EXHIBIT 10.11
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SECOND AMENDMENT TO LEASE AGREEMENT AND LANDLORD CONSENT
THIS SECOND AMENDMENT TO LEASE AGREEMENT AND LANDLORD CONSENT (the
"Second Amendment") is made as of the 8th day of July, 2002, by and between
XXXXXXX KODAK COMPANY, a New Jersey corporation (hereinafter called "Landlord")
and GENENCOR INTERNATIONAL, INC., a Delaware corporation (hereinafter called
"Tenant").
WITNESSETH:
WHEREAS, by a certain Lease Agreement dated as of August 28, 1991, as
amended November 30, 2001 (the "Lease"), Landlord leased to Tenant and Tenant
leased from Landlord all that certain parcel of and and improvements, buildings
(but not equipment or other personalty acquired by separate xxxx of sale from
Landlord) in the Town of Greece and City of Rochester, County of Monroe, State
of New York, as more particularly defined in the Lease and Exhibit A thereto
(the "Premises"), which is generally known as 0000 Xxxxxxxxx Xxxxxx, Xxxxxxxxx,
Xxx Xxxx, 00000; and
WHEREAS, Tenant desires to construct an addition to the Premises,
consisting of a new building to be constructed adjacent to the existing building
on the Premises, and has requested Landlord's approval of Tenant's proposed
addition; and
WHEREAS, Landlord and Tenant have agreed that Paragraph 22 of the Lease
is no longer applicable and shall be amended as provided herein;
NOW, THEREFORE, for and in consideration of the foregoing and for other
good and valuable consideration and of the mutual agreements hereinafter set
forth, Landlord and Tenant stipulate, covenant and agree to modify the Lease as
follows:
1. CAPITALIZED TERMS: All capitalized terms used in this Second
Amendment but not defined herein shall have the same definitions as are
contained in the Lease.
2. MODIFICATION OF PARAGRAPHS 18 AND 22 OF THE LEASE:
Paragraph 18 of the Lease, entitled "Default Clauses" shall be amended as
follows: -- following the words "and in such case" in line 8 therefore, delete
all text to the end of Paragraph 18 and substitute in lieu thereof: "Landlord
shall have all rights at law or in equity available to Landlord to enforce the
terms of the Lease and obtain relief from such default including recovery of any
substantiated losses, damages and expenses incurred by Landlord as a result of
such default or proceedings to enforce Tenant's obligations and covenants
hereunder.
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Paragraph 22 of the Lease, entitled "Purchase of Premises by Landlord from
Tenant," shall be deleted in its entirely and replaced with the following:
"22. LANDLORD CONTRIBUTION TO UTILITY SEPARATION COSTS.
"For purposes of this Lease, the term "Utility Separation
Costs" shall mean the reasonable, out-of-pocket costs incurred by Tenant for
capital improvements required to permit the Premises to obtain the following
services (the "Utility Services"), which are currently provided by Landlord from
Landlord's facilities at Kodak Park, from an alternative public or private
source. The Utility Services consist of steam/condensate; electric and related
switchgear facility, and water for fire protection, process operations and
drinking. For this purpose, Utility Separation Costs shall include the costs for
all of the work required to be performed by Tenant on, under or at the Premises,
or any part thereof, to physically disconnect the Premises from the pipes, wires
or other equipment or facilities by which Landlord has provided the Utility
Services to the Premises or any improvements located thereon, together with the
costs for the work and materials required to provide the capital improvements
necessary to receive the Utility Services from alternative sources (the "Utility
Separation Project"). The scope and estimated cost of the Utility Separation
Project are described in greater detail in EXHIBIT B attached hereto which the
parties hereby accept as the maximum cost subject to any potential payment
obligation of Landlord hereunder. For avoidance of doubt, Utility Separation
Costs do not include any portion of the cost of any Utility Services obtained by
Tenant from a third party public or private source, other than the cost of
capital improvements required to be incurred by Tenant as a condition to the
receipt of such Utility Services.
a. In the event that Tenant exercises its right
to purchase the Premises pursuant to Xxxxxxxxx 00, Xxxxxxxx shall be obligated
to pay to Tenant an amount equal to the lesser of: (i) fifty percent (50%) of
the actual Utility Separation Costs; or (ii) $1,566,500 the latter amount
adjusted for inflation as provided in paragraph f. below.
b. Alternatively, Landlord shall have the right
at any time during the term of the Lease, upon ninety (90) days written notice
to Tenant, to elect to transfer title to the Premises to Tenant as though Tenant
had exercised its right to purchase pursuant to Paragraph 21. Landlord shall
further have the right at any time during the term of the Lease, without
electing to transfer title to the Premises to Tenant, and only upon twenty-four
(24) months written notice, to separate any one or more but not all of the
Utility Services from Landlord's facilities at Kodak Park. In the event Landlord
elects to transfer title to the Premises to Tenant, Landlord shall be obligated
to pay to Tenant an amount equal to the lesser of: (i) one hundred percent
(100%) of the actual Utility Separation Costs; or (ii) $3,133,000, the latter
amount adjusted for inflation as provided in paragraph f. below, together with,
in each instance, the expenses customarily incurred by the seller of commercial
real estate in Rochester, New York associated with the transfer of title. In the
event that Landlord elects to separate one or more but not all of the Utility
Services from Landlord's facilities at Kodak Park, then Landlord shall be
obligated to pay to Tenant with respect to any such elected Utility
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Service an amount equal to the lesser of: (i) one hundred percent (100%) of the
actual Utility Separation Costs incurred with respect to such elected Utility
Service; or (ii) the amount set forth as the Capital Estimate for such Utility
Service in the Summary portion of Exhibit B (i.e., Water Supply, $255,000; for
Electric, $426,000; and for Steam, $2,452,000), which latter amounts shall be
adjusted for inflation as provided for in paragraph f. below.
c. The amount, if any, to be paid by Landlord
pursuant to paragraphs a, or b. of this Paragraph 22 shall be due and payable by
Landlord to Tenant forty-five (45) days following the receipt by Landlord of
notice from Tenant that Tenant has completed the Utility Separation Project.
Such notice from Tenant to Landlord shall include an accounting in detail
reasonably satisfactory to Landlord of the Utility Separation Costs incurred by
Tenant in completing the Utility Separation Project.
d. Landlord agrees to continue providing
Utility Services to Tenant at the Premises, and Tenant agrees to continue paying
the charges for such Utility Services, during the design, construction and
certification of the Utilities Separation Project; provided however, that Tenant
shall proceed as soon as possible following the election by Tenant or Landlord
pursuant to paragraphs a. or b. above with reasonable diligence to commence and
bring to completion the Utility Separation Project and further provided that the
providing of such Utility Services shall be permitted by applicable law. The
parties agree that, if necessary to accommodate the continuation of Utility
Services during this period, the actual transfer of title to the Premises shall
be delayed until the completion of the Utility Separation Project by Tenant.
e. Notwithstanding the requirements of
paragraphs a. and b. of this Xxxxxxxxx 00, Xxxxxxxx shall have the right, in
lieu of making part or all of the payments required by such paragraphs to make
any necessary arrangements to continue to provide one or more of the Utility
Services after the transfer of title to the Premises to Tenant. In the case of
Tenant's exercise of its purchase right under paragraph a, Landlord shall
exercise this right by delivering notice of its intent to do so within thirty
(30) days following Landlord's receipt of the notice from Tenant required in
Paragraph 21. In the case of Landlord's exercise of its right under paragraph b.
of this Xxxxxxxxx 00, Xxxxxxxx shall include notice of its intent to exercise
its right under this paragraph e. in the notice delivered by it to Tenant under
paragraph b. Such notice shall include a statement of the Utility Services which
Landlord desires to continue to provide to Tenant after the transfer of title to
the Premises, the terms upon which such Utility Services would continue to be
provided by Landlord, and the amount of time (not to exceed nine (9)months)
which Landlord expects would be required to satisfy any regulatory or other
requirements for Landlord to commence and continue supplying such Utility
Service to the Premises subsequent to a transfer of title. Tenant shall within
thirty (30) days following receipt of such notice from Landlord pursuant to this
paragraph e. notify Landlord of whether it elects to accept Landlord's offer to
continue to provide the specified Utility Services. If (x) Tenant accepts
Landlord's offer to continue to provide Utility Services; or (y) Tenant elects
not to accept Landlord's offer to continue to provide Utility Services and
further provided that Landlord's offer to continue to provide Utility
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Services after the transfer of title to the Premises is on substantially the
same terms and conditions as exist under the Lease and can be accomplished in no
less than nine (9) months from the date Tenant notified Landlord of its election
not to accept the Landlord's offer, then, in either instance, the amount payable
by Landlord pursuant to paragraphs a. and b. shall be reduced as follows:
i. If Landlord offered to continue to
provide all of the Utility Services, then Landlord's payment under either
paragraph a. or b. would be reduced to zero.
ii. If Landlord offered to continue to
provide only some but not all of the Utility Services, then Landlord's maximum
payment under paragraph a. or b. would be reduced by the amount corresponding to
the percentage the continued Utility Service represents in relation to the total
Utility Separation Project cost estimate set forth in Exhibit B.
f. The Utility Separation Costs in Exhibit B
and the numerical dollar amounts stated in Paragraphs a. and b. above are in
2002 U.S. Dollars. At the time of any payment(s) to be made by Landlord pursuant
to such paragraphs, such payment(s) will be adjusted for inflation by the
relative change in the Producer Price Index (the "PPI"), for finished goods,
excluding food and energy, as published by the Bureau of Labor Statistics of the
U.S. Department of Labor, from the effective date hereof to the date of payment.
The adjustment amount will be determined by multiplying the applicable payment
due by a fraction, the numerator of which is the PPI index for the month
immediately prior to the month in which the payment is to be made and the
denominator of which is the PPI index for June, 2002, provided further, however,
that the maximum increase under this paragraph f shall be capped at twenty-five
percent (25%).
g. In the event Landlord exercises its rights
under paragraph e. above and Tenant accepts Landlord's offer to continue to
provide any or all of the Utility Services, and thereafter Landlord fails for
any reason to provide such Utility Services on a timely and continuous basis,
(except as a result of unavoidable circumstances beyond the control of
Landlord), including but not limited to (i) Landlord's failure or refusal to
provide such utility services on substantially the same terms and conditions as
exist under the Lease or (ii) Landlord is unable to meet Tenant's requirements
for same or (iii) changed or new governmental regulations, including those of
the New York Public Service Law, prevent Landlord from providing such Utility
Services, then Tenant shall have the continuous and immediate right to invoke
the provisions of paragraphs a. or b. above, whichever would have applied if
paragraph e. above had not been invoked by Landlord.
3. RATIFICATION: Except as modified herein, all other terms and
conditions of the Lease are hereby ratified and confirmed and shall continue in
full force and effect. Landlord further hereby confirms and represents to Tenant
that nothing in its agreement(s), contractual or otherwise, with Trigen-Cinergy
Solutions of Rochester LLC (TCS) prevent Landlord from performing its
obligations under the Lease, as amended.
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4. LANDLORD'S CONSENT: Landlord hereby grants its approval, for
purposes of Paragraph 12(b) of the Lease of Tenant's proposed additions to the
Premises which are more particularly described in EXHIBIT C attached hereto.
Notwithstanding Landlord's approval granted herein, Tenant shall provide
Landlord with updated copies of Tenant's plans and specifications for the
additions Tenant is proposing to add to the Premises, and Tenant shall in good
faith consider implementing Landlord's suggestions and comments on Tenant's
plans and specifications.
IN WITNESS WHEREOF, the parties have caused this Amendment to be
executed by their authorized representatives as of the date first above written.
XXXXXXX KODAK COMPANY, LANDLORD GENENCOR INTERNATIONAL, INC., TENANT
BY: /s/ XXXXXXX X. XXXXXXXXXX BY: /s/ XXXXXX X. XXXXXX
------------------------------- --------------------------
NAME: XXXXXXX X. XXXXXXXXXX NAME: XXXXXX X. XXXXXX
TITLE: MANAGER, KODAK PARKSITE TITLE: SENIOR VICE PRESIDENT,
VICE PRESIDENT,XXXXXXX GENERAL COUNSEL
KODAK COMPANY
EXHIBIT B
XXXXXXXX ASSOCIATES' UTILITY STUDY FOR GENENCOR INTERNATIONAL
Genencor International contracted Xxxxxxxx Associates Inc. to evaluate the
capital cost to convert the Lexington Avenue facility from Kodak utilities to
public utilities. The following data is from that study completed June 24, 2002.
If Genencor were to invest capital to provide utility services to the 0000
Xxxxxxxxx Xxxxxx site the service providers would be:
Water supply Monroe County Water Authority (MCWA)
Sanitary sewers Monroe County Pure Waters (MCPW)
Storm sewers City of Rochester (Lexington Ave. storm sewer system)
Electric Rochester Gas and Electric (RGE)
Natural Gas Rochester Gas and Electric (RGE) (for steam generation)
Initial discussions with all appropriate utility authorities occurred during the
preparation of this report.
SUMMARY
Capital costs associated with the affected utilities, including water supply,
gas service, electric service and steam generating and delivery facilities, are
summarized in the table below.
GENENCOR INTERNATIONAL - Utility Conversion Capital Investment Estimate
UTILITY CAPITAL ESTIMATE
------- ----------------
WATER SUPPLY $ 255,000
-----------
ELECTRIC $ 426,000
-----------
STEAM $ 2,452,000
-----------
TOTAL CAPITAL
INVESTMENT $ 3,133,000
-----------
Note: The capital costs listed above are preliminary estimates which include a
15% contingency allowance. 15% engineering allowance. They do not include soft
costs such as legal, administrative or financing. Water, sewer and gas costs
associated with the boiler building are included under the Steam line item.
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EXHIBIT B
WATER SUPPLY
A 12" combined service will be installed easterly under Xxx Road (presumably in
a jacketed casing) to an underground vault on the site, at which point the
service will split into a 12" fire service and a 6" domestic / process water
service. Inside the vault, the fire service will pass through a 10" RPDA
backflow preventer and the domestic/process service will pass through a 4"
compound meter and a 4" RPZ backflow preventer. The 12" fire main and 6"
domestic service will continue easterly to serve the site buildings. A 4"
domestic/process service and a 4" fire service will be extended to the boiler
building.
Cost
UNIT
DESCRIPTION QUANTITY UNIT PRICE COST
----------- -------- ---- ----- ----
WATER SUPPLY
8"x8"x8" TS&V at Xxx Road and 12 "x8" reducer 1 LS $ 3,000.00 $ 3,000
24" boring under Xxx Road 1 LS $ 20,000.00 $ 20,000
12" combined service 100 LF $ 50.00 $ 5,000
Meter vault, complete 1 LS $ 32,000.00 $ 32,000
12" fire service and appurt. 1200 LF $ 50.00 $ 60,000
6" dom./process service. 1600 LF $ 40.00 $ 64,000
4" dom/process service to Xx.xxxx. 000 LF $ 30.00 $ 4,200
Relocate ex.hydf from City to T/O Greece 1 LS $ 2,500.00 $ 2,500
Disconnect and abandon lawn sprinklers within City 1 LS $ 2,000.00 $ 2,000.00
----------
Sub total $ 192,700
15% contingency $ 28,905
15% engineering allowance $ 33,241
----------
TOTAL WATER SUPPLY $ 254,846
ELECTRIC
Presently Kodak provides service at 13.2 kV to B610 where it is stepped down to
480V. The equipment required to convert to RG&E electric includes power lines to
the site and a new 34kV/13.2kV transformer. Switches, cable, ductbank, and power
monitoring equipment are also required. It is assumed that the existing
switchgear and 13.2kV/480V transformer inside the building will continue to be
used.
The new transformer would be located to the east of B610 and west of the B603
truck entrance. The exact position will be decided when the detailed engineering
is completed. All cabling on the site would be underground.
Cost
The capital investment for the electric conversion is summarized in two parts.
The first part represents the cost to have RG&E provide the feeds to the site up
to the switchgear. The second part is for the switchgear and the balance of the
items discussed above.
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EXHIBIT B
Estimate includes:
Two circuits brought to the site by RG&E (34 KV). (RG&E Estimate) $ 95,000
Automatic switchgear, metering, transformer and accessories. $ 331,000
(Estimate Below) ----------
$ 426,000
QUANTITY
NO. UNIT PER
ITEM DESCRIPTION UNITS MEAS. UNIT TOTAL
---------------- ----- ----- ---- -----
SWITCHGEAR QUOTE 1 LS $ 89,000.00 $ 89,000
PAD FOR ABOVE 1 LS $ 15,000.00 $ 15,000
LABOR - SWITCHGEAR 1 LS $ 6,000.00 $ 6,000
TRANSFORMER 1 LS $ 44,000.00 $ 44,000
PAD FOR TRANSFORMER 1 LS $ 7,500.00 $ 7,500
LABOR FOR TRANSFORMER 1 LS $ 4,500.00 $ 4,500
EXC & BACKFILL 1 LS $ 2,000.00 $ 2,000
RIGGING 1 LS $ 2,500.00 $ 2,500
34 KV CABLE 450 FT $ 8.50 $ 3,825
15 KV CABLE 150 FT $ 6.50 $ 975
34 KV TERM 6 EA $ 250.00 $ 1,500
15 KV TERM 6 EA $ 200.00 $ 1,200
MISC. GND. 1 LS $ 5,000.00 $ 5,000
CONDUIT 200 FT $ 13.65 $ 2,730
CONCRETE 1 LS $ 1,000.00 $ 1,000
MISC. 1 LS $ 5,000.00 $ 5,000
DEMO / OT 1 LS $ 5,000.00 $ 5,000
POWER MONITORING 1 LS $ 12,000.00 $ 12,000
---------
SUBTOTAL $ 208,730
OH & P 20% $ 41,746
CONTINGENCY 15% $ 37,571
ENGINEERING 15% $ 43,207
---------
TOTAL $ 331,255
STEAM
A dual-fired (gas/oil) boiler system to provide steam for the existing operation
plus a 21,000 sq.ft addition. The heart of the system would consist of three
(3), standard, 150 psig Maximum Steam Working Pressure (MSWP) xxxxxxx each rated
at 250. The operating strategy would be to operate two (2) 250 HP boilers
leaving the third boiler as a "hot" backup or available for periodic
maintenance.
This operating method would provide B610 with a reliable steam supply,
comparable with the current supply from Kodak.
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EXHIBIT B
Other major equipment needed includes:
1) deaerator
2) water softener
3) chemical feed system
4) boiler economizers
A 3,740 sq ft pre-engineered building will be required and will be remotely
located northeast of B610 as far as is reasonable. The section of Kodak's
steam/condensate pipe rack between B610 and the proposed building will continue
to be used for the same purpose.
Since no natural gas service presently exists at B610, a 4-inch diameter, 650
foot long PVC natural gas supply line will need to be run from Lexington Avenue
to the boiler house. As backup to the natural gas supply, a 20,000-gallon oil
storage tank would be installed. Water and sewer lines will need to be extended
to the boiler house. These lines will be 4 and 6 inch respectively and will
connect into the "main" lines appropriately.
Cost
Capital Cost for Boiler Plant:
Basis: Existing + 21,000 SF New
Boiler Capacity at Start 750 HP
Bldg Dimensions 44'x85'
Bldg Size (sf) 3,740
Major Categories
Gas Service $ 28,000
Sewer Service $ 4,500
Water Service $ 14,000
Site Work $ 48,145
Gen Const (Bldg) $ 218,790
Elect Svc $ 103,000
Bldg Elect $ 93,700
Mech Work $ 1,017,625
Plumbing $ 36,618
Underground #2 Oil Tank $ 130,721
------------
Sub-total $ 1,695,100
15% Contingency $ 254,265
------------
Interest During Construction (1.157625) $ 146,202
15% Engineering $ 356,246
------------
TOTAL $ 2,451,813
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[MAP]
GENENCOR
INTERNATIONAL
INC. CGMP CLINICAL
MFG. FACILITY
0000 XXXXXXXXX XXX
[XXXXXXX LOGO]
XXXXXXX
ASSOCIATES
ENGINEERS / ARCHITECTS / SURVEYORS
DRAWING TITLE:
RENDERD SITE PLAN
BY:
X. XXXX
CHKD BY:
X. XXXXX
DATE:
JUNE 20, 2002
JOB :
5626.00
SHEET :
RD-01
EXHIBIT C
[MAP]
