Construction Agency Agreement

Exhibit 10.19


------------------------------------------------------------------------


CONSTRUCTION AGENCY AGREEMENT


dated as of November 7, 2001
among
GENOME STATUTORY TRUST 2001A
as Lessor


HUMAN GENOME SCIENCES, INC.
as Construction Agent


------------------------------------------------------------------------


CONSTRUCTION AGENCY AGREEMENT (HGSI)


CONSTRUCTION AGENCY AGREEMENT


Construction Agency Agreement, dated as of November 7, 2001 (this "Agreement"), between Genome Statutory Trust 2001A, (the "Lessor"), and Human Genome Sciences, Inc., a Delaware corporation ("HGSI"), as Construction Agent.


W I T N E S S E T H:
- - - - - - - - - -


A. Lessor and Construction Agent are parties to that certain Participation Agreement (as hereafter defined) pursuant to which Construction Agent, as a Lessee, has agreed to lease from Lessor, and Lessor has agreed to lease to such Lessee, Lessor's interest in the Properties pursuant to the Lease.


B. Lessor, such Lessee and Construction Agent are parties to that certain Participation Agreement of even date herewith (as amended, supplemented or otherwise modified, "Participation Agreement"), among HGSI, as Lessee and Construction Agent, Traville LLC, as Ground Lessor, Lessor, Wells Fargo Bank Northwest, N.A., as Trustee, BancBoston Leasing Investments Inc. and First Union National Bank, as Investors, EagleFunding Capital Corporation, as Lender, Fleet Securities, Inc., as Administrator, Fleet National Bank and First Union National Bank, as Liquidity Providers, Fleet National Bank, as Fleet National Bank Collateral Agent, First Union National Bank, as First Union Collateral Agent and Fleet National Bank, as Administrative Agent and Liquidity Agent.


C. Subject to the terms and conditions hereof, (i) Lessor desires to appoint Construction Agent as its sole and exclusive agent for the construction of the Traville Improvements on the Traville Site in accordance with the Approved Traville Construction Budget, Approved Traville Construction Schedule and Approved Traville Plans and Specifications (each as described more fully in Exhibit A hereto and as each of the foregoing may be modified from time to time in accordance with this Agreement)(collectively, the "Traville Construction Materials") pursuant to this Agreement, and (ii) Construction Agent desires, for the benefit of Lessor, to cause the Traville Improvements to be constructed in accordance with the Traville Construction Materials and in each case in accordance with the terms set forth herein and in the Participation Agreement.


D. Subject to the terms and conditions hereof, the satisfaction or waiver of the conditions set forth in Section 4.3 of the Participation Agreement, and the delivery of the Manufacturing Facility Supplement (i) Lessor desires to appoint Construction Agent as its sole and exclusive agent for the construction of the Manufacturing Facility Improvements on the Manufacturing Facility Site in accordance with the Approved Manufacturing Construction Budget, Approved Manufacturing Construction Schedule and Approved Manufacturing Plans and Specifications (each as will be described more fully in Exhibit A to the Manufacturing Facility Supplement and as each of the foregoing may be modified from time to time in accordance with this Agreement)(collectively, the "Manufacturing Construction Materials") and pursuant to this Agreement, and (ii) Construction Agent desires, for the benefit of Lessor, to cause the Manufacturing Facility Improvements to be constructed in accordance with the Manufacturing Construction Materials and in each case in accordance with the terms set forth herein and in the Lease.


1


CONSTRUCTION AGENCY AGREEMENT (HGSI)


NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties hereto covenant and agree as follows:


ARTICLE I
DEFINITIONS


1.1 Definitions; Interpretation; Amendment and Restatement. Capitalized terms used but not otherwise defined in this Agreement shall have the meanings set forth in Appendix A to the Participation Agreement, and the rules of interpretation set forth therein shall apply to this Agreement.


ARTICLE II
APPOINTMENT OF CONSTRUCTION AGENT


2.1 Appointment and Acceptance.


Pursuant to and subject to the terms and conditions set forth herein and in the Participation Agreement and the other Operative Documents, Lessor hereby irrevocably designates and appoints Construction Agent as its exclusive agent for (i) the purchase of the Manufacturing Facility Site, (ii) the construction of the Traville Improvements on the Traville Site in accordance with the Approved Traville Plans and Specifications, and (iii) subject to the satisfaction or waiver of the conditions set forth in Section 4.3 of the Participation Agreement and the delivery of the Manufacturing Facility Supplement, the construction of the Manufacturing Improvements in accordance with the Approved Manufacturing Plans and Specifications, and Construction Agent by entering into this Agreement accepts such designation and appointment.


2.2 Term. This Agreement shall commence on the Documentation Date and shall terminate with respect to a Property upon the first to occur of:


(a) Substantial Completion of such Property and the
performance of all other material obligations of Construction Agent
hereunder with respect thereto; and


(b) payment by Lessee or Lessor's receipt through other
provisions of the Operative Documents of the aggregate Lease Balance, or
the applicable Lease Balance for such Property, and all other amounts
owing under the Operative Documents (including Article V of the Lease,
incorporated herein by reference), and termination of the Commitments in
accordance with the Participation Agreement; and


(c) termination of this Agreement by Lessor pursuant to
Article V.


2.3 Supplement to this Agreement. On the Manufacturing Facility Site Purchase Date, Lessor and Construction Agent shall execute and deliver a supplement to this Agreement in the form set forth on Exhibit B hereto (the "Manufacturing Facility Supplement"), appropriately completed, pursuant to which Lessor and Construction Agent shall, among other things, each acknowledge and agree that the construction and development of the Manufacturing Facility on the Manufacturing Facility Site will be governed by the terms of this Agreement.


2


CONSTRUCTION AGENCY AGREEMENT (HGSI)


Following the execution and delivery of the Manufacturing Facility Supplement as provided above and the satisfaction or waiver of all of the conditions set forth in Section 4.3 of the Participation Agreement, such Manufacturing Facility Supplement, and Exhibit A to the Manufacturing Facility Supplement attached thereto, shall constitute a part of this Agreement.


2.4 Construction Materials; Construction Documents.


(a) Traville Facility


(i) Construction Agent shall develop, define, refine
and detail proposed budgets, construction schedules and Traville
Plans and Specifications for the Traville Facility. Construction
Agent shall cause each such proposal to provide for compliance
and conformance with generally accepted construction practices,
Applicable Law, Insurance Requirements, Environmental
Requirements and Section 2.6(a) and shall cause each such
proposal to have a reasonable likelihood that it can be
completed as intended on time and within budget. In addition,
the budget for the Traville Facility shall not exceed Two
Hundred and Twenty-Five Million Dollars ($225,000,000), except
as otherwise provided in clause (ii) below. Construction Agent
shall cause such proposal to be provided to the Construction
Consultant for review and approval. Upon the approval of any
such proposal by the Construction Consultant of such proposed
construction budget, construction schedule or plans and
specifications for the Traville Facility, such proposed
construction budget, construction schedule or plans and
specifications shall become, as applicable, the approved
construction budget (as amended or modified from time to time in
accordance with the Terms of this Agreement, the "Approved
Traville Construction Budget"), the approved construction
schedule (as amended or modified from time to time in accordance
with the Terms of this Agreement, the "Approved Traville
Construction Schedule") and the approved plans and
specifications (as amended or modified from time to time in
accordance with the terms of this Agreement, the "Approved
Traville Plans and Specifications") for the Traville Facility.
Failure of the Construction Consultant to respond within sixty
(60) days of receipt in writing of any such proposal will be
deemed rejection thereof, however, if the Construction
Consultant requests additional information or clarifications,
such sixty (60) day period will commence from the date when all
such requests have been satisfied. If the Construction
Consultant shall reject or not expressly approve any such
proposal, then Construction Agent shall consult with the
Construction Consultant, revise such proposal and resubmit it,
repeating such process until all Traville Construction Materials
are approved or deemed to be approved.


(ii) During the Construction Period, Construction
Agent may enter into any changes, supplements, amendments or
revisions ("change orders") to the Traville Construction
Materials so long as the change order could not reasonably have
any adverse effect on the as-built value, utility, residual
value at the end of the Lease Term or useful life of the
Traville Facility or extend Substantial Completion of the
Property beyond the Outside Completion Date (such a change order
that results in an adverse affect described above with respect
to either


3


CONSTRUCTION AGENCY AGREEMENT (HGSI)


Property, a "Material Change Order"), and the costs attributable
to such change order, together with the costs of all other
change orders in respect of the Traville Facility, do not result
in a net increase in the Approved Traville Construction Budget
unless and only to the extent that the Approved Manufacturing
Construction Budget has been decreased by a like amount.


(b) Manufacturing Facility


(i) Construction Agent shall develop, define, refine
and detail proposed budgets, construction schedules and
Manufacturing Plans and Specifications for the Manufacturing
Facility. Construction Agent shall cause each such proposal to
provide for compliance and conformance with generally accepted
construction practices, Applicable Law, Insurance Requirements,
Environmental Requirements and Section 2.6(a) and shall cause
each such proposal to have a reasonable likelihood that it can
be completed as intended on time and within budget. In addition,
the budget for the Manufacturing Facility shall not exceed Two
Hundred and Twenty-Five Million Dollars ($225,000,000), except
as otherwise provided in clause (ii) below. Construction Agent
shall cause such proposal to be provided to the Construction
Consultant for review and approval. Upon the approval of any
such proposal by the Construction Consultant of such proposed
construction budget, construction schedule or plans and
specifications for the Manufacturing Facility, such proposed
construction budget, (as amended or modified from time to time
in accordance with the terms of this Agreement, the "Approved
Manufacturing Construction Budget"), the approved construction
schedule (as amended or modified from time to time in accordance
with the Terms of this Agreement, the "Approved Manufacturing
Construction Schedule") and the approved plans and
specifications (as amended or modified from time to time in
accordance with the Terms of this Agreement, the "Approved
Manufacturing Plans and Specifications") for the Manufacturing
Facility. Failure of the Construction Consultant to respond
within sixty (60) days of receipt in writing of any such
proposal will be deemed rejection thereof, however, if the
Construction Consultant requests additional information or
clarifications, such sixty (60) day period will commence from
the date when all such requests have been satisfied. If the
Construction Consultant shall reject or not expressly approve
any such proposal, then Construction Agent shall consult with
the Construction Consultant, revise such proposal and resubmit
it, repeating such process until all Manufacturing Construction
Materials are approved or deemed to be approved.


(ii) During the Construction Period, Construction
Agent may enter into change orders to the Manufacturing
Construction Materials so long as the costs attributable to such
change order, together with the costs of all other change orders
in respect of the Manufacturing Facility, do not result in a net
increase in the Approved Manufacturing Budget unless and only to
the extent that the Approved Traville Construction Budget has
been decreased by a like amount; provided that Material Change
Orders must comply with clause (iii) below.


4


CONSTRUCTION AGENCY AGREEMENT (HGSI)


(iii) Prior to making any Material Change Order with
respect to either Property, Construction Agent shall submit a
proposal outlining any such proposed change order to the
Construction Consultant for approval. The approval process for
Material Change Orders shall allow the Construction Consultant
twenty (20) days to review any submission and to accept or
reject such submission (or request additional information in
respect thereof) with a failure to respond after twenty (20)
days being deemed acceptance thereof.


(c) Subject to each of the terms and conditions in this
Agreement, Construction Agent may execute any of its duties under this
Agreement by or through agents, developers, consultants, advisors,
contractors, employees or attorneys-in-fact (other than the Construction
Consultant), and Construction Agent with respect to each Property shall
enter into such agreements with architects and contractors as
Construction Agent deems necessary or desirable for the completion of
the Construction pursuant hereto (as such documents may be amended,
supplemented or otherwise modified except as prohibited hereby, the
"Construction Documents").


(d) Certifications. Any amendment to either the Traville
Construction Materials or the Manufacturing Construction Materials for
which Construction Agent does not seek the approval of Lessor shall be
deemed a certification by Construction Agent that such amendment
complies with the foregoing requirement.


2.5 Assignment Under Construction. Construction Agent hereby collaterally assigns all Material Construction Documents and all the proceeds (including liquidated damages, insurance proceeds and warranty payments), if any, payable to Construction Agent or its affiliates under the Construction Documents to Lessor to secure Construction Agent's obligation under this Agreement and the Operative Documents. Construction Agent hereby agrees to file applicable UCC-1 financing statements in respect of the foregoing.


2.6 Scope of Authority.


(a) Subject to the terms, conditions, restrictions and
limitations set forth in the Operative Documents, Lessor hereby
expressly authorizes Construction Agent (or any agent, consultant,
advisor, developer, employee, attorney-in-fact or contractor of
Construction Agent to which Construction Agent has made a delegation of
authority pursuant to the terms of this Agreement), and Construction
Agent unconditionally agrees, for the benefit of Lessor, to take all
action necessary or (as determined by Construction Agent) desirable for
the performance and satisfaction of all of Construction Agent's
obligations hereunder with respect to the Properties, including:


(i) the identification and the acquisition, in the
name of Lessor (by purchasing or ground leasing, as applicable)
of each Site in accordance with the terms and conditions of the
Participation Agreement;


(ii) performing or causing the performance of all
design and supervisory functions and all engineering work
related to the Construction and the retention and supervision of
the General Contractor;


5


CONSTRUCTION AGENCY AGREEMENT (HGSI)


(iii) negotiating and entering into, or causing the
negotiation and execution and delivery of, all contracts or
arrangements to procure the labor, materials, supplies and
equipment necessary or (as determined by Construction Agent)
desirable to construct the Improvements;


(iv) obtaining or causing to be obtained all
necessary permits, licenses, consents, approvals and other
authorizations, including those required under Applicable Laws
(including Environmental Laws), from all Governmental
Authorities in connection with the acquisition of the Sites and
the Construction of the Improvements thereon;


(v) maintaining or causing to be maintained all
books and records with respect to the Construction and the
operation and management of the Properties;


(vi) performing or causing the performance of any
other acts necessary or desirable (as reasonably determined by
Construction Agent) in connection with the construction and
development of the Improvements in accordance in all material
respects with the Traville Construction Materials or the
Manufacturing Construction Materials, as applicable, any
Applicable Laws and all Insurance Requirements; provided,
however, that the foregoing shall not limit Construction Agent's
right to engage in Permitted Contests;


(vii) paying when due or causing to be paid when due
(subject to reimbursement as provided for under this Agreement)
pursuant to and subject to the Approved Traville Construction
Budget or Approved Manufacturing Construction Budget, as
applicable, or the Participation Agreement, all Property Costs
(including costs associated with Construction Agent's actions as
provided in Section 2.6(a)(ix) below, pursuant to and subject to
the Approved Traville Construction Budget or Approved
Manufacturing Construction Budget, as applicable) provided,
however, that the foregoing shall not limit Construction Agent's
right to engage in Permitted Contests. Construction Agent
acknowledges that any liability resulting to Administrative
Agent, any Participant or any other Indemnitee as a result of or
arising from any such negotiation, Permitted Contest, or act or
omission of Construction Agent or its designees with respect to
such Permitted Contest will be a Claim subject to
indemnification under Article IX of the Participation Agreement;


(viii) enforcing or causing the enforcement in all
material respects of performance by each party to each
Construction Document of its respective obligations, warranties
and other design, construction and other obligations with
respect to the design, engineering, construction and completion
of the Improvements on the applicable Site or pursuing remedies
with respect to the breach of those obligations, in each case,
as deemed appropriate by Construction Agent in its discretion;
and


(ix) using the proceeds of any insurance maintained
with respect to the Improvements to complete construction of or
rebuild any portion of such


6


CONSTRUCTION AGENCY AGREEMENT (HGSI)


Improvements with respect to a Casualty or Condemnation and to
fund all Construction Period Accrued Interest accruing during
such Construction or rebuild, provided that the foregoing shall
not affect Construction Agent's right to purchase the Properties
in accordance with Article V of the Lease which shall be
applicable during the Construction Period and is hereby
incorporated herein by reference, mutatis mutandi.


(b) Neither Construction Agent nor any of its Affiliates or
agents shall enter into any contract which would impose any liability or
obligation on Lessor (other than (i) nonrecourse obligations arising out
of the imposition of certain Permitted Liens identified on Schedules
2.6(b)(i) and 2.6(b)(ii) hereto and (ii) Lessor's obligation to
Construction Agent to provide Advances in accordance with and subject to
the terms and conditions of the Operative Documents).


(c) Subject to the terms and conditions of this Agreement
and the other Operative Documents, Construction Agent shall have sole
management and control over the construction means, methods, sequences
and procedures and the hiring, termination and contracting for and
supervision of and payment for the labor, personnel and services with
respect to the Construction; provided, however, that this subsection (c)
shall not give rise to any rights in any Person other than Lessor, the
Participants and the other Indemnitees.


(d) All fees and expenses of Lessee and Construction Agent
under any Operative Document which are included in and which may be paid
in accordance with the Approved Traville Construction Budget or the
Approved Manufacturing Construction Budget, as applicable, shall be paid
or reimbursed through Advances.


2.7 Covenants of Construction Agent. Construction Agent shall with respect to the Land:


(a) following the commencement of Construction, cause the
Construction to proceed diligently and without material interruption
(subject to Force Majeure Events) in accordance in all material respects
with the applicable Construction Materials and Insurance Requirements
and all Applicable Laws;


(b) take or cause to be taken commercially reasonable and
practical steps to minimize liabilities of Lessor or any Agent or
Participant, delays, increased costs and the disruption of the
construction process arising from Force Majeure Events, Casualties and
Condemnations;


(c) subject to Section 3.2(b), cause Substantial Completion
for a Property to occur on or prior to the applicable Outside Completion
Date for such Property;


(d) cause all Liens (including Liens or claims for materials
supplied or labor or services performed in connection with the
construction of the Improvements), other than Permitted Liens, to be
removed or discharged; provided, however, that the foregoing shall not
limit Construction Agent's right to engage in Permitted Contests;


7


CONSTRUCTION AGENCY AGREEMENT (HGSI)


(e) at all times during Construction, cause title to all
Improvements on or within the Land (including any personal property
which Construction Agent acquires with Advances whether or not such
personal property so acquired has become a permanent part of such
Improvements) to be and remain vested in Lessor free of all Liens, other
than Permitted Liens and Lessor Liens, and cause to be on file
(including financing statements and fixture filings) with the applicable
filing office all necessary documents under Article 9 of the ...