zvi, D. (2004). Over-expression of the water and salt stress-regulated Asr1 gene confers an increased salt tolerance. Plant, Cell and Environment, 27, 1459-1468.

 

Gaxiola, R. A., Li, J., Undurraga, S., Dang, V., Allen, G. J., Alper, S. L., et al. (2001). Drought- and salt-tolerant plants result from overexpression of the AVP1 H+ -pump. PNAS, 98, 11444-11449.

 

Good, A.G., S.J. Johnson, M.D. DePauw, R.T. Carroll, N. Savidov, J. Vidamir, Z. Lu, G. Taylor, and V. Stroeher. 2007. Engineering nitrogen use efficiency with alanine amino transferace. Can. J. Bot. 85: 52-62.

 

Haque, S.A. 2006. Salinity Problems and Crop Production in Coastal Areas of Bangaldesh. Pak. J. Bot., 38(5): 1359-1365.

 

Hoshida, H., Tanaka, Y., Hibino, T., Hayashi, Y., Tanaka, A., Takabe, Tetsuko, et al. (2000). Enhanced tolerance to salt stress in transgenic rice that overexpresses chloroplast glutamine synthetase. Plant Mol. Biol., 43, 103-111.

 

Islam, S.M.T, R.S. Tammi, S.L. Singla-Pareek, and Z. I. Seraj. 2010. Enhanced salinity tolerance an improved yield properties in Bangladesh rice Binnotoa through Agrobacterium-mediated transformation of PgNHX1 from Pennisetum glaucum. ACTA Physilogia Plantarum 34(4): 657-663.

 

Kalifa, Y., Perlson, E., Gilad, A., Konrad, Z., Scolnik, P. A., & Bar-zvi, D. (2004). Over-expression of the water and salt stress-regulated Asr1 gene confers an increased salt tolerance. Plant, Cell and Environment, 27, 1459-1468.

 

Lu, Z., Liu, D., & Liu, S. (2007). Two rice cytosolic ascorbate peroxidases differentially improve salt tolerance in transgenic Arabidopsis. Plant Cell Reports, 26(10), 1909-17. Springer Berlin / Heidelberg. doi: 10.1007/s00299-007-0395-7.

 

Majee, M., Maitra, S., Dastidar, K. G., Pattnaik, S., Chatterjee, A., Hait, N. C., et al. (2004). A novel salt-tolerant L-myo-inositol-1-phosphate synthase from Porteresia coarctata (Roxb.) Tateoka, a halophytic wild rice: molecular cloning, bacterial overexpression, characterization, and functional introgression into tobacco-conferring salt tolerance. JBC, 279(27), 28539-52. doi: 10.1074/jbc.M310138200.

 

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Ogawa, D., Yamaguchi, K., & Nishiuchi, T. (2007). High-level overexpression of the Arabidopsis HsfA2 gene confers not only increased themotolerance but also salt/osmotic stress tolerance and enhanced callus growth. Journal of experimental botany, 58(12), 3373-83. doi: 10.1093/jxb/erm184.

 

Rahman, S.M., M.I. Khalil, and M.F. Ahmed. 1994. Yield-water relations and nitrogen utilization by wheat in salt-affected soils in Bangladesh. Agricultural Water Management 28(1): 49-56.

 

Rivero, R.M., Kojima, M., Gepstein, A., Sakakibara, H., Mittler, Rl, Gepstein, S., and Blumwald, E. 2007. Delayed leaf senescence induces extreme drought tolerance in a flowing plant. PNAS 104: 19631-19636.

 

Sade, N., Gebretsadik, M., Seligmann, R., Schwartz, A., Wallach, R., & Moshelion, M. (2010). The Role of Tobacco Aquaporin1 in Improving Water Use Efficiency , Hydraulic Conductivity , and Yield Production Under Salt Stress. Plant Physiol., 152(January), 245-254. doi: 10.1104/pp.109.145854.

 

Salam, M.A., M.A. Rahman, M.A.R. Bhuiyan, K. Uddin, M.R.A. Sarker, R. Yasmeen, and M.S. Rhaman. 2007. BRRI dhan 47: a salt-tolerant variety for the boro season. Interntaional Rice Research Notes 32(1): 42-43.

 

Sharawat, A.K., R.T. Carroll, M. DePauw, G.T. Taylor, and A.G. Good. 2008. Genetic engineering of improved nitrogen use efficiency in rice by the tissue-specific expression of alanine aminotransferase. Plant Biotech. J. 6: 722-732.

 

Shi, W., Muramotoa, Y., Uedaa, A., & Takabe, T. (2001). Cloning of peroxisomal ascorbate peroxidase gene from barley and enhanced thermotolerance by overexpressing in Arabidopsis thaliana. Gene, 273(1), 23-27. doi: 10.1016/S0378-1119(01)00566-2.

 

Uddin, I., Qi, Y., Yamada, S., Shibuya, I., Deng, X.-ping, Kwak, S.-soo, et al. (2008). Overexpression of a New Rice Vacuolar Antiporter Regulating Protein OsARP Improves Salt Tolerance in Tobacco. Plant Cell Physiol., 49(6), 880-890. doi: 10.1093/pcp/pcn062.

 

Xu, D., Duan, X., Wang, B., Hong, B., Ho, T.-hua D., & Wu, R. (1996). Expression of a late Embryogenesis Abundant Protein Cene , HVA1 , from Barley Confers Tolerance to Water Deficit and Salt Stress in Transgenic Rice ’. Plant Physiol., 110, 249-257.

 

Zhang, H.X. and E. Blumwald. 2001. Transgenic salt-tolerant tomtato plants accumulate salt in foliage but not in fruit. Nature Biotechnology 19: 765-768.

 

Zhifang, G., & Loescher, W. (2003). Expression of a celery mannose 6-phosphate reductase in Arabidopsis thaliana enhances salt tolerance and induces biosynthesis of both mannitol and a glucosyl-mannitol dimer. Plant, Cell and Environment, 26, 275-283.

 

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Annex

 

Description of NUE, WUE, and Salt Tolerance Technologies under Development from the Initial USAID Grant

 

Nitrogen Use Efficiency (NUE)

 

The NUE technology developed at Arcadia is based on modulating the expression of an aminotransferase gene. Aminotransferases are integral to N assimilation for the production of amino acids and N allocation in plants. Alanine aminotransferase enzymes catalyze the reversible formation of alanine and 2-oxoglutarate from glutamate and pyruvate. Increased NUE in transgenic plants expressing an alanine aminotransferase (AlaAT) from barley under the control of a stress-inducible promoter from the canola turgor-responsive gene (btg26) was first demonstrated in canola (Good et aI., 2007). Arcadia’s NUE technology enables plants to absorb and utilize nitrogen fertilizer much more efficiently than their non-transgenic controls. This results in the same high yields as conventional crops while using half as much nitrogen fertilizer, or higher yields if using the same amount of fertilizer. In either case, less nitrogen escapes into the water and air.

 

Canola expressing btg-AlaAT has been extensively field tested for NUE by Arcadia since 2002. This work has progressed over 7 field seasons in the Imperial Valley of California and throughout the upper Midwestern United States. Typical results from application of urea fertilizer are shown below. Similar seed yields were achieved in the transgenic line using 66% less nitrogen than the control. In addition, seed yield was increased in the transgenic line by as much as 33% over the control at conventionally applied nitrogen levels.

 

 

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Extensive analyses on btg-AlaAT transgenic canola plants and seeds did not show any significant compositional differences at maturity. The plants showed no differences in nitrogen, phosphorus or potassium content. In addition, the seeds contained no differences in moisture content, size, protein content, amino acid composition, oil percentage or fatty acid composition. In addition to demonstrated field success in canola, Arcadia has shown similar NUE results in several varieties of japonica rice, wheat, and sugar beets. In rice, AlaAT is expressed under the control of the rice homologue of the btg related promoter OsAnt1. Both greenhouse and field trial results from California have shown increases in seed yield, panicle number and biomass in the transgenic lines as compared to controls under various nitrogen treatment. Additional field trials are underway this summer in California. The figure on the left below shows NUE rice versus wild type controls. The figure on the right shows the grain yield differences of the transgenic lines NUE rice as compared to the two types of controls under different applied nitrogen rates.

 

These data are consistent with data published by Shrawat et al (2008).

 

Salt Tolerance Technology (NHX)

 

Arcadia’s salinity-tolerance technology is based on the overexpression of plant vacuolar Na+/H+

 

 

antiporter(s) (NHXs) (Apse et aI., 1999, Zhang and Blumwald, 2001). NHX overexpression promotes the sequestering of sodium ions into the vacuoles of the cells, where it is not toxic and contributes favorably to the osmotic balance of the cells and plant tissues. This strategy, which is based on the characteristic high activity of vacuolar NHX activity observed in salt tolerant halophytes, promotes the tolerance of shoot tissues to sodium. There is also evidence that the overexpression of NHX in roots promotes K+ homeostasis under saline conditions. It permits the growth and production of seed under salinity stress levels that would otherwise have a negative impact on yield. Arcadia’s salt-tolerance technology can improve farming efficiencies and reduce the need to expand agricultural activities into new areas. In addition, this technology can reduce the need for fresh water by allowing increased use of lower quality (brackish) water.

 

Arcadia’s salinity tolerance technology has been demonstrated in multiple model and agricultural crops, including Arabidopsis, tomato, canola, wheat, cotton and rice. The technology has been validated by many academic researchers (Fukuda et aL, 2004, Verma et aL, 2007, and references therein). Arcadia has tested transgenic rice events in field tests in California. On chronic exposure to high salinity stress (E.C.w=6.7), independent transgenic rice lines over-expressing AtNHX1 (G5 and G6) retained 40% of their yield, while the controls (Null and WT) retained only 20%.

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

16

 

 

There are encouraging results published in the literature for wheat reported by Xue et al (2004) using NHX overexpression in wheat in laboratory and field tests and by Islam et al (2010) for rice in the greenhouse.

 

Water Use Efficiency (WUE)

 

The WUE technology being developed at Arcadia is based on the production of cytokinins under stress conditions. This approach has been shown in tobacco to be effective at preserving yields under chronic deficit irrigation and at mitigating yield loss under extended periods of soil drying. The transgenic construct (pSARK-IPT) contains a maturation-induced promoter (SARK) that controls the expression of isopentenyltransferase (IPT), which is the rate-limiting enzyme in cytokinin biosynthesis. Plants typically respond to water stress by reducing transpiration. Initially this will induce stomatal closing. Senescence and abscission of leaves for the recovery of nitrogen and photoassimilates and the reduction of canopy size are typical adaptive responses which allow plants to set seed under prolonged or severe stress. However, the yield is greatly reduced. In crop plants, a severe yield reduction is considered crop failure. Better control over senescence initiation provides protection against yield losses in pSARK-1PT transgenic plants subjected to limiting water conditions.

 

This technology has been successfully tested in tobacco, both in greenhouse (Rivero et aI., 2007) and under field conditions. Field trials in rice are currently underway in California. Rivero et al. (2007) reported that the pSARK-IPT transgenic tobacco recovered from extreme drought. Biomass and seed yields from wild type plants were dramatically reduced (due to senescence and leaf death), while the transgenic plants recovered from wilting and continued to complete their life cycle with good seed yields.

 

In separate experiments in which plants were watered regularly but at reduced rates, the transgenic pSARK-IPT lines lost only 10% in biomass and seed yield, while the wild type controls suffered a 60% loss. The response of the transgenic tobacco to these greenhouse treatments suggests that the technology is appropriate for addressing crop performance during either short term drought, which can lead to crop failure, or prolonged water stresses which reduce yields dramatically in the non- transgenic control.

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

17

 

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

18

 

	
MODIFICATION OF ASSISTANCE AWARD
    	
 
    
	
1.
    	
MODIFICATION
    	
2.
    	
EFFECTIVE   DATE OF
    	
3.
    	
AWARD   NUMBER:
    	
4.
    	
EFFECTIVE   DATE OF
    
	
 
    	
NUMBER:
    	
 
    	
MODIFICATION:
    	
 
    	
 
    	
 
    	
AWARD:
    
	
 
    	
04
    	
 
    	
See block 15
    	
 
    	
AEG-A-00-08-00009-00
    	
 
    	
09/30/2008
    

 

	
 
    	
 
    
	
5. RECIPIENT:
    	
6. ADMINISTERED BY:
    
	
 
    	
 
    
	
Arcadia   Biosciences, Inc.
    	
U.S.   Agency for International Development
    
	
202   Cousteau Pl., Suite 200
    	
Office   of Acquisition and Assistance
    
	
Davis,   CA 95618
    	
M/OAA/EGAT,   Room 566-K1, SA-44
    
	
 
    	
1300   Pennsylvania Avenue, NW
    
	
 
    	
Washington,   DC 20523
    

 

	
DUNS NO: 135964760
    	
 
    
	
TIN NO.: 81-0571538 
    	
LOC NO.: N/A
    	
 
    
	
 
    
	
7. FISCAL DATA:
    	
8. TECHNICAL OFFICE:
    
	
 
    	
 
    
	
See page 2
    	
BFS/ARP
    
	
 
    	
 
    
			

 

	
Amount Obligated:
    	
9. PAYMENT OFFICE:
    
	
Budget Fiscal Year:
    	
 
    
	
Operating Unit:
    	
U.S.   Agency for International Development
    
	
Strategic Objective:
    	
Office   of the Chief Financial Officer
    
	
Team/Division:
    	
Federal   Canter Plaza (SA-44)
    
	
Benefitting Geo Area:
    	
M/CFO/CMP,   4th Floor
    
	
Object Class:
    	
301   4th Street, S.W.
    
	
 
    	
Weshington,   DC 20547
    

 

	
 
    
	
10. FUNDING SUMMARY:
    

 

	
 
    	
 
    	
Obligated   Amount
    	
 
    	
Total   Est. Amount
    	
 
    
	
Amount Obligated prior to this Modification:
    	
 
    	
$
    	
4,131,056
    	
 
    	
$
    	
8,175,367
    	
 
    
	
Change Made by this Modification:
    	
 
    	
$
    	
2,027,953
    	
 
    	
$
    	
0.00
    	
 
    
	
New/Current Total:
    	
 
    	
$
    	
6,159,009
    	
 
    	
$
    	
8,175,387
    	
 
    

 

	
 
    
	
11.   DESCRIPTION OF MODIFICATION:
    
	
 
    
	
The   purposes of this Modification are to:
    
	
1)   Provide incremental funding in the amount of $2,027,953, increasing the total   obligation from $4,131,056 to $6,159,009;
    
	
2)   Replace the previous budget with a revised budget;
    
	
3)   Update Section A.6, Indirect Cost Rates, to incorporate a ceiling   rate to be used for the entirety of the award;
    
	
4)   Correct several administrative details in Section A;
    
	
5)   Update the Section titled Authorized Geographic Code to include the new   Code 937;
    
	
6)   Update the Mandatory Standard Provisions; and
    
	
7)   Update the required as applicable provision entitled “Cost Sharing   (Matching)”.
    
	
 
    
	
CONTINUED ON PAGE 2
    
	
 
    
	
12. THIS MODIFICATION IS ENTERED INTO PURSUANT TO THE   AUTHORITY OF THE FOREIGN ASSISTANCE ACT OF 1961, AS AMENDED, EXCEPT AS   SPECIFICALLY AMENDED HEREIN, ALL TERMS AND CONDITIONS OF THE AWARD REFERENCED   ON BLOCK #3 ABOVE, AS IT MAY HAVE HERETOFORE BEEN AMENDED, REMAIN   UNCHANGED AND IN FULL FORCE AND EFFECT.
    
	
 
    
	
13. RECIPIENT     x      IS        o         IS NOT REQUIRED TO SIGN THIS DOCUMENT TO RECONFIRM ITS AGREEMENT WITH THE   CHANGES EFFECTED HEREIN
    
	
 
    
	
14. RECIPIENT: 
    	
15.
    	
THE UNITED STATES OF AMERICA
    
	
 
    	
 
    	
U.S. AGENCY FOR INTERNATIONAL DEVELOPMENT
    

 

	
 
    	
 
    

 

	
BY:
    	
/s/ Eric   J. Rey
    	
 
    	
BY:
    	
/s/ Moncel Petitto
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
Eric J.   Rey
    	
 
    	
 
    	
Moncel Petitto
    
	
 
    	
(Name Typed or Printed)
    	
 
    	
 
    	
(Name Typed or Printed)
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
TITLE:
    	
President   & CEO
    	
 
    	
TITLE:
    	
Agreement Officer
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
DATE:
    	
09/25/2012
    	
 
    	
DATE:
    	
09/25/2012
    

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

1

 

	
MODIFICATION   OF ASSISTANCE AWARD
    	
 
    
	
CONTINUATION   PAGE
    	
 
    
	
 
    	
 
    
	
AWARD NO.
    	
MODIFICATION NO.
    	
 
    
	
 
    	
 
    	
 
    
	
AEG-A-00-08-00009-00
    	
04
    	
 
    
	
 
    	
 
    	
 
    
	
11. DESCRIPTION OF MODIFICATION (CONTINUED)
    	
 
    

 

Accordingly, the above-numbered award is hereby further amended as follows:

 

Page 3, Section A. General

 

1.          Amount Obligated in this Action: Delete this line in its entirety.

2.          Total Estimated USAID Amount:

Delete $3,631,056

Insert $8,175,387

3.          Total Obligated USAID Amount:

Delete $3,381,056

Insert $6,159,009

 

Page 3, Section B. Specific

 

Insert the following accounting data:

	
REQM-BFS-12-000072
    
	
BBFY
    	
2011
    
	
EBFY
    	
2012
    
	
Fund
    	
DV-GFSI
    
	
OP
    	
BFS/ART
    
	
Prog Area 
    	
A18
    
	
Dist Code 
    	
BFS-CRC
    
	
Prog Elem
    	
A074
    
	
BGA
    	
997
    
	
SOC
    	
4100302
    
	
Amount
    	
$677,953
    
	
 
    	
 
    
	
BBFY
    	
2012
    
	
EBFY
    	
2013
    
	
Fund
    	
DV-GFSI
    
	
OP
    	
BANGLADESH
    
	
Prog Area 
    	
A18
    
	
Dist Code 
    	
388W
    
	
Prog Elem
    	
A074
    
	
Team/Div
    	
BANGLADESH
    
	
BGA
    	
388
    
	
SOC
    	
4100301
    
	
Amount
    	
$1,000,000
    

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

2

 

	
BBFY
    	
2012
    
	
EBFY
    	
2013
    
	
Fund
    	
DV-GFSI
    
	
OP
    	
INDONESIA
    
	
Prog Area 
    	
A18
    
	
Dist Code 
    	
497-W
    
	
Prog Elem
    	
A074
    
	
Team/Div 
    	
RDMA/GDO
    
	
BGA
    	
497
    
	
SOC
    	
4100301
    
	
Amount
    	
$350,000
    

 

Page 6, A.2 Period of Cooperative Agreement

 

Delete

1.      “The estimated completion date of this Cooperative Agreement is 9/29/2011.” in its entirety

Insert

“The estimated completion date of this Cooperative Agreement is 9/30/2016.” in lieu thereof.

 

Delete

2.      “Funds obligated hereunder are available for program expenditures for the estimated period September 30, 2008 to September 30, 2010 subject to approval of performance through September 30, 2009 (See A.3.4 below).” in its entirety.

 

Insert

“Funds obligated hereunder are available for program expenditures for the estimated period September 30, 2008 to September 30, 2016 subject to approval of performance through September 30, 2015 (See A.3.4 below).” in lieu thereof.

 

Page 6, A.3 AMOUNT OF COOPERATIVE AGREEMENT AND PAYMENT

 

1.      The total estimated amount of this Cooperative Agreement for the period shown in A.2 above is $3,631,056.00.

 

Replace “$3,631,056.00” with “$8,175,387.00”

 

2.      USAID hereby obligates the amount of $3,381,056.

 

Replace “$3,381,056” with “$6,159,009”

 

2.      Page 6, A.4 COOPERATIVE AGREEMENT BUDGET

 

Replace the budget with the following revised budget:

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

3

 

	
Overall Budget
    	
 
    	
 
    	
 
    
	
India
    	
 
    	
$
    	
3,631,056
    	
 
    
	
Indonesia
    	
 
    	
$
    	
1,037,252
    	
 
    
	
Bangladesh
    	
 
    	
$
    	
2,250,607
    	
 
    
	
Core Global
    	
 
    	
$
    	
1,256,472
    	
 
    
	
Total
    	
 
    	
$
    	
8,175,387
    	
 
    
	
Arcadia Cost Share
    	
 
    	
$
    	
6,360,000
    	
 
    

 

	
Budget Line Items (Years 4-8)
    	
 
    	
Totals
    	
 
    
	
Salaries   Wages and Benefits
    	
 
    	
$
    	
1,360,148
    	
 
    
	
Plant   Growth Facilities
    	
 
    	
$
    	
331,333
    	
 
    
	
Materials   and Supplies
    	
 
    	
$
    	
264,522
    	
 
    
	
Subcontracting
    	
 
    	
$
    	
1,070,855
    	
 
    
	
Equipment
    	
 
    	
$
    	
56,650
    	
 
    
	
Travel/Per   Diem
    	
 
    	
$
    	
179,208
    	
 
    
	
Core   Global
    	
 
    	
$
    	
250,000
    	
 
    
	
Total   Direct Costs
    	
 
    	
$
    	
3,512,717
    	
 
    
	
Overhead   Indirect Cost
    	
 
    	
$
    	
1,281,614
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
TOTAL   COSTS:
    	
 
    	
$
    	
4,794,331
    	
 
    

 

3. Page 8, A.6 Indirect Cost Rate

 

Delete this section in its entirety and Insert the following in lieu thereof:

 

“Pending establishment of revised provisional or final indirect cost rates, allowable indirect costs shall be reimbursed on the basis of the following negotiated provisional or predetermined rates and the appropriate bases:

 

(1) Reimbursement for allowable indirect costs shall be at final negotiated rates but not in excess of the following ceiling rates:

 

	
Description
    	
 
    	
Rate
    	
 
    	
Base
    	
 
    	
Type
    	
 
    	
Period
    	
 
    
	
G&A*
    	
 
    	
52.5
    	
%
    	
(1/)
    	
 
    	
(1/)
    	
 
    	
(1/)
    	
 
    

 

*G&A on subawards is limited to 15%

 

	
(1/)
    	
Base of application: Total costs incurred excluding G&A expenses
    
	
 
    	
Type of Rate: Ceiling
    
	
 
    	
Period: For the full Term of the Agreement, beginning 9/30/2008,   including any extension(s) thereof.
    

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

4

 

2)             The Awardee is required to provide written notification to the indirect cost negotiator prior to implementing any changes which could affect the applicability of the approved rates. Any changes in accounting practice to include changes in the method of charging a particular type of cost as direct or indirect and changes in the indirect cost allocation base or allocation methodology require the prior approval of the Office of Overhead, Special Cost and Closeout (OCC). Failure to obtain such prior written approval may result in cost disallowance.

 

(3)         The Government shall not be obligated to pay any additional amount on account of indirect costs above the ceiling rates established in the Agreement. If the final indirect cost rates are less than the negotiated ceiling rates, the negotiated rates will be reduced to conform to the lower rates.

 

(4)         This understanding shall not change any monetary ceiling, obligation, cost limitation, or obligation established in the Agreement.”

 

[End of section]

 

4.      Page 8, A.8 Authorized Geographic Code

 

Delete “The authorized geographic code for procurement of goods and services under this award is 000.” in its entirety and

Replace with “The authorized geographic code for procurement of goods and services under this award is 937.” in lieu thereof.

 

5.      Page 5, Required as Applicable Standard Provisions for U.S. NonGovernmental Recipients

 

Delete “7. Cost Sharing (Matching) (July 2002)” in its entirety

Replace with “7. Cost Sharing (Matching) (February 2012)” in lieu thereof.

 

Page 72, 7.Cost Sharing (Matching)

 

Delete this section in its entirety and Insert the following in lieu thereof:

 

COST SHARING (MATCHING) (February 2012)

 

a.                                      If at the end of any funding period, the recipient has expended an amount of non-Federal funds less than the agreed upon amount or percentage of total expenditures, the Agreement Officer may apply the difference to reduce the amount of USAID incremental funding in the following funding period. If the award has expired or has been terminated, the Agreement Officer may require the recipient to refund the difference to USAID.

 

b.                                      The source and nationality requirements and the restricted goods provision established in the Standard Provision entitled “USAID Eligibility Rules for Goods and Services” do

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

5

 

not apply to cost sharing (matching) expenditures.

 

[End of provision]

 

Page 28, STANDARD PROVISIONS FOR U.S. NONGOVERNMENTAL RECIPIENTS, delete the Mandatory Standard Provisions included in the original award in its entirety and substitute with the annex No.1 to this modification.

 

All other terms and conditions will remain the same.

 

[End of Modification]

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

6

 

AEG-A-00-08-00009-00

Modification No. 4

Annex 1

 

MANDATORY STANDARD PROVISIONS FOR U.S. NONGOVERNMENTAL ORGANIZATIONS

 

M1.                          APPLICABILITY OF 22 CFR PART 226 (MAY 2005)

 

a.                                      All provisions of 22 CFR 226 and all Standard Provisions attached to this agreement are applicable to the recipient and to subrecipients which meet the definition of “Recipient” in part 226, unless a section specifically excludes a subrecipient from coverage. The recipient must assure that subrecipients have copies of all the attached standard provisions.

 

b.                                      For any subawards made with Non-U.S. subrecipients the recipient must include the applicable “Standard Provisions for Non-US Nongovernmental Organizations.” Recipients are required to ensure compliance with monitoring procedures in accordance with OMB Circular A-133.

 

[END OF PROVISION]

 

M2.                          INELIGIBLE COUNTRIES (MAY 1986)

 

Unless otherwise approved by the USAID Agreement Officer, funds will only be expended for assistance to countries eligible for assistance under the Foreign Assistance Act of 1961, as amended, or under acts appropriating funds for foreign assistance.

 

[END OF PROVISION]

 

*M3.                   NONDISCRIMINATION (JUNE 2012)

 

No U.S. citizen or legal resident shall be excluded from participation in, be denied the benefits of, or be otherwise subjected to discrimination on the basis of race, color, national origin, age, disability, or sex under any program or activity funded by this award when work under the grant is performed in the U.S. or when employees are recruited from the U.S.

 

Additionally, USAID is committed to achieving and maintaining a diverse and representative workforce and a workplace free of discrimination. Based on law, Executive Order, and Agency policy, USAID prohibits discrimination, including harassment, in its own workplace on the basis of race, color, religion, sex (including pregnancy and gender identity), national origin, disability, age, veteran’s status, sexual orientation, genetic information, marital status, parental status, political affiliation, and any other conduct that does not adversely affect the performance of the employee.

 

In addition, the Agency strongly encourages its recipients and their subrecipients and vendors (at all tiers), performing both in the U.S. and overseas, to develop and enforce comprehensive nondiscrimination policies for their workplaces that include protection for all their employees on these expanded bases, subject to applicable law.

 

[END OF PROVISION]

 

*M4.                   AMENDMENT OF AWARD (JUNE 2012)

 

This award may only be amended in writing, by formal amendment or letter, signed by the Agreement Officer (AO), and in the case of a bilateral amendment, by the AO and an authorized official of the recipient.

 

[END OF PROVISION]

 

*M5.                   NOTICES (JUNE 2012)

 

Any notice given by USAID or the recipient is sufficient only if in writing and delivered in person, mailed or e-mailed as follows:

 

(1)                                 To the USAID Agreement Officer, at the address specified in this award; or

 

* An asterisk indicates that the section has been revised.

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

1

 

(2)                                 To the recipient, at the recipient’s address shown in this award, or to such other address specified in this award.

 

[END OF PROVISION]

 

*M6.                   SUBAGREEMENTS (JUNE 2012)

 

a.                                      Subawardees and contractors have no relationship with USAID under the terms of this award. All required USAID approvals must be directed through the recipient to USAID.

 

b.                                      Notwithstanding any other term of this award, subawardees and contractors have no right to submit claims directly to USAID and USAID assumes no liability for any third party claims against the recipient.

 

[END OF PROVISION]

 

M7.                          OMB APPROVAL UNDER THE PAPERWORK REDUCTION ACT (DECEMBER 2003)

 

Information collection requirements imposed by this award are covered by OMB approval number 0412-0510; the current expiration date is 04/30/2005. The Standard Provisions containing the requirement and an estimate of the public reporting burden (including time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information) are

 

	
Standard Provision
    	
 
    	
Burden Estimate
    	
 
    
	
Air Travel and   Transportation
    	
 
    	
1  (hour)
    	
 
    
	
Ocean Shipment of Goods
    	
 
    	
.5
    	
 
    
	
Patent Rights
    	
 
    	
.5
    	
 
    
	
Publications
    	
 
    	
.5
    	
 
    
	
Negotiated Indirect Cost   Rates - (Predetermined and Provisional)
    	
 
    	
1
    	
 
    
	
Voluntary Population   Planning
    	
 
    	
.5
    	
 
    
	
Protection of the   Individual as a Research Subject
    	
 
    	
1
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
22 CFR 226
    	
 
    	
Burden Estimate
    	
 
    
	
22 CFR 226.40-.49,   Procurement of Goods and Services
    	
 
    	
1 (hour)
    	
 
    
	
22 CFR 226.30 -.36, Property   Standards
    	
 
    	
1.5
    	
 
    

 

 

Comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden, may be sent to the Office of Acquisition and Assistance, Policy Division (M/OAA/P), U.S. Agency for International Development, Washington, DC 20523-7801 and to the Office of Management and Budget, Paperwork Reduction Project (0412-0510), Washington, DC 20503.

 

[END OF PROVISION]

 

*M8.                   USAID ELIGIBILITY RULES FOR GOODS AND SERVICES (JUNE 2012)

 

a.                                      This provision is not applicable to commodities or services that the recipient provides with private funds as part of a cost-sharing requirement, or with Program Income generated under this award.

 

b.                                      Ineligible and Restricted Commodities and Services:

 

(1)                                 Ineligible Commodities and Services. The recipient must not, under any circumstances, procure any of the following under this award:

 

* An asterisk indicates that the section has been revised.

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

2

 

(i)                                     Military equipment,

(ii)                                  Surveillance equipment,

(iii)                               Commodities and services for support of police or other law enforcement activities,

(iv)                              Abortion equipment and services,

(v)                                 Luxury goods and gambling equipment, or

(vi)                              Weather modification equipment.

 

(2)                                 Ineligible Suppliers. Any firms or individuals that do not comply with the requirements in Standard Provision, “Debarment, Suspension and Other Responsibility Matters” and Standard Provision, “Preventing Terrorist Financing” must not be used to provide any commodities or services funded under this award.

 

(3)                                 Restricted Commodities. The recipient must obtain prior written approval of the Agreement Officer (AO) or comply with required procedures under an applicable waiver, as provided by the AO when procuring any of the following commodities:

 

(i)                                     Agricultural commodities,

(ii)                                  Motor vehicles,

(iii)                               Pharmaceuticals,

(iv)                              Pesticides,

(v)                                 Used equipment,

(vi)                              U.S. Government-owned excess property, or

(vii)                           Fertilizer.

 

c.                                       Source and Nationality:

 

Except as may be specifically approved in advance by the AO, all commodities and services that will be reimbursed by USAID under this award must be from the authorized geographic code specified in this award and must meet the source and nationality requirements set forth in 22 CFR 228. If the geographic code is not specified, the authorized geographic code is 937. When the total value of procurement for commodities and services during the life of this award is valued at $250,000 or less, the authorized geographic code for procurement of all goods and services to be reimbursed under this award is code 935. For a current list of countries within each geographic code, see: http://inside.usaid.gov/ADS/300/310.pdf.

 

d.                                      Guidance on the eligibility of specific commodities and services may be obtained from the AO. If USAID determines that the recipient has procured any commodities or services under this award contrary to the requirements of this provision, and has received payment for such purposes, the AO may require the recipient to refund the entire amount of the purchase.

 

e.                                       This provision must be included in all subagreements, including subawards and contracts, which include procurement of commodities or services.

 

[END OF PROVISION]

 

*M9.                   DEBARMENT, SUSPENSION, AND OTHER RESPONSIBILITY MATTERS (JUNE 2012)

 

a.                                      The recipient agrees to notify the Agreement Officer (AO) immediately upon learning that it or any of its principals:

 

(1)                                 Are presently excluded or disqualified from covered transactions by any Federal department or agency;

 

(2)                                 Have been convicted within the preceding three-year period preceding this proposal; been convicted of or had a civil judgment rendered against them for commission of fraud or a criminal offense in connection with obtaining, attempting to obtain, or performing a public (Federal, State,

 

* An asterisk indicates that the section has been revised.

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

3

 

or local) transaction or contract under a public transaction; violation of Federal or State antitrust statutes or commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, tax evasion, receiving stolen property, making false claims, or obstruction of justice; commission of any other offense indicating a lack of business integrity or business honesty that seriously and directly affects your present responsibility;

 

(3)                                 Are presently indicted for or otherwise criminally or civilly charged by a governmental entity (Federal, State, or local) with commission of any of the offenses enumerated in paragraph a.(2); and

 

(4)                                 Have had one or more public transactions (Federal, State, or local) terminated for cause or default within the preceding three years.

 

b.                                      The recipient agrees that, unless authorized by the AO, it will not knowingly enter into any subagreements or contracts under this award with a person or entity that is included on the Excluded Parties List System (www.epls.gov/). The recipient further agrees to include the following provision in any subagreements or contracts entered into under this award:

 

DEBARMENT, SUSPENSION, INELIGIBILITY, AND VOLUNTARY EXCLUSION (JUNE 2012)

 

The recipient/contractor certifies that neither it nor its principals is presently excluded or disqualified from participation in this transaction by any Federal department or agency.

 

c.                                       The policies and procedures applicable to debarment, suspension, and ineligibility under USAID-financed transactions are set forth in Subpart C of 2 CFR Section 180, as supplemented by 2 CFR 780.

 

[END OF PROVISION]

 

*M10.            DRUG-FREE WORKPLACE (JUNE 2012)

 

a.                                      The recipient must comply with drug-free workplace requirements in subpart B (or subpart C, if the recipient is an individual) of 2 CFR 782, which adopts the Government-wide implementation (2 CFR part 182) of sec. 5152—5158 of the Drug-Free Workplace Act of 1988 (Pub. L. 100—690, Title V, Subtitle D; 41 U.S.C. 701—707).

 

[END OF PROVISION]

 

*M11.            EQUAL PARTICIPATION BY FAITH-BASED ORGANIZATIONS (JUNE 2012)

 

a.                                      Faith-Based Organizations Encouraged.

 

Faith-based organizations are eligible to compete on an equal basis as any other organization to participate in USAID programs. Neither USAID nor entities that make and administer subawards of USAID funds will discriminate for or against an organization on the basis of the organization’s religious character or affiliation. A faith-based organization may continue to carry out its mission, including the definition, practice, and expression of its religious beliefs, within the limits contained in this provision. More information can be found at the USAID Faith-Based and Community Initiatives Web site: http://transition.usaid.gov/our work/global partnerships/fbci/ and 22 CFR 205.1.

 

b.                                      Inherently Religious Activities Prohibited.

 

(1)                                 Inherently religious activities include, among other things, worship, religious instruction, prayer, or proselytization.

 

* An asterisk indicates that the section has been revised.

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

4

 

(2)                                 The recipient must not engage in inherently religious activities as part of the programs or services directly funded with financial assistance from USAID. If the recipient engages in inherently religious activities, it must offer those services at a different time or location from any programs or services directly funded by this award, and participation by beneficiaries in any such inherently religious activities must be voluntary.

 

(3)                                 These restrictions apply equally to religious and secular organizations. All organizations that participate in USAID programs, including religious ones, must carry out eligible activities in accordance with all program requirements and other applicable requirements governing USAID-funded activities.

 

(4)                                 These restrictions do not apply to USAID-funded programs where chaplains work with inmates in prisons, detention facilities, or community correction centers, or where USAID funds are provided to religious or other organizations for programs in prisons, detention facilities, or community correction centers, in which such organizations assist chaplains in carrying out their duties.

 

(5)                                 Notwithstanding the restrictions of b.(1) and (2), a religious organization that participates in USAID-funded programs or services

 

(i)                                     Retains its independence and may continue to carry out its mission, including the definition, practice, and expression of its religious beliefs, provided that it does not use direct financial assistance from USAID to support any inherently religious activities,

 

(ii)                                  May use space in its facilities, without removing religious art, icons, scriptures, or other religious symbols, and

 

(iii)                               Retains its authority over its internal governance, and it may retain religious terms in its organization’s name, select its board members on a religious basis, and include religious references in its organization’s mission statements and other governing documents.

 

c.                                       Construction of Structures Used for Inherently Religious Activities Prohibited. The recipient must not use USAID funds for the acquisition, construction, or rehabilitation of structures to the extent that those structures are used for inherently religious activities, such as sanctuaries, chapels, or other rooms that the recipient uses as its principal place of worship. Except for a structure used as its principal place of worship, where a structure is used for both eligible and inherently religious activities, USAID funds may not exceed the cost of those portions of the acquisition, construction, or rehabilitation that are attributable to eligible activities.

 

d.                                      Discrimination Based on Religion Prohibited. The recipient must not discriminate against any beneficiary or potential beneficiary on the basis of religion or religious belief as part of the programs or services directly funded with financial assistance from USAID.

 

e.                                       A religious organization’s exemption from the Federal prohibition on employment discrimination on the basis of religion, set forth in Sec. 702(a) of the Civil Rights Act of 1964, 42 U.S.C. 2000e—1 is not forfeited when the organization receives financial assistance from USAID.

 

f.                                        The Secretary of State may waive the requirements of this section in whole or in part, on a case-by-case basis, where the Secretary determines that such waiver is necessary to further the national security or foreign policy interests of the United States.

 

[END OF PROVISION]

 

* An asterisk indicates that the section has been revised.

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

5

 

*M12.            PREVENTING TERRORIST FINANCING — IMPLEMENTATION OF E.O.13224 (JUNE 2012)

 

a.                                      The recipient is reminded that U.S. Executive Orders and U.S. law prohibits transactions with, and the provision of resources and support to, individuals and organizations associated with terrorism. The recipient must not engage in transactions with, or provide resources or support to, individuals and organizations associated with terrorism. In addition, the recipient must verify that no support or resources are provided to individuals or entities that appear on the Specially Designated Nationals and Blocked Persons List maintained by the U.S. Treasury (online at: http://www.treasury.gov/resource-center/sanctions/SDN-List/Pages/default.aspx) or the United Nations Security designation list (online at: http://www.un.org/sc/committees/1267/aq sanctions list.shtml).

 

b.                                      This provision must be included in all subagreements, including contracts and subawards, issued under this award.

 

[END OF PROVISION]

 

*M13.            MARKING AND PUBLIC COMMUNICATIONS UNDER USAID-FUNDED ASSISTANCE (JUNE 2012)

 

a.                                      The USAID Identity is the official marking for USAID, comprised of the USAID logo and brandmark with the tagline “from the American people.” The USAID Identity is on the USAID Web site at www.usaid.gov/branding. Recipients must use the USAID Identity, of a size and prominence equivalent to or greater than any other identity or logo displayed, to mark the following:

 

(1)                                 Programs, projects, activities, public communications, and commodities partially or fully funded by USAID;

 

(2)                                 Program, project, or activity sites funded by USAID, including visible infrastructure projects or other physical sites;

 

(3)                                 Technical assistance, studies, reports, papers, publications, audio-visual productions, public service announcements, Web sites/Internet activities, promotional, informational, media, or communications products funded by USAID;

 

(4)                                 Commodities, equipment, supplies, and other materials funded by USAID, including commodities or equipment provided under humanitarian assistance or disaster relief programs; and

 

(5)                                 Events financed by USAID, such as training courses, conferences, seminars, exhibitions, fairs, workshops, press conferences and other public activities. If the USAID Identity cannot be displayed, the recipient is encouraged to otherwise acknowledge USAID and the support of the American people.

 

b.                                      When this award contains an approved Marking Plan, the recipient must implement the requirements of this provision following the approved Marking Plan.

 

c.                                       If a “Marking Plan” is not included in this award, the recipient must propose and submit a plan for approval within the time specified by the Agreement Officer (AO).

 

d.                                      The AO may require a preproduction review of program materials and “public communications” (documents and messages intended for external distribution, including but not limited to correspondence; publications; studies; reports; audio visual productions; applications; forms; press; and promotional materials) used in connection with USAID-funded programs, projects or activities, for compliance with an approved Marking Plan.

 

e.                                       The recipient is encouraged to give public notice of the receipt of this award and announce progress and accomplishments. The recipient must provide copies of notices or announcements to the Agreement

 

* An asterisk indicates that the section has been revised.

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

6

 

Officer’s Representative (AOR) and to USAID’s Office of Legislative and Public Affairs in advance of release, as practicable. Press releases or other public notices must include a statement substantially as follows:

 

‘The U.S. Agency for International Development administers the U.S. foreign assistance program providing economic and humanitarian assistance in more than 80 countries worldwide.”

 

f.                                        Any “public communication” in which the content has not been approved by USAID must contain the following disclaimer:

 

“This study/report/audio/visual/other information/media product (specify) is made possible by the generous support of the American people through the United States Agency for International Development (USAID). The contents are the responsibility of [insert recipient name] and do not necessarily reflect the views of USAID or the United States Government.”

 

g.                                       The recipient must provide the USAID AOR, with two copies of all program and communications materials produced under this award.

 

h.                                      The recipient may request an exception from USAID marking requirements when USAID marking requirements would:

 

(1)                                 Compromise the intrinsic independence or neutrality of a program or materials where independence or neutrality is an inherent aspect of the program and materials;

 

(2)                                 Diminish the credibility of audits, reports, analyses, studies, or policy recommendations whose data or findings must be seen as independent;

 

(3)                                 Undercut host-country government “ownership” of constitutions, laws, regulations, policies, studies, assessments, reports, publications, surveys or audits, public service announcements, or other communications;

 

(4)                                 Impair the functionality of an item;

 

(5)                                 Incur substantial costs or be impractical;

 

(6)                                 Offend local cultural or social norms, or be considered inappropriate; or

 

(7)                                 Conflict with international law.

 

i.                                          The recipient may submit a waiver request of the marking requirements of this provision or the Marking Plan, through the AOR, when USAID-required marking would pose compelling political, safety, or security concerns, or have an adverse impact in the cooperating country.

 

(1)                                 Approved waivers “flow down” to subagreements, including subawards and contracts, unless specified otherwise. The waiver may also include the removal of USAID markings already affixed, if circumstances warrant.

 

(2)                                 USAID determinations regarding waiver requests are subject to appeal by the recipient, by submitting a written request to reconsider the determination to the cognizant Assistant Administrator.

 

j.                                         The recipient must include the following marking provision in any subagreements entered into under this award:

 

* An asterisk indicates that the section has been revised.

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

7

 

“As a condition of receipt of this subaward, marking with the USAID Identity of a size and prominence equivalent to or greater than the recipient’s, subrecipient’s, other donor’s, or third party’s is required. In the event the recipient chooses not to require marking with its own identity or logo by the subrecipient, USAID may, at its discretion, require marking by the subrecipient with the USAID Identity.”

 

[END OF PROVISION]

 

M14.                   REGULATIONS GOVERNING EMPLOYEES (AUGUST 1992)

 

a.                                      The recipient’s employees must maintain private status and may not rely on local U.S. Government offices or facilities for support while under this grant.

 

b.                                      The sale of personal property or automobiles by recipient employees and their dependents in the foreign country to which they are assigned are subject to the same limitations and prohibitions which apply to direct-hire USAID personnel employed by the Mission, including the rules contained in 22 CFR 136, except as this may conflict with host government regulations.

 

c.                                      Other than work to be performed under this award for which an employee is assigned by the recipient, employees of the recipient must not engage directly or indirectly, either in the individual’s own name or in the name or through an agency of another person, in any business, profession, or occupation in the foreign countries to which the individual is assigned. In addition, the individual must not make loans or investments to or in any business, profession, or occupation in the foreign countries to which the individual is assigned.

 

d.                                      The recipient’s employees, while in a foreign country, are expected to show respect for its conventions, customs, and institutions, to abide by its applicable laws and regulations, and not to interfere in its internal political affairs.

 

e.                                       In the event the conduct of any recipient employee is not in accordance with the preceding paragraphs, the recipient’s chief of party must consult with the USAID Mission Director and the employee involved, and must recommend to the recipient a course of action with regard to such employee.

 

f.                                        The parties recognize the rights of the U.S. Ambassador to direct the removal from a country of any U.S. citizen or the discharge from this grant award of any third country national when, in the discretion of the Ambassador, the interests of the United States so require.

 

g.                                       If it is determined, either under e. or f. above, that the services of such employee should be terminated, the recipient must use its best efforts to cause the return of such employee to the United States, or point of origin, as appropriate.

 

[END OF PROVISION]

 

M15.                   CONVERSION OF UNITED STATES DOLLARS TO LOCAL CURRENCY (NOVEMBER 1985)

 

Upon arrival in the cooperating country, and from time to time as appropriate, the recipient’s chief of party must consult with the Mission Director who must provide, in writing, the procedure the recipient and its employees must follow in the conversion of United States dollars to local currency. This may include, but is not limited to, the conversion of currency through the cognizant United States Disbursing Officer or Mission Controller, as appropriate.

 

[END OF PROVISION]

 

M16.                   USE OF POUCH FACILITIES (AUGUST 1992)

 

a.                                      Use of diplomatic pouch is controlled by the Department of State. The Department of State has authorized the use of pouch facilities for USAID recipients and their employees as a general policy, as

 

* An asterisk indicates that the section has been revised.

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

8

 

detailed in items (1) through (6) below. However, the final decision regarding use of pouch facilities rest with the Embassy or USAID Mission. In consideration of the use of pouch facilities, the recipient and its employees agree to indemnify and hold harmless, the Department of State and USAID for loss or damage occurring in pouch transmission:

 

(1)                                 Recipients and their employees are authorized use of the pouch for transmission and receipt of up to a maximum of .9 kgs per shipment of correspondence and documents needed in the administration of assistance programs.

 

(2)                                 U.S. citizen employees are authorized use of the pouch for personal mail up to a maximum of .45 kgs per shipment (but see a.(3) below).

 

(3)                                 Merchandise, parcels, magazines, or newspapers are not considered to be personal mail for purposes of this standard provision and are not authorized to be sent or received by pouch.

 

(4)                                 Official and personal mail pursuant to a.(1) and (2) above sent by pouch should be addressed as follows:

 

Name of individual or organization (followed by

letter symbol “G”)

City Name of post (USAID/            )

Agency for International Development

Washington, DC 20523-0001

 

(5)                                 Mail sent via the diplomatic pouch may not be in violation of U.S. Postal laws and may not contain material ineligible for pouch transmission.

 

(6)                                 Recipient personnel are NOT authorized use of military postal facilities (APO/FPO). This is an Adjutant General’s decision based on existing laws and regulations governing military postal facilities and is being enforced worldwide.

 

b.                                      The recipient is responsible for advising its employees of this authorization, these guidelines, and limitations on use of pouch facilities.

 

c.                                       Specific additional guidance on grantee use of pouch facilities in accordance with this standard provision is available from the Post Communication Center at the Embassy or USAID Mission.

 

[END OF PROVISION]

 

*M17.            TRAVEL AND INTERNATIONAL AIR TRANSPORTATION (JUNE 2012)

 

a.                                      PRIOR BUDGET APPROVAL

 

Direct charges for travel costs for international air travel by individuals are allowable only when each international trip has received prior budget approval. Such approval is met when all of the following are met:

 

(1)                                 The trip is identified by providing the following information: the number of trips, the number of individuals per trip, and the origin and destination countries or regions;

 

(2)                                 All of the information noted at a.(1) above is incorporated in the Schedule of this award or amendments to this award; and

 

(3)                                 The costs related to the travel are incorporated in the budget of this award.

 

* An asterisk indicates that the section has been revised.

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

9

 

The Agreement Officer (AO) may approve, in writing, international travel costs that have not been incorporated in this award. To obtain AO approval, the recipient must request approval at least three weeks before the international travel, or as far in advance as possible. The recipient must keep a copy of the AO’s approval in its files. No other clearance (including country clearance) is required for employees of the recipient, its subrecipients or contractors. International travel by employees who are not on official business of the recipient, such as rest and recuperation (R&R) travel offered as part of an employee’s benefits package, must be consistent with the recipient’s personnel and travel policies and procedures and does not require approval.

 

b.                                      TRAVEL COSTS

 

All travel costs must comply with the applicable cost principles and must be consistent with those normally allowed in like circumstances in the recipient’s non-USAID-funded activities. Costs incurred by employees and officers for travel, including air fare, costs of lodging, other subsistence, and incidental expenses, may be considered reasonable and allowable only to the extent such costs do not exceed charges normally allowed by the non-profit organization in its regular operations as the result of the non-profit organization’s written travel policy.

 

In the absence of a reasonable written policy regarding international travel costs, the standard for determining the reasonableness of reimbursement for international travel costs will be the Standardized Regulations (Government Civilians, Foreign Areas), published by the U.S. Department of State, as from time to time amended. The most current Standardized Regulations on international travel costs may be obtained from the AO. In the event that the cost for air fare exceeds the customary standard commercial airfare (coach or equivalent) or the lowest commercial discount airfare, the recipient must document one of the allowable exceptions from the applicable cost principles.

 

c.                                       FLY AMERICA ACT RESTRICTIONS

 

(1)                                 The recipient must use U.S. Flag Air Carriers for all international air transportation (including personal effects) funded by this award pursuant to the Fly America Act and its implementing regulations to the extent service by such carriers is available.

 

(2)                                 In the event that the recipient selects a carrier other than a U.S. Flag Air Carrier for international air transportation, in order for the costs of such international air transportation to be allowable, the recipient must document such transportation in accordance with this provision and maintain such documentation pursuant to the Standard Provision, “Accounting, Audit and Records.” The documentation must use one of the following reasons or other exception under the Fly America Act:

 

(i)                                     The recipient uses a European Union (EU) flag air carrier, which is an airline operating from an EU country that has signed the US-EU “Open Skies” agreement (http://www.state.gov/e/eb/rls/othr/ata/i/ic/170684.htm).

 

(ii)                                  Travel to or from one of the following countries on an airline of that country when no city pair fare is in effect for that leg (see http://apps.fas.gsa.gov/citypairs/search/):

 

a.                                      Australia on an Australian airline,

b.                                      Switzerland on a Swiss airline, or

c.                                       Japan on a Japanese airline;

 

(iii)                               Only for a particular leg of a route on which no US Flag Air Carrier provides service on that route;

 

(iv)                              For a trip of 3 hours or less, the use of a US Flag Air Carrier at least doubles the travel time;

 

* An asterisk indicates that the section has been revised.

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

10

 

(v)                                 If the US Flag Air Carrier offers direct service, use of the US Flag Air Carrier would increase the travel time by more than 24 hours; or

 

(vi)                              If the US Flag Air Carrier does not offer direct service,

 

a.                                      Use of the US Flag Air Carrier increases the number of aircraft changes by 2 or more,

 

b.                                      Use of the US Flag Air Carrier extends travel time by 6 hours or more, or

 

c.                                       Use of the US Flag Air Carrier requires a layover at an overseas interchange of 4 hours or more.

 

d.                                      DEFINITIONS

 

The terms used in this provision have the following meanings:

 

(1)                                 “Travel costs” means expenses for transportation, lodging, subsistence (meals and incidentals), and related expenses incurred by employees who are on travel status on official business of the recipient for any travel outside the country in which the organization is located. “Travel costs” do not include expenses incurred by employees who are not on official business of the recipient, such as rest and recuperation (R&R) travel offered as part of an employee’s benefits package that are consistent with the recipient’s personnel and travel policies and procedures.

 

(2)                                 “International air transportation” means international air travel by individuals (and their personal effects) or transportation of cargo by air between a place in the United States and a place outside thereof, or between two places both of which are outside the United States.

 

(3)                                 “U.S. Flag Air Carrier” means an air carrier on the list issued by the U.S. Department of Transportation at http://ostpxweb.dot.gov/aviation/certific/certlist.htm. U.S. Flag Air Carrier service also includes service provided under a code share agreement with another air carrier when the ticket, or documentation for an electronic ticket, identifies the U.S. flag air carrier’s designator code and flight number.

 

(4)                                 For this provision, the term “United States” includes the fifty states, Commonwealth of Puerto Rico, possessions of the United States, and the District of Columbia.

 

e.                                       SUBAGREEMENTS

 

This provision must be included in all subagreements, including all subawards and contracts, under which this award will finance international air transportation.

 

[END OF PROVISION]

 

*M18.            OCEAN SHIPMENT OF GOODS (JUNE 2012)

 

a.                                      Prior to contracting for ocean transportation to ship goods purchased or financed with USAID funds under this award, the recipient must contact the office below to determine the flag and class of vessel to be used for shipment:

 

U.S. Agency for International Development,

Office of Acquisition and Assistance, Transportation Division

1300 Pennsylvania Avenue, NW

Washington, DC 20523-7900

Email: oceantransportation@usaid.gov

 

* An asterisk indicates that the section has been revised.

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

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b.                                      This provision must be included in all subagreements, including subwards and contracts.

 

[END OF PROVISION]

 

M19.                   VOLUNTARY POPULATION PLANNING ACTIVITIES – MANDATORY REQUIREMENTS (MAY 2006)

 

Requirements for Voluntary Sterilization Programs

 

(1)                                 Funds made available under this award must not be used to pay for the performance of involuntary sterilization as a method of family planning or to coerce or provide any financial incentive to any individual to practice sterilization.

 

Prohibition on Abortion-Related Activities:

 

(1)                                 No funds made available under this award will be used to finance, support, or be attributed to the following activities: (i) procurement or distribution of equipment intended to be used for the purpose of inducing abortions as a method of family planning; (ii) special fees or incentives to any person to coerce or motivate them to have abortions; (iii) payments to persons to perform abortions or to solicit persons to undergo abortions; (iv) information, education, training, or communication programs that seek to promote abortion as a method of family planning; and (v) lobbying for or against abortion. The term “motivate,” as it relates to family planning assistance, must not be construed to prohibit the provision, consistent with local law, of information or counseling about all pregnancy options.

 

(2)                                 No funds made available under this award will be used to pay for any biomedical research which relates, in whole or in part, to methods of, or the performance of, abortions or involuntary sterilizations as a means of family planning. Epidemiologic or descriptive research to assess the incidence, extent or consequences of abortions is not precluded.

 

[END OF PROVISION]

 

*M20.            TRAFFICKING IN PERSONS (JUNE 2012)

 

a.                                      USAID is authorized to terminate this award, without penalty, if the recipient or its employees, or any subrecipient or its employees, engage in any of the following conduct:

 

(1)                                 Trafficking in persons (as defined in the Protocol to Prevent, Suppress, and Punish Trafficking in Persons, especially Women and Children, supplementing the UN Convention against Transnational Organized Crime) during the period of this award;

 

(2)                                 Procurement of a commercial sex act during the period of this award; or

 

(3)                                 Use of forced labor in the performance of this award.

 

b.                                      For purposes of this provision, “employee” means an individual who is engaged in the performance of this award as a direct employee, consultant, or volunteer of the recipient or any subrecipient.

 

c.                                       The recipient must include in all subagreements, including subawards and contracts, a provision prohibiting the conduct described in a(1)-(3) by the subrecipient, contractor or any of their employees.

 

[END OF PROVISION]

 

*M21.            SUBMISSIONS TO THE DEVELOPMENT EXPERIENCE CLEARINGHOUSE AND PUBLICATIONS (JUNE 2012)

 

a.                                      Submissions to the Development Experience Clearinghouse (DEC).

 

1)                                     The recipient must provide the Agreement Officer’s Representative one copy of any Intellectual

 

* An asterisk indicates that the section has been revised.

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

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Work that is published, and a list of any Intellectual Work that is not published.

 

2)                                     In addition, the recipient must submit Intellectual Work, whether published or not, to the DEC, either on-line (preferred) or by mail. The recipient must review the DEC Web site for submission instructions, including document formatting and the types of documents to submit. Submission instructions can be found at: http://dec.usaid.gov.

 

3)                                     For purposes of submissions to the DEC, Intellectual Work includes all works that document the implementation, evaluation, and results of international development assistance activities developed or acquired under this award, which may include program and communications materials, evaluations and assessments, information products, research and technical reports, progress and performance reports required under this award (excluding administrative financial information), and other reports, articles and papers prepared by the recipient under the award, whether published or not. The term does not include the recipient’s information that is incidental to award administration, such as financial, administrative, cost or pricing, or management information.

 

4)                                     Each document submitted should contain essential bibliographic information, such as 1) descriptive title; 2) author(s) name; 3) award number; 4) sponsoring USAID office; 5) development objective; and 6) date of publication.

 

5)                                     The recipient must not submit to the DEC any financially sensitive information or personally identifiable information, such as social security numbers, home addresses and dates of birth. Such information must be removed prior to submission. The recipient must not submit classified documents to the DEC.

 

b.                                      In the event award funds are used to underwrite the cost of publishing, in lieu of the publisher assuming this cost as is the normal practice, any profits or royalties up to the amount of such cost must be credited to the award unless the schedule of the award has identified the profits or royalties as program income.

 

[END OF PROVISION]

 

* An asterisk indicates that the section has been revised

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

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MODIFICATION OF ASSISTANCE
    	
 
    	
 
    
	
1.   MODIFICATION
    	
 
    	
2.   EFFECTIVE DATE OF
    	
 
    	
3.   AWARD NUMBER:
    	
 
    	
4.   EFFECTIVE DATE OF
    
	
NUMBER
    	
 
    	
MODIFICATION
    	
 
    	
 
    	
 
    	
AWARD :
    
	
05
    	
 
    	
See   block 15
    	
 
    	
A1D-AEG-A-00-08-00009
    	
 
    	
09/30/2008
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
5. GRANTEE:
    	
 
    	
6. ADMINISTERED BY:
    
	
 
    	
 
    	
 
    
	
Arcadia   Biosciences, Inc.
    	
 
    	
Acquisition and Assistance
    
	
202   Cousteau Pl., Suite 200
    	
 
    	
Office of Acquisition and Assistance
    
	
Davis,   CA 95618
    	
 
    	
M/OAA/BFS, Room 568A, SA-44
    
	
 
    	
 
    	
1300 Pennsylvania Ave, N.W.
    
	
 
    	
 
    	
Washington, D.C. 20523
    
	
DUNS NO 1359644760
    	
 
    	
 
    
	
TIN NO. : 81-0571538
    	
LOC NO. : HHS-C4625P1
    	
 
    	
 
    
	
 
    
	
7. FISCAL DATA:
    	
Amount Obligated:  $400,000.00
    	
 
    	
8. TECHNICAL OFFICE: E&E/DGST;
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
GLAAS   Requisition: REQM-BFS-14-000033
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
9. PAYMENT OFFICE:
    
	
 
    	
 
    	
 
    
	
Budget Fiscal Year:
    	
 
    	
U.S.   Agency for International Development
    
	
Operating Unit:
    	
 
    	
Office   of Financial Management
    
	
Strategic Objective:
    	
 
    	
M/FM/CMP/DC   - SA-44 Room 435K
    
	
Team/Division:
    	
 
    	
1300   Pennsylvania Avenue, NW
    
	
Benefiting Geo Area:
    	
 
    	
Washington   DC 20523
    
	
Object Class:
    	
 
    	
 
    
	
 
    
	
10. FUNDING SUMMARY:
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Obligated   Amount
    	
 
    	
Total   Est. Amt.
    	
 
    
	
Amount Prior to this   Modification:
    	
 
    	
$
    	
6,159,009.00
    	
 
    	
$
    	
8,175,387.00
    	
 
    
	
Change Made by this   Modification:
    	
 
    	
$
    	
400,000.00
    	
 
    	
$
    	
0.00
    	
 
    
	
New/Current Total:
    	
 
    	
$
    	
6,559,009.00
    	
 
    	
$
    	
8,175,387.00
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
11.   DESCRIPTION OF MODIFICATION
    
	
 
    
	
The   purpose of this modification is to provide incremental funding in the amount   of $400,000.00 to support the Abiotic Stress Tolerant Rice and Wheat program   with Arcadia Biosciences. The total obligated amount has increased by   $400,000.00 from $6,159,009.00 to $6,559,009.00.
    
	
 
    
	
ACCOUNTING   DATA:
    
	
 
    
	
Accounting   Template: BFS BRG Funds: BBFY: 2013; EBFY: 2014; Fund: DV-GFSI; OP: BFS/ARP:   Prog Area: A18; Dist Code; BFS- APF; Prog Elem: A074; BGA: 997; SOC: 4100201.
    
	
 
    
	
ALL OTHER TERMS AND CONDITIONS REMAIN THE SAME.
    
	
 
    
	
12. THIS MODIFICATION IS ENTERED   INTO PURSUANT TO THE AUTHORITY OF FAA Act of 1961, as amended AS AMENDED.   EXCEPT AS SPECIFICALLY HEREIN AMENDED, ALL TERMS AND CONDITIONS OF THE GRANT   REFERENCED IN BLOCK #3 ABOVE, AS IT MAY HAVE HERETOFORE BEEN AMENDED,   REMAIN UNCHANGED AND IN FULL FORCE AND EFFECT.
    
	
 
    
	
13. GRANTEE     o      IS        x         IS NOT REQUIRED TO SIGN THIS DOCUMENT TO RECONFIRM ITS AGREEMENT WITH THE   CHANGES EFFECTED HEREIN
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
14. GRANTEE: 
    	
15.
    	
THE UNITED STATES OF AMERICA
    
	
 
    	
 
    
	
 
    	
U.S.   AGENCY FOR INTERNATIONAL DEVELOPMENT
    
	
 
    	
 
    
	
BY:
    	
 
    	
 
    	
BY:
    	
/s/ Charles Jackson
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
Charles Jackson
    
	
 
    	
(Name   Typed or Printed)
    	
 
    	
 
    	
(Name Typed or Printed)
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
TITLE:
    	
 
    	
 
    	
TITLE:
    	
Agreement Officer
    
	
 
    	
 
    	
 
    	
 
    	
 
    
	
DATE:
    	
 
    	
 
    	
DATE:
    	
11/21/2013
    
																		

 

[...*...] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY  BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE  COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

 

1

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