Item 1.01. Entry into a Material Definitive Agreement.
On August 25, 2021, Personalis, Inc. (the "Company") entered into a lease (the
"Lease Agreement") with Ardenwood Ventures I, LLC (the "Landlord").
Pursuant to the Lease Agreement, the Company will lease approximately 100,000
square feet located at 6600 Dumbarton Circle, Fremont, California (the
"Premises"). The Premises are expected to serve as the Company's new corporate
headquarters and provide space for laboratory and research and development uses.
The buildout for the Premises is expected to begin upon execution of the Lease
Agreement, with completion and occupancy currently anticipated to occur in June
2022. Pursuant to the Lease Agreement, the Company has a right of first offer to
lease additional space in a to-be-constructed building adjacent to the Premises,
subject to customary conditions and notice requirements as set forth in the
Lease Agreement.
The term of the Lease Agreement is thirteen (13) years and six (6) months, with
the option for the Company to extend the term for up to two additional five (5)
year periods. The Lease Agreement will commence on the later of June 1, 2022 and
the date that the Landlord substantially completes building shell and site work
improvements at the Premises (the "Lease Commencement Date"). The Company has
the right to access the Premises prior to the Lease Commencement Date for the
purpose of constructing its tenant improvements. The Company's expected initial
budget for tenant improvements at the Premises is $20,000,000, of which the
Landlord has agreed to contribute up to $15,470,000.
Under the terms of the Lease Agreement, the Company's initial monthly base rent
will be $277,500, which increases to $372,989 for the second year of the Lease
Agreement and thereafter increases on each anniversary of the Lease Commencement
Date by three percent (3.0%). The Company's obligation to pay rent under the
Lease Agreement will start on the seventh (7th) month after the Lease
Commencement Date, except that the first month of rent is prepaid upon execution
of the Lease Agreement. The Lease Agreement contains customary provisions
requiring the Company to pay its pro rata share of utilities and a portion of
the operating expenses and certain taxes, assessments and fees of the Premises
and provisions allowing the Landlord to terminate the Lease Agreement if the
Company fails to remedy a breach of certain of its obligations within specified
time periods. The Company is obligated to post a security deposit in the amount
of $1,790,350, either in cash or, at Company's election, in the form of a letter
of credit, which is subject to use by the Landlord under certain circumstances,
per the terms of the Lease Agreement. The security deposit is subject to a 50%
reduction effective upon the sixty-first (61st) month of the term of the Lease
Agreement.
The Company will continue to lease 45,990 square feet of laboratory and office
space at 1330 and 1360 O'Brien Drive, Menlo Park, California, that currently
serves as the Company's corporate headquarters under a lease agreement which has
a term through November 2027, subject to an earlier expiration date for a
portion of the premises and an option to extend the term for the remainder of
the premises for an additional three (3) year period. The relocation of the
Company's corporate headquarters to the Premises is expected to occur within the
next 12 months.
The foregoing summary of the Lease Agreement does not purport to be complete and
is subject to, and qualified in its entirety by reference to the Lease
Agreement, a copy of which will be filed in the Company's next quarterly report
on Form 10-Q. Capitalized terms used above without definition are defined in the
Lease Agreement.
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an
Off-Balance Sheet Agreement of a Registrant.
The information set forth in Item 1.01 above is incorporated herein by
reference.
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