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Exhibit
10.10
LAND LEASE
AGREEMENT
(Grundstücks-und
Gebäudenutzungsvertag)
between
Bayer AG
- hereinafter referred to as
BAYER -
and
GE Bayer SILICONES
GmbH & Co. KG
- hereinafter referred to as
the Company -
WHEREAS
BAYER maintains, as a separate operation
within its Inorganics Business Group, a Silicones Business Unit
that operates, among other things, a plant on BAYER’s site in
Leverkusen. The Silicones Business Unit will become part of the
Company pursuant to the Foundation Agreement between Bayer AG and
General Electric Company dated April 1, 1998, as amended, and
the other Transaction Documents contemplated thereby, including the
Service and Supply Agreement and Environmental Agreement BAYER
wishes to make certain areas on its Leverkusen site, including,
without limitation, the buildings thereon currently belonging to
the Silicones Business Unit, and certain additional areas and
buildings, as defined hereafter, available to the Company under the
terms and conditions of this lease agreement (“Lease
Agreement”).
The objective of this Lease Agreement is
to enable the Company to operate the business of the Silicones
Business Unit and any extensions thereof in accordance with the
Foundation Agreement and the other Transaction Documents
contemplated thereby. The parties agree that the Company’s
enjoyment of the Leased Land for the term of this Lease Agreement
is integral to the formation, operation and expansion of the
Company as contemplated by the Foundation Agreement.
It is also understood between the
parties that the location of the Leased Land (as defined below)
within the existing site structures makes it necessary for them to
show each other particular consideration.
The following agreement sets forth the
terms and conditions for the lease of the land and buildings let to
the Company.
NOW IT IS HEREBY agreed as
follows:
Article 1 - The Property
and its Use
| 1. |
BAYER is the registered owner of the real estate entered in the
land register of the Leverkusen Local Court in
Wiesdorf, |
real property register serial
No. 32
local subdistrict Wiesdorf,
cadastral unit 15,
No. 152, site premises,
Bayerwerk, area 82,953 sq m.
real property register serial
No. 33
local subdistrict Wiesdorf,
cadastral unit 15,
No. 153, site premises,
Bayerwerk, area 61,748 sq m.
real property register serial
No. 34
local subdistrict Wiesdorf,
cadastral unit 15,
No. 154, site premises,
Bayerwerk, area 54,418 sq m.
Neither the land register nor
any other official register of the town of Leverkusen lists any
encumbrances on this real estate.
| 2. |
BAYER hereby permits the Company to use, for industrial
purposes not inconsistent with the purposes set forth in the
Foundation Agreement, a portion of the real estate, including the
buildings thereon, specified in the foregoing Article 1.1,
hereinafter referred to as the “Leased Land”. The
Leased Land and further details of its use by the Company is
described and is shown on the site plan and property description
appended to this Lease Agreement as Schedules 1A and 1B, which are
an integral part of this Lease Agreement. |
| 3. |
In the event any of the options set forth in Schedule 1B cannot
be exercised on or prior to the expiration of the option period
because of the absence of any Regulatory Approvals or any
injunction, order or similar restraint issued by a court of
competent jurisdiction, the option shall expire on the ninetieth
(90) day after such Regulatory Approval shall have been
obtained or injunction, order or restraint shall have been
dissolved or when such injunction, order or restraint shall have
become permanent and no longer subject to appeal, as the case may
be. |
| 4. |
The Company
and Bayer, as the case may be, may exercise their options by giving
written notice to the other party of its decision to exercise the
option. Within thirty (30) days following any exercise of the
option, the Company and Bayer shall execute and
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deliver an addendum to the
Lease Agreement, if applicable, and such other instruments and
documents as are necessary or appropriate to transfer the property
being transferred.
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| 5. |
The lease of any option property by the Company shall be
subject to the terms and conditions of the Environmental Agreement,
and of any further lease agreement, if applicable, and any addendum
to be attached to the Lease Agreement to give effect to any
exercise of the option shall provide accordingly. |
| 6. |
Bayer and the Company will take all reasonable actions
necessary to accomplish the transfers contemplated by the options,
and shall comply promptly with all legal requirements which may be
imposed on Bayer or the Company, respectively, with respect to any
exercise of the option. Each such party will take all reasonable
actions necessary to obtain any consent, approval, order or
authorization of, or any registration, declaration or filing with,
any Governmental Authority or other Person required to be obtained
or made by Bayer or the Company in connection with any exercise of
the option. |
| 7. |
Subject to the Environmental Agreement, the Company shall be
entitled and obligated to hold, operate and maintain on its own
responsibility, on the Leased Land with the buildings thereon, the
silicone production plants belonging to its business operation,
including any ancillary facilities needed for this purpose.
Following the Closing Date, it shall be the Company’s
responsibility to obtain any permits and licenses required for this
use. In case that the COMPANY should operate under permits,
authorizations or licences of which BAYER should be the holder,
BAYER will undertake all reasonable steps to ensure the future use
of said permits, authorizations or licenses. BAYER will also give
COMPANY any reasonably necessary support in administrative
procedures for any changes thereof. Subject to Article 7,
Section 2 of this Lease Agreement, any changes in said use
shall require BAYER’s written consent which consent shall be
deemed granted with respect to all changes contemplated by the
Foundation Agreement and the Transaction Documents contemplated
thereby, and which shall not be unreasonably withheld in the case
of other changes. |
| 8. |
The duty to maintain safety on the Leased Land shall be the
responsibility of the Company as of the date of
occupancy. |
| 9. |
The Company is granted full rights of entry and access to the
Leased Land as far as necessary to operate the business in
accordance with Article 1, sections 1, 2 and 7, above. |
Article 2 - Compliance
with Bayer Rules
| 1. |
The Company shall be obligated to comply with the BAYER
regulations (house rules, guidelines, etc.), as last amended,
governing the use of roads and streets and of buildings other than
those let to the Company. Moreover, the Company shall oblige its
visitors and such third parties as it engages to work on the Leased
Land to observe these regulations. BAYER shall furnish the Company
with these regulations in suitable and updated form for the purpose
of dissemination, and shall provide any modifications of such Bayer
regulations to the Company promptly after they are adopted. The
Company undertakes to comply with all fire and safety regulations
required by Applicable Law. |
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| 2. |
Gate controls shall be carried out according to the current
BAYER guidelines and practices. If for this purpose coded site ID
cards are necessary whose specification has to be coordinated with
BAYER, the Company shall procure the same, as far as legally
possible, at its own expense. The Company shall issue instructions
and adopt policies and procedures to ensure that the instructions
of BAYER’s site security are complied with throughout the
plant area. The Company shall coordinate with BAYER the particulars
of the required presentation of identification to BAYER site
security. |
Article 3 - Warranty and
Contaminated Sites
| 1. |
Unless otherwise provided in this Lease Agreement or the
Foundation Agreement, BAYER does not warrant any particular size,
quality or condition of the Leased Land and buildings. The Company
is aware that the Leased Land has been used for industrial
purposes. No protection shall be afforded against competition on
the Leverkusen site, except that Bayer does agree not to allow any
other third party silicone production facility to operate at the
Leverkusen site, except for fumed silica and any appropriate
feedstock production pursuant to an agreement between the Company
and such production facility. |
| 2. |
The Company is aware that foundations or remains of foundations
may exist on the Leased Land. BAYER shall furnish the Company with
available documents thereon. Furthermore, BAYER shall reimburse the
Company for all additional expenses incurred in removing these
foundations or remains of foundations to the extent that such
removal is necessary for the realization of the Future Expansion
Plan contemplated by the Foundation Agreement. All demolition
necessary for the Future Expansion Plan is to be carried out at the
expense of BAYER. In any event, any Environmental Liabilities
arising therefrom shall be the obligation of Bayer as set forth in
the Environmental Agreement. |
Article 4 - Payment; Due
Date
| 1. |
The Company shall pay BAYER an annual rental fee of 100DM (one
hundred Deutschmarks). The fee shall fall due on January 5 of
each year. The Company also shall pay such additional charges as to
be determined by paragraphs 9 and 10 of Schedule 1B attached
hereto. |
| 2. |
The rental fee shall be plus value-added tax at the current
statutory rate. |
| 3. |
The pro rata payment for the current year shall be due and
payable immediately after occupancy of the Leased Land. |
| 4. |
If the Deutschmark ceases to be legal tender in Germany, this
Lease Agreement shall remain effective. The prices shall thereafter
be payable in the currency which is then legal tender in Germany;
and the conversion shall be effected according to the statutory
conversion rate. |
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Article 5 - Taxes and
Expenses
| 1. |
From the date of occupancy, the Company shall bear the current
property taxes due on the Leased Land and existing buildings and
facilities and the buildings and facilities to be erected thereon,
and other recurring or nonrecurring taxes and rates, contributions
or public charges. Subject to the obligations of Bayer in the
Service and Supply Agreement and the Environmental Agreement, the
Company shall be responsible for the maintenance and repairs to the
Leased Land and existing buildings and facilities and the buildings
and facilities to be erected thereon, and the expenses related
thereto (but in any case not including roads, drives or other
vehicular routes, except as set forth in the Service and Supply
Agreement). |
| 2. |
The Company shall bear development charges and other local
assessments for future improvements, particularly as per the German
Town and Country Planning Code (BauGB) and the North
Rhine-Westphalia Local Rates Act (KAG), for the Leased Land and the
buildings and facilities it has built thereon, in accordance with
the distribution ratio chosen by the authorities who commissioned
the development, always provided they are not caused by BAYER
projects and are unrelated to this Lease Agreement. Except as
contemplated by the Foundation Agreement and by Article 3,
Section 2 of this Lease Agreement, and subject to the
allocation of Environmental Liabilities as set forth in the
Environmental Agreement, the Company shall bear the costs of the
development of the Leased Land undertaken at its own initiative,
including preparation thereof for development and shall bear any
expenses imposed under the Federal Natural Preservation Act, but in
no event shall the Company be liable for any Environmental
Liabilities relating to soil or groundwater. |
Article 6 -
Insurances
| 1. |
It shall be the Company’s responsibility to take out
adequate insurance against fire damage and other risks for existing
buildings and facilities and the buildings and facilities to be
erected on the Leased Land. If the buildings and facilities are
destroyed wholly or in part, the Company, unless otherwise agreed,
shall be obliged to restore them immediately to their status quo
ante to the extent of the insurance benefits or compensation to be
paid by the insurer, subject to all necessary permits and
licenses. |
| 2. |
If such a loss-entailing event coincides with the final
termination of this Lease Agreement, for whatsoever reason, or if
the termination of use is agreed or to be expected shortly after
the loss-entailing event, or if the restoration could not be
completed prior to the final termination of this Lease Agreement or
the use, the Company, or Bayer as the case may be, shall not be
obliged to restore the status quo ante, without prejudice in the
Company’s case to any other duties of restoration under
Article 12.4 of this Lease Agreement. |
| 3. |
The Company
shall maintain appropriate Public, Product and environmental
liability insurance; the environmental liability cover shall not be
less than DM 20 million with regard to normal operations, for
the rest with combined single limit of DM 50 million per claim
for bodily injury and property damage (three times in the annual
aggregate).
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At BAYER’s request, the
Company shall furnish proof thereof by presenting confirmation of
cover.
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Article 7 - Coordination
of Construction/Erection of Facilities
| 1. |
The Company shall be obliged to have the competent department
at BAYER carry out the surveying and planning necessary for the
preparation and execution of its construction projects (
e.g., development and line planning including links to the
existing infrastructure, site plan for building application,
calculation of demarcation elements/coordinates, staking out of
principal points and axes, alignment and measurement of supply,
transfer and discharge systems outside the planned building,
measurement of the building and documentation) at the
Company’s own expense, other than with respect to the
projects set forth in the Leverkusen Expansion and other Project
Completion Criteria (Annex S to the Foundation Agreement), which
expenses shall be borne by Bayer. This shall not apply to
building-related technical surveying. BAYER shall deliver such
services on a timely basis and at the rates specified in the
Service and Supply Agreement and the applicable Term Sheet attached
thereto. |
| 2. |
The Company undertakes to obtain BAYER’s approval of its
complete application for permission (including plans, descriptions
of the building and operations, etc.) environmental permit
applications and any additional applications ( e.g. ,
drainage, etc.) that it may need to file in this connection, as
well as any subsequent applications for modification, before
sending them to the competent authorities. This is to ensure in
particular that the Company does not cause any environmental impact
which, in conjunction with the environmental impact caused by BAYER
or other present or future occupants of the site, exceeds the
permissible level of emissions, Bayer agrees to provide a prompt
response to any such submission by the Company, and that its
approval will not be unreasonably withheld. To the extent that
projects to be undertaken by the COMPANY depend upon the acquiring
or modification of permits held by BAYER, BAYER shall use its best
efforts to acquire or modify such permits, provided that the
operations and projects of BAYER are not adversely affected by such
permitting activities. |
| 3. |
The Company shall be obliged to erect, design, maintain and
operate its buildings and facilities in accordance with the
pertinent provisions of Applicable Law and the specific
stipulations of its permits and licenses. Modifications requiring
official authorization shall be subject to BAYER’s prior
approval. Bayer agrees to provide a prompt response to any such
submission by the Company, and that its approval will not be
unreasonably withheld. |
| 4. |
The Company
shall be obliged to adhere to BAYER’s current site zoning,
specific plans ( e.g. , noise-level plans), block
demarcation and building alignment plans, line planning and
planning guidelines. This shall apply particularly if any buildings
or facilities are wholly or partially destroyed or the Leased Land
is to be redeveloped after the demolition of existing buildings.
BAYER shall make the said plans and modifications thereof
accessible to the Company as needed and as far as they concern the
Company. If
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necessary, BAYER shall
exempt the Company from the aforesaid guidelines, applying the same
standards that apply to its own construction projects.
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The Company shall be a member
of the Leverkusen site structure committee and shall be entitled to
participate in its discussions on proposed changes by BAYER to the
above plans to the extent that they directly or indirectly affect
the Leased Land. If employees of either party are appointed to
committees of the other party, the former shall furnish the other
party with the names of the appointees in writing and enjoin them
to secrecy. Employees who will not acknowledge this obligation
shall not be appointed to the other party’s
committees.
Any existing buildings or
facilities that are not in conformity with BAYER’s plans
shall only be afforded a limited degree of protection, so that they
may only be rebuilt according to such plans as last revised.
Existing buildings and facilities need not be adjusted to
subsequent changes in such plans.
| 5. |
Building operations or other construction work on the land
and/or buildings shall not be permitted without the approval of the
competent departments at BAYER ( e.g. , Site
Development/Surveying, Site Services, etc.). Bayer agrees to
provide a prompt response to any such submission by the Company,
and that its approval will not be unreasonably withheld.
Responsibility for the interfaces (transfer points) between
BAYER’s and the Company’s infrastructures shall be
determined according to the Service and Supply
Agreement. |
Article 8 - Supply,
Transfer and Discharge Systems
| 1. |
The Company shall lay above-ground and underground supply,
transfer and discharge systems ( e.g. , electrical, mains,
roads, sewers, etc.) on the Leased Land and, if necessary, on the
adjacent BAYER plant premises only with BAYER’s prior
approval and along the lines fixed by BAYER. Bayer agrees to
provide a prompt response to any such submission by the Company,
and that its approval will not be unreasonably
withheld. |
| 2. |
BAYER shall be entitled to measure and document the supply,
transfer and discharge systems laid by the Company at the
latter’s expense, which expense shall be determined as set
forth in Term Sheet Annex 1.32.002 of the Service and Supply
Agreement. For this purpose the Company shall advise BAYER in good
time of the first such installation and any changes made to the
systems, particularly prior to filling any ditches. |
| 3. |
The Company
is aware that there are above-ground and underground supply,
transfer, discharge and telecommunication systems of BAYER’s
and perhaps of third parties as well, on and around the Leased
Land. These systems shall be taken into consideration in erecting
the buildings and/or facilities and connecting them to public or
other supply and waste disposal systems. If in the course of
construction of the buildings and/or facilities by the Company it
is necessary to move and/or cross these systems in order to clear
the construction area, the costs thereby incurred, including
measurement and documentation, shall be charged to the Company at
market rates unless a Term Sheet applies. If BAYER’s own
systems need to be moved and/or modified as a result of
construction
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initiated by the Company,
all the necessary measures shall be carried out by BAYER at the
Company’s expense. Where third-party systems are involved,
the respective operator’s requirements shall be complied
with. Bayer shall provide a written estimate of its expenses prior
to incurring any expenses.
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Article 9 - Mutual
Obligations to Tolerate
| 1. |
The Company grants BAYER or its singular or universal legal
successors and the companies, or their singular or universal legal
successors, in which BAYER or its legal successors have an
interest, free of charge, the right to use and to have access to
the Leased Land, with prior notice to the Company, at mutually
agreed reasonable times for the purposes of construction, operation
and maintenance of existing and future above-ground and underground
supply, transfer and discharge systems, including but not limited
to systems for utilities, raw materials, intermediates and
products, waste water, water, pipe bridges, transformer stations,
telecommunications systems (indoor and outdoor) sewers, poles,
paths, fences, rail tracks, and future additions, modifications,
renewals, repairs, etc. to these facilities, always provided that
it does not cause disruption of the Company’s operations.
Bayer shall use its best efforts to plan and undertake such
demolition, construction, operation and maintenance projects so as
not to disrupt the operations and facilities of the Company nor the
proposed expansions, constructions and related activities of the
Company of which Bayer is aware prior to its undertaking of its
projects. Should the Company’s operations or facilities be
disrupted by such projects of Bayer, BAYER will reimburse or
indemnify the Company for any Losses suffered by the Company to the
extent Bayer has statutory liability. |
For the duration of the
existence of the above systems, no actions may be taken on the
Leased Land that would jeopardize these systems.
| 2. |
The Company and Bayer each shall be obliged to contact the
other party immediately and receive instructions prior to
commencing any work or projects in the vicinity of facilities (
i.e. , underground) that are being built, have been built or
may subsequently be built by BAYER or the Company or other entitled
parties under the terms of this Article and that are operated and
maintained by the same. |
| 3. |
The Company and Bayer each shall be obliged to consult with the
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