$330,000,000.00
AMENDED AND RESTATED LEASE AGREEMENT
BETWEEN
BNP LEASING CORPORATION,
AS LANDLORD
AND
GENENTECH, INC.,
AS TENANT
EFFECTIVE AS OF DECEMBER 8, 1995
(Vacaville Biopharmaceutical Manufacturing Facility)
This Agreement is being facilitated by the following banks:
Banque Nationale de Paris
Credit Suisse
Mellon Bank, N.A.
Union Bank of Switzerland
Swiss Bank Corporation
TABLE OF CONTENTS
Page
1 Definitions . . . . . . . . . . . . . . . . . . . . . 2
(a) Active Negligence . . . . . . . . . . . . . . 2
(b) Additional Rent . . . . . . . . . . . . . . . 2
(c) Advance Date . . . . . . . . . . . . . . . . 3
(d) Affiliate . . . . . . . . . . . . . . . . . . 3
(e) Agency Fees . . . . . . . . . . . . . . . . . 3
(f) Applicable Laws . . . . . . . . . . . . . . . 3
(g) Applicable Purchaser . . . . . . . . . . . . . 3
(h) Appraised Value . . . . . . . . . . . . . . . 3
(I) Attorneys' Fees . . . . . . . . . . . . . . . 3
(j) Base Rent . . . . . . . . . . . . . . . . . . 3
(k) Base Rental Commencement Date . . . . . . . . 3
(l) Base Rental Date . . . . . . . . . . . . . . 4
(m) Base Rental Period . . . . . . . . . . . . . . 4
(n) Business Day . . . . . . . . . . . . . . . . . 4
(o) Capital Adequacy Charges . . . . . . . . . . . 4
(p) Capital Lease . . . . . . . . . . . . . . . . 4
(q) Carrying Costs . . . . . . . . .. . . . . . . 4
(r) Code . . . . . . . . . . . . . . . .. . . . . 4
(s) Commitment Fee . . . . . . . . . . .. . . . . 4
(t) Consolidated Current Liabilities . . . . . . . 4
(u) Consolidated Quick Assets . . .. . . . . . . . 4
(v) Consolidated Subsidiary . . . . . .. . . . . . 4
(w) Consolidated Tangible Net Worth . . . . . . . 4
(x) Consolidated Total Assets . . . . .. . . . . . 5
(y) Consolidated Total Liabilities . .. . . . . . 5
(z) Current Liabilities . . . . . . . .. . . . . . 5
(aa) Construction Advances . . . . . .. . . . . . 5
(ab) Construction Allowance . . . .. . . . . . . . 5
(ac) Construction Documents . . . .. . . . . . . . 5
(ad) Construction Period . . . . . . . . . . . . 5
(ae) Construction Project . . . . . . . . . . . . 5
(af) Debt . . . . . . . . . . . . . . . . .. . . . 6
(ag) Default . . . . . . . . . . . . . .. . . . . 6
(ah) Default Rate . . . . . . . . . . . . . . . . 6
(ai) Designated Payment Date . . . . . . . . . . . 6
(aj) Development Contracts . . . . . . . . . . . . 6
(ak) Effective Rate . . . . . . . . . . . . . . . . 6
(al) Environmental Cutoff Date . . . . . . . . . . 7
(am) Environmental Indemnity Agreement . . . . . . 7
(an) Environmental Laws . . . . . . . . . . . . . . 7
(ao) Environmental Losses . . . . . . . . . . . . . 7
(ap) Environmental Report . . . . . . . . . . . . . 7
(aq) ERISA . . . . . . . . . . . . . . . . . . . . 7
(ar) ERISA Affiliate . . . . . . . . . . . . . . . 7
(as) Escrowed Proceeds . . . . . . . . . . . . . . 8
(at) Eurocurrency Liabilities . . . . . . . . . . . 8
(au) Eurodollar Rate Reserve Percentage . . . . . . 8
(av) Event of Default . . . . . . . . . . . . . . . 8
(aw) Excluded Taxes . . . . . . . . . . . . . . . . 8
(ax) Fed Funds Rate . . . . . . . . . . . . . . . . 9
(ay) Funding Advances . . . . . . . . . . . . . . . 9
(az) GAAP . . . . . . . . . . . . . . . . . . . . . 9
(ba) Hazardous Substance . . . . . . . . . . . . . 9
(bb) Hazardous Substance Activity . . . . . . . . . 9
(bc) Hazardous Substance Claims . . . . . . . . . . 9
(bd) Impositions. . . . . . . . . . . . . . . . . . 9
(be) Improvements . . . . . . . . . . . . . . . . . 10
(bf) Indemnified Party . . . . . . . . . . . . . . 10
(bg) Initial Funding Advances . . . . . . . . . . . 10
(bh) Intangible Assets . . . . . . . . . . . . . . 10
(bi) Landlord's Parent . . . . . . . . . . . . . . 11
(bj) LIBOR . . . . . . . . . . . . . . . . . . . . 11
(bk) Lien . . . . . . . . . . . . . . . . . . . . . 11
(bl) Losses . . . . . . . . . . . . . . . . . . . . 11
(bm) Maximum Construction Allowance . . . . . . . . 11
(bn) Multiemployer Plan . . . . . . . . . . . . . . 12
(bo) Outstanding Construction Allowance . . . . . . 12
(bp) Participant . . . . . . . . . . . . . . . . . 12
(bq) PBGC . . . . . . . . . . . . . . . . . . . . . 12
(br) Permitted Encumbrances . . . . . . . . . . . . 12
(bs) Permitted Hazardous Substance Use . . . . . . 12
(bt) Permitted Hazardous Substances . . . . . . . . 13
(bu) Permitted Transfer . . . . . . . . . . . . . . 13
(bv) Person . . . . . . . . . . . . . . . . . . . . 13
(bw) Plan . . . . . . . . . . . . . . . . . . . . . 13
(bx) Potential Lien Claimants . . . . . . . . . . . 13
(by) Prime Rate . . . . . . . . . . . . . . . . . . 13
(bz) Purchase Agreement . . . . . . . . . . . . . . 14
(ca) Qualified Affiliate . . . . . . . . . . . . . 14
(cb) Qualified Payments . . . . . . . . . . . . . . 14
(cc) Quick Assets . . . . . . . . . . . . . . . . . 14
(cd) Remaining Proceeds . . . . . . . . . . . . . . 15
(ce) Rent . . . . . . . . . . . . . . . . . . . . . 15
(cf) Scope Change . . . . . . . . . . . . . . . . . 15
(cg) Special Participation Fees . . . . . . . . . . 15
(ch) Spread . . . . . . . . . . . . . . . . . . . . 15
(ci) Stipulated Loss Value . . . . . . . . . . . . 16
(cj) Subsidiary . . . . . . . . . . . . . . . . . . 16
(ck) Tenant's Agents . . . . . . . . . . . . . . . 16
(cl) Term . . . . . . . . . . . . . . . . . . . . . 16
(cm) Term Sheet . . . . . . . . . . . . . . . . . . 16
(cn) Transaction Expenses . . . . . . . . . . . . . 16
(co) Unfunded Benefit Liabilities . . . . . . . . . 16
(cp) Upfront Fee . . . . . . . . . . . . . . . . . 16
(cq) Other Terms and References . . . . . . . . . . 16
2 Term. . . . . . . . . . . . . . . . . . . . . . . . . 17
(a) Scheduled Term . . . . . . . . . . . . . . . . 17
(b) Early Termination By Tenant . . . . . . . . . 17
3 Rental. . . . . . . . . . . . . . . . . . . . . . . . 17
(a) Base Rent . . . . . . . . . . . . . . . . . . 17
(b) Upfront Fee . . . . . . . . . . . . . . . . . 18
(c) Agency Fee . . . . . . . . . . . . . . . . . . 18
(d) Special Participation Fee . . . . . . . . . . 18
(e) Commitment Fees . . . . . . . . . . . . . . . 18
(f) Additional Rent . . . . . . . . . . . . . . . 18
(g) Interest and Order of Application . . . . . . 18
(h) Net Lease . . . . . . . . . . . . . . . . . . 18
(I) No Demand or Setoff . . . . . . . . . . . . . 19
4 Application of Insurance, Condemnation and
Other Proceeds; Waiver of Insured Claims;
Determination of Appraised Value . . . . . . . . . . 19
5 No Lease Termination. . . . . . . . . . . . . . . . . 22
(a) Status of Lease . . . . . . . . . . . . . . . 22
(b) Waiver By Tenant . . . . . . . . . . . . . . . 23
6 Construction Allowance . . . . . . . . . . . . . . . 23
(a) Advances; Outstanding Construction Allowance . 23
(b) Construction Projects . . . . . . . . . . . . 24
(i) Preconstruction Approvals. . . . . . . 24
(ii) Scope Changes . . . . . . . . . . . . 24
(iii) Responsibility for Construction. . . . 24
(iv) Value Added. . . . . . . . . . . . . . 25
(v) Estoppel Letters Required. . . . . . . 25
(vi) Advances Not a Waiver. . . . . . . . . 26
(c) Conditions to Construction Advances . . . . . 26
(i) Prior Notice . . . . . . . . . . . . . 26
(ii) Amount of the Advances . . . . . . . . 26
(iii) Insurance. . . . . . . . . . . . . . . 26
a) Title Insurance . . . . . . . . . 26
b)Builder's Risk Insurance. . . . . . 26
(iv) Progress of Construction . . . . . . . 27
(v) Evidence of Costs and Expenses
to be Reimbursed. . . . . . . . . . . 27
(vi) No Event of Default. . . . . . . . . . 27
(vii) No Sale of Landlord's Interest . . . . 27
(viii) Certificate of No Default and
Other Matters . . . . . . . . . . . 27
(ix) Payments by Participants . . . . . . . 27
(x) Execution of Participation Agreements
With Participants . . . . . . . . . 29
7 Purchase Agreement and Environmental Indemnity
Agreement . . . . . . . . . . . . . . . . . . . . . 29
8 Use and Condition of Leased Property . . . . . . . . 29
(a) Use . . . . . . . . . . . . . . . . . . . . . 29
(b) Condition . . . . . . . . . . . . . . . . . . 29
(c) Consideration for and Scope of Waiver . . . . 30
9 Other Representations, Warranties
and Covenants of Tenant . . . . . . . . . . . . . . 30
(a) Financial Matters . . . . . . . . . . . . . . 30
(b) The Contract and Other Development Contracts . 30
(c) No Default or Violation . . . . . . . . . . . 31
(d) Compliance with Covenants and Laws . . . . . . 31
(e) Environmental Representations . . . . . . . . 31
(f) No Suits . . . . . . . . . . . . . . . . . . . 31
(g) Condition of Property . . . . . . . . . . . . 32
(h) Organization . . . . . . . . . . . . . . . . . 32
(I) Enforceability . . . . . . . . . . . . . . . . 32
(j) Not a Foreign Person . . . . . . . . . . . . . 32
(k) Omissions . . . . . . . . . . . . . . . . . . 32
(l) Existence . . . . . . . . . . . . . . . . . . 32
(m) Tenant Taxes . . . . . . . . . . . . . . . . . 32
(n) Operation of Property . . . . . . . . . . . . 33
(o) Debts for Construction . . . . . . . . . . . . 34
(p) Impositions . . . . . . . . . . . . . . . . . 34
(q) Repair, Maintenance, Alterations
and Additions . . . . . . . . . . . . . . . 35
(r) Insurance and Casualty . . . . . . . . . . . . 35
(s) Condemnation . . . . . . . . . . . . . . . . . 36
(t) Protection and Defense of Title Against Liens
and Other Encumbrances or Defects . . .. . . 36
(u) Books and Records . . . . . . . . . . . . . . 37
(v) Financial Statements; Required Notices;
Certificates . . . . . . . . . . . . . . . . 37
(w) Further Assurances . . . . . . . . . . . . . . 38
(x) Fees and Expenses; Indemnification; Increased
Costs; and Capital Adequacy Charges . . .. . 39
(y) Liability Insurance . . . . . . . . . . . . . 40
(z) Permitted Encumbrances . . . . . . . . . . . . 41
(aa) Environmental Covenants . . . . . . . . . . . 41
(ab) Affirmative Financial Covenants . . . . . . . 42
(i) Minimum Tangible Net Worth . . . . . . 42
(ii) Leverage Ratio . . . . . . . . . . . . 42
(iii) Quick Ratio . . . . . . . . . . . . . . 42
(ac) Negative Covenants . . . . . . . . . . . . . . 42
(i) Liens . . . . . . . . . . . . . . . . . 42
(ii) Transactions with Affiliates . . . . . 44
(ad) ERISA . . . . . . . . . . . . . . . . . . . . 44
(ae) Assignment of Certain Rights . . . . . . . . . 44
10 Other Representations and Covenants of Landlord . . 45
(a) Title Claims By, Through or Under Landlord . . 45
(b) Actions Required of the Title Holder . . . . . 45
(c) Actions Permitted by Tenant Without
Landlord's Consent . . . . . . . . . . . . . 47
(d) No Default or Violation . . . . . . . . . . . 47
(e) No Suits . . . . . . . . . . . . . . . . . . . 48
(f) Organization . . . . . . . . . . . . . . . . . 48
(g) Enforceability . . . . . . . . . . . . . . . . 48
(h) Existence . . . . . . . . . . . . . . . . . . 48
(i) Not a Foreign Person . . . . . . . . . . . . . 48
(j) Responding to Requests for Information . . . . 48
11 Assignment and Subletting . . . . . . . . . . . . . 48
(a) Consent Required . . . . . . . . . . . . . . . 48
(b) Standard for Landlord's Consent to Assignments
and Certain Other Matters . . . . . . . . . 49
(c) Consent Not a Waiver . . . . . . . . . . . . . 49
(d) Landlord's Assignment . . . . . . . . . . . . 49
12 Environmental Indemnification . . . . . . . . . . . 49
(a) Indemnity . . . . . . . . . . . . . . . . . . 49
(b) Assumption of Defense . . . . . . . . . . . . 49
(c) Notice of Environmental Losses . . . . . . . . 50
(d) Rights Cumulative . . . . . . . . . . . . . . 50
(e) Survival of the Indemnity . . . . . . . . . . 50
13 Inspections and Right of Landlord to Perform,
Generally . . . . . . . . . . . . . . . . . . . . 50
14 Events of Default . . . . . . . . . . . . . . . . . 51
(a) Definition . . . . . . . . . . . . . . . . . . 51
(b) Remedies . . . . . . . . . . . . . . . . . . . 53
(c) Enforceability . . . . . . . . . . . . . . . . 54
(d) Remedies Cumulative . . . . . . . . . . . . . 54
15 No Implied Waiver . . . . . . . . . . . . . . . . . 55
16 Default by Landlord . . . . . . . . . . . . . . . . 55
17 Quiet Enjoyment . . . . . . . . . . . . . . . . . . 55
18 Surrender Upon Termination . . . . . . . . . . . . . 55
19 Holding Over by Tenant . . . . . . . . . . . . . . . 55
20 Miscellaneous . . . . . . . . . . . . . . . . . . . 56
(a) Notices . . . . . . . . . . . . . . . . . . . 56
(b) Severability . . . . . . . . . . . . . . . . . 57
(c) No Merger . . . . . . . . . . . . . . . . . . 58
(d) NO IMPLIED REPRESENTATIONS BY LANDLORD . . . . 58
(e) Entire Agreement . . . . . . . . . . . . . . . 58
(f) Binding Effect . . . . . . . . . . . . . . . . 58
(g) Time is of the Essence . . . . . . . . . . . . 58
(h) Governing Law . . . . . . . . . . . . . . . . 58
(i) Attorneys' Fees . . . . . . . . . . . . . . . 58
21 Waiver of Jury Trial . . . . . . . . . . . . . . . . 58
22 Tax Reporting . . . . . . . . . . . . . . . . . . . 59
23 Proprietary Information, Confidentiality
and Security . . . . . . . . . . . . . . . . . . . 59
Exhibits and Schedules
Exhibit A . . . . . . . . . . . . . . . . . . . . Legal Description
Exhibit B . . . . . . . . . . . . . . . . . . . . .Encumbrance List
Exhibit C . . . . . . . . . . . . . Estoppel Letter from Contractor
Exhibit D . . . . . . . . . . . . . .Estoppel Letter from Architect
Exhibit E . . . . . . . . . . . . . . . . . . . .Draw Request Forms
Exhibit F . . . . . . . . . . . . . . . . . . . Officer Certificate
Schedule 1. . . . . . . . . . . . . . . . . . .List of Participants
Schedule 2. . . . . . Documents Conveying Rights Assigned to Tenant
Schedule 3. . . . . Description of the initial Construction Projec
AMENDED AND RESTATED LEASE AGREEMENT
This AMENDED AND RESTATED LEASE AGREEMENT (as extended,
supplemented, amended, restated or otherwise modified from time to time,
hereinafter called this "Lease"), made to be effective as of December 8,
1995 (all references herein to the "date hereof" or words of like effect
shall mean such effective date), by and between BNP LEASING CORPORATION,
a Delaware corporation (hereinafter called "Landlord"), and GENENTECH,
INC., a Delaware corporation (hereinafter called "Tenant");
W I T N E S E T H T H A T:
WHEREAS, pursuant to a Property Sale Agreement dated as of May 24,
1995, as amended by Amendment No. 1 dated as of June 30, 1995, as
amended by Amendment No. 2 dated as of July 31, 1995, as amended by
Amendment No. 3 dated as of July 31, 1995, as amended by Amendment No. 4
dated as of July 31, 1995 and as amended by Amendment No. 5 dated as of
September 5, 1995 (hereinafter called the "Contract") covering the land
described in Exhibit A attached hereto (hereinafter called the "Land"),
Landlord acquired the Land and any existing improvements on the Land
from Chevron Land and Development Company, a Delaware corporation
(hereinafter called "Seller");
WHEREAS, contemporaneously with the closing of Landlord's purchase
of the Land, Landlord and Tenant entered into a Lease Agreement dated to
be effective as of August 1, 1995, as modified by First Amendment to
Lease Agreement dated as of September 7, 1995 (hereinafter called the
"Prior Lease"), a Purchase Agreement dated to be effective as of August
1, 1995 (hereinafter called the "Prior Purchase Agreement") and an
Environmental Indemnity Agreement dated to be effective as of August 1,
1995 (hereinafter called the "Environmental Indemnity Agreement");
WHEREAS, in anticipation of Tenant's construction of new
improvements on the Land and purchase of equipment and other personal
property for use in such improvements, Landlord and Tenant desire by
this Lease to evidence their agreement as to the terms and conditions
upon which Landlord is willing to provide funds for such construction
and purchase and upon which Tenant will continue to lease the Land and
improvements thereon and the equipment and other personal property
purchased with funds provided by Landlord; and
WHEREAS, Landlord and Tenant desire by this Lease to amend,
restate, replace and supersede the Prior Lease in its entirety,
effective as of the date hereof;
NOW, THEREFORE, in consideration of the rent to be paid and the
covenants and agreements to be performed by Tenant, as hereinafter set
forth, Landlord does hereby LEASE, DEMISE and LET unto Tenant for the
term hereinafter set forth the Land, together with:
(i) Landlord's interest in any and all buildings and other
real property improvements on the Land from time to time, including
improvements hereafter erected on the Land by Tenant, and including, but
not limited to, mechanical, electrical, HVAC and other building systems
attached to future buildings and improvements constructed on the Land by
Tenant (hereinafter called the "Improvements");
(ii) all easements and rights-of-way now owned or hereafter
acquired by Landlord for use in connection with the Land or Improvements
or as a means of access thereto;
(iii) all right, title and interest of Landlord, now owned or
hereafter acquired, in and to (A) any land lying within the right-of-way
of any street, open or proposed, adjoining the Land, (B) any and all
sidewalks and alleys adjacent to the Land and (C) any strips and gores
between the Land and abutting land (except strips and gores, if any,
between the Land and abutting land owned by Landlord, with respect to
which this Lease shall cover only the portion thereof to the center line
between the Land and the abutting land owned by Landlord).
The Land and all of the property described in items (i) through (iii)
above are hereinafter referred to collectively as the "Real Property".
In addition to conveying a leasehold in the Real Property as
described above, Landlord hereby grants, assigns and leases to Tenant
for the term of this Lease the right to use and enjoy (and, to the
extent the following consist of contract rights, to enforce) any
interests or rights of Landlord in, to or under the following, to the
extent, but only to the extent, that such interests or rights are
assignable and have been or will be transferred to Landlord by Seller
under the Contract, transferred to Landlord because of Tenant's purchase
thereof with funds advanced by Landlord as described in subparagraph
9(ae) below, assigned to Landlord by Tenant pursuant to subparagraph
9(af) of the Prior Lease or pursuant to subparagraph 9(ae) below or
otherwise transferred to Landlord by reason of Landlord's status as the
owner of the Real Property: (a) any goods, equipment, furnishings,
furniture, chattels and tangible personal property of whatever nature
that are located on the Real Property and all renewals or replacements
of or substitutions for any of the foregoing; (b) the rights of
Landlord, now existing or hereafter arising, under Permitted
Encumbrances (including the Development Contracts, as defined below),
and (c) any other general intangibles, permits, licenses, franchises,
certificates, and other rights and privileges related to the Real
Property that Tenant (rather than Landlord) would have acquired if
Tenant had itself acquired the Real Property as the purchaser under the
Contract. All of the property, rights and privileges described above in
this paragraph whether now existing or hereafter arising, are
hereinafter collectively called the "Personal Property". The Real
Property and the Personal Property are hereinafter sometimes
collectively called the "Leased Property."
Provided, however, the leasehold estate conveyed hereby and
Tenant's rights hereunder are expressly made subject and subordinate to
the Permitted Encumbrances (as hereinafter defined) and to any other
claims or encumbrances not asserted by Landlord itself or by third
parties lawfully claiming through or under Landlord.
The Leased Property is leased by Landlord to Tenant and is accepted
and is to be used and possessed by Tenant upon and subject to the
following terms, provisions, covenants, agreements and conditions:
1 Definitions. As used herein, the terms "Landlord," "Tenant,"
"Contract," "Seller," "Land," "Prior Lease," "Prior Purchase Agreement,"
"Environmental Indemnity Agreement," "Improvements," "Real Property,"
"Personal Property" and "Leased Property" shall have the meanings
indicated above and the terms listed immediately below shall have the
following meanings:
(a) Active Negligence. "Active Negligence" of an Indemnified
Party means, and is limited to, the negligent conduct of activities
actually on or about the Leased Property by the Indemnified Party or its
employees, agents or representatives in a manner that proximately causes
actual bodily injury or property damage to be incurred. "Active
Negligence" shall not include (1) any negligent failure of Landlord to
act when the duty to act would not have been imposed but for Landlord's
status as owner of the Leased Property or as a party to the transactions
described in this Lease, (2) any negligent failure of any other
Indemnified Party to act when the duty to act would not have been
imposed but for such party's contractual or other relationship to
Landlord or participation or facilitation in any manner, directly or
indirectly, of the transactions described in this Lease, or (3) the
exercise in a lawful manner by Landlord (or any party claiming through
or under Landlord) of any remedy provided herein or in the Purchase
Agreement.
(b) Additional Rent. "Additional Rent" shall have the meaning
assigned to it in subparagraph 3(f) below.
(c) Advance Date. "Advance Date" means, regardless of whether any
Construction Advance shall actually be made thereon, the first Business
Day of every calendar month, beginning with January 2, 1996 and
continuing regularly thereafter to and including the first Business Day
of the first calendar month upon which the then Outstanding Construction
Allowance (including any Construction Advance and Carrying Costs added
to the Outstanding Construction Advance on that Business Day) shall
equal or exceed the Maximum Construction Allowance available under this
Lease; provided, that if Landlord sells its interest in the Leased
Property pursuant to the Purchase Agreement before the Base Rental
Commencement Date, the last Advance Date shall be the Designated Payment
Date. An Advance Date under this definition may also be the Base Rental
Commencement Date or a Base Rental Date under the definitions below.
(d) Affiliate. "Affiliate" of any Person (including Tenant) means
any other Person controlling, controlled by or under common control with
such Person. For purposes of this definition, "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through
the direct or indirect ownership of fifty percent (50%) or more of any
class of voting stock of a Person, by contract or otherwise, and the
terms "controlling" and "controlled" have meanings correlative to the
foregoing.
(e) Agency Fees. "Agency Fees" shall have the meaning assigned to
it in subparagraph 3(c) below.
(f) Applicable Laws. "Applicable Laws" shall have the meaning
assigned to it in subparagraph 9(d) below.
(g) Applicable Purchaser. "Applicable Purchaser" means any third
party designated by Tenant to purchase the Landlord's interest in the
Leased Property and in any Escrowed Proceeds as provided in the Purchase
Agreement.
(h) Appraised Value. "Appraised Value" shall have the meaning
assigned to it in Paragraph 4 below.
(i) Attorneys' Fees. "Attorneys' Fees" means the reasonable
expenses and fees of counsel to the parties incurring the same, which
may include fairly allocated costs of in-house counsel, printing,
photostating, duplicating and other expenses, air freight charges, and
fees billed for law clerks, paralegals, librarians and others not
admitted to the bar but performing services under the supervision of an
attorney. Such terms shall also include, without limitation, all such
reasonable expenses and fees incurred with respect to appeals,
arbitrations and bankruptcy proceedings, and whether or not any manner
or proceeding is brought with respect to the matter for which the
expenses and fees were incurred.
(j) Base Rent. "Base Rent" means the rent payable by Tenant
pursuant to subparagraph 3(a) below.
(k) Base Rental Commencement Date. "Base Rental Commencement
Date" means the earlier of the first Business Day in June, 1998 or the
first Business Day of the first calendar month upon which any of the
following shall have occurred: (1) Tenant shall have substantially
completed the initial Construction Project described in subparagraph
6(b)(i), or (2) the then Outstanding Construction Allowance (including
any Construction Advance and Carrying Costs added to the Outstanding
Construction Advance on that Business Day) shall not be less than the
Maximum Construction Allowance available under this Lease. For example,
if on the first Business Day of April, 1998 construction of the initial
Construction Project is continuing, the Outstanding Construction
Allowance is $314,799,999 (before adding any Carrying Costs for the
preceding month) and the Maximum Construction Allowance is $314,800,000
(assuming the Initial Funding Advances are $15,200,000), and if Carrying
Costs of $1,500,000 would be added to the Outstanding Construction
Allowance on such day if the Construction Allowance were not limited to
the Maximum Construction Allowance, then such day shall be the Base
Rental Commencement Date and on such day $1 will be added to the
Outstanding Construction Allowance as Carrying Cost and $1,499,999 will
be payable as Base Rent pursuant to Paragraph 3(a).
(l) Base Rental Date. "Base Rental Date" means the first Business
Day of each calendar month, beginning with first Business Day of the
first calendar month after the Base Rental Commencement Date and
continuing regularly thereafter to and including the Designated Payment
Date.
(m) Base Rental Period. "Base Rental Period" means each
successive period of approximately one (1) month, with the first Base
Rental Period beginning on and including the Base Rental Commencement
Date and ending on but not including the first Base Rental Date. Each
successive Base Rental Period after the first Base Rental Period shall
begin on and include the day on which the preceding Base Rental Period
ends and shall end on but not include the next following Base Rental
Date. A Base Rental Period under this definition may also be a
Construction Period under the definition of Construction Period below.
(n) Business Day. "Business Day" means any day that is (1) not a
Saturday, Sunday or day on which commercial banks are generally closed
or required to be closed in New York City, New York or San Francisco,
California, and (2) a day on which dealings in deposits of dollars are
transacted in the London interbank market; provided that if such
dealings are suspended indefinitely for any reason, "Business Day" shall
mean any day described in clause (1).
(o) Capital Adequacy Charges. "Capital Adequacy Charges" means
any additional amounts Landlord's Parent or any Participant requires
Landlord to pay as compensation for an increase in required capital as
provided in subparagraph 9(x)(iv).
(p) Capital Lease. "Capital Lease" means any lease which has been
or should be capitalized on the books of the lessee in accordance with
GAAP or for federal income tax purposes.
(q) Carrying Costs. "Carrying Costs" means the charges (accruing
at the Effective Rate) and other fees added to and made a part of the
Outstanding Construction Allowance from time to time on or before the
Base Rental Commencement Date pursuant to and as more particularly
described in subparagraph 6(a)(ii) below.
(r) Code. "Code" means the Internal Revenue Code of 1986, as
amended from time to time.
(s) Commitment Fee. "Commitment Fee" shall have the meaning
assigned to it in subparagraph 3(e) below.
(t) Consolidated Current Liabilities. "Consolidated Current
Liabilities" means Current Liabilities of Tenant and its Consolidated
Subsidiaries, as determined on a consolidated basis in accordance with
GAAP.
(u) Consolidated Quick Assets. "Consolidated Quick Assets" means
Quick Assets of Tenant and its Consolidated Subsidiaries, as determined
on a consolidated basis in accordance with GAAP (except as otherwise
provided in the definition of "Quick Assets" set forth in subparagraph
1(cc) below).
(v) Consolidated Subsidiary. "Consolidated Subsidiary" means any
Subsidiary of Tenant whose accounts are or are required to be
consolidated with the accounts of Tenant in accordance with GAAP.
(w) Consolidated Tangible Net Worth. "Consolidated Tangible Net
Worth" means, at any date of determination thereof, the excess of
Consolidated Total Assets on such date over Consolidated Total
Liabilities on such date; provided, however, that Intangible Assets on
such date shall be excluded from any determination of Consolidated Total
Assets on such date, but any after-tax charges previously taken in
connection with the acquisition of technology or distribution rights
shall be included in any determination of Consolidated Total Assets on
such date.
(x) Consolidated Total Assets. "Consolidated Total Assets" means,
as of the date of any determination thereof, the total assets of Tenant
and its Consolidated Subsidiaries, as determined on a consolidated basis
in accordance with GAAP.
(y) Consolidated Total Liabilities. "Consolidated Total
Liabilities" means, as of the date of any determination thereof, the
total liabilities of Tenant and its Consolidated Subsidiaries, as
determined on a consolidated basis in accordance with GAAP, and any and
all amounts guaranteed by Tenant not otherwise recorded in the financial
statements of Tenant and its Consolidated Subsidiaries as liabilities.
(z) Current Liabilities. "Current Liabilities" means, with
respect to any Person, all liabilities of such Person treated as current
liabilities in accordance with GAAP, including without limitation (a)
all obligations payable on demand or within one year after the date in
which the determination is made and (b) installment and sinking fund
payments required to be made within one year after the date on which
determination is made, but excluding all such liabilities or obligations
which are renewable or extendable at the option of such Person to a date
more than one year from the date of determination.
(aa) Construction Advances. "Construction Advances" means actual
advances of funds made by or on behalf of Landlord to Tenant pursuant to
Paragraph 6 below for Construction Projects.
(ab) Construction Allowance. "Construction Allowance" means the
allowance which is to be provided by Landlord for Construction Projects
as more particularly described in Paragraph 6 below.
(ac) Construction Documents. "Construction Documents" means all
construction contracts, architectural contracts, engineering contracts,
drawings, plans, specifications, change orders, budgets, surveys, soils
reports, environmental impact studies and other documents executed by or
prepared for Tenant with respect to the Construction Projects.
(ad) Construction Period. "Construction Period" means each
successive period of approximately one (1) month, except that the first
Construction Period shall be a shorter period beginning on and including
the effective date hereof and ending on but not including the first
Advance Date. Each successive Construction Period after the first
Construction Period shall begin on and include the day on which the
preceding Construction Period ends and shall end on but not include the
next following Advance Date.
(ae) Construction Project. Construction Projects include (1) the
"initial Construction Project" which means the construction of the
improvements described in Schedule 3 and contemplated by any plans,
renderings and budgets referenced therein (including site work done on
or about the Land by Tenant to prepare the Land for future
construction), the purchase of equipment and other personal property for
use in such improvements, and the provision of or payment for potable
and non-potable water, sewer and other infrastructure and utility
improvements related thereto, whether on-site or off-site, all
consistent with the uses permitted by this Lease, and (2) "subsequent
Construction Projects" which means any other project to be undertaken by
Tenant during the term of this Lease for the construction of new
Improvements or for the alteration of then existing Improvements. A
subsequent Construction Project may involve demolition of then existing
Improvements which are no longer needed or which must be removed to
accommodate new Improvements, subject to the requirements of Paragraph
6(b) below. All construction work planned or done contemporaneously
shall constitute a single Construction Project for purposes of this
Lease, notwithstanding that such work may be done in stages or performed
by more than one general contractor. However, it is understood that any
number of distinct Construction Projects may be undertaken by Tenant
during the term of (and in accordance with the provisions of) this
Lease.
(af) Debt. "Debt" means, with respect to any Person, (a)
indebtedness of such Person for borrowed money; (b) indebtedness of such
Person for the deferred purchase price of property or services (except
trade payables and accrued expenses constituting current liabilities in
the ordinary course of business); (c) the face amount of any outstanding
letters of credit issued for the account of such Person; (d) obligations
of such Person arising under acceptance facilities; (e) guaranties,
endorsements (other than for collection in the ordinary course of
business) and other contingent obligations of such Person to purchase,
to provide funds for payment, to provide funds to invest in any Person,
or otherwise to assure a creditor against loss; (f) obligations of
others secured by any Lien on property of such Person; and (g)
obligations of such Person as lessee under Capital Leases.
(ag) Default. "Default" means any event which, with the passage
of time or the giving of notice or both, would constitute an Event of
Default.
(ah) Default Rate. "Default Rate" means a floating per annum rate
equal to five percent (5%) above the Prime Rate in effect from time to
time. However, for purposes of computing interest on any past due
reimbursement which is payable by Tenant upon demand under this Lease,
the "Default Rate" for the first ten (10) Business Days after a demand
for such reimbursement is made upon Tenant shall (1) equal zero, if the
reimbursement required is $10,000 or less, and (2) if the required
reimbursement is more than $10,000, not exceed the Prime Rate in effect
on the date demand for such reimbursement is first made. Further, in no
event will the "Default Rate" charged on any past due amount exceed the
maximum interest rate permitted by law.
(ai) Designated Payment Date. "Designated Payment Date" shall
have the meaning assigned to it in the Purchase Agreement.
(aj) Development Contracts. "Development Contracts" means the
documents described in Schedule 2 attached hereto, as such documents may
be modified from time to time with the consent of Landlord pursuant to
subparagraph 10(b) below, and any applications, permits, contracts or
documents concerning the use or development of the Leased Property or
other Development Contracts that Landlord may hereafter execute or to
which Landlord may consent at the request of Tenant pursuant to
subparagraph 10(b) below.
(ak) Effective Rate. "Effective Rate" means, for each
Construction Period and Base Rental Period, the rate which equals the
Spread plus the rate per annum determined by dividing (A) LIBOR for such
Construction Period or Base Rental Period, as the case may be, by (B)
100% minus the Eurodollar Rate Reserve Percentage for such Construction
Period or Base Rental Period. If LIBOR or the Eurodollar Rate Reserve
Percentage changes from period to period, then the Effective Rate shall
be automatically increased or decreased as of the date of such change,
as the case may be. After the Base Rental Commencement Date, however,
Landlord will provide notice of any such change (as required by
Paragraph 3(a)) after the same shall take effect and at least five (5)
Business Days prior to the next following Base Rental Date. If for any
reason Landlord determines in good faith that it is impossible or
impractical to determine the Effective Rate with respect to a given
Construction Period or Base Rental Period in accordance with the
preceding sentences, then the "Effective Rate" for that Construction
Period or Base Rental Period shall equal the Spread plus any published
index or per annum interest rate determined in good faith by Landlord's
Parent to be comparable to LIBOR at the beginning of the first day of
that period. A comparable interest rate might be, for example, the then
existing yield on short term United States Treasury obligations (as
compiled by and published in the then most recently published United
States Federal Reserve Statistical Release H.15(519) or its successor
publication), plus or minus a fixed adjustment based on Landlord's
Parent's comparison of past eurodollar market rates to past yields on
such Treasury obligations. Any determination by Landlord of the
Effective Rate hereunder shall, in the absence of clear and demonstrable
error, be conclusive and binding.
(al) Environmental Cutoff Date. "Environmental Cutoff Date" means
the later of the dates upon which (i) this Lease terminates, or (ii)
Tenant surrenders possession and control of the Leased Property.
(am) Environmental Indemnity Agreement. "Environmental Indemnity
Agreement" means Environmental Indemnity Agreement dated as of August 1,
1995 executed by Tenant in favor of Landlord.
(an) Environmental Laws. "Environmental Laws" means any and all
existing and future Applicable Laws pertaining to safety, health or the
environment, or to Hazardous Substances or Hazardous Substance
Activities, including without limitation the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended by the
Superfund Amendments and Reauthorization Act of 1986 (as amended,
hereinafter called "CERCLA"), and the Resource Conservation and Recovery
Act of 1976, as amended by the Used Oil Recycling Act of 1980, the Solid
Waste Disposal Act Amendments of 1980, and the Hazardous and Solid Waste
Amendments of 1984 (as amended, hereinafter called "RCRA").
(ao) Environmental Losses. "Environmental Losses" means Losses
suffered or incurred by any Indemnified Party, directly or indirectly,
relating to or arising out of, based on or as a result of any of the
following: (i) any Hazardous Substance Activity on or prior to the
Environmental Cutoff Date; (ii) any violation on or prior to the
Environmental Cutoff Date of any applicable Environmental Laws relating
to the Leased Property or to the ownership, use, occupancy or operation
thereof; (iii) any investigation, inquiry, order, hearing, action, or
other proceeding by or before any governmental or quasi-governmental
agency or authority in connection with any Hazardous Substance Activity
that occurs or is alleged to have occurred on or prior to the
Environmental Cutoff Date; or (iv) any claim, demand, cause of action or
investigation, or any action or other proceeding, whether meritorious or
not, brought or asserted against any Indemnified Party which directly or
indirectly relates to, arises from, is based on, or results from any of
the matters described in clauses (i), (ii), or (iii) of this
subparagraph 1(ao) or any allegation of any such matters. For purposes
of determining whether Losses constitute "Environmental Losses," as the
term is used in this Lease, any actual or alleged Hazardous Substance
Activity or violation of Environmental Laws relating to the Leased
Property will be presumed to have occurred prior to the Environmental
Cutoff Date unless Tenant establishes by clear and convincing evidence
to the contrary that the relevant Hazardous Substance Activity or
violation of Environmental Laws did not occur or commence prior to the
Environmental Cutoff Date. Environmental Losses incurred by or asserted
against a particular Indemnified Party shall include Losses relating to
or arising out of or as a result of any matters listed above even when
such matters are caused by the negligence of that particular Indemnified
Party or any other Indemnified Party. However, Losses incurred by or
asserted against a particular Indemnified Party and proximately caused
by (and attributed by any applicable principles of comparative fault to)
the wilful misconduct, Active Negligence or gross negligence of that
Indemnified Party or its Affiliates, agents or employees will not
constitute Environmental Losses of such Indemnified Party for purposes
of this Lease.
(ap) Environmental Report. "Environmental Report" means
collectively the following reports: the Phase I Environmental Site
Assessment Report, Vaca Valley Business Park, Genentech, Inc.,
Vacaville, California, dated June 16, 1995, prepared by SECOR
International Incorporated; and the Subsurface Soil and Ground Water
Investigation Letter Report, Proposed Genentech Parcel, Vaca Valley
Parkway and Akerly Drive, Vacaville California, dated July 21, 1995,
prepared by Tetra Tech, Inc.
(aq) ERISA. "ERISA" means the Employee Retirement Income Security
Act of 1974, as amended from time to time, including any rules and
regulations promulgated thereunder.
(ar) ERISA Affiliate. "ERISA Affiliate" means any corporation or
trade or business which is a member of any group of organizations (i)
described in Section 414(b) or (c) of the Code of which Tenant is a
member, or (ii) solely for purposes of potential liability under Section
302(c) (11) of ERISA and Section 412(c) (11) of the Code and the lien
created under Section 302(f) of ERISA and Section 412(n) of the Code,
described in Section 414(m) or (o) of the Code of which Tenant is a
member.
(as) Escrowed Proceeds. "Escrowed Proceeds" shall mean any
proceeds that are received by Landlord from time to time during the Term
(and any interest earned thereon), which Landlord is holding for the
purposes specified in the next sentence, from any party (1) under any
casualty insurance policy as a result of damage to the Leased Property,
(2) as compensation for any sale of a Parcel pursuant to subparagraph
10(b) or for any restriction placed upon the use or development of the
Leased Property or for the condemnation of the Leased Property or any
portion thereof, (3) because of any judgment, decree or award for injury
or damage to the Leased Property or (4) under any title insurance policy
or otherwise as a result of any title defect or claimed title defect
with respect to the Leased Property; provided, however, in determining
"Escrowed Proceeds" there shall be deducted all expenses and costs of
every type, kind and nature (including Attorneys' Fees) incurred by
Landlord to collect such proceeds; and provided, further, "Escrowed
Proceeds" shall not include any payment to Landlord by a Participant or
an Affiliate of Landlord that is made to compensate Landlord for the
Participant's or Affiliate's share of any Losses Landlord may incur as a
result of any of the events described in the preceding clauses (1)
through (4). "Escrowed Proceeds" shall include only such proceeds as
are held by Landlord (A) pursuant to Paragraph 4 for the payment to
Tenant for the restoration or repair of the Leased Property or (B) for
application (generally, on the next following Advance Date or Base
Rental Date which is at least three (3) Business Days following
Landlord's receipt of such proceeds) as a Qualified Payment or as
reimbursement of costs incurred in connection with a Qualified Payment.
"Escrowed Proceeds" shall not include any proceeds that have been
applied as a Qualified Payment or to pay any costs incurred in
connection with a Qualified Payment. Until Escrowed Proceeds are paid
to Tenant pursuant to Paragraph below or applied as a Qualified Payment
or as reimbursement for costs incurred in connection with a Qualified
Payment, Landlord shall keep the same deposited in an interest bearing
account, and all interest earned on such account shall be added to and
made a part of Escrowed Proceeds.
(at) Eurocurrency Liabilities. "Eurocurrency Liabilities" has the
meaning assigned to that term in Regulation D of the Board of Governors
of the Federal Reserve System, as in effect from time to time.
(au) Eurodollar Rate Reserve Percentage. "Eurodollar Rate Reserve
Percentage" means, for purposes of determining the Effective Rate for
any Construction Period or Base Rental Period, the reserve percentage
applicable two (2) Business Days before the first day of such
Construction Period or Base Rental Period under regulations issued from
time to time by the Board of Governors of the Federal Reserve System (or
any successor) for determining the maximum reserve requirement
(including, but not limited to, any emergency, supplemental or other
marginal reserve requirement) for a member bank of the Federal Reserve
System in New York City with deposits exceeding One Billion Dollars with
respect to liabilities or deposits consisting of or including
Eurocurrency Liabilities (or with respect to any other category of
liabilities by reference to which LIBOR is determined) having a term
comparable to such Construction Period or Base Rental Period.
(av) Event of Default. "Event of Default" shall have the meaning
assigned to it in subparagraph 14(a) below.
(aw) Excluded Taxes. "Excluded Taxes" shall mean all federal,
state and local income taxes (whether designated as income taxes or
franchise taxes) upon Base Rent, the Upfront Fee, Agency Fees, Special
Participation Fees, Commitment Fees and any interest paid to Landlord
pursuant to subparagraph 3(g). Further, "Excluded Taxes" will include
any transfer or change of ownership taxes assessed because of Landlord's
transfer or conveyance to any third party of any rights or interest in
this Lease, the Purchase Agreement or the Leased Property, but excluding
any such taxes assessed because of any Permitted Transfer under clauses
(1), (4) or (5) of subparagraph 1(bu) below.
(ax) Fed Funds Rate. "Fed Funds Rate" means, for any period, a
fluctuating interest rate (expressed as a per annum rate and rounded
upwards, if necessary, to the next 1/16 of 1%) equal for each day during
such period to the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System arranged
by Federal funds brokers, as published for such day (or, if such day is
not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rates are not so published for any
day which is a Business Day, the average of the quotations for such day
on such transactions received by the Landlord's Parent from three
Federal funds brokers of recognized standing selected by Landlord's
Parent. All determinations of the Fed Funds Rate by Landlord's Parent
shall, in the absence of clear and demonstrable error, be binding and
conclusive upon Landlord and Tenant.
(ay) Funding Advances. "Funding Advances" means (1) the Initial
Funding Advances and (2) all future advances (which, together with
Initial Funding Advances, are expected to total but in no event exceed
$330,000,000) made by Landlord's Parent or any Participant to or on
behalf of Landlord to allow Landlord to provide the Construction
Allowance hereunder.
(az) GAAP. "GAAP" means generally accepted accounting principles
in the United States of America as in effect from time to time, applied
on a basis consistent with those used in the preparation of the
financial statements referred to in subparagraph 9(v) (except for
changes concurred in by Tenant's independent public accountants).
(ba) Hazardous Substance. "Hazardous Substance" means (i) any
chemical, compound, material, mixture or substance that is now or
hereafter defined or listed in, regulated under, or otherwise classified
pursuant to, any Environmental Laws as a "hazardous substance,"
"hazardous material," "hazardous waste," "extremely hazardous waste,"
"infectious waste," "toxic substance," "toxic pollutant," or any other
formulation intended to define, list or classify substances by reason of
deleterious properties, including, without limitation, ignitability,
corrosiveness, reactivity, carcinogenicity, toxicity or reproductive
toxicity; (ii) petroleum, any fraction of petroleum, natural gas,
natural gas liquids, liquified natural gas, synthetic gas usable for
fuel (or mixtures of natural gas and such synthetic gas), and ash
produced by a resource recovery facility utilizing a municipal solid
waste stream, and drilling fluids, produced waters and other wastes
associated with the exploration, development or production of crude oil,
natural gas or geothermal resources; (iii) asbestos and any asbestos
containing material; (iv) "waste" as defined in section 13050(d) of the
California Water Code; and (v) any other material that, because of its
quantity, concentration or physical or chemical characteristics, poses a
significant present or potential hazard to human health or safety or to
the environment if released into the workplace or the environment.
(bb) Hazardous Substance Activity. "Hazardous Substance Activity"
means any use, storage, holding, existence, location, release
(including, without limitation, any spilling, leaking, leaching,
pumping, pouring, emitting, emptying, dumping, disposing into the
environment, and the continuing migration into or through soil, surface
water, groundwater or any body of water), discharge, deposit, placement,
generation, processing, construction, treatment, abatement, removal,
disposal, disposition, handling or transportation of any Hazardous
Substance from, under, in, into or on the Leased Property, including,
without limitation, the movement or migration of any Hazardous Substance
from surrounding property, surface water, groundwater or any body of
water under, in, into or onto the Leased Property and any residual
Hazardous Substance contamination in, on or under the Leased Property.
(bc) Hazardous Substance Claims. "Hazardous Substance Claims"
shall have the meaning assigned to it in subparagraph 9(aa) below.
(bd) Impositions. "Impositions" shall have the meaning assigned
to it in subparagraph 9(p) below.
(be) Improvements. "Improvements," as defined in the recitals at
the beginning of this Lease, shall include not only existing
improvements to the Land as of the date hereof, if any, but also new
improvements or changes to existing improvements made by Tenant or
Tenant's Agents during the Term. Accordingly, all new improvements made
to the Leased Property by Tenant using the Construction Allowance as
contemplated in this Lease shall constitute "Improvements" as that term
is used herein.
(bf) Indemnified Party. "Indemnified Party" means each of (1)
Landlord and any of Landlord's successors and permitted assigns as to
all or any portion of the Leased Property or any interest therein, (2)
Landlord's Parent and each Participant, and (3) any Affiliate, officer,
agent, director, employee or servant of any of the parties described in
clause (1) or (2) preceding.
(bg) Initial Funding Advances. "Initial Funding Advances" means
the advances made by Landlord's Parent or Participants described in the
following subparagraphs:
(1) Landlord's Parent advanced $15,000,000 to or on behalf of Landlord
on or prior to the delivery of the executed Prior Lease to pay the cost
of Landlord's acquisition of the Leased Property pursuant to the
Contract, to provide the funds which Landlord advanced to Tenant for
purposes listed below and to pay Transaction Expenses incurred by
Landlord on or before the date the Prior Lease was delivered by Landlord
and Tenant. The portion of such advance from Landlord's Parent not used
by Landlord for the acquisition of the Leased Property pursuant to the
Contract or to pay Transaction Expenses incurred by Landlord was paid by
Landlord to Tenant contemporaneously with the delivery of the Prior
Lease, with the understanding (which continues under this Lease) that
Tenant would use the same for the following purposes: (A) to pay
certain fees and to provide certain reimbursements to Tenant as
described in the Prior Lease, (B) to pay Transaction Expenses incurred
by Tenant on or before the date the Prior Lease was delivered by
Landlord and Tenant, (C) as reimbursement to Tenant in the amount of
$750,000 for an initial deposit and additional deposit paid by Tenant to
Seller in connection with the Contract, plus accrued interest credited
on funds so deposited, and (D) as reimbursement to Tenant (or to pay
directly) for all actual costs and expenses (including soft costs and
hard costs and, in the case of Tenant only, Tenant's internal labor
costs) of Tenant or Tenant's Agents in connection with anticipated
Improvements, including subdivision, demolition and grading activities,
as appropriate, the planning, design, engineering and permitting of the
Improvements, and the maintenance of the Leased Property.
(2) Landlord's Parent or Participants are advancing to Landlord the
sum of $12,027,080 contemporaneously with the execution of this Lease to
provide the funds which Landlord is advancing to Tenant for purposes
listed below and to pay additional Transaction Expenses incurred by
Landlord on or before the date this Lease is signed by Landlord and
Tenant. Any portion of the such advance not used by Landlord to pay
Transaction Expenses incurred by Landlord is being paid by Landlord to
Tenant contemporaneously with the execution of this Lease, with the
understanding that Tenant shall use the same for the following purposes:
(A) to pay the Upfront Fee, the first Agency Fee and the Special
Participation Fees and to provide reimbursement to Tenant of the deposit
required of Tenant by the Term Sheet, (B) to pay Transaction Expenses
incurred by Tenant on or before the date this Lease is executed by
Landlord and Tenant, (C) as reimbursement to Tenant (or to pay directly)
for actual costs and expenses (including soft costs and hard costs and,
in the case of Tenant only, Tenant's internal labor costs) of Tenant or
Tenant's Agents in connection with anticipated Improvements, including
subdivision, demolition and grading activities, as appropriate, the
planning, design, engineering and permitting of the Improvements, and
the maintenance of the Leased Property, and (D) to pay any unpaid rent
or other charges which, at the time this Lease is executed, Landlord and
Tenant have identified as amounts due or scheduled to become due under
the Prior Lease on or before the effective date hereof.
(bh) Intangible Assets. "Intangible Assets" means, as of the date
of any determination thereof, the total amount of all assets of Tenant
and its Consolidated Subsidiaries that are properly classified as
"intangible assets" in accordance with GAAP and, in any event, shall
include, without limitation, goodwill, patents, trade names, trademarks,
copyrights, franchises, experimental expense, organization expense,
unamortized debt discount and expense, and deferred charges other than
prepaid insurance and prepaid taxes and current deferred taxes which are
classified on the balance sheet of Tenant and its Consolidated
Subsidiaries as a current asset in accordance with GAAP.
(bi) Landlord's Parent. "Landlord's Parent" means Banque
Nationale de Paris, a bank organized and existing under the laws of
France, together with any Affiliates of such bank that directly or
indirectly provided or hereafter during the Term provide or maintain any
part of the Funding Advances, and any successors of such bank and such
Affiliates.
(bj) LIBOR. "LIBOR" means, for purposes of determining the
Effective Rate for each Construction Period and Base Rental Period, the
rate determined by Landlord's Parent to be the average rate of interest
per annum (rounded upwards, if necessary, to the next 1/16 of 1%) of the
rates at which deposits of dollars are offered or available to
Landlord's Parent in the London interbank market at approximately 11:00
a.m. (London time) on the second Business Day preceding the first day of
such Construction Period or Base Rental Period. Landlord shall instruct
Landlord's Parent to consider deposits, for purposes of making the
determination described in the preceding sentence, that are offered: (i)
for delivery on the first day of such Construction Period or Base Rental
Period, (ii) in an amount equal or comparable to the total (projected on
the applicable date of determination by Landlord's Parent) Stipulated
Loss Value on the first day of such Construction Period or Base Rental
Period, and (iii) for a period of time equal or comparable to the length
of such Construction Period Base Rental Period. If Landlord's Parent so
chooses, it may determine LIBOR for any period by reference to the rate
reported by the British Banker's Association on Page 3750 of the
Telerate Service at approximately 11:00 a.m. (London time) on the second
Business Day preceding the first day of such period. If for any reason
Landlord's Parent in good faith determines that it is impossible or
impractical to determine LIBOR with respect to a given Construction
Period or Base Rental Period in accordance with the preceding sentences,
or if Landlord's Parent shall determine that it is unlawful (or any
central bank or governmental authority shall assert that it is unlawful)
for Landlord, Landlord's Parent or any Participant to maintain Funding
Advances hereunder during any Construction Period or Base Rental Period
for which Carrying Costs or Base Rent is computed by reference to LIBOR,
then "LIBOR" for that Construction Period or Base Rental Period shall
equal the rate which is fifty basis points (50/100 of 1%) above the Fed
Funds Rate for that period. All determinations of LIBOR by Landlord's
Parent shall, in the absence of clear and demonstrable error, be binding
and conclusive upon Landlord and Tenant.
(bk) Lien. "Lien" means any lien (statutory, constitutional,
contractual or otherwise), security interest, mortgage, deed of trust,
priority, pledge, charge, hypothecation, conditional sale, title
retention agreement, financing lease or other encumbrance or similar
right of others, or any agreement to give any of the foregoing. In
addition, for purposes of subparagraph 9(ad)(i)(8) below, "Lien"
includes any Liens under ERISA relating to Unfunded Benefit Liabilities
of which Tenant is required to notify Landlord under subparagraph
9(ae)(i) below (which shall be included hereunder irrespective of
whether Tenant actually notifies Landlord as required thereunder).
(bl) Losses. "Losses" means any and all losses, liabilities,
damages (whether actual, consequential, punitive or otherwise
denominated), demands, claims, actions, judgments, causes of action,
assessments, fines, penalties, costs, and out-of-pocket expenses
(including, without limitation, Attorneys' Fees, accountants' fees and
the reasonable fees of environmental consultants), of any and every kind
or character, foreseeable and unforeseeable, liquidated and contingent,
proximate and remote, known and unknown.
(bm) Maximum Construction Allowance. "Maximum Construction
Allowance" means an amount equal to the lesser of (i) $330,000,000, less
the Initial Funding Advances and less Qualified Payments, if any,
deducted in determining the Outstanding Construction Allowance, or (ii)
such amount (not less than the then Outstanding Construction Allowance)
as may be designated by Tenant to Landlord in a notice delivered
subsequent to substantial completion of the initial Construction
Project.
(bn) Multiemployer Plan. "Multiemployer Plan" means a
multiemployer plan as defined in Section 3(37) of ERISA to which
contributions have been made by Tenant or any ERISA Affiliate during the
preceding six years and which is covered by Title IV of ERISA.
(bo) Outstanding Construction Allowance. "Outstanding
Construction Allowance" shall have the meaning assigned to it in
subparagraph 6(a)(i).
(bp) Participant. "Participant" means (1) the Persons listed in
Schedule 1 attached hereto, each of which is executing a participation
agreement dated as of the effective date hereof, wherein each such
Person is agreeing with Landlord to participate in all or some of the
risks and rewards to Landlord of this Lease and the Purchase Agreement,
and (2) the successors and permitted assigns of each such Person under
the applicable participation agreement.
(bq) PBGC. "PBGC" means the Pension Benefit Guaranty Corporation
and any entity succeeding to any or all of its functions under ERISA.
(br) Permitted Encumbrances. "Permitted Encumbrances" means the
following and any future modifications of any of the following which
Landlord may execute or to which Landlord may give consent pursuant to
subparagraph 10(b): (i) the encumbrances and other matters affecting the
Leased Property that are set forth in Exhibit B attached hereto and made
a part hereof, (ii) the obligations imposed upon the buyer under the
Contract, if any, that survived the closing thereunder, (iii) any
easement agreement or other document affecting title to the Leased
Property that Landlord may execute, accept an assignment of or give its
consent to pursuant to the Contract or pursuant to a document executed
in accordance with the Contract or at the request of or with the consent
of Tenant (including any such easement agreement or other document
executed by Landlord or to which Landlord may give consent pursuant to
subparagraph 10(b)), (iv) Development Contracts, if any, in addition to
those included in the preceding clauses, (v) any Liens securing the
payment of Impositions which are not delinquent or claimed to be
delinquent or which are being contested in accordance with subparagraph
9(p) of this Lease; (vi) the Assessment District Lien (as defined in the
Contract); (vii) mechanics' and materialmen's liens for amounts not past
due or claimed to be past due or which are being contested in accordance
with subparagraph 9(o) of this Lease; and (viii) easements, rights-of-
way, restrictions and similar encumbrances which, in the aggregate, do
not significantly interfere with the occupation, use or enjoyment of or
ability to develop the Real Property in accordance with and for uses
permitted by Applicable Laws or impose any significant monetary
obligations on the Landlord or otherwise materially and adversely
decrease the fair market value of the Leased Property. Nothing in this
definition is intended to impair Tenant's rights under subparagraph
10(c) which may be exercised without notice to or the consent of
Landlord as provided therein.
(bs) Permitted Hazardous Substance Use. "Permitted Hazardous
Substance Use" means the use, storage and offsite disposal of Permitted
Hazardous Substances in strict accordance with applicable Environmental
Laws and with due care given the nature of the Hazardous Substances
involved; provided, the scope and nature of such use, storage and
disposal shall not include the use of underground storage tanks for any
purpose other than the storage of water for fire control, nor shall such
scope and nature:
(1) exceed that reasonably required for the construction and
operation of the Leased Property for the purposes permitted under
subparagraph 8(a); or
(2) include any disposal, discharge or other release of Hazardous
Substances in any manner that might allow such substances to reach the
surface water or groundwater, except (i) through a lawful and properly
authorized discharge (A) to a publicly owned treatment works or (B) with
rainwater or storm water runoff in accordance with Applicable Laws and
any permits obtained by Tenant that govern such runoff; or (ii) any such
disposal, discharge or other release of Hazardous Substances for which
no permits are required and which are not otherwise regulated under
applicable Environmental Laws.
Further, notwithstanding anything to the contrary herein contained,
Permitted Hazardous Substance Use shall not include any use of the
Leased Property as a treatment, storage or disposal facility (as defined
by federal Environmental Laws), including but not limited to a landfill,
incinerator or other waste disposal facility.
(bt) Permitted Hazardous Substances. "Permitted Hazardous
Substances" means Hazardous Substances used and reasonably required for
Tenant's operation of the Leased Property for the purposes permitted
under subparagraph 8(a) in strict compliance with all Environmental Laws
and with due care given the nature of the Hazardous Substances involved.
(bu) Permitted Transfer. "Permitted Transfer" means any one or
more of the following: (1) the creation or conveyance by Landlord of
rights and interests in favor of any Participant pursuant to the
original participation agreements they are entering into with Landlord
contemporaneously with this Lease; (2) the creation or conveyance of
rights and interests in favor of or to Banque Nationale de Paris
(through its San Francisco Branch or otherwise), as Landlord's Parent,
provided that Landlord must notify Tenant before any such conveyance to
Banque Nationale de Paris of (A) any interest in the Leased Property or
any portion thereof by an assignment or other document which will be
recorded in the real property records of Solano County, California or
(B) Landlord's entire interest in the Leased Property; (3) the creation
or conveyance of rights and interests in favor of or to Qualified
Affiliates of Landlord (other than Banque Nationale de Paris) with
Tenant's prior written consent, which consent shall not be unreasonably
withheld; (4) any assignment or conveyance by Landlord requested by
Tenant or required by any Permitted Encumbrance, by the Purchase
Agreement, by the Contract, by any other Development Contract or by
Applicable Laws; or (5) any assignment or conveyance after a Designated
Payment Date on which Tenant shall not have purchased or caused an
Applicable Purchaser to purchase Landlord's interest in the Leased
Property and, if applicable, after the expiration of the thirty (30) day
cure period specified in Paragraph 2(c) of the Purchase Agreement.
(bv) Person. "Person" means an individual, partnership,
corporation, business trust, joint stock company, trust, unincorporated
association, joint venture, governmental authority or other entity of
whatever nature, and shall include, but not be limited to, Tenant and
any Affiliates thereof, Landlord and any Affiliates thereof, Landlord's
Parent and any Affiliates thereof, and each Participant and any
Affiliates thereof.
(bw) Plan. "Plan" means any employee benefit or other plan
established or maintained, or to which contributions have been made, by
Tenant or any ERISA Affiliate of Tenant during the preceding six years
and which is covered by Title IV of ERISA, other than a Multiemployer
Plan.
(bx) Potential Lien Claimants. "Potential Lien Claimants" shall
have the meaning assigned to it in Paragraph 6(c)(viii).
(by) Prime Rate. "Prime Rate" means the higher of (1) the prime
interest rate or equivalent charged by Landlord's Parent in the United
States as announced or published by Landlord's Parent from time to time,
which need not be the lowest interest rate charged by Landlord's Parent,
or (2) the rate quoted by Landlord's Parent at approximately 11:00 a.m.
New York City time to dealers in the New York Federal Funds Market for
the overnight offering of dollars by Landlord's Parent, for deposit,
plus one-quarter of one percent (1/4%). If for any reason Landlord's
Parent does not announce or publish a prime rate or equivalent, the
prime rate or equivalent announced or published by either Citibank, N.A.
or Credit Commercial de France as selected by Landlord shall be used to
compute the rate describe in clause (1) of the preceding sentence. The
prime rate or equivalent announced or published by such bank need not be
the lowest rate charged by it. The Prime Rate may change from time to
time after the date hereof without notice to Tenant as of the effective
time of each change in rates described in this definition.
(bz) Purchase Agreement. "Purchase Agreement" means the Purchase
Agreement dated as of the date hereof between Landlord and Tenant
pursuant to which Tenant has agreed to purchase or to arrange for the
purchase by a third party of the Leased Property, as such Purchase
Agreement may be extended, supplemented, amended, restated or otherwise
modified from time to time.
(ca) Qualified Affiliate. "Qualified Affiliate" means any Person
that is one hundred percent (100%) owned, directly or indirectly, by
Banque Nationale de Paris or any successor of such bank, provided that
Landlord and such Person can (and each does in writing) represent to
Tenant as follows: (1) all parties to whom such Person has any material
obligations are (and are expected to be) Affiliates of Banque Nationale
de Paris or any successor of such bank, except for participants with
such Person in other leasing deals or loans made by such Person and
except for tenants or borrowers in such other leasing deals or loans;
(2) no material legal actions are pending or expected against such
Person and no material legal actions are pending by such Person; (3)
such Person is solvent; (4) such Person has substantial assets in
addition to the Leased Property, thereby making it inappropriate to
characterize such Person as a "special purpose entity" created to
accommodate only the transactions contemplated in this Lease and the
Purchase Agreement; and (5) such Person will notify Tenant immediately
in writing if any of the foregoing changes before the Designated Payment
Date.
(cb) Qualified Payments. "Qualified Payments" means all payments
received by Landlord from time to time during the Term from any party
(1) under any casualty insurance policy as a result of damage to the
Leased Property, (2) as compensation for any sale of a Parcel pursuant
to subparagraph 10(b) or for any restriction placed upon the use or
development of the Leased Property or for the condemnation of the Leased
Property or any portion thereof, (3) because of any judgment, decree or
award for injury or damage to the Leased Property or (4) under any title
insurance policy or otherwise as a result of any title defect or claimed
title defect with respect to the Leased Property; provided, however,
that (x) in determining "Qualified Payments", there shall be deducted
all expenses and costs of every kind, type and nature (including taxes
and Attorneys' Fees) incurred by Landlord with respect to the collection
of such payments, (y) "Qualified Payments" shall not include any payment
to Landlord by a Participant or an Affiliate of Landlord that is made to
compensate Landlord for the Participant's or Affiliate's share of any
Losses Landlord may incur as a result of any of the events described in
the preceding clauses (1) through (4) and (z) "Qualified Payments" shall
not include any payments received by Landlord that Landlord has paid to
Tenant for the restoration or repair of the Leased Property or that
Landlord is holding as Escrowed Proceeds. For purposes of computing the
total Qualified Payments (and other amounts dependent upon Qualified
Payments, such as Stipulated Loss Value) paid to or received by Landlord
as of any date, payments described in the preceding clauses (1) through
(4) will be considered as Escrowed Proceeds, not Qualified Payments,
until they are actually applied as Qualified Payments by Landlord, which
Landlord will do upon the first Advance Date or Base Rental Date which
is at least three (3) Business Days after Landlord's receipt of the same
unless postponement of such application is required by other provisions
of this Lease or consented to by Tenant in writing. Thus, for example,
condemnation proceeds actually received by Landlord in the middle of a
Base Rental Period will not be considered as having been received by
Landlord for purposes of computing the total Qualified Payments unless
and until actually applied by Landlord as a Qualified Payment on a
subsequent Advance Date or Base Rental Date in accordance with Paragraph
4 below.
(cc) Quick Assets. "Quick Assets" means the sum of the following
to the extent not encumbered by any Lien:
(1) cash on hand or on deposit in banks;
(2) readily marketable securities:
(A) issued by the United States of America or any agency
thereof and fully guaranteed by the United States Government and
reported for purposes of this Lease (i) as reported by Tenant on its
books and records in accordance with GAAP (regardless of whether GAAP
requires reporting at cost or at market value) if maturing no later than
three years after the applicable determination of Quick Assets, or (ii)
at not greater than fair market value if maturing more than three years
after the applicable determination of Quick Assets, regardless of
whether GAAP would permit reporting at a higher cost; or
(B) maturing within three years after the applicable
determination of Quick Assets and rated at least (i) A (in the case of
securities with an original maturity greater than one year) or A-2 (in
the case of securities with an original maturity of one year or less) or
the equivalent thereof by Standard and Poor's Corporation, or (ii) A-2
(in the case of securities with an original maturity greater than one
year) or P-2 (in the case of securities with an original maturity of one
year or less) or the equivalent thereof by Moody's Investor Service,
Inc.;
(3) certificates of deposit or banker's acceptances maturing
within three years and issued by commercial banks operating in the
United States of America having capital and surplus in excess of
$500,000,000; and
(4) accounts receivable of Tenant and its Consolidated
Subsidiaries (determined on a consolidated basis net of reserves for
uncollectible amounts in accordance with GAAP).
(cd) Remaining Proceeds. "Remaining Proceeds" shall have the
meaning assigned to it in Paragraph 4.
(ce) Rent. "Rent" means the Base Rent and all Additional Rent.
(cf) Scope Change. "Scope Change" means a change to a
Construction Project that, if implemented, will make the quality,
function or capacity of the Improvements affected by such Construction
Project "materially different" (as defined below in this paragraph) than
as described or inferred by plans or other items submitted to Landlord
by Tenant as described in subparagraph 6(b)(i). Notwithstanding the
foregoing, "Scope Change" shall not include refinement, correction and
detailing of plans or other items submitted to Landlord by Tenant. As
used in this definition, a "material difference" means a difference that
(a) could (after completion of the applicable Construction Project and
the funding of any Construction Advances required in connection
therewith) significantly reduce any excess of the fair market value of
the Leased Property over Stipulated Loss Value or significantly increase
any excess of Stipulated Loss Value over the fair market value of the
Leased Property, or (b) will change the general character of the
Improvements from that needed to accommodate the uses permitted by
subparagraph 8(a).
(cg) Special Participation Fees. "Special Participation Fees"
shall have the meaning assigned to it in subparagraph 3(d) below.
(ch) Spread. "Spread" means thirty-two and one-half basis points
(32.5/100 of 1%), for purposes of calculating the Effective Rate for any
period ending on or before the end of the thirtieth (30th) full calendar
month after the date hereof, and it means twenty-eight and one-half
basis points (28.5/100 of 1%) for purposes of calculating the Effective
Rate for any period beginning thereafter.
(ci) Stipulated Loss Value. "Stipulated Loss Value" as of any
date means an amount equal to the sum of the Initial Funding Advances,
plus the sum of all Construction Advances and Carrying Costs added to
the Outstanding Construction Allowance on or prior to such date, minus
all funds received by Landlord and applied as Qualified Payments on or
prior to such date. Under no circumstances will any payment of Base
Rent, the Upfront Fee, Agency Fees, Special Participation Fees or
Commitment Fees reduce Stipulated Loss Value.
(cj) Subsidiary. "Subsidiary" means, with respect to any Person,
any Affiliate of which at least a majority of the securities or other
ownership interests having ordinary voting power then exercisable for
the election of directors or other persons performing similar functions
are at the time owned directly or indirectly by such Person.
(ck) Tenant's Agents. "Tenant's Agents" shall mean collectively
any contractors, subcontractors and other agents that Tenant (or
Tenant's contractors, subcontractors or other agents) may hire from time
to time to perform construction or services related to any Construction
Project.
(cl) Term. "Term" shall have the meaning assigned to it in
Paragraph 2(a) below.
(cm) Term Sheet. "Term Sheet" means the letter dated October 4,
1995 from Landlord to Tenant, signed by Tenant on October 5, 1995, as
amended by a second letter dated October 16, 1995 from Landlord to
Tenant, signed by Tenant on October 17, 1995, and as amended by a third
letter dated November 17, 1995 from Landlord to Tenant, signed by Tenant
on November 21, 1995.
(cn) Transaction Expenses. "Transaction Expenses" means (a) the
sums actually paid by or for Landlord for costs and expenses incurred on
or before the date this Lease is signed by Landlord and Tenant in
connection with the preparation, negotiation and execution of the Prior
Lease, the Prior Purchase Agreement, the Environmental Indemnity
Agreement, this Lease, the Purchase Agreement or any related documents,
the acquisition of the Land and the obtaining of entitlements for the
initial Construction Project and (b) costs and expenses incurred by
Tenant in connection with the preparation, negotiation and execution of
the Prior Lease, the Prior Purchase Agreement, the Environmental
Indemnity Agreement, this Lease, the Purchase Agreement, the Contract,
the Development Contracts or any related documents, the acquisition of
the Land and the obtaining of entitlements for the initial Construction
Project.
(co) Unfunded Benefit Liabilities. "Unfunded Benefit Liabilities"
means, with respect to any Plan, the amount (if any) by which the
present value of all benefit liabilities (within the meaning of Section
4001(a)(16) of ERISA) under the Plan exceeds the fair market value of
all Plan assets allocable to such benefit liabilities, as determined on
the most recent valuation date of the Plan and in accordance with the
provisions of ERISA for calculating the potential liability of Tenant or
any ERISA Affiliate of Tenant under Title IV of ERISA.
(cp) Upfront Fee. "Upfront Fee" shall have the meaning assigned
to it in subparagraph 3(b) below.
(cq) Other Terms and References. Words of any gender used in this
Lease shall be held and construed to include any other gender, and words
in the singular number shall be held to include the plural and vice
versa, unless the context otherwise requires. References herein to
Paragraphs, subparagraphs or other subdivisions shall refer to the
corresponding Paragraphs, subparagraphs or subdivisions of this Lease,
unless specific reference is made to another document or instrument.
References herein to any Schedule or Exhibit shall refer to the
corresponding Schedule or Exhibit attached hereto, which shall be made a
part hereof by such reference. All capitalized terms used in this Lease
which refer to other documents shall be deemed to refer to such other
documents as they may be renewed, extended, supplemented, amended or
otherwise modified from time to time, provided such documents are not
renewed, extended or modified in breach of any provision contained
herein or therein or, in the case of any other document to which
Landlord is a party or of which Landlord is an intended beneficiary,
without the consent of Landlord. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP. The words
"this Lease", "herein", "hereof", "hereby", "hereunder" and words of
similar import refer to this Lease as a whole and not to any particular
subdivision unless expressly so limited. The phrases "this Paragraph"
and "this subparagraph" and similar phrases refer only to the Paragraphs
or subparagraphs hereof in which the phrase occurs. The word "or" is
not exclusive. Other capitalized terms are defined in the provisions
that follow.
2 Term.
(a) Scheduled Term. The term of this Lease (herein called the
"Term") shall commence on and include the effective date hereof, and end
at 8:00 A.M. on December 1, 2003 (or the next following Business Day if
December 1, 2003 is not a Business Day), unless sooner terminated as
herein provided.
(b) Early Termination By Tenant. Provided that Tenant is still in
possession of the Leased Property and has not breached its obligation to
make or have made any payment required by Paragraph 2 of the Purchase
Agreement on any prior Designated Payment Date, Tenant may elect to
terminate this Lease, effective as of midnight of any Advance Date or
Base Rental Date, by giving Landlord (and Participants) an irrevocable
notice of such election at least ninety (90) days prior to the effective
date of the termination. If Tenant elects to so terminate this Lease,
then on the Advance Date or Base Rental Date on which this Lease is to
be terminated, not only must Tenant pay all unpaid Rent, Tenant must
also satisfy its obligations under the Purchase Agreement. The payment
of any unpaid Rent and satisfaction of Tenant's obligations under the
Purchase Agreement shall be a condition precedent to the effectiveness
of any early termination of this Lease by Tenant.
3 Rental.
(a) Base Rent. Tenant shall pay Landlord rent (herein called
"Base Rent") in arrears, in currency that at the time of payment is
legal tender for public and private debts in the United States of
America, in monthly installments on the Base Rental Commencement Date
and on each Base Rental Date through the end of the Term. Each payment
of Base Rent must be received by Landlord no later than 10:00 a.m. (San
Francisco time) on the date it becomes due; if received after 10:00 a.m.
(San Francisco time) it will be considered for purposes of this Lease as
received on the next following Business Day. Each installment of Base
Rent shall represent rent allocable to the Construction Period or Base
Rental Period ending on the date on which the installment is due.
Landlord shall notify Tenant in writing of the Base Rent due for the
Construction Period ending on the Base Rental Commencement Date (if any)
and of the Base Rent due for each Base Rental Period at least five (5)
Business Days prior to the Base Rental Commencement Date or Base Rental
Date on which such period ends, but any failure by Landlord to so notify
Tenant shall not constitute a waiver of Landlord's right to payment. If
Tenant or any Applicable Purchaser purchases Landlord's interest in the
Leased Property pursuant to the Purchase Agreement, any Base Rent for
the month ending on the date of purchase and all outstanding Additional
Rent shall be due on the Designated Payment Date in addition to the
purchase price and other sums due Landlord under the Purchase Agreement.
The Base Rent payable on the Base Rental Commencement Date shall equal
the difference (if any) between (a) total Carrying Costs that would have
been added to the Outstanding Construction Allowance on such date if the
Construction Allowance available hereunder were not limited to the
Maximum Construction Allowance, and (b) the Carrying Costs actually
added on such date to the Outstanding Construction Allowance. The Base
Rent for each Base Rental Period shall equal (A) Stipulated Loss Value
on the first day of such Base Rental Period, times (B) the Effective
Rate with respect to such Base Rental Period, times (C) the number of
days in such Base Rental Period, divided by (D) three hundred sixty
(360). Assume, only for the purpose of illustration: that a
hypothetical Base Rental Period contains exactly thirty (30) days; that
on the first day of such Base Rental Period Stipulated Loss Value is
$300,000,000; and that the Effective Rate computed with respect to the
applicable Base Rental Period is six percent (6%). Under such
assumptions, the Base Rent for the hypothetical Base Rental Period will
equal:
$300,000,000 x 6% x 30/360, or $1,500,000.
(b) Upfront Fee. As provided in the Term Sheet, upon execution
and delivery of this Lease by Landlord, Tenant shall pay Landlord an
upfront fee (herein called the "Upfront Fee") (less the deposit already
paid by Tenant pursuant to the Term Sheet). The Upfront Fee shall
represent Additional Rent for the first Construction Period.
(c) Agency Fees. Upon execution and delivery of this Lease by
Landlord, and on December 1 of 1996 and each calendar year thereafter
during the Term, Tenant shall pay Landlord an administrative fee (herein
called "Agency Fees") as provided in the Term Sheet; provided that if
December 1 of any calendar year during the Term does not fall on a
Business Day, the payment of Agency Fees otherwise then due shall become
due on the next following Business Day. Each payment of the Agency Fee
shall represent Additional Rent for the Construction Period or Base
Rental Period during which it is paid.
(d) Special Participation Fee. Upon execution and delivery of
this Lease by Landlord, Tenant shall also pay Landlord a fee (herein
called a "Special Participation Fee"), for the account of each
Participant who has committed by the terms of its participation
agreement with Landlord to provide or maintain Funding Advances of
$70,000,000 or more, assuming that the entire Maximum Construction
Allowance is used by Tenant. Such fee shall equal four basis points
(4/100 of 1%) times such Funding Advances which the Participant has
committed to provide or maintain. The Special Participation Fees shall
also represent Additional Rent for the first Construction Period.
(e) Commitment Fees. For each Construction Period during the Term
Tenant shall pay Landlord a fee (herein called a "Commitment Fee") equal
to (1) twelve basis points (12/100 of 1%), times (2) the difference at
the end of the first day of such Construction Period between (A) the
Maximum Construction Allowance and (B) the Outstanding Construction
Allowance, times (3) the number of days in such Construction Period,
divided by (4) three hundred sixty (360). Tenant shall pay Commitment
Fees in arrears on January 2, April 1, July 1 and October 1 of each
calendar year, beginning with January 2, 1996 and continuing regularly
throughout the Term so long as Commitment Fees accrue because of a
difference between the Maximum Construction Allowance and the
Outstanding Construction Allowance; provided that if any of such dates
does not fall on a Business Day, the payment of Commitment Fees
otherwise then due shall become due on the next following Business Day;
provided, further, if any Commitment Fees shall have accrued and remain
unpaid on the Designated Payment Date, such accrued unpaid Commitment
Fees shall be due on the Designated Payment Date; and provided, further,
that the first such Commitment Fee due on January 2, 1996 shall be
prorated to reflect a period commencing on the effective date of this
Lease and ending on December 31, 1995.
(f) Additional Rent. All amounts which Tenant is required to pay
to or on behalf of Landlord pursuant to this Lease, together with every
charge, premium, interest and cost set forth herein which may be added
for nonpayment or late payment thereof, shall constitute rent (all such
amounts, other than Base Rent, are herein called "Additional Rent").
(g) Interest and Order of Application. The Base Rent and all
Additional Rent shall bear interest, if not paid when first due, at the
Default Rate in effect from time to time from the date due until paid;
provided, that nothing herein contained will be construed as permitting
the charging or collection of interest at a rate exceeding the maximum
rate permitted under Applicable Laws. Landlord shall be entitled to
apply any amounts paid by or on behalf of Tenant hereunder against any
Rent then past due in the order the same became due or in such other
order as Landlord may elect.
(h) Net Lease. It is the intention of Landlord and Tenant that
the Base Rent and all other payments herein specified shall be
absolutely net to Landlord. Subject only to the other express
provisions of this Lease (including, without limitation, the express
limitations on the indemnification obligations set forth in subparagraph
9(x) below) Tenant shall pay all costs, expenses and obligations of
every kind relating to the Leased Property or this Lease which may arise
or become due, including, without limitation: (i) Impositions, including
any taxes payable by virtue of Landlord's receipt of amounts paid to or
on behalf of Landlord in accordance with this subparagraph 3(h), but not
including any Excluded Taxes; (ii) any Capital Adequacy Charges; (iii)
any amount for which Landlord is or becomes liable with respect to the
Permitted Encumbrances; and (iv) any costs incurred by Landlord
(including Attorneys' Fees) because of Landlord's acquisition or
ownership of the Leased Property or because of this Lease or the
transactions contemplated herein.
(i) No Demand or Setoff. The Base Rent and all Additional Rent
shall be paid without notice or demand and without abatement,
counterclaim, deduction, setoff or defense, except as expressly provided
herein.
4 Application of Insurance, Condemnation and Other Proceeds; Waiver
of Insured Claims; Determination of Appraised Value.
(a) This Paragraph 4 shall govern the application of proceeds
received by Landlord or Tenant during the Term from any third party (1)
under any casualty insurance policy as a result of damage to the Leased
Property, (2) as compensation for any restriction placed upon the use or
development of the Leased Property or for the condemnation of the Leased
Property or any portion thereof, or (3) because of any judgment, decree
or award for injury or damage to the Leased Property; excluding,
however, any funds paid to Landlord by Landlord's Parent or an Affiliate
of Landlord or any Participant that is made to compensate Landlord for
any losses Landlord may incur in connection with this Lease or the
Leased Property. Landlord and Tenant shall apply all insurance,
condemnation and other proceeds described in the preceding sentence
(including proceeds payable under any insurance policy covering the
Leased Property which is maintained by Tenant) as follows:
(i) First, any such proceeds shall be used to reimburse Landlord
for any costs and expenses, including Attorneys' Fees, incurred in
connection with the collection of such proceeds.
(ii) Second, unless otherwise required by this Paragraph 4, such
proceeds remaining after application in accordance with clause (a)(i)
above (hereinafter, the "Remaining Proceeds") will be applied by
Landlord as Qualified Payments. However, pending a determination of
whether Remaining Proceeds must be applied by Landlord to reimburse
Tenant for the cost of repairs or restoration of the Leased Property
pursuant to the following provisions, Landlord shall be entitled to hold
any Remaining Proceeds as Escrowed Proceeds. Until Remaining Proceeds
are paid to Tenant as reimbursement for repairs to or restoration of the
Lease Premises pursuant to this Paragraph 4 or applied as a Qualified
Payment or as reimbursement to Landlord for costs incurred in connection
with a Qualified Payment, Landlord shall keep the same as Escrowed
Proceeds deposited in an interest bearing account, and all interest
earned on such account shall be added to and made a part of such
Escrowed Proceeds.
(iii) Subject to the next clause (iv), after any taking by
condemnation of all or any portion of the Leased Property or any
casualty resulting in the diminution, destruction, demolition or damage
to all or any portion of the Leased Property, either Landlord or Tenant
may require a determination of whether Appraised Value immediately after
such condemnation or casualty event is less than, equal to or greater
than thirty percent (30%) of Stipulated Loss Value immediately after
such condemnation or casualty event, and:
(1) If Appraised Value is greater than or equal to thirty
percent (30%) of Stipulated Loss Value, then Landlord shall hold
Remaining Proceeds as Escrowed Proceeds and apply them to reimburse
Tenant for the actual cost of the repairs or restoration of the Leased
Property. Repairs or restoration for which Tenant shall be entitled to
reimbursement pursuant to the preceding sentence shall include any
repairs or restoration Tenant deems appropriate so long as the repairs
or restoration return the Leased Property to a safe and secure condition
and do not reduce its Appraised Value below thirty percent (30%) of
Stipulated Loss Value. Any Remaining Proceeds not used for such repairs
or restoration shall, after Tenant notifies Landlord that they are not
needed for repairs or restoration, be applied by Landlord as Qualified
Payments.
(2) If Appraised Value is less than thirty percent (30%) of
Stipulated Loss Value, then, either:
(A) Tenant must no later than the next Advance Date or
Base Rental Date after such condemnation or casualty event (1) cause
Stipulated Loss Value to be reduced to an amount no greater than three
and one-third (3.33) times Appraised Value by authorizing Landlord's
application of Remaining Proceeds as Qualified Payments and, if
necessary to so reduce Stipulated Loss Value, by making additional
payments to Landlord as Qualified Payments, and (2) do whatever is
necessary to make the Leased Property safe and secure without further
reducing its Appraised Value; or
(B) Tenant must elect no later than the next Advance
Date or Base Rental Date after such condemnation or casualty event to
terminate this Lease in accordance with Paragraph 2(b), and then Tenant
or an Applicable Purchaser must purchase (and Landlord must sell)
Landlord's interest in the Leased Property (even if Landlord can claim
no interest of any value because of a total taking by eminent domain) in
accordance with the Purchase Agreement, but for a net price to Landlord
(when taken together with any additional payments made by Tenant
pursuant to Paragraph 2(a)(ii) of the Purchase Agreement, in the case of
a purchase by an Applicable Purchaser) of not less than Stipulated Loss
Value, computed after the application of all Remaining Proceeds as
Qualified Payments (and pending such purchase Tenant must do whatever is
necessary to keep the Leased Property safe and secure); or
(C) Tenant must promptly restore the Leased Property or
the remainder thereof as necessary to raise its Appraised Value to no
less than thirty percent (30%) of Stipulated Loss Value as of the date
such restoration is complete and as necessary to make the Leased
Property safe and secure.
Tenant's (and Landlord's) obligations under this
clause (iii) with respect to any casualty or condemnation during the
Term shall survive the expiration of the Term.
(iv) If any taking by condemnation of any portion of the
Leased Property or any casualty resulting in the diminution,
destruction, demolition or damage to any portion of the Leased Property
shall reduce Appraised Value by less than $1,000,000 and shall result in
Remaining Proceeds of less than $1,000,000, then so long as no Event of
Default shall have occurred and be continuing Tenant shall be entitled
to collect the Remaining Proceeds resulting therefrom. Tenant shall
apply any such Remaining Proceeds to the repair or restoration of the
Leased Property to a safe and secure condition and to an Appraised Value
of no less than thirty percent (30%) of Stipulated Loss Value in such
manner as Tenant shall reasonably deem appropriate.
(v) As used herein, "Appraised Value" shall mean an amount
not less than the fair market value of the Leased Property (or any
applicable portion thereof) on the date in question as determined by
Landlord and Tenant, or if Landlord and Tenant cannot agree, determined
in accordance with the following procedure:
(A) Landlord and Tenant shall each, within ten (10) days
after written notice from either to the other, select an appraiser. If
either Landlord or Tenant fails to select an appraiser within the
required period, then the appraiser who has been timely selected shall
conclusively determine the fair market value of the Leased Property (or
applicable portion thereof) in accordance with this clause (v) within
forty-five (45) days after his or her selection.
(B) Upon the selection of the two appraisers as provided
above, such appraisers shall proceed to determine the fair market value
of the Leased Property (or applicable portion thereof) in accordance
with this clause (v). Such appraisals shall be submitted in writing no
later than forty-five (45) days after selection of the second appraiser.
If the fair market value as determined by such appraisers is identical,
such sum shall be Appraised Value. In the event the lower appraisal is
not lower than five percent (5%) below the higher appraisal, then
Appraised Value shall be the sum of the two appraisal figures divided by
two (2). If either appraiser fails to timely submit his or her
appraisal, the timely submitted appraisal shall be determinative of
Appraised Value.
(C) In the event the lower appraisal is lower than five
percent (5%) below the higher appraisal figure, then the two appraisers
previously selected shall select a third appraiser. The name of such
appraiser shall be submitted at the same time the written appraisals are
due. Such third appraiser shall then review the previously submitted
appraisals and select the one that, in his professional opinion, more
closely reflects the fair market value of the Leased Property (or
applicable portion thereof), such selection to be submitted in writing
no later than ten (10) days after selection of the third appraiser.
Such selection shall be determinative of Appraised Value.
(D) In making any such determination of fair market
value, the appraisers shall assume that any improvements then located on
the Leased Property (or applicable portion thereof) or under
construction constitute the highest and best use, that Tenant will
promptly complete all construction which this Lease obligates Tenant to
complete and that neither this Lease nor the Purchase Agreement add any
value to the Leased Property. Each appraiser selected hereunder shall
be an independent MAI-designated appraiser with not less than ten (10)
years' experience in industrial real estate appraisal in Solano County,
California and surrounding areas.
(vi) Notwithstanding the foregoing, following any Event of
Default, Landlord shall be entitled to receive and collect any Remaining
Proceeds and either, at the discretion of Landlord, hold such Remaining
Proceeds as Escrowed Proceeds to be applied to the repair, restoration
or replacement of the Leased Property in accordance with clause (b)
below, or retain such Remaining Proceeds (net of collection costs, as
set forth in clause (a)(i) above, and other appropriate deductions) as
Qualified Payments. Further, nothing contained in this Paragraph 4
shall excuse Tenant from Tenant's obligation for completing all
Construction Projects in accordance with the requirements of Paragraph
6(b).
(b) If, in accordance with any provision of this Paragraph 4,
Remaining Proceeds are to be held by Landlord for reimbursement to
Tenant of the cost of repair or restoration of the Leased Property: (a)
Landlord will hold such Remaining Proceeds as Escrowed Proceeds in an
interest bearing account as provided above and shall pay the same to
Tenant upon completion of the applicable repair or restoration of the
Leased Property and upon compliance by Tenant with such terms,
conditions and requirements as may be reasonably imposed by Landlord,
but in no such event shall Landlord be required to pay any Remaining
Proceeds to Tenant in excess of the actual cost to Tenant of the
applicable repair or restoration, it being understood that Landlord may
retain any such excess as a Qualified Payment; and (b) Tenant, in
accordance with the foregoing, will perform or cause to be performed the
actual repair or restoration of the Leased Property to a safe and secure
condition leaving the Leased Property with an Appraised Value of no less
than thirty percent (30%) of Stipulated Loss Value upon completion of
such repair or restoration. In any event, Tenant will not be entitled
to any abatement or reduction of the Base Rent or any other amount due
hereunder except to the extent that such insurance or condemnation
proceeds result in Qualified Payments which reduce Stipulated Loss Value
as provided in the definitions set out above.
(c) Nothing herein contained shall be construed to prevent Tenant
from obtaining a separate award from any condemning authority for a
taking of Tenant's personal property or for moving expenses or business
interruption, provided, such award is not combined with and does not
reduce the award for any taking of the Leased Property, including
Tenant's leasehold estate and any other interest therein.
(d) Landlord and Tenant each waive any right of recovery against
the other, and the other's agents, officers, or employees, for any
damage to the Leased Property or to the personal property situated from
time to time in or on the Leased Property resulting from fire or other
casualty covered by a valid and collectible insurance policy; provided,
however, that the waiver set forth in this subparagraph shall be
effective insofar, but only insofar, as compensation for such damage or
loss is actually recovered by the waiving party (net of costs of
collection) under the policy notwithstanding the waivers set out in this
paragraph. Tenant shall cause the insurance policies required of Tenant
by this Lease to be properly endorsed, if necessary, to prevent any loss
of coverage because of the waivers set forth in this paragraph. If such
endorsements are not available, the waivers set forth in this paragraph
shall be ineffective to the extent that such waivers would cause
required insurance with respect to the Leased Property to be impaired.
5 No Lease Termination.
(a) Status of Lease. Except as expressly provided herein, this
Lease shall not terminate, nor shall Tenant have any right to terminate
this Lease, nor shall Tenant be entitled to any abatement of the Rent,
nor shall the obligations of Tenant under this Lease be excused, for any
reason whatsoever, including without limitation any of the following:
(i) any damage to or the destruction of all or any part of the Leased
Property from whatever cause, (ii) the taking of the Leased Property or
any portion thereof by eminent domain or otherwise for any reason, (iii)
the prohibition, limitation or restriction of Tenant's use of all or any
portion of the Leased Property or any interference with such use by
governmental action or otherwise, (iv) any eviction of Tenant or of
anyone claiming through or under Tenant by paramount title or otherwise
(provided, if Tenant is wrongfully evicted by Landlord or by any third
party lawfully claiming through or under Landlord, other than Tenant or
a third party claiming through or under Tenant, then Tenant will have
the remedies described in Paragraph 16 below), (v) any default on the
part of Landlord under this Lease or under any other agreement to which
Landlord and Tenant are parties, (vi) the inadequacy in any way
whatsoever of the design or construction of any improvements included in
the Leased Property, it being understood that Landlord has not made and
will not make any representation express or implied as to the adequacy
thereof, or (vii) any other cause whether similar or dissimilar to the
foregoing, any existing or future law to the contrary notwithstanding.
It is the intention of the parties hereto that the obligations of Tenant
hereunder shall be separate and independent of the covenants and
agreements of Landlord, that the Base Rent and all other sums payable by
Tenant hereunder shall continue to be payable in all events and that the
obligations of Tenant hereunder shall continue unaffected, unless the
requirement to pay or perform the same shall have been terminated or
limited pursuant to an express provision of this Lease. However,
nothing in this Paragraph shall be construed as a waiver by Tenant of
any right Tenant may have at law or in equity to (i) recover monetary
damages for any default under this Lease by Landlord that Landlord fails
to cure within the period provided in Paragraph 16, (ii) injunctive
relief in case of the violation, or attempted or threatened violation,
by Landlord of any of the express covenants, agreements, conditions or
provisions of this Lease (including the confidentiality provisions set
forth in Paragraph 23 below), or (iii) a decree compelling performance
of any of the express covenants, agreements, conditions or provisions of
this Lease.
(b) Waiver By Tenant. Without limiting the foregoing, Tenant
waives to the extent permitted by Applicable Laws, except as otherwise
expressly provided herein, all rights to which Tenant may now or
hereafter be entitled by law (including any such rights arising because
of any implied "warranty of suitability" or other warranty under
Applicable Laws) (i) to quit, terminate or surrender this Lease or the
Leased Property or any part thereof or (ii) to any abatement,
suspension, deferment or reduction of the Base Rent or any other sums
payable under this Lease.
6 Construction Allowance.
(a) Advances; Outstanding Construction Allowance.
(i) Subject to the conditions set forth below, Landlord shall
make advances (herein called "Construction Advances") on Advance Dates
from time to time as requested by Tenant to reimburse Tenant for the
cost of Construction Projects or to pay Commitment Fees or Agency Fees
then due. As used herein, references to the "Outstanding Construction
Allowance" shall mean the difference on the date in question (but not
less than zero) of (A) the total Construction Advances made by Landlord
on or prior to the date in question, less (B) any Qualified Payments
received on or prior to the date in question; provided, that Landlord
will not be under any obligation to readvance any portion of the
Construction Allowance repaid by Qualified Payments. Notwithstanding
the foregoing, if for any reason Stipulated Loss Value (and thus the
Outstanding Construction Allowance included as a component thereof) must
be determined under this Lease as of any date between Advance Dates, the
Outstanding Construction Allowance determined on such date shall equal
the Outstanding Construction Allowance on the immediately preceding
Advance Date computed in accordance with the preceding sentence, plus
Carrying Costs (if any) accruing on and after such preceding Advance
Date to but not including the date in question.
(ii) Charges accruing at the Effective Rate (herein
collectively called "Carrying Costs") for each Construction Period
ending on or prior to the Base Rental Commencement Date will be added to
(and thereafter be included in) the Outstanding Construction Allowance
on the last day of each such Construction Period (i.e., on the Advance
Date upon which such Construction Period ends). The amount of Carrying
Costs for each such Construction Period shall be equal to (A) Stipulated
Loss Value (including Carrying Costs added with respect to every
previous Construction Period, if any) as of the first day of such
Construction Period, times (B) the Effective Rate with respect to such
Construction Period, times (C) the number of days in such Construction
Period, divided by (D) 360; provided, however, that because the
Construction Allowance available under this Lease is limited to the
Maximum Construction Allowance, Carrying Costs added to the Outstanding
Construction Allowance on the Base Rental Commencement Date shall not
exceed the amount that can be added without causing the Outstanding
Construction Allowance to exceed the Maximum Construction Allowance.
(iii) For purposes of determining the Effective Rate to be
used in the calculation of Carrying Costs which will accrue during the
first short Construction Period ending on January 2, 1996, the
"comparable period" referred to in clause (iii) of the definition of
LIBOR above shall be thirty days. If, however, any Breakage Costs (as
defined below) are incurred in connection with the use of such an
Effective Rate for the first Construction Period, the Breakage Costs
will be included in Carrying Costs added to the Outstanding Construction
Allowance at the end of the first Construction Period. "Breakage Costs"
means losses, if any, incurred or sustained by Landlord's Parent and
Participants with respect to prior Funding Advances that they would not
have incurred or sustained but for a decline on the first Advance Date,
before the end of the LIBOR period used to compute LIBOR for the first
short Construction Period, in the LIBOR component of the Effective Rate.
Any determination by Landlord's Parent of Breakage Costs shall, in the
absence of clear and demonstrable error, be conclusive and binding upon
Landlord and Tenant.
(b) Construction Projects.
(i) Preconstruction Approvals. Prior to the execution of
this Lease, Tenant submitted and obtained Landlord's approval of plans
or renderings for, a construction budget for, and descriptions of the
initial Construction Project which Tenant expects to construct with the
Construction Allowance. Except as provided below in this subparagraph,
Tenant shall submit and obtain Landlord's written approval of plans or
renderings for any subsequent Construction Project prior to commencement
of the subsequent Construction Project. Landlord may disapprove of such
plans or other items if, but only if, Landlord believes in good faith
that the Construction Project proposed by Tenant will (1) fail to
satisfy the requirements set forth in subparagraph 6(b)(iv), (2) change
the general character of the Leased Property from that needed to
accommodate the uses permitted by subparagraph 8(a) or (3) cause Tenant
or the Leased Property to violate some other express provision of this
Lease; but no approval given by Landlord in connection with any
Construction Project, prior to or after the date hereof, shall
constitute a waiver of subparagraph 6(b)(iv) or of any other provision
of this Lease. Any items hereafter submitted by Tenant to satisfy this
subparagraph shall be sufficiently detailed to allow Landlord to make a
reasonable determination of whether the applicable Construction Project
will satisfy subparagraph 6(b)(iv), but need not include all detailed
construction specifications and drawings of the work to be included in
the Construction Project. All Construction Projects commenced by
Tenant, including the initial Construction Project which is described in
Schedule 3, and all Construction Documents executed or adopted by Tenant
in connection therewith, must be substantially consistent with the plans
or other items heretofore or hereafter submitted to and approved by
Landlord as described above in this subparagraph, except to the extent
otherwise provided by any Scope Changes approved as described below.
Before commencing any Construction Project subsequent to the initial
Construction Project, Tenant shall notify Landlord if Tenant believes
that, upon completion of such subsequent Construction Project, there
will be a substantial likelihood that the Leased Property will have an
Appraised Value of less than 30% of Stipulated Loss Value.
(ii) Scope Changes. Before making a Scope Change to any
Construction Project, Tenant shall provide to Landlord a reasonably
detailed written description of the Scope Change, a revised construction
budget (only if such Scope Change will require an increase in the
existing construction budget) and a copy of any changes to the drawings,
plans and specifications for the Improvements required in connection
therewith, all of which must be approved in writing by Landlord (or by
any construction representative appointed by Landlord from time to time)
before the Scope Change is implemented. Landlord may disapprove of any
Scope Change if, but only if, Landlord believes in good faith that the
Construction Project proposed by Tenant, as modified by the Scope
Change, will (1) fail to satisfy the requirements set forth in
subparagraph 6(b)(iv), (2) change the general character of the Leased
Property from that needed to accommodate the uses permitted by
subparagraph 8(a) or (3) cause Tenant or the Leased Property to violate
some other express provision of this Lease; but Landlord's approval
shall not constitute a waiver of subparagraph 6(b)(iv) or of any other
provision of this Lease.
(iii) Responsibility for Construction. Tenant shall have sole
responsibility for contracting for and administering all Construction
Projects, it being understood that Landlord's obligation with respect to
Construction Projects shall be limited to the making of advances under
and subject to the conditions set forth in this Paragraph 6. No
contractor or other third party shall be entitled to require Landlord to
make advances as a third party beneficiary of this Lease or otherwise.
Notwithstanding delays beyond Tenant's control, and even if the
Construction Allowance is not sufficient to pay for completion of any
Construction Project, Tenant warrants that on the Designated Payment
Date under the Purchase Agreement it shall have caused the initial
Construction Project and any subsequent Construction Projects which are
commenced during the Term to be completed in a good and workmanlike
manner, substantially in accordance with Applicable Laws, and otherwise
in compliance with the provisions of this Lease, unless Tenant or an
Applicable Purchaser has purchased the Leased Property pursuant to the
Purchase Agreement for a net price to Landlord (when taken together with
any additional payments made by Tenant pursuant to Paragraph 2(a)(ii) of
the Purchase Agreement, in the case of a purchase by an Applicable
Purchaser) of not less than Stipulated Loss Value.
(iv) Value Added. Each Construction Project, upon completion
and taken as a whole, must enhance the value of the Leased Property by
an amount commensurate with the Construction Advances made for such
Construction Project, and no Construction Project may significantly
reduce the fair market value of the Property; however:
(1) this subparagraph 6(b)(iv) will not preclude Tenant
from obtaining Construction Advances for soft costs (such as
architectural fees and design and permitting costs), Tenant's internal
labor costs, demolition costs or other costs that do not, individually,
add value to the Leased Property but that are incurred in connection
with a Construction Project which will in the aggregate satisfy this
subparagraph 6(b)(iv);
(2) to address any concerns Landlord may express about
Tenant's ability to satisfy this subparagraph 6(b)(iv) for a
Construction Project, Tenant may by a written notice to Landlord
stipulate a maximum amount of Construction Advances that Landlord will
be required to make for such Construction Project, in which case
Landlord shall not be required to make Construction Advances for such
project in excess of the amount so stipulated;
(3) if Landlord invokes this subparagraph 6(b)(iv) as
justification for disapproving of a Construction Project (or Scope
Change) or for declining to provide Construction Advances for a
Construction Project, then Tenant may satisfy this subparagraph 6(b)(iv)
by (A) stipulating a maximum amount of Construction Advances that
Landlord will be required to make for such Construction Project, and (B)
establishing that Appraised Value of the Leased Property (determined in
accordance with the procedures outlined in Paragraph 4) will be no less
than 30% of Stipulated Loss Value upon completion of the Construction
Project and after Landlord provides Construction Advances equal to the
maximum so stipulated;
(4) further, if Tenant ever does satisfy this
subparagraph 6(b)(iv) for a particular Construction Project by
establishing an Appraised Value of no less than 30% of Stipulated Loss
Value as described in the preceding clause (3), Landlord shall have no
further right, absent a subsequent Scope Change to such Construction
Project, to invoke this subparagraph 6(b)(iv) as justification for
disapproving of such Construction Project or for withholding
Construction Advances requested within the limit of the maximum
Construction Advances stipulated by Tenant.
(v) Estoppel Letters Required. Upon the execution of each
general construction contract for the initial Construction Project and
for any subsequent Construction Project expected to cost in excess of
$10,000,000, Tenant shall cause the contractor thereunder to execute and
deliver to Landlord an estoppel letter in the form of Exhibit C attached
hereto. Tenant shall also cause the architect and engineer under any
material architectural or engineering contract for such a Construction
Project to execute and deliver to Landlord an estoppel letter in the
form of Exhibit D attached hereto. Landlord shall consider in good faith
any changes to the estoppel letter forms attached hereto that Tenant may
reasonably request for a particular Construction Project, provided the
requested changes do not impair Landlord's rights or create or increase
any liability Landlord may have in connection with the Construction
Project.
(vi) Advances Not a Waiver. No funding of Construction
Advances and no failure of Landlord to object to any Construction
Project proposed or constructed by Tenant shall constitute a waiver by
Landlord of the requirements contained in this subparagraph 6(b).
(c) Conditions to Construction Advances. Landlord's obligation to
make Construction Advances from time to time under this Paragraph 6
shall be subject to the following terms and conditions, all of which are
intended for the sole benefit of Landlord:
(i) Prior Notice. Tenant must make a request in
substantially the form attached to this Lease as Exhibit E for any
Construction Advance at least ten (10) Business Days prior to the
Advance Date upon which the advance is to be paid. Landlord shall
consider in good faith any changes to the Construction Advance request
forms attached hereto that Tenant may reasonably request for a
particular Construction Project, provided the requested changes do not
impair Landlord's rights or create or increase any liability Landlord
may have in connection with the Construction Project.
(ii) Amount of the Advances. No Construction Advance shall
exceed the lesser of:
a) the Maximum Construction Allowance, less the then
Outstanding Construction Allowance (computed after adding any Carrying
Costs accrued for the month ending on the Advance Date upon which such
Construction Advance is to be made); or
b) (1) the actual costs and expenses previously incurred
or paid by Tenant for the preparation, negotiation and execution of this
Lease (other than expenses already included in Transaction Expenses),
for Construction Projects (including "soft costs"), for Agency Fees not
included in Transaction Expenses or for Commitment Fees, less (2) the
sum of the portion of the Initial Funding Advances provided for
construction of Improvements (or site work on the Land) as described in
the definition of Initial Funding Advances, plus all Construction
Advances made under this Paragraph 6 to Tenant as reimbursement for such
costs and expenses.
No Construction Advance (other than the final Construction Advance)
shall be requested for an amount less than the lesser of (A) the maximum
advance that may be required of Landlord under the preceding sentence,
and (B) $500,000.
(iii) Insurance. Tenant shall have obtained and provided
certificates (or, in the case of clause a) below, title policies or
binders) reasonably satisfactory to Landlord evidencing insurance
covering the Leased Property as follows (in addition to the liability
insurance required under subparagraph 9(y) below):
a) Title Insurance. An owner's title insurance policy
(or binder committing the applicable title insurer to issue an owner's
title insurance policy, without the payment of further premiums) in the
amount of $125,000,000, in form and substance reasonably satisfactory to
Landlord, written by Chicago Title Insurance Company or one or more
other title insurance companies reasonably satisfactory to Landlord and
insuring Landlord's ownership of fee title to the Leased Property,
including any new Improvements constructed by Tenant; and
b) Builder's Risk Insurance. Builder's Completed Value
Risk and such other hazard insurance as Landlord may require against all
risks of physical loss (including collapse and transit coverage, but not
including earthquake coverage) with deductibles not to exceed
$1,000,000, such insurance to be in amounts sufficient to cover the
total value of all Improvements under construction and to be maintained
in full force and effect at all times until completion of the initial
Construction Project or any subsequent Construction Projects.
(iv) Progress of Construction. Each Construction Project
which has commenced but not yet been completed shall be progressing
without any significant continuing interruption in a good and
workmanlike manner and substantially in accordance with Applicable Laws
and the requirements of this Lease, and Tenant shall have corrected or
be diligently pursuing the correction of any significant defect in the
construction thereof.
(v) Evidence of Costs and Expenses to be Reimbursed. To the
extent contemplated by the Construction Advance request forms attached
as Exhibit E and described in subparagraph 6(c)(i), or otherwise
reasonably required by Landlord at the time a Construction Advance is to
be made, Tenant shall have submitted invoices, requests for payment from
contractors and other evidence that all costs and expenses for which
Tenant requests reimbursement constitute actual costs and expenses
incurred by Tenant for a Construction Project.
(vi) No Event of Default. No Event of Default shall have
occurred and be continuing under this Lease.
(vii) No Sale of Landlord's Interest. No sale of Landlord's
interest in the Leased Property shall have occurred pursuant to the
Purchase Agreement.
(viii) Certificate of No Default and Other Matters. Landlord
shall have received, together with the notice requesting the
Construction Advance described in clause (i) above, a current
certificate of an officer of Tenant in the form included in Exhibit F
(a) certifying that no Event of Default has occurred and is continuing,
(b) certifying that the representations and warranties contained herein
are true and correct in all material respects on and as of the date of
such certificate as though made on and as of such date, subject only to
such exceptions as may be disclosed therein and as are acceptable to
Landlord, (c) certifying that each Construction Project which has
commenced but not yet been completed is progressing without any
significant continuing interruption in a good and workmanlike manner and
substantially in accordance with the requirements of this Lease and all
Applicable Laws and that Tenant has corrected or is diligently pursuing
the correction of any significant defect in the construction thereof,
(d) certifying that all costs and expenses for which Tenant is
requesting reimbursement by the Construction Advance constitute actual
costs and expenses incurred by Tenant for a Construction Project, and
(e) certifying that, to the knowledge of Tenant, any liens then being
asserted against the Leased Property by general contractors or other
parties who have filed a statutory Preliminary Notice to preserve their
right to a mechanic's or materialman's lien against the Leased Property
(collectively, "Potential Lien Claimants") do not in the aggregate
secure or allegedly secure more that $5,000,000 of claims. (As used in
this subparagraph a lien will be considered as "being asserted" if a
claim of lien relating thereto shall have been recorded and not
discharged by payment or settlement.) Further, a copy of the
certificate required by this clause shall have been furnished by Tenant
to each of the Participants, and the certificate shall be true and
correct. Without limiting the foregoing, Landlord may decline to
advance any amount when liens are being asserted against any part of or
interest in the Leased Property that in the aggregate secure or
allegedly secure more that $5,000,000 of claims by Potential Lien
Claimants, regardless whether any such liens have caused an Event of
Default to occur hereunder or are being contested by Tenant as permitted
by subparagraph 9(o).
(ix) Payments by Participants. None of the Participants or
their successors under their participation agreements with Landlord
shall have failed to advance to Landlord their pro rata shares of the
Construction Advance being requested. However, any such failure shall
excuse Landlord's obligation to provide the Construction Advance
requested only to the extent of the funds that the applicable
Participant or Participants should have advanced (but did not advance)
to Landlord, and in the event of any such failure:
a) Landlord will immediately notify Tenant if any
Participant refuses or fails to advance its pro rata share of any
Construction Advance, but Landlord will not in any event be liable to
Tenant for Landlord's failure to do so.
b) Landlord will, to the extent possible, postpone
reductions of Construction Advances because of the failure by any one or
more Participants ("Nonfunding Participants") to make required advances
under their participation agreements with Landlord (a "Participant
Default") by adjusting (and readjusting from time to time, as required)
the funding "Percentages" of other Participants, and by requesting the
other Participants to make advances to Landlord on the basis of such
adjusted Percentages, in each case as provided in the participation
agreements between the Participants and Landlord; however, so long as a
Participant Default continues, no Construction Advance shall be required
that would cause the Outstanding Construction Allowance to exceed (a)
the Maximum Construction Allowance available under this Lease, less (b)
all amounts that should have been, but because of a continuing
Participant Default have not been, advanced by any one or more of the
Participants to Landlord under their participation agreements with
Landlord with respect to Construction Advances.
c) Further, after a Participant Default, and so long as
no Event of Default has occurred and is continuing, Landlord shall do
the following as reasonably requested by Tenant, provided that nothing
in this provision shall require Landlord to take any action that would
violate Applicable Laws, that would constitute a breach of Landlord's
obligations under the participation agreements with the Participants, or
that would require Landlord to waive any rights or remedies it has under
this Lease, the Purchase Agreement or Landlord's other agreements with
Tenant concerning the Leased Property:
(1) Landlord shall promptly make a written demand
upon the Nonfunding Participants for the cure of the Participant
Default.
(2) Landlord shall, to the extent Landlord has
the right to do so under Landlord's participation agreements with the
Participants, decline to allow the Nonfunding Participants to exercise
voting, consent or notification rights under the participation
agreements.
(3) Landlord shall not unreasonably withhold its
approval for the substitution of any new participant proposed by Tenant
for Nonfunding Participants, if (A) the proposed substitution does not
require Landlord to waive rights against the Nonfunding Participants,
(B) the new participant will agree (by executing a participation
agreement that is consistent with and substantially similar to the
participation agreements that Landlord has entered into with the
Participants and that is otherwise in form reasonably satisfactory to
Landlord and Tenant) to provide funds to replace the payments that would
otherwise be required of the Nonfunding Participants with respect to
future Construction Advances, (C) the new participant (or Tenant)
provides the funds (if any) needed to terminate the Nonfunding
Participants' rights to receive payments of "Net Cash Flow" (as defined
in the participation agreements between with Landlord and the
Participants) that Landlord will be required to pay the new participant
under the terms of the substitution reasonably proposed by Tenant, (D)
the new participant (or Tenant) provides and agrees in writing to
provide funds needed to reimburse Landlord for any and all Losses
incurred by Landlord in connection with or because of the substitution
of the new participant for the Nonfunding Participants, including the
cost of preparing, negotiating and executing a new participation
agreement between Landlord and the new participant and including any
cost of defending and paying any claim asserted by Nonfunding
Participants because of the substitution (but not including any
liability of Landlord to the Nonfunding Participants for damages caused
by Landlord's bad faith or gross negligence in the performance of
Landlord's obligations to the Nonfunding Participants), (E) the
obligations of Landlord to the new participant per dollar of the new
participant's "investment" (it being understood that such investment
will be computed in a manner consistent with the examples set forth in
Exhibit A of the participation agreements between Landlord and the
Participants, but net of reimbursements to Landlord under clause (D)
preceding) shall not exceed the obligations per dollar of investment by
the Nonfunding Participants that Landlord would have had to the
Nonfunding Participants if there had been no Participant Default, and
(F) the new participant shall be a reputable financial institution
having a net worth of no less than seven and one half percent (7.5%) of
total assets and total assets of no less than $10,000,000,000.00 (all
according to then recent audited financial statements).
(x) Execution of Participation Agreements With Participants.
All of the Persons listed in Schedule 1 shall have entered into
participation agreements with Landlord which shall cause them to qualify
as Participants hereunder. Any such participation agreement executed
after this Lease is executed shall be subject to Tenant's prior
approval, and Landlord shall promptly furnish Tenant with a copy of any
such agreement.
7 Purchase Agreement and Environmental Indemnity Agreement. Tenant
acknowledges and agrees that nothing contained in this Lease shall
limit, modify or otherwise affect any of Tenant's obligations under the
Purchase Agreement or the Environmental Indemnity Agreement, which
obligations, to the maximum extent possible, shall be deemed to be
separate, independent and in addition to, and not in lieu of, the
obligations set forth herein. In the event of any inconsistency between
the terms and provisions of the Purchase Agreement or the Environmental
Indemnity Agreement and the terms and provisions of this Lease, the
terms and provisions of the Purchase Agreement or Environmental
Indemnity Agreement shall control.
8 Use and Condition of Leased Property.
(a) Use. Subject to the Permitted Encumbrances and the terms
hereof, Tenant may use, occupy and operate the Leased Property during
the Term so long as no Event of Default occurs hereunder, but only for
the following purposes and other lawful purposes incidental thereto:
(i) construction, development, testing and validation of
Construction Projects;
(ii) biotechnology/pharmaceutical manufacturing;
(iii) support functions for such manufacturing uses, including
processing, research, laboratory, development, distribution, warehousing
or similar uses;
(iv) administrative and office space; and
(v) cafeteria, library and facilities that Tenant may provide
to its employees.
(b) Condition. Tenant accepts the Leased Property (and will
accept the same upon any purchase of the Landlord's interest therein) in
its present state, AS IS, and without any representation or warranty,
express or implied, as to the condition of such property or as to the
use which may be made thereof. Tenant also accepts the Leased Property
without any representation or warranty, express or implied, by Landlord
regarding the title thereto or the rights of any parties in possession
of any part thereof, except as set forth in subparagraph 10(a).
Landlord shall not be responsible for any latent or other defect or
change of condition in the Land, Improvements, fixtures and personal
property forming a part of the Leased Property, and the Rent hereunder
shall in no case be withheld or diminished because of any latent or
other defect in such property, any change in the condition thereof or
the existence with respect thereto of any violations of Applicable Laws.
Further, though Tenant may obtain from third parties any facilities or
services to which Tenant is entitled by reason of the assignment and
lease of Personal Property set forth on page 2 of this Lease, Landlord
shall not itself be required to furnish to Tenant any facilities or
service of any kind, such as, but not limited to, water, steam, heat,
gas, hot water, electricity, light or power.
(c) Consideration for and Scope of Waiver. The provisions of
subparagraph 8(b) above have been negotiated by the Landlord and Tenant
after due consideration for the Rent payable hereunder and are intended
to be a complete exclusion and negation of any representations or
warranties of the Landlord, express or implied, with respect to the
Leased Property that may arise pursuant to any law now or hereafter in
effect, or otherwise. However, such exclusion of representations and
warranties by Landlord is not intended to impair any representations or
warranties made by other parties, including Seller, the benefit of which
may pass to Tenant during the Term because of the definition of Personal
Property and Leased Property above.
9 Other Representations, Warranties and Covenants of Tenant. Tenant
represents, warrants and covenants as follows:
(a) Financial Matters. Tenant is solvent and has no outstanding
liens, suits, garnishments or court actions which could render Tenant
insolvent. There has not been filed by or, to Tenant's knowledge,
against Tenant a petition in bankruptcy or a petition or answer seeking
an assignment for the benefit of creditors, the appointment of a
receiver, trustee, custodian or liquidator with respect to Tenant or any
significant portion of Tenant's property, reorganization, arrangement,
rearrangement, composition, extension, liquidation or dissolution or
similar relief under the federal Bankruptcy Code or any state law. (As
used in this Lease, "Tenant's knowledge" means the present actual
knowledge (with due investigation) of Daniel Spiegelman and Marty Glick
and, as to matters concerning the Leased Property only, James Panek and
George Mackey, all current employees of Tenant. However, to the extent
Tenant's knowledge after the date hereof may become relevant hereunder
or under any certificate or other notice provided by Tenant to Landlord
in connection with this Lease, "Tenant's knowledge" shall include the
then actual knowledge of other employees of Tenant (if any) that have
assumed responsibilities of the current employees listed in the
preceding sentence or that have replaced such current employees. None
of the employees of Tenant whose knowledge is now or may hereafter be
relevant shall be personally liable for the representations or
warranties of Tenant made herein.) The financial statements and all
financial data heretofore delivered to Landlord relating to Tenant are
true, correct and complete in all material respects. No material
adverse change has occurred in the financial position of Tenant as
reflected in Tenant's financial statements covering the fiscal period
ended September 30, 1995.
(b) The Contract and Other Development Contracts. Except to the
extent required of Landlord under subparagraph 10(b), Tenant shall
satisfy the surviving obligations, if any, of the "Buyer" (as the term
"Buyer" is used in the Contract) under the Contract and under all other
documents to which Landlord has become bound or subject because of
Landlord's acceptance of the assignment of the Contract or ownership of
the Leased Property, including without limitation the Development
Contracts listed in Schedule 2 attached hereto. Tenant agrees to
indemnify, defend and hold Landlord harmless from and against any and
all Losses imposed on or asserted against or incurred by Landlord at any
time and from time to time by reason of, in connection with or arising
out of any obligations imposed by the Contract or the other Development
Contracts. The indemnity set out in this subparagraph shall apply even
if the subject of the indemnification is caused by or arises out of the
negligence of Landlord; provided, such indemnity shall not apply to
Losses proximately caused by (and attributed by any applicable
principles of comparative fault to) the Active Negligence, gross
negligence or willful misconduct of Landlord, its Affiliates, agents or
employees. Because Tenant hereby assumes and agrees to satisfy all
surviving obligations of the Buyer under the Contract and any other
obligations imposed upon Landlord by reason of the Contract or the other
Development Contracts, no failure by Landlord to take any action
required by the Contract or the other Development Contracts (save and
except any actions required of Landlord under subparagraph 10(b) below)
shall, for the purposes of this indemnity, be deemed to be caused by the
Active Negligence, gross negligence or willful misconduct of Landlord,
its Affiliates, agents or employees. The foregoing indemnity is in
addition to the other indemnities set out herein and shall not terminate
upon the closing of any sale of Landlord's interest in the Leased
Property pursuant to the provisions of the Purchase Agreement or the
termination of this Lease.
(c) No Default or Violation. The execution, delivery and
performance by Tenant of this Lease and the Purchase Agreement do not
and will not constitute a breach or default under any other material
agreement or contract to which Tenant is a party or by which Tenant is
bound or which affects the Leased Property or which affects Tenant's
use, occupancy or operation of the Leased Property or any part thereof
and do not, to the knowledge of Tenant, violate or contravene any law,
order, decree, rule or regulation to which Tenant is subject. Further,
such execution, delivery and performance by Tenant will not result in
the creation or imposition of (or the obligation to create or impose)
any lien, charge or encumbrance on, or security interest in, Tenant's
property pursuant to the provisions of any of the foregoing in any
respect which would have a material adverse effect upon the properties,
assets, operations or businesses of Tenant and its Subsidiaries, taken
as a whole.
(d) Compliance with Covenants and Laws. To Tenant's knowledge,
the intended use of the Leased Property by Tenant complies, or will
comply after Tenant obtains readily available permits, in all material
respects with all applicable restrictive covenants, zoning ordinances
and building codes, flood disaster laws, applicable health, safety and
environmental laws and regulations, the Americans with Disabilities Act
and other laws pertaining to disabled persons, and all other applicable
laws, statutes, ordinances, rules, permits, regulations, orders,
determinations and court decisions (all of the foregoing are herein
sometimes collectively called "Applicable Laws"). Tenant has obtained
or will during the Term obtain on a timely basis all utility, building,
health and operating permits as may be required for Tenant's use of the
Leased Property during the Term by any governmental authority or
municipality having jurisdiction over the Leased Property.
(e) Environmental Representations. To Tenant's knowledge and
except as otherwise disclosed in the Environmental Report, as of the
date hereof: (i) no Hazardous Substances Activity (other than Permitted
Hazardous Substance Use by Tenant) has occurred prior to the date of
this Lease; (ii) neither Tenant nor any prior owner or operator of the
Leased Property has reported or been required to report any release of
any Hazardous Substances on or from the Leased Property pursuant to any
Environmental Law; (iii) neither Tenant nor any prior owner or operator
of the Leased Property has received any warning, citation, notice of
violation or other communication regarding a suspected or known material
release or discharge of Hazardous Substances on or from the Leased
Property or regarding any significant continuing or allegedly
continuing violation of Environmental Laws concerning the Leased
Property from any federal, state or local agency; and (iv) none of the
following are located on the Leased Property: asbestos; urea
formaldehyde foam insulation; transformers or other equipment which
contain dielectric fluid containing levels of polychlorinated biphenyls
in excess of fifty (50) parts per million; any other Hazardous
Substances other than Permitted Hazardous Substances; or any underground
storage tank or tanks. Further, Tenant represents that to the best of
its knowledge the Environmental Report is not misleading or inaccurate
in any material respect.
(f) No Suits. Other than as previously disclosed in Tenant's most
recent 10-K filings with the Securities and Exchange Commission (copies
of which have been delivered to Landlord), there are no judicial or
administrative actions, suits, proceedings or investigations pending or,
to Tenant's knowledge, threatened that are reasonably likely to affect
Tenant's intended use of the Leased Property or the validity,
enforceability or priority of this Lease, or Tenant's use, occupancy and
operation of the Leased Property or any part thereof, and Tenant is not
in default with respect to any order, writ, injunction, decree or demand
of any court or other governmental or regulatory authority that could
materially and adversely affect the business or assets of Tenant and its
Subsidiaries taken as a whole or Tenant's use, occupancy or operation of
the Leased Property. No condemnation or other like proceedings are
pending or, to Tenant's knowledge, threatened against the Leased
Property.
(g) Condition of Property. Adequate provisions have been made, or
during the Term adequate provision will be made by Tenant or Tenant's
Agents (pursuant to, without limitation, the Development Contracts), for
any existing or planned Improvements (other than grading or other site
work) to be served by electric, gas, storm and sanitary sewers, sanitary
water supply, telephone and other utilities and by streets, alleys and
easements necessary to serve such Improvements. Upon completion of the
initial Construction Project, the Leased Property will be in a condition
satisfactory for its use and occupancy as intended under this Lease. No
part of the Real Property is within an area identified by the Secretary
of Housing and Urban Development as an area having special flood
hazards.
(h) Organization. Tenant is duly incorporated and legally
existing under the laws of the State of Delaware and is duly qualified
to do business in the State of California. Tenant has all requisite
power and has procured or will procure on a timely basis all
governmental certificates of authority, licenses, permits,
qualifications and other documentation required to lease and operate the
Leased Property. Tenant has the corporate power and adequate authority,
rights and franchises to own Tenant's property and to carry on Tenant's
business as now conducted and is duly qualified and in good standing in
each state in which the character of Tenant's business makes such
qualification necessary (including, without limitation, the State of
California) or, if it is not so qualified in a state other than
California, such failure does not have a material adverse effect on the
properties, assets, operations or businesses of Tenant and its
Subsidiaries, taken as a whole.
(i) Enforceability. The execution, delivery and performance of
this Lease and the Purchase Agreement by Tenant are duly authorized, are
not in contravention of or conflict with any term or provision of
Tenant's articles of incorporation or bylaws and do not, to Tenant's
knowledge, conflict with any Applicable Laws or require the consent or
approval of any governmental body or other regulatory authority that has
not heretofore been obtained; provided, some consents or approvals which
are readily obtainable and which are required for Tenant's performance
hereunder (for example, building permits required for construction of
the initial Construction Project) may not have been heretofore obtained,
but Tenant shall obtain such consents or approvals as required in
connection with its performance of this Lease. This Lease and the
Purchase Agreement are valid, binding and legally enforceable
obligations of Tenant except as such enforcement is affected by
bankruptcy, insolvency and similar laws affecting the rights of
creditors, generally, and equitable principles of general application.
(j) Not a Foreign Person. Tenant is not a "foreign person" within
the meaning of Sections 1445 and 7701 of the Code (i.e., Tenant is not a
non-resident alien, foreign corporation, foreign partnership, foreign
trust or foreign estate as those terms are defined in the Code and
regulations promulgated thereunder).
(k) Omissions. None of Tenant's representations or warranties
contained in this Lease or in any other agreement between Tenant and
Landlord relating to the Leased Property or in any Tenant certificate
furnished to Landlord by or on behalf of Tenant in connection with the
Leased Property contains any untrue statement of a material fact or
omits a material fact necessary in order to make the statements
contained herein or therein (when taken in their entireties) not
misleading.
(l) Existence. During the Term, Tenant shall continuously
maintain its existence and its qualification to do business in the State
of California, and Tenant will not make any significant change in the
nature of the business of Tenant and its Subsidiaries, taken as a whole,
as presently conducted.
(m) Tenant Taxes. During the Term, Tenant shall comply with all
applicable tax laws and pay before the same become delinquent all taxes
imposed upon it or upon its property where the failure to so comply or
so pay would have a material adverse effect on the financial condition
or operations of Tenant and its Subsidiaries on a consolidated basis;
except that Tenant may in good faith by appropriate proceedings contest
the validity, applicability or amount of any such taxes and pending such
contest Tenant shall not be deemed in default under this subparagraph if
(1) Tenant diligently prosecutes such contest to completion in an
appropriate manner, and (2) Tenant promptly causes to be paid any tax
adjudged by a court of competent jurisdiction to be due, with all costs,
penalties, and interest thereon, promptly after such judgment becomes
final; provided, however, in any event such contest shall be concluded
and the tax, penalties, interest and costs shall be paid prior to the
date any writ or order is issued under which any of Tenant's property
that is material to the business of Tenant and its Subsidiaries taken as
a whole may be seized or sold because of the nonpayment thereof.
(n) Operation of Property. During the Term, Tenant shall operate
the Leased Property in a good and workmanlike manner and substantially
in compliance with all Applicable Laws and will pay or cause to be paid
all fees or charges of any kind in connection therewith. (If Tenant
does not promptly correct any failure of the Leased Property to comply
with Applicable Laws that is the subject of a written notice given to
Tenant or Landlord by any governmental authority, then for purposes of
the preceding sentence, Tenant shall be considered not to have
maintained the Leased Property "substantially in accordance with
Applicable Laws" whether or not the noncompliance would be substantial
in the absence of the notice.) During the Term, Tenant shall not use or
occupy, or allow the use or occupancy of, the Leased Property in any
manner which violates any Applicable Law or which constitutes a public
or private nuisance or which makes void, voidable or cancelable any
insurance then in force with respect thereto. During the Term, to the
extent that any of the following would, individually or in the
aggregate, materially and adversely affect the value of the Leased
Property or Tenant's use, occupancy or operations on the Leased
Property, Tenant shall not, without Landlord's prior consent: (i)
initiate or permit any zoning reclassification of the Leased Property;
(ii) seek any variance under existing zoning ordinances applicable to
the Leased Property; (iii) use or permit the use of the Leased Property
in a manner that would result in such use becoming a nonconforming use
under applicable zoning ordinances or similar laws, rules or
regulations; (iv) subject to Paragraph 10(b) below, execute or file any
subdivision plat affecting the Leased Property; or (v) consent to the
annexation of the Leased Property to any municipality. During the Term,
if (A) a change in the zoning or other Applicable Laws affecting the
permitted use or development of the Leased Property shall occur that
reduces Appraised Value, or (B) conditions or circumstances on or about
the Leased Property are discovered (such as the presence of an
endangered species) which substantially impede development and thereby
reduce Appraised Value, and if after any such reduction under clause (A)
or (B) above Appraised Value of the Leased Property is less than thirty
percent (30%) of Stipulated Loss Value, then Tenant shall pay Landlord
upon request the amount by which Appraised Value is less than thirty
percent (30%) of Stipulated Loss Value, for application as a Qualified
Payment. For purposes of determining Appraised Value under the
preceding sentence, the provisions of subparagraph 4(a)(v) shall apply.
During the Term, Tenant shall not cause or permit any drilling or
exploration for, or extraction, removal or production of, minerals from
the surface or subsurface of the Leased Property, and Tenant shall not
do any act whereby the market value of the Leased Property may
reasonably be expected to be materially lessened. Subject to Paragraph
23, during the Term, Tenant shall allow Landlord or its authorized
representative to enter the Leased Property at any reasonable time to
inspect the Leased Property and, after reasonable notice, to inspect
Tenant's books and records pertaining thereto, and Tenant shall assist
Landlord or Landlord's representative in whatever way reasonably
necessary to make such inspections. During the Term, if Tenant receives
a written notice or claim from any federal, state or other governmental
entity that the Leased Property is not in compliance in any material
respect with any Applicable Law, or that any action may be taken against
the owner of the Leased Property because the Leased Property does not
comply with Applicable Law, Tenant shall promptly furnish a copy of such
notice or claim to Landlord. Notwithstanding the foregoing, Tenant may
in good faith by appropriate proceedings contest the validity and
applicability of any Applicable Law with respect to the Leased Property,
and pending such contest Tenant shall not be deemed in default hereunder
because of a violation of such Applicable Law, if Tenant diligently
prosecutes such contest to completion in a manner reasonably
satisfactory to Landlord, and if Tenant promptly causes the Leased
Property to comply with any such Applicable Law upon a final
determination by a court of competent jurisdiction that the same is
valid and applicable to the Leased Property; provided, that in any event
such contest shall be concluded and the violation of such Applicable Law
must be corrected (in a manner that will not materially impede future
development of the Leased Property) and any claims asserted against
Landlord or the Leased Property because of such violation must be paid
by Tenant, all prior to (i) any Designated Payment Date on which neither
Tenant nor any Applicable Purchaser purchases the Leased Property
pursuant to the Purchase Agreement for a net price to Landlord (when
taken together with any additional payments made by Tenant pursuant to
Paragraph 2(a)(ii) of the Purchase Agreement, in the case of a purchase
by an Applicable Purchaser) of not less than Stipulated Loss Value, (ii)
the date any criminal charges may be brought against Landlord or any of
its directors, officers or employees because of such violation or (iii)
the date any action may be taken by any governmental authority against
Landlord or any property owned by Landlord (including the Leased
Property) because of such violation.
(o) Debts for Construction. During the Term, Tenant shall cause
all debts and liabilities incurred in the construction, maintenance,
operation and development of the Leased Property, including without
limitation all debts and liabilities for labor, material and equipment
and all debts and charges for utilities servicing the Leased Property,
to be promptly paid. Notwithstanding the foregoing, Tenant may in good
faith by appropriate proceedings contest the validity, applicability or
amount of any asserted mechanic's or materialmen's lien and pending such
contest Tenant shall not be deemed in default under this subparagraph
(or subparagraph 9(t)) because of the contested lien if (1) within sixty
(60) days after being asked to do so by Landlord, Tenant bonds over to
Landlord's satisfaction any contested liens alleged to secure an amount
in excess of $1,000,000 (individually or in the aggregate) (2) Tenant
diligently prosecutes such contest to completion in a manner reasonably
satisfactory to Landlord, and (3) Tenant promptly causes to be paid any
amount adjudged by a court of competent jurisdiction to be due, with all
costs and interest thereon, promptly after such judgment becomes final;
provided, however, that in any event each such contest shall be
concluded and the lien, interest and costs shall be paid prior to (i)
any Designated Payment Date on which neither Tenant nor any Applicable
Purchaser purchases the Leased Property pursuant to the Purchase
Agreement for a net price to Landlord (when taken together with any
additional payments made by Tenant pursuant to Paragraph 2(a)(ii) of the
Purchase Agreement, in the case of a purchase by an Applicable
Purchaser) of not less than Stipulated Loss Value, (ii) the date any
criminal action may be instituted against Landlord or its directors,
officers or employees because of the nonpayment thereof or (iii) any
writ or order is issued under which any property owned by Landlord
(including the Leased Property) may be seized or sold or any other
action may be taken against Landlord or any property owned by Landlord
because of the nonpayment thereof.
(p) Impositions. Tenant shall reimburse Landlord for (or, if
requested by Landlord, will pay or cause to be paid prior to
delinquency) all sales, excise, ad valorem, gross receipts, business,
transfer, stamp, occupancy, rental and other taxes, levies, fees,
charges, surcharges, assessments or penalties which arise out of or are
attributable to this Lease or which are imposed upon Landlord or the
Leased Property because of the ownership, leasing, occupancy, sale,
development or operation of the Leased Property, or any part thereof,
during the Term or which relate to or are required to be paid during the
Term by the terms of any of the Permitted Encumbrances (collectively,
herein called the "Impositions"), excluding only (and in every case)
Excluded Taxes. If Landlord requires Tenant to pay any Impositions
directly to the applicable taxing authority or other party entitled to
collect the same, Tenant shall furnish Landlord with receipts showing
payment of such Impositions and other amounts prior to delinquency;
except that Tenant may in good faith by appropriate proceedings contest
the validity, applicability or amount of any asserted Imposition, and
pending such contest Tenant shall not be deemed in default of this
subparagraph 9(p) (or subparagraph 9(t)) because of the contested
Imposition if (1) within sixty (60) days after being asked to do so by
Landlord, Tenant bonds over to the satisfaction of Landlord any lien
asserted against the Leased Property and alleged to secure an amount in
excess of $1,000,000 because of the contested Imposition (2) Tenant
diligently prosecutes such contest to completion in a manner reasonably
satisfactory to Landlord, and (3) Tenant promptly causes to be paid any
amount adjudged by a court of competent jurisdiction to be due, with all
costs, penalties and interest thereon, promptly after such judgment
becomes final; provided, however, that in any event each such contest
shall be concluded and the Impositions, penalties, interest and costs
shall be paid prior to (i) any Designated Payment Date on which neither
Tenant nor any Applicable Purchaser purchases the Leased Property
pursuant to the Purchase Agreement for a net price to Landlord (when
taken together with any additional payments made by Tenant pursuant to
Paragraph 2(a)(ii) of the Purchase Agreement, in the case of a purchase
by an Applicable Purchaser) of not less than Stipulated Loss Value, (ii)
the date any criminal action may be instituted against Landlord or its
directors, officers or employees because of the nonpayment thereof or
(iii) the date any writ or order is issued under which any property
owned by Landlord (including the Leased Property) may be seized or sold
or any other action may be taken against Landlord or any property owned
by Landlord because of the nonpayment thereof. As used herein,
"Impositions" shall include real estate taxes imposed because of a
change of use or ownership of the Leased Property, including, to the
extent attributable to the term of this Lease or any prior period, any
such real estate taxes imposed because of a change in use or ownership
after the term of this Lease expires or is terminated.
(q) Repair, Maintenance, Alterations and Additions. During the
Term, Tenant shall keep the Leased Property in good order, repair,
operating condition and appearance (subject to reasonable deviations
required to accommodate Construction Projects permitted by this Lease
and ordinary wear and tear) and shall cause all necessary repairs,
renewals, replacements, additions and improvements to the Leased
Property to be promptly made. Tenant shall not allow the Leased
Property to be materially misused, abused or wasted or to deteriorate
(subject to reasonable deviations required to accommodate Construction
Projects permitted by this Lease and ordinary wear and tear), and Tenant
shall promptly replace any worn-out fixtures and Personal Property with
fixtures and Personal Property comparable to the replaced items when
new. Tenant shall not, without the prior written consent of Landlord,
(i) remove from the Leased Property any fixture or Personal Property
having significant value except such as are replaced by Tenant by
fixtures or Personal Property of equal suitability and value, free and
clear of any lien or security interest (and for purposes of this clause
"significant value" will mean any fixture or Personal Property that has
a value of more than $100,000 or that, when considered together with all
other fixtures and Personal Property removed and not replaced by Tenant
by items of equal suitability and value, has an aggregate value of
$1,000,000 or more) or (ii) make or alter Improvements except as part of
Construction Projects meeting the requirements of Paragraph 6(b). At
any time requested by Landlord, Tenant shall deliver to Landlord an
inventory describing and showing the make, model, serial number and
location of each item of Personal Property having a significant value
with a certification by Tenant that such inventory is true and complete
and that all items specified in the inventory are free and clear of any
lien or security interest other than the Permitted Encumbrances
described in Exhibit B.
(r) Insurance and Casualty. Throughout the Term, Tenant shall
keep all Improvements (other than Improvements consisting only of
grading and other site work) and tangible Personal Property covered by
insurance against damage or destruction by fire or other casualty in the
amount of one hundred percent (100%) of the replacement value. The
policy or policies under which such insurance is maintained shall
include endorsements for contingent liability from operation of building
laws and increased cost of construction and demolition costs which may
be necessary to comply with building laws. Such insurance shall, except
to the extent provided under a builder's risk policy maintained as
required by subparagraph 6(c)(iii)b) above during the construction of
any Construction Project, be provided under an all-risk property
insurance policy (not excluding from coverage perils normally included
within the definitions of extended coverage, vandalism and malicious
mischief and flood, but not including earthquake coverage). Tenant will
be responsible for determining the amount of property insurance to be
maintained, but such coverage will be on an agreed value basis to
eliminate the effects of coinsurance. Such insurance shall be issued by
an insurance company or companies rated by the A.M. Best Company of
Oldwick, New Jersey as having a policyholder's rating of A or better and
a reported financial information rating of X or better. Any deductible
applicable to such insurance shall not exceed $1,000,000. Such
insurance shall cover not only the value of Tenant's interest in the
applicable Improvements and tangible Personal Property, but also the
interest of Landlord, and such insurance shall include provisions that
Landlord must be notified at least ten (10) days prior to any
cancellation or reduction of insurance coverage. With this Lease Tenant
shall deliver to Landlord a certificate from the applicable insurer or
its authorized agent evidencing the insurance required by this
subparagraph and any additional insurance which shall be taken out upon
any part of the Leased Property. Thereafter during the Term, Tenant
shall deliver to Landlord certificates from the applicable insurer or
its authorized agent in form reasonably satisfactory to Landlord
evidencing renewals or replacements of all such policies of insurance at
least fifteen (15) days before any such insurance shall expire. Tenant
further agrees that all such policies shall provide that proceeds
thereunder will be payable to Landlord as Landlord's interest may
appear, without reduction because of any negligence or other acts or
omissions of Tenant (including any use of the Leased Property by Tenant
for a purpose more hazardous than that permitted by the terms of the
applicable insurance policy). If Tenant fails to obtain any insurance
required by this Lease or to provide confirmation of any such insurance
as required by this Lease, Landlord shall be entitled (but not required)
to obtain the insurance that Tenant has failed to obtain or for which
Tenant has not provided the required confirmation and, without limiting
Landlord's other remedies under the circumstances, Landlord may require
Tenant to reimburse Landlord for the cost of such insurance and to pay
interest thereon computed at the Default Rate from the date such cost
was paid by Landlord until the date of reimbursement by Tenant. In the
event any of the Leased Property is destroyed or damaged by fire,
explosion, windstorm, hail or by any other casualty against which
insurance shall have been required hereunder, (i) Landlord may, but
shall not be obligated to, make proof of loss if not made promptly by
Tenant, (ii) each insurance company concerned is hereby authorized and
directed to make payment for such loss directly to Landlord for
application as required by Paragraph 4, and (iii) Landlord may settle,
adjust or compromise any and all claims for loss, damage or destruction
under any policy or policies of insurance (provided, that if any such
claim is for less than $10,000,000 and no Event of Default shall have
occurred and be continuing, Tenant shall have the right to settle,
adjust or compromise the claim as Tenant deems appropriate; and,
provided further, that so long as no Event of Default shall have
occurred and be continuing, Landlord must provide Tenant with at least
forty-five (45) days notice of Landlord's intention to settle any such
claim before settling it unless Tenant shall already have approved of
the settlement by Landlord). If any casualty shall result in damage to
or loss or destruction of the Leased Property in excess of $1,000,000,
Tenant shall give immediate notice thereof to Landlord and Paragraph 4
shall apply. In the event that insurance proceeds totaling not more
than $1,000,000 are collected as a result of a fire or other casualty
involving the Leased Property, Tenant may directly receive such proceeds
so long as no Event of Default shall have occurred and be continuing and
so long as Tenant applies such proceeds towards the restoration,
replacement and repair of the Leased Property as provided under
subparagraph 4(a)(iv).
(s) Condemnation. During the Term, immediately upon obtaining
knowledge of the institution of any proceedings for the condemnation of
the Leased Property or any portion thereof, or any other similar
governmental or quasi-governmental proceedings arising out of injury or
damage to the Leased Property or any portion thereof, Tenant shall
notify Landlord of the pendency of such proceedings. Tenant shall, at
its expense, diligently prosecute any such proceedings and shall consult
with Landlord, its attorneys and experts and cooperate with them as
reasonably requested in the carrying on or defense of any such
proceedings. All proceeds of condemnation awards or proceeds of sale in
lieu of condemnation with respect to the Leased Property and all
judgments, decrees and awards for injury or damage to the Leased
Property shall be paid to Landlord and applied as provided in Paragraph
4 above. Landlord is hereby authorized, in the name of Tenant, to
execute and deliver valid acquittances for, and to appeal from, any such
judgment, decree or award concerning condemnation of any of the Leased
Property. Landlord shall not be, in any event or circumstances, liable
or responsible for failure to collect, or to exercise diligence in the
collection of, any such proceeds, judgments, decrees or awards.
(t) Protection and Defense of Title Against Liens and Other
Encumbrances or Defects. If any encumbrance or title defect whatsoever
affecting the fee interest in the Leased Property is claimed or
discovered (including Liens against any part of or interest in the
Leased Property, whether or not expressly subordinate to this Lease or
Landlord's interest in the Leased Property, but excluding Permitted
Encumbrances, this Lease and any other encumbrance which is claimed by
Landlord or lawfully claimed through or under Landlord and which is not
claimed by, through or under Tenant) or if any legal proceedings are
instituted with respect to title to the Leased Property, Tenant shall
give prompt written notice thereof to Landlord and at Tenant's own cost
and expense will promptly cause the removal of any such encumbrance and
cure any such defect and will take all necessary and proper steps for
the defense of any such legal proceedings, including but not limited to
the employment of counsel, the prosecution or defense of litigation and
the release or discharge of all adverse claims. If Tenant fails to
promptly remove any such encumbrance or title defect, Landlord (whether
or not named as a party to legal proceedings with respect thereto) shall
be entitled to take such additional steps as in its judgment may be
necessary or proper to remove such encumbrance or cure such defect or
for the defense of any such attack or legal proceedings or the
protection of Landlord's fee interest in the Leased Property, including
but not limited to the employment of counsel, the prosecution or defense
of litigation, the compromise or discharge of any adverse claims made
with respect to the Leased Property, the removal of prior liens or
security interests, and all expenses (including Attorneys' Fees) so
incurred of every kind and character shall be a demand obligation owing
by Tenant.
For purposes of this subparagraph 9(t), Tenant shall be deemed to
be acting promptly to remove any encumbrance or to cure any title
defect, other than a Lien which Tenant has itself granted or authorized,
so long as Tenant is in good faith by appropriate proceedings contesting
the validity and applicability of the encumbrance or defect, and pending
such contest Tenant shall not be deemed in default under this
subparagraph because of the encumbrance or defect; provided, with
respect to a contest of any encumbrance or title defect which is the
subject of subparagraphs 9(o) or 9(p), Tenant must satisfy the
conditions and requirements for a permitted contest set forth in those
subparagraphs, and with respect to a contest of any other encumbrance or
title defect, Tenant must satisfy the following conditions and
requirements:
(1) Tenant must diligently prosecute the contest to completion
in a manner reasonably satisfactory to Landlord.
(2) Tenant must immediately remove the encumbrance or cure the
defect upon a final determination by a court of competent jurisdiction
that it is valid and applicable to the Leased Property.
(3) Tenant must in any event conclude the contest and remove
the encumbrance or cure the defect and pay any claims asserted against
Landlord or the Leased Property because of such encumbrance or defect,
all prior to (i) any Designated Payment Date on which neither Tenant nor
any Applicable Purchaser purchases the Leased Property pursuant to the
Purchase Agreement for a net price to Landlord (when taken together with
any additional payments made by Tenant pursuant to Paragraph 2(a)(ii) of
the Purchase Agreement, in the case of a purchase by an Applicable
Purchaser) of not less than Stipulated Loss Value, (ii) the date any
criminal charges may be brought against Landlord or any of its
directors, officers or employees because of such encumbrance or defect
or (iii) the date any action may be taken against Landlord or any
property owned by Landlord (including the Leased Property) by any
governmental authority or any other Person who has or claims rights
superior to Landlord because of the encumbrance or defect.
(u) Books and Records. During the Term Tenant shall keep books
and records that are accurate and complete in all material respects for
the operations affecting the Leased Property and shall, subject to
Paragraph 23, permit all such books and records (including without
limitation records which evidence the testing and validation of the
Leased Property required for the use thereof as described in
subparagraph 8(a), as well as all contracts, statements, invoices, bills
and claims for labor, materials and services supplied for the
construction and operation of Improvements) to be inspected and copied
by Landlord and its duly accredited representatives at all times during
reasonable business hours after five (5) Business Days advance written
notice and no more than twice in any twelve (12) month period (except
when an Event of Default has occurred and is continuing). This
subparagraph shall not be construed as requiring Tenant to regularly
maintain separate books and records relating exclusively to the Leased
Property; provided, however, that upon request, Tenant shall construct
or abstract from its regularly maintained books and records information
required by this subparagraph relating to the Leased Property.
(v) Financial Statements; Required Notices; Certificates. During
the Term, Tenant shall deliver to Landlord and to each Participant:
(i) as soon as available and in any event within one hundred
twenty (120) days after the end of each fiscal year of Tenant, a
consolidated balance sheet of Tenant and its Consolidated Subsidiaries
as of the end of such fiscal year and a consolidated income statement
and statement of cash flows of Tenant and its Consolidated Subsidiaries
for such fiscal year, all in reasonable detail and all prepared in
accordance with GAAP and accompanied by a report and opinion of
accountants of national standing selected by Tenant, which report and
opinion shall be prepared in accordance with generally accepted auditing
standards and shall not be subject to any qualifications or exceptions
as to the scope of the audit nor to any qualification or exception which
Landlord determines, in Landlord's reasonable discretion, is
unacceptable;
(ii) as soon as available and in any event within sixty (60)
days after the end of each of the first three quarters of each fiscal
year of Tenant, the consolidated balance sheet of Tenant and its
Consolidated Subsidiaries as of the end of such quarter and the
consolidated income statement and the consolidated statement of cash
flows of Tenant and its Consolidated Subsidiaries for the period
commencing at the end of the previous fiscal year and ending with the
end of such quarter, all in reasonable detail and all prepared in
accordance with GAAP and certified by the chief financial officer or
controller of Tenant (subject to year-end adjustments);
(iii) together with the financial statements furnished in
accordance with subparagraph 9(v)(ii) and 9(v)(i), a certificate of the
chief financial officer or controller of Tenant in substantially the
form attached hereto as Exhibit F: (i) certifying that to the knowledge
of Tenant no Default or Event of Default under this Lease has occurred
and is continuing or, if a Default or Event of Default has occurred and
is continuing, a brief statement as to the nature thereof and the action
which is proposed to be taken with respect thereto, (ii) certifying that
the representations of Tenant set forth in Paragraph 9 of this Lease are
true and correct in all material respects as of the date thereof as
though made on and as of the date thereof or, if not then true and
correct, a brief statement as to why such representations are no longer
true and correct, and (iii) with computations demonstrating compliance
with the financial covenants contained in subparagraph 9(ab);
(iv) promptly after the sending or filing thereof, copies of
all proxy statements, financial statements and reports which Tenant
sends to Tenant's stockholders, and copies of all regular, periodic and
special reports, and all registration statements (other than
registration statements on Form S-8 or any form substituted therefor)
which Tenant files with the Securities and Exchange Commission or any
governmental authority which may be substituted therefor, or with any
national securities exchange;
(v) upon request by Landlord, a statement in writing
certifying that this Lease is unmodified and in full effect (or, if
there have been modifications, that this Lease is in full effect as
modified, and setting forth such modifications) and the dates to which
the Base Rent has been paid and either stating that to the knowledge of
Tenant no Default or Event of Default under this Lease has occurred and
is continuing or, if a Default or Event of Default under this Lease has
occurred and is continuing, a brief statement as to the nature thereof;
it being intended that any such statement by Tenant may be relied upon
by any prospective purchaser or mortgagee of the Leased Property and by
the Participants; and
(vi) subject to Paragraph 23, such other information
respecting the condition or operations, financial or otherwise, of
Tenant, of any of its Subsidiaries or of the Leased Property as Landlord
or any Participant through Landlord may from time to time reasonably
request.
Landlord is hereby authorized to deliver a copy of any information or
certificate delivered to it pursuant to this subparagraph 9(v) to
Landlord's Parent, to the Participants and to any regulatory body having
jurisdiction over Landlord or Landlord's Parent or any Participant that
requires or requests it, but in connection therewith Landlord will, if
practicable, request confidential treatment of any information described
in clauses (iii) and (vi).
(w) Further Assurances. During the Term Tenant shall, on request
of Landlord, (i) promptly correct any defect or error which may be
discovered in the contents of this Lease or in any other instrument
executed in connection herewith or in the execution or acknowledgment
thereof as may be necessary, desirable or proper to carry out more
effectively the purposes of this Lease or such other document; (ii)
execute, acknowledge, deliver and record or file such further
instruments and do such further acts as may be necessary, desirable or
proper to carry out more effectively the purposes of this Lease and to
subject to this Lease any property intended by the terms hereof to be
covered hereby including specifically, but without limitation, any
renewals, additions, substitutions, replacements or appurtenances to the
Leased Property; (iii) execute, acknowledge, deliver, procure and record
or file any document or instrument deemed advisable by Landlord to
protect its rights in and to the Leased Property against the rights or
interests of third persons; and (iv) provide such certificates,
documents, reports, information, affidavits and other instruments and do
such further acts as may be necessary, desirable or proper in the
reasonable determination of Landlord to enable Landlord, Landlord's
Parent and Participants to comply with the requirements or requests of
any agency or authority having jurisdiction over them.
(x) Fees and Expenses; Indemnification; Increased Costs; and
Capital Adequacy Charges.
(i) Except for any costs and expenses paid by Landlord with
the proceeds of the Initial Funding Advances as part of the Transaction
Expenses, Tenant shall pay (and shall indemnify and hold harmless
Landlord, Landlord's Parent and any Person claiming through Landlord by
reason of a Permitted Transfer from and against) all Losses incurred by
Landlord or Landlord's Parent or any Person claiming through Landlord
through a Permitted Transfer in connection with or because of (A) the
ownership of any interest in or operation of the Leased Property, (B)
the negotiation or administration of this Lease or the Purchase
Agreement or the participation agreements concerning this Lease between
Landlord and Participants (excluding, however, any costs or expenses
incurred by Participants for the review, negotiation or administration
(absent an Event of Default) of this Lease, the Purchase Agreement or
such participation agreements and any costs or expenses incurred by
Landlord or any transferee to accomplish any Permitted Transfers
described in clauses (2), (3) or (5) of subparagraph 1(bu)), or (C)
Construction Projects, whether such Losses are incurred at the time of
execution of this Lease or at any time during the Term. Costs and
expenses included in such Losses may include, without limitation, all
appraisal fees, filing and recording fees, inspection fees, survey fees,
taxes (other than Excluded Taxes), brokerage fees and commissions,
abstract fees, title policy fees, Uniform Commercial Code search fees,
escrow fees, Attorneys' Fees and reasonable environmental consulting
fees incurred by Landlord with respect to the Leased Property. If
Landlord pays or reimburses Landlord's Parent for any such Losses,
Tenant shall reimburse Landlord for the same notwithstanding that
Landlord may have already received any payment from any Participant on
account of such Losses, it being understood that the Participant may
expect repayment from Landlord when Landlord does collect the required
reimbursement from Tenant. Tenant shall be entitled to pay any of the
foregoing Losses for which Tenant is responsible hereunder out of
Construction Advances, subject to all of the conditions to Construction
Advances set forth in Paragraph 6 hereof.
(ii) Tenant shall also pay (and indemnify and hold harmless
Landlord, Landlord's Parent and any Person claiming through Landlord by
reason of a Permitted Transfer from and against) all Losses, including
Attorneys' Fees, incurred or expended by Landlord or Landlord's Parent
or any Person claiming through Landlord through a Permitted Transfer in
connection with (A) the breach by Tenant of any covenant of Tenant
herein or in any other instrument executed in connection herewith or (B)
Landlord's exercise of any of Landlord's rights and remedies hereunder
or under Applicable Law or Landlord's protection of the Leased Property
and Landlord's interest therein as permitted hereunder or under
Applicable Law. (However, the indemnity in the preceding sentence shall
not be construed to make Tenant liable to both Landlord and any
Participant or other party claiming through Landlord for the same
damages. For example, so long as Landlord remains entitled to recover
any past due Base Rent from Tenant, no Participant shall be entitled to
collect a percentage of the same Base Rent from Tenant.) Tenant shall
further indemnify and hold harmless Landlord and all other Indemnified
Parties against, and reimburse them for, all Losses which may be imposed
upon, asserted against or incurred or paid by them by reason of, on
account of or in connection with any bodily injury or death or damage to
the property of third parties occurring in or upon or in the vicinity of
the Leased Property through any cause whatsoever. The foregoing
indemnity for injury, death or property damage shall apply even when
injury, death or property damage in, on or in the vicinity of the Leased
Property results in whole or in part from the negligence of an
Indemnified Party; provided, such indemnity shall not apply to Losses
suffered by an Indemnified Party that were proximately caused by (and
attributed by any applicable principles of comparative fault to) the
Active Negligence, gross negligence or wilful misconduct of such
Indemnified Party or its Affiliates, agents or employees.
(iii) If, after the date hereof, due to either (A) the
introduction of or any change (other than any change by way of
imposition or increase of reserve requirements included in the
Eurodollar Rate Reserve Percentage) in or in the interpretation of any
law or regulation or (B) the compliance with any guideline or request
from any central bank or other governmental authority (whether or not
having the force of law), there shall be any increase in the cost to
Landlord's Parent or any Participant of agreeing to make or making,
funding or maintaining advances to Landlord in connection with the
Leased Property, then Tenant shall from time to time, upon demand by
Landlord pay to Landlord for the account of Landlord's Parent or such
Participant, as the case may be, additional amounts sufficient to
compensate Landlord's Parent or the Participant for such increased cost.
However, the aggregate of such additional amounts payable for the
account of any original Participant listed in Schedule 1 and all Persons
who may qualify as Participants through permitted assignments from such
original Participant shall not exceed the additional amounts that would
have been payable to such original Participant absent any assignments by
it of its rights under its participation agreement with Landlord. A
certificate as to the amount of such increased cost, submitted to
Landlord and Tenant by Landlord's Parent or the Participant, shall be
conclusive and binding for all purposes, absent clear and demonstrable
error.
(iv) If Landlord's Parent or any Participant determines that
any law or regulation or any guideline or request from any central bank
or other governmental authority (whether or not having the force of law)
affects the amount of capital to be maintained by it and that the amount
of such capital is increased by or based upon the existence of advances
made or to be made to Landlord to permit Landlord to maintain Landlord's
investment in the Leased Property, then to the extent that Landlord's
Parent or the Participant reasonably determines that the increase in
required capital is allocable to such advances, Tenant shall pay
Landlord additional amounts (herein called "Capital Adequacy Charges")
for the account of Landlord's Parent or the Participant, as the case may
be, as Landlord's Parent or the Participant may specify as sufficient to
compensate it in light of such circumstances.
(v) Any amount to be paid to Landlord, Landlord's Parent or
any Indemnified Party under this subparagraph 9(x) shall be a demand
obligation owing by Tenant. Tenant's indemnities and obligations under
this subparagraph 9(x) shall survive the termination or expiration of
this Lease with respect to any circumstance or event existing or
occurring prior to such termination or expiration.
(y) Liability Insurance. During the Term, Tenant shall maintain
commercial general liability insurance against claims for bodily injury
or death and property damage occurring or resulting from any occurrence
in or upon the Leased Property, in standard form and with an insurance
company or companies rated by the A.M. Best Company of Oldwick, New
Jersey as having a policyholder's rating of A or better and a reported
financial information rating of X or better, such insurance to afford
immediate protection, to the limit of not less than $10,000,000 combined
single limit for bodily injury and property damage in respect of any one
accident or occurrence, with not more than $1,000,000 self-insured
retention. Such commercial general liability insurance shall include
blanket contractual liability coverage which insures contractual
liability under the indemnifications set forth in this Lease (other than
the indemnifications set forth in Paragraph 12 concerning environmental
matters), but such coverage or the amount thereof shall in no way limit
such indemnifications. The policy evidencing such insurance shall name
as additional insureds Landlord, Landlord's Parent and the Participants.
Tenant shall maintain with respect to each policy or agreement
evidencing such commercial general liability insurance such endorsements
as may be reasonably required by Landlord and shall at all times deliver
and maintain with Landlord written certificates with respect to such
insurance from the applicable insurer or its authorized agent in form
satisfactory to Landlord, which certificates must provide that insurance
coverage will not be canceled or reduced without at least thirty (30)
days notice to Landlord. Not less than fifteen (15) days prior to the
expiration date of each policy of insurance required of Tenant pursuant
to this subparagraph, Tenant shall deliver to Landlord a certificate
evidencing a paid renewal policy or policies.
(z) Permitted Encumbrances. Except to the extent expressly
required of Landlord by subparagraph 10(b), Tenant shall during the Term
comply with and will cause to be performed all of the covenants,
agreements and obligations imposed upon the owner of the Leased Property
in the Permitted Encumbrances in accordance with their respective terms
and provisions. Tenant shall not modify or permit any modification of
any Permitted Encumbrance in any manner that could be binding upon
Landlord or any future owner of the Leased Property (other than Tenant
or an Applicable Purchaser or the successors or assigns of Tenant or an
Applicable Purchaser) without first requesting and obtaining the prior
written consent of Landlord. Whether Landlord must give or may withhold
any such consent will be governed by subparagraph 10(b).
(aa) Environmental Covenants. During the Term, Tenant shall not
cause or permit the Leased Property to be in violation of, or do
anything or permit anything to be done which will subject the Leased
Property to any remedial obligations under, any Environmental Laws,
including without limitation CERCLA and RCRA, assuming disclosure to the
applicable governmental authorities of all relevant facts, conditions
and circumstances pertaining to the Leased Property, and Tenant shall
promptly notify Landlord in writing of any existing, pending or, to the
knowledge of Tenant, threatened investigation or inquiry by any
governmental authority in connection with any suspected violation of the
Leased Property under any Environmental Laws. During the Term, Tenant
shall not conduct or permit Hazardous Substance Activities, except
Permitted Hazardous Substance Use. During the Term, Tenant shall keep
the Leased Property free of all Hazardous Substances (other than
Permitted Hazardous Substances) and will remove the same (or if removal
is prohibited by law, will take whatever action is required by law)
promptly upon Tenant's discovery at Tenant's sole expense. During the
Term, in the event Tenant fails to comply with or perform any of the
foregoing obligations concerning Hazardous Substance Activities and
Hazardous Substances, Landlord may, in addition to any other remedies
available to it, after notifying Tenant in writing in advance of the
remediation efforts Landlord believes are needed, cause the Leased
Property to be freed from all Hazardous Substances as provided above (or
if removal is prohibited by law, may take whatever action is required by
law) and take such other action as is necessary to cause the foregoing
obligations to be met, and the cost of the removal and any such other
action shall be a demand obligation owing by Tenant to Landlord. For
such removal and other action, Tenant grants to Landlord and Landlord's
agents and employees access to the Leased Property and the license to
remove Hazardous Substances as provided above (or if removal is
prohibited by law or otherwise deemed inadvisable by Landlord, to take
whatever action is required by law or otherwise deemed advisable by
Landlord) and take such other action as is necessary to cause the
foregoing obligations to be met, subject to Paragraph 23. Further,
subject to the provisions of subparagraph 12(c) below, Tenant agrees to
indemnify Landlord against all Losses incurred by or asserted or proven
against Landlord in connection therewith in accordance with Paragraph
12. During the Term, Tenant agrees to submit from time to time, if
requested by Landlord, a certificate of an officer of Tenant, certifying
that, except for Permitted Hazardous Substance Use, the Leased Property
is not being used for, nor to Tenant's knowledge (except as may be
described in the Environmental Report) has the Leased Property been used
in the past for, any Hazardous Substances Activities. Landlord reserves
the right to retain an independent professional consultant to review any
report prepared by Tenant or to conduct Landlord's own investigation to
confirm whether Hazardous Substances Activities or the discharge of
anything into groundwater or surface water has occurred, but Landlord's
right to reimbursement for the fees of such consultant shall be limited
to the following circumstances: (1) an Event of Default shall have
occurred and be continuing; (2) Landlord shall have retained the
consultant to establish the condition of the Leased Property just prior
to any conveyance thereof pursuant to the Purchase Agreement or just
prior to the expiration of this Lease; (3) Landlord shall have retained
the consultant to satisfy any regulatory requirements applicable to
Landlord or its Affiliates; or (4) Landlord shall have retained the
consultant because Landlord has been notified of a violation of
Environmental Laws concerning the Leased Property or Landlord otherwise
reasonably believes that Tenant has not complied with this subparagraph.
Subject to Paragraph 23, Tenant grants to Landlord and to Landlord's
agents, employees, consultants and contractors the right during
reasonable business hours and after reasonable advance written notice to
enter upon the Leased Property to inspect the Leased Property and to
perform such tests as are reasonably necessary or appropriate to conduct
a review or investigation of Hazardous Substances on, or discharged into
groundwater or surface water from, the Leased Property. Tenant further
agrees that Landlord will have the same right, power and authority to
enter and inspect the Leased Property as is granted to a secured lender
under Section 2929.5 of the California Civil Code. Tenant shall
promptly reimburse Landlord for the cost of any such inspections and
tests, but only when the inspections and tests are: (1) ordered by
Landlord after an Event of Default has occurred and is continuing; (2)
ordered by Landlord to establish the condition of the Leased Property
just prior to any conveyance thereof pursuant to the Purchase Agreement
or just prior to the expiration of this Lease; (3) ordered by Landlord
to satisfy any regulatory requirements applicable to Landlord or its
Affiliates; or (4) ordered because Landlord has been notified of a
violation of Environmental Laws concerning the Leased Property or
Landlord otherwise reasonably believes that Tenant has not complied with
this subparagraph. During the Term, Tenant shall immediately advise
Landlord of (i) Tenant's discovery of any event or circumstance which
would render any of the representations contained in subparagraph 9(e)
inaccurate in any material respect if made at the time of such
discovery, (ii) any remedial action taken by Tenant in response to any
(A) Hazardous Substances other than Permitted Hazardous Substances on,
under or about the Leased Property or (B) any claim for damages
resulting from Hazardous Substance Activities (herein called "Hazardous
Substance Claims"), and (iii) Tenant's discovery of any occurrence or
condition on any real property adjoining or in the vicinity of the
Leased Property which creates a material risk of causing the Leased
Property or any part thereof to be subject to significant ownership,
occupancy, transferability or use restrictions under Environmental Laws
or that could give rise to Hazardous Substance Claims. In such event,
Tenant shall deliver to Landlord within thirty (30) days after
Landlord's request, a preliminary written environmental plan setting
forth a general description of the action that Tenant proposes to take
with respect thereto to bring the Leased Property into compliance with
Environmental Laws (herein called a "Clean Up"), including, without
limitation, any proposed corrective work, the estimated cost and time of
completion, the name of the contractor and a copy of the construction
contract, if any, and such additional data, instruments, documents,
agreements or other materials or information as Landlord may reasonably
request. Tenant shall thereafter diligently and continuously pursue the
Clean Up of the Leased Property in strict compliance with all
Environmental Laws and shall inform Landlord monthly as to the status of
the Clean Up.
(ab) Affirmative Financial Covenants. During the Term:
(i) Minimum Tangible Net Worth. On the last day of each
fiscal quarter of Tenant, Consolidated Tangible Net Worth shall not be
less than the sum of $1,000,000,000.00.
(ii) Leverage Ratio. On the last day of each fiscal quarter
of Tenant the ratio of Consolidated Total Liabilities to Consolidated
Tangible Net Worth shall not be greater than 1.0 to 1.0.
(iii) Quick Ratio. On the last day of each fiscal quarter of
Tenant, the ratio of Consolidated Quick Assets to Consolidated Current
Liabilities shall not be less than 3.75 to 1.0.
(ac) Negative Covenants. During the Term, Tenant shall not,
without the prior written consent of Landlord in each case:
(i) Liens. Create, incur, assume or suffer to exist, or
permit any of its Consolidated Subsidiaries to create, incur, assume or
suffer to exist, any Lien, upon or with respect to any of its
properties, now owned or hereafter acquired, provided that the following
shall be permitted except to the extent that they would encumber any
interest in the Leased Property in violation of other provisions of this
Lease:
(1) Liens for taxes or assessments or other government
charges or levies if not yet due and payable or if they are being
contested in good faith by appropriate proceedings (including contests
expressly permitted by other provisions of this Lease) and for which
appropriate reserves are maintained;
(2) Liens imposed by law, such as mechanic's,
materialmen's, landlord's, warehousemen's and carrier's Liens, and other
similar Liens, securing obligations incurred in the ordinary course of
business which are not past due for more than thirty (30) days, or which
are being contested in good faith by appropriate proceedings (including
contests expressly permitted under other provisions of this Lease) and
for which appropriate reserves have been established;
(3) Liens under workmen's compensation, unemployment
insurance, social security or similar laws (other than ERISA);
(4) Liens, deposits or pledges to secure the performance
of bids, tenders, contracts (other than contracts for the payment of
money), leases, public or statutory obligations, surety, stay, appeal,
indemnity, performance or other similar bonds, or other similar
obligations arising in the ordinary course of business;
(5) judgment and other similar Liens against assets
other than the Leased Property or any part thereof in an aggregate
amount not in excess of $10,000,000 arising in connection with court
proceedings; provided that the execution or other enforcement of such
Liens is effectively stayed and the claims secured thereby are being
actively contested in good faith by appropriate proceedings (including
contests permitted under other provisions of this Lease) ;
(6) easements, rights-of-way, restrictions and other
similar encumbrances which, in the aggregate, do not materially
interfere with the occupation, use and enjoyment by Tenant or any such
Consolidated Subsidiary of the property or assets encumbered thereby in
the normal course of its business or materially impair the value of the
property subject thereto;
(7) Liens securing obligations of such a Consolidated
Subsidiary to Tenant or to another such Consolidated Subsidiary;
(8) Liens not otherwise permitted by this subsection
9(ac)(i) (and not encumbering the Leased Property) incurred in
connection with the incurrence of additional Debt or asserted to secure
Unfunded Benefit Liabilities, provided that the sum of the aggregate
principal amount of all outstanding Debt and any Unfunded Benefit
Liabilities secured by Liens incurred pursuant to this clause (8) shall
not at any time exceed thirty percent (30%) of Consolidated Tangible Net
Worth at such time; and
(9) Liens incurred in connection with any renewals,
extensions or refundings of any Debt secured by Liens described in the
preceding clauses of this subsection 9(ac)(i), provided that there is no
increase in the aggregate principal amount of Debt secured thereby from
that which was outstanding as of the date of such renewal, extension or
refunding and no additional property is encumbered.
For purposes of this subparagraph 9(ac)(i), the following shall be
deemed not to constitute Liens: this Lease, the Purchase Agreement and
other documents being executed or accepted by Landlord in connection
with this Lease; and other lease agreements, purchase agreements and
similar documents executed or accepted by Landlord to evidence
agreements between Landlord and Tenant concerning properties owned by
Landlord and leased to Tenant, including but not limited to the existing
Lease Agreements and Purchase Agreements between Landlord and Tenant
dated November 19, 1993 and May 2, 1994, which concern properties leased
by Landlord to Tenant in Tenant's South San Francisco campus known as
Building 7 and Buildings 1 and 4, as the same may be renewed, increased,
reduced, amended and/or restated from time to time.
(ii) Transactions with Affiliates. Enter into or permit any
Consolidated Subsidiary of Tenant to enter into any material
transactions (including, without limitation, the purchase, sale or
exchange of property or the rendering of any service) with any
Affiliates of Tenant which would cause or result in a Default by Tenant
under the financial covenants set forth in subparagraph 9(ab).
(ad) ERISA.
(i) Each Plan, and, to the knowledge of Tenant, any
Multiemployer Plan, is in compliance with, and has been administered in
compliance with, the applicable provisions of ERISA, the Code and any
other applicable Federal or state law in all respects, the failure to
comply with which would have a material adverse effect upon the
properties, assets, operations or businesses of Tenant and its
Subsidiaries taken as a whole, and as of the date hereof no event or
condition is occurring or exists which would require a notice from
Tenant under clause 9(ad)(ii).
(ii) Tenant shall provide a notice to Landlord as soon as
possible after, and in any event within ten (10) days after Tenant
becomes aware that, any of the following has occurred, with respect to
which the potential aggregate liability to Tenant relating thereto is
$10,000,000 or more, and such notice shall include a statement signed by
a senior financial officer of Tenant setting forth details of the
following and the response, if any, which Tenant or its ERISA Affiliate
proposes to take with respect thereto (and a copy of any report or
notice required to be filed with or given to PBGC by Tenant or an ERISA
Affiliate with respect to any of the following or the events or
conditions leading up to the following): (A) the assertion, to secure
any Unfunded Benefit Liabilities, of any Lien against the assets of
Tenant, against the assets of any Plan of Tenant or any ERISA Affiliate
of Tenant or against any interest of Landlord or Tenant in the Leased
Property, or (B) the taking of any action by the PBGC or any other
governmental authority against Tenant to terminate any Plan of Tenant or
any ERISA Affiliate of Tenant or to cause the appointment of a trustee
or receiver to administer any such Plan.
(ae) Assignment of Certain Rights; Ownership of the Personal
Property Purchased With Funds Provided by Landlord. Subject in each
case to the assignment and lease back as set forth on page 2 of this
Lease and to subparagraph 10(c), and without limiting the obligations of
Landlord under subparagraph 10(b):
(i) Tenant hereby assigns to Landlord all of Tenant's right,
title and interest, whether now existing or hereafter arising during the
Term of this Lease, in and to (1) the Real Property itself, including
any legal or equitable interest therein, but not including any interest
created or arising under this Lease, the Purchase Agreement or the
Environmental Indemnity Agreement; (2) the Contract (including without
limitation, (A) the right upon valid tender to Seller to purchase the
Real Property pursuant to the Contract at the purchase price set forth
therein and the right to take title to the Real Property and be named
the purchaser in the deed to be delivered by Seller; (B) all claims for
damages in respect of the Contract, including, without limitation, all
warranty and indemnity provisions in the Contract; (C) any and all
rights of Tenant to compel performance of the terms of the Contract; and
(D) without limiting the foregoing, any and all rights and benefits,
including pursuant to representations, warranties, indemnities and
covenants, arising under the Contract); and (3) each of the other
Development Contracts, to the extent rights or interests under such
Development Contracts can be assigned by Tenant to Landlord and then
assigned and leased back hereunder as part of the Personal Property. To
the extent, if any, rights and interests of Tenant under any Development
Contract cannot be assigned by Tenant to Landlord and then assigned and
leased back as part of the Personal Property, Tenant will retain such
rights and interests and agrees to enforce and maintain such rights and
interests as Tenant would if it were the owner of the Leased Property.
Thus, without limiting the foregoing, Landlord acknowledges and agrees
that Tenant has not and cannot assign the "Financial Commitments" under
and as defined in the Development Agreement described in Schedule 2.
(ii) All goods, equipment, furnishings, furniture, chattels,
general intangibles, permits (to the extent assignable), licenses (to
the extent assignable), franchises, certificates and other personal
property of whatever nature and all renewals or replacements of or
substitutions for any of the foregoing shall have been purchased for
Landlord, be owned by Landlord and constitute Personal Property covered
by this Lease, to the extent heretofore or hereafter purchased by
Tenant, in whole or in part, with any portion of the Initial Funding
Advances provided to Tenant or with any Construction Advances or with
other funds for which Tenant has received or hereafter receives
reimbursement from the Initial Funding Advances or Construction
Advances.
10 Other Representations and Covenants of Landlord. Landlord
represents and covenants as follows:
(a) Title Claims By, Through or Under Landlord. Except by a
Permitted Transfer, Landlord shall not assign, transfer, mortgage,
pledge, encumber or hypothecate this Lease or any interest of Landlord
in and to the Leased Property during the Term without the prior written
consent of Tenant. Landlord further agrees that if any encumbrance or
title defect affecting the Leased Property is lawfully claimed through
or under Landlord, including any judgment lien lawfully filed against
Landlord, Landlord will at its own cost and expense promptly remove any
such encumbrance and cure any such defect; provided, however, Landlord
shall not be responsible for (i) any Permitted Encumbrances (regardless
of whether claimed through or under Landlord) or any other encumbrances
not lawfully claimed through or under Landlord, (ii) any encumbrances or
title defects claimed by, through or under Tenant, or (iii) any
encumbrance or title defect arising because of Landlord's compliance
with subparagraph 10(b) or any request made by Tenant.
(b) Actions Required of the Title Holder. So long as no Event of
Default shall have occurred and be continuing, Landlord shall take any
and all action required of Landlord by the Permitted Encumbrances or
otherwise required of Landlord by Applicable Laws or reasonably
requested by Tenant; provided, that (i) actions which Tenant may require
of Landlord under this subparagraph shall be limited to actions that can
only be taken by Landlord as the owner of the Leased Property, as
opposed to any action that can be taken by Tenant or any third party
(and the payment of any monetary obligation shall not be an action
required of Landlord under this subparagraph unless Landlord shall first
have received funds from Tenant, in excess of any other amounts due from
Tenant hereunder, sufficient to pay such monetary obligations), (ii)
Tenant requests the action to be taken by Landlord (which request must
be specific and in writing, if required by Landlord at the time the
request is made) and (iii) the action to be taken will not constitute a
violation of any Applicable Laws or compromise or constitute a waiver of
Landlord's rights hereunder or under the Environmental Indemnity
Agreement or the Purchase Agreement or otherwise be reasonably
objectionable to Landlord.
The actions Landlord shall perform if reasonably requested by
Tenant will include, without limitation, but subject to the conditions
set forth in the proviso of the preceding sentence, executing or
consenting to, or exercising or assisting Tenant to exercise rights
under any (I) grant of easements, licenses, rights of way, and other
rights in the nature of easements encumbering the Real Property, (II)
release or termination of easements, licenses, rights of way or other
rights in the nature of easements which are for the benefit of the Real
Property or any portion thereof, (III) dedication or transfer of
portions of the Real Property not improved with a building, for road,
highway or other public purposes, (IV) agreements for the use and
maintenance of common areas, for reciprocal rights of parking, ingress
and egress and amendments to any covenants and restrictions affecting
the Real Property or any portion thereof, (V) documents required to
create or administer a governmental special benefit district or
assessment district for public improvements and collection of special
assessments, (VI) instruments necessary or desirable for the exercise or
enforcement of rights or performance of obligations of the buyer under
the Contract or the exercise of rights or performance of obligations
under any Permitted Encumbrance or any contract, permit, license,
franchise or other right included within the term "Leased Property"
(including, without limitation, under the Development Contracts), (VII)
modifications of Permitted Encumbrances (including any Development
Contracts), (VIII) permit applications or other documents required to
accommodate Construction Projects permitted by this Lease, (IX)
confirmations of Tenant's rights under any particular provisions of this
Lease which Tenant may wish to provide to a third party or (X) execution
or filing of a tract or parcel map subdividing the Real Property into
lots or parcels. However, the determination of whether any such action
is reasonably requested or reasonably objectionable to Landlord may
depend in whole or in part upon the extent to which the requested action
shall result in a lien to secure payment or performance obligations
against Landlord's interest in the Leased Property, shall cause a
decrease in the value of the Leased Property to less than thirty percent
(30%) of Stipulated Loss Value after any Qualified Payments that may
result from such action are taken into account, or shall impose upon
Landlord any present or future obligations greater than the obligations
Landlord is willing to accept in reliance on the indemnifications
provided by Tenant hereunder.
So long as no Event of Default shall have occurred and be
continuing, Tenant shall have the option from time to time during the
Term to purchase or to designate one or more assignees to purchase one
or more undeveloped portions of the Real Property consisting of one or
more tracts or lots of the Land which can be sold under Applicable Laws
separate and apart from the rest of the Land (each, a "Parcel"), for an
amount equal to the Appraised Value thereof (such amount with respect to
each Parcel being referred to herein as the "Parcel Release Price").
Tenant may exercise such option by delivering to Landlord not less than
ninety (90) days prior written notice, which written notice shall
describe the Parcel or Parcels to be purchased, the date such Parcels
are to be conveyed by Landlord and whether the conveyance will be to
Tenant or an assignee designated in such notice. In each case
Landlord's obligation to convey such Parcels to Tenant or Tenant's
assignee shall be subject to Tenant's and/or such assignee's
satisfaction of each of the following conditions:
a) Landlord, Tenant and, if applicable, such assignee
shall have agreed upon, entered into and recorded such reciprocal
easements relating to the Land and the Parcel to be so sold as they
shall deem necessary or reasonably required to preserve usefulness of
the Parcels and the remaining Land after the conveyance;
b) It shall have been established that, following such
conveyance and the application of the Partial Release Price as a
Qualified Payment, Appraised Value of the Leased Property retained by
Landlord will be no less than thirty percent (30%) of Stipulated Loss
Value.
c) Tenant or such assignee shall have paid to Landlord
the Parcel Release Price for such Parcels; and
d) In addition to the Partial Release Price, Tenant or
such assignee shall have paid all costs and expenses necessary to
consummate the sale, including all legal fees of Landlord.
Upon Tenant's or such assignee's satisfaction of each of the foregoing
conditions, Landlord shall convey such Parcel or Parcels to Tenant or
such assignee pursuant to a quitclaim transfer of all of Landlord's
right, title and interest therein on as "as is, where is, with all
faults" basis free and clear of this Lease, the Purchase Agreement and
all encumbrances claimed by Landlord or lawfully claimed through or
under Landlord and which are not claimed by, through or under Tenant,
but otherwise without recourse, representation or warranty of any kind.
In any event, all claims, demands, liabilities, losses, damages,
judgments, penalties, costs and expenses incurred by Landlord because of
any action taken pursuant to this subparagraph shall be covered by the
indemnifications set forth in subparagraph 9(x). Further, for purposes
of such indemnification, any action taken by Landlord will be deemed to
have been made at the request of Tenant if made pursuant to any request
of Tenant's counsel or of any officer of Tenant (or with their
knowledge, and without their objection) in connection with the execution
of, closing under or enforcement of the Contract.
(c) Actions Permitted by Tenant Without Landlord's Consent. No
refusal by Landlord to execute or join in the execution of any
agreement, application or other document requested by Tenant pursuant to
the preceding subparagraph 10(b) shall preclude Tenant from itself
executing such agreement, application or other document; provided, that
in doing so Tenant is not purporting to act for Landlord and does not
thereby create any encumbrance or cloud on Landlord's title to the
Leased Property (other than any Permitted Encumbrance to which Landlord
shall have already given its written approval or consent). Further,
subject to the other terms and conditions of this Lease (including
subparagraph 9(z), which sets forth certain performance obligations of
Tenant with respect to the Permitted Encumbrances), Tenant shall be
entitled, because of the assignment and lease of Personal Property set
forth on page 2 of this Lease, to do any of the following in Tenant's
own name and to the exclusion of Landlord during the Term without any
notice to or consent of Landlord so long as no Event of Default has
occurred and is outstanding and so long as Tenant is not purporting to
act for Landlord and does not thereby create any encumbrance or cloud on
Landlord's title to the Leased Property (other than any Permitted
Encumbrance to which Landlord shall have already given its written
approval or consent):
(A) to perform obligations arising under and to exercise and
enforce the rights of the buyer under the Contract;
(B) to perform obligations arising under and to exercise and
enforce the rights of Tenant or the owner of the Real Property under the
Development Contracts and other Permitted Encumbrances (including,
without limitation, the exercise of all consent rights and voting rights
of said owner as a member of the Vaca Valley Business Park Association
under the Declaration of Covenants, Conditions and Restrictions for the
Vaca Valley Business Park described in Schedule 2 and any applicable by-
laws, articles of incorporation or similar documents of such
Association);
(C) to perform obligations arising under and to exercise and
enforce the rights of Tenant or the owner of the Real Property with
respect to the creation and operation of and obtaining of financing by
the Assessment District (as defined in the Contract);
(D) to perform obligations arising under and to exercise and
enforce the rights of Tenant or the owner of the Real Property with
respect to any other contracts or documents (such as plans and
specifications) included within the Personal Property; and
(E) to recover and retain any monetary damages or other
benefit inuring to Tenant or the owner of the Real Property through the
enforcement of any rights, contracts or other documents included within
the Personal Property (including without limitation the Contract, the
Development Contracts and other Permitted Encumbrances and any
agreements, ordinances, regulations and laws concerning any Assessment
District as defined in the Contract); provided, that to the extent any
such monetary damages may become payable as compensation for an adverse
impact on value of the Leased Property, the rights of Landlord and
Tenant hereunder with respect to the collection and application of such
monetary damages shall be the same as for condemnation proceeds payable
because of a taking of all or any part of the Leased Property.
(d) No Default or Violation. The execution, delivery and
performance by Landlord of this Lease and the Purchase Agreement do not
and will not constitute a breach or default under any material contract
or agreement to which Landlord is a party or by which Landlord is bound
or which affects the Leased Property and do not, to the knowledge of
Landlord, violate or contravene any law, order, decree, rule or
regulation to which Landlord is subject. (As used in this Paragraph 10,
"Landlord's knowledge" means the present actual knowledge of Lloyd Cox,
the current officer of Landlord having responsibility for the
negotiation of this Lease, with due investigation and after consultation
with Landlord's Parent's representative, Jennifer Cho; but neither Lloyd
Cox nor Jennifer Cho shall be personally liable for the representations
or warranties of Landlord made herein.)
(e) No Suits. There are no judicial or administrative actions,
suits, proceedings or investigations pending or, to Landlord's
knowledge, threatened that are reasonably likely to affect Landlord's
ownership of the Leased Property or the validity, enforceability or
priority of this Lease, and Landlord is not in default with respect to
any order, writ, injunction, decree or demand of any court or other
governmental or regulatory authority that could materially and adversely
affect the business or assets of Landlord or its ownership of the Leased
Property. To Landlord's knowledge, no condemnation proceedings are
pending or threatened against the Leased Property.
(f) Organization. Landlord is duly incorporated and legally
existing under the laws of Delaware and is duly qualified to do business
in the State of California. Landlord has or will obtain on a timely
basis, at Tenant's expense pursuant to the other provisions of this
Lease, all requisite power and all governmental certificates of
authority, licenses, permits, qualifications and other documentation
necessary to own and lease the Leased Property and to perform its
obligations under this Lease.
(g) Enforceability. The execution, delivery and performance of
this Lease and the Purchase Agreement by Landlord are duly authorized,
are not in contravention of or conflict with any term or provision of
Landlord's articles of incorporation or bylaws and do not, to Landlord's
knowledge, require the consent or approval of any governmental body or
other regulatory authority that has not heretofore been obtained or
conflict with any Applicable Laws. This Lease and the Purchase
Agreement are valid, binding and legally enforceable obligations of
Landlord except as such enforcement is affected by bankruptcy,
insolvency and similar laws affecting the rights of creditors,
generally, and equitable principles of general application; provided,
Landlord makes no representation or warranty that conditions imposed by
any state or local Applicable Laws to the purchase, ownership, lease or
operation of the Leased Property have been satisfied.
(h) Existence. During the Term, Landlord will continuously
maintain its existence and, after qualifying to do business in the State
of California if Landlord has not already done so, Landlord will
continuously maintain its right to do business in that state to the
extent necessary for the performance of Landlord's obligations
hereunder.
(i) Not a Foreign Person. Landlord is not a "foreign person"
within the meaning of Sections 1445 and 7701 of the Code (i.e., Landlord
is not a non-resident alien, foreign corporation, foreign partnership,
foreign trust or foreign estate as those terms are defined in the Code
and regulations promulgated thereunder).
(j) Responding to Requests for Information. Tenant shall have the
right ask Landlord questions from time to time concerning Landlord's
financial condition or Landlord's ability to perform under this Lease or
the Purchase Agreement, to which questions Landlord shall promptly
respond. (Such response, however, may be limited to a statement that
Landlord will not provide requested information.) Landlord shall notify
Tenant in writing if, at any time during the Term, Landlord ceases to be
100% owned, directly or indirectly, by Banque Nationale de Paris.
11 Assignment and Subletting.
(a) Consent Required. During the Term, without the prior written
consent of Landlord first had and received, Tenant shall not assign,
transfer, mortgage, pledge or hypothecate this Lease or any interest of
Tenant hereunder and shall not sublet all or any part of the Leased
Property, by operation of law or otherwise; provided, that subject to
subparagraph 11(c) below: (1) Tenant shall be entitled to sublet less
than twenty percent (20%) (computed on the basis of square footage) of
the useable space in then existing and completed building Improvements,
if any, so long as (i) any sublease by Tenant is made expressly subject
and subordinate to the terms hereof, and (ii) such sublease has a term
equal to or less than the remainder of the then effective Term of this
Lease; and (2) Tenant shall be entitled to assign or transfer this Lease
or any interest of Tenant hereunder to an Affiliate of Tenant if both
Tenant and its Affiliate confirm their joint and several liability
hereunder by written notice given to Landlord.
(b) Standard for Landlord's Consent to Assignments and Certain
Other Matters. Consents and approvals of Landlord which are required by
the preceding subparagraph will not be unreasonably withheld, but Tenant
acknowledges, without limiting the reasons why Landlord might reasonably
withhold such consents or approvals, that Landlord's withholding of such
consent or approval shall be reasonable if Landlord determines in good
faith that giving the consent or approval may significantly increase
Landlord's risk of liability for any existing or future environmental
problem relating to the Leased Property. Further, Tenant acknowledges
that Landlord's withholding of such consent or approval shall be
reasonable if Landlord determines in good faith that giving the consent
or approval would negate Tenant's representations in this Lease
regarding ERISA or cause this Lease, the Purchase Agreement or other
documents described herein or therein (or any exercise of Landlord's
rights hereunder or thereunder) to constitute a violation of any
provision of ERISA or of any applicable state statute regulating a Plan
or Multiemployer Plan.
(c) Consent Not a Waiver. No consent by Landlord to a sale,
assignment, transfer, mortgage, pledge or hypothecation of this Lease or
Tenant's interest hereunder, and no assignment or subletting of the
Leased Property or any part thereof in accordance with this Lease or
otherwise with Landlord's consent, shall release Tenant from liability
hereunder; and any such consent shall apply only to the specific
transaction thereby authorized and shall not relieve Tenant from any
requirement of obtaining the prior written consent of Landlord to any
further sale, assignment, transfer, mortgage, pledge or hypothecation of
this Lease or any interest of Tenant hereunder.
(d) Landlord's Assignment. Unless Tenant or an Applicable
Purchaser has failed to purchase the Leased Property in accordance with
the Purchase Agreement and Tenant is thereby in default under the terms
of the Purchase Agreement, Landlord shall have no right to transfer,
assign or convey, in whole or in part, the Leased Property or any of its
rights thereto or under this Lease except by a Permitted Transfer.
Further, notwithstanding anything to the contrary herein contained, if
withholding taxes are imposed on the rents and other amounts payable to
Landlord hereunder because of Landlord's assignment of this Lease to any
citizen of, or any corporation or other entity formed under the laws of,
a country other than the United States, Tenant shall not be required to
compensate Landlord or any such assignee for the withholding tax.
12 Environmental Indemnification.
(a) Indemnity. Tenant hereby agrees to assume liability for and
to pay, indemnify, defend, and hold harmless each and every Indemnified
Party from and against any and all Environmental Losses, subject only to
the provisions of subparagraph 12(c) below.
(b) Assumption of Defense.
(i) If an Indemnified Party notifies Tenant of any claim,
demand, action, administrative or legal proceeding, investigation or
allegation as to which the indemnity provided for in this Paragraph 12
applies, Tenant shall assume on behalf of the Indemnified Party and
conduct with due diligence and in good faith the investigation and
defense thereof and the response thereto with counsel selected by Tenant
but reasonably satisfactory to the Indemnified Party; provided, that the
Indemnified Party shall have the right to be represented by advisory
counsel of its own selection and at its own expense; and provided
further, that if any such claim, demand, action, proceeding,
investigation or allegation involves both Tenant and the Indemnified
Party and the Indemnified Party shall have been advised in writing by
counsel that there may be legal defenses available to it which are
inconsistent with or in addition to those available to Tenant, then the
Indemnified Party shall have the right to select separate counsel to
participate in the investigation and defense of and response to such
claim, demand, action, proceeding, investigation or allegation on its
own behalf, and Tenant shall pay or reimburse the Indemnified Party for
all Attorney's Fees incurred by the Indemnified Party because of the
selection of such separate counsel.
(ii) If any claim, demand, action, proceeding, investigation
or allegation arises as to which the indemnity provided for in this
Paragraph 12 applies, and Tenant fails to assume promptly (and in any
event within fifteen (15) days after being notified of the claim,
demand, action, proceeding, investigation or allegation) the defense of
the Indemnified Party, then the Indemnified Party may contest (or
settle, with the prior written consent of Tenant, which consent will not
be unreasonably withheld) the claim, demand, action, proceeding,
investigation or allegation at Tenant's expense using counsel selected
by the Indemnified Party; provided, that after any such failure by
Tenant which continues for forty-five (45) days or more no such contest
need be made by the Indemnified Party and settlement or full payment of
any claim may be made by the Indemnified Party without Tenant's consent
and without releasing Tenant from any obligations to the Indemnified
Party under this Paragraph 12 if, in the written opinion of reputable
counsel to the Indemnified Party, the settlement or payment in full is
clearly advisable.
(c) Notice of Environmental Losses. If Landlord receives a
written notice of Environmental Losses that Landlord believes are
covered by this Paragraph 12, then Landlord shall promptly furnish a
copy of such notice to Tenant. The failure to so provide a copy of the
notice to Tenant shall not excuse Tenant from its obligations under this
Paragraph 12; provided, that if none of the officers of Tenant and none
of the employees of Tenant in Tenant's Environmental Health & Safety
group or in Tenant's Facilities Engineering group (and, in the future,
no employees taking over responsibilities that such groups now have) are
aware of the matters described in the notice and such failure by
Landlord renders unavailable defenses that Tenant might otherwise
assert, or precludes actions that Tenant might otherwise take, to
minimize its obligations hereunder, then Tenant shall be excused from
its obligation to indemnify the Indemnified Parties against assessments,
fines, costs and expenses, if any, which would not have been incurred
but for such failure. For example, if Landlord fails to provide Tenant
with a copy of a notice of an obligation covered by the indemnity set
out in subparagraph 12(a) and Tenant is not otherwise already aware of
such obligation, and if as a result of such failure Landlord becomes
liable for penalties and interest covered by the indemnity in excess of
the penalties and interest that would have accrued if Tenant had been
promptly provided with a copy of the notice, then Tenant will be excused
from any obligation to Landlord to pay the excess.
(d) Rights Cumulative. The rights of each Indemnified Party under
this Paragraph 12 shall be in addition to any other rights and remedies
of such Indemnified Party against Tenant under the other provisions of
this Lease or under any other document or instrument now or hereafter
executed by Tenant, or under any Applicable Law or in equity (including,
without limitation, any right of reimbursement or contribution pursuant
to CERCLA).
(e) Survival of the Indemnity. Tenant's obligations under this
Paragraph 12 shall survive the termination or expiration of this Lease.
All obligations of Tenant under this Paragraph 12 shall be payable upon
written demand, and any amount due upon demand to any Indemnified Party
by Tenant which is not paid shall bear interest from the date of such
written demand at a floating interest rate equal to the Default Rate,
but in no event in excess of the maximum rate permitted by law.
13 Inspections and Right of Landlord to Perform, Generally.
(a) During the Term, Landlord and Landlord's representatives may
(subject to Paragraph 23) enter the Leased Property at any reasonable
time after five (5) Business Days advance written notice to Tenant for
the purpose of making inspections or performing any work Landlord is
authorized to undertake by the next subparagraph.
(b) If Tenant fails to perform any act or to take any action which
hereunder Tenant is required to perform or take, or to pay any money
which hereunder Tenant is required to pay, and if such failure or action
constitutes an Event of Default or renders Landlord or any director,
officer, employee or Affiliate of Landlord at risk of criminal
prosecution or renders Landlord's interest in the Leased Property or any
part thereof at risk of forfeiture by forced sale or otherwise, then in
addition to any other remedies specified herein or otherwise available,
Landlord may, in Tenant's name or in Landlord's own name, perform or
cause to be performed such act or take such action or pay such money.
Any expenses so incurred by Landlord, and any money so paid by Landlord,
shall be a demand obligation owing by Tenant to Landlord. Further,
Landlord, upon making such payment, shall be subrogated to all of the
rights of the person, corporation or body politic receiving such
payment. But nothing herein shall imply any duty upon the part of
Landlord to do any work which under any provision of this Lease Tenant
may be required to perform, and the performance thereof by Landlord
shall not constitute a waiver of Tenant's default. Landlord may during
the progress of any such work permitted by Landlord hereunder on or in
the Leased Property keep and store upon the Leased Property all
necessary materials, tools, and equipment. Landlord shall not in any
event be liable for inconvenience, annoyance, disturbance, loss of
business, or other damage to Tenant or the subtenants of Tenant by
reason of making such repairs or the performance of any such work on or
in the Leased Property, or on account of bringing materials, supplies
and equipment into or through the Leased Property during the course of
such work (except for liability in connection with death or injury or
damage to the property of third parties caused by the Active Negligence,
gross negligence or wilful misconduct of Landlord or its officers,
employees, or agents in connection therewith), and the obligations of
Tenant under this Lease shall not thereby be affected in any manner.
14 Events of Default.
(a) Definition. Each of the following events shall be deemed to
be an "Event of Default" by Tenant under this Lease:
(i) Tenant shall fail to pay when due any installment of Rent
due hereunder and such failure shall continue for three (3) Business
Days after Tenant is notified in writing thereof.
(ii) Tenant shall fail to cause any representation or warranty
of Tenant contained herein that is false or misleading in any material
respect when made to be made true and not misleading (other than as
described in the other clauses of this subparagraph 14(a)), or Tenant
shall fail to comply with any term, provision or covenant of this Lease
(other than as described in the other clauses of this subparagraph
14(a)), and in either case shall not cure such failure prior to the
earlier of (A) thirty (30) days after written notice thereof is sent to
Tenant or (B) the date any writ or order is issued for the levy or sale
of any property owned by Landlord (including the Leased Property) or any
criminal action is instituted against Landlord or any of its directors,
officers or employees because of such failure; provided, however, that
so long as no such writ or order is issued and no such criminal action
is instituted, if such failure is susceptible of cure but cannot with
reasonable diligence be cured within such thirty day period, and if
Tenant shall promptly have commenced to cure the same and shall
thereafter prosecute the curing thereof with reasonable diligence, the
period within which such failure may be cured shall be extended for such
further period (not to exceed an additional sixty (60) days) as shall be
necessary for the curing thereof with reasonable diligence.
(iii) Tenant shall fail to comply with any term, provision or
condition of the Purchase Agreement after the expiration of applicable
notice and cure periods set forth in the Purchase Agreement.
(iv) Tenant shall abandon any significant portion of the
Leased Property.
(v) Tenant shall fail to make any payment or payments of
principal, premium or interest, of Debt of Tenant described in the next
sentence when due (taking into consideration the time Tenant may have to
cure such failure, if any, under the documents governing such Debt). As
used in this clause 14(a)(v), "Debt" shall include only Debts of Tenant
now existing or arising in the future (a) payable to Landlord or any
Affiliate of Landlord, or (B) payable to any other Person and with
respect to which $10,000,000 or more is actually due and payable because
of acceleration or otherwise.
(vi) Tenant: (a) shall generally not, or be unable to, or
shall admit in writing its inability to, pay its debts as such debts
become due; or (b) shall make an assignment for the benefit of
creditors, petition or apply to any tribunal for the appointment of a
custodian, receiver or trustee for it or a substantial part of its
assets; or (c) shall file any petition or application to commence any
proceeding under any bankruptcy, reorganization, arrangement,
readjustment of debt, dissolution or liquidation law or statute of any
jurisdiction, whether now or hereafter in effect; or (d) shall have had
any such petition or application filed against it; or (e) by any act or
omission shall indicate its consent to, approval of or acquiescence in
any such petition, application or proceeding or order for relief or the
appointment of a custodian, receiver or trustee for all or any
substantial part of its property; or (f) shall suffer any such
custodianship, receivership or trusteeship to continue undischarged for
a period of sixty (60) days or more.
(vii) One or more final non-appealable judgments, decrees or
orders for the payment of money in excess of $10,000,000 in the
aggregate shall be rendered against Tenant and such judgments, decrees
or orders shall continue unsatisfied and in effect for a period of
thirty (30) consecutive days without Tenant's having obtained an
agreement (or after the expiration or termination of an agreement) of
the Persons entitled to enforce such judgment, decrees or orders not to
enforce the same pending negotiations with Tenant concerning the
satisfaction or other discharge of the same.
(viii) Tenant shall fail to comply with the covenants set forth
in subparagraph 9(ab) or subparagraph 9(ac).
(ix) Tenant shall merge into or consolidate with any other
entity or permit any other entity to merge into or consolidate with
Tenant, or Tenant shall directly or indirectly sell, lease, transfer,
abandon or otherwise dispose of in one or more transactions all or
substantially all of Tenant's properties other than the Leased Property;
except that the following shall not constitute an Event of Default: (a)
any corporation shall merge into or with Tenant and the continuing or
surviving corporation shall immediately after such event be in
compliance with the financial covenants set forth in subparagraph 9(ab),
shall be an Affiliate of F. Hoffmann La-Roche, Ltd., a Swiss corporation
("Roche"), or any successor of Roche and shall unconditionally assume in
writing Tenant's obligations under this Lease, the Environmental
Indemnity Agreement and the Purchase Agreement; and (b) the Tenant shall
sell, lease or otherwise transfer all or substantially all of Tenant's
properties other than the Leased Property to another party and the party
acquiring such properties shall immediately after such event be in
compliance with the financial covenants set forth in subparagraph 9(ab),
shall be an Affiliate of Roche or any successor of Roche and shall
unconditionally assume in writing Tenant's obligations under this Lease,
the Environmental Indemnity Agreement and the Purchase Agreement.
(x) as of the effective date of this Lease, any of the
representations or warranties of Tenant contained in subparagraph 9(a),
in subparagraph 9(c), in subparagraph 9(h), in subparagraph 9(i), in
subparagraph 9(l) or in subparagraph 9(ad)(i) is false or misleading in
any material respect.
(xi) Tenant shall fail to comply with any term, provision or
condition of any Vacaville Pledge Documents (as defined in the Purchase
Agreement) after the expiration of applicable notice and cure periods
set forth in such Vacaville Pledge Documents.
Notwithstanding the foregoing, any Default that could become an Event of
Default under clause 14(a)(ii) may be cured within the earlier of the
periods described in clauses (A) and (B) thereof by Tenant's delivery to
Landlord of a written notice irrevocably exercising Tenant's option
under the Purchase Agreement to purchase or have an Applicable Purchaser
purchase Landlord's interest in the Leased Property and designating as
the Designated Payment Date the next following date which is a Advance
Date or Base Rental Date and which is at least ten (10) days after the
date of such notice hereunder; provided, however, Tenant must, as a
condition to the effectiveness of its cure, on the date so designated as
the Designated Payment Date tender or have the Applicable Purchaser
tender to Landlord the full Purchase Price (as defined in the Purchase
Agreement) and all Rent and all other amounts then due or accrued and
unpaid hereunder on such Designated Payment Date (including
reimbursement for any costs incurred by Landlord in connection with the
applicable Default hereunder, regardless of whether Landlord shall have
been reimbursed for such costs in whole or in part by Participants or
any Affiliate of Landlord) and Tenant must also furnish written
confirmation to Landlord that all indemnities set forth herein
(including specifically, but without limitation, the indemnities set
forth in subparagraph 9(x) and the environmental indemnity set forth in
Paragraph 12 shall survive the payment of such amounts by Tenant to
Landlord and the conveyance of Landlord's interest in the Leased
Property to Tenant.
(b) Remedies. When any Event of Default has occurred and is
continuing, at Landlord's option and without limiting Landlord in the
exercise of any other right or remedy Landlord may have, and without any
further demand or notice except as expressly described in this
subparagraph 14(b), Landlord may institute any remedies available to
Landlord, which remedies will include the following:
(i) By written notice to Tenant, Landlord may terminate
Tenant's right to possession of the Leased Property. A notice given in
connection with unlawful detainer proceedings specifying a time within
which to cure an Event of Default shall terminate Tenant's right to
possession if Tenant fails to cure the Event of Default within the time
specified in the notice.
(ii) Upon termination of Tenant's right to possession and
without further demand or notice, Landlord may re-enter the Leased
Property and take possession of all improvements, additions,
alterations, equipment and fixtures thereon and remove any persons in
possession thereof. Any property in the Leased Property may be removed
and stored in a warehouse or elsewhere at the expense and risk of and
for the account of Tenant.
(iii) Upon termination of Tenant's right to possession, this
Lease shall terminate and Landlord may recover from Tenant:
a) The worth at the time of award of the unpaid Rent
which had been earned at the time of termination;
b) The worth at the time of 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;
c) The worth at the time of award of the amount by
which the unpaid Rent through the balance of the scheduled Term (or if
sooner, through the date a sale is consummated or required under the
Purchase Agreement) after the time of award exceeds the amount of such
rental loss that Tenant proves could be reasonably avoided; and
d) Any other amount necessary to compensate Landlord
for all the detriment proximately caused by Tenant's failure to perform
Tenant's obligations under this Lease or which in the ordinary course of
things would be likely to result therefrom, including, but not limited
to, the costs and expenses (including Attorneys' Fees, advertising costs
and brokers' commissions) of recovering possession of the Leased
Property, removing persons or property therefrom, placing the Leased
Property in good order, condition, and repair, preparing and altering
the Leased Property for reletting, all other costs and expenses of
reletting, and any loss incurred by Landlord as a result of Tenant's
failure to perform Tenant's obligations under the Purchase Agreement.
The "worth at the time of award" of the amounts referred to in
subparagraph 14(b)(iii)a) and subparagraph 14(b)(iii)b) shall be
computed by allowing interest at ten percent (10%) per annum or such
other rate as may be the maximum interest rate then permitted to be
charged under California law at the time of computation. The "worth at
the time of award" of the amount referred to in subparagraph
14(b)(iii)c) shall be computed by discounting such amount at the
discount rate of the Federal Reserve Bank of San Francisco at the time
of award plus one percent (1%).
e) Such other amounts in addition to or in lieu of the
foregoing as may be permitted from time to time by applicable California
law.
(iv) The Landlord shall have the remedy described in California
Civil Code Section 1951.4 (lessor may continue lease in force even after
lessee's breach and abandonment and recover rent as it becomes due, if
lessee has right to sublet or assign, subject only to reasonable
limitations). Accordingly, even though Tenant has breached this Lease
and abandoned the Leased Property, this Lease shall continue in effect
for so long as Landlord does not terminate Tenant's right to possession,
and Landlord may enforce all of Landlord's rights and remedies under
this Lease, including the right to recover the Rent as it becomes due
under this Lease. Tenant's right to possession shall not be deemed to
have been terminated by Landlord except pursuant to subparagraph
14(b)(i) hereof. The following shall not constitute a termination of
Tenant's right to possession:
a) Acts of maintenance or preservation or efforts to
relet the Leased Property;
b) The appointment of a receiver upon the initiative of
Landlord to protect Landlord's interest under this Lease; or
c) Reasonable withholding of consent to an assignment
or subletting, or terminating a subletting or assignment by Tenant.
(c) Enforceability. This Paragraph shall be enforceable to the
maximum extent not prohibited by Applicable Law, and the
unenforceability of any provision in this Paragraph shall not render any
other provision unenforceable.
(d) Remedies Cumulative. No right or remedy herein conferred upon
or reserved to Landlord is intended to be exclusive of any other right
or remedy, and each and every right and remedy shall be cumulative and
in addition to any other right or remedy given hereunder or now or
hereafter existing under Applicable Law or in equity. In addition to
other remedies provided in this Lease, Landlord shall be entitled, to
the extent permitted by Applicable Law, to injunctive relief in case of
the violation, or attempted or threatened violation, of any of the
covenants, agreements, conditions or provisions of this Lease to be
performed by Tenant, or to a decree compelling performance of any of the
other covenants, agreements, conditions or provisions of this Lease to
be performed by Tenant, or to any other remedy allowed to Landlord under
Applicable Law or in equity. Nothing contained in this Lease shall
limit or prejudice the right of Landlord to prove for and obtain in
proceedings for bankruptcy or insolvency of Tenant by reason of the
termination of this Lease, 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, the damages are to be proved, whether or not the
amount be greater, equal to, or less than the amount of the loss or
damages referred to above. Without limiting the generality of the
foregoing, nothing contained herein shall modify, limit or impair any of
the rights and remedies of Landlord under the Environmental Indemnity
Agreement or the Purchase Agreement.
15 No Implied Waiver. The failure of Landlord or Tenant to insist at
any time upon the strict performance of any covenant or agreement or to
exercise any option, right, power or remedy contained in this Lease
shall not be construed as a waiver or a relinquishment thereof for the
future. The waiver of or redress for any violation by Landlord or
Tenant of any term, covenant, agreement or condition contained in this
Lease shall not prevent a similar subsequent act from constituting a
violation. Any express waiver shall affect only the term or condition
specified in such waiver and only for the time and in the manner
specifically stated therein. A receipt by Landlord of any Base Rent or
other payment hereunder with knowledge of the breach of any covenant or
agreement of Tenant contained in this Lease shall not be deemed a waiver
of such breach, and no waiver by either party of any provision of this
Lease shall be deemed to have been made unless expressed in writing and
signed by that party.
16 Default by Landlord. If Landlord should default in the
performance of any of its obligations, covenants, agreements,
conditions, representations or warranties under this Lease, Landlord
shall have the time reasonably required, but in no event less than
thirty (30) days, to cure such default after receipt of written notice
from Tenant specifying such default and specifying what action Tenant
believes is necessary to cure the default. If Tenant prevails in any
litigation brought against Landlord because of Landlord's failure to
cure a default within the time required by the preceding sentence, then
Tenant shall be entitled to an award against Landlord for the damages
proximately caused to Tenant by such default.
17 Quiet Enjoyment. Provided Tenant pays the Base Rent and all
Additional Rent payable hereunder as and when due and payable and keeps
and fulfills all of the terms, covenants, agreements and conditions to
be performed by Tenant hereunder, neither Landlord nor any one claiming
through Landlord (excluding Tenant or anyone claiming through Tenant)
shall during the Term disturb Tenant's peaceable and quiet enjoyment of
the Leased Property; however, such enjoyment shall be subject to the
terms, provisions, covenants, agreements and conditions of this Lease
and the Permitted Encumbrances and any other claims or encumbrances not
lawfully asserted through or under Landlord, to which this Lease is
subject and subordinate as hereinabove set forth. Any breach by
Landlord of the foregoing covenant of quiet enjoyment shall, subject to
the other provisions of this Lease, render Landlord liable to Tenant for
any monetary damages proximately caused thereby, but as more
specifically provided in Paragraph 5 above, no such breach shall entitle
Tenant to terminate this Lease or excuse Tenant from its obligation to
pay Base Rent and other amounts hereunder.
18 Surrender Upon Termination. Unless Tenant or an Applicable
Purchaser purchases Landlord's entire interest in the Leased Property
pursuant to the terms of the Purchase Agreement, Tenant shall, upon the
termination of Tenant's right to occupancy, surrender to Landlord the
Leased Property, including any buildings, alterations, improvements,
fixtures, replacements or additions constructed or purchased by Tenant
with funds advanced by Landlord, but not including movable personal
property not covered by this Lease, free of all Hazardous Substances
(including Permitted Hazardous Substances) and tenancies and, to the
extent required by Landlord, with all Improvements and tangible Personal
Property in good repair and condition, excepting only (i) ordinary wear
and tear (provided that the Leased Property shall have been maintained
as required by the other provisions hereof) and (ii) demolition,
alterations and additions which are expressly permitted by the terms of
this Lease and which have been completed by Tenant in a good and
workmanlike manner in accordance with all Applicable Laws. Any movable
furniture or movable personal property belonging to Tenant or any party
claiming under Tenant, if not removed at the time of such termination
and if Landlord shall so elect, shall be deemed abandoned and become the
property of Landlord without any payment or offset therefor. If
Landlord shall not so elect, Landlord may remove such property from the
Leased Property and store it at Tenant's risk and expense. Tenant shall
bear the expense of repairing any damage to the Leased Property caused
by such removal by Landlord or Tenant.
19 Holding Over by Tenant. Should Tenant not purchase Landlord's
right, title and interest in the Leased Property as provided in the
Purchase Agreement, but nonetheless continue to hold the Leased Property
after the termination of this Lease without Landlord's written consent,
whether such termination occurs by lapse of time or otherwise, such
holding over shall constitute and be construed as a tenancy from day to
day only, at a daily Base Rent equal to: (i) Stipulated Loss Value on
the day in question, times (ii) the Default Rate for such day; divided
by (iii) three hundred sixty (360); subject, however, to all of the
terms, provisions, covenants and agreements on the part of Tenant
hereunder. No payments of money by Tenant to Landlord after the
termination of this Lease shall reinstate, continue or extend the Term
of this Lease and no extension of this Lease after the termination
thereof shall be valid unless and until the same shall be reduced to
writing and signed by both Landlord and Tenant.
20 Miscellaneous.
(a) Notices. Each provision of this Lease, or of any Applicable
Laws with reference to the sending, mailing or delivery of any notice or
with reference to the making of any payment by Tenant to Landlord, shall
be deemed to be complied with when and if the following steps are taken:
(i) All Rent required to be paid by Tenant to Landlord
hereunder shall be paid to Landlord in immediately available funds by
wire transfer to:
Federal Reserve Bank of San Francisco
Account: Banque Nationale de Paris
ABA #: 121027234
Reference: Genentech-Vacaville Facility.
or at such other place and in such other manner as Landlord may
designate in a notice to Tenant. Time is of the essence as to all
payments and other obligations of Tenant under this Lease.
(ii) All advances paid to Tenant by Landlord hereunder or in
connection herewith shall be paid to Tenant in immediately available
funds by wire transfer to:
Citibank, N.A.
Account Name: Genentech, Inc.
Account Number: 4052-7763
ABA #: 021-000-089
Reference: Genentech-Vacaville Facility.
or at such other place and in such other manner as Tenant may
designate in a notice signed by Tenant's Treasurer or Chief Financial
Officer to Landlord. Time is of the essence as to the payment of all
Construction Advances required of Landlord under this Lease.
(iii) All notices, demands and other communications to be made
hereunder to the parties hereto shall be in writing (at the addresses
set forth below, or in the case of communications to Participants, at
the addresses set forth in Schedule 1) and shall be given by any of the
following means: (A) personal service; (B) electronic communication,
whether by telex, telegram or telecopying (if confirmed in writing sent
by United States first class mail, return receipt requested); or (C)
registered or certified first class mail, return receipt requested.
Such addresses may be changed by notice to the other parties given in
the same manner as provided above. Any notice or other communication
sent pursuant to clause (A) or (B) hereof shall be deemed received upon
such personal service or upon dispatch by electronic means, and, if sent
pursuant to clause (C) shall be deemed received five (5) days following
deposit in the mail.
Address of Landlord:
BNP Leasing Corporation
717 North Harwood Street
Suite 2630
Dallas, Texas 75201
Attention: Lloyd Cox
Telecopy: (214) 969-0060
With a copy to:
Banque Nationale de Paris, San Francisco
180 Montgomery Street
San Francisco, California 94104
Attention: Jennifer Cho
Telecopy: (415) 296-8954
And with a copy to:
Clint Shouse
Thompson & Knight, P.C.
1700 Pacific Avenue
Suite 3300
Dallas, Texas 75201
Telecopy: (214) 969-1550
Address of Tenant:
Genentech, Inc.
Attn: Corporate Secretary
460 Point San Bruno Boulevard
South San Francisco, CA 94080
Telecopy: (415) 952-9881
With a copy to:
Morrison & Foerster
555 West Fifth Street
Los Angeles, CA 90013-1024
Attention: Tom Fileti
Telecopy: (213) 892-5454
(b) Severability. If any term or provision of this Lease or the
application thereof shall to any extent be held by a court of competent
jurisdiction to be invalid and unenforceable, the remainder of this
Lease, or the application of such term or provision other than to the
extent to which it is invalid or unenforceable, shall not be affected
thereby.
(c) No Merger. There shall be no merger of this Lease or of the
leasehold estate hereby created with the fee estate in the Leased
Property or any part thereof by reason of the fact that the same person
may acquire or hold, directly or indirectly, this Lease or the leasehold
estate hereby created or any interest in this Lease or in such leasehold
estate as well as the fee estate in the Leased Property or any interest
in such fee estate, unless all Persons with an interest in the Leased
Property that would be adversely affected by any such merger
specifically agree in writing that such a merger shall occur.
(d) NO IMPLIED REPRESENTATIONS BY LANDLORD. LANDLORD AND
LANDLORD'S AGENTS HAVE MADE NO REPRESENTATIONS OR PROMISES WITH RESPECT
TO THE LEASED PROPERTY EXCEPT AS EXPRESSLY SET FORTH HEREIN, AND NO
RIGHTS, EASEMENTS OR LICENSES ARE ACQUIRED BY TENANT BY IMPLICATION OR
OTHERWISE EXCEPT AS EXPRESSLY SET FORTH IN THE PROVISIONS OF THIS LEASE
AND THE PURCHASE AGREEMENT.
(e) Entire Agreement. This Lease and the instruments referred to
herein supersede any prior negotiations and agreements between the
parties concerning the Leased Property, including the Prior Lease and
the Prior Purchase Agreement, but not including the Environmental
Indemnity Agreement, and no amendment or modification of this Lease
shall be binding or valid unless expressed in a writing executed by both
parties hereto. Tenant ratifies and confirms the Environmental
Indemnity Agreement as a separate and independent continuing agreement.
(f) Binding Effect. All of the covenants, agreements, terms and
conditions to be observed and performed by the parties hereto shall be
applicable to and binding upon their respective successors and, to the
extent assignment is permitted hereunder, their respective assigns.
(g) Time is of the Essence. Time is of the essence as to all
obligations of Tenant and Landlord and all notices required of Tenant
and Landlord under this Lease.
(h) Governing Law. This Lease shall be governed by and construed
in accordance with the laws of the State of California without regard to
conflict or choice of laws.
(i) Attorneys' Fees. If either party to this Lease commences any
legal action or other proceeding to enforce any of the terms of this
Lease or the documents or agreements referred to herein, or because of
any breach of the other party or dispute hereunder or thereunder, the
successful or prevailing party shall be entitled to recover from the
nonprevailing party all Attorneys' Fees incurred in connection
therewith, whether or not such controversy, claim or dispute is
prosecuted to a final judgment. Any such Attorneys' Fees incurred by
either party in enforcing a judgment in its favor under this Lease shall
be recoverable separately from such judgment, and the obligation for
such Attorneys' Fees is intended to be severable from other provisions
of this Lease and not to be merged into any such judgment.
21 Waiver of Jury Trial. LANDLORD AND TENANT EACH HEREBY WAIVES ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED
UPON OR ARISING OUT OF THIS LEASE OR ANY OTHER DOCUMENT OR DEALINGS
BETWEEN THEM RELATING TO THIS LEASE OR THE LEASED PROPERTY. The scope
of this waiver is intended to be all-encompassing of any and all
disputes that may be filed in any court and that relate to the subject
matter of this transaction, including, without limitation, contract
claims, tort claims, breach of duty claims, and all other common law and
statutory claims. Tenant and Landlord each acknowledge that this waiver
is a material inducement to enter into a business relationship, that
each has already relied on the waiver in entering into this Lease and
the other documents referred to herein, and that each will continue to
rely on the waiver in their related future dealings. Tenant and
Landlord each further warrants and represents that it has reviewed this
waiver with its legal counsel, and that it knowingly and voluntarily
waives its jury trial rights following consultation with legal counsel.
THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS LEASE OR TO
ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THIS LEASE OR THE LEASED
PROPERTY. In the event of litigation, this Lease may be filed as a
written consent to a trial by the court.
22 Tax Reporting. Landlord and Tenant shall report this Lease and
the Purchase Agreement for federal income tax purposes as a conditional
sale unless prohibited from doing so by the Internal Revenue Service.
Similarly, Tenant shall report all interest earned on Escrowed Proceeds
as Tenant's income for federal and state income tax purposes. If the
Internal Revenue Service shall challenge Landlord's characterization of
this Lease and the Purchase Agreement as a conditional sale for federal
income tax reporting purposes, Landlord shall notify Tenant in writing
of such challenge and consider in good faith any reasonable suggestions
by Tenant about an appropriate response. In any event, Tenant shall
(subject only to the limitations set forth in this Paragraph) indemnify,
defend and hold harmless Landlord from and against all liabilities,
costs, additional taxes and other expenses, but in any case not any
Excluded Taxes, that may become due or be asserted because of such
challenge or because of any resulting recharacterization required by the
Internal Revenue Service, including any additional taxes that may become
due upon any sale under the Purchase Agreement to the extent (if any)
that such additional taxes are not offset by tax savings resulting from
additional depreciation deductions or other tax benefits to Landlord of
the recharacterization. If Landlord receives a written notice of any
challenge by the Internal Revenue Service that Landlord believes will be
covered by this Paragraph, then Landlord shall promptly furnish a copy
of such notice to Tenant. The failure to so provide a copy of the
notice to Tenant shall not excuse Tenant from its obligations under this
Paragraph; provided, that if none of the officers of Tenant and none of
the employees of Tenant responsible for tax matters are aware of the
challenge described in the notice and such failure by Landlord renders
unavailable defenses that Tenant might otherwise assert, or precludes
actions that Tenant might otherwise take, to minimize its obligations
hereunder, then Tenant shall be excused from its obligation to indemnify
Landlord against liabilities, costs, additional taxes and other
expenses, if any, which would not have been incurred but for such
failure. For example, if Landlord fails to provide Tenant with a copy
of a notice of a challenge by the Internal Revenue Service covered by
the indemnity set out in this Paragraph and Tenant is not otherwise
already aware of such challenge, and if as a result of such failure
Landlord becomes liable for penalties and interest covered by the
indemnity in excess of the penalties and interest that would have
accrued if Tenant had been promptly provided with a copy of the notice,
then Tenant will be excused from any obligation to Landlord to pay the
excess.
23 Proprietary Information, Confidentiality and Security.
(a) Tenant shall have no obligation to provide proprietary
information (as defined in the next sentence) to Landlord, except and to
the extent that (1) Landlord reasonably determines that Landlord cannot
accomplish the purposes of Landlord's inspection of the Leased Property
pursuant to the various provisions hereof without evaluating such
information, and (2) before conducting any inspections of the Leased
Property permitted hereunder Landlord shall, if requested by Tenant,
confirm and ratify the confidentiality agreements covering such
proprietary information set forth in the next subparagraph. For
purposes of this Lease "proprietary information" includes Tenant's
intellectual property, trade secrets and other confidential information
of value to Tenant about, among other things, Tenant's manufacturing
processes, products, marketing and corporate strategies, but in no event
will "proprietary information" include any disclosure of substances and
materials (and their chemical composition) which are or previously have
been present in, on or under the Leased Property at the time of any
inspections by Landlord, nor will "proprietary information" include any
additional disclosures reasonably required to permit Landlord to
determine whether the presence of such substances and materials has
constituted a violation of Environmental Laws. In addition, under no
circumstances shall Tenant have any obligation to disclose to Landlord
or any other party any proprietary information of Tenant (including,
without limitation, any pending applications for patents or trademarks,
any research and design and any trade secrets) except if and to the
limited extent reasonably necessary to comply with the express
provisions of this Lease.
(b) Landlord agrees to use reasonable precautions to keep
confidential any proprietary information that Landlord may receive from
Tenant or otherwise discover with respect to Tenant or Tenant's business
pursuant to this Lease or any investigation by Landlord hereunder,
except for disclosures: (i) specifically and previously authorized in
writing by Tenant; (ii) to any assignee of Landlord as to any interest
in the Leased Property so long as such assignee has agreed in writing to
use its reasonable efforts to keep such information confidential in
accordance with the terms of this paragraph; (iii) to legal counsel,
accountants, auditors, environmental consultants and other professional
advisors to Landlord so long as Landlord shall inform such persons in
writing (if practicable) of the confidential nature of such information
and shall direct them to treat such information confidentially; (iv) to
regulatory officials having jurisdiction over Landlord or Landlord's
Parent (provided that the disclosing party shall request confidential
treatment of the disclosed information, if practicable); (v) as required
by legal process (provided that the disclosing party shall request
confidential treatment of the disclosed information, if practicable);
(vi) of information which has previously become publicly available
through the actions or inactions of a person other than Landlord not, to
Landlord's knowledge, in breach of an obligation of confidentiality to
Tenant; and (vii) to any Participant so long as the Participant is bound
by and has not repudiated the confidentiality provision concerning
Tenant's proprietary information set forth in the participation
agreement between Landlord and such Participant.
(c) So long as Tenant remains in possession of the Leased
Property, Landlord or Landlord's representative will, before making any
inspection or performing any work on the Leased Property authorized by
this Lease, if then requested to do so by Tenant to maintain Tenant's
security: (i) sign in at Tenant's security or information desk if Tenant
has such a desk on the premises, (ii) wear a visitor's badge or other
reasonable identification, (iii) permit an employee of Tenant to observe
such inspection or work, and (iv) comply with other similar reasonable
nondiscriminatory security requirements of Tenant that do not,
individually or in the aggregate, significantly interfere with
inspections or work of Landlord authorized by this Lease.
[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, this Lease is hereby executed in multiple
originals as of the effective date above set forth.
"Landlord"
BNP LEASING CORPORATION
a Delaware corporation
By: /S/LLOYD G. COX
Name: Lloyd G. Cox
Title: Vice President
"Tenant"
GENENTECH, INC.
a Delaware corporation
By: /S/MARTY GLICK
Name: Marty Glick
Title: Vice President and Tresure
Exhibit A
PROPERTY DESCRIPTION
ALL THAT REAL PROPERTY SITUATED IN THE CITY OF VACAVILLE, COUNTY OF
SOLANO, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS:
PARCEL ONE:
PARCEL "4D", AS SHOWN ON THAT CERTAIN MAP ENTITLED: "PARCEL MAP, BEING A
RESUBDIVISION OF PARCEL 4, AS SHOWN IN BOOK 38 OF PARCEL MAPS, PAGE 35,
PARCELS 14-22, PORTIONS OF AKERLY DRIVE AND BARCAR DRIVE AS SHOWN IN
BOOK 39 OF MAPS, PAGE 74, AND PORTIONS OF LANDS DESCRIBED IN DEED
RECORDED MAY 13, 1982, PAGE 29409, AS INSTRUMENT NO. 17086 IN THE OFFICE
OF THE COUNTY RECORDER OF SOLANO COUNTY, STATE OF CALIFORNIA," FILED
JULY 31, 1995 IN THE OFFICE OF THE COUNTY RECORDER OF SOLANO COUNTY, IN
BOOK 39 OF PARCEL MAPS, PAGE 37.
EXCEPTING THEREFROM AN UNDIVIDED ONE-HALF (1/2) INTEREST IN ALL
MINERALS, MINERAL DEPOSITS, OIL, GAS AND OTHER HYDROCARBON SUBSTANCES OF
EVERY KIND AND CHARACTER BELOW 500 FEET FROM THE SURFACE OF SAID LAND,
BUT WITHOUT, HOWEVER, THE RIGHT OF SURFACE ENTRY, AS EXCEPTED AND
RESERVED IN DEED FROM MARGARET JOSEPHINE SHELLHAMMER TO GERTRUDE M.
EAMES, DATED JUNE 8, 1956, RECORDED JUNE 12, 1956 IN BOOK 833 OF
OFFICIAL RECORDS, PAGE 480 AND IN DEED FROM MARGARET JOSEPHINE
SHELLHAMMER TO BARBARA C. SANTOS DATED DECEMBER 28, 1962, RECORDED
JANUARY 4, 1963 IN BOOK 1178 OF OFFICIAL RECORDS, PAGE 520, AND IN DEED
FROM MARGARET JOSEPHINE SHELLHAMMER TO ROBERTA SANTOS, DATED DECEMBER
28, 1962, RECORDED JANUARY 4, 1963 IN BOOK 1178 OF OFFICIAL RECORDS,
PAGE 529, SOLANO COUNTY RECORDS.
ALSO EXCEPTING AN UNDIVIDED ONE-HALF (1/2) INTEREST IN ALL OIL, GAS AND
OTHER HYDROCARBONS; NON-HYDROCARBON GASSES OR GASEOUS SUBSTANCES; ALL
OTHER MINERALS OF WHATSOEVER NATURE, WITHOUT REGARD TO SIMILARITY TO THE
ABOVE-MENTIONED SUBSTANCES; AND ALL SUBSTANCES THAT MAY BE PRODUCED
THEREWITH FROM SAID REAL PROPERTY AS RESERVED IN THE DEED FROM CHEVRON
U.S.A. INC., A CORPORATION, RECORDED APRIL 1, 1987 IN BOOK 1987 PAGE
42125 OFFICIAL RECORDS AS INSTRUMENT NO. 21698.
ALSO EXCEPTING AN UNDIVIDED ONE-HALF (1/2) INTEREST IN ALL GEOTHERMAL
RESOURCES, EMBRACING: INDIGENOUS STEAM, HOT WATER AND HOT BRINES; STEAM
AND OTHER GASSES, HOT WATER AND HOT BRINES RESULTING FROM WATER, GAS OR
OTHER FLUIDS ARTIFICIALLY INTRODUCED INTO SUBSURFACE FORMATIONS; HEAT OR
OTHER ASSOCIATED ENERGY FOUND BENEATH THE SURFACE OF THE EARTH; AND
BYPRODUCTS OF ANY OF THE FOREGOING SUCH AS MINERALS (EXCLUSIVE OF OIL OR
HYDROCARBON GAS THAT CAN BE SEPARATELY PRODUCED) WHICH ARE FOUND IN
SOLUTION OR ASSOCIATION WITH OR DERIVED FROM ANY OF THE FOREGOING, AS
RESERVED IN THE DEED FROM CHEVRON U.S.A. INC., A CORPORATION, RECORDED
APRIL 1, 1987 IN BOOK 1987 PAGE 42125 OFFICIAL RECORDS AS INSTRUMENT NO.
21698.
ALSO THE SOLE AND EXCLUSIVE RIGHT FROM TIME TO TIME TO BORE OR DRILL AND
MAINTAIN WELLS AND OTHER WORKS INTO AND THROUGH SAID REAL PROPERTY AND
ADJOINING STREETS, ROADS AND HIGHWAYS BELOW A DEPTH OF FIVE HUNDRED
(500') FEET FROM THE SURFACE THEREOF FOR THE PURPOSE OF EXPLORING FOR
AND PRODUCING ENERGY RESOURCES; THE RIGHT TO PRODUCE, INJECT, STORE AND
REMOVE FROM AND THROUGH SAID BORES, WELLS OR WORKS, OIL, GAS, WATER AND
OTHER SUBSTANCES OF WHATEVER NATURE, INCLUDING THE RIGHT TO PERFORM
BELOW SAID DEPTH ANY AND ALL OPERATIONS DEEMED BY GRANTOR NECESSARY OR
CONVENIENT FOR THE EXERCISE OF SUCH RIGHTS, AS RESERVED IN THE DEED FROM
CHEVRON U.S.A. INC., A CORPORATION, RECORDED APRIL 1, 1987 IN BOOK 1987
PAGE 42125 OFFICIAL RECORDS AS INSTRUMENT NO. 21698.
ALL RIGHTS EXCEPTED AND RESERVED TO CHEVRON DO NOT INCLUDE AND DO NOT
EXCEPT OR RESERVE TO CHEVRON ANY RIGHT OF CHEVRON TO USE THE SURFACE OF
SAID PROPERTY OR THE FIRST FIVE HUNDRED (500') FEET BELOW SAID SURFACE
OR TO CONDUCT ANY OPERATIONS THEREON OR THEREIN.
APN: PORTION 133-080-290
PORTION 133-120-300
133-190-030 THRU 100
133-190-130
PARCEL TWO:
THOSE CERTAIN EASEMENTS GRANTED IN ARTICLE 8 OF THE DECLARATION OF
COVENANTS, CONDITIONS AND RESTRICTIONS FOR VACA VALLEY BUSINESS PARK,
DATED NOVEMBER 10, 1993, EXECUTED BY CHEVRON LAND AND DEVELOPMENT
COMPANY, A DELAWARE CORPORATION, RECORDED NOVEMBER 12, 1993 AS
INSTRUMENT NO. 1993-00107441 IN THE SOLANO COUNTY RECORDS, AS AMENDED BY
A FIRST AMENDMENT THERETO, RECORDED NOVEMBER 12, 1993 AS INSTRUMENT NO.
1993-00107445 IN THE SOLANO COUNTY RECORDS, AS FURTHER AMENDED BY A
SECOND AMENDMENT THERETO, RECORDED SEPTEMBER 13, 1995 AS INSTRUMENT NO.
1995-00056033 IN THE SOLANO COUNTY RECORDS AND AS FURTHER AMENDED BY A
THIRD AMENDMENT THERETO, RECORDED SEPTEMBER 13, 1995 AS INSTRUMENT NO.
1995-00056034 IN THE SOLANO COUNTY RECORDS
Exhibit B
PERMITTED ENCUMBRANCES
The leasehold and all rights conveyed to Tenant hereby are conveyed
subject to the Development Contracts described in Schedule 2 and to
other matters described hereinbelow to the extent such other matters are
still valid and in force.
(i) THE FACT THAT THE REAL PROPERTY IS WITHIN THE SOLANO IRRIGATION
DISTRICT AS ESTABLISHED BY THE BOARD OF SUPERVISORS OF SOLANO COUNTY,
CALIFORNIA ON MARCH 8, 1948, AND ANY TAXES OR ASSESSMENTS THEREOF WHICH
ARE NOT DELINQUENT OR CLAIMED TO BE DELINQUENT OR WHICH ARE BEING
CONTESTED IN ACCORDANCE WITH SUBPARAGRAPH 9(p) OF THIS LEASE.
(ii) THE FACT THAT THE OWNERSHIP OF SAID LAND DOES NOT INCLUDE ANY
RIGHTS OF ACCESS TO THE STATE FREEWAY (INTERSTATE 505), SAID RIGHTS
HAVING BEEN RELINQUISHED TOGETHER WITH A WAIVER OF CLAIMS FOR DAMAGES,
IN THE DEED
FROM : JAMES J. KILKENNY, A WIDOWER
TO : STATE OF CALIFORNIA
RECORDED : MARCH 21, 1946
IN BOOK : 344 PAGE 162
INSTRUMENT NO.: 7390, OFFICIAL RECORDS
(iii) AN EASEMENT FOR THE PURPOSE SHOWN BELOW AND RIGHTS INCIDENTAL
THERETO AS SET FORTH IN A DOCUMENT
GRANTED TO: CITY OF VACAVILLE
PURPOSE: STORM DRAINAGE
RECORDED: MARCH 20, 1981 IN BOOK 1981 PAGE 19683 AS
INSTRUMENT NO. 11433, OFFICIAL RECORDS
AFFECTS: STRIP OF LAND RUNNING THROUGHOUT THE PREMISES
LOCATED AS SHOWN ON SURVEY PREPARED BY MOUNTAIN PACIFIC SURVEYS, DATED
JULY 31, 1995
(iv) AN EASEMENT FOR THE PURPOSE SHOWN BELOW AND RIGHTS INCIDENTAL
THERETO AS SET FORTH IN A DOCUMENT
GRANTED TO: UNITED STATES OF AMERICA
PURPOSE: PIPELINES
RECORDED: OCTOBER 30, 1981 IN BOOK 1981 PAGE 79172 AS
INSTRUMENT NO. 45851, OFFICIAL RECORDS
AFFECTS: A 20' STRIP OF LAND RUNNING EAST/WEST THROUGH THE
MIDDLE PORTION OF THE PROPERTY, LOCATED AS SHOWN ON SURVEY PREPARED BY
MOUNTAIN PACIFIC SURVEYS, DATED JULY 31, 1995
(v) AN EASEMENT FOR THE PURPOSE SHOWN BELOW AND RIGHTS INCIDENTAL
THERETO AS RESERVED IN A DOCUMENT
PURPOSE: WATER PIPELINE
RECORDED: APRIL 1, 1982 IN BOOK 1982 PAGE 20129 AS
INSTRUMENT NO. 11654, OFFICIAL RECORDS
AFFECTS: WESTERLY 20 FEET, LOCATES AS SHOWN ON SURVEY
PREPARED BY MOUNTAIN PACIFIC SURVEYS, DATED JULY 31, 1995.
(vi) THE FACT THAT SAID LAND IS INCLUDED WITHIN A PROJECT AREA OF THE
REDEVELOPMENT AGENCY SHOWN BELOW, AND THAT PROCEEDINGS FOR THE
REDEVELOPMENT OF SAID PROJECT HAVE BEEN INSTITUTED UNDER THE
REDEVELOPMENT LAW (SUCH REDEVELOPMENT TO PROCEED ONLY AFTER THE ADOPTION
OF THE REDEVELOPMENT PLAN) AS DISCLOSED BY A DOCUMENT.
REDEVELOPMENT AGENCY: THE REDEVELOPMENT PLAN FOR THE VACAVILLE
I-505/80 REDEVELOPMENT PROJECT
RECORDED: JULY 15, 1983 IN BOOK 1983 PAGE 55732,
INSTRUMENT NO. 29527 OFFICIAL RECORDS
(vii) AN EASEMENT FOR THE PURPOSE SHOWN BELOW AND RIGHTS INCIDENTAL
THERETO AS SET FORTH IN A DOCUMENT
GRANTED TO: COUNTY OF SOLANO
PURPOSE: AVIGATION EASEMENT
RECORDED: MAY 31, 1989 IN BOOK 1989 AS INSTRUMENT NO.
890035033, OFFICIAL RECORDS
AFFECTS: THE HEREIN DESCRIBED PROPERTY
(viii) DEFERRED IMPROVEMENT AGREEMENT, UPON THE TERMS AND CONDITIONS
CONTAINED THEREIN
DATED: MAY 16, 1989
EXECUTED BY: THE CITY OF VACAVILLE AND CHEVRON LAND AND
DEVELOPMENT COMPANY, A DELAWARE CORPORATION
RECORDED: MAY 31, 1989
BOOK: 1989
INSTRUMENT NO.: 890035035, OFFICIAL RECORDS
AN AMENDMENT TO THE ABOVE WAS
DATED: OCTOBER 28, 1993
RECORDED: NOVEMBER 12, 1993
IN BOOK: 1993
INSTRUMENT NO.: 1993-00107440
NATURE OF CHANGES: IMPLEMENTATION PROCEDURES
NOTE: UPON COMPLETION OF REQUIREMENTS SET FORTH IN THE AGREEMENT
SHOWN IN EXCEPTION NO. XV SAID AGREEMENT WILL BE TERMINATED AND REPLACED
BY AGREEMENT SHOWN AS EXCEPTION NO. XV.
(IX) ASSESSMENT DISTRICT AND MAINTENANCE DISTRICT AGREEMENT, UPON THE
TERMS AND CONDITIONS CONTAINED THEREIN
DATED: OCTOBER 28, 1993
EXECUTED BY: THE CITY OF VACAVILLE AND CHEVRON LAND AND
DEVELOPMENT COMPANY
RECORDED: NOVEMBER 12, 1993
BOOK: 1993
INSTRUMENT NO.: 1993-00107439, OFFICIAL RECORDS
(x) COVENANTS, CONDITIONS AND RESTRICTIONS (DELETING THEREFROM ANY
RESTRICTIONS BASED ON RACE, COLOR, RELIGION, SEX, HANDICAP, FAMILIAL
STATUS OR NATIONAL ORIGIN, UNLESS AND ONLY TO THE EXTENT THAT SAID
COVENANT (A) IS EXEMPT UNDER CHAPTER 42, SECTION 3607 OF THE UNITED
STATES CODE OR (B) RELATES TO HANDICAP BUT DOES NOT DISCRIMINATE AGAINST
HANDICAPPED PERSONS) AS SET FORTH IN THE DOCUMENT
EXECUTED BY: CHEVRON LAND AND DEVELOPMENT COMPANY, A DELAWARE
CORPORATION
RECORDED: NOVEMBER 12, 1993
IN BOOK: 1993
INSTRUMENT NO.: 1993-00107441 OFFICIAL RECORDS
WHICH PROVIDE THAT A VIOLATION THEREOF SHALL NOT DEFEAT NOR RENDER
INVALID THE LIEN OF ANY MORTGAGE OR DEED OF TRUST MADE IN GOOD FAITH AND
FOR VALUE. SAID INSTRUMENT DOES NOT PROVIDE FOR REVERSION OF TITLE IN
THE EVENT OF A BREACH THEREOF.
MODIFICATION(S) OF SAID COVENANTS, CONDITIONS AND RESTRICTIONS
EXECUTED BY: CHEVRON LAND AND DEVELOPMENT COMPANY, A DELAWARE
CORPORATION
RECORDED: NOVEMBER 12, 1993
IN BOOK: 1993
INSTRUMENT NO.: 1993-00107445 OFFICIAL RECORDS
SAID COVENANTS, CONDITIONS AND RESTRICTIONS HAVE BEEN MODIFIED BY
AN INSTRUMENT
EXECUTED BY: CHEVRON LAND AND DEVELOPMENT COMPANY, A DELAWARE
CORPORATION
RECORDED: SEPTEMBER 13, 1995
BOOK: 1995
INSTRUMENT NO.: 1995-00056033, OFFICIAL RECORDS
SAID COVENANTS, CONDITIONS AND RESTRICTIONS HAVE BEEN MODIFIED BY
AN INSTRUMENT
EXECUTED BY: CHEVRON LAND AND DEVELOPMENT COMPANY, A DELAWARE
CORPORATION
RECORDED: SEPTEMBER 13, 1995
BOOK: 1995
INSTRUMENT NO.: 1995-00056034, OFFICIAL RECORDS
(xi) NOTICE OF ASSESSMENT, CITY OF VACAVILLE, NORTHEAST SECTOR
ASSESSMENT DISTRICT, RECORDED JULY 21, 1995 AS INSTRUMENT NO. 1995-
00043084, SOLANO COUNTY RECORDS.
(xii) AN EASEMENT FOR THE PURPOSE SHOWN BELOW AND RIGHTS INCIDENTAL
THERETO AS SHOWN OR OFFERED FOR DEDICATION ON THE RECORDED MAP SHOWN
BELOW.
MAP OF: 39 PM 37
RECORDED: JULY 31, 1995
EASEMENT PURPOSE: PUBLIC UTILITIES, LANDSCAPE AND PUBLIC ACCESS
EASEMENT
AFFECTS: THE NORTHEASTERLY 25 FEET, THE SOUTHEASTERLY 30
FEET AND THE NORTHEASTERLY 30 FEET (ALONG THE MOST EASTERLY PORTION OF
THE PROPERTY) AND AS SHOWN ON SURVEY PREPARED BY MOUNTAIN PACIFIC
SURVEYS, DATED JULY 31, 1995.
(xiii) AN EASEMENT FOR THE PURPOSE SHOWN BELOW AND RIGHTS INCIDENTAL
THERETO AS SHOWN OR AS OFFERED FOR DEDICATION ON THE RECORDED MAP SHOWN
BELOW.
MAP OF: 39 PM 37
RECORDED: JULY 31, 1995
EASEMENT PURPOSE: LANDSCAPE SIGNAGE AND PUBLIC UTILITY EASEMENT
AFFECTS: A 100 FT. X 100 FT. STRIP OF LAND IN THE
NORTHEASTERLY CORNER AND A STRIP OF LAND IN THE MOST EASTERLY
NORTHEASTERLY CORNER AND AS SHOWN ON SURVEY PREPARED BY MOUNTAIN PACIFIC
SURVEYS, DATED JULY 31, 1995.
(xiv) AN EASEMENT FOR THE PURPOSE SHOWN BELOW AND RIGHTS INCIDENTAL
THERETO AS SHOWN OR AS OFFERED FOR DEDICATION ON THE RECORDED MAP SHOWN
BELOW.
MAP OF: 39 PM 37
RECORDED: JULY 31, 1995
EASEMENT PURPOSE: LANDSCAPING EASEMENT
AFFECTS: THE WESTERLY 30 FEET AND AS SHOWN ON SURVEY
PREPARED BY MOUNTAIN PACIFIC SURVEYS, DATED JULY 31, 1995.
(xv) AS SHOWN ON PARCEL MAP, BK 39 PM PAGE 37, NON-ACCESS ALONG THE
NORTHERLY PORTION OF THE PROPERTY (VACA VALLEY PARKWAY).
(xvi) DEFERRED IMPROVEMENT AGREEMENT, UPON THE TERMS AND CONDITIONS
CONTAINED THEREIN
DATED: JUNE 30, 1995
EXECUTED BY: THE CITY OF VACAVILLE AND CHEVRON LAND AND
DEVELOPMENT COMPANY, A DELAWARE CORPORATION
RECORDED: AUGUST 16, 1995
BOOK: 1995
INSTRUMENT NO.: 1995-00048797, OFFICIAL RECORDS
(xvii) AGREEMENT CONTAINING COVENANTS AFFECTING REAL PROPERTY
DATED: SEPTEMBER 11, 1995
BY AND BETWEEN: CHEVRON LAND AND DEVELOPMENT COMPANY, A DELAWARE
CORPORATION AND MISSION-VACAVILLE, LIMITED PARTNERSHIP, A CALIFORNIA
LIMITED PARTNERSHIP
RECORDED: SEPTEMBER 13, 1995
BOOK: 1995
INSTRUMENT NO.: 1995-00056036, OFFICIAL RECORDS
(xviii) DEVELOPMENT AGREEMENT, UPON THE TERMS AND CONDITIONS CONTAINED
THEREIN
EXECUTED BY: THE CITY OF VACAVILLE, THE REDEVELOPMENT AGENCY
OF THE CITY OF VACAVILLE AND GENENTECH, INC.
RECORDED: SEPTEMBER 28, 1995
BOOK: 1995
INSTRUMENT NO.: 1995-00059945, OFFICIAL RECORDS
Exhibit C
ESTOPPEL FROM CONTRACTORS
_________, 199__
BNP Leasing Corporation
717 North Harwood Street
Suite 2630
Dallas, Texas 75201
Attention: Lloyd Cox
Re: Assignment of Construction Contract
Ladies and Gentlemen:
The undersigned hereby confirms, warrants and represents to BNP
Leasing Corporation, a Delaware corporation ("BNP"), and covenants with
BNP as follows:
1. The undersigned has entered into that certain [**Construction
Contract] (the "Construction Contract") by and between the undersigned
and Genentech, Inc. ("Tenant") dated, 199__ for the construction of the
manufacturing complex to be constructed on the Vacaville campus leased
by Tenant (the "Improvements") located on the land described in Exhibit
A attached hereto and made a part hereof for all purposes (the "Land"
and, together with the Improvements and any other improvements now on or
constructed in the future on the Land, being collectively herein
referred to as the "Project").
2. The undersigned has been advised that BNP owns the Land.
3. The undersigned has also received a copy of the Amended and
Restated Lease Agreement dated as of December 8, 1995 (the "Lease"),
pursuant to which BNP is leasing the Project to Tenant, and BNP has
agreed, subject to the terms and conditions of the Lease, to provide a
construction allowance for Tenant's construction of the Improvements.
The Lease also requires Tenant to fulfill all obligations of "Genentech"
under the Construction Contract and related documents and to indemnify
BNP against any liability arising thereunder, all as more particularly
provided in the Lease, reference to which is hereby made for all
purposes.
4. A complete and correct copy of the Construction Contract is
attached to this letter. The Construction Contract is in full force and
effect and has not been modified or amended.
5. The undersigned has not sent or received any notice of default to
or from Tenant or any other notice to or from Tenant for the purpose of
terminating the Construction Contract, nor is there any existing
circumstance or event which, but for the elapse of time or otherwise,
would constitute a default by the undersigned or "Genentech" under the
Construction Contract.
The undersigned acknowledges and agrees that:
a) BNP shall not be held liable for, and the undersigned shall not
assert, any claims, demands or liabilities against BNP or, except for
any statutory stop notice or lien rights, against the Project arising
under or in any way relating to the Construction Contract; provided,
this paragraph will not prohibit the undersigned from asserting any
claims or making demands under the Construction Contract if BNP elects
in writing, pursuant to Paragraph b) below, to assume the Construction
Contract in the event Tenant's right to possession of the Land is
terminated, in which event BNP shall be liable thereunder for (but only
for) any acts or omissions on the part of BNP occurring after the date
on which BNP notifies the undersigned of BNP's election to assume the
Construction Contract.
b) Upon any termination of Tenant's right to possession of the
Project under the Lease, including but not limited to any eviction of
Tenant resulting from an Event of Default (as defined in the Lease), BNP
may, by notice to the undersigned and without the necessity of the
execution of any other document, assume Tenant's rights and obligations
under the Construction Contract, cure any defaults by Tenant thereunder
and enforce the Construction Contract and all rights of "Genentech"
thereunder. Within ten (10) days of receiving notice from BNP that
Tenant's right to possession has been terminated, the undersigned shall
send to BNP a written estoppel letter stating: (i) that the undersigned
has not performed any act or executed any other instrument which
invalidates or modifies the Construction Contract in whole or in part
(or, if so, the nature of such modification); (ii) that the Construction
Contract is valid and subsisting and in full force and effect; (iii)
that there are no defaults or events of default then existing under the
Construction Contract and no event has occurred which with the passage
of time or the giving of notice, or both, would constitute such a
default or event of default under the Construction Contract (or, if
there is a default, the nature of such default in detail); (iv) that the
construction contemplated by the Construction Contract is proceeding in
a satisfactory manner in all material respects (or if not, a detailed
description of all significant problems with the progress of
construction); (v) a reasonably detailed report of the then critical
dates projected by the undersigned for work and deliveries required to
complete the Project; (vi) the total amount paid for construction
through the date of the letter; (vii) the estimated total cost of
completing such construction as of the date of the letter, together with
a current draw schedule; and (viii) any other information BNP may
request to allow it to decide whether to assume the Construction
Contract. BNP shall have thirty (30) days from receipt of such written
certificate containing all such requested information to decide whether
to assume the Construction Contract, but during such thirty (30) day
period Contractor may suspend work as reasonably required to mitigate
any further losses it may suffer under the Construction Contract until
such time as BNP provides written notice of BNP's election to assume the
Construction Contract. If BNP fails to provide written notice to
Contractor of BNP's election to assume the Construction Contract within
such thirty (30) day period, the undersigned agrees that BNP shall not
be liable for (and the undersigned shall not assert or bring any action
against BNP or, except for any statutory stop notice or lien rights not
waived, against the Land or improvements thereon for) any damages or
other amounts resulting from the breach or termination of the
Construction Contract or under any other theory of liability of any kind
or nature, but rather the undersigned shall look solely to Tenant and
any statutory stop notice or lien rights not waived for the recovery of
any such damages or other amounts.
c) Following the termination of Tenant's right to possession of
the Project under the Lease, if BNP notifies the undersigned that BNP
shall not assume the Construction Contract pursuant to the preceding
paragraph, or if BNP fails to provide written notice of its election to
assume the Construction Contract within the thirty (30) days described
in the preceding paragraph, the undersigned shall immediately
discontinue the work under the Construction Contract and remove its
personnel from the Project, and BNP shall be entitled to take exclusive
possession of the Project and all or any part of the equipment and
materials delivered or en route to the Project. The undersigned shall
also, upon request by BNP, deliver and assign to BNP all plans and
specifications and other contract documents previously delivered to the
undersigned, all other material relating to the work which belongs to
BNP or Tenant, and all papers and documents relating to governmental
permits, orders placed, bills and invoices, lien releases and financial
management under the Construction Contract; provided, that BNP pays or
reimburses Contractor for its copying costs and other reasonable out of
pocket expenses in complying with such request; and, provided, further,
that if Contractor has only one original counterpart of any contract or
other document that it needs in connection with any claim, demand, or
the exercise of any rights or remedies the undersigned may have against
the Tenant, whether provided by law, the Construction Contract or
otherwise, then Contractor may retain such original counterpart and
deliver only a copy of it to BNP. Notwithstanding the undersigned's
receipt of any notice from BNP that BNP declines to assume the
Construction Contract, the undersigned shall for a period not to exceed
fifteen (15) days after receipt of such notice take such steps, at BNP's
expense, as are reasonably necessary to preserve and protect work
completed and in progress and to protect materials, equipment and
supplies at the site or in transit.
d) No action taken by BNP or the undersigned with respect to the
Construction Contract shall prejudice any other rights or remedies of
BNP or the undersigned provided by law, by the Lease , by the
Construction Contract or otherwise against Tenant.
e) The undersigned agrees promptly to notify BNP of any aterial
default or claimed material default by Tenant under the Construction
Contract, describing with particularity the default and the action the
undersigned believes is necessary to cure the same. The undersigned
will send any such notice to BNP prominently marked "URGENT - NOTICE OF
TENANT'S DEFAULT UNDER CONSTRUCTION AGREEMENT WITH _______________ -
___________ CALIFORNIA" at the address specified for notice below (or at
such other addresses as BNP shall designate in notice sent to the
undersigned), by certified or registered mail, return receipt requested.
Following receipt of such notice, the undersigned will permit BNP or its
designee to cure any such default within the time period reasonably
required for such cure, but in no event less than thirty (30) days.
Pending any such cure by BNP, Contractor may, to the extent (if any)
permitted by the Construction Contract itself, suspend work under the
Construction Contract unless BNP elects to fund the ongoing construction
activities of Contractor during the period before the cure is complete.
If it is necessary or helpful to take possession of all or any portion
of the Project to cure a default by Tenant under the Construction
Contract, the time permitted by the undersigned for cure by BNP will
include the time necessary to terminate Tenant's right to possession of
the Project and evict Tenant, provided that BNP commences the steps
required to exercise such right within sixty (60) days after it is
entitled to do so under the terms of the Lease and applicable law. If
the undersigned incurs additional costs due to an extension of any cure
period under the Construction Contract by reason of the foregoing, the
undersigned shall be entitled to an equitable adjustment to the price of
the Construction Contract for such additional costs. Similarly, to the
extent that Contractor's work is actually delayed by the extension of
cure periods under the Construction Contract pursuant to the foregoing
provisions, Contractor shall be entitled to an equitable extension of
deadlines and time schedules established by the Construction Contract.
f) Any notice or communication required or permitted hereunder
shall be given in writing, sent by (a) personal delivery or (b)
expedited delivery service with proof of delivery or (c) United States
mail, postage prepaid, registered or certified mail or (d) telegram,
telex or telecopy, addressed as follows:
To the undersigned:
To BNP: BNP Leasing Corporation
717 North Harwood Street
Suite 2630
Dallas, Texas 75201
Attn: Lloyd Cox
g) The undersigned acknowledges that it has all requisite
authority to execute this letter. The undersigned further acknowledges
that BNP has requested this letter, and is relying on the truth and
accuracy of the representations made herein, in connection with BNP's
decision to advance funds for construction under the Lease with Tenant.
Very truly yours,
_____________________________
By:
Name:
Title:
Tenant joins in the execution of this letter solely for the purpose
of evidencing its consent hereto, including its consent to the
provisions that would allow, but not require, BNP to assume the
Construction Contract in the event Tenant is evicted from the Project in
accordance with the Lease.
_____________________________
By:
Name:
Title:
Exhibit D
ESTOPPEL FROM ARCHITECTS/ENGINEERS
_________, 199__
BNP Leasing Corporation
717 North Harwood Street
Suite 2630
Dallas, Texas 75201
Attention: Lloyd Cox
Re: Assignment of [Architects/Engineers Agreement]
Ladies and Gentlemen:
The undersigned hereby confirms, warrants and represents to BNP
Leasing Corporation, a Delaware corporation ("BNP"), and covenants with
BNP as follows:
1. The undersigned has entered into that certain
[**Architects/Engineers Agreement] (the "Agreement") by and between the
undersigned and Genentech, Inc. ("Tenant") dated, 199__ for the
[**design] of the manufacturing complex to be constructed on the
Vacaville campus leased by Applied (the "Improvements") located on the
land described in Exhibit A attached hereto and made a part hereof for
all purposes (the "Land" and, together with the Improvements and any
other improvements now on or constructed in the future on the Land,
being collectively referred to herein as the "Project").
2. The undersigned has been advised that BNP owns the Land.
3. The undersigned has also received a copy of the Amended and
Restated Lease Agreement dated as of December 8, 1995 (the "Lease"),
pursuant to which BNP is leasing the Project to Tenant, and BNP has
agreed, subject to the terms and conditions of the Lease, to provide a
construction allowance for Tenant's construction of the Improvements.
The Lease also requires Tenant to fulfill all obligations of "Genentech"
under the Agreement and related documents and to indemnify BNP against
any liability arising thereunder, all as more particularly provided in
the Lease, reference to which is hereby made for all purposes.
4. complete and correct copy of the Agreement is attached to this
letter. The Agreement is in full force and effect and has not been
modified or amended.
5. The undersigned has not sent or received any notice of default to
or from Tenant or any other notice to or from Tenant for the purpose of
terminating the Agreement, nor is there any existing circumstance or
event which, but for the elapse of time or otherwise, would constitute a
default by the undersigned or "Genentech" under the Agreement.
The undersigned acknowledges and agrees that:
a) BNP shall not be held liable for, and the undersigned shall not
assert, any claims, demands or liabilities against BNP or, except for
any statutory stop notice or lien rights, against the Project arising
under or in any way relating to the Agreement; provided, this paragraph
will not prohibit the undersigned from asserting any claims or making
demands under the Agreement if BNP elects in writing, pursuant to
Paragraph b) below, to assume the Agreement in the event Tenant's right
to possession of the Land is terminated, in which event BNP shall be
liable thereunder for (but only for) any acts or omissions on the part
of BNP occurring after the date on which BNP notifies the undersigned of
BNP's election to assume the Agreement.
b) Upon any termination of Tenant's right to possession of the
Project under the Lease, including but not limited to any eviction of
Tenant resulting from an Event of Default (as defined in the Lease), BNP
may, by notice to the undersigned and without the necessity of the
execution of any other document, assume Tenant's rights and obligations
under the Agreement, cure any defaults by Tenant thereunder and enforce
the Agreement and all rights of "Genentech" thereunder. Within ten (10)
days of receiving notice from BNP that Tenant's right to possession has
been terminated, the undersigned shall send to BNP a written estoppel
letter stating: (i) that the undersigned has not performed any act or
executed any other instrument which invalidates or modifies the
Agreement in whole or in part (or, if so, the nature of such
modification); (ii) that the Agreement is valid and subsisting and in
full force and effect; (iii) that there are no defaults or events of
default then existing under the Agreement and no event has occurred
which with the passage of time or the giving of notice, or both, would
constitute such a default or event of default under the Agreement (or,
if there is a default, the nature of such default in detail); (iv) that
the construction contemplated by the Agreement is proceeding in a
satisfactory manner in all material respects (or if not, a detailed
description of all significant problems with the progress of
construction); (v) a reasonably detailed report of the then critical
dates projected by the undersigned for work and deliveries required to
complete the Project; (vi) the total amount paid for construction
through the date of the letter; (vii) the estimated total cost of
completing such construction as of the date of the letter, together with
a current draw schedule; and (viii) any other information BNP may
request to allow it to decide whether to assume the Agreement. BNP
shall have thirty (30) days from receipt of such written certificate
containing all such requested information to decide whether to assume
the Agreement. If BNP fails to assume the Agreement within such time,
the undersigned agrees that BNP shall not be liable for (and the
undersigned shall not assert or bring any action against BNP or, except
for any statutory stop notice or lien rights not waived, against the
Land or improvements thereon for) any damages or other amounts resulting
from the breach or termination of the Agreement or under any other
theory of liability of any kind or nature, but rather the undersigned
shall look solely to Tenant and any statutory stop notice or lien rights
not waived for the recovery of any such damages or other amounts.
c) If BNP notifies the undersigned that BNP shall not assume the
Agreement pursuant to the preceding paragraph following the termination
of Tenant's right to possession of the Project under the Lease, the
undersigned shall immediately discontinue the work under the Agreement
and remove its personnel from the Project, and BNP shall be entitled to
take exclusive possession of the Project and all or any part of the
equipment and materials delivered or en route to the Project. The
undersigned shall also, upon request by BNP, deliver and assign to BNP
all plans and specifications and other contract documents previously
delivered to the undersigned (except that the undersigned may keep an
original set of the Agreement and other contract documents executed by
Tenant), all other material relating to the work which belongs to BNP or
Tenant, and all papers and documents relating to governmental permits,
orders placed, bills and invoices, lien releases and financial
management under the Agreement. Notwithstanding the undersigned's
receipt of any notice from BNP that BNP declines to assume the
Agreement, the undersigned shall for a period not to exceed fifteen (15)
days after receipt of such notice take such steps, at BNP's expense, as
are reasonably necessary to preserve and protect work completed and in
progress and to protect materials, equipment and supplies at the site or
in transit.
d) No action taken by BNP or the undersigned with respect to the
Agreement shall prejudice any other rights or remedies of BNP or the
undersigned provided by law, by the Lease, by the Agreement or otherwise
against Tenant.
e) The undersigned agrees promptly to notify BNP of any material
default or claimed material default by Tenant under the Agreement,
describing with particularity the default and the action the undersigned
believes is necessary to cure the same. The undersigned will send any
such notice to BNP prominently marked "URGENT - NOTICE OF TENANT'S
DEFAULT UNDER AGREEMENT WITH _______________ - ___________ CALIFORNIA"
at the address specified for notice below (or at such other addresses as
BNP shall designate in notice sent to the undersigned), by certified or
registered mail, return receipt requested. Following receipt of such
notice, the undersigned will permit BNP or its designee to cure any such
default within the time period reasonably required for such cure, but in
no event less than thirty (30) days. If it is necessary or helpful to
take possession of all or any portion of the Project to cure a default
by Tenant under the Agreement, the time permitted by the undersigned for
cure by BNP will include the time necessary to terminate Tenant's right
to possession of the Project and evict Tenant, provided that BNP
commences the steps required to exercise such right within sixty (60)
days after it is entitled to do so under the terms of the Lease and
applicable law.
f) Any notice or communication required or permitted hereunder
shall be given in writing, sent by (a) personal delivery or (b)
expedited delivery service with proof of delivery or (c) United States
mail, postage prepaid, registered or certified mail or (d) telegram,
telex or telecopy, addressed as follows:
To the undersigned:
To BNP: BNP Leasing Corporation
717 North Harwood Street
Suite 2630
Dallas, Texas 75201
Attn: Lloyd Cox
g) The undersigned acknowledges that it has all requisite
authority to execute this letter. The undersigned further acknowledges
that BNP has requested this letter, and is relying on the truth and
accuracy of the representations made herein, in connection with BNP's
decision to advance funds for construction under the Lease with Tenant.
Very truly yours,
By:
Name:
Title:
Tenant joins in the execution of this letter solely for the purpose
of evidencing its consent hereto, including its consent to the
provisions that would allow, but not require, BNP to assume the
Agreement in the event Tenant is evicted from the Project in accordance
with the Lease.
_______________________
By:
Name:
Title:
Exhibit E
DRAW REQUEST FORMS
________, 199__
BNP Leasing Corporation
c/o Banque Nationale de Paris
180 Montgomery Street
San Francisco, California 94104
Attention: Ms. Jennifer Cho
Re: Construction Advance Request No. __________
by Genentech, Inc.
Ladies and Gentlemen:
Reference is made to the Amended and Restated Lease Agreement
between BNP Leasing Corporation (herein "Landlord") and Genentech, Inc.
(herein "Genentech") dated as of December 8, 1995 (herein "the Lease").
Capitalized terms defined in the Lease and used but not defined in this
letter are intended to have the meanings assigned to them in the Lease.
Genentech hereby makes request for a Construction Advance in the
amount of $________________ (herein the "Current Advance"). Included
herewith are:
1. An Application and Certificate for Payment based on AIA Form G702
(herein the "Contractor's Application") from Genentech's general
contractor or construction manager, attached to which is a schedule of
values listing all subcontractors, suppliers and other parties to whom
the general contractor or construction manager has or will make payments
from the draw requested in the Contractor's Application. The
Contractor's Application evidences an obligation incurred by (and
previously paid by) Genentech for construction of Improvements and for
which Genentech is entitled to reimbursement from the Current Advance.
2. A list of any costs paid by Genentech, other than to the general
contractor or construction manager, for which Genentech is entitled to
reimbursement from the proceeds of the Current Advance (herein the
"Other Costs List").
3. Invoices and requests for payments from the subcontractors and
others entitled to payment from the general contractor or construction
manager for construction and related work covered by the Contractor's
Application; excluding, however, invoices or requests from some or all
subcontractors and others that, according to the Contractor's
Application, are to be paid less than $500,000 from the draw requested
in Contractor's Application. Such invoices and requests for payments
are consistent with the detail shown in the schedule of values attached
to the Contractor's Application.
4. Invoices or other evidence of the costs (if any) included in the
Other Costs List.
5. A list of any "checks on hold" (i.e., payments withheld from
subcontractors or suppliers by Tenant's general contractor or
construction manager because of some defect or deficiency in the payee's
request for payment or in the work or materials provided by the payee)
in excess of $100,000.
6. An up-to-date list of the names and addresses of any
subcontractors that have actually filed a claim of lien against the
Leased Property, together with, to the extent not already provided with
a prior request for a Construction Advance, a copy of the claim of lien
filed.
7. A certification of an officer of Genentech as required by
Paragraph 6(c)(viii) of the Lease.
We hereby confirm that Landlord will not be responsible for the
application of any funds advanced to Genentech or to any other party at
our request.
Sincerely,
Genentech, Inc.
By:___________________________
Name:___________________________
Title:___________________________
cc: BNP Leasing Corporation
717 North Harwood Street
Suite 2630
Dallas, Texas 75201
Attention: Lloyd Cox
Clint Shouse
Thompson & Knight,
a Professional Corporation
3300 First City Center
1700 Pacific Avenue
Dallas, Texas 75201
Tricia Borga
Genentech, Inc.
460 Point San Bruno Boulevard
South San Francisco, CA 9408
Construction Advance Certificate
Pursuant to Section 6(c)(viii) of the Lease dated December 8, 1995 (the
"Lease") between Genentech, Inc. ("Genentech") and BNP Leasing
Corporation ("Landlord"), Genentech does hereby represent, warrant and
certify to Landlord in connection with Genentech's request for
Construction Advance No. __________ that:
a) no Event of Default has occurred and is continuing,
b) the representations and warranties of Genentech contained in
the Lease are true and correct in all material respects on and as of the
date hereof as though made on and as of the date hereof, subject only to
the following exceptions:
[LIST EXCEPTIONS HERE, OR IF THERE ARE NO EXCEPTIONS, INSERT "NONE"]
c) each Construction Project which has commenced but not yet been
completed is progressing without any significant continuing interruption
in a good and workmanlike manner and substantially in accordance with
the requirements of the Lease and all Applicable Laws and Genentech has
corrected or is diligently pursuing the correction of any significant
defect in such construction,
d) all costs and expenses for which Genentech is requesting
reimbursement by the Construction Advance referenced above constitute
actual costs and expenses incurred by Genentech for a Construction
Project, and
e) to the knowledge of Genentech, liens (if any) now being
asserted against the Leased Property by Potential Lien Claimants do not
in the aggregate secure or allegedly secure more that $5,000,000 of
claims. (As used in this certificate a lien will be considered as
"being asserted" if a claim of lien relating thereto shall have been
recorded and not discharged by payment or settlement.)
Capitalized terms used herein which are defined in the Lease but not in
this Certificate shall have the meanings assigned to them in the Lease.
In witness whereof, this Certificate is executed by an officer of
Genentech, Inc. as of ______________, 19___.
Genentech, Inc.
By:____________________________
Name:____________________________
Title:____________________________
List of Liens For Which a Claim of Lien Has Actually Been Filed
(Construction Advance Request No. ________)
Liens for which a claim of lien has actually been filed are as follows:
1.
2.
3.
Other Costs List
(Construction Advance Request No. ________)
Costs paid - other than to Genentech's general contractor or
construction manager - by Genentech and for which Genentech is entitled
to reimbursement from the Current Advance being requested are as
follows:
1.
2.
3.
Exhibit F
FINANCIAL COVENANT COMPLIANCE CERTIFICATE
BNP Leasing Corporation
c/o Banque Nationale de Paris, San Francisco
180 Montgomery Street
San Francisco, California 94104
Attention: Jennifer Cho
Re: Genentech Vacaville Facility
Gentlemen:
I, the undersigned, the chief financial officer or controller of
Genentech, Inc., do hereby certify, represent and warrant that:
1. This Certificate is furnished pursuant to subparagraph 9(v)(iii)
of that certain Amended and Restated Lease Agreement dated as of
December 8, 1995 (the "Lease Agreement," the terms defined therein being
used herein as therein defined) between Genentech, Inc. (the "Tenant"),
and you.
2. Annex 1 attached hereto sets forth financial data and computations
evidencing the Tenant's compliance with certain covenants of the Lease
Agreement, all of which data and computations are complete, true and
correct.
3. To the knowledge of Tenant no Default or Event of Default under
the Lease Agreement has occurred and is continuing.
4. The representations of Tenant set forth in Paragraph 9 of the
Lease Agreement are true and correct in all material respects as of the
date hereof as though made on and as of the date hereof.
Executed this _____ day of ______________, 19___.
______________________________
Name:_________________________
Title:________________________
Annex 1 To Compliance Certificate
For the _________________ Ended ________________, 19___
I. PARAGRAPH 9(ab)(i): Minimum Tangible Net Worth
A. Reported Consolidated Total Assets: $_____________
B. Intangible assets: $_____________
C. After-tax charges taken upon
the acquisition of technology
or distribution rights: $_____________
D. Reported Consolidated Total Liabilities: $_____________
E. Amounts guaranteed by Genentech, Inc.
or subsidiaries and not included in
Reported Consolidated Total Liabilities: $_____________
F. Consolidated Tangible Net Worth
(A - B + C - D - E): $_____________
E. Minimum: $1,000,000,000.00
II. PARAGRAPH 9(ab)(ii): Leverage Ratio
A. Reported Consolidated Total Liabilities: $_____________
B. Amounts guaranteed by Genentech, Inc.
or subsidiaries and not included in
Reported Consolidated Total Liabilities: $_____________
C. Consolidated Tangible Net Worth
(from calculation above): $_____________
D. Leverage Ratio (Ratio of [A+B] to C: _____ to ____
E. Maximum ratio: 1.0 to 1.0
III. PARAGRAPH 9(ab)(iii): Quick Ratio
A. Unencumbered Cash and Cash Equivalents
and other "Quick Assets" as defined in
clauses (1), (2) and (3) of
Paragraph 1(cc) of the Lease: $_____________
B. Unencumbered accounts receivable
(net of reserve for
uncollectible accounts): $_____________
C. A + B $_____________
D. Current Liabilities (as defined in
Subparagraph 1(z)): $_____________
E. Ratio of C to D: __.__ to __.__
F. Minimum ratio: 3.75 to 1.
Schedule 1
LIST OF PARTICIPANTS
Participant: SWISS BANK CORPORATION, SAN FRANCISCO BRANCH
Country Under Whose Laws Participant Exists: Switzerland
1. Amount of Participation: $ 50,000,000.00
2. Percentage Share: 15.15151515%
3. Address for Notices:
Swiss Bank Corporation
101 California Street
Suite 1700
San Francisco, Ca. 94111-5884
Attention: David L. Parrot
Telephone: (415) 774-3425
Facsimile: (415) 989-7570
4. Payment Instructions:
Bank: Swiss Bank Corporation, New York Branch
New York, New York
Account: Swiss Bank Corporation, San Francisco Branch
Account No.: WA-119997.000
ABA No.: 0260-0799-3
Reference: BNP Leasing/Genentech/Vacaville
5. Operations Contact:
Swiss Bank Corporation
101 California Street
Suite 1700
San Francisco, Ca. 94111-5884
Attention: William B. Walzer
Telephone: (415) 774-3329
Facsimile: (415) 956-3882
SCHEDULE 1
(cont.)
Participant: UNION BANK OF SWITZERLAND
Country Under Whose Laws Participant Exists: Switzerland
1. Amount of Participation: $ 70,000,000.00
2. Percentage Share: 21.21212121%
3. Address for Notices:
Union Bank of Switzerland, Los Angeles Branch
444 South Flower Street, 45th Floor
Los Angeles, Ca. 90071
Attention: Andres T. Brown
Telephone: (213) 489-0660
Facsimile: (213) 489-0697
4. Payment Instructions:
Bank: Union Bank of Switzerland
New York Branch
Fed Routing No.: 026008439
Favor of: UBS Los Angeles
Account No.: 40064502
Reference: Genentech, Inc.
5. Operations Contact:
Union Bank of Switzerland, Los Angeles Branch
444 South Flower Street, 45th Floor
Los Angeles, Ca. 90071
Attention: Susan U. Beltran
Telephone: (213) 489-0675
Facsimile: (213) 489-0637, -0690
SCHEDULE 1
(cont.)
Participant: CREDIT SUISSE
Country Under Whose Laws Participant Exists: Switzerland
1. Amount of Participation: $ 70,000,000.00
2. Percentage Share: 21.21212121%
3. Address for Notices:
Credit Suisse
50 California Street
San Francisco, Ca. 94111
Attention: Thomas Clausen
Tel No.: (415) 391-9590
Fax No.: (415) 362-1175
With a copy to:
Greenwich Funding Corporation
c/o Credit Suisse
12 East 49th
New York, NY 10017
Attention:Carin Okita
Tel No.: (213) 238-5366
Fax No.: (213) 238-5332
4. Payment Instructions:
Bank: Credit Suisse
New York
ABA #: 026009179
Account #: 339989-01
F/A GFC
Reference: Genentech - BNP Leasing Genentech/Vacaville
5. Operations Contact:
Greenwich Funding Corporation
c/o Credit Suisse
12 East 49th
New York, NY 10017
Attention: Carin Okita
Tel No.: (213) 238-5366
Fax No.: (213) 238-533
SCHEDULE 1
(cont.)
Participant: Mellon Bank, N.A.
Country Under Whose Laws Participant Exists: United States
1. Participation Amount: $ 70,000,000.00
2. Percentage Share: 21.21212121%
3. Address for Notices:
Mellon Bank, N. A.
300 South Grand Ave., Suite 3800
Los Angeles, Ca. 90071
Attention: R. Jane Westrich
Telephone: (213) 680-7353
Facsimile: (213) 626-3745
4. Payment Instructions:
Bank: Mellon Bank, N.A.
Pittsburgh, Pa.
Account: Loan Administration
Account No.: 990873800
ABA No.: 043000261
5. Operations Contact:
Mellon Bank, N.A.
3 Mellon Bank Center
Room 153-2300
Pittsburgh, Pa. 15259
Attention: Loan Administration
Telephone: (412) 236-3242
Facsimile: (412) 234-5049
Schedule 2
LIST OF EXISTING DEVELOPMENT CONTRACTS
1. Property Sale Agreement, dated May 24, 1995.
2. Amendment No. 1 to Property Sale Agreement, dated as of June 30, 1995.
3. Amendment No. 2 to Property Sale Agreement, dated as of July 31, 1995.
4. Amendment No. 3 to Property Sale Agreement, dated as of July 31, 1995.
5. Amendment No. 4 to Property Sale Agreement, dated as of July 31, 1995.
6. Amendment No. 5 to Property Sale Agreement, dated as of September 5,
1995.
7. Water Rights Agreement, dated May, 1987, between Chevron Land and
Development Co. and the City of Vacaville, California.
8. Wetlands Mitigation and Monitoring Plan for the Vaca Valley Business
Park, as approved by the Army Corps of Engineers in its Letter, dated March
31, 1995, and as modified pursuant to the Letter, dated June 7, 1995, from
Chevron Land and Development Co. to the Army Corps of Engineers and the
Letter, dated June 28, 1995, from the Army Corps of Engineers approving the
changes requested in Chevron Land and Development Co.'s June 7 letter.
9. Waiver letter, dated June 5, 1995, from the Regional Water Quality
Control Board.
10. Rights with respect to the Northeast Sector Assessment District.
11. Deferred Improvement Agreement between Chevron Land and Development
Company and the City of Vacaville, California.
12. Development Agreement among the City of Vacaville, California, the
Redevelopment Agency of the City of Vacaville, California and Genentech,
Inc.
13. Negative declaration (State Clearinghouse No. 95043004) for the
Genentech project.
14. Declaration of Covenants, Conditions and Restrictions for the Vaca
Valley Business Park, as amended by the First, Second and Third Amendments
thereto.
15. California Department of Fish and Game Section 1603 Permit applicable
to the Vaca Valley Business Park.
16. Agreement Containing Covenants Affecting Real Property dated September
11, 1995 between Chevron Land and Development Company and Mission-Vacaville
Limited Partnership.
17. Memorandum of Understanding dated as of September 7, 1995 between
Chevron Land and Development Company, Mission-Vacaville Limited Partnership
and Genentech, Inc.
Schedule 3
DESCRIPTION OF INITIAL CONSTRUCTION PROJECT
The following description has been provided by Tenant to Landlord:
GENERAL DESCRIPTION
The "initial Construction Project" will consist of the design,
construction, validation, start-up, and operation of a Bulk
Manufacturing Facility (hereafter referred to as the Manufacturing
Facility) for mammalian cell culture based products substantially in
accordance with the site plan attached to and made a part of this
Schedule. The Manufacturing Facility is being designed to use large-
scale cell culture (12,000 L production fermenters) and purification
technologies similar to those used at Genentech's South San Francisco
facilities. The facility will initially be licensed for the manufacture
of monoclonal antibody-based proteins which are intended for worldwide
distribution. The facility design criteria are based on the clinical
processes developed for rhuMAb HER2, rhuMAb-E25, TNFR-rigG, and C2B8
with batch sizes in the range of 1 to 9 kg. It is anticipated that the
Vacaville facility will be available for production of qualification
lots by mid-1998.
The site encompasses approximately 100 acres and the planned buildings
will occupy approximately 30 acres. The support buildings will include
a warehouse, a quality/administration building, a facility services
building, and a central processing utility plant.
The Vacaville location was chosen primarily because of the reduced risk
of earthquake potential, presence of skilled labor resources, adequate
space for future growth, and proximity to current Genentech operations.
The City of Vacaville has experience in working with biotechnology firms
as well as an established infrastructure required to support such an
endeavor.
Possible future requirements for the new site that have been identified
but will not be addressed at this time are: a bacterial manufacturing
facility; a second cell culture facility; pharmaceutical filling,
labeling, and packaging; and the expansion of the existing warehousing
and quality operations. No current provision is made for these future
requirements other than the purchase of land and some utility capacity.
MANUFACTURING FACILITY
The Manufacturing Facility is being designed for the production of
multiple products on a campaigned basis. The frozen bulk drug substance
will be transferred to Genentech facilities in South San Francisco for
further processing. The capacity will be approximately one- to two-fold
Genentech's current bulk product production capacity in South San
Francisco.
The Manufacturing Facility is planned to be approximately 170,000 ft2.
The facility will be a three floor building with dedicated manufacturing
areas. The utilities will be located in the center of the building
spanning the three floors, and will separate the various processing
areas.
WAREHOUSE
The warehouse will be a two-floor building of approximately 45,000 ft2,
and will be connected to the Manufacturing Facility on the second floor
by an environmentally controlled corridor to facilitate the movement of
raw materials and frozen bulk drug substance tanks. In addition to
storage of released raw materials the warehouse will include Raw
material weigh rooms.
QUALITY/ADMINISTRATION BUILDING
The quality/administration building will house Quality Assurance,
Quality Control laboratories, manufacturing science laboratory support,
and offices. The QC laboratories will perform in-process testing,
environmental monitoring and water analysis.