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EXHIBIT 10.3
(NOVELLUS III)
SECOND AMENDMENT TO PARTICIPATION AGREEMENT
THIS SECOND AMENDMENT TO PARTICIPATION AGREEMENT (this "Amendment"),
dated as of April 13, 2001, is entered into by and among:
(1) NOVELLUS SYSTEMS, INC., a California corporation
("Lessee");
(2) ABN AMRO LEASING, INC., an Illinois corporation
("Lessor");
(3) Each of the financial institutions listed in Schedule I to
the Participation Agreement referred to in Recital A below
(collectively, the "Participants"); and
(4) ABN AMRO BANK N.V., as agent for the Participants (in such
capacity, "Agent").
RECITALS
A. Lessee, Lessor, Participants and Agent are parties to a
Participation Agreement dated as of August 7, 1998 (as amended by a First
Amendment thereto dated as of August 16, 1999, the "Participation Agreement"),
pursuant to which Lessor and Participants have provided to Lessee a lease
facility.
B. Lessee now has requested Lessor, Participants and Agent to amend the
Participation Agreement and certain of the other Operative Documents (as defined
in the Participation Agreement) to make certain changes.
C. Lessor, Participants and Agent are willing so to amend the
Participation Agreement and the other Operative Documents upon the terms and
subject to the conditions set forth in this Amendment.
AGREEMENT
NOW, THEREFORE, in consideration of the above recitals and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Lessee, Lessor, the Participants and Agent hereby agree as
follows:
1. DEFINITIONS, INTERPRETATION. All capitalized terms defined above and
elsewhere in this Amendment shall be used herein as so defined. Unless otherwise
defined herein, all other capitalized terms used herein shall have the
respective meanings given to those terms in the Participation Agreement, as
amended by this Amendment. The rules of construction set forth in Schedule 1.02
to the Participation Agreement shall, to the extent not inconsistent with the
terms of this Amendment, apply to this Amendment and are hereby incorporated by
reference.
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2. AMENDMENTS TO PARTICIPATION AGREEMENT. Subject to the satisfaction
of the conditions set forth in Paragraph 5 below, the Participation Agreement is
hereby amended as follows:
(a) Subparagraph 2.06(a) is amended by changing clause
(iii)(D) to read in its entirety as follows:
(D) the purchase price paid by any Person (except as
otherwise provided in clause (i) above) to purchase the
Property (whether after the retention of such Property by
Lessor following the Expiration Date of the Lease Agreement,
upon foreclosure or otherwise);
(b) Subparagraph 4.01(g) is amended to read in its entirety as
follows:
(g) Litigation. Except as set forth in the most
recent Form 10-Q and 10-K reports filed by Lessee with the
Securities and Exchange Commission, no actions (including,
without limitation, derivative actions), suits, proceedings or
investigations are pending or, to the knowledge of Lessee,
threatened against Lessee or any of its Subsidiaries at law or
in equity in any court or before any other Governmental
Authority which (i) is reasonably likely (alone or in the
aggregate) to have a Material Adverse Effect or (ii) seeks to
enjoin, either directly or indirectly, the execution, delivery
or performance by Lessee of the Operative Documents or the
transactions contemplated thereby.
(c) Subparagraph 4.01(k) is amended to read in its entirety as
follows:
(k) No Agreements to Sell Assets; Etc. Neither Lessee
nor any of its Subsidiaries has any legal obligation, absolute
or contingent, to any Person to sell the assets of Lessee or
any of its Subsidiaries (other than sales in the ordinary
course of business), or to effect any merger, consolidation or
other reorganization of Lessee or any of its Subsidiaries or
to enter into any agreement with respect thereto, except for
sales, mergers, consolidations or reorganizations permitted by
Subparagraph 5.02(c), 5.02(d) or 5.02(e).
(d) Subparagraph 4.01(l) is amended by changing clause (i) to
read in its entirety as follows:
(i) Based on the most recent valuation date for any
Pension Plan, the amount of unfunded benefit liabilities (as
defined in Section 4001(a)(18) of ERISA), individually or in
the aggregate for all Pension Plans (excluding for purposes of
such computation any Pension Plans with respect to which
assets exceed benefit liabilities) does not exceed an amount
equal to $10,000,000. No Pension Plan has failed to meet the
minimum funding standard of Code Section 412 (whether or not
waived under Code Section 412(d)) or failed to make by its due
date a required installment under Code Section 412(m). Neither
Lessee nor any ERISA Affiliate has any liability with respect
to any post-retirement benefit under any Employee Benefit Plan
which is a welfare plan (as defined in section 3(1) of ERISA)
that is reasonably likely to have a Material Adverse Effect.
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(e) Subparagraph 4.01(n) is amended to read in its entirety as
follows:
(n) Patent and Other Rights. Except as set forth in
Schedule 4.01(g), Lessee and its Subsidiaries own, license or
otherwise have the right to use, under validly existing
agreements, all patents, licenses, trademarks, trade names,
trade secrets, service marks, copyrights and all rights with
respect thereto, which are required to conduct their
businesses as now conducted, except where the failure to have
any such rights, either individually or collectively, is not
reasonably likely to have a Material Adverse Effect.
(f) Subparagraph 4.01(q) is amended to read in its entirety as
follows:
(q) Subsidiaries, etc. Set forth in Schedule 4.01(q)
(as supplemented by Lessee from time to time in a written
notice to Agent) is a complete list of all of Lessee's
Subsidiaries, the jurisdiction of incorporation of each, the
classes of Equity Securities of each and the percentages of
shares of each such class owned directly or indirectly by
Lessee.
(g) Paragraph 4.01 is further amended by (i) deleting
Subparagraph 4.01(v) and (ii) changing the designation of Subparagraph
4.01(w) to "(v)".
(h) Subparagraph 5.01(a) is amended by (i) changing clauses
(iii) and (v) to read in their entireties as follows:
(iii) Contemporaneously with the quarterly and
year-end Financial Statements required by the foregoing
clauses (i) and (ii), a compliance certificate of the
president or chief financial officer of Lessee which (A)
states that no Default has occurred and is continuing, or, if
any such Default has occurred and is continuing, a statement
as to the nature thereof and what action Lessee proposes to
take with respect thereto; and (B) sets forth, for the quarter
or year covered by such Financial Statements or as of the last
day of such quarter or year (as the case may be), the
calculation of the financial ratios and tests provided in
Paragraph 5.03;
(v) As soon as possible and in no event later than
five (5) Business Days after any Senior Officer of Lessee
knows of the occurrence or existence of (A) any Reportable
Event (excluding any Reportable Event for which the provision
of a 30-day notice to the PBGC has been waived by regulation)
under any Employee Benefit Plan or Multiemployer Plan; (B) any
actual or threatened litigation, suits, claims or disputes
against Lessee or any of its Subsidiaries involving potential
monetary damages payable by Lessee or its Subsidiaries of
$10,000,000 or more (alone or in the aggregate); (C) any other
event or condition which is reasonably likely to have a
Material Adverse Effect; or (D) any Default; the statement of
the president or chief financial officer of Lessee setting
forth details of such event, condition or Default and the
action which Lessee proposes to take with respect thereto;
(ii) deleting clause (vii) and (iii) changing the designations of
clauses (viii), (ix), (x) and (xi) to "(vii)", "(viii)", "(ix)" and
"(x)", respectively.
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(i) Subparagraph 5.01(e) is amended to read in its entirety as
follows:
(e) Governmental Charges and Other Indebtedness.
Lessee and its Subsidiaries shall promptly pay and discharge
when due (i) all taxes and other Governmental Charges prior to
the date upon which penalties accrue thereon, (ii) all
indebtedness which, if unpaid, could become a Lien upon the
property of Lessee or its Subsidiaries and (iii) subject to
any subordination provisions applicable thereto, all other
indebtedness; except where (A) the failure to pay any such
taxes, other Governmental Charges or indebtedness, either
alone or collectively, is not reasonably likely to have a
Material Adverse Effect and (B) any such taxes, other
Governmental Charges or indebtedness as may in good faith be
contested or disputed, or for which arrangements for deferred
payment have been made, provided that in each such case
appropriate reserves as required by GAAP are maintained.
(j) Paragraph 5.01 is further amended by (i) deleting
Subparagraphs 5.01(h) and 5.01(i) and (ii) adding a new Subparagraph
5.01(h) to read in its entirety as follows:
(h) Related Credit Agreement. If at any time the
financial covenants set forth in Paragraph 5.03 (or any
applicable definition used therein) differs from the financial
covenants set forth in the Related Credit Agreement (or any
applicable definition used therein), Lessee shall execute such
amendments to this Agreement as Lessor or Required
Participants may reasonably request to conform the financial
covenants set forth in Paragraph 5.03 (or any applicable
definition used therein) with such financial covenants set
forth in the Related Credit Agreement.
(k) Subparagraph 5.02(a) is amended by (i) changing clauses
(iii) and (iv) to read in their entirety as follows:
(iii) Synthetic Lease Obligations, provided that the
aggregate principal amount thereof (including the Outstanding
Lease Amounts hereunder) outstanding at any time does not
exceed $595,000,000;
(iv) Indebtedness of Lessee and its Subsidiaries
listed in Schedule 5.02(a) and existing on April 13, 2001
(including committed but undrawn amounts);
and (ii) changing the reference to "clause (ii), (iii) or (v)" in
clause (ix) to "clause (ii) or (iv)".
(l) Subparagraph 5.02(b) is amended by changing clauses (ii)
and (x) to read in their entireties as follows:
(ii) Liens securing the Related Credit Obligations or
Synthetic Lease Obligations;
(x) Judgement Liens, provided that such Liens do not
have a value in excess of $10,000,000 or such Liens are
released, stayed, vacated or otherwise
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dismissed within twenty (20) days after issue or levy and, if
so stayed, such stay is not thereafter removed;
(m) Subparagraph 5.02(c) is amended by changing clause (vi) to
read in its entirety as follows:
(vi) Sales or other dispositions of assets and
property by Lessee to any of Lessee's Subsidiaries or by any
of Lessee's Subsidiaries to Lessee or any of its other
Subsidiaries, provided the terms of any such sales or other
dispositions by or to Lessee (other than sales or other
dispositions by Lessee to any of Lessee's wholly owned
Subsidiaries or by any of Lessee's wholly owned subsidiaries
to Lessee, except for sales or dispositions by Lessee which,
either singly or in the aggregate with respect to all such
sales or dispositions, would involve all or substantially all
of the assets or property of Lessee or which would render
Lessee incapable of performing its obligations under the
Operative Documents) are on terms which are no less favorable
to Lessee than would prevail in the market for similar
transactions between unaffiliated parties dealing at arms
length;
(n) Subparagraph 5.02(d) is amended by changing clause
(iii)(C) thereof to read in its entirety as follows:
(C) The aggregate cost of any such merger,
consolidation, establishment or acquisition does not exceed
the amounts permitted under clause (v) of Subparagraph 5.02(e)
(except for Lessee's cost of acquiring Gasonics International
Corporation, which shall not be subject to such limitation).
(o) Subparagraph 5.02(e) is amended to read in its entirety as
follows:
(e) Investments. Neither Lessee nor any of its
Subsidiaries shall make any Investment except for Investments
in the following:
(i) Investments permitted by the investment
policy of Lessee duly approved by the Board of
Directors of Lessee and in effect at the time of such
Investment;
(ii) Investments held by Gasonics
International Corporation on the date Gasonics
International Corporation is acquired by Lessee;
(iii) Any transaction permitted by
Subparagraph 5.02(a);
(iv) Investments by Lessee in the "Tranche
A" portion of synthetic leases in which it is the
lessee and which constitute Economically Defeased
Synthetic Lease Obligations;
(v) Investments in joint ventures and
strategic alliances, provided that the aggregate
amount of such Investments does not exceed in any
fiscal year two and one-half percent (2 1/2%) of the
tangible assets of Lessee and its Subsidiaries,
determined on a consolidated basis in accordance with
GAAP, on the last day of the immediately preceding
fiscal year; and
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(vi) Other Investments, provided that the
aggregate amount of such other Investments plus the
aggregate cost of all mergers and consolidations
consummated, Subsidiaries established and
Subsidiaries and assets acquired by Lessee pursuant
to Subparagraph 5.02(d) (excluding Lessee's
acquisition of Gasonics International Corporation)
does not exceed in any fiscal year (A) $100,000,000
for any amounts paid in cash and (B) $500,000,000 for
any amounts paid with shares of common stock of
Lessee (as determined according to the stock price of
such shares on the date of transfer) and accounted
for on a pooling basis in accordance with GAAP.
(p) Paragraph 5.02 is further amended by (i) deleting
Subparagraph 5.02(i) and (ii) changing the designation of Subparagraph
5.02(j) to "(i)".
(q) Paragraph 5.03 is amended to read in its entirety as
follows:
5.03. Lessee's Financial Covenants. Until the
termination of this Agreement and the satisfaction in full by
Lessee of all Lessee Obligations, Lessee will comply, and will
cause compliance, with the following financial covenants,
unless Lessor and Required Participants shall otherwise
consent in writing:
(a) Funded Indebtedness/Capital Ratio.
Lessee shall not permit its Funded
Indebtedness/Capital Ratio on any day set forth below
to be greater than the ratio set forth opposite such
day below:
The last day of any
fiscal quarter 0.40 to
1.00.
(b) Quick Ratio. Lessee shall not permit its
Quick Ratio on any day set forth below to be less
than the ratio set forth opposite such day below:
The last day of any
fiscal quarter 1.50 to
1.00.
(c) Debt Service Coverage Ratio. Lessee
shall not permit its Debt Service Coverage Ratio for
any fiscal quarter ending on any day set forth below
to be less than the ratio set forth opposite such day
below:
The last day of any
fiscal quarter 3.50 to
1.00.
(d) Tangible Net Worth. Commencing on
December 31, 2000, Lessee shall not permit its
Tangible Net Worth on the last day of any fiscal
quarter (such date to be referred to herein as a
"determination date") to be less than the sum on such
determination date of the following:
(i) $664,477,000.00 (the
approximate amount of Lessee's Tangible Net
Worth on December 31, 1999);
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plus
(ii) Seventy-five percent (75%) of
the sum of (A) Lessee's consolidated annual
net income for its fiscal year ending
December 31, 2000 (ignoring any annual
loss); plus (B) the sum of Lessee's
consolidated quarterly net income (ignoring
any quarterly losses) for each fiscal
quarter ending after December 31, 2000
through and including the fiscal quarter
ending on the determination date;
plus
(iii) One hundred percent (100%) of
the Net Proceeds of all Equity Securities
issued by Lessee and its Subsidiaries (to
Persons other than Lessee or its
Subsidiaries) during the period commencing
on December 31, 1999 and ending on the
determination date;
plus
(iv) One hundred percent (100%) of
the principal amount of all debt securities
of Lessee and its Subsidiaries converted
into Equity Securities of Lessee and its
Subsidiaries during the period commencing on
December 31, 1999 and ending on the
determination date.
provided, however, that in no case shall Lessee
permit its Tangible Net Worth on December 31, 2000 to
be less than $1,260,000,000.00.
(e) Minimum Cash Balances. Lessee shall not
permit its Cash Balances on any date to be less than
the remainder of:
(i) The aggregate amount on such
date of all Synthetic Lease Obligations of
Lessee and its Subsidiaries that (A) would
be attributable to principal if such
obligations were treated as loan obligations
and (B) become due within one (1) year of
such date;
minus
(ii) The sum of (A) all cash of
Lessee and its Subsidiaries on such date and
(B) the market value of Cash Equivalents and
short-term marketable securities (that are
classified as current assets in accordance
with GAAP) of Lessee and its Subsidiaries on
such date to the extent such cash, Cash
Equivalents and short-term marketable
securities secure payment of the current
Synthetic Lease Obligations referred to in
clause (i) above.
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(In calculating the market value of Cash Equivalents
and short-term marketable securities under this
subparagraph, Cash Equivalents and short-term
marketable securities shall be marked to market
quarterly.)
(r) Paragraph 7.01 is amended by changing the notice
addresses, etc. for Lessee, Lessor and Agent set forth therein to read
in their entireties as follows:
Lessee: Novellus Systems, Inc.
4000 North First Street
San Jose, CA 95134
Attn: Treasurer
Telephone: (408) 432-5339
Fax No: (408) 545-3009
Lessor: ABN AMRO Leasing, Inc.
c/o ABN AMRO Bank N.V.
135 South LaSalle Street, Suite 740
Chicago, IL 60603
Attn: David M. Shipley
Telephone: (312) 904-2183
Fax No: (312) 904-6217
Agent: ABN AMRO Bank N.V.
Agency Services
208 South LaSalle Street, Suite 1500
Chicago, IL 60604
Attn: Josephine O'Brien
Telephone: (312) 992-5091
Fax: (312) 992-5157
with copies to:
ABN AMRO Bank N.V.
101 California Street, Suite 4550
San Francisco, CA 94111-5812
Attn: Joe Endoso
Telephone: (415) 984-3718
Fax: (415) 362-3524
and
ABN AMRO Bank N.V.
Credit Administration
208 South LaSalle Street, Suite 1500
Chicago, IL 60604
Attn: Gregory Miller
Telephone: (312) 992-5116
Fax: (312) 992-5111
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(s) Schedule 1.01 is amended by changing the definitions of
the following terms appearing therein to read in their entireties as
follows:
"Adjusted Net Income" shall mean, with respect to
Lessee for any period, the sum, determined on a consolidated
basis in accordance with GAAP, of the following:
(a) The net income or net loss of Lessee and
its Subsidiaries for such period before provision for
income taxes;
plus
(b) The sum (to the extent deducted in
calculating net income or loss in clause (a) above)
of (i) all Interest Expenses of Lessee and its
Subsidiaries accruing during such period, (ii) all
depreciation and amortization expenses of Lessee and
its Subsidiaries accruing during such period, and
(iii) all rental expenses of Lessee and its
Subsidiaries accruing during such period (including
Base Rent under the Lease Agreement but excluding any
Base Rent or other rental expenses that are
capitalized by the lessor during such period);
minus
(c) Fifty percent (50%) of all Capital
Expenditures of Lessee and its Subsidiaries accruing
during such period.
"Agent's Fee Letter" shall mean collectively the
letter agreement dated as of July 20, 1998 between Lessee and
Agent regarding certain fees payable by Lessee to Agent and
the letter agreements dated as of October 11, 2000 and
December 5, 2000 between Lessee and Agent regarding certain
other fees payable by Lessee to Agent.
"Debt Service Coverage Ratio" shall mean, with
respect to Lessee for any period, the ratio, determined on a
consolidated basis in accordance with GAAP, of:
(a) The Adjusted Net Income of Lessee for
such period;
to
(b) The sum of (i) all Interest Expenses of
Lessee and its Subsidiaries accruing during such
period, (ii) all rental expenses of Lessee and its
Subsidiaries accruing during such period (including
Base Rent under the Lease Agreement but excluding any
Base Rent or other rental expenses that are
capitalized by the lessor during such period), and
(iii) 25% of all payments of principal (or, in the
case of Capital Leases, amounts attributable to
principal) of Funded Indebtedness (excluding
Synthetic Lease Obligations) paid or scheduled to be
paid by Lessee and its Subsidiaries due within one
year.
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"EBITDA" shall mean, with respect to Lessee for any
period, the sum, determined on a consolidated basis in
accordance with GAAP, of the following:
(a) The net income or net loss of Lessee and
its Subsidiaries for such period before provision for
income taxes;
plus
(b) The sum (to the extent deducted in
calculating net income or loss in clause (a) above)
of (i) all Interest Expenses of Lessee and its
Subsidiaries accruing during such period and (ii) all
depreciation and amortization expenses of Lessee and
its Subsidiaries accruing during such period.
"Funded Indebtedness" of any Person shall mean,
without duplication:
(a) All obligations of such Person evidenced
by notes, bonds, debentures or other similar
instruments and all other obligations of such Person
for borrowed money (including obligations to
repurchase receivables and other assets sold with
recourse);
(b) All obligations of such Person for the
deferred purchase price of property or services
(including obligations under letters of credit and
other credit facilities which secure or finance such
purchase price but excluding trade payables incurred
by such Person in the ordinary course of its business
on ordinary terms and not overdue) and all Synthetic
Lease Obligations of such Person (excluding the
Economically Defeased Portion of Synthetic Lease
Obligations);
(c) All obligations of such Person under
conditional sale or other title retention agreements
with respect to property acquired by such Person (to
the extent of the value of such property if the
rights and remedies of the seller or lender under
such agreement in the event of default are limited
solely to repossession or sale of such property); and
(d) All obligations of such Person as lessee
under or with respect to Capital Leases.
"Lease Reduction Payments" shall mean each of the
following to the extent applied to reduce the Outstanding
Lease Amount pursuant to the Operative Documents:
(a) Casualty and Condemnation Proceeds;
(b) The purchase price paid for the Property
(or any portion thereof) by Lessee, an Assignee
Purchaser or a Designated Purchaser pursuant to the
Purchase Agreement;
(c) The Residual Value Guaranty and
Indemnity Amount paid by Lessee pursuant to the
Purchase Agreement;
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(d) Any proceeds received by Lessee from any
sale of the Property after the Expiration Date if
such Property is retained by Lessor after such
Expiration Date pursuant to the Purchase Agreement;
(e) Any proceeds received by any Lessor
Party from the exercise of any of its remedies under
the Operative Documents after the occurrence of an
Event of Default under the Lease Agreement; and
(f) Any other amount received by Lessor that
Lessee, Lessor and Agent agree shall be applied to
reduce the Outstanding Lease Amount.
"Material Casualty" shall mean any Casualty to the
Property that alone, or in combination with any prior
Casualties to the Property for which repairs to restore the
Property to its prior condition have not been completed, will
require repairs costing $1,725,000 or more to restore the
Property to its prior condition.
"Operative Documents" shall mean and include the
Participation Agreement, the Ground Lease, the Lease
Agreement, the Construction Agency Agreement, the Purchase
Agreement, the Lessee Security Documents, the Lessor Deed of
Trust, the Lessor Security Agreement, the Assignment of Lease,
the Agent's Fee Letter and the Agent's Syndication Letter; all
other notices, requests, certificates, documents, instruments
and agreements delivered to any Lessor Party pursuant to
Paragraph 3.01 of the Participation Agreement; all notices,
requests, certificates, documents, instruments and agreements
required to be delivered to any Lessor Party in connection
with any of the foregoing on or after the date of the
Participation Agreement; and all Rate Contracts provided to
Lessee by any Participant to hedge against fluctuations in the
LIBOR Rental Rate under the Lease Agreement. (Without limiting
the generality of the preceding definition, the term
"Operative Documents" shall include all written waivers,
amendments and modifications to any of the notices, requests,
certificates, documents, instruments and agreements referred
to therein.)
"Pension Plan" shall mean any Employee Benefit Plan
subject to Title IV of ERISA that either Lessee or any ERISA
Affiliate maintains or contributes to or has any obligation
under.
"Quick Ratio" shall mean, with respect to Lessee at
any time, the ratio, determined on a consolidated basis in
accordance with GAAP, of:
(a) The remainder of (i) the sum (without
duplication) of all cash, Cash Equivalents,
short-term investments and net accounts receivable of
Lessee and its Subsidiaries at such time, minus (ii)
the sum (without duplication) of all such cash, Cash
Equivalents, short-term investments and net accounts
receivable that are subject to a Lien or are
otherwise restricted;
to
(b) The current liabilities of Lessee and
its Subsidiaries at such time.
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(In calculating the Quick Ratio, Cash Equivalents and
short-term investments shall be marked to market quarterly.)
"Tranche A Proportionate Share" shall mean (a) at any
time prior to the Completion Date, eighty-nine and nine-tenths
percent (89.9%) and (b) at any time on or after the Completion
Date, ninety-seven percent (97.0%).
"Tranche B Proportionate Share" shall mean (a) at any
time prior to the Completion Date, seven and one tenth percent
(7.1%) and (b) at any time on or after the Completion Date,
zero percent (0%).
(t) Schedule 1.01 is further amended by adding thereto, in the
appropriate alphabetical order, the definitions of the following terms
to read in their entireties as follows:
"Cash Balances" shall mean, with respect to Lessee
and its Subsidiaries at any time, the sum, determined on a
consolidated basis in accordance with GAAP, of (a) the
unrestricted, unencumbered cash of Lessee and its Subsidiaries
at such time and (b) the market value of unrestricted,
unencumbered Cash Equivalents and short-term marketable
securities (that are classified as current assets in
accordance with GAAP) of Lessee and its Subsidiaries at such
time. (In calculating Cash Balances, Cash Equivalents and
short-term marketable securities shall be marked to market
quarterly.)
"Economically Defeased Portion of Synthetic Lease
Obligations" shall mean the remainder of (a) the sum of the
"Tranche A" portions, "Tranche B" portions and "Tranche C"
portions of leases constituting Economically Defeased
Synthetic Lease Obligations, minus (b) the aggregate amount of
the "Tranche A" portions of such leases that the lessee has
sold, assigned or otherwise transferred to any other Person.
"Economically Defeased Synthetic Lease Obligations"
shall mean Synthetic Lease Obligations under synthetic leases
in which the lessee has secured the "Tranche B" portion of
such leases and the "Tranche C" portion of such leases with
cash and/or Cash Equivalents and initially has purchased a
100% participation interest in the "Tranche A" portion of such
leases.
"Synthetic Lease Obligations" shall mean the monetary
obligations of a Person under (a) a so-called synthetic,
off-balance sheet or tax retention lease, or (b) an agreement
for the use or possession of property creating obligations
that do not appear on the balance sheet of such Person but
which, upon the insolvency or bankruptcy of such Person, would
be characterized as the indebtedness of such Person (without
regard to accounting treatment).
(u) Schedules 4.01(g) and 5.02(e) are deleted.
(v) Schedule 5.02(a) is amended to read in its entirety as set
forth in the counterpart schedule hereto.
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(w) Exhibits E, F(1) and F(2) are hereby amended by changing
the notice address appearing therein to the following:
ABN AMRO Leasing, Inc.
c/o ABN AMRO Bank N.V.,
as Agent
Agency Services
208 South LaSalle Street, Suite 1500
Chicago, IL 60604
Attn: Josephine O'Brien
3. AMENDMENTS TO OTHER OPERATIVE DOCUMENTS. Subject to the satisfaction
of the conditions set forth in Paragraph 5 below, the Lease Agreement, Purchase
Agreement and Construction Agency Agreement are hereby amended by changing the
notice address appearing in the exhibits thereto in the same manner as provided
in the immediately preceding subparagraph 2(w).
4. REPRESENTATIONS AND WARRANTIES. Lessee hereby represents and
warrants to Agent and the Participants that the following are true and correct
on the date of this Amendment and that, after giving effect to the amendments
set forth in Paragraphs 2 and 3 above, the following will be true and correct on
the Effective Date (as defined below):
(a) The representations and warranties of Lessee set forth in
Paragraph 4.01 of the Participation Agreement and in the other
Operative Documents are true and correct in all material respects as if
made on such date (except for representations and warranties expressly
made as of a specified date, which shall be true as of such date);
(b) No Default has occurred and is continuing; and
(c) All of the Operative Documents are in full force and
effect.
(Without limiting the scope of the term "Operative Documents," Lessee expressly
acknowledges in making the representations and warranties set forth in this
Paragraph 4 that, on and after the date hereof, such term includes this
Amendment.)
5. EFFECTIVE DATE. Lessee shall deliver to Agent a written notice
specifying the effective date for this Amendment ("Effective Date"), which date
shall be a Business Day on or prior to April 27, 2001. Lessee shall deliver such
notice to Agent at least five (5) Business Days prior to the Effective Date. The
amendments effected by Paragraphs 2 and 3 above shall then become effective on
the Effective Date, subject to receipt by Lessor, Agent and Required
Participants, on or prior to such date, of the following, each in form and
substance satisfactory to Agent, Required Participants and their respective
counsel:
(a) This Amendment duly executed by Lessor, Lessee, Required
Participants and Agent;
(b) A First Amendment to Lease Agreement in the form of
Exhibit A hereto, duly executed by Lessee and Lessor and appropriately
notarized for recording;
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(c) Evidence that the First Amendment to Lease Agreement
delivered pursuant to clause 5(b) above will be promptly recorded in
the Official Records of the County of Santa Clara, California;
(d) A certificate of the Chief Financial Officer or Treasurer
of Lessee, addressed to Lessor and Agent and dated the Closing Date,
certifying that:
(1) The representations and warranties set forth in
Paragraph 4.01 of the Participation Agreement and in the other
Operative Documents are true and correct in all material
respects as of such date (except for such representations and
warranties made as of a specified date, which shall be true as
of such date);
(2) No Default has occurred and is continuing as of
such date;
(3) All of the Operative Documents are in full force
and effect on such date;
(e) A favorable written opinion of Morrison & Foerster, LLP,
counsel to Lessee, dated the Effective Date, addressed to Agent for the
benefit of Lessor, Agent and the Participants, covering such legal
matters as Agent may reasonably request and otherwise in form and
substance satisfactory to Agent;
(f) An amendment fee for each Participant that executes this
Amendment on or prior to April 13, 2001 equal to 0.125% of such
Participant's aggregate Outstanding Participation Amount on the
Effective Date;
(g) All fees and expenses payable to the Lessor Parties on or
prior to the Effective Date (including all Agent's Fees);
(h) All fees and expenses of Lessor's and Agent's counsels
through the Effective Date, to the extent set forth in statements of
such counsels delivered to Lessee one or more days prior to the
Effective Date; and
(i) Such other evidence as Lessor, Agent or any Participant
may reasonably request to establish the accuracy and completeness of
the representations and warranties and the compliance with the terms
and conditions contained in this Amendment and the other Operative
Documents.
6. EFFECT OF THIS AMENDMENT. On and after the Effective Date, each
reference in the Participation Agreement and the other Operative Documents to
the Participation Agreement shall mean the Participation Agreement as amended
hereby. Except as specifically amended above, (a) the Participation Agreement
and the other Operative Documents shall remain in full force and effect and are
hereby ratified and affirmed and (b) the execution, delivery and effectiveness
of this Amendment shall not, except as expressly provided herein, operate as a
waiver of any right, power, or remedy of the Lessor, Participants or Agent, nor
constitute a waiver of any provision of the Participation Agreement or any other
Operative Document.
7. MISCELLANEOUS.
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(a) Counterparts. This Amendment may be executed in any number
of identical counterparts, any set of which signed by all the parties
hereto shall be deemed to constitute a complete, executed original for
all purposes.
(b) Headings. Headings in this Amendment are for convenience
of reference only and are not part of the substance hereof.
(c) Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of California
without reference to conflicts of law rules.
[Signature pages follow]
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IN WITNESS WHEREOF, Lessee, Lessor, Agent and the Participants have
caused this Amendment to be executed as of the day and year first above written.
LESSEE: NOVELLUS SYSTEMS, INC.
By:_______________________________
Name:__________________________
Title:_________________________
LESSOR: ABN AMRO LEASING, INC.
By:_______________________________
Name:__________________________
Title:_________________________
AGENT: ABN AMRO BANK N.V.
By:_______________________________
Name:__________________________
Title:_________________________
By:_______________________________
Name:__________________________
Title:_________________________
PARTICIPANTS: ABN AMRO BANK N.V.
By:_______________________________
Name:__________________________
Title:_________________________
By:_______________________________
Name:__________________________
Title:_________________________
ABN AMRO LEASING, INC.
By:_______________________________
Name:__________________________
Title:_________________________
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COMERICA BANK-CALIFORNIA
By:________________________________
Name:___________________________
Title:__________________________
THE INDUSTRIAL BANK OF JAPAN,
LIMITED, SAN FRANCISCO AGENCY
By:________________________________
Name:___________________________
Title:__________________________
THE BANK OF NOVA SCOTIA
By:________________________________
Name:___________________________
Title:__________________________
THE FUJI BANK, LIMITED
By:________________________________
Name:___________________________
Title:__________________________
SANWA BANK CALIFORNIA
By:________________________________
Name:___________________________
Title:__________________________
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SCHEDULE 5.02(a)
EXISTING INDEBTEDNESS
FINANCIAL INSTITUTION CURRENCY AMOUNT FACILITY TYPE
- --------------------- -------- ------ -------------
Bank of Tokyo Mitsubishi JPY 1,300,000,000 Line of Credit
Bank of Tokyo Mitsubishi JPY 520,000,000 Line of Credit
Sanwa Bank JPY 2,400,000,000 Line of Credit
Sumitomo Bank JPY 500,000,000 Line of Credit
ABN AMRO Bank USD 97,000 Standby L/C
Malayan Banking Berhad RM 30,000 Bank Guarantee Facility
5.02(a)-1
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EXHIBIT A
RECORDING REQUESTED BY
AND WHEN RECORDED, RETURN TO:
Orrick, Herrington & Sutcliffe LLP
Old Federal Reserve Bank Building
400 Sansome Street
San Francisco, CA 94111
Attn: John Rivers, Esq.
FIRST AMENDMENT TO LEASE AGREEMENT,
CONSTRUCTION DEED OF TRUST WITH ASSIGNMENT OF RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
THIS FIRST AMENDMENT TO LEASE AGREEMENT, CONSTRUCTION DEED OF TRUST
WITH ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING (this
"Amendment"), dated as of April 13, 2001, is entered into by and between:
(1) NOVELLUS SYSTEMS, INC., a California corporation
("Lessee"); and
(2) ABN AMRO LEASING, INC., an Illinois corporation, as lessor
under the Lease Agreement (as defined below) and as trustee under the
deed of trust contained therein ("Lessor").
RECITALS
A. Lessee; Lessor; each of the financial institutions that are parties
thereto as "Participants" ("Participants"); and ABN AMRO BANK, N.V., as agent
for the Participants (in such capacity, "Agent"), are parties to that certain
Participation Agreement dated as of August 7, 1998 (as amended by a First
Amendment thereto dated as of August 16, 1999, the "Participation Agreement"),
pursuant to which Lessor and Participants have provided to Lessee a certain
lease facility.
B. Pursuant to the Participation Agreement, Lessee and Lessor executed
a Lease Agreement, Construction Deed of Trust with Assignment of Rents, Security
Agreement and Fixture Filing dated as of August 7, 1998, affecting certain real
property located in Santa Clara County, California, described in Exhibit A
thereto (the "Lease Agreement"). The Lease Agreement was recorded in the
Official Records of Santa Clara County, California, on December 1, 1998, as
Document No. 14528604.
C. Lessee now has requested Lessor, Participants and Agent to amend the
Participation Agreement and certain of the other Operative Documents (as defined
in the Participation Agreement) to make certain changes.
D. Pursuant to a Second Amendment to Participation Agreement dated as
of April 13, 2001 (the "Second Amendment to Participation Agreement") among
Lessee, Lessor, Participants and Agent, Lessor, Participants and Agent have
agreed to amend the Participation Agreement and the other Operative Documents
upon the terms and subject to the conditions set
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forth in the Second Amendment to Participation Agreement, including without
limitation, the execution and delivery by Lessee of this Amendment.
AGREEMENT
NOW, THEREFORE, in consideration of the above recitals and for other
good and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Lessee and Lessor hereby agree as follows:
1. DEFINITIONS, INTERPRETATION. All capitalized terms defined above and
elsewhere in this Amendment shall be used herein as so defined. Unless otherwise
defined herein, all other capitalized terms used herein shall have the
respective meanings given to those terms in Schedule 1.01 to the Participation
Agreement. The rules of construction set forth in Schedule 1.02 to the
Participation Agreement shall, to the extent not inconsistent with the terms of
this Amendment, apply to this Amendment and are hereby incorporated by
reference.
2. AMENDMENTS TO THE LEASE AGREEMENT.
(a) Subparagraph 3.07(a) is amended to read in its entirety as
follows:
(a) Lessee's Covenants. Subject to Paragraph 3.12
relating to permitted contests, Lessee shall not create,
incur, assume or permit to exist any Lien or easement on or
with respect to any of the Property of any character, whether
now owned or hereafter acquired, except for the following
("Permitted Property Liens"):
(i) Liens in favor of a Lessor Party
securing the Lessee Obligations and other Lessor
Liens;
(ii) Liens and easements in existence on the
Commencement Date to the extent reflected in the
title insurance policies delivered to Agent pursuant
to Paragraph 3.02 of and Schedule 3.02 to the
Participation Agreement and approved by Lessor;
(iii) Liens for taxes or other Governmental
Charges not at the time delinquent or thereafter
payable without penalty;
(iv) Liens of carriers, warehousemen,
mechanics, materialmen and vendors and other similar
Liens imposed by law incurred in the ordinary course
of business for sums not overdue;
(vi) Easements granted or created in
connection with and reasonably necessary for the
construction of the New Improvements as approved by
Lessor; and
(vi) Lessor Liens.
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Subject to Paragraph 3.12 relating to permitted contests,
Lessee shall promptly (A) pay all Indebtedness of Lessee and
other obligations prior to the time the non-payment thereof
would give rise to a Lien on the Property and (B) discharge,
at its sole cost and expense, any Lien on the Property which
is not a Permitted Property Lien.
(b) Subparagraphs 5.01(e) and 5.01(h) are hereby amended by
changing the amount "$2,500,000" wherever it appears therein to
"$10,000,000".
3. EFFECTIVE DATE. The amendments effected by Paragraph 2 above shall
become effective on the "Effective Date" as defined in the Second Amendment to
Participation Agreement, subject to satisfaction of the conditions set forth in
Paragraph 5 thereof.
4. EFFECT OF THIS AMENDMENT. On and after the Effective Date, each
reference in the Lease Agreement and the other Operative Documents to the Lease
Agreement shall mean the Lease Agreement as amended hereby. Except as
specifically amended above, (a) the Lease Agreement and the other Operative
Documents shall remain in full force and effect and are hereby ratified and
affirmed and (b) the execution, delivery and effectiveness of this Amendment
shall not, except as expressly provided herein, operate as a waiver of any
right, power, or remedy of Lessor, the Participants or Agent, nor constitute a
waiver of any provision of the Lease Agreement or any other Operative Document.
5. MISCELLANEOUS.
(a) Counterparts. This Amendment may be executed in any number
of counterparts, each of which shall be deemed an original, but all of
which taken together shall constitute one and the same instrument. The
signature page and acknowledgment of any counterpart may be removed
therefrom and attached to any other counterpart to evidence execution
thereof by all of the parties hereto without affecting the validity
thereof.
(b) Headings. Headings in this Amendment are for convenience
of reference only and are not part of the substance hereof.
(c) Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of California
without reference to conflicts of law rules.
[The signature page follows.]
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IN WITNESS WHEREOF, Lessee and Lessor have caused this Amendment to be
executed as of the day and year first above written.
LESSEE: NOVELLUS SYSTEMS, INC.
By:_________________________________
Name:____________________________
Title:___________________________
LESSOR: ABN AMRO LEASING, INC.
By:_________________________________
Name:____________________________
Title:___________________________
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STATE OF ___________________________________________)
)
COUNTY OF __________________________________________)
On ________ 2001, before me, _______________________, a Notary
Public in and for the State of California, personally appeared
_______________________________, personally known to me (or 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.
WITNESS my hand and official seal.
[SEAL]
________________________________________
24
STATE OF ___________________________________________)
)
COUNTY OF __________________________________________)
On ___________, 2001, before me, _______________________, a
Notary Public in and for the State of California, personally appeared
_______________________________, personally known to me (or 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.
WITNESS my hand and official seal.
[SEAL]
_________________________________________
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