Exhibit 10.7

 

A.CERTAIN INFORMATION (INDICATED BY ASTERISKS) HAS BEEN OMITTED FROM THIS
DOCUMENT BECAUSE IT IS NOT MATERIAL AND WOULD LIKELY CAUSE COMPETITIVE HARM TO
THE REGISTRANT IF PUBLICLY DISCLOSED

 

 

 

RECORDING REQUESTED BY

 

 

 

WHEN RECORDED MAIL TO:

 

 

 

Bruce D. Hickey, Esq.

 

Dechert LLP

 

One International Place, 40th Floor

 

100 Oliver Street

 

Boston, MA 02110

 

 

 

ORDER NO. 00101039

 

 

 

 

SPACE ABOVE THIS LINE FOR RECORDER'S USE

THE UNDERSIGNED GRANTOR(s) DECLARE(s)

DOCUMENTARY TRANSFER TAX is $0.00

CITY TAX $0.00

No transfer tax is due because the Lease term is less than 35 years.

 

MEMORANDUM OF LEASE, FEE AND LEASEHOLD DEED OF TRUST, ASSIGNMENT OF LEASES AND
RENTS, SECURITY AGREEMENT AND FIXTURE FILING

 

 

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MEMORANDUM OF LEASE, FEE AND LEASEHOLD DEED OF TRUST, ASSIGNMENT OF LEASES AND
RENTS, SECURITY AGREEMENT AND FIXTURE FILING

 

Dated as of February 5, 2019

 

by and between

 

CUBIC CORPORATION

 

and

 

BANKERS COMMERCIAL CORPORATION

 

and

 

CHICAGO TITLE COMPANY, as Deed of Trust Trustee

 

for the benefit of

 

BANKERS COMMERCIAL CORPORATION, as Lessor

 

 

 

 

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TABLE OF CONTENTS

 

 

 

Page

SECTION 1.

DEFINITIONS AND INTERPRETATION.

2

SECTION 2.

ACCEPTANCE AND APPROVAL.

6

SECTION 3.

LEASE OF LEASED PROPERTY; PAYMENT AND PERFORMANCE OF OBLIGATIONS.

6

SECTION 4.

LEASE TERM.

6

SECTION 5.

NOTICE OF PURCHASE OPTIONS.

7

SECTION 6.

LESSEE GRANT OF LIEN AND SECURITY INTEREST.

7

SECTION 7.

REMEDIES.

7

SECTION 8.

REMEDIES NOT EXCLUSIVE.

12

SECTION 9.

OTHER COVENANTS.

13

SECTION 10.

DUTY OF LESSOR.

13

SECTION 11.

POWERS COUPLED WITH AN INTEREST.

13

SECTION 12.

AUTHORIZATION OF FINANCING STATEMENTS.

14

SECTION 13.

SECURITY AGREEMENT UNDER UCC.

14

SECTION 14.

LESSOR’S MORTGAGE IN FAVOR OF LESSEE’S DEED OF TRUST TRUSTEE.

15

SECTION 15.

INCORPORATION INTO LEASE.

16

SECTION 16.

NOTICE TO POTENTIAL CLAIMANT.

16

SECTION 17.

RATIFICATION.

16

SECTION 18.

ASSIGNMENT OF LEASE, THE CONSTRUCTION AND DEVELOPMENT AGREEMENT AND LIENS.

17

SECTION 19.

NOTICES.

17

SECTION 20.

SEVERABILITY.

17

SECTION 21.

AMENDMENTS IN WRITING; CUMULATIVE REMEDIES.

17

SECTION 22.

SECTION HEADINGS.

17

SECTION 23.

SUCCESSORS AND ASSIGNS.

17

SECTION 24.

PARTIAL RELEASE; FULL RELEASE.

18

SECTION 25.

FUTURE ADVANCES; CONSTRUCTION RELATED PROVISIONS.

18

SECTION 26.

CERTAIN POWERS OF DEED OF TRUST TRUSTEE:  SUBSTITUTION OF DEED OF TRUST TRUSTEE.

18

 

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SECTION 27.

SUCCESSOR COLLATERAL AGENT.

19

SECTION 28.

CERTAIN ACKNOWLEDGMENTS AND AGREEMENTS OF LESSEE.

19

SECTION 29.

COUNTERPART EXECUTION.

21

SECTION 30.

WAIVER OF CERTAIN RIGHTS.

21

SECTION 31.

REFERENCES.

21

SECTION 32.

CALIFORNIA PROVISIONS.  TO THE EXTENT PERMITTED BY, AND SUBJECT TO, APPLICABLE
LAWS AND REGULATIONS:

22

SECTION 33.

GOVERNING LAW.

24

SECTION 34.

DEED OF TRUST TRUSTEE PROVISIONS.

24

 

 

 

 

EXHIBIT A

Legal Description of Site

 

 

Appendix I

Definitions

 

 

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MEMORANDUM OF LEASE, FEE AND LEASEHOLD DEED OF TRUST,

ASSIGNMENT OF LEASES AND RENTS,

SECURITY AGREEMENT AND FIXTURE FILING

 

This Memorandum of Lease, Fee and Leasehold Deed of Trust, Assignment of Leases
and Rents, Security Agreement and Fixture Filing is made as of February 5, 2019
(this “Memorandum of Lease”), by and between CUBIC CORPORATION,  a Delaware
corporation, as Lessee and trustor (together with its successors and assigns,
“Lessee” or “Cubic”), and BANKERS COMMERCIAL CORPORATION, a California
corporation, as Lessor (together with its successors and assigns, “Lessor”),
 and with respect to the grant set forth in Section 6 below, from Lessee to
Chicago Title Company,  as Deed of Trust Trustee (“Deed of Trust Trustee”) for
the benefit of the Lessor, having an address at 445 South Figueroa, 14th Floor,
Los Angeles, California 90017.

RECITALS

 

A.        Lessee and Lessor have entered into that certain Lease Agreement dated
as of the date hereof (as amended, restated, or supplemented from time to time,
the “Lease”).

B.         Pursuant to that certain Participation Agreement (as amended,
restated, or supplemented from time to time, the “Participation Agreement”),
 dated as of the date hereof, by and among Lessee, as lessee,  Lessor, as
lessor,  the Rent Assignees that are a party thereto from time to time, as rent
assignees (the “Rent Assignees” and together with the Lessor, collectively, the
“Participants”), MUFG Bank, Ltd., as Administrative Agent for the Participants
(in such capacity, “Administrative Agent”) and MUFG Union Bank, N.A., as
Collateral Agent for the Rent Assignees (“Collateral Agent”), Lessee, as
Construction Agent, and Lessor, as Owner, shall enter into a Construction and
Development Agreement (the “Construction and Development Agreement”), dated as
of the date hereof, pursuant to which Lessee, as Construction Agent, shall enter
in the Construction Documents and cause the Facility to be constructed on the
Site.

C.         Pursuant to each Rent Assignment Agreement (as amended, restated,
supplemented, or otherwise modified from time to time, the “Rent Assignment
Agreement”) dated as of the date hereof,  each by and between Lessor, as rent
assignor, and a  Rent Assignee,  as rent assignee, and the Participation
Agreement, the Rent Assignee has agreed to acquire Rent Assignment Interests
from Lessor in the aggregate amount of $52,400,000 upon the terms and subject to
the conditions set out in the Rent Assignment Agreement and the Participation
Agreement.

D.        Pursuant to the Participation Agreement, Lessor will use the proceeds
of a Lessor Investment advanced by Lessor in an aggregate amount not to exceed
$52,400,000 together with the Rent Assignment Advances to finance (i) its
leasing of the Site from Lessee under a Ground Lease,  (ii) its acquisition of
Building 1 pursuant to the Deed, (iii)  the demolition of Building 1 and the
construction of the Facility by Construction Agent, and (iv) the payment of
related Transaction Costs.

 

 

 

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E.         Lessor will record its leasehold interests in the Site and its record
title to the Facility and other Mortgaged Property, subject to the rights of
Lessee under the Lease, the Construction and Development Agreement and the other
Operative Documents.

F.         The Participation Agreement and the Lease provide for the execution
and delivery of this Memorandum of Lease with respect to the Site and Facility,
all for the purpose of confirming (i) Lessee’s acceptance of the lease of the
Site and the Facility in accordance with the terms and conditions of the Lease,
(ii) Construction Agent’s construction of the Facility in accordance with the
Construction and Development Agreement, (iii) Lessor’s lease of its interest in
the Site and Facility to Lessee pursuant to the terms of the Lease, (iv)
Lessee’s grant of a lien and security interest in its interest in the Site and
Facility in order to secure Lessee’s and Construction Agent’s payment and
performance obligations under the Operative Documents, and (v) Lessor’s grant of
a lien and security interest in its interest in the Site and Facility in order
to secure its obligation to convey title therein to Lessee under certain
circumstances.

NOW, THEREFORE, in consideration of the premises and other good and sufficient
consideration, Lessor and Lessee hereby agree as follows:

Section 1.        Definitions and Interpretation.

For purposes of this Memorandum of Lease, each capitalized term or phrase used
and not defined in this Memorandum of Lease shall have the meaning set forth in
Appendix I  attached hereto and the rules of interpretation set out in such
Appendix I shall also apply to this Memorandum of Lease.  This Memorandum of
Lease evidences of record the Lease, and all references in this Memorandum of
Lease or in the other Operative Documents to the Lease shall be deemed to
include this Memorandum of Lease.  As used in this Memorandum of Lease:

“Base Term Commencement Date” means the date on which Substantial Completion of
the Facility has occurred.

“Construction Documents Collateral” means all of Construction Agent’s right,
title and interest in (i) the Construction Documents, (ii) contracts and
warranties relating to the construction of the Facility, (iii) the Plans and
Specifications and all other plans and specifications relating to the Facility,
including without limitation all blueprints and other construction,
architectural, design and engineering drawings and specifications or other
similar documents relating to the Facility, (iv) any liquidated damage payments
payable under any Construction Document together with all rebates, offsets or
other warranty payments thereunder, (v) any assignments under purchase orders,
invoices or purchase agreements with any manufacturer of or contractor for any
portion of the Facility including the General Contractor under the General
Construction Agreement and any other contractor under any other Construction
Documents, (vi) all insurance policies required to be maintained pursuant to the
Construction and Development Agreement and/or the Construction Documents, and
(vii) all products, excess successions, subleases, rents, issues, profits,
products, returns, income and proceeds of and from any or all of the foregoing
(including proceeds from any of the foregoing), and to the extent not otherwise
included, all payments under insurance (whether or not Lessee or Construction
Agent is the loss payee thereof) or any indemnity, warranty or guarantee payable
by reason of loss or damage to or otherwise with respect to any of the
foregoing.

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“Excluded Property” means fixtures, Equipment and other personalty not funded
with Advances (which may include, without limitation (except to the extent
acquired using the Advances), lab equipment, machinery, tools and testing
equipment, and which does not constitute property of the Lessor pursuant to the
Lease).

“Event of Default” means an  Event of Default, as set forth in the Lease.

“Force Majeure Event” shall mean any act of God, unusually severe weather
conditions (such as catastrophic storms or floods, tornadoes, hurricanes and
cyclones), civil or enemy action, or any Governmental Action or inability to
obtain or delay in obtaining labor or materials not arising from an act or
omission of any Cubic Person; provided, that any Specified Event and any other
event, cause or condition that is within the control of any Cubic Person shall
not be a Force Majeure Event.

“Mortgaged Property” means all of Lessee’s interest and title in and to all of
the following property, wherever located whether such interest and title is held
or owned now or in the future, as such interest may appear, be determined or be
re-characterized:

(a)        the Site described on Exhibit A attached hereto, along with all
buildings, structures and other improvements which are now or in the future
located or to be constructed on the Site from time to time,  and whether or not
such buildings, structures, or other improvements have become subject to the
Lease (the “Facility”), and all other Leased Property which is now or in the
future located or to be constructed or installed on or off the Site from time to
time with proceeds from the Advances made pursuant to the Participation
Agreement and Construction Development Agreement but excluding any Excluded
Property (the interest in Facility and in the Site, together with Appurtenant
Rights and Fixtures (as such terms are defined below) relating thereto being
collectively referred to as the “Leased Property”);

(b)        the Lease, including without limitation, the deed of trust liens and
security interests granted by Lessee to Lessor hereunder and under the Lease,
and all Rent and all other rents, payments, purchase prices, receipts, revenues,
issues and profits payable under the Lease or pursuant to any other lease with
respect to the Leased Property;

(c)        all subleases with respect to the Leased Property together with all
rent payable thereunder;

(d)        all the estate, right, title, claim or demand, in possession or
expectancy, in and to the Leased Property or any part thereof;

(e)        all of the fixtures of every kind and nature whatsoever, and all
appurtenances and additions thereto and substitutions or replacements thereof
(together with, in each case, attachments, components, parts and accessories)
now or subsequently attached to the Leased Property which are Non-Severable or
which are acquired with proceeds from the Advances made pursuant to the
Participation Agreement and Construction Development Agreement but excluding any
Excluded Property (all of the foregoing in this paragraph (c) being referred to
as the “Fixtures”);

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(f)        all substitutes and replacements of, and all additions and
improvements to, the Leased Property and the Fixtures, subsequently acquired,
constructed, assembled or placed on the Site, immediately upon such acquisition,
construction, assembling or placement, including any and all building materials
whether stored at the Leased Property or offsite, and, in each such case,
without any further conveyance, mortgage, assignment or other act by any Person
but excluding the Excluded Property;

(g)        to the extent assignable, all Construction Documents and all other
contracts and warranties necessary to purchase, construct, remodel, repair,
operate and maintain the Leased Property (including without limitation all
contracts and subcontracts for the performance of work or the supply of
materials required for the purchase, construction, remodeling, repair, operation
or maintenance of the Leased Property, and all architectural, engineering and
other design contracts related to the Leased Property);

(h)        (i) to the extent assignable, all Governmental Actions relating to
construction, completion, occupancy, use or operation of the Leased Property or
any part thereof and (ii) all Plans and Specifications relating to the Leased
Property;

(i)         all right, title and interest of Lessee in proceeds payable under
all property insurance policies required to be maintained by Lessee or obtained
on behalf of Lessee pursuant to Article XI of the Lease and by or on behalf of
Construction Agent pursuant to Section 2.7(d) of the Construction and
Development Agreement (to the extent relating to the Leased Property and/or
Fixtures), including subject to the rights of Lessee under Article XIII of the
Lease and of Construction Agent under Section 3.3 of the Construction and
Development Agreement, respectively, the right to collect and receive such
proceeds; and, subject to such rights of Lessee and Construction Agent, all
awards and other compensation, including the interest payable thereon and the
right to collect and receive the same, made to the present or any subsequent
owner of the Leased Property for the taking by eminent domain, condemnation or
otherwise, of all or any part of the Leased Property or any easement or other
right therein running for the benefit of the Leased Property;

(j)         (i) all accounts, general intangibles, tangible chattel paper,
deposit accounts, money, investment property, instruments and documents relating
to or otherwise arising in connection with or derived from the Leased Property,
(ii) all refunds, rebates, reserves, deferred payments, deposits, cost savings,
and payments of any kind due from or payable by (A) any Authority, or (B) any
insurance or utility company, relating in either case to any or all of the
Leased Property, (iii) all refunds, rebates and payments of any kind due from or
payable by any Authority for any taxes, assessments, or governmental or quasi
governmental charges or levies imposed with respect to or upon any or all of the
Leased Property, and (iv) any cash collateral account maintained pursuant to any
of the or Operative Documents;

(k)        all tenements, hereditaments, appurtenances and privileges in and to
all or any part of the Leased Property or any interest therein (and any greater
estate in the Leased Property now owned or hereafter acquired pursuant thereto),
and all other rights and interests now or in the future benefiting or otherwise
relating to the Leased Property,

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including easements, rights of way, sidewalks, alleys and strips and gores of
land adjacent to or used in connection with the Leased Property, development
rights, mineral rights, water rights and water stock (collectively, “Appurtenant
Rights”);

(l)         all the estate, right, title, claim or demand, in possession or
expectancy, in and to the Construction Documents Collateral or any part thereof
with respect to the construction of or on any portion of the Leased Property;

(m)       all rights to liquidated damages, rebates, offset or other warranty
payments, or assignment under a purchase order, invoice or purchase agreement
with any manufacturer of or contractor with respect to the Construction
Documents;

(n)        all security deposits, rents, issues, profits, returns, income and
proceeds of and from any or all of the foregoing (including proceeds from any of
the foregoing), and to the extent not otherwise included, all payments under
insurance (whether or not Lessee is the loss payee thereof) or any indemnity,
warranty or guarantee payable by reason of loss or damage to or otherwise with
respect to any of the foregoing but excluding all products; and

(o)        all cash and non-cash proceeds of the foregoing.

“Non-Severable” means those fixtures, Alterations, additions and improvements
and substitutions and replacements thereof relating to the Facility which (i)
cannot be readily removed from the Facility without causing damage to the
Facility or the Site unless promptly repaired by Lessee, or (ii) is required for
the Leased Property to comply with Applicable Laws and Regulations and Insurance
Requirements.

“Obligations” shall mean, in each case, whether now in existence or hereafter
arising: all payment and performance obligations of Cubic under the Operative
Documents including, without limitation, (i) Cubic’s obligation to pay the
Construction Recourse Amount, (ii) Cubic’s obligation to pay the Recourse
Deficiency Amount or the Return Price Recourse Deficiency Amount, as applicable,
and Deficiency payments, (iii) Cubic’s obligation to pay the Purchase Amount as
the purchase price for the Leased Property, (iv) Cubic’s obligation to pay any
damages incurred by the Administrative Agent or any Participant or other amounts
due under the Operative Documents from time to time, including, without
limitation, following an Event of Default including any rejection by Cubic of
the Construction and Development Agreement, the Lease or any other Operative
Document in any bankruptcy, insolvency or similar proceeding, (v) Cubic’s
obligation to pay the Basic Rent (including yield accruing after the filing of
any bankruptcy, insolvency or similar petition), (vi) Cubic’s obligation to pay
any and all other amounts of Rent, and (vii) Cubic’s obligation to pay or
perform, as applicable, all other fees, expenses and commissions (including
attorney’s fees and expenses), charges, costs, indebtedness, loans, liabilities,
financial accommodations, obligations, covenants and duties owing by the Lessee
to the Agents, any Participant or any other Person, of every kind, nature and
description, direct or indirect, absolute or contingent, due or to become due,
contractual or tortuous, liquidated or unliquidated, and whether or not
evidenced by any note, instrument, agreement or any other document, in each case
under or in respect of the Operative Documents.

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“Personal Property” means all of the Mortgaged Property that does not constitute
real property and in which a security interest may be created under the UCC.

“Substantial Completion” means substantial completion of the Construction
subject to punch list items, final work and final payments, in accordance with
the approved Plans and Specifications and pursuant to the General Construction
Agreement which substantial completion may be evidenced by a certificate of
occupancy (including a temporary certificate of occupancy) or its equivalent as
available.

“Uniform Commercial Code” and “UCC” means the Uniform Commercial Code as in
effect from time to time in the State of New York except to the extent the
Uniform Commercial Code of the State in which the Site is located is applicable
pursuant to Section 33 hereof.

Section 2.        Acceptance and Approval.

Lessee hereby acknowledges and confirms that Lessee’s execution of this
Memorandum of Lease, without further act, constitutes the irrevocable acceptance
by Lessee of Lessor’s interest in the Site described on Exhibit A attached
hereto and incorporated herein by reference and in the Facility on the Site for
all purposes of the Lease and the other Operative Documents.

Section 3.        Lease of Leased Property; Payment and Performance of
Obligations.

(a)        Effective upon the execution and delivery of this Memorandum by
Lessor and Lessee, Lessor’s rights in and to the Leased Property for all
purposes hereof and of the Lease shall be subject to the terms and provisions of
the Lease.  Commencing on the Base Term Commencement Date as defined in the
Lease, Lessor hereby delivers, demises and leases the Leased Property to Lessee
and Lessee hereby accepts, hires and leases the Leased Property from Lessor for
the term of the Lease, as described in Section 2.2 of the Lease.

(b)        Cubic in its capacities as Lessee and Construction Agent shall pay
and perform the Obligations in accordance with the terms of the Lease, the
Construction and Development Agreement, the Participation Agreement and the
other Operative Documents.

Section 4.        Lease Term.

Unless earlier terminated, the term of the Lease shall commence on and include
the Base Term Commencement Date,  which shall occur on or prior to two (2) years
from the date hereof, or to the extent of an occurrence of a Force Majeure
Event, in which case the Base Term Commencement Date shall occur no later than
May 5, 2021, and end on:

(a)        the fifth year anniversary of the Base Term Commencement Date; or, if
applicable,

(b)        the end of any Extended Remarketing Period described in Section 22.4
of the Lease (which shall not exceed twelve (12) months).

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Section 5.        Notice of Purchase Options.

Notice is hereby made of purchase options that have been granted under the Lease
in favor of Lessee which purchase options may, subject to the terms and
conditions set forth therein, be exercised on any Business Day two years
following the Base Term Commencement Date but at least one hundred eighty (180)
days prior to the Return Date, upon not less than thirty  (30) days’ prior
written notice which election shall be irrevocable when made.

Section 6.        Lessee Grant of Lien and Security Interest.

(a)        To secure the full and timely payment of, and the complete and timely
performance and discharge of, the Obligations by Lessee, Lessee has GRANTED,
BARGAINED, SOLD, ASSIGNED, and CONVEYED, and does hereby GRANT, BARGAIN, SELL,
ASSIGN and CONVEY unto the Deed of Trust Trustee, in trust with a power of sale
and for the benefit of Lessor, all of the Mortgaged Property (other than the
Personal Property), subject to the Permitted Liens, TO HAVE AND TO HOLD the
Mortgaged Property and the rights and privileges hereby granted unto Deed of
Trust Trustee and its successors and assigns, until all the Obligations are
paid, performed and satisfied in full.

(b)        To secure the full and timely payment of, and the complete and timely
performance and discharge of, the Obligations by Lessee, Lessee further grants
to the Lessor, pursuant to the UCC, a security interest in all of Lessee’s
present and future right, title, and interest in and to the Personal Property.

Section 7.        Remedies.

(a)        Without limiting any other remedies set forth in the Lease or the
Construction and Development Agreement, while an Event of Default or a
Construction Event of Default exists, Lessor may, at its option, declare all
Obligations to be immediately due and payable without any presentment, demand,
protest or notice of any kind (except as may otherwise be provided in the
Operative Documents), and if the Obligations have been accelerated then, so long
as Lessee has not already purchased the Leased Property in accordance with
Section 20.1 of the Lease, subject to and in accordance with applicable law:

(i)         the Deed of Trust Trustee and the Collateral Agent,  as assignee of
Lessor’s interests, in addition to all other remedies available at law or in
equity, shall have the right forthwith, with or without bringing any action or
proceeding, with or without a receiver appointed by a court, and without regard
to the adequacy of its security, (A) to enter upon and take possession of the
Mortgaged Property, or any part thereof, in its own name or in the name of
Lessee, to make repairs and do any acts which it deems necessary or desirable to
preserve the value, marketability or rentability of the Mortgaged Property, or
any part thereof or interest therein, increase the income therefrom or protect
the security hereof, (B) to let the Mortgaged Property, and (C) with or without
taking possession of the Mortgaged Property, to sue for or otherwise collect and
receive the rents, issues and profits

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thereof and to apply said rentals and profits, after payment of all necessary or
proper charges and expenses, including reasonable attorneys’ fees, on account of
the amounts hereby secured (subject to the Excluded Amounts).  The collection of
such rentals and profits and the application thereof as aforesaid, shall not
cure or waive any Event of Default or notice of an Event of Default hereunder or
invalidate any act done in response to such Event of Default or pursuant to such
notice of and Event of Default and, notwithstanding the continuance in
possession of all or any portion of the Mortgaged Property or the collection,
receipt and application of rentals and profits, Collateral Agent shall be
entitled to exercise every right provided for in any of the Operative Documents
or by law upon occurrence of any Event of Default, including the right to
exercise the power of sale herein contained.  Failure or discontinuance of
Collateral Agent at any time, or from time to time, to collect rentals and
profits shall not in any manner affect the subsequent enforcement of Collateral
Agent of the right to collect the same. Lessee grants to Lessor the right but
not the obligation to enter upon and take possession of the Mortgaged Property
for the purpose of collecting any such rents and to otherwise exercise in
Lessor’s discretion any and all rights and remedies afforded Lessor under
Section 2938 of the California Civil Code.

(ii)        Collateral Agent shall, as a matter of right, without notice to
Lessee or anyone claiming under Lessee, and without regard to the then value of
the Mortgaged Property, or the interest of Lessee therein, at the option of
Collateral Agent, be entitled to the appointment of a receiver for the Mortgaged
Property, and Lessee hereby consents to such appointment and waives notice of
any application therefor and waives any requirement that the receiver post or
deliver a bond.  Any such receiver or receivers shall have all the usual powers
and duties of receivers in like or similar cases and all the powers and duties
of Collateral Agent and Deed of Trust Trustee in case of entry as provided in
this Memorandum of Lease and shall continue as such and exercise all such powers
until the later of (A) the date of confirmation of sale of the Mortgaged
Property; (B) the disbursement of all proceeds of the Mortgaged Property
collected by such receiver and the payment of all expenses incurred in
connection therewith; or (C) the termination of such receivership with the
consent of Collateral Agent or pursuant to an order by a court of competent
jurisdiction.

(iii)       Lessee and Lessor agree that, in any assignments, deeds, bills of
sale, notices of sale, or postings, given by Deed of Trust Trustee or Lessor,
any and all statements of fact or other recitals therein made as to the identity
of Lessor, or as to the existence of any Event of Default, or as to the
acceleration of the maturity of the Obligations, or as to the request to sell,
posting of notice of sale, notice of sale, time, place, terms and manner of sale
and receipt, distribution and application of the money realized therefrom, or as
to the due and proper appointment of a substitute trustee and without being
limited by the foregoing, as to any other act or thing having been duly done by
Lessor or by Deed of Trust Trustee, shall be construed by all courts of law and
equity as prima facie evidence that the said statements or recitals state facts
and are without further question to be so accepted,

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and Lessee does hereby ratify and confirm any and all acts that Deed of Trust
Trustee may lawfully do in the Mortgaged Property by virtue hereof.

(iv)       Collateral Agent, as assignee of Lessor’s interests, may, or Deed of
Trust Trustee may upon written request of Collateral Agent, proceed by suit or
suits, at law or in equity, to enforce the payment and performance of the
Obligations in accordance with the terms hereof or of the other Operative
Documents, to foreclose or otherwise enforce the assignments, liens, and
security interests created or evidenced by the other Operative Documents, or
this Memorandum of Lease as against all, or any part of, the Mortgaged Property,
and to have all or any part of the Mortgaged Property sold under the judgment or
decree of a court of competent jurisdiction.

(v)        To the extent permitted by law, Lessor or Collateral Agent may enter
upon the Site, take possession of the Mortgaged Property and remove the Leased
Property or any part thereof, with or without judicial process, and, in
connection therewith, without any responsibility or liability on the part of
Lessor or Collateral Agent, take possession of any property located on or in the
Site and the improvements situated on the Site which is not a part of the
Mortgaged Property and hold or store such property at Lessee’s expense.

(vi)       Lessor or Collateral Agent may assume and/or purchase the Mortgaged
Property, or any part thereof, at any public sale (if permitted by applicable
law) or any judicial sale.

(vii)      Notwithstanding anything contained herein to the contrary, pursuant
to Section 9-604(a) of the UCC, as amended, Collateral Agent may proceed under
Chapter 9 of the UCC as to all Personal Property covered hereby or, at
Collateral Agent’s election, Collateral Agent may proceed as to both the real
and personal property covered hereby in accordance with Collateral Agent’s
rights and remedies in respect of real property, in which case the provisions of
Chapter 9 of the UCC shall not apply.

(viii)     If Lessor or Collateral Agent is the purchaser of the Mortgaged
Property, or any part thereof, at any sale thereof or upon any other foreclosure
(conducted in accordance with the terms of applicable California law) or
enforcement of the assignments, liens, and security interests hereof, or
otherwise, Lessor or Collateral Agent, as applicable, shall, upon any such
purchase, acquire good title to the Mortgaged Property so purchased, free of the
assignments, liens, and security interests of these presents.

(ix)       Lessee covenants to promptly reimburse and pay to Lessor until the
Obligations are indefeasibly paid and performed in full, the amount of all
reasonable expenses (including the cost of any insurance, taxes, or other
charges) incurred by Lessor and Collateral Agent in connection with its custody,
preservation, use or operation of the Mortgaged Property, together with interest
thereon from the date incurred by such party at the Overdue Rate (so long as
such

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interest is not deemed a penalty under applicable California law) and all such
expenses, cost, taxes, interest, and other charges shall be a part of the
Obligations.

(x)        If the assignments, liens, or security interests hereof shall be
foreclosed or otherwise enforced by a Deed of Trust Trustee’s sale, or by any
other judicial or (to the extent permitted by applicable law) non-judicial
action, then the purchaser at any such sale shall receive, as an incident to his
ownership, immediate possession of that portion of the Mortgaged Property
purchased, and if Lessee or Lessee’s successors shall hold possession of any of
said portion of the Mortgaged Property subsequent to such foreclosure, Lessee
and Lessee’s successors shall be considered as tenants at sufferance of the
purchaser at such foreclosure sale, and any one occupying the Mortgaged Property
(or any part thereof) after demand made for possession thereof shall be guilty
of forcible detainer and shall be subject to eviction and removal, in accordance
with applicable California law, and all damages by reason thereof are hereby
expressly waived.

(xi)       Deed of Trust Trustee, Lessor, Collateral Agent and Administrative
Agent may exercise all other rights and remedies provided herein, in any of the
Operative Documents or other document or agreement now or hereafter securing all
or any portion of the Obligations secured hereby, by law or equity or by virtue
of any of the Operative Documents, or under the UCC or otherwise.

(xii)      During the continuance of an Event of Default hereunder, Collateral
Agent may proceed or cause Deed of Trust Trustee, in any sequence: (A) to
exercise its rights hereunder with respect to all or any portion of the
Mortgaged Property and all or any portion of the Personal Property; and (B) to
exercise its rights under Section 13 hereof with respect to all or any portion
of the Personal Property in accordance with the provisions of the UCC, in each
case subject to Lessee’s rights under the Lease (including Lessee’s right to
purchase the Leased Property under Section 20.1 of the Lease).

(xiii)     Subject to the rights, if any, of Lessee under the Lease (including
Lessee’s right to purchase the Leased Property under Section 20.1 of the Lease)
and of Construction Agent under the Construction and Development Agreement and
the other Operative Documents to which it is a party, to the extent not
prohibited by applicable California law, Lessor or Collateral Agent as its
assignee may proceed to exercise all rights, privileges and remedies of Lessor
under the Lease and under the Construction and Development Agreement.

(b)        Foreclosure By Power of Sale Pursuant to California Civil Code
Sections 2924-2924l. Subject to, and in accordance with, Applicable Laws and
Regulations:

(i)         Should Lessor elect to foreclose by exercise of the power of sale
herein contained, Lessor shall notify Deed of Trust Trustee and shall deposit
with Deed of Trust Trustee this Memorandum of Lease and such receipts and
evidence of expenditures made and secured hereby as Deed of Trust Trustee may
require.

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(ii)        Upon receipt of such notice from Lessor, Deed of Trust Trustee shall
cause to be recorded, published and delivered to Lessee such notice of default
and election to sell as is then required by law and by this Memorandum of
Lease.  Deed of Trust Trustee shall, without demand on Lessee, after lapse of
such time as may then be required by law and after recordation of such notice of
default and after notice of sale having been given as required by law, sell the
Mortgaged Property at the time and place of sale fixed by Deed of Trust Trustee
in said notice of sale, either as a whole, or in separate lots or parcels or
items, and in such order as Lessor may direct Deed of Trust Trustee so to do, at
public auction to the highest bidder for cash in lawful money of the United
States payable at the time of sale.  Deed of Trust Trustee shall deliver to such
purchaser or purchasers thereof its good and sufficient deed or deeds conveying
the property so sold, but without any covenant or warranty, express or
implied.  The recitals in such deed of any matter or fact shall be conclusive
proof of the truthfulness thereof.  Any person including, without limitation,
Lessee, Deed of Trust Trustee or Lessor may purchase at such sale, and Lessee
hereby covenants to warrant and defend the title of such purchaser or
purchasers.

(iii)       Upon non-judicial foreclosure of this Memorandum of Lease, Lessor
shall be entitled to credit bid up to and including the entire amount of the
obligations and indebtedness secured hereby.  If Lessor makes a combined credit
and cash bid and is the successful bidder, Deed of Trust Trustee shall apply the
cash bid first to pay the holders of liens subordinate hereto and encumbering
the Mortgaged Property, in their respective order of priority; then to pay
delinquent taxes, if any; and shall pay any remaining balance to Lessee; or, if
such order of payment shall be prohibited by law, then in such other order or
priority as is required by law.  If a third party is the successful bidder at
such public auction, upon receipt of cash from such bidder:  Deed of Trust
Trustee shall apply the cash bid received from the third party, after deducting
all costs, fees and expenses of Lessor and of the Deed of Trust Trustee,
including costs of evidence of title in connection with the sale, (i) first to
pay all sums due and owing by Lessee, with accrued interest at the Overdue Rate,
under this Memorandum of Lease and the other Operative Documents (except as to
any other Operative Document) and to the satisfaction of all of Lessee’s other
obligations under this Memorandum of Lease and such other Operative Documents,
and (ii) the remainder, if any, to the Lessee or any other person or persons
legally entitled thereto.

(iv)       Subject to California Civil Code Section 2924g, Deed of Trust Trustee
may postpone sale of all or any portion of the Mortgaged Property by public
announcement at such time and place of sale, and from time to time thereafter
may postpone such sale by public announcement or subsequently noticed sale, and
without further notice make such sale at the time fixed by the last
postponement, or may, in its discretion, give a new notice of sale.

(v)        A sale of less than the whole of the Mortgaged Property or any
defective or irregular sale made hereunder shall not exhaust the power of sale
provided for herein; and subsequent sales may be made hereunder until all

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obligations secured hereby have been satisfied, or the entire Mortgaged Property
sold, without defect or irregularity.

(c)        If an Event of Default or a Construction Event of Default, as
applicable, exists and the Obligations have been accelerated, subject to the
then existing rights, if any, of Lessee under the Lease (including Lessee’s
right to purchase the Leased Property under Section 20.1 of the Lease) and of
Construction Agent under the Construction and Development Agreement, and the
other Operative Documents to which it is a party, Lessor or Collateral Agent as
its assignee may, subject to Applicable Laws and Regulations, proceed by an
action at law, suit in equity or other appropriate proceeding, to protect and
enforce its rights, including for the foreclosure of the lien of this Memorandum
of Lease.  Lessee acknowledges and agrees that any defense or contest by Lessee
of Lessor’s exercise of its rights hereunder or under the Lease during the
continuance of an Event of Default is within the control of Lessee.

Section 8.        Remedies Not Exclusive.

Subject to, and in accordance with Applicable Laws and Regulations, each of
Lessor and Collateral Agent shall be entitled to enforce payment of the
indebtedness and performance of the Obligations and to exercise or cause Deed of
Trust Trustee to exercise all rights and powers under this Memorandum of Lease
or under any of the other Operative Documents or other agreement or any
Applicable Laws and Regulations now or hereafter in force, notwithstanding that
some or all of the Obligations may now or hereafter be otherwise secured,
whether by deed of trust, mortgage, security agreement, pledge, lien, assignment
or otherwise.  Neither the acceptance of this Memorandum of Lease nor its
enforcement shall prejudice or in any manner affect Lessor’s, Collateral Agent’s
or Deed of Trust Trustee’s right to realize upon or enforce any other security
now or hereafter held by Lessor, Collateral Agent or Deed of Trust Trustee, it
being agreed that such parties shall be entitled to enforce or cause Deed of
Trust Trustee to enforce this Memorandum of Lease and any other security now or
hereafter held by Lessor, Collateral Agent or Deed of Trust Trustee in such
order and manner as such party may determine in its absolute discretion, subject
to, and in accordance with, Applicable Laws and Regulations.  To the extent
permitted by Applicable Laws and Regulations, no remedy herein conferred upon or
reserved to Lessor or Collateral Agent as its assignee or Deed of Trust Trustee
is intended to be exclusive of any other remedy herein or by law provided or
permitted, but each shall be cumulative and shall be in addition to every other
remedy given hereunder or now or hereafter existing at law or in equity or by
statute.  To the extent permitted by Applicable Laws and Regulations, every
power or remedy given by any of the Operative Documents to Lessor, Collateral
Agent or Deed of Trust Trustee or to which they may otherwise be entitled, may
be exercised, concurrently or independently, from time to time and as often as
may be deemed expedient by such party.  In no event shall any such party, in the
exercise of the remedies provided in this Memorandum of Lease (including in
connection with the appointment of a receiver and the entry of such receiver on
to all or any part of the Mortgaged Property or the Leased Property), be deemed
a “mortgagee in possession” unless and until such party takes possession of the
Mortgaged Property or the Leased Property and no such party shall in any way be
made liable for any act, either of commission or omission, in connection with
the exercise of such remedies.

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Section 9.        Other Covenants.

(a)        At any time and from time to time, upon the written request of Lessor
or Collateral Agent, and at the sole expense of Lessee, Lessee will promptly and
duly execute and deliver such further instruments and documents and take such
further actions as such party reasonably may request for the purposes of
obtaining or preserving the full benefits of this Memorandum of Lease and of the
rights and powers granted by this Memorandum of Lease.  Lessee hereby
irrevocably constitutes and appoints each of Lessor and Collateral Agent as
Lessee’s true and lawful attorney-in fact (which power is coupled with an
interest) to execute and deliver such further instruments, and take such further
actions for the purposes of obtaining or preserving the full benefits of this
Memorandum of Lease and of the rights and powers granted by this Memorandum of
Lease.

(b)        Provided no Event of Default exists, Lessee shall be suffered and
permitted to remain in full possession, enjoyment and control of Lessee’s
interest in the Mortgaged Property subject always to the observance and
performance by Lessee of the terms of this Memorandum of Lease and of the
Participation Agreement and the other Operative Documents.

(c)        All monies constituting a part of the Mortgaged Property shall be
paid and distributed in accordance with the terms and provisions of Article III
of the Rent Assignment Agreement.

Any monies received by Lessee as payment for any loss under any policy of title
insurance or as an award or compensation for any condemnation shall become part
of the Mortgaged Property and shall be paid and applied in the same manner as
net proceeds of a Casualty or Condemnation as provided in the Participation
Agreement.

Section 10.      Duty of Lessor.

Lessor’s sole duty with respect to the custody, safekeeping and physical
preservation of any Mortgaged Property in its possession, under the UCC or
otherwise, shall be to deal with it in the same manner as Lessor deals with
similar property for its own account.  None of Lessor, Collateral Agent, Deed of
Trust Trustee, the Rent Assignees and their respective directors, officers,
employees or agents shall be liable for failure to demand, collect or realize
upon any of the Mortgaged Property, or for any delay in doing so or shall be
under any obligation to sell or otherwise dispose of any Mortgaged Property,
upon the request of Lessee or any other Person or to take any other action
whatsoever with regard to the Mortgaged Property, or any part thereof.

Section 11.      Powers Coupled with an Interest.

All powers, authorizations and agencies contained in this Memorandum of Lease
are coupled with an interest and are irrevocable until this Memorandum of Lease
is terminated and the lien created hereby is released.

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Section 12.      Authorization of Financing Statements.

Lessee authorizes the financing statements to be filed with respect to the
Mortgaged Property without the signature of such party in such form and in such
filing offices as Lessor or Collateral Agent reasonably determines appropriate
to perfect the security interests of Lessor and Collateral Agent under this
Memorandum of Lease.  A carbon, photographic or other reproduction of this
Memorandum of Lease shall be sufficient as a financing statement for filing in
any jurisdiction.

Section 13.      Security Agreement under UCC.

(a)        It is the intention of the parties hereto that this Memorandum of
Lease shall constitute with respect to the Personal Property a “security
agreement” within the meaning of the UCC.  If an Event of Default shall be
continuing, and subject to Lessee’s rights under the Lease (including Lessee’s
right to purchase the Leased Property under Section 20.1 of the Lease), then in
addition to having any other right or remedy available at law or in equity,
Collateral Agent as assignee of Lessor’s interests thereunder shall have the
option (subject to and in accordance with applicable law) of either (i)
proceeding under the UCC and exercising such rights and remedies as may be
provided to a secured party by the UCC with respect to all or any portion of the
Mortgaged Property or Lessee’s Collateral which is personal property (including
taking possession of and selling such property) or (ii) treating such property
as real property and proceeding with respect to both the real and personal
property constituting the Mortgaged Property or Lessee’s Collateral in
accordance with Deed of Trust Trustee’s rights, powers and remedies with respect
to the real property (in which event the default provisions of the UCC shall not
apply).  If Collateral Agent shall elect to proceed under the UCC, then ten (10)
days’ notice of sale of the personal property shall be deemed reasonable notice
and the expenses of retaking, holding, preparing for sale, selling and the like
incurred by Collateral Agent shall include, but not be limited to, attorneys’
fees and legal expenses (including allocated costs of internal counsel) of
Collateral Agent.  At Collateral Agent’s request, Lessee shall assemble its
Personal Property subject to the lien hereof and make it available to Collateral
Agent at a place designated by Collateral Agent which is reasonably convenient
to both parties.

(b)        Lessee and Lessor agree, to the extent permitted by law, that this
Memorandum of Lease, upon recording or registration in the real estate records
of the proper office, shall constitute a financing statement filed as a “fixture
filing” within the meaning of the UCC, with Lessee as debtor and Lessor as
secured party.  The Lessee’s organization number in the State of Delaware is
2050509.

(c)        Lessee hereby acknowledges that (i) this Memorandum of Lease covers
goods which are or are to become fixtures on the Leased Property, (ii) this
Memorandum of Lease is to be recorded in the real estate records, and (iii)
products of collateral are also covered.

(d)        With respect to “fixtures” within the meaning of the California
Uniform Commercial Code (the “California UCC”), to the extent permitted by
applicable law, Lessor or Deed of Trust Trustee may elect to treat same as
either real property or personal

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property and proceed to exercise such rights and remedies applicable to the
categorization so chosen.  Lessor may proceed against the items of real property
and any items of Mortgaged Property separately or together in any order
whatsoever, without in any way affecting or waiving Lessor’s rights and remedies
under the California UCC, this Memorandum of Lease or the other Operative
Documents.  Lessee acknowledges and agrees that Lessor’s rights and remedies
under this Memorandum of Lease and the other Operative Documents shall be
cumulative and shall be in addition to every other right and remedy now or
hereafter existing at law, in equity, by statute or by agreement of parties.

Section 14.      Lessor’s Mortgage in favor of Lessee’s Deed of Trust Trustee.

(a)        In the event a Purchase Option is validly exercised and Lessee has
fully performed its obligations under the Lease with respect to the conveyance
of Lessor’s right, title and interest in and to the Leased Property to Lessee or
its designee including, without limitation, the payment to Lessor (or deposit
into mutually agreeable escrow of such payment) of the Purchase Amount and all
other amounts due and payable under the Lease, Lessor is obligated to convey
such right, title and interest to Lessee in accordance with  the Lease (the
“Lessor’s Secured Obligation”).  In order to secure the full and timely
performance and discharge of Lessor’s Secured Obligation, Lessor has GRANTED,
BARGAINED, SOLD, ASSIGNED, CONVEYED, MORTGAGED and WARRANTED, and does hereby
GRANT, BARGAIN, SELL, ASSIGN, CONVEY, MORTGAGE and WARRANT unto the Deed of
Trust Trustee for the benefit of Lessee solely with regard to the Lessor’s
Secured Obligations, all of Lessor’s present and future right, title and
interest in and to the Leased Property, subject to the Permitted Liens, TO HAVE
AND TO HOLD the Leased Property unto Lessee, its successors and assigns, until
(i) all Lessor’s Secured Obligations are performed and satisfied in full, (ii)
an Event of Default shall be continuing and either a foreclosure of the liens
created pursuant to Section 6 hereof shall have been consummated which results
in a transfer of title to any Mortgaged Property or Lessee shall have delivered
an assignment of lease in lieu of foreclosure, or (iii) Lessee shall have
elected and consummated the Return Option.  Lessee may enforce such mortgage
after any breach by Lessor of Lessor’s Secured Obligation, but not
otherwise.  Upon the occurrence of any circumstance described in clauses (i),
(ii) or (iii) above, such mortgage shall be discharged, released and of no
further force and effect without any further act or deed by Lessor or Lessee
provided, however, if requested by Lessor, Lessee shall execute written releases
of such mortgage in recordable form reasonably acceptable to
Lessor.  Notwithstanding anything contained to the contrary herein or in any
other Operative Document, the grant of the Lien by Lessor in this Section 14(a)
shall be second and subject and subordinate to the grant of the Lien by Lessee
set forth in Sections 6 and 13 above.

(b)        To secure the full and timely payment of, and the complete and timely
performance and discharge of, Lessor’s Secured Obligations, Lessor further
grants to Lessee, pursuant to the UCC, a security interest in all of Lessor’s
present and future right, title, and interest in and to the Personal
Property.  Lessee may enforce such security interest after any breach by Lessor
of Lessor’s Secured Obligations, but not otherwise.  Upon the occurrence of any
circumstance described in clauses (i), (ii) or (iii) in clause (a) above, such
security interest shall be discharged, released and of no further force and
effect without any further act or deed by Lessor or Lessee; provided, however,
if requested by

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Lessor, Lessee shall execute written releases of, or provide applicable
termination statements with respect to, such security interest, in each case in
form reasonably acceptable to Lessor.  Notwithstanding anything contained to the
contrary herein or in any other Operative Document, the grant of the Lien by
Lessor in this Section 14(b) shall be second and subject and subordinate to the
grant of the Lien by Lessee.

(c)        Lessee and Lessor agree, to the extent permitted by law, that this
Memorandum of Lease, upon recording or registration in the local real estate
records, shall constitute a financing statement filed as a “fixture filing”
within the meaning of the UCC, with Lessor as debtor and Lessee as secured
party.  Lessor’s organization number in the State of California is C0577846
7.  Lessee is the record title holder of the Site and Lessor is the record title
holder of the leasehold interest in the Site.

(d)        Lessee and Lessor hereby acknowledge that (i) this Memorandum of
Lease covers goods which are or are to become fixtures on the Leased Property,
and (ii) this Memorandum of Lease is to be recorded in the real estate records.

Section 15.      Incorporation into Lease.

This Memorandum of Lease shall be construed in connection with and as part of
the Lease, and all terms, conditions and covenants contained in the Lease, as
supplemented by this Memorandum of Lease, shall be and remain in full force and
effect and shall govern the Leased Property, as located on the Site described in
Exhibit A attached hereto and incorporated herein by reference.

Section 16.      Notice to Potential Claimant.

Nothing contained in this Memorandum of Lease or the Lease shall be construed as
constituting the consent or request of Lessor, expressed or implied, to or for
the performance by any contractor, mechanic, laborer, materialman, supplier or
vendor of any labor or services or for the furnishing of any materials for any
construction, alteration, addition, repair or demolition of or to the Facility
or any part thereof.  NOTICE IS HEREBY GIVEN THAT NEITHER LESSOR NOR COLLATERAL
AGENT IS OR SHALL BE LIABLE FOR ANY LABOR, SERVICES OR MATERIALS FURNISHED OR TO
BE FURNISHED TO LESSEE, OR TO ANYONE HOLDING THE FACILITY OR ANY PART OR PORTION
THEREOF THROUGH OR UNDER LESSEE, AND THAT NO MECHANIC’S OR OTHER LIENS FOR ANY
SUCH LABOR, SERVICES OR MATERIALS SHALL ATTACH TO OR AFFECT THE INTEREST OF
LESSOR OR COLLATERAL AGENT IN AND TO ALL OR ANY PORTION OF THE FACILITY.

Section 17.      Ratification.

Except as expressly supplemented hereby, the terms and provisions of the Lease
are hereby ratified and confirmed and remain in full force and effect.  In the
event of any conflict between the terms of the Lease and the terms of this
Memorandum of Lease, the terms of the Lease shall control.

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Section 18.      Assignment of Memorandum of Lease.

Notwithstanding the intention of the parties, in the event a court of competent
jurisdiction determines that the transactions contemplated by the Rent
Assignment Agreement are found to be a financing and not a true sale, Lessor
hereby assigns the mortgage granted by Lessee to Lessor in Section 6(a) hereof
to Collateral Agent for the benefit of Lessor and the Rent Assignees as security
for the payment and performance obligations of Lessor under the Rent Assignment
Agreement.    Notwithstanding the foregoing, pursuant to the Construction and
Development Agreement, so long as no Construction Event of Default shall be
continuing, the Lessee may exercise all rights under or with respect to the
Construction Documents.

Section 19.      Notices.

All notices, requests and demands to or upon Collateral Agent, Lessor or Lessee
shall be given in accordance with Section 9.3 of the Participation
Agreement.  Notices to the Deed of Trust Trustee shall be addressed as provided
on page 1 hereof, or such other address as such party may designate by written
notice.

Section 20.      Severability.

To the extent permitted by applicable law, any provision of this Memorandum of
Lease which is prohibited or unenforceable shall be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof.

Section 21.      Amendments in Writing; Cumulative Remedies.

(a)        None of the terms or provisions of this Memorandum of Lease may be
waived, amended, supplemented or otherwise modified except by a written
instrument executed by Lessee and Lessor in accordance with the terms of Section
9.5 of the Participation Agreement.

(b)        The rights and remedies herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any other rights or
remedies provided by Applicable Laws and Regulations.

Section 22.      Section Headings.

The section headings used in this Memorandum of Lease are for convenience of
reference only and are not to affect the construction hereof or be taken into
consideration in the interpretation hereof.

Section 23.      Successors and Assigns.

This Memorandum of Lease shall run with the land and be binding upon the
successors and assigns of Lessor and Lessee and shall inure to the benefit of
Lessor, Administrative Agent, Rent Assignees, Deed of Trust Trustee and their
respective successors and assigns.

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Section 24.      Partial Release; Full Release.

Subject to Section 9.5 of the Participation Agreement and Article VII of the
Lease, at any time, or from time to time without liability therefor and without
notice, upon written request of Administrative Agent and presentation of this
Memorandum of Lease and the Operative Documents for endorsement, and without
affecting the personal liability of any Person for payment of the indebtedness
secured hereby or the effect of this Memorandum of Lease upon the remainder of
the Mortgaged Property, Lessor may (a) release any part of said Mortgaged
Property, (b) consent in writing to the making of any map or plat thereof, (c)
join in granting any easement thereon, or (d) join in any extension agreement or
any agreement subordinating the lien or charge hereof.

Section 25.      Future Advances; Construction Related Provisions.

In addition to any other sum secured hereby, this Memorandum of Lease shall also
secure the unpaid principal balance of, plus accrued interest on, any amount of
money loaned, advanced or paid by Lessor or Administrative Agent to or for the
account and benefit of Lessee after this Memorandum of Lease is delivered to and
filed in the Office of the Clerk of San Diego County, California, for recording,
in order to pay (i) any real estate taxes and assessments, and insurance
premiums; and (ii) all other costs and expenses incurred in connection with the
operation of the Mortgaged Property and the protection or preservation of the
Mortgaged Property or the security of this Memorandum of Lease, including to
cure any of Lessee’s defaults by making any payments which Lessee should have
made as provided in this Memorandum of Lease.

Section 26.      Certain Powers of Deed of Trust Trustee:  Substitution of Deed
of Trust Trustee.

(a)        Deed of Trust Trustee may act in the execution of this trust, and
Deed of Trust Trustee is hereby authorized to act by agent or attorney in the
execution of this trust.  It shall not be necessary for Deed of Trust Trustee to
be present in person at any foreclosure sale hereunder.

(b)        It is hereby expressly covenanted and agreed by all parties hereto
that Lessor may, at any time and from time to time hereafter, with notice to
Lessee by registered or certified mail (or otherwise in compliance with
applicable law), appoint and substitute another Deed of Trust Trustee in place
of Deed of Trust Trustee herein named to execute the trust herein created.  Upon
such appointment, either with or without conveyance to said substituted Deed of
Trust Trustee by the Deed of Trust Trustee herein named, or by any substituted
Deed of Trust Trustee in case the said right of appointment is exercised more
than once, the new and substituted Deed of Trust Trustee in each instance shall
be vested with all rights, titles, interests, powers, duties and trusts in the
premises which are vested in and conferred upon the Deed of Trust Trustee herein
named; and such new and substituted Deed of Trust Trustee shall be considered
the successor and assign of Deed of Trust Trustee who is named herein within the
meaning of this Memorandum of Lease, and substituted in its place and
stead.  Each such appointment and substitution shall be evidenced by an
instrument in writing which shall recite the parties to, and the book and page
of record of, this Memorandum of Lease and the description of the real property
herein described, which instrument, executed and acknowledged by Lessor or
Collateral Agent

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and recorded in the appropriate office of the county wherein the Mortgaged
Property is situated, shall be conclusive proof of the proper substitution and
appointment of such successor Deed of Trust Trustee, and notice of such proper
substitution and appointment to all parties in interest.

Section 27.      Successor Collateral Agent.

Collateral Agent acting alone may from time to time, by written instrument
executed and acknowledged by Collateral Agent, mailed to Lessee and Lessor and
recorded in the Office of the Clerk of San Diego County, California, and by
otherwise complying with the provisions of Applicable Laws and Regulations,
substitute a successor or successors to Collateral Agent named herein or acting
hereunder for the benefit of Lessor and the Rent Assignees.

Section 28.      Certain Acknowledgments and Agreements of Lessee.

Lessee hereby acknowledges and agrees that:

(a)        The Rent Assignment Advances and the Lessor Investment are being made
for Lessee’s direct benefit and will be used to ground lease the Mortgaged
Property and fund the demolition of Building 1 and the construction of the
Facility on the Site, and it is the intention of the parties hereto that Lessee
be the beneficial owner of the Mortgaged Property for tax and bankruptcy law
purposes, but that Lessor be the owner for Lessee’s financial reporting
purposes.

(b)        Lessee, on behalf of itself and all persons now or hereafter
interested in the Mortgaged Property, or any part thereof, to the fullest extent
permitted by Applicable Laws and Regulations, hereby waives all rights under all
appraisement, homestead, moratorium, valuation, exemption, stay, extension, and
redemption statutes, laws or equities now or hereafter existing, and hereby
further waives the pleading of any statute of limitations as a defense to any
and all indebtedness and payments thereon secured by this Memorandum of Lease,
and Lessee agrees that no defense, claim or right based on any thereof will be
asserted, or may be enforced, in any action enforcing or relating to this
Memorandum of Lease or any of this Mortgaged Property.  Without limiting the
generality of the preceding sentence, Lessee, on its own behalf and on behalf of
each and every person acquiring any interest in or title to the Mortgaged
Property, or any part thereof, subsequent to the date of this Memorandum of
Lease, hereby irrevocably waives any and all rights of redemption from sale
under any order or decree of foreclosure of this Memorandum of Lease or under
any power contained herein or under any sale pursuant to any statute, order,
decree or judgment of any court.  Lessee, for itself and for all persons
hereafter claiming through or under it, hereby expressly waives and releases all
rights to direct the order in which any of the Mortgaged Property shall be sold
in the event of any sale or sales pursuant hereto and to have any of the
Mortgaged Property and/or any other property now or hereafter constituting
security for any of the indebtedness secured hereby marshaled upon any
foreclosure of this Memorandum of Lease.  Collateral Agent shall have the right
to determine the order in which any or all of the Mortgaged Property shall be
subjected to the remedies provided herein.  Collateral Agent shall have the
right to determine the order in which any or all portions of the Obligations are
satisfied from the proceeds realized upon

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the exercise of the remedies provided herein.  Nothing contained herein shall be
deemed to be a waiver of Lessee’s right to purchase the Leased Property in
accordance with the provisions of the Lease.

(c)        Lessee further waives: (i) diligence and demand of payment except as
otherwise required hereunder, the Lease and the Participation Agreement or any
other Operative Document; (ii) the right to receive any notices sent to the
other or to any other person, including notices of the creation, renewal,
extension, modification, or accrual, of any obligations contained in the
Operative Documents or notice of any other matters relating thereto not
expressly required under the other Operative Documents; (iii) all demands
whatsoever not otherwise required to be delivered under the Operative Documents;
(iv) any duty on the part of Collateral Agent or Deed of Trust Trustee to
disclose to Lessee any facts that either may now or hereafter know about the
other, regardless of whether Collateral Agent or Deed of Trust Trustee has
reason to believe that any such facts materially increase the risk beyond that
which Lessee intends to assume or has reason to believe that such facts are
unknown to Lessee, it being understood and agreed that Lessee is fully
responsible for being and keeping informed of the financial condition of the
other and of all circumstances bearing on the risk of nonpayment of any amount
hereby secured; (v) any circumstances which would constitute a legal or
equitable discharge of Lessee hereunder; (vi) any right Lessee may have to
require Collateral Agent or Deed of Trust Trustee to proceed against Lessor or
against any other party to foreclose any lien on any real or personal property,
to exercise any right or remedy under the Operative Documents, or to pursue any
other remedy, or to enforce any other right; and (vii) any rights, legal or
equitable, to require marshaling of assets or to require upon foreclosure sales
in a particular order.

(d)        No failure to exercise, nor any delay in exercising, on the part of
Collateral Agent, Deed of Trust Trustee, Lessor or Rent Assignees, any right,
power or privilege hereunder shall operate as a waiver thereof.  No single or
partial exercise of any right, power or privilege hereunder shall preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege.  A waiver by Lessor, Collateral Agent, Deed of Trust Trustee or Rent
Assignees of any right or remedy hereunder on any one occasion shall not be
construed as a bar to any right or remedy that Lessor, Collateral Agent, Deed of
Trust Trustee or Rent Assignees would otherwise have on any future occasion.

(e)        The rights of Lessor, Collateral Agent, Deed of Trust Trustee and
Rent Assignees in relation to the Mortgaged Property or in relation to Lessee
under any Operative Document shall in no way be affected or impaired by reason
of the occurrence from time to time of any of the following events, even if such
event takes place without notice to or the further consent of Lessee: (i) the
waiver by Lessor, Rent Assignees,  Collateral Agent, Deed of Trust Trustee of
the performance or observance by Lessee or any other party of any of the
agreements, covenants, terms or conditions contained in any of the Operative
Documents; (ii) the doing or the omission of any of the acts referred to in the
Participation Agreement, the Rent Assignment Agreement or any other Operative
Document; (iii) any failure, omission or delay on the part of Lessor, Collateral
Agent, Deed of Trust Trustee or Rent Assignees to enforce, assert or exercise
any right, power or remedy conferred on or available to Lessor, Collateral
Agent, Deed of Trust Trustee, Rent

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Assignees, or any of them in or by any of the Operative Documents; (iv) the
voluntary or involuntary liquidation, dissolution, sale of all or substantially
all of the assets, marshaling of assets and liabilities, receivership,
conservatorship, custodianship, insolvency, bankruptcy, assignment for the
benefit of creditors, reorganization, arrangement, composition or readjustment
of, or other similar proceeding affecting Lessee or any of its assets; (v) the
inability of Lessor, Collateral Agent, Deed of Trust Trustee or Rent Assignees,
respectively, to enforce any provision of the Operative Documents; (vi) any
change in the relationship between Lessor and Lessee or any termination of such
relationship; (vii) the inability of Lessee to perform, or the release of Lessee
from the performance of, any obligation, agreement, covenant, term or condition
of Lessee under any of the Operative Documents, including this Memorandum of
Lease, by reason of any law, regulation or decree, now or hereafter in effect;
or (viii) any action or inaction by Collateral Agent, Deed of Trust Trustee,
Rent Assignees or Lessor that results in any impairment or destruction of any
rights of Lessee to proceed against the other or any person for reimbursement.

Notwithstanding anything stated to the contrary herein, nothing contained herein
shall limit or impair the right of Lessee to purchase the Leased Property
pursuant to Section 20.1 of the Lease or any other rights (including the right
to receive notices) Lessee may have under any of the other Operative Documents.

Section 29.      Counterpart Execution.

This Memorandum of Lease may be executed in any number of counterparts and by
each of the parties hereto in separate counterparts, all such counterparts
together constituting but one and the same instrument.

Section 30.      Waiver of Certain Rights.

If the Lease shall be terminated pursuant to Article XVIII thereof or a
foreclosure hereunder, Lessee waives, to the fullest extent permitted by law,
(a) any notice of legal proceedings to obtain possession; (b) any right of
redemption or repossession; and (c) the benefit of any laws now or hereafter in
force exempting property from liability for rent or for debt or limiting Lessor
with respect to the election of remedies.

Section 31.      References.

Any and all notices, requests, certificates and other instruments executed and
delivered concurrently with or after the execution and delivery of this
Memorandum of Lease may refer to the “Memorandum of Lease, dated as of February
5, 2019,” or may identify this Memorandum of Lease in any other respect without
making specific reference to this Memorandum of Lease, but nevertheless all such
references shall be deemed to include this Memorandum of Lease, unless the
context shall otherwise require.

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Section 32.      California Provisions.  To the extent permitted by, and subject
to, Applicable Laws and Regulations:

(a)        In the case of a power of sale foreclosure under this Memorandum of
Lease, the fair market value of the real property collateral shall be
conclusively deemed to be the amount of the successful bid at the foreclosure
sale.  Lessee waives any rights or benefits it may now or hereafter have to a
fair value hearing under Section 580a of the California Code of Civil
Procedure.  Lessor shall have absolutely no obligation to make a bid at any
foreclosure sale, but rather may make no bid or bid any amount which Lessor, in
its sole discretion, deems appropriate.

(b)        Lessee warrants and represents to Lessor that (i) it now has or will
continue to have full and complete access to any and all information concerning
the transactions contemplated by the Operative Documents and (ii) Lessee has
reviewed and approved copies of the Operative Documents and is fully informed of
the remedies Lessor may pursue, with or without notice to Lessee, in the event
of default under the Operative Documents.

(c)        Lessee agrees that Lessor may exercise any right or remedy hereunder
or under any of the Operative Documents without the necessity of resorting to or
exhausting any security or collateral conveyed or assigned by Lessee.  Lessee,
to the extent permitted by law, hereby waives any right it may now or hereafter
have to require Lessor to foreclose any lien on any real or personal property
collateral conveyed or assigned to Lessor by Lessee, to exercise any right or
remedy under the Operative Documents, to draw upon any letter of credit issued
in connection with any of the Obligations, or to pursue any other remedy or to
enforce any other right under the Operative Documents.

(d)        Lessee has read and hereby approves this Memorandum of Lease, the
other Operative Documents and all other agreements and documents relating
thereto.  Lessee acknowledges that it has been represented by counsel of its
choice to review this Memorandum of Lease, the other Operative Documents and all
other documents relating thereto and said counsel has explained and Lessee
understands the provisions thereof, or that Lessee has voluntarily declined to
retain such counsel.

(e)        Lessee hereby authorizes and empowers Lessor in its sole discretion,
without any notice or demand and without affecting the lien and charge of this
Memorandum of Lease, to exercise any right or remedy which Lessor may have
available to it, including, but not limited to, judicial foreclosure, exercise
of rights of power of sale without judicial action as to any collateral security
for the Obligations, whether real, personal or intangible property.  Without
limiting the foregoing, Lessee specifically agrees that any action maintained by
Lessor for the appointment of any receiver, trustee or custodian to collect
rents, issues or profits or to obtain possession of the Mortgaged Property shall
not constitute an “action” within the meaning of §726 of the California Code of
Civil Procedure.

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(f)        The power of sale conferred by this Memorandum of Lease and by the
California Deeds of Trust Act is not an exclusive remedy, and when not
exercised, Lessor may judicially foreclose this Memorandum of Lease as a
mortgage.

(g)        In case of a non-judicial sale under this Memorandum of Lease, the
Mortgaged Property and any property therein contained, real, personal and mixed,
may be sold in one parcel or in separate parcels and in such order as Deed of
Trust Trustee shall determine.

(h)        In the event that this Memorandum of Lease is foreclosed as a
mortgage and the Mortgaged Property or any part thereof sold at a foreclosure
sale, the purchaser may, during any redemption period allowed, make such repairs
or alteration on any such property as may be reasonably necessary for the proper
operation, care, preservation, protection and insuring thereof.  To the extent
permitted by law, any sums so paid together with interest thereon from the time
of such expenditure at the Overdue Rate shall be added to, and become a part of,
the amount required to be paid for redemption from such sale.

(i)         Lessee agrees that, to the extent permitted by law, if an Event of
Default occurs and reinstatement is claimed by Lessee under the provisions of
any law permitting reinstatement upon payment of all sums then due, Lessor shall
designate an attorney or other professional help for the assistance of the Deed
of Trust Trustee and the cost and fees of any such attorney or professional help
together with all other expenses incurred as a result of the Event of Default
and foreclosure proceedings, shall be deemed Deed of Trust Trustee’s costs and
shall be paid by Lessee directly to Lessor as a condition precedent to the
reinstatement.

(j)         In the event of any non-judicial Memorandum of Lease foreclosure by
Deed of Trust Trustee hereunder, Lessee requests that a copy of any notice of
default executed by Deed of Trust Trustee hereunder be mailed to Lessee at its
address hereinbefore set forth.

(k)        Lessor may at any time and from time to time, by an instrument in
writing served upon the Deed of Trust Trustee, substitute a successor or
successors to any deed of trust trustee named herein or acting hereunder, which
instrument, executed and acknowledged by Lessor and recorded in the office of
the recorder of the recording district where the Site is situated, shall be
conclusive proof of proper substitution of such successor trustee or trustees,
who shall, without conveyance from the predecessor trustee, succeed to all its
title, estate, rights, powers and duties.  Said instrument shall contain the
names of Lessee, the original deed of trust trustee and Lessor, the book and
page where this Memorandum of Lease is recorded, and the name and address of the
new deed of trust trustee.

(l)         Without limiting the generality of the foregoing, to the fullest
extent now or hereafter permitted by applicable law, Lessee agrees that if an
Event of Default is continuing (i) Lessor is not subject to any “one action” or
“election of remedies” law or rule, and (ii) all liens and other rights,
remedies or privileges provided to Lessor shall remain in full force and effect
until Lessor has exhausted all of its remedies against the

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Mortgaged Property and/or the Leased Property and the liens created pursuant to
Section 6 hereof have been foreclosed, sold and/or otherwise realized upon in
satisfaction of the Obligations or the Obligations have been satisfied in full.

Section 33.      Governing Law.

THIS MEMORANDUM OF LEASE SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS
OF LAW PRINCIPLES (OTHER THAN TITLE 14 OF ARTICLE 5 OF THE NEW YORK GENERAL
OBLIGATIONS LAW), EXCEPT AS TO MATTERS RELATING TO THE CREATION OF THE GRANT OF
A DEED OF TRUST LIEN AND SECURITY INTEREST HEREUNDER AND THE EXERCISE OF RIGHTS
AND REMEDIES WITH RESPECT THERETO, WHICH SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF CALIFORNIA.  WITHOUT LIMITING THE
FOREGOING, IN THE EVENT THAT THE LEASE IS DEEMED TO CONSTITUTE A FINANCING,
WHICH IS THE INTENTION OF THE PARTIES FOR THIS PURPOSE, THE LAWS OF THE STATE OF
NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES (OTHER THAN TITLE 14 OF
ARTICLE 5 OF THE NEW YORK GENERAL OBLIGATIONS LAW), SHALL GOVERN THE CREATION,
TERMS AND PROVISIONS OF THE INDEBTEDNESS EVIDENCED HEREBY AND THE CREATING OF
THE LIEN GRANTED HEREUNDER, BUT PERFECTION AND ENFORCEMENT OF SAID LIEN SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE IN WHICH THE
SITE IS LOCATED.

Section 34.      Deed of Trust Trustee Provisions.

(a)        Deed of Trust Trustee shall be under no duty to take any action
hereunder except as expressly required hereunder or by law, or to perform any
act which would involve Deed of Trust Trustee in any expense or liability or to
institute or defend any suit in respect hereof, unless properly indemnified to
Deed of Trust Trustee’s reasonable satisfaction.  Deed of Trust Trustee, by
acceptance of this Memorandum of Lease (which acceptance shall be indicated in
writing or by Deed of Trust Trustee knowingly exercising powers or performing
duties hereunder), covenants to perform and fulfill the trusts herein created,
being liable, however, only for gross negligence or willful misconduct, and
hereby waives any statutory fee and agrees to accept reasonable compensation, in
lieu thereof, for any services rendered by Deed of Trust Trustee in accordance
with the terms hereof.  Deed of Trust Trustee may resign at any time upon giving
thirty (30) days’ notice to Lessor and to Lessee or as otherwise permitted by
Applicable Laws and Regulations.  Lessor may remove Deed of Trust Trustee at any
time or from time to time and select a successor trustee.  In the event of the
death, removal, resignation, refusal to act, or inability to act of Deed of
Trust Trustee, or in its sole discretion for any reason whatsoever Lessor may,
without notice and without specifying any reason therefor and without applying
to any court, select and appoint a successor trustee, by an instrument recorded
wherever this Memorandum of Lease is recorded and all powers, rights, duties and
authority of Deed of Trust Trustee, as aforesaid, shall thereupon become vested
in such successor.  Such substitute trustee shall not be required to give bond
for the faithful performance of the duties of Deed of Trust Trustee hereunder
unless required by Lessor.  The procedure provided for in this Section 34(a) for
substitution of Deed of Trust

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Trustee shall be in addition to and not in exclusion of any other provisions for
substitution, by law or otherwise.

(b)        Lessee shall pay all costs, fees and expenses incurred by Deed of
Trust Trustee and Deed of Trust Trustee’s agents and counsel in connection with
the performance by Deed of Trust Trustee of Deed of Trust Trustee’s duties
hereunder and all such costs, fees and expenses shall be secured by this
Memorandum of Lease.

(c)        With the approval of Lessor, Deed of Trust Trustee shall have the
right to take any and all of the following actions:  (i) to select, employ, and
advise with counsel (who may be, but need not be, counsel for Lessor) upon any
matters arising hereunder, including the interpretation of this Memorandum of
Lease or the other Operative Documents, and shall be fully protected in relying
as to legal matters on the advice of counsel, (ii) to execute any of the trusts
and powers hereof and to perform any duty hereunder either directly or through
his/her agents or attorneys, (iii) to select and employ, in and about the
execution of his/her duties hereunder, suitable accountants, engineers and other
experts, agents and attorneys-in-fact, either corporate or individual, not
regularly in the employ of Deed of Trust Trustee, and Deed of Trust Trustee
shall not be answerable for any act, default, negligence, or misconduct of any
such accountant, engineer or other expert, agent or attorney-in-fact, if
selected with reasonable care, or for any error of judgment or act done by Deed
of Trust Trustee in good faith, or be otherwise responsible or accountable under
any circumstances whatsoever, except for Deed of Trust Trustee’s gross
negligence or willful misconduct, and (iv) any and all other lawful action as
Lessor may instruct Deed of Trust Trustee to take to protect or enforce Lessor’s
rights hereunder.  Deed of Trust Trustee shall not be personally liable in case
of entry by Deed of Trust Trustee, or anyone entering by virtue of the powers
herein granted to Deed of Trust Trustee, upon the Mortgaged Property for debts
contracted for or liability or damages incurred in the management or operation
of the Mortgaged Property.  Deed of Trust Trustee shall have the right to rely
on any instrument, document, or signature authorizing or supporting an action
taken or proposed to be taken by Deed of Trust Trustee hereunder, believed by
Deed of Trust Trustee in good faith to be genuine.  Deed of Trust Trustee shall
be entitled to reimbursement for actual expenses incurred by Deed of Trust
Trustee in the performance of Deed of Trust Trustee’s duties hereunder and to
reasonable compensation for such of Deed of Trust Trustee’s services hereunder
as shall be rendered.

(d)        All moneys received by Deed of Trust Trustee shall, until used or
applied as herein provided, be held in trust for the purposes for which they
were received, but need not be segregated in any manner from any other moneys
(except to the extent required by Applicable Laws and Regulations) and Deed of
Trust Trustee shall be under no liability for interest on any moneys received by
the Deed of Trust Trustee hereunder.

(e)        Should any deed, conveyance, or instrument of any nature be required
from Lessee by any Deed of Trust Trustee or substitute trustee to more fully and
certainly vest in and confirm to the Deed of Trust Trustee or substitute trustee
such estates, rights, powers, and duties, then, upon request by the Deed of
Trust Trustee or substitute trustee, any and all such deeds, conveyances and
instruments shall be made, executed, acknowledged, and delivered and shall be
caused to be recorded and/or filed by Lessee.

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(f)        Any substitute trustee appointed pursuant to any of the provisions
hereof shall, without any further act, deed, or conveyance, become vested with
all the estates, properties, rights, powers, and trusts of its or his/her
predecessor in the rights hereunder with like effect as if originally named as
Deed of Trust Trustee herein; but nevertheless, upon the written request of
Lessor or of the substitute trustee, the Deed of Trust Trustee ceasing to act
shall execute and deliver any instrument transferring to such substitute
trustee, upon the trusts herein expressed, all the estates, properties, rights,
powers, and trusts of the Deed of Trust Trustee so ceasing to act, and shall
duly assign, transfer and deliver any of the property and moneys held by such
Deed of Trust Trustee to the substitute trustee so appointed in the Deed of
Trust Trustee’s place.

[Signatures Begin on Following Page]

 

 

 

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In Witness Whereof, the parties hereto have caused this Memorandum of Lease,
Deed of Trust, Assignment of Leases and Rents, Security Agreement and Fixture
Filing to be executed by the parties on the date set out in their respective
acknowledgments below, but it is to be effective on the day and year first above
written.

 

 

 

 

 

Lessee:

 

 

 

CUBIC CORPORATION, a Delaware corporation

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

 

Address: 9333 Balboa Avenue

 

               San Diego, California 92123-1589

 

 

 

 

 

 

Lessor:

 

 

 

BANKERS COMMERCIAL CORPORATION, a

 

California corporation

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

 

Address: 445 South Figueroa Street

 

               12th Floor

 

               Los Angeles, California 90071

 

 

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Collateral Agent:

 

 

 

MUFG UNION BANK, N.A.,

 

a national association

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

 

 

 

 

Address: 350 California Street

 

               17th Floor

 

               San Francisco, CA  94104

 

               Attention: Corporate Trust

 

 

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A notary public or other officer completing this certificate verifies only the
identity of the individual who signed the document to which this certificate is
attached, and not the truthfulness, accuracy, or validity of that document.

 

 

ACKNOWLEDGMENT

State of California                                )

County of ______________________ )

On                                   , before me,
                                                                 , Notary
Public, personally appeared
                                                                                        ,
who proved to me on the basis of satisfactory evidence to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and
that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California
that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Signature  _______________________________

(Seal)

 

 

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A notary public or other officer completing this certificate verifies only the
identity of the individual who signed the document to which this certificate is
attached, and not the truthfulness, accuracy, or validity of that document.

 

 

ACKNOWLEDGMENT

State of California                                )

County of ______________________ )

On                                   , before me,
                                                                 , Notary
Public, personally
appeared                                                                                         ,
who proved to me on the basis of satisfactory evidence to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and
that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California
that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Signature  _______________________________

(Seal)

 

 

 

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A notary public or other officer completing this certificate verifies only the
identity of the individual who signed the document to which this certificate is
attached, and not the truthfulness, accuracy, or validity of that document.

 

 

ACKNOWLEDGMENT

State of California                                )

County of ______________________ )

On                                   , before me,
                                                                 , Notary
Public, personally
appeared                                                                                          ,
 who proved to me on the basis of satisfactory evidence to be the person(s)
whose name(s) is/are subscribed to the within instrument and acknowledged to me
that he/she/they executed the same in his/her/their authorized capacity(ies),
and that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California
that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Signature  _______________________________

(Seal)

 

 

 

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Exhibit A

 

THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF SAN DIEGO, IN THE
COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:

 

PARCEL 2 OF PARCEL MAP NO. 21650, IN THE CITY OF SAN DIEGO, COUNTY OF SAN DIEGO,
STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF FILED IN THE OFFICE OF THE COUNTY
RECORDER OF SAN DIEGO COUNTY, DECEMBER 21, 2018 AS DOCUMENT NO. 2018-7000508 OF
OFFICIAL RECORDS.

 

EXCEPTING THEREFROM ALL BUILDING IMPROVEMENTS LOCATED ON SAID LAND.

 

APN: PORTIONS 369-163-05-00 AND 369-170-18-00

 

 

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Appendix I

 

APPENDIX I

TO

PARTICIPATION AGREEMENT

In this Memorandum of Lease, unless the context otherwise requires:

any term defined below by reference to another instrument or document shall
continue to have the meaning ascribed thereto whether or not such other
instrument or document remains in effect;

words importing the singular include the plural and vice versa;

words importing a gender include any gender;

a reference to a part, clause, section, article, exhibit or schedule is a
reference to a part, clause, section and article of, and exhibit and schedule
to, such Operative Document;

a reference to any statute, regulation, proclamation, ordinance or law includes
all statutes, regulations, proclamations, ordinances or laws amending,
supplementing, supplanting, varying, consolidating or replacing them, and a
reference to a statute includes all regulations, proclamations and ordinances
issued or otherwise applicable under that statute;

a reference to a document includes any amendment, modification or supplement to,
or replacement, restatement or novation of, that document;

a reference to a party to a document includes that party’s successors and
assigns;

all accounting terms not specifically defined herein shall be construed in
accordance with GAAP; and

references to “including” shall mean including without limiting the generality
of any description preceding such term and for purposes hereof the rule of
ejusdem generis shall not be applicable to limit a general statement followed by
or referable to an enumeration of specific matters to matters similar to those
specifically mentioned.

Further, each of the parties hereto and their counsel have reviewed and revised
this Memorandum of Lease, or requested revisions thereto, and the usual rule of
construction that any ambiguities are to be resolved against the drafting party
shall be inapplicable in construing and interpreting this Memorandum of Lease.

“Additional Costs” shall mean the amounts payable by the Lessee pursuant to
Sections 7.2(a)(iii), 7.4, 7.5 and 7.7 of the Participation Agreement.

 

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 “Advance” shall mean an advance of funds by the Lessor pursuant to Article II
of the Participation Agreement comprised of Rent Assignment Advances made by the
Rent Assignees and an advance of a portion of the Lessor Investment made by the
Lessor.

 “Advance Date” shall mean the actual date on which an Advance occurs in
accordance with the terms of Section 2.5 of the Participation Agreement.

 “Affiliate” shall mean, with respect to any Person, any other Person which
directly or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, such first Person or any of its
subsidiaries. The term “control” shall mean the possession, directly or
indirectly, of any power to direct or cause the direction of the management and
policies of a Person, whether through ownership of voting securities, by
contract or otherwise.

 “Agents” shall mean the Administrative Agent and the Collateral Agent.

 “Alterations” shall have the meaning provided in Section 9.2(a) of the Lease.

“Alternate Base Rate” shall mean for any day, a rate per annum equal to the
higher of (a) the MUFG Base Rate for such day, (b) the sum of 0.50% per annum
plus the Federal Funds Rate for such day, and (c) the LIBOR Rate on such day
plus 1.00%. Any change in the Alternate Base Rate due to a change in the MUFG
Base Rate, the Federal Funds Rate or the LIBOR Rate shall be effective as of the
opening of business on the day of such change in the MUFG Base Rate, the Federal
Funds Rate or the LIBOR Rate, respectively.

 “Applicable Laws and Regulations” shall mean as of any date all applicable
laws, rules, regulations (including Environmental Laws), statutes, treaties,
codes, ordinances, permits, certificates, orders and licenses of and
interpretations by, any Authority, and applicable judgments, decrees,
injunctions, writs, orders or like action of any court, arbitrator or other
administrative, judicial or quasi-judicial tribunal or agency of competent
jurisdiction (including those pertaining to health, safety or the environment
and those pertaining to the construction, use, occupancy or subdivision of the
Leased Property and the Site) and any restrictive covenant or deed restriction
or easement of record affecting the Leased Property or the Site (including the
Appurtenant Service Rights).

“Applicable Margin” shall mean [***] basis points.

“Appraisal” shall have the meaning provided in Section 2.1(h) of the
Participation Agreement.

“Appraiser” shall mean CBRE Group, Inc., or such other appraiser or appraisal
firm that is reasonably satisfactory to the Lessor.

“Appurtenant Service Rights” shall mean all rights and easements appurtenant to
the Site which are necessary to provide the Facility with all utility services
necessary for construction and use of the Facility (including without
limitation, electric, gas, telephone, water and sewer service) to be transmitted
into the Facility and out of the Facility which the Ground Lessor, as fee owner,
has the right to grant and connect.

 

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“Assignment of Contracts” shall have the meaning provided in Section 2.4(a) of
the Construction and Development Agreement, which shall include, without
limitation, the following, each of which is dated as of the Closing Date: (1)
Developer Consent Agreement, by and among the Construction Agent and the
Developer for the benefit of the Lessor, (2) General Contractor Assignment and
Consent Agreement, by and among the Construction Agent and the Developer for the
benefit of the Lessor, and acknowledged and consented to by the General
Contractor, (3) General Contractor Consent Agreement, by and between the
Construction Agent and the Lessor, and (4) Subcontractor Assignment and Consent
Agreement, by and among the Construction Agent, the Developer and the General
Contractor for the benefit of Lessor, and acknowledged and consented to by the
subcontractor and suppliers listed on Exhibit A thereto from time to time.

“Authority” shall mean the government of the United States, any other nation, or
any political subdivision thereof, whether state or local, and any agency,
authority, instrumentality, regulatory body, court, central bank or other entity
exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.

“Available Commitment” shall mean, as to any Participant, an amount equal to the
difference, if any, of (a) the aggregate Commitment of such Participant minus
(b) the aggregate outstanding amount of such Participant’s Rent Assignment
Advances (in the case of the Rent Assignees) or Lessor Investment (in the case
of the Lessor).

 “Base Term” shall have the meaning provided in Section 2.2 of the Lease.

“Base Term Commencement Date” shall have the meaning provided in Section 2.2 of
the Lease.

 “Basic Rent” shall mean the sum of the Basic Rent (Facility) and the Basic Rent
(Land).

“Basic Rent (Facility)” shall mean for any period of determination, an amount
equal to the aggregate amount of Yield payable on the last day of such period on
the Lease Balance.

“Basic Rent (Land)” shall mean for any period of determination, an amount equal
to $750,000, per annum, payable in advance on the Closing Date and on the first
Advance Date after the one year anniversary of the Closing Date.

 “Bill of Sale” shall mean any Bill of Sale, dated on or after the Closing Date,
from a vendor, as grantor, to the Lessor, as grantee, with respect to any
Equipment.

“Board of Directors” shall mean, with respect to any Person, (a) in the case of
any corporation, the board of directors of such Person, (b) in the case of any
limited liability company, the board of managers of such Person, (c) in the case
of any partnership, the Board of Directors of the general partner of such Person
and (d) in any other case, the functional equivalent of the foregoing.

“Break Amount” shall have the meaning provided in Section 7.5 of the
Participation Agreement.

 

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“Building 1” shall mean 9223 Balboa Avenue; 132,172 square feet on 13.879 acres.

“Business Day” shall mean any day other than a Saturday, Sunday or other day on
which commercial banks in New York, New York and San Diego, California (and,
solely with respect to definition of LIBOR Rate and the payment of any Yield
calculated on the basis of the LIBOR Rate, London, England) are authorized or
required by law to close.

 “Capital Lease” shall mean all leases that have been or should be, in
accordance with GAAP, recorded as capital leases.

 “Capitalized Yield” shall mean, with respect to the Lessor Investment and Rent
Assignment Advances, the aggregate amount of all Yield accruing thereon
attributable to Advances made during and for any Payment Period ending on or
before the Base Term Commencement Date. Yield accruing during such Payment
Periods on the Advances shall be treated as Capitalized Yield pursuant to
Section 2.10 of the Participation Agreement, except to the extent that such
amount is not to be capitalized because such amount exceeds the Available
Commitment for the Lessor or Rent Assignee, as applicable.

“Carrying Costs” shall mean, carrying and closing costs incurred in connection
the Overall Transaction including Transaction Costs (except any amounts
constituting indemnification that are payable by the Lessee directly prior to
the Construction Period Termination Date and not through Advances) and
Capitalized Yield on prior unpaid Advances, Taxes, insurance premiums and other
similar budget items.

“Casualty” shall mean an event of damage or casualty relating to any portion or
all of the Leased Property which does not constitute an Event of Loss.

 “Claims” shall mean liabilities, obligations, damages, losses, demands,
penalties, fines, claims, actions, suits, judgments, settlements, charges,
costs, fees, expenses and disbursements (including, without limitation,
out-of-pocket legal fees and expenses and costs of investigation which, in the
case of counsel or investigators retained by an Indemnitee, shall be reasonable)
of any kind and nature whatsoever including (except where specifically noted
otherwise) but not limited to the outstanding Lease Balance or any part thereof.

 “Closing Date” shall mean February 5, 2019.

 “Commitment” shall mean (i) as to any Rent Assignee, its obligation to acquire
Rent Assignment Interests from the Lessor which are to be sold by the Lessor
under each Rent Assignment Agreement and to make Rent Assignment Advances
available to the Escrow Agent (for the account of Lessor) in an aggregate amount
not to exceed at any one time outstanding the amount set forth opposite such
Rent Assignee’s name on Schedule I-A to the Participation Agreement, and (ii) as
to the Lessor, its obligation to fund Advances from proceeds of its Lessor
Investment in an aggregate amount not to exceed at any one time outstanding the
amount set forth on Schedule I-B to the Participation Agreement, in each case as
such schedule may be amended pursuant to Section 2.2(d) or Section 9.5 of the
Participation Agreement.

“Completion” shall mean Substantial Completion of the Facility substantially in
accordance with the Plans and Specifications and in accordance with the
Construction Budget (in

 

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each case, as supplemented or amended pursuant to Section 3.2 of the
Construction and Development Agreement, but without regard to whether the
Facility has been subjected to any post-construction testing requirements called
for under any Construction Document).

“Completion Date” shall mean the date on which Completion has occurred.

“Condemnation” shall mean any condemnation, requisition, confiscation, seizure
or other taking or sale of the use, occupancy or title to the Leased Property or
the Site or any part thereof in, by or on account of any eminent domain
proceeding or other action by any Authority or other Person under the power of
eminent domain or otherwise or any transfer in lieu of or in anticipation
thereof, which in any case (a) does not constitute an Event of Taking and (b) in
any event, unlike an Event of Taking, does not result in the loss of use or
possession of substantially all or a material portion of the Leased Property or
the Site as reasonably determined in good faith by the Board of Directors of the
Lessee, with any such determination of an Event of Taking to be made promptly
after the occurrence of such event and to be evidenced by an Officer’s
Certificate of the Lessee delivered promptly after the occurrence of such event
to the Administrative Agent and each of the Participants. A Condemnation shall
be deemed to have “occurred” on the earliest of the dates that use, occupancy or
title is taken. For clarification, a Condemnation shall not constitute an Event
of Taking.

“Consent and Acknowledgment” shall mean each Joinder to Subcontractor Assignment
and Consent Agreement, in form and substance reasonably acceptable to Lessor, to
be entered into by a subcontractor or a supplier, pursuant to which such
subcontractor or supplier will consent to, among other things, the Assignment of
Contracts to the Lessor related to the Major Construction Document applicable to
such subcontractor or supplier.

 “Construction” shall mean the razing of Building 1, preparation of the Site,
remediation of the Site pursuant to the Remediation Plan and design and
construction of the entire Facility on the Site, including engineering
(including front-end loading and detailed engineering), mechanical construction
and procurement procedures.

“Construction Agent” shall mean Cubic in its capacity as the “Construction
Agent” under the Operative Documents.

 “Construction Budget” shall mean the construction budget delivered pursuant to
Section 2.1(j)(ii) of the Participation Agreement, which Construction Budget
shall (i) specify the Construction Costs allocable to Completion of the Facility
and (ii) set forth as separate line items the portion of the Contingency Reserve
allocated by the Construction Agent and which, as modified, shall be subject to
the reasonable satisfaction of the Participants and the Construction Consultant.

“Construction Consultant” shall mean CBRE Global Investors, LLC, or such other
construction consultant services firm reasonably satisfactory to the
Participants.

“Construction Costs” shall mean the amounts (including Carrying Costs during the
Construction Period) required to (i) construct the Facility (including Soft
Costs) substantially in accordance with the Plans and Specifications (as
supplemented or amended pursuant to Section 2.7(o) or 3.2 of the Construction
and Development Agreement) and the Operative Documents, (ii)

 

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pay Transaction Costs, (iii) pay Fees, (iv) pay utility charges pursuant to
Article VI of the Lease, (v) pay property taxes relating to the Site, (vi) pay
any tax indemnity claims required by Section 7.2 of the Participation Agreement,
(vii) pay any funded insurance premium, deductible or other costs, all of which
shall be funded through the Commitments, (viii) rent the Site under the Ground
Lease and acquire and demolish Building 1, and (ix) pay any other expenses for
Construction of the Facility or other items as set forth in the Construction
Budget.

“Construction Documents” shall have the meaning provided in Section 2.4(a) of
the Construction and Development Agreement.

 “Construction Event of Default” shall have the meaning provided in Section 5.1
of the Construction and Development Agreement.

 “Construction Period” shall mean a period commencing on and including the
Closing Date and ending on the Completion Date.

 “Construction Period Termination Date” shall mean February 5, 2021, as the same
may be extended by the Lessee up to (3) three months during the occurrence of
any Force Majeure Event or restoration of the Facility following an Event of
Loss, Condemnation or Casualty, or as may be extended by the Lessor in its sole
and absolute discretion at the request of the Construction Agent; provided, that
such date shall not be extended beyond May 5, 2021.

“Construction Recourse Amount” shall mean, as of any date of determination
calculated as required by ASC 840-40-55-10 through 55-13, the sum of (i) the
accreted value of Basic Rent and any other payments that are required to be
included in the computation of the maximum guarantee test as prescribed in ASC
840-40-55-11(a) previously paid prior to Completion and (ii) an amount, the
present value of which, discounted to the date on which any claim or demand is
paid in the case of a Construction Event of Default (such date, the “Calculation
Date”), when added to the present value (discounted to the Calculation Date) of
(x) Fees described in Section 2.13(a) and (b) of the Participation Agreement,
and (y) any other Supplemental Rent (other than the Construction Recourse Amount
itself) which is required by ASC 840-40-55-11(b), in each case to be paid by the
Lessee (including the estimated reasonable costs relating to the realization by
the Lessor of the Construction Recourse Amount which will be borne by the
Lessee) will not exceed 89.9% of the Eligible Construction Costs. The rate used
to accrete or discount values will be the incremental borrowing rate of the
Lessee.

“Contingency Reserve” shall mean an aggregate reserve, as such shall adjust from
time to time, to be funded by Advances in excess of all budgeted Construction
Costs and Transaction Costs (without duplication), as listed in the Construction
Budget.

 “Cubic Person” shall mean (i) the Lessee or the Construction Agent, (ii) any
contractor, subcontractor, architect, engineer or Person performing services or
providing materials under a Major Construction Document with respect to the
Construction of the Facility pursuant to the Construction and Development
Agreement and the other applicable Operative Documents, (iii) any other third
party for which any Person identified in clauses (i) through (ii) above has
control or supervisory authority (by contract or otherwise), and (iv) their
respective affiliates, employees, officers or agents.

 

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 “Deed” shall mean the Quitclaim Deed dated on or one (1) Business Day prior to
the Demolition Date from Lessee, as grantor, to Lessor, as grantee, pursuant to
which Lessor acquires title to Building 1.

 “Deficiency” shall have the meaning set forth in Section 22.3(a) of the Lease.

“DEH” shall mean the Department of Environmental Health of the City of San
Diego, California.

“Demolition Date” shall mean the date demolition of Building 1 commences
pursuant to the Construction and Development Agreement.

“Developer”  shall mean Cisterra Partners, LLC, a California limited liability
company.

“Development Agreement” shall mean that certain Development Management Agreement
dated as of the Closing Date between Developer and Construction Agent.

“Dollars” or “$” shall mean, unless otherwise qualified, dollars in lawful
currency of the United States.

 “Eligible Construction Costs” shall mean the aggregate amount of all
Construction Costs incurred as of the date of any demand for the Lessee to pay
the Lease Balance, Construction Recourse Amount or Recourse Deficiency Amount,
as applicable (including any amounts paid by the Lessor to complete construction
of the Facility pursuant to Section 5.3(a)(ii), (iii) or (v) of the Construction
and Development Agreement (including any payments made under any Construction
Document)), and any damages relating to the breach or termination of any
Construction Document following a Construction Event of Default, but excluding
(i) all Capitalized Yield, (ii) all Fees paid to the Lessor or any of its
Affiliates (in any capacity) and (iii) all payments which may not be capitalized
in accordance with GAAP, and subject to the provisions of Section 7.1(f)(iii) of
the Participation Agreement.

 “Environmental Expert” shall mean EFI Global, Inc., or such other environmental
services firm reasonably satisfactory to the Participants.

“Environmental Laws” shall mean all laws, statutes, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Authority, relating in any
way to the environment, preservation or reclamation of natural resources, the
presence, management, release or threatened release of or exposure to any
Hazardous Material or to health and safety matters.

“Environmental Permits” shall mean all permits, licenses, authorizations,
registrations, certificates and approvals of Authorities required by
Environmental Laws relating to the Leased Property or the Overall Transaction.

“Environmental Violation” shall mean an activity, occurrence or condition that
violates or results in non-compliance with or liability under or arising as a
result of Environmental Laws or Environmental Permits.

 

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“Equipment” shall mean personal property of every kind and nature whatsoever
purchased or otherwise paid for with Advances or otherwise acquired by or on
behalf of the Lessor and necessary for the legal use and operation of the
Facility or the Site including but without limiting the generality of the
foregoing, all electrical and mechanical equipment, plumbing, ventilation,
furnaces, air conditioning and air-cooling apparatus, escalators, generators,
communications systems (including satellite dishes and antennae), sprinkler
systems and other fire prevention and extinguishing apparatus and materials,
security systems, motors, engines, machinery, pipes, pumps, tanks, conduits,
fittings and fixtures of every kind and description, and any substitutions or
replacements thereof, except that, unless acquired using the Advances, lab
equipment, machinery, tools and testing equipment are the sole property of the
Lessee and shall not be part of the Equipment.

 “Escrow Agent” shall mean the Title Insurance Company agent.

“Escrow Agreement” shall mean that certain Escrow Agreement dated as of the Base
Term Commencement Date among Escrow Agent, the Administrative Agent and the
Lessee.

 “Event of Loss” shall mean: (w) the actual or constructive total or substantial
loss of the Facility, the Site or damage to the Facility or the Site to an
extent rendering repair impractical or uneconomical, in any case as reasonably
determined in good faith by the Board of Directors of the Lessee, such
determination to be made promptly after the occurrence of such event and to be
evidenced by an Officer’s Certificate of the Lessee delivered to the
Administrative Agent, (x) damage to the Facility which results in an insurance
settlement on the basis of a total loss or constructive total loss (including
title insurance proceeds) in respect of a total loss of the Facility or (y) an
Environmental Violation with respect to which the Lessee, the Agents or any
Participant could reasonably be expected to incur liability in excess of
$1,000,000; provided, however, any activity, occurrence or condition subject to
the Remediation Plan shall not constitute an Event of Loss. For clarification,
no Casualty, Condemnation or Event of Taking shall constitute an Event of Loss.

“Event of Taking” shall mean:  any Condemnation, requisition, confiscation,
seizure or other taking or sale of the use, occupancy or title to the Leased
Property or the Site or any part thereof in, by or on account of any eminent
domain proceeding or other action by any Authority or other Person under the
power of eminent domain or otherwise or any transfer in lieu thereof (other than
a requisition of temporary use) or requisition of use for a period scheduled to
last beyond the Maturity Date or which in fact is continuing on the Maturity
Date (even if not scheduled to last beyond the Maturity Date), in any case,
resulting in the loss of use or possession of substantially all or a material
portion of the Leased Property or the Site as reasonably determined in good
faith by the Board of Directors of the Lessee, such determination to be made
promptly after the occurrence of such event and to be evidenced by an Officer’s
Certificate of the Lessee delivered promptly after the occurrence of such event
to the Administrative Agent. For clarification, no Casualty, Condemnation or
Event of Loss shall constitute an Event of Taking.

 “Extended Remarketing Period” shall have the meaning provided in Section
22.4(b) of the Lease.

 

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 “Federal Funds Rate” shall mean, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with members of the
Federal Reserve System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Business Day next
succeeding such day; provided that (a) if such day is not a Business Day, the
Federal Funds Rate for such day shall be such rate on such transactions on the
next preceding Business Day as so published on the next succeeding Business Day,
and (b) if no such rate is so published on such next succeeding Business Day,
the Federal Funds Rate for such day shall be the average rate quoted to the
Administrative Agent, on such day on such transactions as determined by the
Administrative Agent.

“Fees” shall have the meaning provided in Section 2.13 of the Participation
Agreement.

 “F.R.S. Board” shall mean the Board of Governors of the Federal Reserve System
or any successor thereto.

 “Funded Claim” shall have the meaning provided in Section 7.1(f)(iii) of the
Participation Agreement.

“GAAP” shall mean generally accepted accounting principles in the United States
as in effect from time to time, consistently applied and maintained on a
consistent basis for the Lessee throughout the period indicated.

 “General Construction Agreement” shall mean that certain Cubic Corporation
Headquarters/CTS Building General Contractor Agreement (Cost of the Work with a
Fee and Guaranteed Maximum Price), dated as of February 5, 2019, by and among
General Contractor, Developer and Construction Agent, as agent for the Lessor,
together with all addendums appended thereto, and assigned to the Lessor
pursuant to the Assignment of Contracts, as it may be amended, supplemented or
modified from time to time in accordance with the terms thereof and of the
Construction and Development Agreement.

“General Contractor” shall mean The Whiting-Turner Contracting Company, a
Maryland corporation.

“Governmental Action” shall mean all applicable permits, authorizations,
registrations, consents, approvals, waivers, exceptions, variances, orders,
judgments, decrees, licenses, exemptions, publications, filings, notices to and
declarations of or with, or required by, any Authority, or required by any
Applicable Laws and Regulations, and shall include, without limitation, all
citings, Environmental Permits, construction permits and operating permits and
licenses that are required for the use, occupancy, zoning, construction and
operation of the Leased Property.

“Grossed-Up Basis” shall have the meaning provided in Section 7.6 of the
Participation Agreement.

“Ground Lease” shall mean the Ground Lease Agreement, dated as of the Closing
Date, between Lessee, as ground lessor, and Lessor, as ground lessee.

 

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 “Ground Lessee” shall mean the Lessor in its capacity as ground lessee under
the Ground Lease.

“Ground Lessor”  shall mean the Lessee in its capacity as ground lessor under
the Ground Lease.

 “Hazardous Material” shall mean all explosive or radioactive substances or
wastes and all hazardous or toxic materials, substances, wastes or other
pollutants or contaminants, including petroleum or petroleum distillates,
asbestos or asbestos-containing materials, polychlorinated biphenyls, radon gas,
infectious or medical wastes and all other substances, materials or wastes of
any nature regulated or defined pursuant to any Environmental Law.

 “Indemnitee” shall mean the Lessor, the Rent Assignees, the Agents, any
co-agent appointed in accordance with the terms of the Participation Agreement
and their respective Affiliates, successors, permitted assigns, permitted
transferees, contractors, servants, employees, officers, directors,
shareholders, partners, participants, representatives, trustees and agents;
provided, however, that in no event shall the Lessee or any its Affiliates be an
indemnitee.

 “Insurance Requirements” shall mean the terms of the insurance required to be
maintained in accordance with the Lease.

 “Land”  shall mean approximately 26-acres of property located on Balboa Avenue
between Ponderosa Avenues and Ruffin Road in San Diego, California, together
with all rights, privileges, easements and appurtenances thereto, as more
particularly described in Exhibit A attached to the Development Agreement.

 “Lease Balance” shall mean, as of any date of determination, an amount equal to
the aggregate sum of the outstanding principal amount of the Rent Assignment
Advances of all of the Rent Assignees and of the Lessor Investment of the Lessor
which may include, without limitation, any Advance amounts by the Participants
during the Construction Period in excess of the aggregate Commitments of the
Lessor and the Rent Assignees, any Capitalized Yield and any Transaction Costs
which are capitalized. Except as otherwise expressly required pursuant to
Section 18.5 of the Lease, any reference to the Lease Balance shall be to the
Lease Balance taken as a whole.

“Lease Expiration Date” shall mean the last day of the Lease Term, subject to
any Extended Remarketing Period or any other date on which the Lease is
terminated, including pursuant to Article XIII, XVIII, XX, XXI or XXII of the
Lease.

“Lease Supplement” shall mean the supplement to the Lease delivered prior to the
Base Term Commencement Date pursuant to Section 3.4 of the Participation
Agreement.

 “Lessee Change of Control” shall mean (a) the acquisition by any party, or two
or more parties acting in concert, of beneficial ownership (within the meaning
of Rule 13d-3 of the SEC under the Securities Exchange Act of 1934) of 50% or
more of the outstanding shares of voting stock of the Lessee, or (b) during any
period of twelve (12) consecutive months, a majority of the members of the board
of directors or other equivalent governing body of the Lessee cease to be
composed of individuals (i) who were members of that board or equivalent
governing body as of the first day of such period, (ii) whose election or
nomination to that board or equivalent governing

 

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body was approved by individuals referred to in clause (i) above constituting at
the time of such election or nomination at least a majority of that board or
equivalent governing body, or (iii) whose election or nomination to that board
or other equivalent governing body was approved by individuals referred to in
clauses (i) and (ii) above constituting at the time of such election or
nomination at least a majority of that board or equivalent governing body;
provided, however, that neither the ownership nor acquisitions of shares of the
capital stock of the Lessee by, nor the transfers of shares of the capital stock
of the Lessee between, Members of the Zable Family shall constitute a Lessee
Change in Control.

 “Lessor Investment” shall mean, as of any date of determination, the aggregate
amount advanced by the Lessor pursuant to Article II of the Participation
Agreement, net of any distributions (other than distributions of Yield or Break
Amount) with respect thereto. Except as otherwise expressly required pursuant to
Section 18.5 of the Lease, any reference to the Lessor Investment shall be to
the Lessor Investment taken as a whole.

“Lessor Liens” shall mean Liens on or against the Leased Property, the Site, the
Lease or any payment of Rent (a) which result from any act of, or any Claim
against, either of the Agents and any Participant, in any case, unrelated to the
transactions contemplated by the Operative Documents, (b) which result from any
Tax owed by the Lessor (in its individual capacity), the Agents or any
Participant, except any Tax for which such Person is entitled to indemnification
by Lessee under the Operative Documents, or (c) which result from any act or
omission of the Lessor that is in breach of such Person’s covenants or
agreements under the Operative Documents.

 “LIBOR Rate” shall mean with respect to any Payment Period, (i) the rate of
interest equal to a rate per annum (rounded upward, if necessary, to the nearest
1/100th of 1%) determined by the Administrative Agent to be the London interbank
offered rate as administered by the ICE Benchmark Administration (or any other
Person that takes over the administration of such rate) as displayed on pages
LIBOR01 or LIBOR02 of the Reuters screen that displays such rate (or, in the
event such rate does not appear on a Reuters page or screen, on any successor or
substitute page on such screen that displays such rate, or on the appropriate
page of such other information service that publishes such rate from time to
time as selected by the Administrative Agent in its reasonable discretion) as of
approximately 1l:00 a.m., London time, two Business Days prior to the beginning
of such Payment Period as the rate for dollar deposits in the London interbank
market with a maturity comparable to such Payment Period, provided, however,
that for the initial Payment Period, such selection by the Administrative Agent
may be made as of approximately 11:00 a.m., London Time, one (1) Business Day
prior to the beginning of such Payment Period, provided further, however, that
such LIBOR Rate shall be capped for a period beginning with the Payment Period
starting on February 25, 2019, and continuing up to and including the Payment
Period starting on January 25, 2021, at a rate of 3.00% per annum for Advances
on a cumulative basis at or below the levels set forth on Schedule 2.9(f) of the
Participation Agreement, or (ii) in the event the rates referenced in the
preceding clause (i) are not available, (x) the rate per annum (rounded to the
nearest 1/100 of 1%) equal to the quotation rate offered to first class banks in
the London interbank market as determined by the Administrative Agent for
deposits (for delivery on the first day of the relevant period) in Dollars of
amounts in same day funds comparable to the principal amount of the Lease
Balance, for which LIBOR is then being determined with maturities comparable to
such period as of approximately 11:00 a.m., (London time) time on such
determination date or (y) to the extent an alternative rate under clause (x) is
not ascertainable, a

 

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comparable or successor rate, which rate is approved by the Administrative Agent
provided, that if the LIBOR as otherwise determined above would be less than
zero percent (0.00%), then the LIBOR for the purposes hereof shall be deemed to
be zero percent (0.00%). If the F.R.S. Board imposes a LIBOR Reserve Percentage
with respect to LIBOR deposits and the applicable rate is determined by
reference to the foregoing clause (i), then LIBOR shall be (x) the foregoing
rate, divided by (y) the sum of 1 minus the LIBOR Reserve Percentage. To the
extent a comparable or successor rate is approved by the Administrative Agent in
connection herewith, the approved rate shall be applied in a manner consistent
with market practice; provided, further that to the extent such market practice
is not administratively feasible for the Administrative Agent, such approved
rate shall be applied in a manner as otherwise reasonably determined by the
Administrative Agent.

“LIBOR Reserve Percentage” shall mean, relative to any Payment Period, the
reserve percentage (expressed as a decimal) equal to the maximum aggregate
reserve requirements (including all basic, emergency, supplemental, marginal and
other reserves and taking into account any transitional adjustments or other
scheduled changes in reserve requirements) specified under regulations issued
from time to time by the F.R.S. Board and then applicable to assets or
liabilities consisting of and including “Eurocurrency Liabilities”, as currently
defined in Regulation D of the F.R.S. Board, having a term approximately equal
or comparable to such Payment Period.

“Lien” shall mean any interest in property securing an obligation owed to, or a
claim by, a Person other than the owner of the property, whether such interest
is based on the common law, statute or contract, and including but not limited
to the security interest lien arising from a mortgage, encumbrance, pledge,
conditional sale or trust receipt or a lease, consignment or bailment for
security purposes. The term “Lien” shall include reservations, exceptions,
encroachments, easements, rights-of-way, covenants, conditions, restrictions,
leases and other title exceptions and encumbrances (including, with respect to
stock, stockholder agreements, voting trust agreements, buy-back agreements and
all similar arrangements) affecting property. For the purposes of this
Memorandum of Lease, the Lessee or a Subsidiary shall be deemed to be the owner
of any property which it has acquired or holds subject to a conditional sale
agreement, Capital Lease or other arrangement pursuant to which title to the
property has been retained by or vested in some other Person for security
purposes and such retention or vesting shall constitute a Lien.

“Limiting Event” shall mean an Event of Default arising under (i) paragraph (n)
of Article XVII of the Lease (solely to the extent that such Event of Default
was the result of an unsolicited Lessee Change of Control to which neither the
board of directors nor the shareholders of the Lessee approved, consented or
acquiesced), or (ii) paragraphs (e), (f), (g), or (j) of Article XVII of the
Lease, with respect to the paragraphs in clause (ii) solely if the breach of the
related covenant, representation or warranty was based on the following: a
subjective interpretation of the term “adequate,” “diligently,” “material,”
“materially,” “Material Adverse Effect,” “materially adversely affect,”
“material adverse change,” “materially and adversely affects,” “material adverse
effect,” or any other term that is not objectively determinable, or results from
a condition that is not solely related to the Lessee or the Lessee’s operations
or the Lessee’s use of the Leased Property; provided, however, if the Event of
Default, covenant, representation or warranty relates to the Lessee’s use of the
Leased Property, then such Event of Default, covenant, representation or
warranty will not be deemed a Limiting Event.

 

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“Major Construction Document” shall have the meaning provided in Section 2.4(a)
of the Construction and Development Agreement.

 “Maturity Date” shall mean the date which is the earlier of the day that is the
seventh anniversary of the Closing Date (subject to any extension due to a Force
Majeure Event not to exceed three months) or the fifth anniversary of the Base
Term Commencement Date.

“Member of the Zable Family” shall mean Walter J. Zable, his spouse, his
children, his grandchildren and any trust of which Walter J. Zable is the
settlor.

“Memorandum of Ground Lease” shall mean that certain Memorandum of Ground Lease,
dated as of the Closing Date by and between the Ground Lessor and the Ground
Lessee.

 “Monthly Date” shall mean (i) the twenty-fifth (25th) calendar day of each
month (or the next succeeding Business Day if such day is not a Business Day
unless such next succeeding Business Day falls in the next calendar month in
which case Monthly Date shall mean the prior Business Day if such day is not a
Business Day) and (ii) for the final Advance only, the Base Term Commencement
Date.

“MUFG Base Rate” shall mean the rate of interest publicly announced by MUFG
Union Bank, N.A., from time to time as its base rate.

 “Officer’s Certificate” of a Person shall mean a certificate signed by the
Chairman of the Board of Directors and/or the President and/or any Executive
Vice President and/or any Senior Vice President and/or any other Vice President,
Managing Director, Principal and/or other authorized officer(s) of such Person,
provided, that with respect to the Lessee, whomever signs the certificate is
authorized to represent such Person.

 “Operative Documents” shall mean, as the context requires:

(1)        the Participation Agreement;

(2)        the Lease;

(3)        this Memorandum of Lease;

(4)        the Construction and Development Agreement;

(5)        each Rent Assignment Agreement;

(6)        the Ground Lease;

(7)        the Memorandum of Ground Lease;

(8)        the Deed;

(9)        each Assignment of Contracts;

(10)      each Consent and Acknowledgment;

 

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(11)      each Bill of Sale; and

(12)      the Escrow Agreement.

 “Overall Transaction” shall mean all the transactions and activities referred
to in or contemplated by the Operative Documents.

“Overdue Rate” shall mean the lesser of (a) the highest interest rate permitted
by Applicable Laws and Regulations and (b) an interest rate per annum equal to
the Yield Rate (without regard to the proviso in clause (i) of the definition of
“LIBOR Rate”, to the extent applicable) plus 2% per annum.

“Owner” shall mean Bankers Commercial Corporation, in its capacity as owner of
the Facility and Building 1, and as lessee under the Ground Lease.

 “Payment Date” shall mean (i) for any Payment Period commencing and ending
prior to the Base Term Commencement Date:  the Monthly Date, (ii) for the
Payment Period commencing prior to the Base Term Commencement Date and ending
on, but excluding, the Base Term Commencement Date: the Base Term Commencement
Date, and (iii) for any Payment Period commencing on or after the Base Term
Commencement Date:  the Monthly Date occurring after the third month of a
respective Payment Period; provided, that, with reference to Yield defined by
reference to the Alternate Base Rate, the Monthly Date immediately following the
prior Payment Period, provided further, that in each case regarding the
foregoing subsection (i) – (iii), any Payment Date that would otherwise extend
beyond the Maturity Date shall end on the Maturity Date.

 “Payment Period” shall mean (i) during the Construction Period, a period of one
(1) month ending on a Monthly Date, except for (x) the first Payment Period
during the Construction Period which shall be for a period less than one (1)
month and which shall commence on the Closing Date and shall end on the next
Monthly Date, and (y) the final Payment Period during the Construction Period
which may be for a period of less than one (1) month and shall end on, but
exclude, the Base Term Commencement Date, and (ii) during the Base Term, a
period of three (3) months; provided, that, in each case, each Payment Period in
which a Payment Date occurs shall end on such Payment Date, provided that, with
respect to Yield defined by reference to the Alternate Base Rate, the Monthly
Date immediately following the prior Payment Period, provided, further, that
regarding each of the foregoing subsections (i) and (ii), any Payment Period
that would otherwise extend beyond the Maturity Date shall end on the Maturity
Date.

 “Permitted Contest” shall mean actions taken by a Person to contest in good
faith, by appropriate proceedings initiated timely and diligently prosecuted,
the legality, validity or applicability to the Leased Property, the Site or any
interest in the Leased Property, the Site or to the operation, use or
maintenance of the Leased Property and the Site or the Overall Transaction by,
any Person of: (a) any Applicable Laws and Regulations; (b) any term or
condition of, or any revocation or amendment of, or other proceeding relating
to, any Governmental Action; or (c) any Lien or Tax; provided that the
initiation and prosecution of such contest would not: (i) in the reasonable
opinion of an Indemnitee to which such proceeding relates, result in, or
increase the risk of, the imposition of any criminal liability or penalty or
material civil liability on any

 

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Indemnitee; (ii) be reasonably likely to adversely affect the validity,
perfection or priority of the lien and security interests created by the
Operative Documents or the right, title or interest of the Lessor in or to the
Leased Property, the Site, or the right of any Participant to receive payment of
the Lease Balance or Yield or any interest therein; (iii) be reasonably likely
to adversely affect the fair market value, utility or remaining useful life of
the Leased Property, the Site or any interest in the Leased Property or the Site
or the continued economic operation of the Leased Property and the Site; and
provided further that in any event reserves to the extent required by GAAP are
maintained against any adverse determination of such contest; or (iv) involve
any Claim not fully indemnified by the Lessee which the Lessee and the
Indemnitee to which such Claim relates have been unable to sever from the
indemnified Claims, unless the Lessee shall have posted a bond or other security
that is reasonably satisfactory to such Indemnitee to defend, protect, save and
keep harmless such Indemnitee on a Grossed Up Basis with respect to costs,
expenses, fees and charges arising from such otherwise not fully indemnified
Claim; and provided further that in any event reserves to the extent required by
GAAP are maintained against any adverse determination of such contest.

 “Permitted Liens” shall mean (a) the respective rights and interests of the
Lessee, the Participants, the Agents, as provided in the Operative Documents,
(b) Lessor Liens, (c) Liens for Taxes either not yet delinquent or being
contested in good faith and by appropriate proceedings diligently conducted and
in any event constituting a Permitted Contest, (d) materialmen’s, mechanics’,
workers, repairmen’s, employees’ or other like Liens arising in the ordinary
course of business for amounts either not yet due or being contested in good
faith and by appropriate proceedings constituting a Permitted Contest and to the
extent any reserve or other appropriate provision required by GAAP shall have
been made in respect of the Lien, (e) Liens arising after the Closing Date out
of judgments or awards not otherwise constituting an Event of Default under
clause (j) of Article XVII of the Lease and with respect to which at the time an
appeal or proceeding for review is being prosecuted in good faith and either (x)
(A) with respect to such Liens arising on or prior to the Completion Date, have
been bonded to the reasonable satisfaction of the Lessor or (B) with respect to
such Liens arising after the Completion Date, have been reserved for to the
extent required by GAAP, or (y) the enforcement of such Lien has been stayed
pending such appeal or review, and (f) Liens set forth on Schedule III to the
Participation Agreement.

 “Person” shall mean any individual, partnership, corporation, limited liability
company, trust, association, joint venture, joint stock company, un-incorporated
organization, Authority or any other entity.

 “Plans and Specifications” shall mean the plans and specifications necessary to
demolish Building 1 and to construct the Facility to operate in accordance with
its intended purposes as Class A office buildings and delivered to the Appraiser
and the Lessor pursuant to Section 2.7(o) of the Construction and Development
Agreement and updated and supplemented pursuant to Section 2.7(o) of the
Construction and Development Agreement including working drawings and other
drawings and specifications of every kind and description required to assemble
and construct the Facility.

 “Purchase Amount” shall mean, as of any date of determination, the sum of
(a) the aggregate sum of the outstanding principal amount of the outstanding
Rent Assignment Advances of all the Rent Assignees and the Lessor Investment of
the Lessor (including amounts with respect

 

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to Funded Claims), plus (b) all accrued but unpaid Yield, plus (c) Break
Amounts, if any, plus (d) without duplication, all unpaid Rent and all other
sums then due and payable pursuant to the terms of the Operative Documents by
the Lessee or the Lessor including, without limitation, all Supplemental Rent.

“Purchase Option” shall have the meaning provided in Section 21.1(a) of the
Lease.

 “Recourse Deficiency Amount” shall mean, as of the date on which any claim or
demand is made (the “Calculation Date”) due to the occurrence of a Limiting
Event (in the case of application of Section 18.1(b) of the Lease), the sum of
(i) the accreted value of Basic Rent and any other payments that are required to
be included in the computation of the maximum guarantee test as prescribed in
ASC 840-10-25-14 and ASC 840-10-25-1(d) or ASC 842-10-25-2 and ASC 842-10-55-2,
as applicable to Lessee, previously paid prior to the Calculation Date and (ii)
an amount, the present value of which, discounted to the Calculation Date, when
added to the present value (discounted to the Calculation Date) of (x) Fees
described in Section 2.13(a) and (b) of the Participation Agreement and (y) any
other Supplemental Rent (other than the Recourse Deficiency Amount itself) which
is required to be included in the 90% test pursuant to ASC 840-10-25-14 and ASC
840-10-25-1(d) or ASC 842-10-25-2 and ASC 842-10-55-2, as applicable to Lessee,
in each case to be paid by the Lessee (plus the estimated reasonable costs
relating to such Limiting Event which will be borne by the Lessee) from and
after the Completion Date to and including the Calculation Date will be equal to
89.95% of Eligible Construction Costs. The rate used to accrete or discount
values will be (x) the incremental borrowing rate of Lessee prior to the
Construction Period Termination Date, and (y) the implicit rate of the Lease
used for determination of classification of the Lease on the Closing Date for a
term equal to such date of claim or demand under ASC 840-10-25-1(d) or ASC
842-20-30-3, respectively. The calculation further assumes that such payments
are made quarterly in arrears throughout the period at the rates established
hereunder, calculated using an actual day convention on the Lease Balance
outstanding on such date of claim or demand. To the extent the Calculation Date
shall occur on or before September 30, 2019, the foregoing calculations shall be
made with reference to ASC 840, and thereafter, with reference to ASC 842.

 “Remediation Plan” shall mean the Soil Management Plan dated December 17, 2018
by SCS Engineers related to DEH Voluntary Assistance Program Case #
DEH2018-LSAM-000521.

“Rent” shall mean Basic Rent and Supplemental Rent, collectively.

 “Rent Assignment Advance” shall mean the aggregate amount advanced by the Rent
Assignees pursuant to Article II of the Participation Agreement and Section 2.1
of each Rent Assignment Agreement.

“Rent Assignment Agreements” shall mean each Rent Assignment Agreement dated as
of the Closing Date between the Lessor and a Rent Assignee and any Rent
Assignment Agreement agreed to from time to time pursuant to a permitted
assignment by a Rent Assignee.

 “Rent Assignment Interests” shall have the meaning set forth in Section 2.01 of
each Rent Assignment Agreement.

 

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“Replacement Rate” shall have the meaning provided in Section 2.9(b) of the
Participation Agreement.

 “Return Date” shall mean the earlier to occur of the Lease Expiration Date or
the Maturity Date.

“Return Option” shall have the meaning provided in Section 21.1(b) of the Lease.

 “Return Price Recourse Deficiency Amount” shall mean the amount equal to the
Return Price Recourse Deficiency Amount set forth on the Lease Supplement
calculated as an amount, the present value of which, discounted to the Base Term
Commencement Date (herein, the “Calculation Date”) if paid on the last day of
the Base Term (in the case of the application of Article XXII of the Lease),
when added to the present value (discounted to the Base Term Commencement Date)
of (x) the accreted value of Basic Rent and any other payments that are required
to be included in the computation of the maximum guarantee test as prescribed in
ASC 842-10-25-2 and ASC 842-10-55-2 previously paid prior to Completion together
with the Basic Rent to be paid during the Base Term, (y) Fees described in
Section 2.13(a) and (b) of the Participation Agreement and (z) any other
Supplemental Rent (other than the Return Price Recourse Deficiency Amount
itself) which is included under ASC 842-10-25 and ASC 842-10-55-2, in each case
to be paid by the Lessee during the Lease Term to and including the Calculation
Date will be equal to 89.95% of Eligible Construction Costs. The rate used to
accrete or discount values will be the implicit rate of the Lease used for
determination of classification of the Lease on the Calculation Date for a term
equal to the Base Term as prescribed in ASC 842-20-30-3. The calculation further
assumes that such payments are made quarterly in arrears throughout the period
at the rates established hereunder, calculated using an actual day convention on
the Lease Balance outstanding on the Base Term Commencement Date.

 “Site” shall mean an approximately 13.879-acre portion located on the northwest
corner of the Land on which the Facility is to be located, as described in
Schedule IV to the Participation Agreement.

“Soft Costs” shall mean Construction Costs incurred for the production of the
Plans and Specifications, architectural and engineering fees, legal and
accounting fees, permit and license fees and other such similar costs.

 “Specified Event” shall mean (i) any Event of Default described in clause (h)
or (i) of Article XVII of the Lease, (ii) fraud, misapplication of funds,
illegal acts or willful misconduct on the part of Lessee, (iii) with respect to
Claims pursuant to Section 7.1(a)(vii) of the Participation Agreement, any acts,
events, conditions or circumstances existing or occurring with respect to the
Site on or prior to the Closing Date, or (iv) any act or failure to act
(including any misrepresentation or the failure to comply with the Operative
Documents including, without limitation, the failure to maintain insurance
required by the Lease or the Construction and Development Agreement) by any
Cubic Person (other than the failure to complete construction of the Facility or
to cause Completion by the Construction Period Termination Date). For the
avoidance of doubt, it shall deemed to be the Lessee’s failure to act where any
exclusion arises from insurance coverages required to be maintained by the
Lessee under the Lease or the Construction and Development Agreement.

 

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 “Subsidiary” shall mean, as to any Person, any corporation, association or
other business entity in which such Person or one or more of its Subsidiaries or
such Person and one or more of its Subsidiaries owns sufficient equity or voting
interests to enable it or them (as a group) ordinarily, in the absence of
contingencies, to elect a majority of the directors (or Persons performing
similar functions) of such entity, and any partnership or joint venture if more
than a 50% interest in the profits or capital thereof is owned by such Person or
one or more of its Subsidiaries or such Person and one or more of its
Subsidiaries (unless such partnership can and does ordinarily take major
business actions without the prior approval of such Person or one or more of its
Subsidiaries). Unless the context otherwise clearly requires, any reference to a
“Subsidiary” is a reference to a Subsidiary of the Lessee.

 “Supplemental Rent” shall mean any and all amounts, liabilities and obligations
other than Basic Rent which the Lessee assumes or agrees or is otherwise
obligated to pay under the Lease or any other Operative Document (whether or not
designated as Supplemental Rent) to the Lessor or any other Person, including,
without limitation and without duplication, Purchase Amount, Break Amounts,
Additional Costs, Sale Proceeds, the Construction Recourse Amount, payments of
Deficiency, the Recourse Deficiency Amount or the Return Price Recourse
Deficiency Amount, the amounts payable pursuant to Section 7.7 of the
Participation Agreement and indemnities and damages for breach of any covenants,
representations, warranties or agreements by Lessee contained in the Operative
Documents.

 “Tax” and “Taxes” shall mean any and all fees (including, without limitation,
documentation, recording, license and registration fees and public dues), taxes
(including, without limitation, income (whether net, gross or adjusted gross),
gross receipts, sales, rental, use, value added, net asset, property, real
estate transfer, transfer, excise and stamp taxes), levies, imposts, duties,
charges, assessments or withholdings of any nature whatsoever imposed by an
Authority, together with any penalties, fines or interest thereon or additions
thereto.

“Title Insurance Company” shall mean the title insurance company that has or
will issue the title policies with respect to the Leased Property, which company
shall be reasonably acceptable to the Lessor.

“Title Policy” shall have the meaning provided in Section 2.1(m) of the
Participation Agreement.

“Transaction Costs” shall mean reasonable and properly documented costs,
expenses and fees incurred by the Lessee, the Agents and the Participants in
connection with the consummation of the transactions contemplated by the
Operative Documents, and the preparation, negotiation, syndication, execution
and delivery of the Operative Documents, including, without duplication, (1) the
fees and expenses of Jones Day, special counsel to the Lessee and special
California counsel to the Lessee; (2) the fees and expenses of Dechert LLP,
special counsel to the Lessor and Rent Assignees; (3) all premiums and other
fees and expenses of the Title Insurance Company with respect to its issuance of
the Title Policies; (4) all fees and expenses of the Environmental Expert with
respect to the Phase I environmental report and any additional work as
referenced in Section 2.1(i) of the Participation Agreement, payable in
accordance with the fee agreement between the Environmental Expert and the
Lessor; (5) the initial and ongoing reasonable fees and expenses of the Agents
and their respective counsel; (6) all fees and expenses of the Appraiser with
respect to

 

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the Appraisal payable in accordance with the fee agreement between the Appraiser
and the Lessor; (7) all taxes and search fees, recording fees and filing fees
incurred in connection with lien searches and the recording, registering or
filing any Operative Document, any deed, declaration, mortgage, security
agreement, notice, release, discharge, termination or financing statement with
any public office, registry or governmental agency; (8) all reasonable costs,
expenses and fees of the surveyor engaged to survey the Site, including any
flood zone determination costs, expenses and fees; (9) all fees and expenses of
the Construction Consultant with respect to the initial preparation and
subsequent updating of the construction report (as referenced in Section 3.1(j)
of the Participation Agreement) payable in accordance with the fee agreement
between the Construction Consultant and the Lessor; (10) all costs and expenses
of one company engaged to advise the Participants on insurance issues arising in
connection with the negotiation of the Operative Documents; (11) all insurance
premiums, including premiums related to residual value insurance procured by
Lessor for its accounting purposes; (12) the out-of-pocket fees and expenses of
the Participants; and (13) all other Fees.

 “Yield” shall mean with respect to each Payment Period (a) the Yield Rate for
such Payment Period multiplied by (b) the aggregate Lease Balance outstanding.

“Yield Rate” shall mean, for any Payment Period, (a) the sum of the LIBOR Rate
for such Payment Period plus the Applicable Margin or (b) at any time that the
provisions of Section 2.9(b) of the Participation Agreement shall apply to the
Lease Balance, the Replacement Rate or the Alternate Base Rate, as applicable,
plus the Applicable Margin; and (ii) during the Base Term, (a) the sum of the
LIBOR Rate for such Payment Period plus the Applicable Margin.

 

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