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EXHIBIT 10.5
[NOVELLUS IV]
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PARTICIPATION AGREEMENT
AMONG
NOVELLUS SYSTEMS, INC.
AND
LEASE PLAN NORTH AMERICA, INC.
AND
ABN AMRO LEASING, INC.
AND
THE PARTICIPANTS NAMED HEREIN
AND
ABN AMRO BANK N.V.,
AS AGENT FOR THE PARTICIPANTS
APRIL 13, 2001
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TABLE OF CONTENTS
PAGE
SECTION 1. INTERPRETATION............................................................................ 2
1.01. Definitions............................................................................... 2
1.02. Rules of Construction..................................................................... 2
SECTION 2. LEASE FACILITIES.......................................................................... 3
2.01. Acquisition, Lease, Amount Limitations, Etc............................................... 3
2.02. Participation Agreement................................................................... 6
2.03. Advance Requests.......................................................................... 7
2.04. Fees...................................................................................... 9
2.05. Funding of Advances....................................................................... 9
2.06. Sharing of Payments....................................................................... 11
2.07. Other Payment Terms....................................................................... 14
2.08. Commitment Reductions..................................................................... 15
2.09. Extensions................................................................................ 15
2.10. Nature of the Transactions................................................................ 16
2.11. Security.................................................................................. 18
2.12. Change of Circumstances................................................................... 20
2.13. Taxes on Payments......................................................................... 22
2.14. Funding Loss Indemnification.............................................................. 24
2.15. Replacement of Participants............................................................... 24
SECTION 3. CONDITIONS PRECEDENT...................................................................... 25
3.01. Initial Advances.......................................................................... 25
3.02. Subsequent Advances....................................................................... 25
3.03. Other Conditions Precedent................................................................ 25
3.04. Covenant to Deliver....................................................................... 26
SECTION 4. REPRESENTATIONS AND WARRANTIES............................................................ 26
4.01. Lessee's Representations and Warranties................................................... 26
4.02. Lessor's Representations and Warranties................................................... 31
4.03. Participants' Representations and Warranties.............................................. 32
SECTION 5. COVENANTS................................................................................. 33
5.01. Lessee's Affirmative Covenants............................................................ 33
5.02. Lessee's Negative Covenants............................................................... 37
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TABLE OF CONTENTS
(CONTINUED)
PAGE
5.03. Lessee's Financial Covenants.............................................................. 43
5.04. Lessor's Covenants........................................................................ 46
5.05. Participants' Covenants................................................................... 46
SECTION 6. LESSOR, AGENT AND THEIR RELATIONS WITH PARTICIPANTS....................................... 46
6.01. Appointment of Agent...................................................................... 46
6.02. Powers and Immunities..................................................................... 46
6.03. Reliance.................................................................................. 47
6.04. Defaults.................................................................................. 47
6.05. Indemnification........................................................................... 47
6.06. Non-Reliance.............................................................................. 48
6.07. Resignation or Removal of Agent........................................................... 48
6.08. Authorization............................................................................. 49
6.09. Lessor and Agent in their Individual Capacities........................................... 49
SECTION 7. MISCELLANEOUS............................................................................. 49
7.01. Notices................................................................................... 49
7.02. Expenses.................................................................................. 50
7.03. Indemnification........................................................................... 51
7.04. Waivers; Amendments....................................................................... 51
7.05. Successors and Assigns.................................................................... 52
7.06. Setoff.................................................................................... 56
7.07. No Third Party Rights..................................................................... 56
7.08. Partial Invalidity........................................................................ 57
7.09. JURY TRIAL................................................................................ 57
7.10. Counterparts.............................................................................. 57
7.11. No Joint Venture, Etc..................................................................... 57
7.12. Usury Savings Clause...................................................................... 57
7.13. Confidentiality........................................................................... 57
7.14. Governing Law............................................................................. 58
7.15. Termination of Novellus I Participation Agreement and Novellus I Operative Documents...... 58
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SCHEDULES
I Participants (Preamble, 7.01, Schedule 1.01)
II Pricing Grid (Schedule 3.01)
1.01 Definitions
1.02 Rules of Construction
3.01 Initial Conditions Precedent
4.01(q) Subsidiaries
4.01(t) Individual Property Representations
5.02(a) Existing Indebtedness
5.02(b) Existing Liens
EXHIBITS
A Land (2.01(b), 2.01(c))
B(1) Facility 1 Lease Agreement (2.01(b))
B(2) Facility 2 Lease Agreement (2.01(c))
C(1) Facility 1 Purchase Agreement (2.01(b))
C(2) Facility 2 Purchase Agreement (2.01(c))
D Facility 2 Construction Agency Agreement (2.01(c))
E Advance Request (2.03(a))
F(1) Commitment Extension Request (2.09(a))
F(2) Lease Extension Request (2.09(b))
G Assignment of Construction Agreements (2.11(a))
H [RESERVED]
I Assignment of Lease (2.11(b))
J Lessor Deed of Trust (2.11(b))
K Lessor Security Agreement (2.11(b))
L Assignment Agreement (7.05(b))
M(1) Facility 1 Head Lease Agreement (2.01(b)
M(2) Facility 2 Head Lease Agreement (2.01(c)
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PARTICIPATION AGREEMENT
THIS PARTICIPATION AGREEMENT (this "Agreement" herein), dated as of
April 13, 2001, is entered into by and among:
(1) NOVELLUS SYSTEMS, INC., a California corporation
("Lessee");
(2) LEASE PLAN NORTH AMERICA, INC., an Illinois
corporation ("Head Lessor");
(3) ABN AMRO LEASING, INC., an Illinois corporation
("Lessor");
(4) Each of the Persons from time to time listed in
Schedule I hereto, as amended from time to time (such Persons to be
referred to collectively as the "Participants"); and
(5) ABN AMRO BANK N.V., as agent for the Participants (in
such capacity, "Agent").
RECITALS
A. Lessee, Head Lessor, certain financial institutions as
"Participants" (the "Novellus I Participants") and ABN AMRO Bank N.V., as agent
for the Novellus I Participants, are parties to a Participation Agreement dated
as of August 31, 1998 (as amended, the "Novellus I Participation Agreement").
Pursuant to the Novellus I Participation Agreement, Lessor and the Novellus I
Participants have provided to Lessee two lease facilities (the "Novellus I
Facilities") as follows:
(1) Pursuant to the first facility ("Novellus I Facility
1"), Lessor (a) leased from Head Lessor certain land designated by
Lessee (the "Novellus I Facility 1 Property"), (b) subleased the
Novellus I Facility 1 Property to Lessee, (c) made advances to finance
certain related expenses and (d) granted to Lessee the right to
purchase the Novellus I Facility 1 Property.
(2) Pursuant to the second facility ("Novellus I Facility
2"), Lessor (a) leased from Head Lessor certain land, improvements
(including improvements to the Novellus I Facility 1 Property) and
other property designated by Lessee (the "Novellus I Facility 2
Property"), (b) subleased the Novellus I Facility 2 Property to Lessee,
(c) appointed Lessee as Lessor's agent to make certain improvements to
the Novellus I Facility 2 Property and certain of the Novellus I
Facility 1 Property, (d) made advances to finance such improvements and
to pay certain related expenses and (e) granted to Lessee the right to
purchase the Novellus I Facility 2 Property.
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(3) The Novellus I Participants participated in the
Novellus I Facilities by (a) funding the advances made by Lessor and
(b) acquiring participation interests in the rental and certain other
payments made by Lessee.
B. Lessee, Head Lessor, Lessor, Participants and Agent now wish
to restructure the Novellus I Facilities by (x) removing certain of the Novellus
I Facility 2 Property from Novellus I Facility 2 (such removed property, as more
fully defined in Schedule 1.01, to be referred to as the "Property") and (z)
entering into this Agreement and related agreements to create two new lease
facilities as follows:
(1) Pursuant to the first new facility ("Facility 1"),
Lessor will (a) lease certain of the Property (as more fully defined in
Schedule 1.01, the "Facility 1 Property") from Head Lessor, (b)
sublease such property to Lessee, (c) make advances to finance certain
related expenses and (d) grant to Lessee the right to purchase such
property.
(2) Pursuant to the second new facility ("Facility 2"),
Lessor will (a) lease the remainder of the Property (as more fully
defined in Schedule 1.01, the "Facility 2 Property") from Head Lessor,
(b) sublease such property to Lessee, (c) appoint Lessee as Lessor's
agent to make certain improvements to such property, (d) make advances
to finance such improvements and to pay certain related expenses and
(e) grant to Lessee the right to purchase such property.
(3) Participants will participate in Facility 1 and
Facility 2 (collectively, the "Facilities") by (a) funding the advances
to be made by Lessor and (b) acquiring participation interests in the
rental and certain other payments to be made by Lessee.
(The Novellus I Participation Agreement and all related documents, instruments
and agreements shall remain in full force and effect with respect to the
Novellus I Facility 1 Property and all of the Novellus I Facility 2 Property not
removed and covered by Facility 1 and Facility 2 hereunder.)
AGREEMENT
NOW, THEREFORE, in consideration of the above Recitals and the mutual
covenants herein contained, the parties hereto hereby agree as follows:
SECTION 1. INTERPRETATION.
1.01. Definitions. Unless otherwise indicated in this Agreement or
any other Operative Document, each term set forth in Schedule 1.01, when used in
this Agreement or any other Operative Document, shall have the respective
meaning given to that term in Schedule 1.01 or in the provision of this
Agreement or other document, instrument or agreement referenced in Schedule
1.01.
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1.02. Rules of Construction. Unless otherwise indicated in this
Agreement or any other Operative Document, the rules of construction set forth
in Schedule 1.02 shall apply to this Agreement and the other Operative
Documents.
SECTION 2. LEASE FACILITIES.
2.01. Acquisition, Lease, Amount Limitations, Etc.
(a) Removal of Property from Novellus I Agreements. On
the date specified by Lessee pursuant to Subparagraph 2.03(a) for the
Initial Advances hereunder (the "Closing Date"):
(i) Lessee, Head Lessor, Lessor, the Novellus I
Participants and ABN AMRO, as agent for the Novellus I
Participants, shall (A) execute such amendments and other
documents, instruments and agreements as are necessary to
remove the Property from Facility 2 under the Novellus I
Participation Agreement and the other Novellus I Operative
Documents; and (B) where appropriate, cause such amendments
and other documents, instruments and agreements, or memoranda
thereof (collectively the "Novellus I Amendments"), to be
properly notarized and recorded in the Official Records of the
County of Santa Clara, California.
(ii) Lessee shall pay to Head Lessor, the
Novellus I Participants and ABN AMRO, as agent for the
Novellus I Participants, all amounts due and payable to such
Persons under the Novellus I Participation Agreement and the
other Novellus I Operative Documents, other than the
"Outstanding Lease Amount" (as defined in the Novellus I
Participation Agreement) under each of the Novellus I
Facilities. Lessor shall pay to Agent (with funds provided by
Participants hereunder), for the benefit of the Novellus I
Participants, $44,813,000 (the "Novellus I Lease Reduction
Payment"), in payment of the portion of the "Outstanding Lease
Amount" (as defined in the Novellus I Participation Agreement)
under Novellus I Facility 2 attributable to the Property and
the portion of each Participant's respective "Outstanding
Participation Amount" (as defined in the Novellus I
Participation Agreement) under Novellus I Facility 2
attributable to the Property, the rent payable by Lessor under
the Head Lease Agreements on the Closing Date; provided,
however, that the "Outstanding Lease Amount" (as defined in
the Novellus I Participation Agreement") under Novellus I
Facility 2 and each Participant's respective "Outstanding
Participation Amount" (as defined in the Novellus I
Participation Agreement) under Novellus I Facility 2 shall be
deemed paid and then funded hereunder to the extent provided
in Subparagraph 2.05(d) for each Novellus I Participant that
is continuing as a Participant under this Agreement. (Of the
total Novellus I Lease Reduction Payment to be paid by Lessor
on the Closing Date, (A) $10,119,000 is attributable to the
Land Portion of the Facility 1 Property and $24,214,000 is
attributable to the Improvement Portion of the Facility 1
Property and shall be treated as part of the Initial Advance
under
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Facility 1, and (B) $6,198,000 is attributable to the Land
Portion of the Facility 2 Property (the "Facility 2 Land
Portion Cost") and $4,282,000 is attributable to the
Improvement Portion of the Facility 2 Property and shall be
treated as part of the Initial Advance under Facility 2.) In
the event that a Novellus I Participant is owed additional
amounts under the Novellus I Participation Agreement and the
other Novellus I Operative Documents that is not to be deemed
paid and funded pursuant to Subparagraph 2.05(d), such
additional amounts shall be paid directly to such Novellus I
Participant in accordance with the Novellus I Participation
Agreement.
(b) Facility 1 Lease, Etc. Subject to the terms and
conditions of this Agreement (including the limitations set forth in
Subparagraph 2.01(d)):
(i) Lessor and Head Lessor shall, on the Closing
Date, execute a Facility 1 Head Lease Agreement in the form of
Exhibit M(1) (the "Facility 1 Head Lease Agreement"), pursuant
to which Lessor will acquire a leasehold interest in (A) the
Tract of land described in Part 1 of Exhibit A as the Tract 2
Land (as more fully defined in Schedule 1.01, the "Facility 1
Land"), together with any Appurtenant Rights thereto, (B) all
existing and new Improvements to the Facility 1 Land, and (C)
certain other related property (collectively, as more fully
defined in Schedule 1.01, the "Facility 1 Property"); and
(ii) Immediately upon the execution by Lessor and
Head Lessor of the Facility 1 Head Lease Agreement, Lessor and
Lessee shall, on the Closing Date, execute (A) a Facility 1
Lease Agreement in the form of Exhibit B(1) (the "Facility 1
Lease Agreement"), pursuant to which Lessor will lease to
Lessee the Facility 1 Property and (B) a Facility 1 Purchase
Agreement in the form of Exhibit C(1) (the "Facility 1
Purchase Agreement"), pursuant to which Lessor will grant to
Lessee the right to purchase the Facility 1 Property.
(c) Facility 2 Lease, Etc. Subject to the terms and
conditions of this Agreement (including the limitations set forth in
Subparagraph 2.01(d)):
(i) Lessor and Head Lessor shall, on the Closing
Date, execute a Facility 2 Head Lease Agreement in the form of
Exhibit M(2) (the "Facility 2 Head Lease Agreement"), pursuant
to which Lessor will acquire a leasehold interest (A) the
Tract of land described in Part 2 of Exhibit A as the Tract 5
Land (as more fully defined in Schedule 1.01, the "Facility 2
Land"), together with any Appurtenant Rights thereto, (B) all
existing and new Improvements to the Facility 2 Land, and (C)
certain other related property (collectively, as more fully
defined in Schedule 1.01, the "Facility 2 Property")
(ii) Immediately upon the execution by Lessor and
Head Lessor of the Facility 2 Head Lease Agreement, Lessor and
Lessee shall, on the Closing Date, execute (A) a Facility 2
Lease Agreement in the form of Exhibit B(2) (the "Facility 2
Lease Agreement"), pursuant to which Lessor will lease to
Lessee the
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Facility 2 Property, (B) a Facility 2 Purchase Agreement in
the form of Exhibit C(2) (the "Facility 2 Purchase
Agreement"), pursuant to which Lessor will grant to Lessee the
right to purchase the Facility 2 Property and (C) a Facility 2
Construction Agency Agreement in the form of Exhibit D (the
"Facility 2 Construction Agency Agreement"), pursuant to which
Lessee will agree to construct certain improvements to the
Facility 2 Property; and
(iii) During the period (the "Commitment Period")
beginning on the date of this Agreement and ending on the
Outside Completion Date or, if earlier, the first Business Day
of the first full calendar month immediately succeeding the
earlier of (A) the Completion Date and (B) the date on which
the Unused Total Facility 2 Commitment is $0 (the earlier of
the Outside Completion Date and such first Business Day to be
referred to as the "Commitment Termination Date"), Lessor
shall, at the request of Lessee, make additional advances
(with funds provided by the Participants) to pay Permitted
Improvement Costs and Permitted Transaction Expenses under
Facility 2.
(d) Amount Limitations. The amount of all advances made
by Lessor hereunder (the "Advances") shall be subject to the following
limitations:
(i) The aggregate amount of all Advances made by
Lessor for the Land Portion under Facility 1 shall not exceed
the lesser of (A) Ten Million Two Hundred Ninety-Three
Thousand Dollars ($10,293,000) (the "Total Facility 1 Land
Portion Commitment") and (B) the Expiration Date Appraisal for
the Land Portion of the Facility 1 Property;
(ii) The aggregate amount of all Advances made by
Lessor for the Improvement Portion under Facility 1 shall not
exceed the lesser of (A) Twenty-Four Million Six Hundred
Twenty Thousand Dollars ($24,620,000) (the "Total Facility 1
Improvement Portion Commitment") and (B) the Expiration Date
Appraisal for the Improvement Portion of the Facility 1
Property;
(iii) The aggregate amount of all Advances made by
Lessor under Facility 1 shall not exceed Thirty-Four Million
Nine Hundred Thirteen Thousand Dollars ($34,913,000) (the
"Total Facility 1 Commitment");
(iv) The aggregate amount of all Advances made by
Lessor under Facility 2 shall not exceed the lesser of (A)
Fifty-Four Million Eighty-Seven Thousand Dollars ($54,087,000)
(the "Total Facility 2 Commitment") and (B) the Expiration
Date Appraisal for the Facility 2 Property; and
(v) The aggregate amount of all Advances made by
Lessor under both Facilities shall not exceed Eighty-Nine
Million Dollars ($89,000,000) (the "Total Commitment").
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(e) Tranches. Each Advance shall consist of a Tranche A
Portion, a Tranche B Portion and a Tranche C Portion. For accounting
purposes, the Tranche A Portion and Tranche B Portion of each Advance
shall constitute debt and the Tranche C Portion shall constitute
equity.
2.02. Participation Agreement.
(a) Advances. Each Participant severally, unconditionally
and irrevocably agrees with Lessor to participate in each Advance made
by Lessor in an amount equal to such Participant's Proportionate Share
of such Advance; provided, however, that:
(i) The aggregate amount of each Participant's
Proportionate Share of all Advances made under Facility 1
shall not exceed such Participant's Facility 1 Commitment;
(ii) The aggregate amount of each Participant's
Proportionate Share of all Advances made under Facility 2
shall not exceed such Participant's Facility 2 Commitment; and
(iii) The aggregate amount of each Participant's
Proportionate Share of all Advances shall not exceed such
Participant's Commitment.
Each Participant shall fund its Proportionate Share of each Advance as
provided in Subparagraph 2.05(a). Each Participant's Proportionate
Share of each Advance shall consist of such Participant's Tranche A
Portion, Tranche B Portion and Tranche C Portion of such Advance.
(b) Payments. In consideration of each Participant's
participation in each Advance made by Lessor, such
Participant shall participate in the payments made by Lessee under this
Agreement and the other Operative Documents as provided in Paragraph
2.06.
(c) Other Rights of Participants and Agent.
(i) Until all amounts payable to Agent and
Participants under this Agreement and the other Operative
Documents are paid in full, Lessee shall deliver all notices
for Lessor under this Agreement and the other Operative
Documents to Agent at the office or facsimile number and
during the hours specified in Paragraph 7.01. Agent shall
promptly furnish to Lessor and each Participant copies of each
such notice and, in the case of each request for an Advance,
shall notify each Participant of the amount of such
Participant's Proportionate Share of the Advance requested
thereby. (Lessee shall not be liable for, and no Event of
Default shall occur upon, Agent's failure to provide copies of
notices delivered to Agent by Lessee to Lessor and/or the
Participants.)
(ii) Lessor is not an agent for Participants or
Agent and may exercise or refrain from exercising its rights
under this Agreement and the other Operative
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Documents in its discretion; provided, however that, until all
amounts payable to Agent and Participants under this Agreement
and the other Operative Documents are paid in full, (A) Lessor
shall, subject to the limitations set forth in Section VI, be
required to act or to refrain from acting upon instructions of
the Required Participants as provided in Paragraph 6.03 and
(B) Agent may exercise any or all of the rights and remedies
of Lessor, and shall be entitled to the other benefits
afforded Lessor, under this Agreement and the other Operative
Documents.
(iii) Neither Agent nor any Participant shall have
any right, title or interest in the Property except for the
Lien therein granted to Agent, for the benefit of the
Participants, in the Lessor Deed of Trust, the Assignment of
Lease and the Lessor Security Agreement.
2.03. Advance Requests.
(a) Advance Requests. Lessee shall request Lessor to make
each Advance by delivering to Lessor:
(i) An irrevocable written request in the form
of Exhibit E, appropriately completed (an "Advance Request"),
which specifies, among other things:
(A) The Facility under which such
Advance is to be made;
(B) The amount of such Advance, which
shall be in the minimum amount of $10,000 or an
integral multiple of $10,000 in excess thereof, and,
if such Advance is under Facility 1, the portions
thereof attributable to the Land Portion and
Improvement Portion;
(C) The date of such Advance, which
shall be (1) a Business Day on or prior to May 2,
2001 in the case of the Initial Advances (which day
shall also be the same for both of the Initial
Advances) and (2) the first Business Day of a
calendar month in the case of all other Advances; and
(D) The Permitted Improvement Costs and
Permitted Transaction Expenses to be paid by such
Advance; and
(ii) If the proceeds of such Advance are to be
used to purchase Related Goods:
(A) A Supplement to Exhibit B to the
Facility 2 Lease Agreement in the form of Exhibit
B(1) to the Lease Agreement (an "Exhibit B
Supplement"), which contains a detailed description
of such Related Goods; and
(B) Bills of sale for all such Related
Goods showing Lessor as the purchaser.
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Lessee shall not request more than one (1) Advance under each Facility
in any calendar month. (For the purposes of calculating each
Participant's Proportionate Share of each Advance, Outstanding
Participation Amount, Outstanding Tranche A Participation Amount,
Outstanding Tranche B Participation Amount, and Outstanding Tranche C
Participation Amount, Tranche A Portion, Tranche B Portion, and Tranche
C Portion under Facility 1, the Land Portion and Improvement Portion of
each Advance shall be treated as separate Advances.)
(b) Delivery of Advance Requests. Etc. Lessee shall
deliver each Advance Request to Lessor at least three (3) Business Days
before the date of such Advance by first-class mail or facsimile as
required by Subparagraph 2.02(c) and Paragraph 7.01; provided, however,
that Lessee shall promptly deliver to Lessor the original of any
Advance Request initially delivered by facsimile.
(c) Capitalization of Certain Amounts.
(i) Lessee shall not be required to pay during
the Construction Period the following amounts that would
otherwise be payable by Lessee under Facility 2 pursuant to
the terms of the Operative Documents:
(A) Any Base Rent payable by Lessee
during the Construction Period under the Facility 2
Lease Agreement; provided, however, that Lessee may
pay any such Base Rent due on a Scheduled Rent
Payment Date (and such Base Rent shall not be
capitalized as provided below) if, not later than
three (3) Business Days prior to such Scheduled Rent
Payment Date, Lessee notifies Lessor in writing that
Lessee will pay such Base Rent;
(B) Any fees payable by Lessee pursuant
to Paragraph 2.04 during the Construction Period and
attributable to the Facility 2 Lease Agreement; and
(C) Any increased costs or reduced
amounts that would be payable by Lessee during the
Construction Period on account of Facility 2 pursuant
to Subparagraph 2.12(c) but for the proviso to such
subparagraph.
Lessor shall capitalize all such amounts by automatically
treating each such amount as an Advance made on the date such
amount would be payable by Lessee but for this clause (i). All
such amounts so capitalized shall be added to the Outstanding
Lease Amount under Facility 2 and shall be included in the
Outstanding Lease Amount under Facility 2 for all purposes,
including the calculation of the Base Rent payable by Lessee
under the Facility 2 Lease Agreement after the Construction
Period and the calculation of the Residual Value Guaranty
Amount under the Facility 2 Purchase Agreement.
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(ii) Lessee also shall not be required to pay the
following amounts unless Lessee purchases the Facility 2
Property:
(A) Any liabilities, losses, damages or
expenses not constituting Project Costs and not
covered by insurance that would be payable by Lessee
during the Construction Period on account of Facility
2 pursuant to Paragraph 7.03 but for the proviso to
such paragraph;
(B) Any losses or liabilities not
constituting Project Costs and not covered by
insurance that would be payable by Lessee during the
Construction Period on account of Facility 2 pursuant
to Paragraph 3.02 of the Facility 2 Lease Agreement
but for the proviso to such paragraph;
(C) Any Cost Overrun not constituting
Project Costs and not covered by insurance that
Lessor and Participants fund under Facility 2, except
any Cost Overrun that is caused by or arises from any
failure by Lessee to comply with any of its
obligations under the Operative Documents (including
its insurance obligations), any representation by
Lessee in any of the Operative Documents not being
true, any negligence or willful misconduct of Lessee,
or any claim by any third-party against Lessee (or
against any Lessor Party) based upon any alleged
action or inaction by Lessee; or
(D) Any portion of Base Rent that is
attributable to the inclusion in the Facility 2
Outstanding Lease Amount of the amounts of (1) any
liabilities, losses, damages or expenses referred to
in clause (ii)(A) above, (2) any losses or
liabilities referred to in clause (ii)(B) above or
(3) any Cost Overruns referred to in clause (ii)(C)
above.
Lessor shall capitalize all such amounts by automatically
treating each such amount as an Advance made on the date such
amount would be payable by Lessee but for this clause (ii).
All such amounts so capitalized shall be added to the
Outstanding Lease Amount under Facility 2 and shall be
included in the Outstanding Lease Amount; provided, however,
that, if Lessee exercises the Marketing Option in accordance
with the applicable Purchase Agreement and the other Operative
Documents, Lessee shall have no obligation to pay any such
amounts and Lessor Parties may recover such amounts only to
the extent provided in Subparagraph 3.02(j) of the Facility 2
Purchase Agreement. If any amounts referred to in clauses
(ii)(A), (ii)(B), (ii)(C) or (ii)(D) above (collectively,
"Ineligible Project Costs") are capitalized and included in
the Outstanding Lease Amount, all Lessee payments and other
amounts applied to the Outstanding Lease Amount shall be
applied first to all other amounts included in the Outstanding
Lease Amount and then to pay the Ineligible Project Costs. All
payments applied to Ineligible Project Costs shall be shared
by the Lessor Parties that funded such Ineligible Project
Costs pro rata based on the amounts so funded by and owed to
such Lessor Parties.
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Agent shall notify Lessee, Lessor and each Participant of each amount
capitalized and treated as an Advance under this Subparagraph 2.03(c).
2.04. Fees.
(a) Agent's Fees. Lessee shall pay to Agent, for its own
account, agent's fees in the amounts and at the times set forth in the
Agent's Fee Letter (the "Agent's Fees").
(b) Commitment Fees. Lessee shall pay to Agent, for the
ratable benefit of the Participants as provided in clause (ii) of
Subparagraph 2.06(c), commitment fees (the "Commitment Fees") equal to:
(i) For Facility 1, the Commitment Fee
Percentage (as such percentage shall change from time to time
for each Pricing Period) of the daily average Unused Total
Facility 1 Commitment for the entire Commitment Period; and
(ii) For Facility 2, the Commitment Fee
Percentage (as such percentage shall change from time to time
for each Pricing Period) of the daily average Unused Total
Facility 2 Commitment for the entire Commitment Period.
Lessee shall pay the Commitment Fees in arrears on the first Business
Day in each January, April, July and October (commencing July 2, 2001)
and on the Commitment Termination Date (or if the Total Commitment is
cancelled on a date prior to such day, on such prior date).
(c) Commitment Extension Fee. If Lessor and the
Participants consent to any extension of the Commitment Termination
Date requested by Lessee pursuant to Subparagraph 2.09(a), Lessee shall
pay to Agent, for the ratable benefit of the Participants as provided
in clause (v) of Subparagraph 2.06(c), an extension fee (the
"Commitment Extension Fee") equal to ten hundredths of one percent
(0.10%) of the Unused Total Commitment on the date Lessee is notified
by Agent of such consent. Lessee shall pay the Commitment Extension Fee
on or prior to the Business Day immediately preceding the original
Commitment Termination Date.
2.05. Funding of Advances.
(a) Participant Funding and Disbursement. Except as
otherwise provided in Subparagraph 2.05(d) relating to the Initial
Advances, each Participant shall, before 12:00 noon (Central time) on
the date of each Advance, make available to Agent at its office
specified in Paragraph 7.01, in same day or immediately available
funds, such Participant's Proportionate Share of such Advance. After
Agent's receipt of such funds and upon fulfillment of the applicable
conditions set forth in Section 3, Agent will promptly disburse such
funds on behalf of Lessor, in same day or immediately available funds,
as follows:
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(i) Agent shall disburse to Head Lessor such
portion of the Initial Advance under each Facility as is
necessary to pay the rent payable under the Head Lease
Agreement for such Facility.
(ii) Agent shall disburse the remainder of the
Initial Advances and all other Advances as directed by Lessee
in the Advance Requests for such Advances.
(b) Participant Failure to Fund. Unless Agent shall have
received notice from a Participant prior to the date of any Advance
that such Participant will not make available to Agent such
Participant's Proportionate Share of such Advance, Agent may assume
that such Participant has made such portion available to Agent on the
date of such Advance in accordance with Subparagraph 2.05(a), and Agent
may, in reliance upon such assumption, disburse the full amount of such
Advance on such date; provided, however, that neither Agent nor Lessor
shall have any obligation to make an Advance requested hereunder in an
amount which exceeds the aggregate amount of funds actually received by
Agent from the Participants on account of their respective
Proportionate Shares of such Advance. If any Participant does not make
the amount of its Proportionate Share of any Advance available to Agent
on or prior to the date such Advance is made, Agent promptly shall
notify such Participant of such failure and such Participant shall pay
to Agent, on demand, interest which shall accrue on such amount until
made available to Agent at rates equal to (i) the daily Federal Funds
Rate during the period from the date of such Advance through the third
Business Day thereafter and (ii) the Base Rate plus two percent (2.0%)
thereafter. A certificate of Agent submitted to any Participant with
respect to any amounts owing under this Subparagraph 2.05(b) shall be
conclusive absent manifest error. If any Participant's Proportionate
Share of any Advance is not in fact made available to Agent by such
Participant within three (3) Business Days after the date of such
Advance, Lessee shall pay to Agent, on demand, an amount equal to such
Proportionate Share together with interest thereon, for each day from
the date such amount was made available to Lessee until the date such
amount is repaid to Agent, at a per annum rate equal to the Base Rate.
(c) Participants' Obligations Several. The failure of any
Participant to fund its Proportionate Share of any Advance shall not
relieve any other Participant of its obligation hereunder to fund its
Proportionate Share of such Advance, and no Participant shall be
responsible for the failure of any other Participant to fund its
Proportionate Share of any Advance on the date of such Advance.
(d) Funding of Initial Advances. For each Participant
under this Agreement that is a Novellus I Participant on the Closing
Date, such Participant shall be deemed to have satisfied its funding
obligation under Subparagraph 2.05(a) with respect to the Initial
Advance under each Facility to the extent of such Participant's
"Outstanding Participation Amount" (as defined in the Novellus I
Participation Agreement) in the Novellus I Facility 2 on the Closing
Date by treating the amount of such "Outstanding Participation Amount"
on the Closing Date as (i) having been paid to such Participant, as a
Novellus I Participant, under the Novellus I Participation Agreement
and (ii) then having been made available by such Participant pursuant
to Subparagraph 2.05(a) as its Proportionate Share
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of such Initial Advance. All such amounts shall in turn be deemed to
have been (A) provided by Lessor to Lessee as a part of the respective
Initial Advances hereunder and (B) disbursed to Head Lessor in payment
of the rent payable under the respective Head Lease Agreements.
2.06. Sharing of Payments.
(a) Outstanding Lease Amount. Subject to clause (ii) of
Subparagraph 2.03(c) in the event any amount is capitalized pursuant to
such clause, Lessor shall share payments applied to reduce the
Outstanding Lease Amount of a Facility (or the portion thereof
attributable to the Land Portion or Improvement Portion in the case of
Facility 1) as follows:
(i) Each payment of the Outstanding Lease Amount
under a Facility (or the applicable portion thereof in the
case of Facility 1) derived from the purchase price paid by
Lessee (or an Assignee Purchaser) to purchase the Property
under such Facility (or the applicable portion thereof in the
case of Facility 1) pursuant to the Purchase Agreement for
such Facility shall be shared by the Participants pro rata
according to their respective Outstanding Participation
Amounts under such Facility (or the applicable portions
thereof in the case of Facility 1) at the time of such
payment.
(ii) Each payment of the Outstanding Lease Amount
under a Facility (or the applicable portion thereof in the
case of Facility 1) derived from:
(A) The Residual Value Guaranty Amount
paid by Lessee pursuant to the Purchase Agreement for
such Facility (or the applicable portion thereof in
the case of Facility 1); or
(B) The Principal Component of Base
Rent under such Facility (or the applicable portion
thereof in the case of Facility 1);
Shall be shared first by the Tranche A Participants pro rata
according to their respective applicable Outstanding Tranche A
Participation Amounts at the time of such payment; second, if
any amounts remain after all such Outstanding Tranche A
Participation Amounts are paid in full, by the Tranche B
Participants pro rata according to their respective applicable
Outstanding Tranche B Participation Amounts at the time of
such payment; and third, if any amounts remain after all such
Outstanding Tranche A Participation Amounts and all such
Outstanding Tranche B Participation Amounts are paid in full,
by the Tranche C Participants pro rata according to their
respective applicable Outstanding Tranche C Participation
Amounts at the time of such payment.
(iii) Each payment of the Outstanding Lease Amount
under a Facility (or the applicable portion thereof in the
case of Facility 1) derived from:
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(A) the purchase price paid by a
Designated Purchaser to purchase the Property under
such Facility (or the applicable portion thereof in
the case of Facility 1) pursuant to the Purchase
Agreement for such Facility;
(B) the Indemnity Amount paid by Lessee
pursuant to the Purchase Agreement for such Facility
(or the applicable portion thereof in the case of
Facility 1);
(C) Casualty Proceeds or Condemnation
Proceeds related to any of the Property under such
Facility (or the applicable portion thereof in the
case of Facility 1); or
(D) the purchase price paid by any
Person (except as otherwise provided in clause (i)
above) to purchase the Property under such Facility
(or the applicable portion thereof in the case of
Facility 1), whether after the retention of such
Property by Lessor following the Expiration Date of
the Lease Agreement for such Facility, upon
foreclosure or otherwise;
Shall be shared first by the Tranche B Participants pro rata
according to their respective applicable Outstanding Tranche B
Participation Amounts at the time of such payment; second, if
any amounts remain after all such Outstanding Tranche B
Participation Amounts are paid in full, by the Tranche A
Participants pro rata according to their respective applicable
Outstanding Tranche A Participation Amounts at the time of
such payment; and third, if any amounts remain after all such
Outstanding Tranche B Participation Amounts and all such
Outstanding Tranche A Participation Amounts are paid in full,
by the Tranche C Participants pro rata according to their
respective applicable Outstanding Tranche C Participation
Amounts at the time of such payment.
(iv) Notwithstanding anything to the contrary set
forth in this Paragraph 2.06, the proceeds from the
foreclosure, application, setoff, withdrawal or other
collection or disposition of any Cash Collateral shall be
shared in accordance with the other provisions of this
Paragraph 2.06 based upon the Lessee Obligations to which such
proceeds of Cash Collateral are applied; provided, however,
that if the Property (or the applicable portion thereof in the
case of Facility 1) is sold to a Designated Purchaser pursuant
to the Marketing Option in the Purchase Agreement, any
proceeds of Cash Collateral shall be applied only in
satisfaction of the obligations of Lessee in respect of the
Residual Value Guaranty Amount applicable to such Property (or
the applicable portion thereof in the case of Facility 1) and
such other Lessee Obligations as may then be due and owing in
accordance with the Operative Documents, and such proceeds (as
so applied) shall be shared in accordance with the other
provisions of this Paragraph 2.06 which govern the sharing of
proceeds which are applied to the Residual Value Guaranty
Amount and such other Lessee Obligations as are then due and
owing. Any
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remaining Cash Collateral after such Lessee Obligations have
been paid shall be remitted to Lessee or to such other Person
as may be entitled thereto.
(b) Interest Component of Base Rent. Lessor shall share
each payment applied to the Interest Component of Base Rent under
either Facility among the Participants which funded the Outstanding
Lease Amount under such Facility (or the applicable portion thereof in
the case of Facility 1) pro rata within the Tranche A Portion, Tranche
B Portion and the Tranche C Portion, respectively, according to (i) the
respective Outstanding Participation Amounts so funded by such
Participants and (ii) the dates on which such Participants so funded
such amounts.
(c) Supplemental Rent. Lessor shall share each payment
applied to Supplemental Rent under either Facility among the Lessor
Parties as follows:
(i) Each payment applied to Agent's Fees shall
be solely for the account of Agent.
(ii) Each payment applied to:
(A) Commitment Fees under Facility 1
shall be shared by the Facility 1 Participants pro
rata according to (1) their respective Proportionate
Shares under Facility 1 and (2) in the case of each
Facility 1 Participant which becomes a Facility 1
Participant hereunder after the date hereof, the date
upon which such Facility 1 Participant so became a
Facility 1 Participant; and
(B) Commitment Fees under Facility 2
shall be shared by the Facility 2 Participants pro
rata according to (1) their respective Proportionate
Shares under Facility 2 and (2) in the case of each
Facility 2 Participant which becomes a Facility 2
Participant hereunder after the date hereof, the date
upon which such Facility 2 Participant so became a
Facility 2 Participant.
(iii) Each payment applied to reimburse any Lessor
Party for any fees, costs and expenses incurred by such Lessor
Party shall be solely for the account of such Lessor Party.
(iv) Each payment of interest (other than Base
Rent) shall be shared among the Lessor Parties owed the amount
upon which such interest accrues pro rata according to (A) the
respective amounts so owed such Lessor Parties and (B) the
dates on which such amounts became owing to such Lessor
Parties.
(v) Each payment applied to the Commitment
Extension Fee shall be shared by the Participants pro rata
according to the Unused amounts of their Commitments on the
date of such payment.
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(vi) All other payments under this Agreement and
the other Operative Documents shall be for the benefit of the
Person or Persons specified.
(All amounts payable by Lessee under the Operative Documents shall be
attributable to Facility 1 or Facility 2 and, in the case of amounts
attributable to Facility 1, the Land Portion or Improvement Portion of
Facility 1. If any amounts are not clearly on account of either
Facility (or a portion thereof in the case of Facility 1), Lessor may
attribute such amounts to either Facility (or either portion thereof in
the case of Facility 1) using reasonable methods of allocation;
provided, however, that Lessee may direct Lessor to attribute such
amounts to the Facility (or portion thereof in the case of Facility 1)
designated by Lessee if no Default has occurred and is continuing.)
(d) Disproportionate Payments, Etc. If any Participant
shall obtain any payment (whether voluntary, involuntary, through the
exercise of any right of setoff, or otherwise) on account of amounts
owed to it in excess of its ratable share of payments on account of
such amounts obtained by all Participants entitled to such payments,
such Participant shall forthwith purchase from the other Participants
such participations in the payments to be made under the Operative
Documents as shall be necessary to cause such purchasing Participant to
share the excess payment ratably with each of them; provided, however,
that if all or any portion of such excess payment is thereafter
recovered from such purchasing Participant, such purchase shall be
rescinded and each other Participant shall repay to the purchasing
Participant the purchase price to the extent of such recovery together
with an amount equal to such other Participant's ratable share
(according to the proportion of (i) the amount of such other
Participant's required repayment to (ii) the total amount so recovered
from the purchasing Participant) of any interest or other amount paid
or payable by the purchasing Participant in respect of the total amount
so recovered. Lessee agrees that any Participant so purchasing a
participation from another Participant pursuant to this Subparagraph
2.06(d) may, to the fullest extent permitted by law, exercise all its
rights of payment (including the right of setoff) with respect to such
participation as fully as if such Participant were the direct creditor
of Lessee in the amount of such participation.
2.07. Other Payment Terms.
(a) Place and Manner of Payments by Lessee. Lessee shall
make all payments due to any Lessor Party under this Agreement and the
other Operative Documents by payments to Agent, for the account of such
Person, at Agent's office, located at the address specified in
Paragraph 7.01, with each payment due to a Participant to be for the
account of such Participant's Applicable Participating Office. Lessee
shall make all payments in lawful money of the United States and in
same day or immediately available funds not later than 11:00 a.m. on
the date due. Agent shall promptly disburse to the appropriate Person
each such payment received by Agent for such Person.
(b) Date. Whenever any payment due under this Agreement
or any other Operative Document shall fall due on a day other than a
Business Day, such payment
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shall be made on the next succeeding Business Day, and such extension
of time shall be included in the computation of Rent, interest or fees,
as the case may be.
(c) Late Payments. If any amounts required to be paid by
Lessee under this Agreement or any other Operative Document (including
Rent, interest, fees or other amounts) remain unpaid after such amounts
are due, Lessee shall pay interest on the aggregate, outstanding
balance of such amounts from the date due until those amounts are paid
in full at a per annum rate equal to the Base Rate plus two percent
(2.0%), such rate to change from time to time as the Base Rate shall
change.
(d) Application of Payments. All payments under this
Agreement and the other Operative Documents on account of either
Facility (or the Land Portion or Improvement Portion thereof in the
case of Facility 1) shall be applied first to unpaid fees, costs and
expenses and other Supplemental Rent then due and payable under this
Agreement or any other Operative Document on account of such Facility
(or the applicable portion thereof in the case of Facility 1), second
to the accrued Interest Component of Base Rent then due and payable
under this Agreement or any other Operative Document on account of such
Facility (or the applicable portion thereof in the case of Facility 1)
and finally to the Principal Component of Base Rent or otherwise to
reduce the Outstanding Lease Amount under such Facility(or the
applicable portion thereof in the case of Facility 1). If any payments
are not clearly on account of either Facility (or a portion thereof in
the case of Facility 1), Lessor may apply such payments to either
Facility (or either portion thereof in the case of Facility 1) in its
discretion; provided, however, that Lessee may direct Lessor to apply
such payments to the Facility (or portion thereof in the case of
Facility 1) designated by Lessee if no Default has occurred and is
continuing.
(e) Failure to Pay Agent. Unless Agent shall have
received notice from Lessee at least one (1) Business Day prior to the
date on which any payment is due to Lessor or the Participants under
this Agreement or the other Operative Documents that Lessee will not
make such payment in full, Agent may assume that Lessee has made such
payment in full to Agent on such date and Agent may, in reliance upon
such assumption, cause to be distributed to the appropriate Persons on
such due date an amount equal to the amount then due such Persons. If
and to the extent Lessee shall not have so made such payment in full to
Agent, each such Person shall repay to Agent forthwith on demand such
amount distributed to such Person together with interest thereon, for
each day from the date such amount is distributed to such Person until
the date such Person repays such amount to Agent, at (i) the Federal
Funds Rate for the first three (3) days and (ii) the Base Rate plus two
percent (2.0%) thereafter, such rate to change from time to time as the
Base Rate shall change. A certificate of Agent submitted to any Person
with respect to any amounts owing by such Person under this
Subparagraph 2.07(e) shall be conclusive absent manifest error.
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2.08. Commitment Reductions.
(a) Reduction or Cancellation of Commitments. Lessee may,
at any time prior to the Commitment Termination Date, upon five (5)
Business Days written notice to Lessor, permanently reduce the Total
Facility 1 Land Portion Commitment, the Total Facility 1 Improvement
Portion Commitment or the Total Facility 2 Commitment by the amount of
Five Million Dollars ($5,000,000) or an integral multiple of One
Million Dollars ($1,000,000) in excess thereof or cancel the Total
Facility 1 Land Portion Commitment, the Total Facility 1 Improvement
Portion Commitment or the Total Facility 2 Commitment in its entirety.
(b) Effect of Commitment Reductions. From the effective
date of any reduction of the Total Facility 1 Land Portion Commitment,
the Total Facility 1 Improvement Portion Commitment or the Total
Facility 2 Commitment, the Commitment Fees shall be computed on the
basis of the Total Facility 1 Commitment or Total Facility 2 Commitment
as reduced. The Total Commitment shall be automatically reduced by the
amount of each reduction in the Total Facility 1 Land Portion
Commitment, the Total Facility 1 Improvement Portion Commitment or the
Total Facility 2 Commitment. Once reduced or cancelled, the Total
Facility 1 Land Portion Commitment, the Total Facility 1 Improvement
Portion Commitment or the Total Facility 2 Commitment and the Total
Commitment may not be increased or reinstated without the prior written
consent of Lessor and all Participants. Any reduction of the Total
Facility 1 Land Portion Commitment, the Total Facility 1 Improvement
Portion Commitment or the Total Facility 2 Commitment pursuant to this
Paragraph 2.08 shall be applied ratably to reduce each Participant's
Facility 1 Land Portion Commitment, Facility 1 Improvement Portion
Commitment or Facility 2 Commitment, as the case may be, and its
Commitment pro rata in accordance with its respective Proportionate
Share.
2.09. Extensions.
(a) Commitment Extension. Lessee may request Lessor to
extend the Outside Completion Date for an additional period of one (1),
two (2), three (3), four (4), five (5) or six (6) months by
appropriately completing, executing and delivering to Agent a written
request in the form of Exhibit F(1) (a "Commitment Extension Request").
Lessee shall deliver the Commitment Extension Request to Agent not more
than three (3) months and not less than two (2) months before the
original Outside Completion Date. Agent shall promptly deliver to
Lessor and each Participant three (3) copies of each Commitment
Extension Request received by Agent. If Lessor or a Participant, in its
sole and absolute discretion, consents to the Commitment Extension
Request, such Person shall evidence such consent by executing and
returning two (2) copies of the Commitment Extension Request to Agent
not later than the last Business Day which is not less than twelve (12)
Business Days prior to the original Outside Completion Date. Any
failure by Lessor or any Participant so to execute and return a
Commitment Extension Request shall be deemed a denial thereof. If
Lessee shall deliver a Commitment Extension Request to Lessor pursuant
to the first sentence of this Subparagraph 2.09(a), then not later than
ten (10) Business Days prior to the original
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Outside Completion Date, Agent shall notify Lessee, Lessor and the
Participants in writing whether (i) Agent has received a copy of the
Commitment Extension Request executed by Lessor and each Participant,
in which case the definition of "Outside Completion Date" set forth in
Schedule 1.01 shall be deemed extended to the date which is the
requested extension period after the original Outside Completion Date
(subject to receipt by Agent of the Commitment Extension Fee), or (ii)
Agent has not received a copy of the Commitment Extension Request
executed by Lessor and each Participant, in which case such Commitment
Extension Request shall be deemed denied. Lessee acknowledges that
neither Lessor nor any Participant has promised (either expressly or
implicitly), or has any obligation or commitment, to extend or consent
to the extension of the Outside Completion Date at any time.
(b) Lease Extensions. Lessee may, as provided herein but
not more than three (3) times, request Lessor to extend the Scheduled
Expiration Date of each Lease Agreement for an additional period of one
(1) year by appropriately completing, executing and delivering to Agent
a written request in the form of Exhibit F(2), together with an
attachment thereto setting forth the terms upon which Lessee would
propose for the requested extension (a "Lease Extension Request").
Lessee shall deliver each Lease Extension Request to Agent not more
than twelve (12) months and not less than nine (9) months before the
then current Scheduled Expiration Date. Agent shall promptly deliver to
Lessor and each Participant three (3) copies of each Lease Extension
Request received by Agent. If Lessor or a Participant, in its sole and
absolute discretion, consents to a Lease Extension Request, such Person
shall evidence such consent by executing and returning two (2) copies
of such Lease Extension Request to Agent not later than the last
Business Day which is not less than seven (7) months prior to the then
current Scheduled Expiration Date for the applicable Lease Agreement.
Any failure by Lessor or any Participant so to execute and return a
Lease Extension Request shall be deemed a denial thereof. If Lessee
shall deliver a Lease Extension Request to Lessor pursuant to the first
sentence of this Subparagraph 2.09(b), then not later than the last
Business Day which is not less than six (6) months prior to the then
current Scheduled Expiration Date for the applicable Lease Agreement,
Agent shall notify Lessee, Lessor and the Participants in writing
whether (i) Agent has received a copy of the Lease Extension Request
executed by Lessor and each Participant, in which case the definition
of "Scheduled Expiration Date" set forth in Subparagraph 2.02(a) of the
applicable Lease Agreement shall be deemed extended to the date which
is one (1) year after the then current Scheduled Expiration Date
(subject to the receipt by Agent of any amounts payable by Lessee in
connection with such extension), or (ii) Agent has not received a copy
of the Lease Extension Request executed by Lessor and each Participant,
in which case such Lease Extension Request shall be deemed denied.
Lessee acknowledges that neither Lessor nor any Participant has
promised (either expressly or implicitly), or has any obligation or
commitment, to extend or consent to the extension of the Scheduled
Expiration Date for either Lease Agreement at any time.
2.10. Nature of the Transactions. Lessee and the Lessor Parties
intend that the transactions evidenced by this Agreement and the other Operative
Documents constitute operating leases pursuant to FASB 13 for accounting
purposes and loans secured by the Property
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for other purposes, including federal, state and local income tax purposes and
commercial, real estate and bankruptcy law purposes. To the extent that this
Agreement and the other Operative Documents reflect the lease form alone, they
do so for convenience only. Lessee and the Lessor Parties intend that the
Operative Documents have the dual form referred to in the first sentence of this
paragraph, notwithstanding the use of the lease form alone.
(a) Tax Treatment. For purposes of all income, franchise
and other taxes imposed upon or measured by income, Lessee and Lessor
Parties intend that the transactions evidenced by the Operative
Documents shall be treated as loans by the Participants (through
Lessor) to Lessee secured by the Property, with Lessee as owner of the
Property. Lessee and the Lessor Parties may only take deductions,
credits, allowances and other reporting positions on their respective
returns, reports and statements which are consistent with such
treatment, unless required to do otherwise by an appropriate taxing
authority or after a clearly applicable change in applicable
Governmental Rules; provided, however, that if an appropriate taxing
authority or a clearly applicable change in applicable Governmental
Rules requires any Lessor Party to take such an inconsistent position,
such Lessor Party shall promptly notify Lessee.
(b) Other Legal Treatment. For purposes of commercial,
real estate and bankruptcy law and other applicable laws, Lessee and
Lessor Parties also intend that the transactions evidenced by the
Operative Documents shall be treated as loans by the Participants
(through Lessor) to Lessee secured by the Property, with Lessee as
owner of the Property. Consistent with such treatment, Lessee and the
Lessor Parties intend that, among other things for such purposes, (i)
the Advances be treated as loans to Lessee by the Participants (through
Lessor); (ii) the Advances be secured by the Property and the Lessor
Parties have the rights and remedies of secured lenders; (iii) Base
Rent be treated as interest on the Advances; (iv) Lessee be required to
pay on the applicable Expiration Date only the Residual Value Guaranty
Amount, the Indemnity Amount and the other amounts required by
Subparagraph 4.06(b) of the applicable Purchase Agreement (or
Subparagraph 4.06(c) if Lessor is retaining the Property) if Lessee
exercises the Marketing Option in accordance with the applicable
Purchase Agreement; and (v) Lessee be required to pay on the applicable
Expiration Date the applicable Outstanding Lease Amount and all other
amounts outstanding under this Agreement and the other Operative
Documents (including amounts required by Subparagraph 4.06(a) of the
applicable Purchase Agreement) if the applicable Lease Agreement is
terminated prior to its Scheduled Expiration Date after an Event of
Default occurs under such Lease Agreement or if Lessee fails to or is
otherwise not entitled to exercise the Marketing Option in accordance
with the applicable Purchase Agreement.
(c) No Reliance by Lessee. Lessee acknowledges and agrees
that no Lessor Party has made any representations or warranties to
Lessee concerning the tax, accounting or legal characteristics of the
Operative Documents and that Lessee has obtained and relied upon such
tax, accounting and legal advice concerning the Operative Documents as
it deems appropriate.
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2.11. Security.
(a) Lessee Obligations.
(i) To the extent that the transaction evidenced
by the Lease Agreement, Purchase Agreement and other Operative
Documents for either Facility is treated as a loan by the
Participants (through Lessor) to Lessee secured by the
Property for such Facility, with Lessee as owner of such
Property pursuant to Paragraph 2.10, the Lessee Obligations
under such Facility shall be secured by such Property and the
other Real Property Collateral for such Facility and, in the
case of Facility 2, Personal Property Collateral for such
Facility (collectively, the "Property Collateral") as provided
in Subparagraphs 2.07(a) and 2.07(b) of the applicable Lease
Agreement and, in the case of Facility 2, in an Assignment of
Construction Agreements in the form of Exhibit G, duly
executed by Lessee (the "Assignment of Construction
Agreements").
(ii) If, at any time, Lessee elects, pursuant to
Subparagraph 3.02(l) of the Purchase Agreement for either
Facility, to exercise the Marketing Option after Lessor
notifies Lessee that Lessor is terminating the Lease Agreement
for such Facility on a Termination Date that is prior to the
Scheduled Expiration Date and the only basis for such early
termination is the occurrence of a Non-Marketing Option Event
of Default, Lessee shall deliver to Agent (A) Cash Collateral
in an amount not less than 105% of the total Tranche A
Proportionate Share of the Outstanding Lease Amount under such
Facility at such time, (B) a security agreement in form and
substance reasonably satisfactory to Lessor and Agent (a "Cash
Collateral Agreement") that grants to Agent a security
interest in such Cash Collateral to secure the Lessee
Obligations under such Facility and (C) a written opinion of
its counsel, in form and substance reasonably satisfactory to
Lessor and Agent but subject to customary qualifications and
assumptions, to the effect that the Cash Collateral Agreement
is a legal, valid and binding agreement of Lessee, enforceable
in accordance with its terms, and that Lessor has a perfected
security interest in the Cash Collateral. Lessee may not
withdraw any Cash Collateral required to be delivered pursuant
to this clause (ii) until the Expiration Date of the
applicable Lease Agreement and the satisfaction in full of all
Lessee Obligations thereunder. After the Expiration Date of
the applicable Lease Agreement and the satisfaction in full of
all Lessee Obligations thereunder, Lessor shall return to
Lessee any Cash Collateral then held by Lessor.
(iii) Lessee shall deliver to Lessor and Agent
such additional mortgages, deeds of trust, security
agreements, pledge agreements, lessor consents and estoppels
(containing appropriate mortgagee and lender protection
language) and other instruments, agreements, certificates,
opinions and documents (including Uniform Commercial Code
financing statements and fixture filings and landlord waivers)
as Lessor or Agent may reasonably request to (A) grant,
perfect, maintain, protect and evidence security interests in
favor of Lessor or Agent in the Property Collateral and the
Cash Collateral prior to the Liens or other interests of
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any Person, except in the case of the Property Collateral for
Permitted Property Liens; and (B) otherwise establish,
maintain, protect and evidence the rights provided to Lessor
and Agent in the Property Collateral and the Cash Collateral.
Lessee shall fully cooperate with Lessor and Agent and perform
all additional acts reasonably requested by Lessor or Agent to
effect the purposes of this Subparagraph 2.11(a).
(b) Lessor Obligations.
(i) The Lessor Obligations shall be secured by
the following:
(A) An Assignment of Head Lease
Agreements, Sublease Agreements and Purchase
Agreements in the form of Exhibit I, duly executed by
Lessor (the "Assignment of Lease");
(B) A Construction Deed of Trust with
Assignment of Rents, Security Agreement and Fixture
Filing in the form of Exhibit J, duly executed by
Lessor (the "Lessor Deed of Trust"); and
(C) A Security Agreement in the form of
Exhibit K, duly executed by Lessor (the "Lessor
Security Agreement").
(ii) Lessor shall deliver to Agent such
additional mortgages, deeds of trust, security agreements,
pledge agreements, lessor consents and estoppels (containing
appropriate mortgagee and lender protection language) and
other instruments, agreements, certificates, opinions and
documents (including Uniform Commercial Code financing
statements and fixture filings and landlord waivers) as Agent
may reasonably request to (A) grant, perfect, maintain,
protect and evidence security interests in favor of Agent in
Lessor's rights in the Property Collateral and the Cash
Collateral; and (B) otherwise establish, maintain, protect and
evidence the rights provided to Agent in the Property
Collateral and the Cash Collateral. Lessor shall fully
cooperate with Agent and perform all additional acts
reasonably requested by Agent to effect the purposes of this
Subparagraph 2.11(b).
(iii) Lessee hereby consents to the Assignment of
Lease, the Lessor Deed of Trust and the Lessor Security
Agreement; the Liens granted to Agent therein; and all other
Liens granted to Agent in any of the Operative Documents and
the Property to secure the Lessor Obligations.
2.12. Change of Circumstances.
(a) Inability to Determine Rates. If, on or before the
first day of any Rental Period for any Portion, (i) any Participant
shall advise Agent that the LIBOR Rental Rate for such Rental Period
and Portion cannot be adequately and reasonably determined due to the
unavailability of funds in or other circumstances affecting the London
interbank market or (ii) Majority Participants shall advise Agent that
the LIBOR Rental Rate for
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such Rental Period and Portion does not adequately and fairly reflect
the cost to such Participants of funding their shares of such Portions
under the applicable Facility, Agent shall immediately give notice of
such condition to Lessee, Lessor and the other Participants. After the
giving of any such notice (and until Agent shall otherwise notify
Lessee and Lessor that the circumstances giving rise to such condition
no longer exist), the LIBOR Rental Rate shall be unavailable and the
Rental Rate for each new Rental Period shall be the Alternate Rental
Rate.
(b) Illegality. If, after the date of this Agreement, the
adoption of any Governmental Rule, any change in any Governmental Rule
or the application or requirements thereof (whether such change occurs
in accordance with the terms of such Governmental Rule as enacted, as a
result of amendment or otherwise), any change in the interpretation or
administration of any Governmental Rule by any Governmental Authority,
or compliance by Lessor or any Participant with any request or
directive (whether or not having the force of law) of any Governmental
Authority (a "Change of Law") shall make it unlawful or impossible for
any Participant to fund or maintain its portion of the Outstanding
Lease Amount under either Facility at the LIBOR Rental Rate, such
Participant shall immediately notify Agent and Agent shall immediately
notify Lessee, Lessor and the other Participants of such Change of Law.
After the giving of any such notice (and until Agent shall otherwise
notify Lessee and Lessor that such Change of Law is no longer in
effect), the LIBOR Rental Rate shall be unavailable and the Rental Rate
under both Facilities for each Rental Period shall be the Alternate
Rental Rate.
(c) Increased Costs. If, after the date of this
Agreement, any Change of Law:
(i) Shall subject Lessor or any Participant to
any tax, duty or other charge with respect to the Outstanding
Lease Amount under either Facility, or shall change the basis
of taxation of Base Rent payments by Lessee to Lessor or any
Participant under this Agreement or any other Operative
Document (except for changes in the rate of taxation on the
overall net income of Lessor or any Participant imposed by its
jurisdiction of incorporation or, in the case of any
Participant, the jurisdiction in which its Applicable
Participating Office is located); or
(ii) Shall impose, modify or hold applicable any
reserve (excluding any Reserve Requirement or other reserve to
the extent included in the calculation of the LIBOR Rental
Rate), special deposit or similar requirement against assets
held by, deposits or other liabilities in or for the account
of, advances or loans by, or any other acquisition of funds by
Lessor or any Participant for its portion of the Outstanding
Lease Amount under either Facility; or
(iii) Shall impose on Lessor or any Participant
any other condition related to the Outstanding Lease Amount
under either Facility, Base Rent under either Facility or
Lessor's or such Participant's commitments hereunder;
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And the effect of any of the foregoing is to increase the cost to
Lessor or such Participant of funding or maintaining its portion of the
Outstanding Lease Amount under either Facility or commitments or to
reduce any amount receivable by Lessor or such Participant hereunder;
then Lessee shall from time to time within five (5) Business Days after
demand by such Person, pay to such Person additional amounts sufficient
to reimburse such Person for any such increased costs of such Person or
to compensate such Person for any such reduced amounts of such Person;
provided, however, that Lessee shall have no obligation to pay any
additional amounts under this Subparagraph 2.12(c) on account of any
increased costs or reduced amounts arising under Facility 2 during the
Construction Period except as follows:
(A) Lessee shall pay any such additional amounts
under this Subparagraph 2.12(c) on account of any increased
costs or reduced amounts arising under Facility 2 during the
Construction Period if caused by or arising from any failure
by Lessee to comply with any of its obligations under the
Operative Documents (including its insurance obligations), any
representation by Lessee in any of the Operative Documents not
being true, any negligence or willful misconduct of Lessee, or
any claim by any third-party against Lessee (or against any
Lessor Party) based upon any alleged action or inaction by
Lessee.
(B) If any Lessor Party incurs any such
increased costs or reduced amounts under Facility 2 during the
Construction Period for which Lessee is not obligated to pay
additional amounts pursuant to clause (A) above, the amount of
such increased costs and reduced amounts shall, if such Lessor
Party shall so request by a written notice to Lessor, be
capitalized pursuant to clause (i) of Subparagraph 2.03(c).
A certificate setting forth in reasonable detail the amount of any
increased costs or reduced amounts submitted by any Lessor Party shall
constitute prima facie evidence of such costs or amounts. The
obligations of Lessee under this Subparagraph 2.12(c) shall survive the
payment and performance of the Lessee Obligations and the termination
of this Agreement.
(d) Capital Requirements. If, after the date of this
Agreement, Lessor or any Participant determines that (i) any Change of
Law affects the amount of capital required or expected to be maintained
by such Person or any other Person controlling such Person (a "Capital
Adequacy Requirement") and (ii) the amount of capital maintained by
such Person or such other Person which is attributable to or based upon
the Advances, the commitments or this Agreement must be increased as a
result of such Capital Adequacy Requirement (taking into account such
Person's or such other Person's policies with respect to capital
adequacy), Lessee shall pay to such Person or such other Person, within
five (5) Business Days after demand of such Person, such amounts as
such Person or such other Person shall determine are necessary to
compensate such Person or such other Person for the increased costs to
such Person or such other Person of such increased capital. A
certificate of Lessor or any Participant setting forth in reasonable
detail the computation of any such increased costs, delivered by such
Person to Lessee shall
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constitute prima facie evidence of such costs. The obligations of
Lessee under this Subparagraph 2.12(d) shall survive the payment and
performance of the Lessee Obligations and the termination of this
Agreement.
(e) Mitigation. If Lessor or any Participant becomes
aware of (i) any Change of Law which will make it unlawful or
impossible for such Person to fund or maintain its portion of the
Outstanding Lease Amount under either Facility at the LIBOR Rental Rate
or (ii) any Change of Law or other event or condition which will
obligate Lessee or Lessor to pay any amount pursuant to Subparagraph
2.12(c) or Subparagraph 2.12(d), such Person shall notify Lessee and
Lessor thereof as promptly as practical. If any Person has given notice
of any such Change of Law or other event or condition and thereafter
becomes aware that such Change of Law or other event or condition has
ceased to exist, such Person shall notify Lessee and Lessor thereof as
promptly as practical. Each Person affected by any Change of Law which
makes it unlawful or impossible for such Person to fund or maintain its
portion of the Outstanding Lease Amount under either Facility at the
LIBOR Rental Rate or to which Lessee or Lessor is obligated to pay any
amount pursuant to Subparagraph 2.12(c) or Subparagraph 2.12(d) shall
use reasonable commercial efforts (including changing the jurisdiction
of its Applicable Participating Office) to avoid the effect of such
Change of Law or to avoid or materially reduce any amounts which Lessee
or Lessor is obligated to pay pursuant to Subparagraph 2.12(c) or
Subparagraph 2.12(d) if, in the reasonable opinion of such Person, such
efforts would not be disadvantageous to such Person.
2.13. Taxes on Payments.
(a) Payments Free of Taxes. All payments made by Lessee
under this Agreement and the other Operative Documents shall be made
free and clear of, and without deduction or withholding for or on
account of, any present or future Indemnified Taxes, now or hereafter
imposed, levied, collected, withheld or assessed by any Governmental
Authority, except as otherwise provided in the last sentence of
Subparagraph 2.13(b). If any Indemnified Taxes are required to be
withheld from any amounts payable to any Lessor Party hereunder or
under the other Operative Documents, the amounts so payable to such
Lessor Party shall be increased to the extent necessary to yield to
such Lessor Party (after payment of all Indemnified Taxes) the Base
Rent or any such other amounts payable hereunder at the rates or in the
amounts specified in this Agreement and the other Operative Documents.
Whenever any Indemnified Taxes are payable by Lessee, as promptly as
possible thereafter, Lessee shall send to Agent for its own account or
for the account of Lessor or such Participant, as the case may be, a
certified copy of an original official receipt received by Lessee
showing payment thereof. If Lessee fails to pay any Indemnified Taxes
when due to the appropriate taxing authority or fails to remit to Agent
the required receipts or other required documentary evidence, Lessee
shall indemnify the Lessor Parties for any incremental taxes, interest
or penalties that may become payable by the Lessor Parties as a result
of any such failure. The obligations of Lessee under this Subparagraph
2.13(a) shall survive the payment and performance of the Lessee
Obligations and the termination of this Agreement.
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(b) Withholding Exemption Certificates. On or prior to
the Closing Date or, if such date does not occur within thirty (30)
days after the date of this Agreement, by the end of such 30-day
period, Lessor, if it is not incorporated under the laws of the United
States of America or a state thereof, and each Participant which is not
incorporated under the laws of the United States of America or a state
thereof shall deliver to Lessee and Lessor two duly completed copies of
United States Internal Revenue Service Form 1001 or 4224 (or successor
applicable form), as the case may be, certifying in each case that
Lessor or such Participant, as the case may be, is entitled to receive
payments under this Agreement and the other Operative Documents without
deduction or withholding of any United States federal income taxes.
Each Person which delivers to Lessee and Lessor a Form 1001 or 4224
pursuant to the immediately preceding sentence further undertakes to
deliver to Lessee and Lessor two further copies of Form 1001 or 4224
(or successor applicable forms), or other manner of certification or
procedure, as the case may be, on or before the date that any such form
expires or becomes obsolete or after the occurrence of any event
requiring a change in the most recent form previously delivered by it
to Lessee and Lessor, and such extensions or renewals thereof as may
reasonably be requested by Lessee or Lessor, certifying in the case of
a Form 1001 or 4224 that such Person is entitled to receive payments
under this Agreement and the other Operative Documents without
deduction or withholding of any United States federal income taxes,
unless in any such cases an event (including without limitation any
change in treaty, law or regulation) has occurred prior to the date on
which any such delivery would otherwise be required which renders all
such forms inapplicable or which would prevent Lessor or a Participant
from duly completing and delivering any such form with respect to it
and Lessor or such Participant advises Lessee and Lessor that it is not
capable of receiving payments without any deduction or withholding of
United States federal income tax. If Lessor or any Participant fails to
provide to Lessee or Lessor pursuant to this Subparagraph 2.13(b) (or,
in the case of an Assignee Participant, Subparagraph 7.05(b)) any
certificates or other evidence required by such provision to establish
that such Lender is, at the time it becomes a Lender hereunder,
entitled to receive payments under this Agreement and the other
Operative Documents without deduction or withholding of any United
States federal income taxes, Lessor or such Participant, as the case
may be, shall not be entitled to any indemnification under Subparagraph
2.13(a) for any Indemnified Taxes imposed on such Lender primarily as a
result of such failure.
(c) Mitigation. If any Lessor Party claims any additional
amounts to be payable to it pursuant to this Paragraph 2.13, such
Lessor Party shall use reasonable commercial efforts to file any
certificate or document requested in writing by Lessee or Lessor
(including copies of Internal Revenue Service Form 1001 (or successor
forms) reflecting a reduced rate of withholding) or to change the
jurisdiction of its Applicable Participating Office if the making of
such a filing or such change in the jurisdiction of its Applicable
Participating Office would avoid the need for or materially reduce the
amount of any such additional amounts which may thereafter accrue and
if, in the reasonable opinion of a Participant, in the case of a change
in the jurisdiction of its Applicable Participating Office, such change
would not be disadvantageous to such Person.
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(d) Tax Returns. Nothing contained in this Paragraph 2.13
shall require any Lessor Party to make available any of its tax returns
(or any other information relating to its taxes which it deems to be
confidential).
2.14. Funding Loss Indemnification. If Lessee shall (a) pay all or
any Portion of the Outstanding Lease Amount under either Facility on any day
other than the last day of a Rental Period therefor (whether an optional
payment, a mandatory payment or otherwise) or (b) cancel or otherwise fail to
consummate any Advance Request which has been delivered to Agent (whether as a
result of the failure to satisfy any applicable conditions or otherwise), then
Lessee shall, within five (5) Business Days after demand by Lessor or any
Participant, reimburse such Person for and hold such Person harmless from all
costs and losses incurred by such Person as a result of such payment,
cancellation or failure. Lessee understands that such costs and losses may
include, without limitation, losses incurred by Lessor or a Participant as a
result of funding and other contracts entered into by such Person to fund its
portion of the Outstanding Lease Amount under the applicable Facility. Each
Person demanding payment under this Paragraph 2.14 shall deliver to Lessee, with
a copy to Agent, a certificate setting forth the amount of costs and losses for
which demand is made, which certificate shall set forth in reasonable detail the
calculation of the amount demanded. Such a certificate so delivered to Lessee
shall constitute prima facie evidence of such costs and losses. The obligations
of Lessee under this Paragraph 2.14 shall survive the payment and performance of
the Lessee Obligations and the termination of this Agreement.
2.15. Replacement of Participants. If any Participant shall (a)
become a Defaulting Participant more than once in a period of twelve (12)
consecutive months, (b) continue as a Defaulting Participant for more than five
(5) Business Days at any time, (c) deliver, pursuant to Subparagraph 2.12(b), a
notice of a Change of Law which does not affect any other Participant, or (d)
demand any payment under Subparagraph 2.12(c), 2.12(d) or 2.13(a) for a reason
which is not applicable to any other Participant, then Agent may (or upon the
written request of Lessee if no Event of Default has occurred and is continuing,
shall) replace such Participant (the "affected Participant"), or cause such
affected Participant to be replaced, with another Person (the "replacement
Participant") satisfying the requirements of an Eligible Assignee under
Subparagraph 7.05(b), by having the affected Participant sell and assign all of
its rights and obligations under this Agreement and the other Operative
Documents to the replacement Participant pursuant to Subparagraph 7.05(b);
provided, however, that if Lessee seeks to exercise such right, it must do so
within sixty (60) days after it first knows of the event, condition or demand
giving rise to such right, and no Lessor Party shall have any obligation to
identify or locate a replacement Participant for Lessee. Upon receipt by any
affected Participant of a written notice from Agent stating that Agent is
exercising the replacement right set forth in this Paragraph 2.15, such affected
Participant shall sell and assign all of its rights and obligations under this
Agreement and the other Operative Documents to the replacement Participant
pursuant to an Assignment Agreement and Subparagraph 7.05(b) for a purchase
price equal to the sum of its portion of the Outstanding Lease Amount, the
accrued and unpaid portion of the Base Rent relating to such portion and its
ratable share of all fees to which it is entitled.
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SECTION 3. CONDITIONS PRECEDENT.
3.01. Initial Advances. The obligation of Lessor to enter into the
Head Lease Agreements and to make the Initial Advances (and the obligations of
the Participants to fund their respective Proportionate Shares of the Initial
Advances) on the Closing Date is (are) subject to receipt by Agent, on or prior
to the Closing Date, of each item listed in Schedule 3.01, each in form and
substance satisfactory to Lessor, Agent and each Participant, and with
sufficient copies for, Lessor, Agent and each Participant.
3.02. Subsequent Advances. The obligation of Lessor to make each
subsequent Advance (and the obligations of the Participants to fund their
respective Proportionate Shares of such Advance) is (are) subject to (a)
satisfaction of the conditions set forth in Paragraph 3.01; (b) receipt by Agent
pursuant to Paragraph 2.03 of the Advance Request for such Advance,
appropriately completed and duly executed by Lessee; and (c) receipt by Agent of
date-down endorsements to Agent's and Lessor's title insurance policies covering
such Tract or binders acceptable to Agent and Lessor.
3.03. Other Conditions Precedent. The occurrence of each Credit
Event (including the making of each Advance by Lessor and the funding of each
Advance by the Participants) is subject to the further conditions that, on the
date such Credit Event is to occur and after giving effect to such Credit Event,
the following shall be true and correct:
(a) The representations and warranties of Lessee set
forth in Paragraph 4.01 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 or will
result from such Credit Event; and
(c) All of the Operative Documents are in full force and
effect.
The submission by Lessee to Lessor and Agent of each Advance Request, each
Notice of Rental Period Selection and a Notice of Marketing Option Exercise
shall be deemed to be a representation and warranty by Lessee that each of the
statements set forth above in this Paragraph 3.03 is true and correct as of the
date of such request and notice.
3.04. Covenant to Deliver.. Lessee agrees (not as a condition but as
a covenant) to deliver to Lessor and Agent each item required to be delivered to
Lessor and Agent as a condition to each Advance if such Advance is made. Lessee
expressly agrees that the making of any Advance prior to the receipt by Lessor
and Agent of any such item shall not constitute a waiver by Lessor, Agent or any
Participant of Lessee's obligation to deliver such item, unless expressly waived
in writing.
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SECTION 4. REPRESENTATIONS AND WARRANTIES.
4.01. Lessee's Representations and Warranties. In order to induce
the Lessor Parties to enter into this Agreement and the other Operative
Documents to which they are parties, Lessee hereby represents and warrants to
the Lessor Parties as follows:
(a) Due Incorporation, Qualification, etc. Each of Lessee
and Lessee's Subsidiaries (i) is a corporation duly organized, validly
existing and in good standing under the laws of its state of
incorporation; (ii) has the power and authority to own, lease and
operate its properties and carry on its business as now conducted; and
(iii) is duly qualified, licensed to do business and in good standing
as a foreign corporation in each jurisdiction where the failure to be
so qualified or licensed is reasonably likely to have a Material
Adverse Effect.
(b) Authority. The execution, delivery and performance by
Lessee of each Operative Document executed, or to be executed, by
Lessee and the consummation of the transactions contemplated thereby
(i) are within the power of Lessee and (ii) have been duly authorized
by all necessary actions on the part of Lessee.
(c) Enforceability. Each Operative Document executed, or
to be executed, by Lessee has been, or will be, duly executed and
delivered by Lessee and constitutes, or will constitute, a legal, valid
and binding obligation of Lessee, enforceable against Lessee in
accordance with its terms, except as limited by bankruptcy, insolvency
or other laws of general application relating to or affecting the
enforcement of creditors' rights generally and general principles of
equity.
(d) Non-Contravention. The execution and delivery by
Lessee of the Operative Documents executed by Lessee and the
performance and consummation of the transactions contemplated thereby
do not (i) violate any Requirement of Law applicable to Lessee; (ii)
violate any provision of, or result in the breach or the acceleration
of, or entitle any other Person to accelerate (whether after the giving
of notice or lapse of time or both), any Contractual Obligation of
Lessee; or (iii) result in the creation or imposition of any Lien (or
the obligation to create or impose any Lien) upon any property, asset
or revenue of Lessee (except such Liens as may be created in favor of
Lessor or Agent pursuant to this Agreement or the other Operative
Documents).
(e) Approvals. No consent, approval, order or
authorization of, or registration, declaration or filing with, any
Governmental Authority or other Person (including, without limitation,
the shareholders of any Person) is required in connection with the
execution and delivery of the Operative Documents executed by Lessee
and the performance and consummation by Lessee of the transactions
contemplated thereby, except (i) such as have been made or obtained and
are in full force and effect and (ii) those construction-related
permits and approvals which will be obtained as and when necessary in
compliance with the Facility 2 Construction Agency Agreement.
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(f) No Violation or Default. Neither Lessee nor any of
its Subsidiaries is in violation of or in default with respect to (i)
any Requirement of Law applicable to such Person; (ii) any Contractual
Obligation of such Person (nor is there any waiver in effect which, if
not in effect, would result in such a violation or default), where, in
each case, such violation or default is reasonably likely to have a
Material Adverse Effect. Without limiting the generality of the
foregoing, neither Lessee nor any of its Subsidiaries (A) has violated
any Environmental Laws, (B) has any liability under any Environmental
Laws or (C) has received notice or other communication of an
investigation or is under investigation by any Governmental Authority
having authority to enforce Environmental Laws, where such violation,
liability or investigation is reasonably likely to have a Material
Adverse Effect. No Default has occurred and is continuing.
(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.
(h) Title; Possession Under Leases. Except as set forth
in Schedule 4.01(g), Lessee and its Subsidiaries own and have good and
marketable title, or a valid leasehold interest in, all their
respective properties and assets as reflected in the most recent
Financial Statements delivered to Agent (except those assets and
properties disposed of in the ordinary course of business or otherwise
in compliance with this Agreement since the date of such Financial
Statements) and all respective assets and properties acquired by Lessee
and its Subsidiaries since such date (except those disposed of in the
ordinary course of business or otherwise in compliance with this
Agreement), except in any case where the failure so to own or to have
such title is not reasonably likely to have a Material Adverse Effect.
Such assets and properties are subject to no Lien, except for Permitted
Liens. Each of Lessee and its Subsidiaries has complied with all
material obligations under all material leases to which it is a party
and all such leases are in full force and effect. Each of Lessee and
its Subsidiaries enjoys peaceful and undisturbed possession under such
leases.
(i) Financial Statements. The Financial Statements of
Lessee and its Subsidiaries which have been delivered to Agent, (i) are
in accordance with the books and records of Lessee and its
Subsidiaries, which have been maintained in accordance with good
business practice; (ii) have been prepared in conformity with GAAP; and
(iii) fairly present the financial conditions and results of operations
of Lessee and its Subsidiaries as of the date thereof and for the
period covered thereby. Neither Lessee nor any of its Subsidiaries has
any Contingent Obligations, liability for taxes or other outstanding
obligations which are material in the aggregate, except as disclosed
(A) in the audited Financial Statements of Lessee dated December 31,
1999, or the 10-Q reports filed by
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Lessee with the Securities and Exchange Commission for the quarters
ended March 31, 2000, June 30, 2000 and September 30, 2000 furnished by
Lessee to Agent prior to the date hereof, or (B) in the Financial
Statements delivered to Agent pursuant to clause (i) or (ii) of
Subparagraph 5.01(a).
(j) Equity Securities. All outstanding Equity Securities
of Lessee are duly authorized, validly issued, fully paid and
non-assessable. All Equity Securities of Lessee have been offered and
sold in compliance with all federal and state securities laws and all
other Requirements of Law.
(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).
(l) Employee Benefit Plans.
(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.
(ii) Each Employee Benefit Plan complies, in both
form and operation, in all material respects, with its terms,
ERISA and the IRC, and no condition exists or event has
occurred with respect to any such plan which would result in
the incurrence by either Lessee or any ERISA Affiliate of any
material liability, fine or penalty. Each Employee Benefit
Plan, related trust agreement, arrangement and commitment of
Lessee or any ERISA Affiliate is legally valid and binding and
in full force and effect. No Employee Benefit Plan is being
audited or investigated by any government agency or is subject
to any pending or threatened claim or suit. Neither Lessee nor
any ERISA Affiliate nor any fiduciary of any Employee Benefit
Plan has engaged in a prohibited transaction under section 406
of ERISA or section 4975 of the IRC.
(iii) Neither Lessee nor any ERISA Affiliate
contributes to or has any material contingent obligations to
any Multiemployer Plan. Neither Lessee nor
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any ERISA Affiliate has incurred any material liability
(including secondary liability) to any Multiemployer Plan as a
result of a complete or partial withdrawal from such
Multiemployer Plan under Section 4201 of ERISA or as a result
of a sale of assets described in Section 4204 of ERISA.
Neither Lessee nor any ERISA Affiliate has been notified that
any Multiemployer Plan is in reorganization or insolvent under
and within the meaning of Section 4241 or Section 4245 of
ERISA or that any Multiemployer Plan intends to terminate or
has been terminated under Section 4041A of ERISA.
(m) Other Regulations. Lessee is not subject to
regulation under the Investment Company Act of 1940, the Public Utility
Holding Company Act of 1935, the Federal Power Act, the Interstate
Commerce Act, any state public utilities code or to any other
Governmental Rule limiting its ability to incur indebtedness.
(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.
(o) Governmental Charges. Lessee and its Subsidiaries
have filed or caused to be filed all tax returns which are required to
be filed by them. Lessee and its Subsidiaries have paid, or made
provision for the payment of, all taxes and other Governmental Charges
which have or may have become due pursuant to said returns or otherwise
and all other indebtedness, except such Governmental Charges or
indebtedness, if any, which are being contested in good faith and as to
which adequate reserves (determined in accordance with GAAP) have been
provided or which are not reasonably likely to have a Material Adverse
Effect if unpaid.
(p) Margin Stock. Lessee owns no Margin Stock which, in
the aggregate, would constitute a substantial part of the assets of
Lessee, and no proceeds of any Loan will be used to purchase or carry,
directly or indirectly, any Margin Stock or to extend credit, directly
or indirectly, to any Person for the purpose of purchasing or carrying
any Margin Stock.
(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.
(r) Catastrophic Events. Neither Lessee nor any of its
Subsidiaries and none of their properties is or has been affected by
any fire, explosion, accident, strike, lockout or other labor dispute,
drought, storm, hail, earthquake, embargo, act of God or other casualty
that is reasonably likely to have a Material Adverse Effect. There are
no disputes
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presently subject to grievance procedure, arbitration or litigation
under any of the collective bargaining agreements, employment contracts
or employee welfare or incentive plans to which Lessee or any of its
Subsidiaries is a party, and there are no strikes, lockouts, work
stoppages or slowdowns, or, to the best knowledge of Lessee,
jurisdictional disputes or organizing activities occurring or
threatened which alone or in the aggregate are reasonably likely to
have a Material Adverse Effect.
(s) No Material Adverse Effect. No event has occurred and
is continuing and no condition exists which is reasonably likely to
have a Material Adverse Effect.
(t) The Property. The representations and warranties
relating to each Tract set forth in Schedule 4.01(t) are true and
correct. The following representations and warranties apply to all of
the Property:
(i) All of the Property complies and will comply
at all times (whether before commencement of any construction,
during any construction or after completion of construction of
any New Improvements) with all applicable Governmental Rules
(including Title III of the Americans with Disabilities Act;
Environmental Laws; and zoning, land use, building, planning
and fire laws, rules, regulations and codes) and Insurance
Requirements, except for violations which could not have a
Material Adverse Effect. No Hazardous Materials have been
used, generated, manufactured, stored, treated, disposed of,
transported or are present on or released or discharged from
the Property in any manner that could have a Material Adverse
Effect. There are no claims or actions which could have a
Material Adverse Effect pending or, to Lessee's knowledge,
threatened against any of the Property by any Governmental
Authority or any other Person relating to Hazardous Materials
or pursuant to any Environmental Laws.
(ii) None of the Improvements (whether before
commencement of any construction, during any construction or
after completion of construction of any New Improvements)
encroach or will at any time encroach in any manner onto any
adjoining land, except as permitted by express written and
recorded encroachment agreements approved by Agent or as
affirmatively insured against by appropriate title insurance.
(iii) All licenses, approvals, authorizations,
consents, permits, easements and rights-of-way required for
the use of any of the Property have been obtained or, if not
yet required, will be obtained before required.
(iv) Head Lessor has a good and valid fee simple
title to the Property, subject to no Liens except for
Permitted Property Liens. After the execution by Head Lessor
and Lessor of the Head Lease Agreements on the Closing Date,
Lessor will have a good and valid leasehold interest in the
Property, subject to no Liens except for Permitted Property
Liens.
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(u) Chief Executive Office. Lessee's chief executive
office is located at 4000 North First Street, San Jose, California.
(v) Accuracy of Information Furnished. None of the
Operative Documents and none of the other certificates, statements or
information furnished to any Lessor Party by or on behalf of Lessee or
any of its Subsidiaries in connection with the Operative Documents or
the transactions contemplated thereby contains or will contain any
untrue statement of a material fact or omits or will omit to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
Lessee shall be deemed to have reaffirmed, for the benefit of the Lessor
Parties, each representation and warranty contained in this Paragraph 4.01 on
and as of the date of each Credit Event (except for representations and
warranties expressly made as of a specified date, which shall be true as of such
date).
4.02. Lessor's Representations and Warranties. In order to induce
Lessee, Agent and the Participants to enter into this Agreement and the other
Operative Documents to which they are parties, Lessor hereby represents and
warranties to Lessee, Agent and the Participants as follows:
(a) Due Incorporation, Qualification, etc. Lessor (i) is
a corporation duly organized, validly existing and in good standing
under the laws of its state of incorporation and (ii) has the power and
authority to own, lease and operate its properties and carry on its
business as now conducted.
(b) Authority. The execution, delivery and performance by
Lessor of each Operative Document executed, or to be executed, by
Lessor and the consummation of the transactions contemplated thereby
(i) are within the power of Lessor and (ii) have been duly authorized
by all necessary actions on the part of Lessor.
(c) Enforceability. Each Operative Document executed, or
to be executed, by Lessor has been, or will be, duly executed and
delivered by Lessor and constitutes, or will constitute, a legal, valid
and binding obligation of Lessor, enforceable against Lessor in
accordance with its terms, except as limited by bankruptcy, insolvency
or other laws of general application relating to or affecting the
enforcement of creditors' rights generally and general principles of
equity.
(d) Non-Contravention. The execution and delivery by
Lessor of the Operative Documents executed by Lessor and the
performance and consummation of the transactions contemplated thereby
do not (i) violate any Requirement of Law applicable to Lessor; (ii)
violate any provision of, or result in the breach or the acceleration
of, or entitle any other Person to accelerate (whether after the giving
of notice or lapse of time or both), any Contractual Obligation of
Lessor; or (iii) result in the creation or imposition of any Lien (or
the obligation to create or impose any Lien) upon any property, asset
or
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revenue of Lessor (except such Liens as may be created in favor of
Agent pursuant to this Agreement or the other Operative Documents).
(e) Approvals. No consent, approval, order or
authorization of, or registration, declaration or filing with, any
Governmental Authority or other Person (including, without limitation,
the shareholders of any Person) is required in connection with the
execution and delivery of the Operative Documents executed by Lessor
and the performance and consummation of the transactions contemplated
thereby, except such as have been made or obtained and are in full
force and effect.
(f) Litigation. No actions (including, without
limitation, derivative actions), suits, proceedings or investigations
are pending or, to the knowledge of Lessor, threatened against Lessor
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
materially and adversely affect the ability of Lessor to perform its
obligations under the Operative Documents to which it is a party or
(ii) seeks to enjoin, either directly or indirectly, the execution,
delivery or performance by Lessor of the Operative Documents or the
transactions contemplated thereby.
(g) Other Regulations. Lessor is not subject to
regulation under the Investment Company Act of 1940, the Public Utility
Holding Company Act of 1935, the Federal Power Act, the Interstate
Commerce Act, any state public utilities code or to any other
Governmental Rule limiting its ability to incur indebtedness.
(h) Chief Executive Office. Lessor's chief executive
office is located at 135 South LaSalle Street, Suite 740, Chicago,
Illinois, 60603.
4.03. Participants' Representations and Warranties. In order to
induce Lessee, Lessor and Agent to enter into this Agreement and the other
Operative Documents to which they are parties, each Participant hereby
represents and warranties to Lessee, Lessor and Agent as follows:
(a) Due Incorporation, Qualification, etc. Such
Participant (i) is a corporation duly organized, validly existing and
in good standing under the laws of its jurisdiction of incorporation
and (ii) has the power and authority to own, lease and operate its
properties and carry on its business as now conducted.
(b) Authority. The execution, delivery and performance by
such Participant of each Operative Document executed, or to be
executed, by such Participant and the consummation of the transactions
contemplated thereby (i) are within the power of such Participant and
(ii) have been duly authorized by all necessary actions on the part of
such Participant.
(c) Enforceability. Each Operative Document executed, or
to be executed, by such Participant has been, or will be, duly executed
and delivered by such Participant and constitutes, or will constitute,
a legal, valid and binding obligation of such Participant, enforceable
against such Participant in accordance with its terms, except as
limited by
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bankruptcy, insolvency or other laws of general application relating to
or affecting the enforcement of creditors' rights generally and general
principles of equity.
(d) Non-Contravention. The execution and delivery by such
Participant of the Operative Documents executed by such Participant and
the performance and consummation of the transactions contemplated
thereby do not (i) violate any Requirement of Law applicable to such
Participant; (ii) violate any provision of, or result in the breach or
the acceleration of, or entitle any other Person to accelerate (whether
after the giving of notice or lapse of time or both), any Contractual
Obligation of such Participant; or (iii) result in the creation or
imposition of any Lien (or the obligation to create or impose any Lien)
upon any property, asset or revenue of such Participant (except such
Liens as may be created in favor of Lessor or Agent pursuant to this
Agreement or the other Operative Documents).
(e) Approvals. No consent, approval, order or
authorization of, or registration, declaration or filing with, any
Governmental Authority or other Person (including, without limitation,
the shareholders of any Person) is required in connection with the
execution and delivery of the Operative Documents executed by such
Participant and the performance and consummation of the transactions
contemplated thereby, except such as have been made or obtained and are
in full force and effect.
(f) Litigation. No actions (including, without
limitation, derivative actions), suits, proceedings or investigations
are pending or, to the knowledge of such Participant, threatened
against such Participant 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 materially and adversely affect the ability of
such Participant to perform its obligations under the Operative
Documents to which it is a party or (ii) seeks to enjoin, either
directly or indirectly, the execution, delivery or performance by such
Participant of the Operative Documents or the transactions contemplated
thereby.
(g) Own Account. Such Participant is acquiring its
participation interest hereunder for its own account for investment and
not with a view to any distribution (as such term is used in Section
2(11) of the Securities Act of 1933) thereof, and, if in the future it
should decide to dispose of its participation interest, it understands
that it may do so only in compliance with the Securities Act of 1933
and the rules and regulations of the Securities and Exchange Commission
thereunder and any applicable state securities laws.
SECTION 5. COVENANTS.
5.01. Lessee's Affirmative 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 affirmative
covenants, unless Lessor and Required Participants shall otherwise consent in
writing:
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(a) Financial Statements, Reports, etc. Lessee shall
furnish to Agent, with sufficient copies for Lessor and each
Participant, the following, each in such form and such detail as Agent,
Lessor or the Required Participants shall reasonably request:
(i) As soon as available and in no event later
than fifty (50) days after the last day of each fiscal quarter
of Lessee (other than the last quarter in any fiscal year), a
copy of the Financial Statements of Lessee and its
Subsidiaries (prepared on a consolidated basis) for such
quarter and for the fiscal year to date, certified by the
president or chief financial officer of Lessee to present
fairly the financial condition, results of operations and
other information reflected therein and to have been prepared
in accordance with GAAP (subject to normal year-end audit
adjustments);
(ii) As soon as available and in no event later
than one hundred (100) days after the close of each fiscal
year of Lessee, (A) copies of the audited Financial Statements
of Lessee and its Subsidiaries (prepared on a consolidated
basis) for such year, prepared by Ernst & Young or by other
independent certified public accountants of recognized
national standing acceptable to Agent, (B) copies of the
unqualified opinions (or qualified opinions reasonably
acceptable to Required Participants) and management letters
delivered by such accountants in connection with all such
Financial Statements and (C) certificates of such accountants
to Agent stating that in making the examination necessary for
their opinion they have reviewed this Agreement and have
obtained no knowledge of any Default which has occurred and is
continuing, or if, in the opinion of such accountants, a
Default has occurred and is continuing, a statement as to the
nature thereof;
(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;
(iv) As soon as available and in no event later
than fifty (50) days after the last day of each fiscal quarter
of Lessee, a certificate of the chief financial officer of
Lessee which sets forth the calculation of the Funded
Indebtedness/EBITDA Ratio for the consecutive four-quarter
period ending on such day;
(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
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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;
(vi) As soon as available and in no event later
than five (5) Business Days after they are sent, made
available or filed, copies of (A) all registration statements
and reports filed by Lessee or any of its Subsidiaries with
any securities exchange or the Securities and Exchange
Commission (including, without limitation, all 10-Q, 10-K and
8-Q reports); (B) all reports, proxy statements and financial
statements sent or made available by Lessee or any of its
Subsidiaries to its security holders; and (C) all press
releases and other similar public concerning any material
developments in the business of Lessee or any of its
Subsidiaries made available by Lessee or any of its
Subsidiaries to the public generally;
(vii) As soon as available and in no event later
than ten (10) days before the first day of each fiscal year of
Lessee, the consolidated plan and forecast of Lessee and its
Subsidiaries for such fiscal year, including quarterly cash
flow projections and quarterly projections of Lessee's
compliance with each of the covenants set forth in Paragraph
5.03;
(viii) As soon as possible and in no event later
than (A) ten (10) days prior to the acquisition by Lessee or
any of its Subsidiaries of any new Subsidiary or all or
substantially all of the assets of any other Person, written
notice thereof; and
(ix) Such other instruments, agreements,
certificates, opinions, statements, documents and information
relating to the operations or condition (financial or
otherwise) of Lessee or its Subsidiaries, and compliance by
Lessee with the terms of this Agreement and the other
Operative Documents as Lessor or Agent may from time to time
reasonably request.
For the purposes of this Subparagraph 5.01(a), (1) the timely delivery
by Lessee to Agent pursuant to clause (vi) of a copy of the Form 10-Q
report filed by Lessee with the Securities and Exchange Commission for
any quarter shall satisfy the requirements of clause (i) for such
quarter and (2) the timely delivery by Lessee to Agent pursuant to
clause (vi) of a copy of the Form 10-K report filed by Lessee with the
Securities and Exchange Commission for any year shall satisfy the
requirements of clause (ii)(A) for such year, provided that such
reports are required to contain the same information as required by
clause (i) and clause (ii)(A), respectively.
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(b) Books and Records. Lessee and its Subsidiaries shall
at all times keep proper books of record and account in which full,
true and correct entries will be made of their transactions in
accordance with GAAP.
(c) Inspections. Lessee and its Subsidiaries shall permit
any Person designated by any Participant, upon reasonable notice and
during normal business hours, to visit and inspect any of the
properties and offices of Lessee and its Subsidiaries, to examine the
books and records of Lessee and its Subsidiaries and make copies
thereof and to discuss the affairs, finances and business of Lessee and
its Subsidiaries with, and to be advised as to the same by, their
officers, auditors and accountants, all at such times and intervals as
any Participant may reasonably request.
(d) Insurance. In addition to the insurance requirements
set forth in the Lease Agreements with respect to the Property, Lessee
and its Subsidiaries shall:
(i) Carry and maintain insurance of the types
and in the amounts customarily carried from time to time
during the term of this Agreement by others engaged in
substantially the same business as such Person and operating
in the same geographic area as such Person, including, but not
limited to, fire, public liability, property damage and
worker's compensation; and
(ii) Carry and maintain each policy for such
insurance with financially sound insurers.
(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.
(f) Use of Proceeds. Lessee shall not use any part of the
proceeds of any Advance, directly or indirectly, for the purpose of
purchasing or carrying any Margin Stock or for the purpose of
purchasing or carrying or trading in any securities under such
circumstances as to involve Lessee or any Lessor Party in a violation
of Regulations T, U or X issued by the Federal Reserve Board.
(g) General Business Operations. Each of Lessee and its
Subsidiaries shall (i) preserve and maintain its corporate existence
and all of its rights, privileges and franchises reasonably necessary
to the conduct of its business, (ii) conduct its business activities in
compliance with all Requirements of Law and Contractual Obligations
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applicable to such Person, the violation of which is reasonably likely
to have a Material Adverse Effect and (iii) keep all property useful
and necessary in its business in good working order and condition,
ordinary wear and tear excepted; provided, however, that Lessee and its
Subsidiaries may dissolve or liquidate any Subsidiary if such
Subsidiary is not a Material Subsidiary and such dissolution or
liquidation is not reasonably likely to have a Material Adverse Effect.
Lessee shall maintain its chief executive office and principal place of
business in the United States and shall not relocate its chief
executive office or principal place of business outside of California
except upon not less than thirty (30) days prior written notice to
Agent.
(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.
5.02. Lessee's Negative 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 negative
covenants, unless Lessor and Required Participants shall otherwise consent in
writing:
(a) Indebtedness. Neither Lessee nor any of its
Subsidiaries shall create, incur, assume or permit to exist any
Indebtedness except for the following ("Permitted Indebtedness"):
(i) The Lessee Obligations under the Operative
Documents;
(ii) The Related Credit Obligations, provided
that the aggregate principal amount thereof outstanding at any
time does not exceed $125,000,000;
(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 the date of this
Agreement (including committed but undrawn amounts);
(v) Indebtedness of Lessee and its Subsidiaries
arising from the endorsement of instruments for collection in
the ordinary course of Lessee's or a Subsidiary's business;
(vi) Indebtedness of Lessee and its Subsidiaries
for trade accounts payable, provided that (A) such accounts
arise in the ordinary course of business and (B) no material
part of any such account is more than ninety (90) days past
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due (unless subject to a bona fide dispute and for which
adequate reserves as required by GAAP have been established);
(vii) Indebtedness of Lessee and its Subsidiaries
under Rate Contracts, provided that all such Rate Contracts
are entered into in connection with bona fide hedging
operations and not for speculation;
(viii) Indebtedness of Lessee and its Subsidiaries
under purchase money loans and Capital Leases incurred by
Lessee or any of its Subsidiaries to finance the acquisition
by such Person of real property, fixtures or equipment
provided that in each case, (A) such Indebtedness is incurred
by such Person at the time of, or not later than thirty (30)
days after, the acquisition by such Person of the property so
financed, (B) such Indebtedness does not exceed the purchase
price of the property so financed, and (C) no Default has
occurred and is continuing at the time such Indebtedness is
incurred or will occur after giving effect to such
Indebtedness;
(ix) Indebtedness of Lessee and its Subsidiaries
under initial or successive refinancings of any Indebtedness
permitted by clause (ii) or (iv) above, provided that (A) the
principal amount of any such refinancing does not exceed the
principal amount of the Indebtedness being refinanced (except
to the extent otherwise permitted by clause (xi) below) and
(B) the material terms and provisions of any such refinancing
(including maturity, redemption, prepayment, default and
subordination provisions) are no less favorable to the
Participants than the Indebtedness being refinanced;
(x) Indebtedness of Lessee and its Subsidiaries
with respect to surety, appeal, indemnity, performance or
other similar bonds in the ordinary course of business; and
(xi) Other Indebtedness of Lessee and its
Subsidiaries, provided that the aggregate principal amount of
all such other Indebtedness does not exceed $25,000,000 at any
time.
(b) Liens. Neither Lessee nor any of its Subsidiaries
shall create, incur, assume or permit to exist any Lien on or with
respect to any of its assets or property of any character, whether now
owned or hereafter acquired, except for the following ("Permitted
Liens"):
(i) Liens in favor of Lessor, Agent or any
Participant securing the Lessee Obligations;
(ii) Liens securing the Related Credit
Obligations or Synthetic Lease Obligations;
(iii) Liens listed in Schedule 5.02(b) and
existing on the date of this Agreement;
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(iv) Liens for taxes or other Governmental
Charges not at the time delinquent or thereafter payable
without penalty or being contested in good faith, provided
that adequate reserves for the payment thereof as required by
GAAP have been established;
(v) Liens of carriers, warehousemen, mechanics,
materialmen, vendors, and landlords and other similar Liens
imposed by law incurred in the ordinary course of business for
sums not overdue or being contested in good faith, provided
that adequate reserves for the payment thereof as required by
GAAP have been established;
(vi) Deposits under workers' compensation,
unemployment insurance and social security laws or to secure
the performance of bids, tenders, contracts (other than for
the repayment of borrowed money) or leases, or to secure
statutory obligations of surety or appeal bonds or to secure
indemnity, performance or other similar bonds in the ordinary
course of business;
(vii) Zoning restrictions, easements,
rights-of-way, title irregularities and other similar
encumbrances, which alone or in the aggregate are not
substantial in amount and do not materially detract from the
value of the property subject thereto or interfere with the
ordinary conduct of the business of Lessee or any of its
Subsidiaries;
(viii) Banker's Liens and similar Liens (including
set-off rights) in respect of bank deposits;
(ix) Liens on property or assets of any
corporation which becomes a Subsidiary of Lessee or on any
property or assets acquired by Lessee or any of its
Subsidiaries after the date of this Agreement, provided that
(A) such Liens exist at the time the stock of such corporation
or such assets or property is or are acquired by Lessee and
(B) such Liens were not created in contemplation of such
acquisition by Lessee;
(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 dismissed within twenty
(20) days after issue or levy and, if so stayed, such stay is
not thereafter removed;
(xi) Rights of vendors or lessors under
conditional sale agreements, Capital Leases or other title
retention agreements, provided that, in each case, (A) such
rights secure or otherwise relate to Permitted Indebtedness,
(B) such rights do not extend to any property other than
property acquired with the proceeds of such Permitted
Indebtedness and (C) such rights do not secure any
Indebtedness other than such Permitted Indebtedness;
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(xii) Liens in favor of customs and revenue
authorities arising as a matter of law to secure payment of
customs duties and in connection with the importation of goods
in the ordinary course of Lessee's and its Subsidiaries'
businesses;
(xiii) Liens securing Indebtedness which
constitutes Permitted Indebtedness under clause (viii) of
Subparagraph 5.02(a) provided that, in each case, such Lien
(A) covers only those assets, the acquisition of which was
financed by such Permitted Indebtedness, and (B) secures only
such Permitted Indebtedness;
(xiv) Liens on the property or assets of any
Subsidiary of Lessee in favor of Lessee or any other
Subsidiary of Lessee;
(xv) Liens incurred in connection with the
extension, renewal or refinancing of the Indebtedness secured
by the Liens described in clause (iii) above, provided that
any extension, renewal or replacement Lien (A) is limited to
the property covered by the existing Lien and (B) secures
Indebtedness which is no greater in amount and has material
terms no less favorable to the Participants than the
Indebtedness secured by the existing Lien;
(xvi) Liens on insurance proceeds in favor of
insurance companies with respect to the financing of insurance
premiums;
(xvii) Permitted Property Liens in the Property;
and
(xviii) Other Liens on the property of Lessee and
its Subsidiaries, provided that the aggregate principal amount
of all Indebtedness secured by such other Liens does not
exceed at any time ten percent (10%) of the consolidated total
assets of Lessee and its Subsidiaries at such time;
Provided, however, that the foregoing exceptions shall not be construed
to permit any Liens, except for Permitted Property Liens, in any of the
Property.
(c) Asset Dispositions. Neither Lessee nor any of its
Subsidiaries shall sell, lease, transfer or otherwise dispose of any of
its assets or property, whether now owned or hereafter acquired, except
for the following:
(i) Sales of inventory by Lessee and its
Subsidiaries in the ordinary course of their businesses;
(ii) Sales of surplus, damaged, worn or obsolete
equipment or inventory for not less than fair market value;
(iii) Sales or other dispositions of Investments
permitted by clauses (i) and (iii) of Subparagraph 5.02(e) for
not less than fair market value;
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(iv) Sales or assignments of defaulted
receivables to a collection agency in the ordinary course of
business;
(v) Licenses by Lessee or its Subsidiaries of
its patents, copyrights, trademarks, trade names and service
marks in the ordinary course of its business provided that, in
each case, the terms of the transaction are terms which then
would prevail in the market for similar transactions between
unaffiliated parties dealing at arm's length;
(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;
(vii) Sales of accounts receivable of Lessee and its
Subsidiaries, provided that (A) each such sale is (1) for not
less than fair market value and (2) for cash, and (B) the
aggregate book value of all such accounts receivable so sold
in any consecutive four-quarter period does not exceed ten
percent (10%) of the consolidated total accounts receivable of
Lessee and its Subsidiaries on the last day immediately
preceding such four-quarter period; and
(viii) Other sales, leases, transfers and disposals
of assets and property for not less than fair market value,
provided that the aggregate book value of all such assets and
property so sold, leased, transferred or otherwise disposed of
in any consecutive four-quarter period does not exceed five
percent (5%) of the consolidated total assets of Lessee and
its Subsidiaries on the last day immediately preceding such
four-quarter period;
Provided, however, that the foregoing exceptions shall not be construed
to permit any sales, leases, transfers or disposals of any of the
Property, except as expressly permitted by the Lease Agreement or
Purchase Agreement.
(d) Mergers, Acquisitions, Etc. Neither Lessee nor any of
its Subsidiaries shall consolidate with or merge into any other Person
or permit any other Person to merge into it, establish any new
Subsidiary, acquire any Person as a new Subsidiary or acquire all or
substantially all of the assets of any other Person, except for the
following:
(i) Any Subsidiary of Lessee may merge or
consolidate with any other Subsidiary of Lessee;
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(ii) Any Subsidiary of Lessee may merge or
consolidate with Lessee, provided that Lessee is the surviving
corporation; and
(iii) Lessee may merge or consolidate with any
other corporation, establish a new Subsidiary, acquire any
Person as a new Subsidiary or acquire all or substantially all
of the assets of any other Person, provided that:
(A) In the case of any merger or
consolidation, either (1) Lessee is the surviving
corporation or (2) the surviving corporation (y) is a
Solvent United States corporation with a financial
condition equal to or better than the financial
condition of Lessee immediately prior to such merger
or consolidation and (z) assumes all of the Lessee
Obligations in a manner reasonably acceptable to the
Required Participants;
(B) No Default has occurred and is
continuing at the time of such merger, consolidation,
establishment or acquisition or will occur after
giving effect to such merger, consolidation or
acquisition; and
(C) The aggregate cost of any such
merger, consolidation, establishment or acquisition
does not exceed the amounts permitted under clause
(vi) of Subparagraph 5.02(e) (except for Lessee's
cost of acquiring Gasonics International Corporation,
which shall not be subject to such limitation).
(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.
(f) Dividends, Redemptions, Etc. Neither Lessee nor any
of its Subsidiaries shall pay any dividends or make any distributions
on its Equity Securities; purchase, redeem, retire, defease or
otherwise acquire for value any of its Equity Securities; return any
capital to any holder of its Equity Securities as such; make any
distribution of assets, Equity Securities, obligations or securities to
any holder of its Equity Securities as such; or set apart any sum for
any such purpose; except as follows:
(i) Either Lessee or any of its Subsidiaries may
pay dividends on its capital stock payable solely in such
Person's own capital stock;
(ii) Any Subsidiary of Lessee may pay dividends
to Lessee;
(iii) Lessee may purchase shares of its capital
stock for its employee stock option plans, provided that (A)
the aggregate amount of such purchases does not exceed
$50,000,000 in any fiscal year and (B) no Default has occurred
and is continuing at the time of such purchase or will occur
after giving effect to such purchase; and
(iv) Lessee may purchase shares of its capital
stock with the proceeds received by it from a substantially
concurrent issue of new shares of its capital stock
(g) Change in Business. Neither Lessee nor any of its
Subsidiaries shall engage, either directly or indirectly through
Affiliates, in any material line of business other than the
semiconductor capital equipment business and other businesses
incidental or reasonably related thereto.
(h) ERISA. Neither Lessee nor any ERISA Affiliate shall
(i) adopt or institute any Employee Benefit Plan that is an employee
pension benefit plan within the meaning of Section 3(2) of ERISA, (ii)
take any action which will result in the partial or complete
withdrawal, within the meanings of sections 4203 and 4205 of ERISA,
from a Multiemployer Plan, (iii) engage or permit any Person to engage
in any transaction prohibited by section 406 of ERISA or section 4975
of the IRC involving any Employee Benefit Plan or Multiemployer Plan
which would subject either Lessee or any ERISA Affiliate to any tax,
penalty or other liability including a liability to indemnify, (iv)
incur or allow to exist any accumulated funding deficiency (within the
meaning of section 412
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of the IRC or section 302 of ERISA), (v) fail to make full payment when
due of all amounts due as contributions to any Employee Benefit Plan or
Multiemployer Plan, (vi) fail to comply with the requirements of
section 4980B of the IRC or Part 6 of Title I(B) of ERISA, or (vii)
adopt any amendment to any Employee Benefit Plan which would require
the posting of security pursuant to section 401(a)(29) of the IRC,
where singly or cumulatively, the above would have a Material Adverse
Effect.
(i) Accounting Changes. Neither Lessee nor any of its
Subsidiaries shall change (i) its fiscal year (currently January 1
through December 31) or (ii) its accounting practices except as
permitted by GAAP.
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);
plus
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(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.
(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.)
5.04. Lessor's Covenants.. Until the termination of this Agreement
and the satisfaction in full by Lessor of all Lessor Obligations, Lessor will
comply, and will cause compliance, with
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the following covenants, unless Lessee and Required Participants shall otherwise
consent in writing:
(a) Use of Proceeds. Lessor shall use the proceeds of all
amounts delivered to Lessor by Participants pursuant to Subparagraph
2.05(a) solely to fund Advances.
(b) Lessor Liens. Lessor shall not create, incur, assume
or permit to exist any Lessor Lien (other than any Lien granted to
Agent or any Participant pursuant to the Operative Documents to secure
the Lessor Obligations) and shall promptly discharge, at its sole cost
and expense, any Lessor Lien on the Property (other than any Liens
granted to Agent or any Participant pursuant to the Operative Documents
to secure the Lessor Obligations); provided, however, that Lessor shall
not be required so to discharge any such Lessor Lien if the same is
being (or promptly will be) contested in good faith by appropriate
proceedings diligently prosecuted, provided that such contest is
completed and all Lessor Liens are discharged on or prior to the
Expiration Date.
(c) Property Disposition. Lessor shall not sell, lease,
transfer or otherwise dispose of its right, title and interest in the
Property and the Operative Documents except as provided in Subparagraph
2.11(b) or Subparagraph 7.05(d) or in either Purchase Agreement after
retaining the Property following the Expiration Date.
(d) Chief Executive Office. Lessor shall not change its
chief executive office without giving Agent prompt written notice.
5.05. Participants' Covenants.. Each Participant covenants that it
will not fund its portion of any Advance with the assets of any "employee
benefit plan" (as defined in Section 3(3) of ERISA) which is subject to Title I
of ERISA or any "plan" (as defined in Section 4975(e)(1) of the IRC.
SECTION 6. LESSOR, AGENT AND THEIR RELATIONS WITH PARTICIPANTS.
6.01. Appointment of Agent Each Participant hereby appoints and
authorizes Agent to act as its agent hereunder and under the other Operative
Documents with such powers as are expressly delegated to Agent by the terms of
this Agreement and the other Operative Documents, together with such other
powers as are reasonably incidental thereto. Lessor is not an agent for the
Participants or Agent, and neither this Agreement nor any other Operative
Document shall be construed to constitute or evidence a partnership among the
Lessor Parties or otherwise to impose upon Lessor or Agent any fiduciary duty.
6.02. Powers and Immunities. Neither Lessor nor Agent shall have any
duties or responsibilities except those expressly set forth in this Agreement or
in any other Operative Document, be a trustee for any Participant or have any
fiduciary duty to any Participant. Notwithstanding anything to the contrary
contained herein, neither Lessor nor Agent shall be required to take any action
which is contrary to this Agreement or any other Operative Document or any
applicable Governmental Rule. Neither Lessor nor Agent nor any Participant shall
be
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responsible to any Participant for any recitals, statements, representations or
warranties made by Lessee or any of its Subsidiaries contained in this Agreement
or in any other Operative Document, for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other
Operative Document or for any failure by Lessee or any of its Subsidiaries to
perform their respective obligations hereunder or thereunder. Lessor and Agent
may employ agents and attorneys-in-fact and shall not be responsible to any
Participant for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care. Neither Lessor nor Agent
nor any of their respective directors, officers, employees, agents or advisors
shall be responsible to any Participant for any action taken or omitted to be
taken by it or them hereunder or under any other Operative Document or in
connection herewith or therewith, except for its or their own gross negligence
or willful misconduct. Except as otherwise provided under this Agreement, Lessor
and Agent shall take such action with respect to the Operative Documents as
shall be directed by the Required Participants.
6.03. Reliance. Lessor or Agent shall be entitled to rely upon any
certificate, notice or other document (including any cable, telegram, facsimile
or telex) believed by it in good faith to be genuine and correct and to have
been signed or sent by or on behalf of the proper Person or Persons, and upon
advice and statements of legal counsel, independent accountants and other
experts selected by Lessor or Agent with reasonable care. As to any other
matters not expressly provided for by this Agreement, neither Lessor nor Agent
shall be required to take any action or exercise any discretion, but shall be
required to act or to refrain from acting upon instructions of the Required
Participants and shall in all cases be fully protected by the Participants in
acting, or in refraining from acting, hereunder or under any other Operative
Document in accordance with the instructions of the Required Participants, and
such instructions of the Required Participants and any action taken or failure
to act pursuant thereto shall be binding on all of the Participants.
6.04. Defaults. Neither Lessor nor Agent shall be deemed to have
knowledge or notice of the occurrence of any Default unless Lessor and Agent
have received a written notice from a Participant or Lessee, referring to this
Agreement, describing such Default and stating that such notice is a "Notice of
Default". If Lessor and Agent receive such a notice of the occurrence of a
Default, Agent shall give prompt notice thereof to the Participants. Lessor and
Agent shall take such action with respect to such Default as shall be reasonably
directed by the Required Participants; provided, however, that until Lessor and
Agent shall have received such directions, Lessor or Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default as it shall deem advisable in the best interest of the
Participants.
6.05. Indemnification. Without limiting the obligations of Lessee
hereunder, each Participant agrees to indemnify Lessor and Agent, ratably in
accordance with such Participant's Proportionate Share, for any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever which may at
any time be imposed on, incurred by or asserted against Lessor or Agent in any
way relating to or arising out of this Agreement or any documents contemplated
by or referred to herein or therein or the transactions contemplated hereby or
thereby or the enforcement of any of the terms hereof or thereof; provided,
however, that no Participant shall be liable for any of the foregoing to the
extent they arise from Lessor's or Agent's gross negligence or willful
misconduct. Lessor
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or Agent shall be fully justified in refusing to take or in continuing to take
any action hereunder unless it shall first be indemnified to its satisfaction by
the Participants against any and all liability and expense which may be incurred
by it by reason of taking or continuing to take any such action. The obligations
of each Participant under this Paragraph 6.05 shall survive the payment and
performance of the Lessee Obligations, the termination of this Agreement and any
Participant ceasing to be a party to this Agreement (with respect to events
which occurred prior to the time such Participant ceased to be a Participant
hereunder).
6.06. Non-Reliance. Each Participant represents that it has,
independently and without reliance on Lessor, Agent, or any other Participant,
and based on such documents and information as it has deemed appropriate, made
its own appraisal of the business, prospects, management, financial condition
and affairs of Lessee and the Subsidiaries and its own decision to enter into
this Agreement and agrees that it will, independently and without reliance upon
Lessor, Agent or any other Participant, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
appraisals and decisions in taking or not taking action under this Agreement or
any other Operative Document. Neither Lessor nor Agent nor any of their
respective affiliates nor any of their respective directors, officers,
employees, agents or advisors shall (a) be required to keep any Participant
informed as to the performance or observance by Lessee or any of its
Subsidiaries of the obligations under this Agreement or any other document
referred to or provided for herein or to make inquiry of, or to inspect the
properties or books of Lessee or any of its Subsidiaries; (b) have any duty or
responsibility to provide any Participant with any credit or other information
concerning Lessee or any of its Subsidiaries which may come into the possession
of Lessor or Agent, except for notices, reports and other documents and
information expressly required to be furnished to the Participants by Lessor or
Agent hereunder; or (c) be responsible to any Participant for (i) any recital,
statement, representation or warranty made by Lessee or any officer, employee or
agent of Lessee in this Agreement or in any of the other Operative Documents,
(ii) the value, validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any Operative Document, (iii) the value or
sufficiency of the Property or the validity or perfection of any of the liens or
security interests intended to be created by the Operative Documents, or (iv)
any failure by Lessee to perform its obligations under this Agreement or any
other Operative Document.
6.07. Resignation or Removal of Agent. Agent may resign at any time
by giving thirty (30) days prior written notice thereof to Lessee and the
Participants, and Agent may be removed at any time with or without cause by the
Required Participants; provided, however, that Agent shall not resign and may
not be removed without cause prior to the expiration of the Commitment Period
without the consent of Lessee unless a Change of Law makes it unlawful or
unreasonably burdensome for Agent to continue to act in such capacity. Upon any
such resignation or removal, the Required Participants shall have the right to
appoint a successor Agent, which Agent, if not a Participant, shall be
reasonably acceptable to Lessee; provided, however, that Lessee shall have no
right to approve a successor Agent if a Default has occurred and is continuing.
Upon the acceptance of any appointment as Agent hereunder by a successor Agent,
such successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from the duties and obligations thereafter arising
hereunder. After any retiring Agent's resignation or removal hereunder as Agent,
the provisions of this Section VI and any other
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provision of this Agreement or any other Operative Document which by its terms
survives the termination of this Agreement shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was acting as Agent.
6.08. Authorization. Agent is hereby authorized by the Participants
to execute, deliver and perform, each of the Operative Documents to which Agent
is or is intended to be a party and each Participant agrees to be bound by all
of the agreements of Agent contained in the Operative Documents.
6.09. Lessor and Agent in their Individual Capacities. Lessor, Agent
and their respective affiliates may make loans to, accept deposits from and
generally engage in any kind of banking or other business with Lessee and its
Subsidiaries and affiliates as though Lessor were not Lessor hereunder and Agent
were not Agent hereunder. With respect to Advances, if any, made by Agent in its
capacity as a Participant, Agent in its capacity as a Participant shall have the
same rights and powers under this Agreement and the other Operative Documents as
any other Participant and may exercise the same as though it were not Agent, and
the terms "Participant" or "Participants" shall include Agent in its capacity as
a Participant.
SECTION 7. MISCELLANEOUS.
7.01. Notices. Except as otherwise provided herein, all notices,
requests, demands, consents, instructions or other communications to or upon
Lessor, Lessee, any Participant or Agent under this Agreement or the other
Operative Documents shall be in writing and faxed, mailed or delivered, if to
Lessor, Lessee or Agent, at its respective facsimile number or address set forth
below or, if to any Participant, at the address or facsimile number specified
beneath the heading "Address for Notices" under the name of such Participant in
Part B of Schedule I (or to such other facsimile number or address for any party
as indicated in any notice given by that party to the other parties). All such
notices and communications shall be effective (a) when sent by Federal Express
or other overnight service of recognized standing, on the Business Day following
the deposit with such service; (b) when mailed, first class postage prepaid and
addressed as aforesaid through the United States Postal Service, upon receipt;
(c) when delivered by hand, upon delivery; and (d) when faxed, upon confirmation
of receipt; provided, however, that any Advance Request, Notice of Rental Period
Selection, Extension Request, Notice of Term Purchase Option Exercise, Notice of
Marketing Option Exercise or Notice of Expiration Date Purchase Option Exercise
delivered to Lessor or Agent shall not be effective until received by Lessor or
Agent.
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.
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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
Each Advance Request, Notice of Rental Period Selection, Extension Request,
Notice of Term Purchase Option Exercise, Notice of Marketing Option Exercise and
Notice of Expiration Date Purchase Option Exercise shall be given by Lessee to
Agent's office located at its address referred to above during its normal
business hours; provided, however, that any such notice received by Agent after
10:00 a.m. on any Business Day shall be deemed received by Agent on the next
Business Day. In any case where this Agreement authorizes notices, requests,
demands or other communications by Lessee to any Lessor Party to be made by
telephone or facsimile, any Lessor Party may conclusively presume that anyone
purporting to be a person designated in any incumbency certificate or other
similar document received by such Lessor Party is such a person.
7.02. Expenses. Lessee shall pay within five (5) Business Days after
demand, whether or not any Advance is made hereunder, (a) all reasonable fees
and expenses, including reasonable
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attorneys' fees and expenses, incurred by Lessor and Agent in connection with
the preparation, negotiation, execution and delivery of, the consummation of the
transactions contemplated by and the exercise of their duties under, this
Agreement and the other Operative Documents, and the preparation, negotiation,
execution and delivery of amendments and waivers hereunder and thereunder (which
fees and expenses shall be treated as Permitted Transaction Expenses if incurred
prior to the Commitment Termination Date), and (b) all reasonable fees and
expenses, including reasonable attorneys' fees and expenses, incurred by the
Lessor Parties in the enforcement or attempted enforcement of any of the Lessee
Obligations or in exercising or preserving any of the Lessor Parties' rights and
remedies (including all such fees and expenses incurred in connection with any
"workout" or restructuring affecting the Operative Documents or the Lessee
Obligations or any bankruptcy or similar proceeding involving Lessee or any of
its Subsidiaries). As used herein, the term "reasonable attorneys' fees and
expenses" shall include, without limitation, allocable costs and expenses of
Agent's and Participants' in-house legal counsel and staff. The obligations of
Lessee under this Paragraph 7.02 shall survive the payment and performance of
the Lessee Obligations and the termination of this Agreement.
7.03. Indemnification. To the fullest extent permitted by law,
Lessee agrees to protect, indemnify, defend and hold harmless, on an after-tax
basis, the Lessor Parties and the other Indemnitees from and against any and all
liabilities, losses, damages or expenses of any kind or nature (including
Indemnified Taxes) and from any suits, claims or demands (including in respect
of or for reasonable attorney's fees and other expenses) arising on account of
or in connection with any matter or thing or action or failure to act by
Indemnitees, or any of them, arising out of or relating to the Operative
Documents, any transaction contemplated thereby or the Property (including any
use by Lessee of the Property or the Advances), except to the extent such
liability arises from the willful misconduct or gross negligence of such
Indemnitee provided, however, that Lessee shall have no obligation to indemnify
any Lessor Party for any such liabilities, losses, damages or expenses under
this Paragraph 7.03 arising under Facility 2 during the Construction Period,
except as follows:
(a) Lessee shall indemnify the Lessor Parties as provided
in this Paragraph 7.03 from and against any and all such liabilities,
losses, damages and expenses arising under Facility 2 during the
Construction Period if caused by or arising from any failure by Lessee
to comply with any of its obligations under the Operative Documents
(including its insurance obligations), any representation by Lessee in
any of the Operative Documents not being true, any negligence or
willful misconduct of Lessee, or any claim by any third-party against
Lessee (or against any Lessor Party) based upon any alleged action or
inaction by Lessee.
(b) If any Lessor Party incurs any such liabilities,
losses, damages or expenses arising under Facility 2 during the
Construction Period for which Lessee is not obligated to indemnify such
Lessor Party pursuant to Subparagraph 7.03(a), such liabilities,
losses, damages and expenses shall, if such Lessor Party shall so
request by a written notice to Lessor, be capitalized pursuant to
clause (ii) of Subparagraph 2.03(c).
Upon receiving knowledge of any suit, claim or demand asserted by a third party
that any Lessor Party believes is covered by this indemnity, such Lessor Party
shall give Lessee notice of the
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matter and an opportunity to defend it, at Lessee's sole cost and expense, with
legal counsel reasonably satisfactory to such Lessor Party. Such Lessor Parties
may also require Lessee to defend the matter. Any failure or delay of any Lessor
Party to notify Lessee of any such suit, claim or demand shall not relieve
Lessee of its obligations under this Paragraph 7.03. The obligations of Lessee
under this Paragraph 7.03 shall survive the payment and performance of the
Lessee Obligations and the termination of this Agreement.
7.04. Waivers; Amendments. Any term, covenant, agreement or
condition of this Agreement or any other Operative Document may be amended or
waived if such amendment or waiver is in writing and is signed by Lessor, Lessee
and the Required Participants; provided, however that:
(a) Any amendment, waiver or consent which (i) increases
the Total Commitment, (ii) extends the Scheduled Expiration Date under
either Lease Agreement, (iii) reduces the Rental Rate or any fees or
other amounts payable for the account of the Participants hereunder,
(iv) postpones any date scheduled for any payment of Base Rent or any
fees or other amounts payable for the account of the Participants
hereunder or thereunder, (v) amends Paragraph 2.06 or this Paragraph
7.04, (vi) amends the definition of Required Participants or (vii)
releases Lessor's interest in any substantial part of the Property,
must be in writing and also signed or approved in writing by all
Participants;
(b) Any amendment, waiver or consent which increases or
decreases any Proportionate Share of any Participant must be in writing
and also signed by such Participant;
(c) Any amendment, waiver or consent which affects the
rights or obligations of Agent must be in writing and also signed by
Agent;
(d) Upon the exercise by Lessee of the Partial Purchase
Option under either Purchase Agreement in accordance with Paragraph
2.02 of such Purchase Agreement, Lessee, Head Lessor and/or Lessor
alone may execute such documents, instruments and agreements (including
releases and/or amendments to the Operative Documents) as may be
reasonably necessary to release the Property to be purchased pursuant
to such Partial Purchase Option; and
(e) If any property is to be added to the Property in
connection with a lot line adjustment or other similar action, Lessee,
Head Lessor and/or Lessor alone may execute such documents, instruments
and agreements (including amendments to the Operative Documents) as may
be reasonably necessary to add such property.
No failure or delay by any Lessor Party in exercising any right hereunder shall
operate as a waiver thereof or of any other right nor shall any single or
partial exercise of any such right preclude any other further exercise thereof
or of any other right. Unless otherwise specified in such waiver or consent, a
waiver or consent given hereunder shall be effective only in the specific
instance and for the specific purpose for which given.
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7.05. Successors and Assigns.
(a) Binding Effect. This Agreement and the other
Operative Documents shall be binding upon and inure to the benefit of
Lessee, Lessor, the Participants, Agent and their respective permitted
successors and assigns. All references in this Agreement to any Person
shall be deemed to include all successors and assigns of such Person.
(b) Participant Assignments.
(i) Any Participant may, at any time, sell and
assign to any other Participant or any Eligible Assignee
(individually, an "Assignee Participant") all or a portion of
its rights and obligations under this Agreement and the other
Operative Documents (such a sale and assignment to be referred
to herein as an "Assignment") pursuant to an assignment
agreement in the form of Exhibit L (an "Assignment
Agreement"), executed by each Assignee Participant and such
assignor Participant (an "Assignor Participant") and delivered
to Agent for its acceptance and recording in the Register;
provided, however, that:
(A) Without the written consent of
Lessor, Agent and, if no Default has occurred and is
continuing, Lessee (which consent of Lessor, Agent
and Lessee shall not be unreasonably withheld), no
Participant may make any Assignment to any Assignee
Participant which is not, immediately prior to such
Assignment, a Participant hereunder or an Affiliate
thereof; or
(B) Without the written consent of
Lessor, Agent and, if no Default has occurred and is
continuing, Lessee (which consent of Lessor, Agent
and Lessee shall not be unreasonably withheld), no
Participant may make any Assignment to any Assignee
Participant if, after giving effect to such
Assignment, the Commitment of such Participant or
such Assignee Participant would be less than Two
Million Dollars ($2,000,000) (except that a
Participant may make an Assignment which reduces its
Commitment to zero without the written consent of
Lessor, Agent or Lessee); or
(C) Without the written consent of
Lessor, Agent and, if no Default has occurred and is
continuing, Lessee (which consent of Lessor, Agent
and Lessee shall not be unreasonably withheld), no
Participant may make any Assignment of its
Outstanding Tranche A Participation Amount or its
Outstanding Tranche B Participation Amount under
either Facility which does not assign and delegate an
equal pro rata interest in (1) such Participant's
Outstanding Tranche A Participation Amount and its
Outstanding Tranche B Participation Amount under both
Facilities, (2) such Participant's Tranche A
Percentage and its Tranche B Percentage under both
Facilities, and (3) such Participant's other rights,
duties and obligations relating to the Tranche A
Portion and the Tranche B Portion of
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both Facilities under this Agreement and the other
Operative Documents; or
(D) Without the written consent of
Lessor, Agent and, if no Default has occurred and is
continuing, Lessee (which consent of Lessor, Agent
and Lessee shall not be unreasonably withheld), no
Tranche C Participant may make any Assignment of its
Outstanding Tranche C Participation Amount under
either Facility which does not assign and delegate an
equal pro rata interest in (1) such Participant's
Outstanding Tranche C Participation Amount under both
Facilities, (2) such Participant's Tranche C
Percentage under both Facilities, and (3) such
Participant's other rights, duties and obligations
relating to the Tranche C Portion of both Facilities
under this Agreement and the other Operative
Documents.
Upon such execution, delivery, acceptance and recording of
each Assignment Agreement, from and after the Assignment
Effective Date determined pursuant to such Assignment
Agreement, (y) each Assignee Participant thereunder shall be a
Participant hereunder with a Tranche A Percentage, Tranche B
Percentage, Tranche C Percentage and Proportionate Share under
each Facility as set forth on Attachment 1 to such Assignment
Agreement (under the caption "Tranche Percentages and
Proportionate Shares After Assignment") and shall have the
rights, duties and obligations of such a Participant under
this Agreement and the other Operative Documents, and (z) the
Assignor Participant thereunder shall be a Participant with a
Tranche A Percentage, Tranche B Percentage, Tranche C
Percentage and Proportionate Share under each Facility as set
forth on Attachment 1 to such Assignment Agreement (under the
caption "Tranche Percentages and Proportionate Shares After
Assignment"), or, if the Proportionate Share of the Assignor
Participant has been reduced to 0% under both Facilities, the
Assignor Participant shall cease to be a Participant and to
have any obligation to fund any portion of any Advance;
provided, however, that any such Assignor Participant which
ceases to be a Participant shall continue to be entitled to
the benefits of any provision of this Agreement which by its
terms survives the termination of this Agreement. Each
Assignment Agreement shall be deemed to amend Schedule I to
the extent, and only to the extent, necessary to reflect the
addition of each Assignee Participant, the deletion of each
Assignor Participant which reduces its Proportionate Share to
0% under both Facilities and the resulting adjustment of
Tranche A Percentages, Tranche B Percentages, Tranche C
Percentages and Proportionate Shares arising from the purchase
by each Assignee Participant of all or a portion of the rights
and obligations of an Assignor Participant under this
Agreement and the other Operative Documents. Each Assignee
Participant which was not previously a Participant hereunder
and which is not incorporated under the laws of the United
States of America or a state thereof shall, within three (3)
Business Days of becoming a Participant, deliver to Lessee and
Agent two duly completed copies of United States Internal
Revenue Service Form 1001 or 4224 (or successor applicable
form), as the case may be, certifying in each case that
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such Participant is entitled to receive payments under this
Agreement without deduction or withholding of any United
States federal income taxes. (Without limiting the generality
of any of the preceding provisions of this clause (i) of
Subparagraph 7.05(b), no Participant may, if no Default has
occurred and is continuing and Lessee shall object in writing,
make any Assignment to any Assignee Participant that, at the
time of such Assignment, (1) has a basis for demanding any
payment under Subparagraph 2.12(c) or Subparagraph 2.12(d) in
excess of the pro rata amount that then could be demanded
thereunder by the Participant proposing to make such
Assignment or (2) would require Lessee to make any payment
under Subparagraph 2.13(a) on account of payments to such
Assignee Participant in excess of the pro rata amount that
Lessee was then required to make thereunder on account of
payments to the Participant proposing to make such
Assignment.)
(ii) Agent shall maintain at its address referred
to in Paragraph 7.01 a copy of each Assignment Agreement
delivered to it and a register (the "Register") for the
recordation of the names and addresses of the Participants and
the Tranche A Percentage, Tranche B Percentage, Tranche C
Percentage and Proportionate Share of each Participant under
each Facility from time to time. The entries in the Register
shall be conclusive in the absence of manifest error, and
Lessee, Agent and the Participants may treat each Person whose
name is recorded in the Register as the owner of the interests
recorded therein for all purposes of this Agreement. The
Register shall be available for inspection by Lessee or any
Participant at any reasonable time and from time to time upon
reasonable prior notice.
(iii) Upon its receipt of an Assignment Agreement
executed by an Assignor Participant and an Assignee
Participant (and, to the extent required by clause (i) of this
Subparagraph 7.05(b), by Lessor, Agent and Lessee), together
with payment to Agent by Assignor Participant of a
registration and processing fee of $3,000, Agent shall (A)
promptly accept such Assignment Agreement and (B) on the
Assignment Effective Date determined pursuant thereto record
the information contained therein in the Register and give
notice of such acceptance and recordation to Lessor, the
Participants and Lessee. Agent may, from time to time at its
election, prepare and deliver to Lessor, the Participants and
Lessee a revised Schedule I reflecting the names, addresses
and respective Proportionate Shares of all Participants then
parties hereto.
(iv) Subject to Subparagraph 7.13(g), the Lessor
Parties may disclose the Operative Documents and any financial
or other information relating to Lessee or any Subsidiary to
each other or to any potential Assignee Participant.
(c) Participant Subparticipations. Any Participant may at
any time sell to one or more Persons ("Subparticipants")
subparticipation interests in the rights and interests of such
Participant under this Agreement and the other Operative Documents. In
the event of any such sale by a Participant of subparticipation
interests, such Participant's obligations under this Agreement and the
other Operative Documents shall remain
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unchanged, such Participant shall remain solely responsible for the
performance thereof and Lessee and the other Lessor Parties shall
continue to deal solely and directly with such Participant in
connection with such Participant's rights and obligations under this
Agreement. Any agreement pursuant to which any such sale is effected
may require the selling Participant to obtain the consent of the
Subparticipant in order for such Participant to agree in writing to any
amendment, waiver or consent of a type specified in clause (i), (ii),
(iii) or (iv) of Subparagraph 7.04(a) but may not otherwise require the
selling Participant to obtain the consent of such Subparticipant to any
other amendment, waiver or consent hereunder. Lessee agrees that any
Participant which has transferred any subparticipation interest shall,
notwithstanding any such transfer, be entitled to the full benefits
accorded such Participant under Paragraph 2.12, Paragraph 2.13, and
Paragraph 2.14, as if such Participant had not made such transfer.
(d) Lessor Assignments. Lessor may, upon one (1) month's
prior written notice to Lessee and Agent, sell and assign all of its
right, title and interest in the Property and its rights, powers,
privileges, duties and obligations under this Agreement and the other
Operative Documents, provided that:
(i) If such sale and assignment is effected
after either (A) the occurrence of a Change of Law which makes
it unlawful or unreasonably burdensome for Lessor to hold
legal or beneficial title to the Property or to perform its
obligations and duties under this Agreement and the other
Operative Documents or (B) the resignation or removal of the
Agent which was the Agent at the time Lessor became the
Lessor, the purchaser/assignee (the "successor Lessor") shall
be either (1) a Participant or an Eligible Assignee that will
not cause the transactions evidenced by this Agreement and the
other Operative Documents to lose their treatment as operating
leases under FASB 13 or (2) a Person approved as provided in
clause (ii) below; or
(ii) If such sale and assignment is effected in
any other circumstance, the successor Lessor shall be a Person
that is (A) a financial institution or a Person controlled by
a financial institution and (B) approved in writing by Agent,
Required Participants and, if no Default has occurred and is
continuing, Lessee (which consents of Agent, Required
Participants and Lessee shall not be unreasonably withheld),
provided that Lessee shall have no obligation to consent to
any such sale and assignment prior to the Commitment
Termination Date; and
(iii) The successor Lessor executes such
documents, instruments and agreements as may reasonably be
necessary to evidence its agreement to assume all of the
obligations and duties of the Lessor under this Agreement and
the other Operative Documents.
Upon the consummation of any such sale and assignment, (A) the
successor Lessor shall become the "Lessor" and shall succeed to and
become vested with all the rights, powers, privileges, duties and
obligations of the Lessor under this Agreement and the other Operative
Documents and (B) the retiring Lessor shall be discharged from the
duties and
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obligations of the Lessor thereafter arising under this Agreement and
the other Operative Documents. After any retiring Lessor's discharge as
the Lessor, the provisions of Section 6 and any other provision of this
Agreement or any other Operative Document which by its terms survives
the termination of this Agreement shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it
while it was acting as the Lessor. Unless a sale and assignment by
Lessor of its right, title and interest in the Property under this
subparagraph is made by Lessor at Lessee's request or pursuant to
clause (i) above, Lessor shall pay any real property transfer taxes
payable as a result of such sale and assignment.
7.06. Setoff. In addition to any rights and remedies of the
Participants provided by law, each Participant shall have the right, with the
prior written consent of Agent, but without prior notice to or consent of
Lessee, any such notice and consent being expressly waived by Lessee to the
extent permitted by applicable law, upon the occurrence and during the
continuance of an Event of Default, to set-off and apply against the Lessee
Obligations, whether matured or unmatured, any amount owing from such
Participant to Lessee, at or at any time after, the occurrence of such Event of
Default. The aforesaid right of set-off may be exercised by such Participant
against Lessee or against any trustee in bankruptcy, debtor in possession,
assignee for the benefit of creditors, receiver or execution, judgment or
attachment creditor of Lessee or against anyone else claiming through or against
Lessee or such trustee in bankruptcy, debtor in possession, assignee for the
benefit of creditors, receiver, or execution, judgment or attachment creditor,
notwithstanding the fact that such right of set-off shall not have been
exercised by such Participant prior to the occurrence of an Event of Default.
Each Participant agrees promptly to notify Lessee after any such set-off and
application made by such Participant, provided that the failure to give such
notice shall not affect the validity of such set-off and application.
7.07. No Third Party Rights. Nothing expressed in or to be implied
from this Agreement is intended to give, or shall be construed to give, any
Person, other than the parties hereto and their permitted successors and assigns
hereunder, any benefit or legal or equitable right, remedy or claim under or by
virtue of this Agreement or under or by virtue of any provision herein.
7.08. Partial Invalidity. If at any time any provision of this
Agreement or any other Operative Document is or becomes illegal, invalid or
unenforceable in any respect under the law or any jurisdiction, neither the
legality, validity or enforceability of the remaining provisions of this
Agreement or the other Operative Documents nor the legality, validity or
enforceability of such provision under the law of any other jurisdiction shall
in any way be affected or impaired thereby.
7.09. JURY TRIAL. EACH OF LESSEE AND THE LESSOR PARTIES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY IRREVOCABLY WAIVES ALL RIGHT
TO TRIAL BY JURY AS TO ANY ISSUE RELATING TO THE OPERATIVE DOCUMENTS IN ANY
ACTION, PROCEEDING, OR COUNTERCLAIM ARISING OUT OF OR RELATING TO ANY OPERATIVE
DOCUMENT.
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7.10. Counterparts. This Agreement 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.
7.11. No Joint Venture, Etc. Neither this Agreement nor any other
Operative Document nor any transaction contemplated hereby or thereby shall be
construed to (a) constitute a partnership or joint venture between Lessee and
any Lessor Party or (b) impose upon any Lessor Party any agency relationship
with or fiduciary duty to Lessee.
7.12. Usury Savings Clause. Nothing contained in this Agreement or
any other Operative Documents shall be deemed to require the payment of interest
or other charges by Lessee in excess of the amount the applicable Lessor Parties
may lawfully charge under applicable usury laws. In the event any Lessor Party
shall collect monies which are deemed to constitute interest which would
increase the effective interest rate to a rate in excess of that permitted to be
charged by applicable law, all such sums deemed to constitute excess interest
shall, upon such determination, at the option of Lessor, be returned to Lessee
or credited against other Lessee Obligations.
7.13. Confidentiality. No Lessor Party shall disclose to any Person
any information with respect to Lessee or any of its Subsidiaries which is
furnished pursuant to this Agreement or under the other Operative Documents,
except that any Lessor Party may disclose any such information (a) to its own
directors, officers, employees, auditors, counsel and other advisors and to its
Affiliates; (b) to any other Lessor Party; (c) which is otherwise available to
the public; (d) if required or appropriate in any report, statement or testimony
submitted to any Governmental Authority having or claiming to have jurisdiction
over such Lessor Party; (e) if required or appropriate in response to any
summons or subpoena; (f) in connection with any litigation relating to the
Operative Documents or the transactions contemplated thereby; (g) to comply with
any Requirement of Law applicable to such Lessor Party; (h) to any Assignee
Participant or Subparticipant or any prospective Assignee Participant or
Subparticipant, provided that such Assignee Participant or Subparticipant or
prospective Assignee Participant or Subparticipant agrees to be bound by this
Paragraph 7.13; or (i) otherwise with the prior consent of Lessee; provided,
however, that any disclosure made in violation of this Agreement shall not
affect the obligations of Lessee and its Subsidiaries under this Agreement and
the other Operative Documents.
7.14. Governing Law. Unless otherwise provided in any Operative
Document, this Agreement and each of the other Operative Documents shall be
governed by and construed in accordance with the laws of the State of California
without reference to conflicts of law rules.
[The first signature page follows.]
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IN WITNESS WHEREOF, Lessee, Head Lessor, Lessor, the Participants and
Agent have caused this Agreement to be executed as of the day and year first
above written.
LESSEE: NOVELLUS SYSTEMS, INC.
By:___________________________
Name:______________________
Title:_____________________
HEAD LESSOR: LEASE PLAN NORTH AMERICA, INC.
By:___________________________
Name:______________________
Title:_____________________
LESSOR: ABN AMRO LEASING, INC.
By:___________________________
Name:______________________
Title:_____________________
AGENT: ABN AMRO BANK N.V.
By:___________________________
Name:______________________
Title:_____________________
By:___________________________
Name:______________________
Title:_____________________
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PARTICIPANTS: ABN AMRO BANK N.V.
By:___________________________
Name:______________________
Title:_____________________
By:___________________________
Name:______________________
Title:_____________________
CREDIT LYONNAIS
By:___________________________
Name:______________________
Title:_____________________
BNP-PARIBAS
By:___________________________
Name:______________________
Title:_____________________
DAI-ICHI KANGYO BANK, LTD.
By:___________________________
Name:______________________
Title:_____________________
FLEET BOSTON
By:___________________________
Name:______________________
Title:_____________________
UNION BANK OF CALIFORNIA, N.A.
By:___________________________
Name:______________________
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Title:_____________________
KEYBANK NATIONAL ASSOCIATION
By:___________________________
Name:______________________
Title:_____________________
BANK OF NOVA SCOTIA
By:___________________________
Name:______________________
Title:_____________________
COMERICA BANK-CALIFORNIA
By:___________________________
Name:______________________
Title:_____________________
ABN AMRO LEASING, INC.
By:___________________________
Name:______________________
Title:_____________________
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SCHEDULE I
PARTICIPANTS
PART A(1) - TRANCHE PERCENTAGES AND
PROPORTIONATE SHARES FOR THE LAND PORTION
UNDER FACILITY 1
TRANCHE A TRANCHE B TRANCHE C PROPORTIONATE
PARTICIPANT PERCENTAGE PERCENTAGE PERCENTAGE SHARE
- -------------------- ------------ ------------ ------------ -------------
ABN AMRO Bank N.V. 12.16853933% 0.00000000% 0.00000000% 12.16853933%
Credit Lyonnais 14.04494382% 0.00000000% 0.00000000% 14.04494382%
BNP-Paribas 11.23595506% 0.00000000% 0.00000000% 11.23595506%
Dai-Ichi Kangyo Bank 11.23595506% 0.00000000% 0.00000000% 11.23595506%
Fleet Boston 11.23595506% 0.00000000% 0.00000000% 11.23595506%
Union Bank of
California 11.23595506% 0.00000000% 0.00000000% 11.23595506%
KeyBank 8.98876404% 0.00000000% 0.00000000% 8.98876404%
Scotia Capital 8.98876404% 0.00000000% 0.00000000% 8.98876404%
Comerica Bank 7.86516854% 0.00000000% 0.00000000% 7.86516854%
ABN AMRO Leasing,
Inc. 0% 0% 3.00000000% 3.00000000%
- -------------------- ------------ ------------ ------------ -------------
TOTAL 97.00000000% 0.00000000% 3.00000000% 100.00000000%
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PART A(2) - TRANCHE PERCENTAGES AND
PROPORTIONATE SHARES FOR THE IMPROVEMENT PORTION
UNDER FACILITY 1
TRANCHE A TRANCHE B TRANCHE C PROPORTIONATE
PARTICIPANT PERCENTAGE PERCENTAGE PERCENTAGE SHARE
- -------------------- ------------ ------------ ------------ -------------
ABN AMRO Bank N.V. 10.66315302% 1.50538631% 0.00000000% 12.16853933%
Credit Lyonnais 12.30742500% 1.73751882% 0.00000000% 14.04494382%
BNP-Paribas 9.84594000% 1.39001506% 0.00000000% 11.23595506%
Dai-Ichi Kangyo Bank 9.84594000% 1.39001506% 0.00000000% 11.23595506%
Fleet Boston 9.84594000% 1.39001506% 0.00000000% 11.23595506%
Union Bank of
California 9.84594000% 1.39001506% 0.00000000% 11.23595506%
KeyBank 7.87675200% 1.11201205% 0.00000000% 8.98876404%
Scotia Capital 7.87675200% 1.11201205% 0.00000000% 8.98876404%
Comerica Bank 6.89215800% 0.97301054% 0.00000000% 7.86516854%
ABN AMRO Leasing,
Inc. 0% 0% 3.00000000% 3.00000000%
- -------------------- ------------ ------------ ------------ -------------
TOTAL 85.00000000% 12.00000000% 3.00000000% 100.00000000%
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PART A(3) - TRANCHE PERCENTAGES AND PROPORTIONATE SHARES UNDER
FACILITY 2 PRIOR TO THE COMPLETION DATE
TRANCHE A TRANCHE B TRANCHE C PROPORTIONATE
PARTICIPANT PERCENTAGE PERCENTAGE PERCENTAGE SHARE
- -------------------- ------------ ------------ ------------ -------------
ABN AMRO Bank N.V. 11.27785243% 0.89068690% 0.00000000% 12.16853933%
Credit Lyonnais 13.01691185% 1.02803197% 0.00000000% 14.04494382%
BNP-Paribas 10.41352948% 0.82242558% 0.00000000% 11.23595506%
Dai-Ichi Kangyo Bank 10.41352948% 0.82242558% 0.00000000% 11.23595506%
Fleet Boston 10.41352948% 0.82242558% 0.00000000% 11.23595506%
Union Bank of
California 10.41352948% 0.82242558% 0.00000000% 11.23595506%
KeyBank 8.33082358% 0.65794046% 0.00000000% 8.98876404%
Scotia Capital 8.33082358% 0.65794046% 0.00000000% 8.98876404%
Comerica Bank 7.28947064% 0.57569790% 0.00000000% 7.86516854%
ABN AMRO Leasing,
Inc 0% 0% 3.00000000% 3.00000000%
- -------------------- ------------ ------------ ------------ -------------
TOTAL 89.90000000% 7.10000000% 3.00000000% 100.00000000%
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PART A(4) - TRANCHE PERCENTAGES AND PROPORTIONATE SHARES UNDER
FACILITY 2 ON AND AFTER THE COMPLETION DATE
TRANCHE A TRANCHE B TRANCHE C PROPORTIONATE
PARTICIPANT PERCENTAGE PERCENTAGE PERCENTAGE SHARE
- -------------------- ------------ ------------ ------------ -------------
ABN AMRO Bank N.V. 10.91405074% 1.25448859% 0.00000000% 12.16853933%
Credit Lyonnais 12.59701147% 1.44793235% 0.00000000% 14.04494382%
BNP-Paribas 10.07760917% 1.15834588% 0.00000000% 11.23595506%
Dai-Ichi Kangyo Bank 10.07760917% 1.15834588% 0.00000000% 11.23595506%
Fleet Boston 10.07760917% 1.15834588% 0.00000000% 11.23595506%
Union Bank of
California 10.07760917% 1.15834588% 0.00000000% 11.23595506%
KeyBank 8.06208734% 0.92667671% 0.00000000% 8.98876404%
Scotia Capital 8.06208734% 0.92667671% 0.00000000% 8.98876404%
Comerica Bank 7.05432642% 0.81084212% 0.00000000% 7.86516854%
ABN AMRO Leasing,
Inc. 0% 0% 3.00000000% 3.00000000%
- -------------------- ------------ ------------ ------------ -------------
TOTAL 87.00000000% 10.00000000% 3.00000000% 100.00000000%
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PART B - ADDRESSES, ETC.
ABN AMRO BANK N.V.
Applicable Participating Office:
ABN AMRO Bank N.V.
101 California Street, Suite 4550
San Francisco, CA 94111
Address for Notices:
ABN AMRO Bank N.V.
San Francisco International Branch
101 California Street, Suite 4550
San Francisco, CA 94111
Attention: Sean Cutting
Telephone: (415) 984-3718
Fax: (415) 362-3524
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
Wiring Instructions:
ABN AMRO Bank N.V.
New York, New York
RT/ABA No.: 026009580
Account Name: ABN AMRO Bank N.V. - CPU
Account No.: 650-001-1789-41
Reference: Novellus Systems, Inc. Synthetic Lease IV
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CREDIT LYONNAIS
MS. RITA RAYCHAUDHURI
CREDIT LYONNAIS
515 SOUTH FLOWER STREET, 22ND FLOOR
LOS ANGELES, CA 90071
Operations Contact: Daphne Chen
Telephone No. (212) 261-7638
Fax No. (917) 849-5439
Wiring Instructions: Credit Lyonnais
ABA No.
026008073
New York, NY
Credit Account of: Credit Lyonnais, LA
Branch
Account No.0100687000100
Ref: Novellus Systems Inc
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BNP-PARIBAS
Credit Contact:
MR. STUART DARBY
BNP PARIBAS
180 MONTGOMERY STREET, 3rd FLOOR
SAN FRANCISCO, CA 94104
Operations Contact: Don
Hart
Telephone No. (415) 956-2511
Fax No. (415) 989-9041
Wiring Instructions: BNP - Paribas
New York, NY
ABA No.
026007689
Account No. 14334000176
BNP - Paribas, San Francisco
agency
Attn: Peggy T.
Ref: Novellus Systems Inc
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DAI-ICHI KANGYO BANK
MR. NELSON CHANG
DAI-ICHI KANGYO BANK
CORPORATE FINANCE DEPARTMENT I
ONE WORLD TRADE CENTER, SUITE 4911
NEW YORK, NY 10048
Operations Contact: Adolfo Aguirre
Telephone No. (212) 432-8330
Fax No. (212) 524-0049
Wiring Instructions: Dai-Ichi Kangyo Bank
New York, NY
ABA No. 026004307
Credit Account: H10740014132
Attn: Loan Operations Department
Ref: Novellus Systems Inc'
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FLEET BOSTON
MS. LEE MERKLE-RAYMOND
FLEET NATIONAL BANK
435 TASSO STREET, SUITE 250
PALO, CA 94301
Operations Contact: James Snyder
Telephone No. (617) 434-6371
Fax No. (617) 434-1709
Wiring Instructions: Fleet National Bank
Boston, MA
ABA 011000138
Commercial Loans Services
Account No. 01035103156
Ref: Novellus Systems Inc
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UNION BANK OF CALIFORNIA
MS. SARABELLE HITCHNER
UNION BANK OF CALIFORNIA
99 ALMADEN BLVD., SUITE 200
SAN JOSE, CA 95113
Operations Contact: Ruby Gonzales
Fax No. (323) 724-6198
Wiring Instructions: Union Bank of California, Los Angeles
ABA No. 122000496
Credit Account No. 070196431
Union Bank of California
Attn: 192 Note Center
Ref: Novellus systems Inc
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KEYBANK
MS. MARY YOUNG
KEY BANK NATIONAL ASSOCIATION
700 FIFTH AVENUA, 48th FLOOR
SEATTLE, WA 98104
Operations Contact: Specialty Services Division
Seattle, WA
Telephone No. (800) 297-5518
Fax No. 800-297-5495
Wiring Instructions: Key Bank National, Seattle, WA
ABA No. 125000574
NW Region Specialty Services
Account No. 01500163
Ref: Novellus Systems Inc.
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BANK OF NOVA SCOTIA
MS. LISA BEARD
THE BANK OF NOVA SCOTIA
580 CALIFORNIA STREET, SUITE 2100
SAN FRANCISCO, CA 94104
Operations Contact: Arnetta Wilford
Telephone No. (404) 877-1563
Fax No. (404) 888-8998
Wiring Instructions: Bank of Nova Scotia, New York, NY
ABA No. 026002532
Credit: Bank of Nova Scotia, San Francisco Service
Account
No. 0610135
Ref: Novellus Systems Inc
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COMERICA BANK
MS. SARAH LEWIS
COMERICA BANK
800 OAKGROVE AVENUE.
MENLO PARK, CA 94025
Operations Contact: Rob Ways
Telephone No. (650) 462-6056
Fax No. (650) 462-6058
Wiring Instructions: Comerica Bank, San Jose, CA
ABA No. 121137522
Credit Account No.: 5692209284
Ref: Novellus Systems Inc
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ABN AMRO LEASING, INC.
Applicable Participating Office:
ABN AMRO Leasing, Inc.
c/o ABN AMRO Bank N.V.
135 South LaSalle Street, Suite 740
Chicago, IL 60603
Address for Notices:
ABN AMRO Leasing, Inc.
c/o ABN AMRO Bank N.V.
135 South LaSalle Street, Suite 740
Chicago, IL 60603
Attention: David M. Shipley
Telephone: (312) 904-2183
Fax: (312) 904-6217
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
Wiring Instructions:
ABN AMRO Leasing, Inc.
Bank Name: LaSalle Bank, NA
RT/ABA No.: 071000505
Account Name: ABN AMRO Leasing, Inc.
Account No.: 2226951
Reference: Novellus Systems, Inc. Synthetic Lease IV
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SCHEDULE II
PRICING GRID
(For LIBOR Rental Rate and Commitment Fee Percentage)
APPLICABLE
MARGIN FOR APPLICABLE
FUNDED LIBOR MARGIN FOR
INDEBTEDNESS/ PRICING RENTAL RATE LIBOR COMMITMENT
EBITDA PERIOD /TRANCHES RENTAL RATE FEE
RATIO* LEVEL A AND B /TRANCHE C PERCENTAGE
- --------------------------- ------- ------- ---------- ----------
less than or equal to 0.60 1 1.125% 2.375% 0.250%
greater than 0.60,
less than or equal to 1.20 2 1.250% 2.500% 0.300%
greater than 1.20,
less than or equal to 1.40 3 1.500% 2.750% 0.375%
greater than 1.40 4 2.000% 3.000% 0.500%
* For preceding consecutive four-quarter period.
EXPLANATION
1. The Applicable Margin with respect to the LIBOR Rental Rate for any period
and the Commitment Fee Percentage will be set for each Pricing Period and
will vary depending upon whether such period is a Level 1 Period, a Level
2 Period, a Level 3 Period or a Level 4 Period.
2. The first Pricing Period, which commences on the date of this Agreement
and ends on May 31, 2001, will be a Level 2 Period.
3. The second pricing period, which commences on June 1, 2001 and ends on
August 31, 2001, will be a Level 1 Period, a Level 2 Period, a Level 3
Period or a Level 4 Period depending upon Lessee's Funded
Indebtedness/EBITDA Ratio for the consecutive four-fiscal quarter period
ending on March 31, 2001.
4. Each Pricing Period thereafter will be a Level 1 Period, a Level 2 Period,
a Level 3 Period or a Level 4 Period depending upon Lessee's Funded
Indebtedness/EBITDA Ratio for the most recent consecutive four-fiscal
quarter period ending prior to the first day of such Pricing Period.
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5. Examples:
(a) Lessee's Funded Indebtedness/EBITDA Ratio is 0.75 for the
consecutive four-fiscal quarter period ending on March 31, 2001. The
Pricing Period June 1, 2001 - August 31, 2001 will be a Level 2
Period.
(b) Lessee's Funded Indebtedness/EBITDA Ratio is 1.30 for the
four-fiscal quarter period ending on June 30, 2001. The Pricing
Period of September 1, 2001 - November 30, 2001 will be a Level 3
Period.
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SCHEDULE 1.01
DEFINITIONS
"ABN AMRO" shall mean ABN AMRO Bank N.V.
"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 both Lease
Agreements 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.
"Advances" shall have the meaning given to that term in Subparagraph
2.01(d) of the Participation Agreement and shall include all amounts capitalized
pursuant to Subparagraph 2.03(c) of the Participation Agreement or otherwise.
"Advance Request" shall have the meaning given to that term in
Subparagraph 2.03(a) of the Participation Agreement.
"Affiliate" shall mean, with respect to any Person, (a) each Person that,
directly or indirectly, owns or controls, whether beneficially or as a trustee,
guardian or other fiduciary, five percent (5%) or more of any class of Equity
Securities of such Person, (b) each Person that controls, is controlled by or is
under common control with such Person or any Affiliate of such Person or (c)
each of such Person's officers, directors, joint venturers and partners;
provided, however, that in no case shall Lessor, Agent or any Participant be
deemed to be an Affiliate of Lessee or any of its Subsidiaries for purposes of
the Operative Documents. For the purpose of this definition, "control" of a
Person shall mean the possession, directly or indirectly, of the power to direct
or cause the direction of its management or policies, whether through the
ownership of voting securities, by contract or otherwise.
"Agent" shall mean ABN AMRO, acting in its capacity as Agent for the
Participants under the Operative Documents.
1.01-1
85
"Agent's Fee Letter" shall mean the letter agreement dated as of December
5, 2000 between Lessee and Agent regarding certain fees payable by Lessee to
Agent.
"Agent's Fees" shall have the meaning given to that term in Subparagraph
2.04(a) of the Participation Agreement.
"Alternate Rental Rate" shall mean, for any Rental Period (or portion
thereof), the per annum rate equal to the Base Rate in effect from time to time
during such period plus the Applicable Margin, such rate to change from time to
time during such period as the Base Rate or Applicable Margin shall change.
"Applicable Margin" shall mean:
(a) Tranche A and Tranche B. With respect to the Outstanding
Tranche A Participation Amounts and Outstanding Tranche B Participation
Amounts under either Facility:
(i) The per annum rate which is determined pursuant to the
Pricing Grid with respect to the LIBOR Rental Rate under the
applicable Lease Agreement; or
(ii) Zero percent (0%) per annum with respect to the
Alternate Rental Rate under the applicable Lease Agreement; and
(b) Tranche C. With respect to the Outstanding Tranche C
Participation Amounts under either Facility:
(i) The per annum rate which is determined pursuant to the
Pricing Grid with respect to the LIBOR Rental Rate under the
applicable Lease Agreement; or
(ii) Two percent (2.0%) per annum with respect to the
Alternate Rental Rate under the applicable Lease Agreement;
provided, however, that each Applicable Margin set forth in subparagraphs (a)
and (b) of this definition shall be increased by two percent (2.0%) per annum on
the date an Event of Default occurs and shall continue at such increased rate
unless and until such Event of Default is waived in accordance with the
Operative Documents.
"Applicable Participating Office" shall mean, with respect to any
Participant, (a) initially, its office designated as such in Part B of Schedule
I (or, in the case of any Participant which becomes a Participant by an
assignment pursuant to Subparagraph 7.05(b) of the Participation Agreement, its
office designated as such in the applicable Assignment Agreement) and (b)
subsequently, such other office or offices as such Participant may designate to
Agent as the office at which such Participant's interest in the Lease Agreement
will thereafter be maintained and for the account of which all payments of Rent
and other amounts payable to such Participant under the Operative Documents will
thereafter be made.
1.01-2
86
"Appraisal" shall mean an appraisal of any Tract of the Property or a
portion thereof in a form satisfactory to Lessor, Agent and the Required
Participants, prepared by an independent MAI appraiser that (a) complies with
the Financial Institutions Reform, Recovery and Enforcement Act of 1989 and all
other applicable Governmental Rules and (b) is approved by Lessor, Agent and the
Required Participants (at the time such appraiser is selected).
"Appurtenant Rights" shall mean all easements and rights-of-way, strips
and gores of land, streets, ways, alleys, passages, sewer rights, water, water
courses, water rights and powers, air rights and development rights, liberties,
tenements, hereditaments and appurtenances of any nature whatsoever, in any way
belonging, relating or pertaining to any Land or the Improvements thereto and
the reversions, remainders, and all the estates, rights, titles, interests,
property, possession, claim and demand whatsoever, both in law and in equity,
of, in and to such Land and Improvements and every part and parcel thereof, with
the appurtenances thereto.
"Assignee Participant" shall have the meaning given to that term in
Subparagraph 7.05(b) of the Participation Agreement.
"Assignee Purchaser" shall have, with respect to each Purchase Agreement,
the meaning given to that term in Subparagraph 5.03(b) of such Purchase
Agreement.
"Assignment" shall have the meaning given to that term in Subparagraph
7.05(b) of the Participation Agreement.
"Assignment Agreement" shall have the meaning given to that term in
Subparagraph 7.05(b) of the Participation Agreement.
"Assignment Effective Date" shall have, with respect to each Assignment
Agreement, the meaning set forth therein.
"Assignment of Construction Agreements" shall have the meaning given to
that term in Subparagraph 2.11(a) of the Participation Agreement.
"Assignment of Lease" shall have the meaning given to that term in
Subparagraph 2.11(b) of the Participation Agreement.
"Assignor Participant" shall have the meaning given to that term in
Subparagraph 7.05(b) of the Participation Agreement.
"Assumed Appraisal" shall have, with respect to each Purchase Agreement,
the meaning given to that term in Subparagraph 3.02(h) of such Purchase
Agreement.
"Base Rate" shall mean, on any day, the greater of (a) the Prime Rate in
effect on such date and (b) the Federal Funds Rate for such day plus one-half
percent (0.50%).
"Base Rent" shall have, with respect to either Lease Agreement, the
meaning given to that term in Subparagraph 2.03(a) of such Lease Agreement. Such
term, when used without reference to either Lease Agreement, shall mean all Base
Rent under both Lease Agreements.
1.01-3
87
"Budget" shall mean the budget for the New Improvements delivered by
Lessee to Lessor pursuant to Paragraph 3.01 and Schedule 3.01 of the
Participation Agreement.
"Business Day" shall mean any day on which (a) commercial banks are not
authorized or required to close in San Francisco, California, Chicago, Illinois
or New York, New York and (b) if such Business Day is related to a LIBOR Rental
Rate, dealings in Dollar deposits are carried out in the London interbank
market.
"Capital Adequacy Requirement" shall have the meaning given to that term
in Subparagraph 2.12(d) of the Participation Agreement.
"Capital Asset" shall mean, with respect to any Person, any tangible fixed
or capital asset owned or leased (in the case of a Capital Lease) by such
Person, or any expense incurred by such Person that is required by GAAP to be
reported as a non-current asset on such Person's balance sheet.
"Capital Expenditures" shall mean, with respect to any Person and any
period, all expenses accrued by such Person during such period for the
acquisition of Capital Assets (including all indebtedness incurred or assumed in
connection with Capital Leases).
"Capital Leases" shall mean any and all lease obligations that, in
accordance with GAAP, are required to be capitalized on the books of a lessee.
"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.)
"Cash Collateral" shall mean:
(a) In the case of any "Cash Collateral" required to be delivered
by Lessee under Facility 2 during the Construction Period as security for
the Lessee Obligations under Facility 2 pursuant to Subparagraph 2.11(a)
of the Participation Agreement, United States Treasury Securities with
maturities not exceeding the Termination Date of the Facility 2 Lease
Agreement that are delivered to and held by Agent as security for such
Lessee Obligations; or
(b) In the case of any "Cash Collateral" required to be delivered
by Lessee in all other cases as security for the Lessee Obligations under
a Facility pursuant to Subparagraph 2.11(a) of the Participation
Agreement, lawful currency of the United States of America in same day or
immediately available funds that is delivered to and held by Agent in an
interest-bearing deposit account as security for such Lessee Obligations.
1.01-4
88
"Cash Collateral Agreement" shall have the meaning given to that term in
Subparagraph 2.11(a) of the Participation Agreement.
"Cash Equivalents" shall mean:
(a) Direct obligations of, or obligations the principal and
interest on which are unconditionally guaranteed by, the United States of
America or obligations of any agency of the United States of America to
the extent such obligations are backed by the full faith and credit of the
United States of America, in each case maturing within one year from the
date of acquisition thereof;
(b) Certificates of deposit maturing within one year from the date
of acquisition thereof issued by a commercial bank or trust company
organized under the laws of the United States of America or a state
thereof or that is a Participant, provided that (A) such deposits are
denominated in Dollars, (B) such bank or trust company has capital,
surplus and undivided profits of not less than $100,000,000 and (C) such
bank or trust company has certificates of deposit or other debt
obligations rated at least A-1 (or its equivalent) by Standard and Poor's
Ratings Group or P-1 (or its equivalent) by Moody's Investors Service,
Inc.;
(c) Open market commercial paper maturing within 270 days from the
date of acquisition thereof issued by a corporation organized under the
laws of the United States of America or a state thereof, provided such
commercial paper is rated at least A-1 (or its equivalent) by Standard and
Poor's Ratings Group or P-1 (or its equivalent) by Moody's Investors
Service, Inc.; and
(d) Any repurchase agreement entered into with a commercial bank
or trust company organized under the laws of the United States of America
or a state thereof or that is a Participant, provided that (A) such bank
or trust company has capital, surplus and undivided profits of not less
than $100,000,000, (B) such bank or trust company has certificates of
deposit or other debt obligations rated at least A-1 (or its equivalent)
by Standard and Poor's Ratings Group or P-1 (or its equivalent) by Moody's
Investors Service, Inc., (C) the repurchase obligations of such bank or
trust company under such repurchase agreement are fully secured by a
perfected security interest in a security or instrument of the type
described in clause (a), (b) or (c) above and (D) such security or
instrument so securing the repurchase obligations has a fair market value
at the time such repurchase agreement is entered into of not less than
100% of such repurchase obligations.
"Casualty" shall mean any damage to, destruction of or decrease in the
value of all or any portion of any of the Property as a result of fire, flood,
earthquake or other natural cause; the actions or inactions of any Person or
Persons (whether willful or unintentional and whether or not constituting
negligence); or any other cause.
"Casualty and Condemnation Proceeds" shall mean all awards, damages,
compensation, reimbursement and other payments made or to be made to Lessee,
Lessor or Agent from any
1.01-5
89
insurer, Governmental Authority or other Person (other than Lessee or any Lessor
Party) on account of any Casualty or Condemnation.
"Change of Control" shall mean, with respect to Lessee, (a) the
acquisition by any person or group of persons (within the meaning of Section 13
or 14 of the Securities Exchange Act of 1934 (as amended, the "Exchange Act"))
of (i) beneficial ownership (within the meaning of Rule 13d-3 promulgated by the
Securities and Exchange Commission under the Exchange Act) of twenty-five
percent (25%) or more of the outstanding Equity Securities of Lessee entitled to
vote for members of the board of directors, or (ii) all or substantially all of
the assets of Lessee and its Subsidiaries taken as a whole; or (b) during any
period of twelve (12) consecutive calendar months, individuals who are directors
of Lessee on the first day of such period ("Initial Directors") and any
directors of Lessee who are specifically approved by two-thirds of the Initial
Directors and previously-approved Directors shall cease to constitute a majority
of the Board of Directors of Lessee before the end of such period.
"Change of Law" shall have the meaning given to that term in Subparagraph
2.12(b) of the Participation Agreement.
"Closing Date" shall have the meaning given to that term in Subparagraph
2.01(a) of the Participation Agreement.
"Collateral" shall mean the Property Collateral, the Cash Collateral and
all other property in which any Lessor Party has a Lien to secure any of the
Lessee Obligations.
"Commencement Date" shall have, with respect to either Lease Agreement,
the meaning given to that term in Subparagraph 2.02(a) of such Lease Agreement.
"Commitment" shall mean, with respect to any Participant at any time, the
sum of such Participant's Facility 1 Commitment and Facility 2 Commitment at
such time.
"Commitment Extension Fee" shall have the meaning given to that term in
Subparagraph 2.04(c) of the Participation Agreement.
"Commitment Extension Request" shall have the meaning given to that term
in Subparagraph 2.09(a) of the Participation Agreement.
"Commitment Fee Percentage" shall mean the per annum rate determined
pursuant to the Pricing Grid.
"Commitment Fees" shall have the meaning given to that term in
Subparagraph 2.04(b) of the Participation Agreement.
"Commitment Period" shall have the meaning given to that term in
Subparagraph 2.01(c) of the Participation Agreement.
"Commitment Termination Date" shall have the meaning given to that term in
Subparagraph 2.01(c) of the Participation Agreement.
1.01-6
90
"Completion" shall have the meaning given to that term in Subparagraph
3.05(c) of the Facility 2 Construction Agency Agreement. "Complete", "Completed"
and "Completion" shall have comparable meanings.
"Completion Date" shall mean the first date on which all of the conditions
set forth in Subparagraph 3.05(c) of the Facility 2 Construction Agency
Agreement are satisfied for all Tracts of Property covered by the Facility 2
Construction Agency Agreement.
"Completion Date Appraisal" shall mean, with respect to the Facility 2
Property or any portion thereof on or as of a recent date prior to the Closing
Date, an Appraisal that assesses at such time the Fair Market Value of such
property on the Completion Date and as improved in accordance with the Plans and
Specifications for the New Improvements.
"Completion Delay Event" shall mean (a) the occurrence of any event or the
existence of any condition that causes the likely Completion Date to be later
than the Outside Completion Date and (b) the delivery by Lessee to any Lessor
Party at any time of any notice, certificate or other writing which indicates
that the likely Completion Date will be later than the Outside Completion Date.
"Compliance Certificate" shall have the meaning given to that term in
Subparagraph 5.01(a) of the Participation Agreement.
"Condemnation" shall mean any condemnation, requisition, confiscation,
seizure or other taking or sale of the use, access, occupancy or other right in
or to all or any portion of any of the Property (whether wholly or partially,
temporarily or permanently), by or on account of any actual or threatened
eminent domain proceeding or other taking of action by any Governmental
Authority or other Person having the power of eminent domain, including an
action by any such Governmental Authority or Person to change the grade of, or
widen the streets adjacent to, such Property or alter the pedestrian or
vehicular traffic flow to such Property so as to result in change in access to
such Property, or by or on account of an eviction by paramount title or any
transfer made in lieu of any such proceeding or action. A "Condemnation" shall
be deemed to have occurred on the earliest of the dates that use, access,
occupancy or other right is taken.
"Conforming Bid" shall have, with respect to either Purchase Agreement,
the meaning given to that term in Subparagraph 3.02(c) of such Purchase
Agreement.
"Construction Agreements" shall have the meaning given to that term in
Paragraph 3.01 of the Facility 2 Construction Agency Agreement.
"Construction Period" shall mean, with respect to any building to be
constructed or improved as part of the New Improvement, the period that begins
on the Closing Date and ends on the earlier of (a) the first date on which
Substantial Completion of such construction or improvement for such building
occurs and (b) the Outside Completion Date.
"Construction Termination Event" shall mean (a) the occurrence or
existence of any Cost Overrun Event or Completion Delay Event, (b) the
incurrence by any Lessor Party of any liabilities, losses, damages or expenses
excluded from Lessee's obligations under Paragraph 7.03
1.01-7
91
of the Participation Agreement by the proviso to such paragraph, (c) the
incurrence by any Lessor Party of any increased costs or reduced amounts
excluded from Lessee's obligations under Subparagraph 2.12(c) of the
Participation Agreement by the proviso to such subparagraph or (d) the
occurrence or existence of any loss or liability excluded from Lessee's
obligations under Paragraph 3.02 of either Lease Agreement by the proviso to
such paragraph.
"Contingent Obligation" shall mean, with respect to any Person, (a) any
Guaranty Obligation of that Person; and (b) any direct or indirect obligation or
liability, contingent or otherwise, of that Person (i) in respect of any Surety
Instrument issued for the account of that Person or as to which that Person is
otherwise liable for reimbursement of drawings or payments, (ii) as a partner or
joint venturer in any partnership or joint venture, (iii) to purchase any
materials, supplies or other property from, or to obtain the services of,
another Person if the relevant contract or other related document or obligation
requires that payment for such materials, supplies or other property, or for
such services, shall be made regardless of whether delivery of such materials,
supplies or other property is ever made or tendered, or such services are ever
performed or tendered, or (iv) in respect to any Rate Contract that is not
entered into in connection with a bona fide hedging operation that provides
offsetting benefits to such Person. The amount of any Contingent Obligation
shall (subject, in the case of Guaranty Obligations, to the last sentence of the
definition of "Guaranty Obligation") be deemed equal to the maximum reasonably
anticipated liability in respect thereof, and shall with respect to item (b)(iv)
of this definition be marked to market on a current basis.
"Contractual Obligation" of any Person shall mean, any indenture, note,
lease, loan agreement, security, deed of trust, mortgage, security agreement,
guaranty, instrument; contract, agreement or other form of contractual
obligation or undertaking to which such Person is a party or by which such
Person or any of its property is bound.
"Cost Overrun" shall mean the amount, if any, by which:
(a) The aggregate cost to acquire the Facility 2 Property and
Complete the New Improvements, less that portion of such cost that is
payable or reimbursable by an insurer, contractor or other party (other
than Lessor, Lessee or Participants);
exceeds
(b) The greater of (i) the Total Facility 2 Commitment and (ii)
the fair market value of the Facility 2 Property on the Completion Date.
"Cost Overrun Event" shall mean (a) the delivery by Lessee of an Advance
Request for any Advance that will reduce the Unused Total Facility 2 Commitment
to $0 prior to the Completion Date, (b) the occurrence of any event or the
existence of any condition that causes the likely aggregate remaining cost for
Completion of the New Improvements at any time to exceed the Unused Total
Facility 2 Commitment at such time or (c) the delivery by Lessee to any Lessor
Party at any time of any notice, certificate or other writing which indicates
that the likely aggregate remaining cost for Completion of the New Improvements
at such time will exceed the Unused Total Facility 2 Commitment at such time.
1.01-8
92
"Credit Event" shall mean the making of each Advance, the selection of a
new Rental Period or the exercise of the Partial Purchase Option or Marketing
Option under either Purchase Agreement.
"Current Appraisal" shall have, with respect to a Purchase Agreement, the
meaning given to that term in Subparagraph 3.02(h) of such Purchase Agreement.
"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 and during such period (including
Base Rent under both Lease Agreements 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.
"Default" shall mean any Event of Default under either Lease Agreement or
any event or circumstance not yet constituting an Event of Default under either
Lease Agreement which, with the giving of any notice or the lapse of any period
of time or both, would become an Event of Default under either Lease Agreement.
"Defaulting Participant" shall mean a Participant which has failed to fund
its portion of any Advance which it is required to fund under the Participation
Agreement and has continued in such failure for three (3) Business Days after
written notice from Agent.
"Designated Purchaser" shall have, with respect to either Purchase
Agreement, the meaning given to that term in Subparagraph 3.02(e) of such
Purchase Agreement.
"Dollars" and "$" shall mean the lawful currency of the United States of
America and, in relation to any payment under the Operative Documents, same day
or immediately available funds.
"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
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(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.
"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 Lessee
Obligations in respect of 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 (or fully secured with treasury securities, cash or Cash
Equivalents, with an obligation to purchase the same upon completion of
construction of the leased property) a 100% participation interest in the
"Tranche A" portion of such leases.
"Eligible Assignee" shall mean (a) a commercial bank organized under the
laws of the United States, or any state thereof, and having a combined capital
and surplus of at least $100,000,000; (b) a commercial bank organized under the
laws of any other country which is a member of the Organization for Economic
Cooperation and Development (the "OECD"), or a political subdivision of any such
country, and having a combined capital and surplus of at least $100,000,000,
provided that such bank is acting through a branch or agency located in the
United States; (c) a Person that is (i) a Subsidiary of a Participant, (ii) a
Subsidiary of a Person of which a Participant is a Subsidiary, or (iii) a Person
of which a Participant is a Subsidiary; or (d) any other Person (other than a
natural person) that is approved by Lessor, Agent and, if no Default has
occurred and is continuing, Lessee (which consent of Lessor, Agent and Lessee
shall not be unreasonably withheld).
"Eligible Project Costs" shall mean, with respect to either Facility on
any date, the remainder of:
(a) The sum of (i) the Outstanding Lease Amount under such
Facility on such date, plus (ii) all Prepaid Rent on such date;
minus
(b) All amounts included in such sum that do not constitute
Project Costs, except for the amounts of any costs, expenses, liabilities
or losses caused by or arising from any failure by Lessee to comply with
any of its obligations under the Operative Documents (including its
insurance obligations), any representation by Lessee in any of the
Operative Documents not being true, any negligence or willful misconduct
of Lessee, or any claim by any third-party against Lessee (or against any
Lessor Party) based upon any alleged action or inaction by Lessee.
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94
Such term, when used without reference to either Facility, shall mean the
aggregate Eligible Project Costs under both Facilities.
"Employee Benefit Plan" shall mean any employee benefit plan within the
meaning of section 3(3) of ERISA maintained or contributed to by Lessee or any
ERISA Affiliate, other than a Multiemployer Plan.
"Environmental Laws" shall mean the Clean Air Act, 42 U.S.C. Section 7401
et seq.; the Federal Water Pollution Control Act, 33 U.S.C. Section 1251 et
seq.; the Resource Conservation and Recovery Act of 1976, 42 U.S.C. Section 6901
et seq.; the Comprehensive Environment Response, Compensation and Liability Act
of 1980 (including the Superfund Amendments and Reauthorization Act of 1986,
"CERCLA"), 42 U.S.C. Section 9601 et seq.; the Toxic Substances Control Act, 15
U.S.C. Section 2601 et seq.; the Occupational Safety and Health Act, 29 U.S.C.
Section 651; the Emergency Planning and Community Right-to-Know Act of 1986, 42
U.S.C. Section 11001 et seq.; the Mine Safety and Health Act of 1977, 30 U.S.C.
Section 801 et seq.; the Safe Drinking Water Act, 42 U.S.C. Section 300f et
seq.; and all other Governmental Rules relating to the protection of human
health and the environment, including all Governmental Rules pertaining to
reporting, licensing, permitting, transportation, storage, disposal,
investigation, and remediation of emissions, discharges, releases, or threatened
releases of Hazardous Materials into the air, surface water, groundwater, or
land, or relating to the manufacture, processing, distribution, use, treatment,
storage, disposal, transport, or handling of Hazardous Materials.
"Equity Securities" of any Person shall mean (a) all common stock,
preferred stock, participations, shares, partnership interests or other equity
interests in and of such Person (regardless of how designated and whether or not
voting or non-voting) and (b) all warrants, options and other rights to acquire
any of the foregoing.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
the same may from time to time be amended or supplemented, including any rules
or regulations issued in connection therewith.
"ERISA Affiliate" shall mean any Person which is treated as a single
employer with Lessee under Section 414 of the IRC.
"Event of Default" shall have, with respect to a Lease Agreement, the
meaning given to that term in Paragraph 5.01 of such Lease Agreement.
"Exhibit B Supplement" shall have the meaning given to that term in
Subparagraph 2.03(a) of the Participation Agreement.
"Existing Improvements" shall mean (a) with respect to a particular Tract
of Land, all Improvements existing on such Land on the Closing Date and (b) with
respect to all the Land, all such Improvements. Each reference to "Existing
Improvements" shall refer collectively to Existing Improvements with respect to
all the Land unless such reference specifically indicates that it applies to a
particular Tract.
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95
"Existing Improvement Property" shall mean all of the Property that is not
New Improvement Property.
"Expiration Date" shall mean, with respect to either Lease Agreement, the
earlier of (a) the Scheduled Expiration Date under such Lease Agreement, as such
date may be extended pursuant to this Agreement, and (b) the Termination Date
for such Lease Agreement, if such Lease Agreement is terminated prior to its
Scheduled Expiration Date in accordance with its terms.
"Expiration Date Appraisal" shall mean (a) with respect to the Facility 1
Property (or any portion thereof) as of any date, an Appraisal that assesses at
such time the Fair Market Value of such Property on the Scheduled Expiration
Date and (b) with respect to the Facility 2 Property (or any portion thereof) as
of any date, an Appraisal that assesses at such time the Fair Market Value of
such Property on the Scheduled Expiration Date and as improved in accordance
with the Plans and Specifications for the New Improvements.
"Expiration Date Purchase Option" shall have, with respect to either
Purchase Agreement, the meaning given to that term in Subparagraph 3.01(b) of
such Purchase Agreement.
"Facilities" shall have the meaning given to that term in Recital B to the
Participation Agreement.
"Facility 1" shall have the meaning given to that term in Recital B to the
Participation Agreement.
"Facility 1 Commitment" shall mean, with respect to any Participant at any
time, the sum of such Participant's Facility 1 Land Portion Commitment and
Facility 1 Improvement Portion Commitment at such time.
"Facility 1 Head Lease Agreement" shall have the meaning given to that
term in Subparagraph 2.01(b) of the Participation Agreement.
"Facility 1 Improvement Portion Commitment" shall mean, with respect to
any Participant at any time, such Participant's Proportionate Share of the Total
Facility 1 Improvement Portion Commitment at such time.
"Facility 1 Land" shall mean all lots, pieces, tracts or parcels of land
described in Exhibit A to the Facility 1 Lease Agreement and leased by Lessee
pursuant to the Facility 1 Lease Agreement.
"Facility 1 Land Portion Commitment" shall mean, with respect to any
Participant at any time, such Participant's Proportionate Share of the Total
Facility 1 Land Portion Commitment at such time.
"Facility 1 Lease Agreement" shall have the meaning given to that term in
Subparagraph 2.01(b) of the Participation Agreement.
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96
"Facility 1 Property" shall have the meaning given to that term in
Paragraph 2.01 of the Facility 1 Lease Agreement.
"Facility 1 Purchase Agreement" shall have the meaning given to that term
in Subparagraph 2.01(b) of the Participation Agreement.
"Facility 2" shall have the meaning given to that term in Recital B to the
Participation Agreement.
"Facility 2 Commitment" shall mean, with respect to any Participant at any
time, such Participant's Facility 2 Proportionate Share of the Total Facility 2
Commitment at such time.
"Facility 2 Construction Agency Agreement" shall have the meaning given to
that term in Subparagraph 2.01(c) of the Participation Agreement.
"Facility 2 Head Lease Agreement" shall have the meaning given to that
term in Subparagraph 2.01(c) of the Participation Agreement.
"Facility 2 Land" shall mean all lots, pieces, tracts or parcels of land
described in Exhibit A to the Facility 2 Lease Agreement and leased by Lessee
pursuant to the Facility 2 Lease Agreement.
"Facility 2 Land Portion Cost" shall have the meaning given to that term
in Subparagraph 2.01(a) of the Participation Agreement.
"Facility 2 Lease Agreement" shall have the meaning given to that term in
Subparagraph 2.01(c) of the Participation Agreement.
"Facility 2 Property" shall have the meaning given to that term in
Paragraph 2.01 of the Facility 2 Lease Agreement.
"Facility 2 Purchase Agreement" shall have the meaning given to that term
in Subparagraph 2.01(c) of the Participation Agreement.
"Fair Market Value" shall mean, with respect to any of the Property or any
portion thereof, the maximum reasonable amount (not less than zero) that would
be paid in cash in an arm's-length transaction between an informed and willing
purchaser and an informed and willing seller, neither of whom is under any
compulsion to purchase or sell, for the ownership of the Property or such
portion.
"FASB 13" shall mean Financial Accounting Standards Board Statement No.
13.
"Federal Funds Rate" shall mean, for any day, the rate per annum set forth
in the weekly statistical release designated as H.15(519), or any successor
publication, published by the Federal Reserve Board (including any such
successor publication, "H.15 (519)") for such day opposite the caption "Federal
Funds (Effective)". If on any relevant day, such rate is not yet published in
H.15 (519), the rate for such day shall be the rate set forth in the daily
statistical release
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97
designated as the Composite 3:30 p.m. Quotations for U.S. Government Securities,
or any successor publication, published by the Federal Reserve Bank of New York
(including any such successor publication, the "Composite 3:30 p.m. Quotations")
for such day under the caption "Federal Funds Effective Rate". If on any
relevant day, such rate is not yet published in either H.15 (519) or the
Composite 3:30 p.m. Quotations, the rate for such day shall be the arithmetic
means, as determined by Agent, of the rates quoted to Agent for such day by
three (3) Federal funds brokers of recognized standing selected by Agent.
"Federal Reserve Board" shall mean the Board of Governors of the Federal
Reserve System.
"Financial Statements" shall mean, with respect to any accounting period
for any Person, statements of income, shareholders' equity and cash flows of
such Person for such period, and a balance sheet of such Person as of the end of
such period, setting forth in each case in comparative form figures for the
corresponding period in the preceding fiscal year if such period is less than a
full fiscal year or, if such period is a full fiscal year, corresponding figures
from the preceding annual audit, all prepared in reasonable detail and in
accordance with GAAP.
"Force Majeure Events" shall mean any Acts of God, riots, civil
commotions, insurrections, wars, strikes, lockouts or other events beyond the
control of Lessee, except for (a) any such events that are known to or should be
known to Lessee on the Closing Date; (b) any such events that are caused by the
financial condition of Lessee or the failure of Lessee to make any payments
under any Construction Agreements, any Operative Documents or any related
agreements; or (c) any events that could be remedied through the payment of
money or the exercise of other commercially reasonable efforts.
"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
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98
(d) All obligations of such Person as lessee under or with respect
to Capital Leases.
"Funded Indebtedness/Capital Ratio" shall mean, with respect to Lessee at
any time, the ratio, determined on a consolidated basis in accordance with GAAP,
of:
(a) The Funded Indebtedness of Lessee and its Subsidiaries at
such time;
to
(b) The sum of (i) the Funded Indebtedness of Lessee and its
Subsidiaries at such time, plus (ii) the Tangible Net Worth of Lessee and
its Subsidiaries at such time.
"Funded Indebtedness/EBITDA Ratio" shall mean, with respect to Lessee for
any period, the ratio, determined on a consolidated basis in accordance with
GAAP, of:
(a) The Funded Indebtedness of Lessee and its Subsidiaries on
the last day of such period;
to
(b) The EBITDA of Lessee and its Subsidiaries for such period.
"GAAP" shall mean generally accepted accounting principles and practices
as in effect in the United States of America from time to time, consistently
applied.
"Governmental Authority" shall mean any domestic or foreign national,
state or local government, any political subdivision thereof, any department,
agency, authority or bureau of any of the foregoing, or any other entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government, including, without limitation, the
Federal Deposit Insurance Corporation, the Federal Reserve Board, the
Comptroller of the Currency, any central bank or any comparable authority.
"Governmental Charges" shall mean taxes, levies, assessments, fees,
imposts, duties, licenses, recording charges, claims or other charges imposed by
any Governmental Authority.
"Governmental Rule" shall mean any law, rule, regulation, ordinance,
order, code, interpretation, judgment, decree, directive, guidelines, policy or
similar form of decision of any Governmental Authority.
"Guaranty Obligation" shall mean, with respect to any Person, any direct
or indirect liability of that Person with respect to any indebtedness, lease,
dividend, letter of credit or other obligation (the "primary obligations") of
another Person (the "primary obligor"), including any obligation of that Person,
whether or not contingent, (a) to purchase, repurchase or otherwise acquire such
primary obligations or any property constituting direct or indirect security
therefor, or (b) to advance or provide funds (i) for the payment or discharge of
any such primary obligation, or (ii) to maintain working capital or equity
capital of the primary obligor or
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99
otherwise to maintain the net worth or solvency or any balance sheet item, level
of income or financial condition of the primary obligor, or (c) to purchase
property, securities or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of the primary obligor to make
payment of such primary obligation, or (d) otherwise to assure or hold harmless
the holder of any such primary obligation against loss in respect thereof. The
amount of any Guaranty Obligation shall be deemed equal to the stated or
determinable amount of the primary obligation in respect of which such Guaranty
Obligation is made or, if not stated or if indeterminable, the maximum
reasonably anticipated liability in respect thereof.
"Hazardous Materials" shall mean all chemical substances, pollutants,
contaminants or hazardous or toxic substances, materials or wastes, whether
solid, liquid, or gaseous in nature, and all other materials, substances and
wastes which are classified or regulated as "hazardous," "toxic" or similar
descriptions under any Environmental Law or which are hazardous, toxic, harmful
or dangerous to the environment or human health.
"Head Lease Agreements" shall mean collectively the Facility 1 Head Lease
Agreement and the Facility 2 Head Lease Agreement.
"Head Lease Commencement Date" shall have, with respect to either Head
Lease Agreement, the meaning given to that term in Paragraph 2.02 of such Head
Lease Agreement.
"Head Lease Event of Default" shall have, with respect to either Head
Lease Agreement, the meaning given to that term in Paragraph 5.01 of such Head
Lease Agreement.
"Head Lease Expiration Date" shall have, with respect to either Head Lease
Agreement, the meaning given to that term in Paragraph 4.02 of such Head Lease
Agreement.
"Head Lease Scheduled Expiration Date" shall have, with respect to either
Head Lease Agreement, the meaning given to that term in Paragraph 2.02 of such
Head Lease Agreement.
"Head Lessee" shall mean ABN AMRO Leasing, Inc., acting in its capacity as
Head Lessee under the Head Lease Agreements.
"Head Lessor" shall mean Lease Plan North America, Inc., acting in its
capacity as Head Lessor under the Head Lease Agreements and the other Operative
Documents.
"Improvement Portion" shall mean, with respect to either Facility, the
portion of the Property under such Facility other than the Land Portion.
"Improvements" shall mean all buildings, structures, facilities, fixtures
and other improvements of every kind and description now or hereafter located on
any of the Land, including (a) all parking areas, roads, driveways, walks,
fences, walls, drainage facilities and other site improvements; (b) all water,
sanitary and storm sewer, drainage, electricity, steam, gas, telephone and other
utility equipment and facilities, all plumbing, lighting, heating, ventilating,
air-conditioning, refrigerating, incinerating, compacting, fire protection and
sprinkler, surveillance and security, public address and communications
equipment and systems, partitions, elevators, escalators, motors, machinery,
pipes, fittings and other items of equipment of every
1.01-16
100
kind and description now or hereafter located on such Land or attached to the
Improvements thereto which by the nature of their location thereon or attachment
thereto are real property under applicable law; and (c) all Modifications to
such Land or its Improvements, except for any Modifications removed by Lessee
from the Property pursuant to Subparagraph 3.10 of the applicable Lease
Agreement.
"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 and
obligations under "synthetic" leases);
(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);
(d) All obligations of such Person as lessee under or with respect
to Capital Leases;
(e) All non-contingent payment or reimbursement obligations of
such Person under or with respect to Surety Instruments;
(f) All net obligations of such Person, contingent or otherwise,
under or with respect to Rate Contracts;
(g) All Guaranty Obligations of such Person with respect to the
obligations of other Persons of the types described in clauses (a) - (f)
above and all other Contingent Obligations of such Person; and
(h) All obligations of other Persons of the types described in
clauses (a) - (f) above to the extent secured by (or for which any holder
of such obligations has an existing right, contingent or otherwise, to be
secured by) any Lien in any property (including accounts and contract
rights) of such Person, even though such Person has not assumed or become
liable for the payment of such obligations.
"Indemnified Taxes" shall mean all income taxes, stamp taxes, sales taxes,
use taxes, rental taxes, gross receipts taxes, property (tangible and
intangible) taxes, franchise taxes, excise taxes, value added taxes, turnover
taxes, withholding taxes and other taxes and Governmental Charges, together with
any and all assessments, penalties, fines, additions and interest thereon,
except:
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101
(a) Net income taxes and franchise taxes in lieu of net income
taxes imposed on any Lessor Party by its jurisdiction of incorporation or,
in the case of any Participant, the jurisdiction in which its Applicable
Participating Office is located (provided, however, that this definition
shall not be construed to prevent a payment from being made on an
after-tax basis);
(b) Any tax or other Governmental Charge that has not become a
Lien on any of the Property and that Lessee is contesting pursuant to
Paragraph 3.12 of either Lease Agreement (but only while Lessee is so
contesting such tax or Governmental Charge); or
(c) Any tax or other Governmental Charge that is imposed upon an
Indemnitee primarily as a result of the gross negligence or willful
misconduct of such Indemnitee itself (as opposed to gross negligence or
willful misconduct imputed to such Indemnitee), but not taxes or other
Governmental Charges imposed as a result of ordinary negligence of such
Indemnitee.
"Indemnitees" shall mean the Lessor Parties and their Affiliates and their
respective directors, officers, employees, agents, attorneys and advisors.
"Ineligible Project Costs" shall have the meaning given to that term in
Subparagraph 2.03(c) of the Participation Agreement.
"Indemnity Amount" shall have, with respect to a Purchase Agreement, the
meaning given to that term in Subparagraph 3.02(g) of such Purchase Agreement.
"Initial Advance" shall mean, with respect to each Facility, the initial
Advance under such Facility.
"Initial Bid" shall have, with respect to either Lease Agreement, the
meaning given to that term in Subparagraph 3.02(b) of such Purchase Agreement.
"Initial Marketing Period" shall have, with respect to either Purchase
Agreement, the meaning given to that term in Subparagraph 3.02(b) of such
Purchase Agreement.
"Insurance Requirements" shall mean all terms, conditions and requirements
imposed by the policies of insurance which Lessee is required to maintain by the
Operative Documents.
"Interest Component" shall have, with respect to either Lease Agreement,
the meaning given to that term in Subparagraph 2.03(a) of such Lease Agreement.
"Interest Expenses" shall mean, with respect to any Person for any period,
the sum, determined on a consolidated basis in accordance with GAAP, of (a) all
interest accruing on the Indebtedness of such Person during such period
(including, without limitation, interest attributable to Capital Leases) plus
(b) all fees in respect of outstanding letters of credit payable by such Person
and accruing during such period.
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102
"Investment" of any Person shall mean any loan or advance of funds by such
Person to any other Person (other than advances to employees of such Person for
moving and travel expenses, drawing accounts and similar expenditures in the
ordinary course of business), any purchase or other acquisition of any Equity
Securities or Indebtedness of any other Person, any capital contribution by such
Person to or any other investment by such Person in any other Person (including
any Guaranty Obligations of such Person and any indebtedness of such Person of
the type described in clause (h) of the definition of "Indebtedness" on behalf
of any other Person); provided, however, that Investments shall not include (a)
accounts receivable or other indebtedness owed by customers of such Person which
are current assets and arose from sales of inventory in the ordinary course of
such Person's business or (b) prepaid expenses of such Person incurred and
prepaid in the ordinary course of business.
"IRC" shall mean the Internal Revenue Code of 1986.
"Issues and Profits" shall mean all present and future rents, royalties,
issues, profits, receipts, revenues, income, earnings and other benefits
accruing from any of the Land, Improvements or Appurtenant Rights (whether in
the form of accounts, chattel paper, instruments, documents, investment
property, general intangibles or otherwise) including all rents and other
amounts payable pursuant to any Subleases.
"Land" shall mean collectively the Facility 1 Land and the Facility 2
Land.
"Land Portion" shall mean, with respect to either Facility, the portion of
the Property under such Facility consisting of the Land covered by such
Facility; all Appurtenant Rights belonging, relating or pertaining to such Land;
all Related Permits and Related Agreements related to such Land or Appurtenant
Rights; and all accessions and accretions to and replacements and substitutions
for the foregoing.
"Lease Agreements" shall mean collectively the Facility 1 Lease Agreement
and the Facility 2 Lease Agreement.
"Lease Extension Request" shall have the meaning given to that term in
Subparagraph 2.09(b) of the Participation Agreement.
"Leasehold Mortgagee" shall have, with respect to either Head Lease
Agreement, the meaning given to that term in Subparagraph 3.07(c) of such Head
Lease Agreement.
"Leasehold Mortgages" shall have, with respect to either Head Lease
Agreement, the meaning given to that term in Subparagraph 3.07(a) of such Head
Lease Agreement.
"Lease Reduction Payments" shall mean each of the following to the extent
applied to reduce the Outstanding Lease Amount under either Facility pursuant to
the Operative Documents:
(a) The Principal Component of Base Rent paid under such Facility;
(b) Casualty and Condemnation Proceeds with respect to such
Facility;
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103
(c) 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 for such Facility;
(d) The Residual Value Guaranty and Indemnity Amount paid by
Lessee pursuant to the Purchase Agreement for such Facility;
(e) Any proceeds received by Lessee from any sale of the Property
under such Facility after the Expiration Date for such Facility if such
Property is retained by Lessor after such Expiration Date pursuant to the
applicable Purchase Agreement;
(f) 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 for such Facility; and
(g) Any other amount received by Lessor that Lessee, Lessor and
Agent agree shall be applied to reduce the Outstanding Lease Amount under
a Facility.
"Lessee" shall mean Novellus Systems, Inc., acting in its capacity as
Lessee under the Operative Documents.
"Lessee Obligations" shall mean and include all liabilities and
obligations owed by Lessee to any Lessor Party under any of the Operative
Documents of every kind and description and however arising (whether direct or
indirect, absolute or contingent, due or to become due, now existing or
hereafter arising), including the obligation of Lessee to pay Rent, to pay the
Residual Value Guaranty Amounts, Indemnity Amounts and/or Outstanding Lease
Amounts and to pay all interest, fees, charges, expenses, attorneys' fees and
accountants' fees chargeable to Lessee or payable by Lessee under the Operative
Documents. Such term, when used with reference to either Facility, shall mean
all Lessee Obligations under the Lease Agreement, Purchase Agreement and, in the
case of Facility 2, the Facility 2 Construction Agency Agreement for such
Facility and all other Lessee Obligations related to such Facility or to both
Facilities. Such term, when used without reference to either Facility, shall
mean all Lessee Obligations under all Operative Documents.
"Lessee Security Documents" shall mean and include the Lease Agreements,
any Cash Collateral Agreement, the Assignment of Construction Agreements and all
other instruments, agreements, certificates, opinions and documents (including
Uniform Commercial Code financing statements and fixture filings and landlord
waivers) delivered to any Lessor Party in connection with any Collateral or to
secure the Lessee Obligations.
"Lessor" shall mean ABN AMRO Leasing, Inc., acting in its capacity as
Lessor under the Operative Documents.
"Lessor Deed of Trust" shall have the meaning given to that term in
Subparagraph 2.11(b) of the Participation Agreement.
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104
"Lessor Liens" shall mean any Liens or other interests in any of the
Property of any Person other than Lessee or a Lessor Party arising as a result
of (a) any transfer or assignment by Lessor to such Person of any of Lessor's
interests in such Property in violation of any of the Operative Documents or (b)
any claim against Lessor by any such Person unrelated to any of the Operative
Documents or the transactions contemplated thereby.
"Lessor Obligations" shall mean and include all liabilities and
obligations owed by Lessor to Agent or any Participant under any of the
Operative Documents of every kind and description and however arising (whether
direct or indirect, absolute or contingent, due or to become due, now existing
or hereafter arising), including the obligation of Lessor to share payments made
by Lessee to Lessor under the Operative Documents as provided in Paragraph 2.06
of the Participation Agreement.
"Lessor Parties" shall mean Head Lessor, Lessor, the Participants and
Agent.
"Lessor Security Agreement" shall have the meaning given to that term in
Subparagraph 2.11(b) of the Participation Agreement.
"LIBO Rate" shall mean, with respect to any Rental Period, a rate per
annum equal to the quotient of (a) the arithmetic mean (rounded upward if
necessary to the nearest 1/16 of one percent) of the rates per annum appearing
on the Telerate Page 3750 (or any successor publication) on the second Business
Day prior to the first day of such Rental Period at or about 11:00 A.M. (London
time) (for delivery on the first day of such Rental Period) for a term
comparable to such Rental Period (or of one (1) month for any Rental Period of
less than one (1) month duration), divided by (b) one minus the Reserve
Requirement in effect from time to time. If for any reason rates are not
available as provided in clause (a) of the preceding sentence, the rate to be
used in clause (a) shall be, the arithmetic mean (rounded upward if necessary to
the nearest 1/16 of one percent) of the rates per annum at which Dollar deposits
are offered by each of the Reference Banks to prime banks in the London
interbank market on the second Business Day prior to the first day of such
Rental Period at or about 11:00 A.M. (London time) (for delivery on the first
day of such Rental Period in an amount substantially equal to such Reference
Bank's Proportionate Share of the Outstanding Lease Amount or Advance, as the
case may be, and for a term comparable to such Rental Period. The LIBO Rate
shall be adjusted automatically as of the effective date of any change in the
Reserve Requirement.
"LIBOR Rental Rate" shall mean, for any Rental Period and Portion, the per
annum rate equal to the LIBO Rate for such Rental Period and Portion, plus the
Applicable Margin, such rate to change from time to time during such period as
the Applicable Margin shall change.
"Lien" shall mean, with respect to any property, any security interest,
mortgage, pledge, lien, charge or other encumbrance in, of, or on such property
or the income therefrom, including the interest of a vendor or lessor under a
conditional sale agreement, Capital Lease, "synthetic" lease or other title
retention agreement, or any agreement to provide any of the foregoing, and the
filing of any financing statement or similar instrument under the Uniform
Commercial Code or comparable law of any jurisdiction.
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"Major Casualty" shall mean, with respect to any Property, any Casualty
affecting such Property where (a) the damage to such Property is treated by any
insurer of such Property as a total loss; (b) such Property cannot reasonably be
repaired and restored prior to the expiration of the Term of the lease
applicable to such Property to the condition in which it existed immediately
prior to such Casualty; or (c) the reasonably anticipated cost to repair and
restore such Property to the condition in which it existed immediately prior to
such Casualty would exceed forty percent (40%) of the Outstanding Lease Amount
applicable to such Property.
"Major Condemnation" shall mean, with respect to any Property, any
Condemnation affecting such Property where (a) all or substantially all of such
Property is taken by such Condemnation; (b) such Property cannot reasonably be
repaired and restored to the condition in which it existed immediately prior to
such Condemnation; or (c) the reasonably anticipated cost to repair and restore
such Property to the condition in which it existed immediately prior to such
Condemnation would exceed forty percent (40%) of the Outstanding Lease Amount
applicable to such Property.
"Majority Participants" shall mean (a) at any time the aggregate
Outstanding Lease Amount is greater than $0, Participants whose aggregate
Outstanding Participation Amounts equal or exceed fifty percent (50%) of the
aggregate Outstanding Lease Amount at such time and (b) at any time the
aggregate Outstanding Lease Amount is $0, Participants whose Proportionate
Shares equal or exceed fifty percent (50%).
"Margin Stock" shall have the meaning given to that term in Regulation U
issued by the Federal Reserve Board, as amended from time to time, and any
successor regulation thereto.
"Marketing Option" shall have, with respect to either Purchase Agreement,
the meaning given to that term in Subparagraph 3.01(a) of such Purchase
Agreement.
"Marketing Option Event of Default" shall mean, with respect to either
Lease Agreement, any Event of Default thereunder other than a Non-Marketing
Option Event of Default.
"Material Adverse Effect" shall mean a material adverse effect on (a) the
business, assets, operations, prospects or financial or other condition of
Lessee and its Subsidiaries, taken as a whole; (b) the ability of Lessee to pay
or perform the Lessee Obligations in accordance with the terms of the Operative
Documents; (c) the ability of any Lessor Party to exercise any of its rights or
remedies under the Operative Documents or any related document, instrument or
agreement; or (d) the value of the Property and the Collateral, any Lessor
Party's security interests, Liens or other rights in the Property and the
Collateral or the perfection or priority of such security interests, Liens or
rights.
"Material Casualty" shall mean any Casualty to any Property that alone, or
in combination with any prior Casualties to such Property for which repairs to
restore such Property to its prior condition have not been completed, will
require repairs costing (a) during the Construction Period, $500,000 or more to
restore such Property to its prior condition, or (b) after the Construction
Period, $2,500,000 or more to restore such Property to its prior condition.
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"Material Subsidiary" shall mean, as of any date, each Subsidiary of
Lessee whose assets on the last day of the immediately preceding fiscal year
equaled or exceeded five percent (5%) of the consolidated total assets of Lessee
and all of its Subsidiaries on such day. As used herein, "assets" shall mean the
net book value of assets calculated in accordance with GAAP.
"maturity" shall mean, with respect to any Rent, interest, fee or other
amount payable by Lessee under the Operative Documents, the date such Rent,
interest, fee or other amount becomes due, whether upon the stated maturity or
due date, upon acceleration or otherwise.
"Modifications" shall have, with respect to a Lease Agreement, the meaning
given to that term in Subparagraph 3.01(c) of such Lease Agreement.
"Multiemployer Plan" shall mean any multiemployer plan within the meaning
of section 3(37) of ERISA maintained or contributed to by Lessee or any ERISA
Affiliate.
"Net Proceeds" shall mean, with respect to any sale or issuance of any
Equity Security or any other security by any Person, the aggregate consideration
received by such Person from such sale or issuance less the sum of the actual
amount of the customary fees and commissions payable to Persons other than such
Person or any Affiliate of such Person, the reasonable legal expenses and the
other customary costs and expenses directly related to such sale or issuance
that are to be paid by such Person.
"New Improvements" shall mean all new Improvements under Facility 2
contemplated by the Plans and Specifications therefor.
"New Improvement Property" shall mean the New Improvements, the buildings
in which the New Improvements are constructed and the footprint of the Land on
which the New Improvements or such buildings are located.
"Non-Marketing Option Event of Default" shall mean:
(a) With respect to the Facility 1 Lease Agreement, an Event of
Default under Subparagraph 5.01(l) of such Lease Agreement; or
(b) With respect to the Facility 2 Lease Agreement, an Event of
Default under Subparagraph 5.01(l), 5.01(m) or 5.01(n) of such Lease
Agreement;
If, in each case, such Event of Default was not caused by any failure by Lessee
to comply with any of its obligations under the Operative Documents (including
its insurance obligations), any representation by Lessee in any of the Operative
Documents not being true, any negligence or willful misconduct of Lessee, or any
claim by any third-party against Lessee (or against any Lessor Party) based upon
any alleged action or inaction by Lessee.
"Notice of Expiration Date Purchase Option Exercise" shall have, with
respect to either Purchase Agreement, the meaning given to that term in
Paragraph 3.01 of such Purchase Agreement.
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"Notice of Marketing Option Exercise" shall have, with respect to either
Purchase Agreement, the meaning given to that term in Paragraph 3.01 of such
Purchase Agreement.
"Notice of Partial Purchase Option Exercise" shall have, with respect to
either Purchase Agreement, the meaning given to that term in Subparagraph
2.02(a) of such Purchase Agreement.
"Notice of Rental Period Selection" shall have, with respect to either
Lease Agreement, the meaning given to that term in Subparagraph 2.03(a) of such
Lease Agreement.
"Notice of Term Purchase Option Exercise" shall have, with respect to
either Purchase Agreement, the meaning given to that term in Subparagraph
2.01(a) of such Purchase Agreement.
"Novellus I Amendments" shall have the meaning given to that term in
Subparagraph 2.01(a) of the Participation Agreement.
"Novellus I Facilities" shall have the meaning given to that term in
Recital A of the Participation Agreement.
"Novellus I Facility 1" shall have the meaning given to that term in
Recital A of the Participation Agreement.
"Novellus I Facility 1 Property" shall have the meaning given to that term
in Recital A of the Participation Agreement.
"Novellus I Facility 2" shall have the meaning given to that term in
Recital A of the Participation Agreement.
"Novellus I Facility 2 Property" shall have the meaning given to that term
in Recital A of the Participation Agreement.
"Novellus I Lease Reduction Payment" shall have the meaning given to that
term in Subparagraph 2.01(a) of the Participation Agreement.
"Novellus I Operative Documents" shall mean the "Operative Documents" as
defined in the Novellus I Participation Agreement.
"Novellus I Participants" shall have the meaning given to that term in
Recital A.
"Novellus I Participation Agreement" shall have the meaning given to that
term in Recital A.
"Operative Documents" shall mean and include the Participation Agreement,
the Head Lease Agreements, the Lease Agreements, the Facility 2 Construction
Agency Agreement, the Purchase Agreements, the Lessee Security Documents, the
Lessor Deed of Trust, the Lessor Security Agreement, the Assignment of Lease and
the Agent's Fee 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,
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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 either
or both Lease Agreements. (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.)
"Outside Completion Date" shall mean the date sixteen (16) months after
the Closing Date, or, if such date is extended pursuant to Subparagraph 2.09(a)
of the Participation Agreement or Subparagraph 3.05(d) of the Facility 2
Construction Agency Agreement, that date to which so extended.
"Outstanding Lease Amount" shall mean, with respect to either Facility (or
the Land Portion or Improvement Portion thereof in the case of Facility 1) on
any date, the remainder of (a) the sum of all Advances made by Lessor on or
prior to such date under such Facility (or the applicable portion thereof in the
case of Facility 1), minus (b) the sum of all Lease Reduction Payments applied
by Lessor on or prior to such date under such Facility (or the Land Portion or
Improvement Portion applicable portion thereof in the case of Facility 1). Such
term, when used without reference to either Facility, shall mean the aggregate
Outstanding Lease Amount under both Facilities.
"Outstanding Participation Amount" shall mean, with respect to any
Participant and any Facility (or the Land Portion or Improvement Portion thereof
in the case of Facility 1) on any date, the remainder of (a) the sum of the
portions of all Advances under such Facility (or the applicable portion thereof
in the case of Facility 1) funded by such Participant on or prior to such date,
minus (b) the sum of such Participant's share of all Lease Reduction Payments
applied to the Outstanding Lease Amount under such Facility (or the applicable
portion thereof in the case of Facility 1) on or prior to such date. Such term,
when used without reference to either Facility, shall mean the aggregate
Outstanding Participation Amounts of the applicable Participant under both
Facilities.
"Outstanding Tranche A Participation Amount" shall mean, with respect to
any Tranche A Participant under any Facility (or the Land Portion or Improvement
Portion thereof in the case of Facility 1) on any date, the remainder of (a)
such Participant's Tranche A Portion of all Advances made by Lessor under such
Facility (or the applicable portion thereof in the case of Facility 1) on or
prior to such date, minus (b) such Participant's share of all Lease Reduction
Payments applied to the Tranche A Portion of the Advances under such Facility
(or the applicable portion thereof in the case of Facility 1) on or prior to
such date.
"Outstanding Tranche B Participation Amount" shall mean, with respect to
any Tranche B Participant under any Facility (or the Land Portion or Improvement
Portion thereof in the case of Facility 1) on any date, the remainder of (a)
such Participant's Tranche B Portion of all Advances made by Lessor under such
Facility (or the applicable portion thereof in the case of Facility 1) on or
prior to such date, minus (b) such Participant's share of all Lease Reduction
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Payments applied to the Tranche B Portion of the Advances under such Facility
(or the applicable portion thereof in the case of Facility 1) on or prior to
such date.
"Outstanding Tranche C Participation Amount" shall mean, with respect to
any Tranche C Participant under any Facility (or the Land Portion or Improvement
Portion thereof in the case of Facility 1) on any date, the remainder of (a)
such Participant's Tranche C Portion of all Advances made by Lessor under such
Facility (or the applicable portion thereof in the case of Facility 1) on or
prior to such date, minus (b) such Participant's share of all Lease Reduction
Payments applied to the Tranche C Portion of the Advances under such Facility
(or the applicable portion thereof in the case of Facility 1) on or prior to
such date.
"Partial Purchase Date" shall have, with respect to either Purchase
Agreement, the meaning given to that term in Subparagraph 2.02(a) of such
Purchase Agreement.
"Partial Purchase Option" shall have, with respect to either Purchase
Agreement, the meaning given to that term in Paragraph 2.02 of such Purchase
Agreement.
"Participants" shall mean the Persons from time to time listed in Schedule
I to the Participation Agreement (as amended from time to time pursuant to
Subparagraph 7.05(b) of the Participation Agreement or otherwise), acting in
their capacities as Participants under the Operative Documents.
"Participation Agreement" shall mean the Participation Agreement, dated as
of April 13, 2001 among Lessee and the Lessor Parties.
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or any
successor thereto.
"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.
"Permitted Improvement Costs" shall mean all reasonable costs and expenses
necessary for the construction of the New Improvements and the acquisition of
the Property under Facility 2 (other than the Existing Improvements), including:
(a) All reasonable costs and expenses of building supplies and
materials necessary for the construction of the New Improvements;
(b) All reasonable costs and expenses of architects, engineers,
contractors and other Persons providing labor and services necessary for
the construction of the New Improvements; and
(c) All reasonable costs and expenses of performance and other
bonds and other insurance necessary for the construction of the New
Improvements.
"Permitted Indebtedness" shall have the meaning given to that term in
Subparagraph 5.02(a) of the Participation Agreement.
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"Permitted Liens" shall have the meaning given to that term in
Subparagraph 5.02(b) of the Participation Agreement.
"Permitted Property Liens" shall have the meaning given to that term in
Subparagraph 3.07(a) of the Lease Agreement.
"Permitted Transaction Expenses" shall mean the following costs and
expenses to the extent payable by Lessee in connection with and directly related
to the preparation, execution and delivery of the Operative Documents and the
transactions contemplated thereby:
(a) All Base Rent payable during the Commitment Period;
(b) The Novellus I Lease Reduction Payment and all rent, if any,
payable under the Head Lease Agreements during the Commitment Period;
(c) All Commitment Fees and Agent's annual administrative fees
payable during the Commitment Period;
(d) All other amounts capitalized pursuant to Subparagraph 2.03(c)
of the Participation Agreement;
(e) The reasonable fees and expenses of counsel for each of Lessor
and Agent incurred in connection with the Operative Documents;
(f) The reasonable fees and expenses incurred in recording,
registering or filing any of the Operative Documents;
(g) The title fees, premiums and escrow costs and other expenses
relating to title insurance and the closing of the transactions
contemplated by the Operative Documents;
(h) The reasonable fees and expenses of required environmental
audits and appraisals;
(i) The reasonable fees and expenses of insurance consultants for
Lessor and Agent;
(j) The reasonable fees and expenses for surveys and appraisals;
(k) The incremental cost of insurance required by Paragraph 3.03
of the Lease Agreement during the Construction Period not exceeding
$400,000; and
(l) The reasonable fees and expenses of the accountants, financial
advisor and counsel for Lessee incurred in connection with the Operative
Documents.
"Person" shall mean and include an individual, a partnership, a
corporation (including a business trust), a joint stock company, an
unincorporated association, a limited liability company, a joint venture, a
trust or other entity or a Governmental Authority.
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"Personal Property Collateral" shall have, with respect to the Facility 2
Lease Agreement, the meaning given to that term in Subparagraph 2.07(b) of such
Lease Agreement.
"Plans and Specifications" shall mean the architectural, engineering and
construction plans, specifications and drawings for the New Improvements, if
any, for each Tract of Land, as delivered to Agent on or prior to the Closing
Date pursuant to Paragraph 3.01 of the Participation Agreement, as such plans,
specifications and drawings may thereafter be revised, amended or modified
pursuant to Paragraph 3.02 of the Facility 2 Construction Agency Agreement. Each
reference to "Plans and Specifications" shall refer collectively to the Plans
and Specifications with respect to all the Land unless such reference
specifically indicates that it applies to a particular Tract.
"Portion" shall mean a portion of the Outstanding Lease Amount under any
Facility. If, at any time, Lessee has not divided the Outstanding Lease Amount
into two or more portions, any reference to a Portion shall mean the total
Outstanding Lease Amount at such time under such Facility.
"Prepaid Rent" shall mean Permitted Improvement Costs and Permitted
Transaction Expenses constituting Cost Overruns that are (i) paid by Lessee and
not reimbursed through Advances and (ii) capitalizable under GAAP by Lessor.
"Pricing Grid" shall mean Schedule II to the Participation Agreement.
"Pricing Period" shall mean (a) the period commencing on the date of this
Agreement and ending on May 31, 2001, (b) the three-calendar month period
commencing June 1, 2001 and ending September 30, 2001 and (c) each consecutive
three-calendar month period thereafter which commences on the day following the
last day of the immediately preceding three-calendar month period and ends on
the last day of that time period.
"Prime Rate" shall mean the per annum rate publicly announced by ABN AMRO
from time to time at its Chicago Office. The Prime Rate is determined by ABN
AMRO from time to time as a means of pricing credit extensions to some customers
and is neither directly tied to any external rate of interest or index nor
necessarily the lowest rate of interest charged by ABN AMRO at any given time
for any particular class of customers or credit extensions. Any change in the
Base Rate resulting from a change in the Prime Rate shall become effective on
the Business Day on which each change in the Prime Rate occurs.
"Principal Component" shall have, with respect to either Lease Agreement,
the meaning given to that term in Subparagraph 2.03(a) of such Lease Agreement.
"Project Costs" shall mean properly capitalizable "project costs" as that
term is used under GAAP.
"Property" shall mean collectively the Facility 1 Property and the
Facility 2 Property.
"Property Collateral" shall have the meaning given to that term in
Subparagraph 2.11(a) of the Participation Agreement.
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"Proportionate Share" shall mean:
(a) With respect to each Participant and the Land Portion of
Facility 1 (including any Advance thereunder) at any time, the percentage
set forth under the caption "Proportionate Share" opposite such
Participant's name in Part A(1) of Schedule I;
(b) With respect to each Participant and the Improvement Portion
of Facility 1 (including any Advance thereunder) at any time, the
percentage set forth under the caption "Proportionate Share" opposite such
Participant's name in Part A(2) of Schedule I;
(c) With respect to each Participant and Facility 2 (including any
Advance thereunder) at any time prior to the Completion Date, the
percentage set forth under the caption "Proportionate Share" opposite such
Participant's name in Part A(3) of Schedule I;
(d) With respect to each Participant and Facility 2 (including any
Advance thereunder) at any time on or after the Completion Date, the
percentage set forth under the caption "Proportionate Share" opposite such
Participant's name in Part A(4) of Schedule I; and
(e) With respect to each Participant without reference to either
Facility (or any Advance under either Facility) at any time, a fraction
(expressed as a percentage rounded to the eighth digit to the right of the
decimal point), the numerator of which is such Participant's Commitment at
such time and the denominator of which is the Total Commitment at such
time;
or, in the case of any percentage referred to in clause (a), (b) or (c), if
changed, such percentage as may be set forth for such Participant in the
Register. The Proportionate Share of each Participant under a Facility at any
time shall equal the sum of such Participant's Tranche A Percentage, Tranche B
Percentage and Tranche C Percentage under such Facility at such time.
"Purchase Agreements" shall mean collectively the Facility 1 Purchase
Agreement and the Facility 2 Purchase Agreement.
"Purchase Documents" shall have, with respect to either Purchase
Agreement, the meaning given to that term in Subparagraph 4.01(a) of such
Purchase Agreement.
"Purchaser" shall have, with respect to either Purchase Agreement, the
meaning given to that term in Subparagraph 4.01(a) of such Purchase Agreement.
"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
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113
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.
(In calculating the Quick Ratio, Cash Equivalents and short-term investments
shall be marked to market quarterly.)
"Rate Contracts" shall mean swap agreements (as that term is defined in
Section 101 of the Federal Bankruptcy Reform Act of 1978, as amended) and any
other agreements or arrangements designed to provide protection against
fluctuations in interest or currency exchange rates.
"Real Property Collateral" shall have, with respect to either Lease
Agreement, the meaning given to that term in Subparagraph 2.07(a) of such Lease
Agreement. Such term, when used without reference to either Lease Agreement,
shall mean collectively the Real Property Collateral under both Lease
Agreements.
"Reference Banks" shall mean ABN AMRO or, at any time other banks are
Participants, ABN AMRO and an additional Participant or additional Participants
(but not more than two additional Participants) acceptable to Lessee and Agent.
"Register" shall have the meaning given to that term in Subparagraph
7.05(b) of the Participation Agreement.
"Related Agreements" shall mean all chattel paper, accounts, instruments,
documents, investment property and general intangibles relating to any of the
Land, Improvements or Appurtenant Rights or to the present or future
development, construction, operation or use of any of the Land, Improvements or
Appurtenant Rights, including (a) all plans, specifications, construction
agreements, maps, surveys, studies, books of account, records, files, insurance
policies, guarantees and warranties relating to such Land or Improvements or to
the present or future development, construction, operation or use of such Land,
Improvements or Appurtenant Rights (including the Construction Agreements and
the Plans and Specifications); (b) all architectural, engineering, construction
and management contracts, all supply and service contracts for water, sanitary
and storm sewer, drainage, electricity, steam, gas, telephone and other
utilities relating to such Land, Improvements or Appurtenant Rights or to the
present or future development, construction, operation or use of such Land,
Improvements or Appurtenant Rights; and (c) all computer software and
intellectual property, guaranties and warranties, letters of credit, and
documents relating to such Land, Improvements or Appurtenant Rights or to the
present or future development, construction, operation or use of such Land,
Improvements or Appurtenant Rights.
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114
"Related Credit Agreement" shall mean the Credit Agreement dated as of
June 9, 1997 among Lessee, the financial institutions from time to time parties
thereto, and ABN AMRO, as agent for such financial institutions.
"Related Credit Documents" shall mean the Related Credit Agreement and the
other "Credit Documents," as such term is defined in the Related Credit
Agreement.
"Related Credit Obligations" shall mean the "Obligations," as such term is
defined in the Related Credit Agreement.
"Related Goods" shall mean:
(a) All machinery, furniture, equipment, fixtures and other goods
and tangible personal property (including construction materials and
supplies) financed by any Advance, including all such property described
in Exhibit B to the Facility 2 Lease Agreement and in each Exhibit B
Supplement delivered by Lessee; and
(b) All machinery, equipment, inventory, fixtures and other goods
and tangible personal property (including construction materials and
supplies) (i) now or hereafter located on any of the Land, Improvements or
Appurtenant Rights; (ii) now or hereafter intended for the construction,
reconstruction, repair, replacement, alteration, addition or improvement
of or to any of the Improvements or any other Related Goods; or (iii) now
or hereafter used in connection with the present or future operation or
occupancy of any of the Land, Improvements or Appurtenant Rights;
Except for any trade fixture, machinery, equipment, inventory or other goods
removed by Lessee from the Property pursuant to Paragraph 3.10 of either Lease
Agreement.
"Related Permits" shall mean all licenses, authorizations, certificates,
variances, consents, approvals and other permits, now or hereafter pertaining to
any of the Land, Improvements or Appurtenant Rights and all tradenames or
business names relating to any of the Land, Improvements or Appurtenant Rights
or the present or future development, construction, operation or use of any of
the Land, Improvements or Appurtenant Rights.
"Rent" shall mean collectively, with respect to either Facility, Base Rent
and Supplemental Rent payable in connection with such Facility. Such term, when
used without reference to either Facility, shall mean all Rent under both
facilities.
"Rental Period" shall mean, with respect to any Facility:
(a) With respect to the entire Outstanding Lease Amount during the
period beginning on the Commencement Date for any Lease Agreement and
ending on the Commitment Termination Date, the time period which commences
on the Commencement Date and each subsequent time period through and
including the time period ending on the Commitment Termination Date as
specified in Subparagraph 2.03(a) of such Lease Agreement; and
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(b) With respect to any Portion of the Outstanding Lease Amount
thereafter, the time period selected by Lessee for such Portion pursuant
to Subparagraph 2.03(a) of such Lease Agreement which commences on the
first day of such Portion and each subsequent time period selected by
Lessee pursuant to Subparagraph 2.03(a) of such Lease Agreement.
Each Rental Period with respect to each Facility shall commence on the last day
of the immediately preceding Rental Period.
"Rental Rate" shall have the meaning given to that term in Subparagraph
2.03(a) of each Lease Agreement.
"Repair and Restoration Account" shall have, with respect to either Lease
Agreement, the meaning given to that term in Subparagraph 3.04(c) of such Lease
Agreement.
"Reportable Event" shall have the meaning given to that term in ERISA and
applicable regulations thereunder.
"Required Participants" shall mean (a) at any time the aggregate
Outstanding Lease Amount under both Facilities is greater than $0, Participants
whose aggregate Outstanding Participation Amounts under both Facilities equal or
exceed sixty-six and two-thirds percent (66-2/3%) or more of the aggregate
Outstanding Lease Amount under both Facilities at such time and (b) at any time
the aggregate Outstanding Lease Amount under both Facilities is $0, Participants
whose Proportionate Shares equal or exceed sixty-six and two-thirds percent
(66-2/3%).
"Requirement of Law" applicable to any Person shall mean (a) the Articles
or Certificate of Incorporation and By-laws, Partnership Agreement or other
organizational or governing documents of such Person, (b) any Governmental Rule
applicable to such Person, (c) any license, permit, approval or other
authorization granted by any Governmental Authority to or for the benefit of
such Person or (d) any judgment, decision or determination of any Governmental
Authority or arbitrator, in each case applicable to or binding upon such Person
or any of its property or to which such Person or any of its property is
subject.
"Reserve Requirement" shall mean, with respect to any day in any Rental
Period, the aggregate of the reserve requirement rates (expressed as a decimal)
in effect on such day for eurocurrency funding (currently referred to as
"Eurocurrency liabilities" in Regulation D of the Federal Reserve Board)
maintained by a member bank of the Federal Reserve System. As used herein, the
term "reserve requirement" shall include, without limitation, any basic,
supplemental or emergency reserve requirements imposed on any Participant by any
Governmental Authority.
"Residual Value Guaranty Amount" shall have, with respect to either
Purchase Agreement, the meaning given to that term in Subparagraph 3.02(g) of
such Purchase Agreement.
"Scheduled Expiration Date" shall have, with respect to either Lease
Agreement, the meaning given to that term in Subparagraph 2.02(a) of such Lease
Agreement.
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"Scheduled Rent Payment Date" shall have, with respect to either Lease
Agreement, the meaning given to that term in Subparagraph 2.03(a) of such Lease
Agreement.
"Secondary Marketing Period" shall have, with respect to either Purchase
Agreement, the meaning given to that term in Subparagraph 3.02(b) of the
Purchase Agreement.
"Senior Officer" shall mean, with respect to Lessee, the Chief Executive
Officer, the Chief Financial Officer, the Executive Vice President of
Operations, the Executive Vice President of Sales or the Treasurer of Lessee.
"Solvent" shall mean, with respect to any Person on any date, that on such
date (a) the fair value of the property of such Person is greater than the fair
value of the liabilities (including, without limitation, contingent liabilities)
of such Person, (b) the present fair saleable value of the assets of such Person
is not less than the amount that will be required to pay the probable liability
of such Person on its debts as they become absolute and matured, (c) such Person
does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person's ability to pay as such debts and liabilities
mature and (d) such Person is not engaged in business or a transaction, and is
not about to engage in business or a transaction, for which such Person's
property would constitute an unreasonably small capital.
"Subleases" shall mean all leases and subleases of any of the Land,
Improvements and/or Appurtenant Rights by Lessee as lessor or sublessor, now or
hereafter in effect, whether or not of record, including all guaranties and
security therefor and the right to bring actions and proceedings thereunder or
for the enforcement thereof and to do anything which Lessee is or may become
entitled to do thereunder.
"Subparticipants" shall have the meaning given to that term in
Subparagraph 7.05(c) of the Participation Agreement.
"Subsidiary" of any Person shall mean (a) any corporation of which more
than 50% of the issued and outstanding Equity Securities having ordinary voting
power to elect a majority of the Board of Directors of such corporation
(irrespective of whether at the time capital stock of any other class or classes
of such corporation shall or might have voting power upon the occurrence of any
contingency) is at the time directly or indirectly owned or controlled by such
Person, by such Person and one or more of its other Subsidiaries or by one or
more of such Person's other Subsidiaries, (b) any partnership, joint venture, or
other Person of which more than 50% of the equity interest having the power to
vote, direct or control the management of such partnership, joint venture,
business trust or other Person is at the time owned and controlled by such
Person, by such Person and one or more of the other Subsidiaries or by one or
more of such Person's other Subsidiaries or (c) any other Person included in the
Financial Statements of such Person on a consolidated basis.
"Substantial Completion" shall have the meaning given to such term in
Subparagraph 3.05(c) of the Facility 2 Construction Agency Agreement.
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"Supplemental Rent" shall have, with respect to either Lease Agreement,
the meaning given to such term in Subparagraph 2.03(b) of such Lease Agreement.
"Surety Instruments" shall mean all letters of credit (including standby
and commercial), banker's acceptances, bank guaranties, shipside bonds, surety
bonds and similar instruments.
"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).
"Tangible Net Worth" shall mean, with respect to Lessee at any time, the
remainder at such time, determined on a consolidated basis in accordance with
GAAP, of (a) the total assets of Lessee and its Subsidiaries, minus (b) the sum
(without limitation and without duplication of deductions) of (i) the total
liabilities of Lessee and its Subsidiaries, (ii) all reserves established by
Lessee and its Subsidiaries for anticipated losses and expenses (to the extent
not deducted in calculating total assets in clause (a) above) and (iii) all
intangible assets of Lessee and its Subsidiaries (to the extent included in
calculating total assets in clause (a) above), including, without limitation,
goodwill (including any amounts, however designated on the balance sheet,
representing the cost of acquisition of businesses and investments in excess of
underlying tangible assets), trademarks, trademark rights, trade name rights,
copyrights, patents, patent rights, licenses, unamortized debt discount,
marketing expenses, organizational expenses, non-compete agreements and deferred
research and development.
"Term" shall mean, with respect to either Lease Agreement, the period
beginning on the Commencement Date of such Lease Agreement and ending on the
Expiration Date of such Lease Agreement.
"Termination Date" shall mean, with respect to either Lease Agreement, (a)
the date set forth in a Notice of Term Purchase Option as the Scheduled Rent
Payment Date on which such Lease Agreement will be terminated by Lessee pursuant
to Paragraph 4.01 of such Lease Agreement and the Property will be purchased by
Lessee pursuant to Section 2 of the applicable Purchase Agreement; (b) the date
set forth in a written notice delivered by Lessor to Lessee pursuant to
Subparagraph 5.03(a) or 5.04(a) of such Lease Agreement after the occurrence of
an Event of Default thereunder as the date on which such Lease Agreement will be
terminated; or (c) the date determined pursuant to clause (ii) of Subparagraph
3.05(d) of the Facility 2 Construction Agency Agreement if Lessee exercises the
Marketing Option pursuant such clause.
"Term Purchase Option" shall have, with respect to either Purchase
Agreement, the meaning given to that term in Paragraph 2.01 of such Purchase
Agreement.
"Total Commitment" shall mean the amount set forth as such in clause (iii)
of Subparagraph 2.01(d) of the Participation Agreement or, if such amount is
reduced pursuant to Subparagraph 2.08(a) of the Participation Agreement, the
amount to which so reduced.
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"Total Facility 1 Commitment" shall mean the amount set forth as such in
clause (iii) of Subparagraph 2.01(d) of the Participation Agreement or, if the
Total Facility 1 Land Portion Commitment or Total Facility 1 Improvement Portion
Commitment is reduced pursuant to Subparagraph 2.08(a) of the Participation
Agreement, the sum of the Total Facility 1 Land Portion Commitment or Total
Facility 1 Improvement Portion Commitment as so reduced.
"Total Facility 1 Improvement Portion Commitment" shall mean the amount
set forth as such in clause (ii) of Subparagraph 2.01(d) of the Participation
Agreement or, if such amount is reduced pursuant to Subparagraph 2.08(a) of the
Participation Agreement, the amount to which so reduced.
"Total Facility 1 Land Portion Commitment" shall mean the amount set forth
as such in clause (i) of Subparagraph 2.01(d) of the Participation Agreement or,
if such amount is reduced pursuant to Subparagraph 2.08(a) of the Participation
Agreement, the amount to which so reduced.
"Total Facility 2 Commitment" shall mean the amount set forth as such in
clause (iv) of Subparagraph 2.01(d) of the Participation Agreement or, if such
amount is reduced pursuant to Subparagraph 2.08(a) of the Participation
Agreement, the amount to which so reduced.
"Tract" shall mean:
(a) With respect to any land, the lots, pieces, parcels and tracts
of land described in Exhibit A to each Lease Agreement or each Part of
Exhibit A to the Participation Agreement, as the case may be; and
(b) With respect to any Property, a Tract of land, together with
all Property related to such Tract of land.
"Tract 2 Land" and "Tract 5 Land" shall mean the lots, pieces, parcels and
tracts of land described as such, respectively, in Exhibit A to the
Participation Agreement.
"Tranche A Participant" shall mean, with respect to any Facility at any
time, any Participant having an Outstanding Tranche A Participation Amount under
such Facility at such time.
"Tranche A Percentage" shall mean (a) with respect to each Participant and
the Land Portion of Facility 1 at any time, the percentage set forth under the
caption "Tranche A Percentage" opposite such Participant's name in Part A(1) of
Schedule I; (b) with respect to each Participant and the Improvement Portion of
Facility 1 at any time, the percentage set forth under the caption "Tranche A
Percentage" opposite such Participant's name in Part A(2) of Schedule I; (c)
with respect to each Participant and Facility 2 at any time prior to the
Completion Date, the percentage set forth under the caption "Tranche A
Percentage" opposite such Participant's name in Part A(3) of Schedule I; and (d)
with respect to each Participant and Facility 2 at any time on or after the
Completion Date, the percentage set forth under the caption "Tranche A
Percentage" opposite such Participant's name in Part A(4) of Schedule I; or in
the case of any such percentage, if changed, such percentage as may be set forth
for such Participant in the Register.
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"Tranche A Portion" shall mean, (a) with respect to any Advance under a
Facility (or the Land Portion or Improvement Portion thereof in the case of
Facility 1) without reference to any Participant, the portion of such Advance
equal to the applicable Tranche A Proportionate Share of such Advance and (b)
with respect to any Advance under a Facility (or the Land Portion or Improvement
Portion thereof in the case of Facility 1) with reference to any Participant,
the portion of such Advance equal to such Participant's applicable Tranche A
Percentage of such Advance.
"Tranche A Proportionate Share" shall mean:
(a) With respect to Facility 1, (i) ninety-seven percent (97.0%)
for the Land Portion and (ii) eighty-five percent (85.0%) for the
Improvement Portion; and
(b) With respect to Facility 2, (i) 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, eighty-seven percent (87.0%).
"Tranche B Participant" shall mean, with respect to any Facility at any
time, any Participant having an Outstanding Tranche B Participation Amount under
such Facility at such time.
"Tranche B Percentage" shall mean (a) with respect to each Participant and
the Land Portion of Facility 1 at any time, the percentage set forth under the
caption "Tranche B Percentage" opposite such Participant's name in Part A(1) of
Schedule I; (b) with respect to each Participant and the Improvement Portion of
Facility 1 at any time, the percentage set forth under the caption "Tranche B
Percentage" opposite such Participant's name in Part A(2) of Schedule I; (c)
with respect to each Participant and Facility 2 at any time prior to the
Completion Date, the percentage set forth under the caption "Tranche B
Percentage" opposite such Participant's name in Part A(3) of Schedule I; and (d)
with respect to each Participant and Facility 2 at any time on or after the
Completion Date, the percentage set forth under the caption "Tranche B
Percentage" opposite such Participant's name in Part A(4) of Schedule I; or in
the case of any such percentage, if changed, such percentage as may be set forth
for such Participant in the Register.
"Tranche B Portion" shall mean, (a) with respect to any Advance under a
Facility (or the Land Portion or Improvement Portion thereof in the case of
Facility 1) without reference to any Participant, the portion of such Advance
equal to the applicable Tranche B Proportionate Share of such Advance and (b)
with respect to any Advance under a Facility (or the Land Portion or Improvement
Portion thereof in the case of Facility 1) with reference to any Participant,
the portion of such Advance equal to such Participant's applicable Tranche B
Percentage of such Advance.
"Tranche B Proportionate Share" shall mean:
(a) With respect to Facility 1, (i) zero percent (0%) for the Land
Portion and (ii) twelve percent (12%) for the Improvement Portion; and
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(b) With respect to Facility 2, (i) at any time prior to the
Completion Date, seven and one tenth percent (7.1%) and (ii) at any time
on or after the Completion Date, ten percent (10.0%).
"Tranche C Participant" shall mean, with respect to any Facility at any
time, any Participant having an Outstanding Tranche C Participation Amount under
such Facility at such time.
"Tranche C Percentage" shall mean (a) with respect to each Participant and
the Land Portion of Facility 1 at any time, the percentage set forth under the
caption "Tranche C Percentage" opposite such Participant's name in Part A(1) of
Schedule I; (b) with respect to each Participant and the Improvement Portion of
Facility 1 at any time, the percentage set forth under the caption "Tranche C
Percentage" opposite such Participant's name in Part A(2) of Schedule I; (c)
with respect to each Participant and Facility 2 at any time prior to the
Completion Date, the percentage set forth under the caption "Tranche C
Percentage" opposite such Participant's name in Part A(3) of Schedule I; and (d)
with respect to each Participant and Facility 2 at any time on or after the
Completion Date, the percentage set forth under the caption "Tranche C
Percentage" opposite such Participant's name in Part A(4) of Schedule I; or in
the case of any such percentage, if changed, such percentage as may be set forth
for such Participant in the Register.
"Tranche C Portion" shall mean, (a) with respect to any Advance under a
Facility (or the Land Portion or Improvement Portion thereof in the case of
Facility 1) without reference to any Participant, the portion of such Advance
equal to the applicable Tranche C Proportionate Share of such Advance and (b)
with respect to any Advance under a Facility (or the Land Portion or Improvement
Portion thereof in the case of Facility 1) with reference to any Participant,
the portion of such Advance equal to such Participant's applicable Tranche C
Percentage of such Advance.
"Tranche C Proportionate Share" shall mean:
(a) With respect to Facility 1, (i) three percent (3.0%) for the
Land Portion and (ii) three percent (3.0%) for the Improvement Portion;
and
(b) With respect to Facility 2, at all times (whether before, on
or after the Completion Date) three percent (3.00%).
"Trustee" shall have the meaning given to that term in the introductory
paragraph of each Lease Agreement.
"UCC" shall mean the California Uniform Commercial Code.
"Unused" shall mean:
(a) With respect to the Total Commitment at any time, the
remainder of (i) the Total Commitment at such time minus (ii) the
aggregate amount of all Advances made prior to such time; or
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(b) With respect to the Total Facility 1 Commitment or Total
Facility 2 Commitment at any time, the remainder of (i) the Total Facility
1 Commitment or Total Facility 2 Commitment, as the case may be, at such
time minus (ii) the aggregate amount of all Advances made under the
applicable Facility prior to such time; or
(c) With respect to any Participant's Commitment at any time, the
remainder of (i) such Participant's Commitment at such time minus (ii) the
aggregate amount of all Advances funded by such Participant prior to such
time.
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SCHEDULE 1.02
RULES OF CONSTRUCTION
(a) GAAP. Unless otherwise indicated in any Operative Document, all
accounting terms used in the Operative Documents shall be construed, and all
accounting and financial computations thereunder shall be computed, in
accordance with GAAP. If GAAP changes after the date of the Participation
Agreement such that any covenants contained in the Operative Documents would
then be calculated in a different manner or with different components, Lessee
and the Lessor Parties agree to negotiate in good faith to amend the applicable
Operative Documents in such respects as are necessary to conform those covenants
as criteria for evaluating Lessee's financial condition to substantially the
same criteria as were effective prior to such change in GAAP; provided, however,
that, until Lessee and the Lessor Parties so amend the Operative Documents, all
such covenants shall be calculated in accordance with GAAP as in effect
immediately prior to such change.
(b) Headings. Headings in each of the Operative Documents are for
convenience of reference only and are not part of the substance thereof.
(c) Plural Terms. All terms defined in any Operative Document in the
singular form shall have comparable meanings when used in the plural form and
vice versa.
(d) Time. All references in each of the Operative Documents to a time of
day shall mean San Francisco, California time, unless otherwise indicated. All
references in each of the Operative Documents to a date (the "action date")
which is one month prior to or after another date (the "reference date") shall
mean the date in the immediately preceding or succeeding calendar month (as the
case may be) which numerically corresponds to the reference date; provided,
however, that (i) if such corresponding date in the immediately preceding or
succeeding calendar month (as the case may be) is not a Business Day, the action
date shall be the next succeeding Business Day after such corresponding date
(unless, in the case of a Rental Period, such next Business Day falls in another
calendar month, in which case the action date shall be the immediately preceding
Business Day) and (ii) if the reference date is the last Business Day of a
calendar month (or a day for which there is no numerically corresponding day in
the immediately preceding calendar month) the action date shall be the last
Business Day of the immediately preceding or succeeding calendar month (as the
case may be). All references in each of the Operative Documents to an earlier
date which is two or more months prior to a reference date or to a later date
which is two or more months after a reference date shall be determined in a
comparable manner.
(e) Governing Law. Unless otherwise provided in any Operative Document,
each of the Operative Documents shall be governed by and construed in accordance
with the laws of the State of California without reference to conflicts of law
rules.
(f) Construction. The Operative Documents are the result of negotiations
among, and have been reviewed by Lessee and each Lessor Party and their
respective counsel. Accordingly,
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the Operative Documents shall be deemed to be the product of all parties hereto,
and no ambiguity shall be construed in favor of or against Lessee or any Lessor
Party.
(g) Entire Agreement. The Operative Documents, taken together,
constitute and contain the entire agreement of Lessee and the Lessor Parties and
supersede any and all prior agreements, negotiations, correspondence,
understandings and communications among the parties, whether written or oral,
respecting the subject matter thereof (including the commitment letter dated as
of October 11, 2000 between Lessee and Agent but excluding the Agent's Fee
Letter).
(h) Calculation of Base Rent, Interest and Fees. All calculations of
Base Rent, interest and fees under the Operative Documents for any period (i)
shall include the first day of such period and exclude the last day of such
period and (ii) shall be calculated on the basis of a year of 360 days for
actual days elapsed, except that during any period that Base Rent or any
interest is to be calculated based upon the Base Rate, such Base Rent or
interest shall be calculated on the basis of a year of 365 or 366 days, as
appropriate, for actual days elapsed.
(i) References.
(i) References in any Operative Document to "Recitals,"
"Sections," "Paragraphs," "Subparagraphs," "Articles," "Exhibits" and
"Schedules" are to recitals, sections, paragraphs, subparagraphs,
articles, exhibits and schedules therein and thereto unless otherwise
indicated.
(ii) References in any Operative Document to any document,
instrument or agreement (A) shall include all exhibits, schedules and
other attachments thereto, (B) shall include all documents, instruments or
agreements issued or executed in replacement thereof, and (C) shall mean
such document, instrument or agreement, or replacement or predecessor
thereto, as amended, modified and supplemented from time to time and in
effect at any given time.
(iii) References in any Operative Document to any Governmental Rule
(A) shall include any successor Governmental Rule, (B) shall include all
rules and regulations promulgated under such Governmental Rule (or any
successor Governmental Rule), and (C) shall mean such Governmental Rule
(or successor Governmental Rule) and such rules and regulations, as
amended, modified, codified or reenacted from time to time and in effect
at any given time.
(iv) References in any Operative Document to any Person in a
particular capacity (A) shall include any permitted successors to and
assigns of such Person in that capacity and (B) shall exclude such Person
individually or in any other capacity.
(j) Other Interpretive Provisions. The words "hereof," "herein" and
"hereunder" and words of similar import when used in any Operative Document
shall refer to such Operative Document as a whole and not to any particular
provision of such Operative Document. The words "include" and "including" and
words of similar import when used in any Operative
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Document shall not be construed to be limiting or exclusive. In the event of any
inconsistency between the terms of the Participation Agreement and the terms of
any other Operative Document, the terms of the Participation Agreement shall
govern.
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SCHEDULE 3.01
INITIAL CONDITIONS PRECEDENT
A. PRINCIPAL OPERATIVE DOCUMENTS.
(1) The Participation Agreement, duly executed by Lessee, Lessor,
each Participant and Agent;
(2) The Head Lease Agreements, each duly executed by Lessor and
Head Lessor;
(3) The Lease Agreements, each duly executed by Lessee and Lessor
and appropriately notarized;
(4) The Purchase Agreements, each duly executed by Lessee and
Lessor;
(5) The Facility 2 Construction Agency Agreement, duly executed by
Lessee and Lessor;
(6) The Assignment of Construction Agreements, duly executed by
Lessee;
(7) The Assignment of Lease, duly executed by Lessor and
appropriately notarized;
(8) The Lessor Deed of Trust, duly executed by Lessor and
appropriately notarized; and
(9) The Lessor Security Agreement, duly executed by Lessor.
B. LESSEE CORPORATE DOCUMENTS.
(1) The Certificate or Articles of Incorporation of Lessee,
certified as of a recent date prior to the Closing Date by the Secretary
of State (or comparable official) of its jurisdiction of incorporation;
(2) A Certificate of Good Standing (or comparable certificate) for
Lessee, certified as of a recent date prior to the Closing Date by the
Secretary of State (or comparable official) of its jurisdiction of
incorporation;
(3) A certificate of the Secretary or an Assistant Secretary of
Lessee, dated the Closing Date, certifying (a) that attached thereto is a
true and correct copy of the Bylaws of Lessee as in effect on the Closing
Date; (b) that attached thereto are true and correct copies of resolutions
duly adopted by the Board of Directors of Lessee and continuing in effect,
which authorize the execution, delivery and performance by Lessee of the
Operative Documents executed or to be executed by Lessee and the
consummation of the
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transactions contemplated thereby; and (c) that there are no proceedings
for the dissolution or liquidation of Lessee;
(4) A certificate of the Secretary or an Assistant Secretary of
Lessee, dated the Closing Date, certifying the incumbency, signatures and
authority of the officers of Lessee authorized to execute, deliver and
perform the Operative Documents and all other documents, instruments or
agreements related thereto executed or to be executed by Lessee; and
(5) A Certificate of Good Standing (or comparable certificates)
for Lessee, certified as of a recent date prior to the Closing Date by the
Secretary of State (or comparable official) of the State of California.
C. FINANCIAL STATEMENTS, FINANCIAL CONDITION, ETC.
(1) A copy of the audited consolidated Financial Statements of
Lessee for the fiscal year ended December 31, 2000, prepared by Ernst &
Young, LLP and a copy of the unqualified opinion delivered by such
accountants in connection with such Financial Statements;
(2) The consolidated plan and forecast of Lessee and its
Subsidiaries for the year ending December 31, 2001, including quarterly
cash flow projections and quarterly projections of Lessee's compliance
with each of the covenants set forth in Paragraph 5.03 of this Agreement;
(3) A certificate of the chief financial officer of Lessee which
sets forth the calculation of the Funded Indebtedness/EBITDA Ratio for the
consecutive four-quarter period ending on December 31, 2000; and
(4) Such other financial, business and other information regarding
Lessee, or any of its Subsidiaries as Lessor or Agent may reasonably
request, including information as to possible contingent liabilities, tax
matters, environmental matters and obligations for employee benefits and
compensation.
D. COLLATERAL DOCUMENTS.
(1) A Memorandum of Head Lease Agreement for each Facility,
appropriately completed and duly executed by Lessor and Head Lessor and
appropriately notarized for recording;
(2) A Memorandum of Purchase Agreement for each Facility,
appropriately completed and duly executed by Lessee and Lessor and
appropriately notarized for recording;
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(3) Evidence that the Lease Agreements, the Assignment of Lease,
the Lessor Deed of Trust, the Memoranda of Head Lease Agreement and the
Memoranda of Purchase Agreement delivered pursuant to items A(3), A(7),
A(8), D(1) and D(2) have been properly recorded in the Official Records of
the County of Santa Clara, California;
(4) An ALTA extended coverage owner's policy or binder of title
insurance (or a commitment therefor) for the Facility 1 Property and
Facility 2 Property insuring Lessor's leasehold estate to the Property
(subject to the Novellus I Operative Documents which will be released upon
receipt of $44,813,000 by Agent on behalf of the Novellus I Participants
and subject to such exceptions as Agent may approve), in such amounts and
with such endorsements as Agent may reasonably require, issued by a title
insurer acceptable to Agent, together with such policies of co-insurance
or re-insurance (or commitments therefor) as Agent may require;
(5) An ALTA extended coverage lender's policy of title insurance
(or a commitment therefor) for the Facility 1 Property and Facility 2
Property insuring the validity and priority of the Lease Agreements
(subject to the Novellus I Operative Documents which will be released upon
receipt of $44,813,000 by Agent on behalf of the Novellus I Participants
and subject to such exceptions as Agent may approve), in such amounts and
with such endorsements as Agent may reasonably require, issued by a title
insurer acceptable to Agent, together with such policies of co-insurance
or re-insurance (or commitments therefor) as Agent may require;
(6) An ALTA extended coverage lender's policy of title insurance
(or a commitment therefor) for the Facility 1 Property and Facility 2
Property insuring the validity and priority of the Lessor Deed of Trust
(subject to the Novellus I Operative Documents which will be released upon
receipt of $44,813,000 by Agent on behalf of the Novellus I Participants
and subject to such exceptions as Agent may approve), in such amounts and
with such endorsements as Agent may reasonably require, issued by a title
insurer acceptable to Agent, together with such policies of co-insurance
or re-insurance (or commitments therefor) as Agent may require;
(7) Copies of all leases for the Facility 1 Property and Facility
2 Property and all other documents, instruments and agreements recorded
against or otherwise affecting such Property, including all amendments,
extensions and other modifications thereof;
(8) Subordination, non-disturbance and attornment agreements from
the lessee under each of the leases for the Facility 1 Property and
Facility 2 Property;
(9) Such consents and estoppels, with appropriate mortgagee
protection language, as are requested by Agent, each duly executed by the
appropriate Person;
(10) Such Uniform Commercial Code financing statements and fixture
filings (appropriately completed and executed) for filing in such
jurisdictions as Agent may request to perfect the Liens granted to Lessor
and Agent in the Lessee Security Documents, the Lessor Security Agreement
and the other Operative Documents;
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(11) Such Uniform Commercial Code termination statements
(appropriately completed and executed) for filing in such jurisdictions as
Agent may request to terminate any financing statement evidencing Liens of
other Persons in the Collateral which are prior to the Liens granted to
Lessor and Agent in the Lessee Security Documents, the Lessor Security
Agreement and the other Operative Documents, except for any such prior
Liens which are expressly permitted by the Operative Documents to be
prior;
(12) Uniform Commercial Code search certificates from the
jurisdictions in which Uniform Commercial Code financing statements are to
be filed pursuant to item D(10) above reflecting no other financing
statements or filings which evidence Liens of other Persons in the
Collateral which are prior to the Liens granted to Lessor and Agent in the
Lessee Security Documents, the Lessor Security Agreement and the other
Operative Documents, except for any such prior Liens (a) which are
expressly permitted by the Operative Documents to be prior or (b) for
which Agent has received a termination statement pursuant to item D(11)
above;
(13) Such other documents, instruments and agreements as Agents may
reasonably request to establish and perfect the Liens granted to any
Lessor Party in the Lessee Security Documents, the Lessor Deed of Trust,
the Lessor Security Agreement and the other Operative Documents; and
(14) Such other evidence as Agent may request to establish that the
Liens granted to Agent or any Participant in the Lessee Security
Documents, the Lessor Deed of Trust, the Lessor Security Agreement and the
other Operative Documents are perfected and prior to the Liens of other
Persons in the Collateral, except for any such Liens which are expressly
permitted by the Operative Documents to be prior.
E. OPINIONS.
(1) A favorable written opinion of Morrison & Foerster, LLP,
counsel for Lessee, dated the Closing Date and 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. OTHER ITEMS.
(1) A duly completed and timely delivered Advance Request for each
of the Initial Advances, each duly executed by Lessee;
(2) Bills of sale for all Related Goods to be acquired with the
Initial Advances, each reflecting Lessor as the purchaser of such Related
Goods;
(3) An Expiration Date Appraisal for the Land Portion of the
Facility 1 Property, dated as of a recent date prior to the Closing Date,
that appraises the Land
3.01-4
129
Portion of the Facility 1 Property at not less than the Total Facility 1
Land Portion Commitment;
(4) An Expiration Date Appraisal for the Improvement Portion of
the Facility 1 Property, dated as of a recent date prior to the Closing
Date, that appraises the Improvement Portion of the Facility 1 Property at
not less than the Total Facility 1 Improvement Portion Commitment;
(5) An Expiration Date Appraisal for the Facility 2 Property,
dated as of a recent date prior to the Closing Date, that appraises the
Facility 2 Property at not less than the Total Facility 2 Commitment;
(6) A Completion Date Appraisal for the Facility 2 Property, dated
as of a recent date prior to the Closing Date, that appraises the Facility
2 Property at not less than the Total Facility 2 Commitment;
(7) A copy of the Plans and Specifications for the New
Improvements, together with a certificate of the architect for the New
Improvements certifying that such Plans and Specifications are complete;
(8) A copy of the budget for the New Improvements which (a)
includes provisions for all hard and soft costs of constructing the New
Improvements (including, without limitation, all capitalized interest) and
reasonable allowances for contingencies and (b) budgets the aggregate cost
of such construction at $45,000,000 or less; together with a certificate
of the Chief Financial Officer of Lessee certifying that such budget is a
reasonable budget that sets forth the likely maximum costs of constructing
the New Improvements;
(9) An as-built survey of each of the Facility 1 Property and the
Facility 2 Property (a) prepared and dated not more than two (2) months
prior to the Initial Closing Date by a registered surveyor reasonably
satisfactory to Agent, (b) certified as correct and as (i) having been
made in accordance with the most recent standards for "Minimum Standard
Detail Requirements for ALTA/ACSM Land Title Surveys," jointly established
and adopted by ALTA and ACSM, and (ii) meeting the accuracy requirements
of a Class A survey (as defined therein) and including items 1-4, 6, 7(a),
7(b)(1), 8-11 and 13 of Table A thereof, and (c) disclosing, among other
things, (i) the location of the perimeter of the Property by courses and
distances, (ii) all easements and rights-of-way, whether above or
underground, (iii) the lines of the street abutting the Property and the
width thereof, (iv) encroachments, if any, and the extent thereof in feet
and inches upon the Property, and (v) all boundary and lot lines, and all
other matters that would be disclosed by inspection of the Property and
the public records;
(10) If requested by Lessor, Agent or any Participant, a list of
and copies of all Construction Agreements;
3.01-5
130
(11) Environmental reports and assessments satisfactory to Agent
issued by environmental consultants acceptable to Agent with respect to
the Facility 1 Property and the Facility 2 Property;
(12) Certificates of insurance evidencing the insurance Lessee is
required to maintain pursuant to Paragraph 3.03 of each Lease Agreements;
(13) Copies of the Novellus I Amendments, duly executed by the
appropriate parties and where appropriate properly notarized for
recording;
(14) Evidence that all amounts due and payable by Lessee under the
Novellus I Participation Agreement and the other Novellus I Operative
Documents have been paid;
(15) A certificate of the Chief Financial Officer of Lessee,
addressed to Lessor and Agent and dated the Closing Date, certifying that:
(a) 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);
(b) No Default has occurred and is continuing as of such
date;
(c) All of the Operative Documents are in full force and
effect on such date;
(16) All fees and expenses payable to the Lessor Parties, which
shall be paid on the funding of the Initial Advance;
(17) All fees and expenses of Lessor's and Agent's counsels through
the Closing Date, which shall be paid on the funding of the Initial
Advance; and
(18) Such other evidence as Agent may reasonably request to
establish the accuracy and completeness of the representations and
warranties and the compliance with the terms and conditions contained in
the Operative Documents.
3.01-6
131
SCHEDULE 4.01(q)
SUBSIDIARIES
SUBSIDIARY JURISDICTION CLASS % OWNED
- ---------- ------------ ----- -------
Novellus Systems
International, Inc. U.S.A. Common 100%
Novellus Malaysia Malaysia Common 100%
Novellus Systems, Ltd. U.K. Common 100%
Novellus Systems, BV Netherlands Common 100%
Nippon Novellus
Systems, KK Japan Common 100%
Novellus Systems Korea
Co. Ltd. Korea Common 100%
Novellus Systems Beijing Mainland China Common 100%
Novellus Singapore PTE
Ltd. Singapore Common 100%
Novellus Systems
Semiconductor Equipment
Shanghai Co., Ltd. Mainland China Common 100%
Novellus Systems
Taiwan Ltd. Taiwan Common 100%
Novellus Systems GmbH Germany Common 100%
Novellus Systems SARL France Common 100%
Novellus Systems
Ireland, Ltd. Ireland Common 100%
Novellus Systems Israel Common 100%
Israel, Ltd.
Novellus Singapore Singapore Common 100%
Pte. Ltd.
4.01(q)-1
132
GaSonics International U.S.A. Common 100%
GaSonics World Trade, Inc. U.S.A. Common 100% (indirectly)
GaSonics International
Japan, Kabushiki Kaisha Japan Common 100% (indirectly)
GaSonics International Korea Common 100% (indirectly)
Korea Corporation
GaSonics International U.K. Common 100% (indirectly)
Europe, Ltd.
GaSonics International France Common 100% (indirectly)
France
GaSonics International Ireland Common 100% (indirectly)
Ireland, Ltd.
GaSonics International Israel Common 100% (indirectly)
Israel, Ltd.
GaSonics International Germany Common 100% (indirectly)
Germany
4.01(q)-2
133
SCHEDULE 4.01(t)
INDIVIDUAL PROPERTY REPRESENTATIONS
4.01(t)-1
134
SCHEDULE 4.01(t)
TRACT 2 LAND AND IMPROVEMENTS
(i) The Tract 2 Land consists of approximately 7.384 acres located at
3940 and 3950 North First Street, San Jose, California, more particularly
described in Part 1 to Exhibit A.
(ii) On the date of this Agreement, the Existing Improvements on the
Tract 2 Land consist of (1) a one story building consisting of approximately
59,904 square feet used for office and warehouse purposes (3940 North First
Street); and (2) a one story building consisting of approximately 42,624 square
feet used for office, warehouse and manufacturing purposes (3950 North First
Street).
(iii) The Existing Improvements to Tract 2 are in good working condition
and fit for use as described above. All utilities required to adequately service
the Existing Improvements for their intended use are available and "tapped on"
and hooked up pursuant to adequate permits (including any that may be required
under applicable Environmental Laws). Access to the Existing Improvements for
pedestrians and motor vehicles from publicly dedicated streets and public
highways is available.
(iv) No portion of the Tract 2 Property is located in an area identified
as a special flood hazard area by the Federal Emergency Management Agency or
other applicable Governmental Authority, or if any portion of the Property is
located in such an area, flood insurance has been obtained for the Property or
such portion thereof in accordance with Paragraph 3.03 of the Facility 2 Lease
Agreement and the National Flood Insurance Act of 1968.
4.01(t)-2
135
SCHEDULE 4.01(t)
TRACT 5 LAND AND IMPROVEMENTS
(i) The Tract 5 Land consists of approximately 4.497 acres located at 90
Headquarters Drive, San Jose, California, more particularly described in Part 2
to Exhibit A.
(ii) On the date of this Agreement, the Existing Improvements on the
Tract 5 Land consist of a building consisting of approximately 82,944 square
feet used for office, research and development, and manufacturing purposes.
(iii) To Lessee's knowledge, the Existing Improvements to Tract 5 are in
good working condition and fit for use as described above. To Lessee's
knowledge, all utilities required to adequately service the Existing
Improvements for their intended use are available and "tapped on" and hooked up
pursuant to adequate permits (including any that may be required under
applicable Environmental Laws). Access to the Existing Improvements for
pedestrians and motor vehicles from publicly dedicated streets and public
highways is available.
(iv) No portion of the Tract 5 Property is located in an area identified
as a special flood hazard area by the Federal Emergency Management Agency or
other applicable Governmental Authority, or if any portion of the Property is
located in such an area, flood insurance has been obtained for the Property or
such portion thereof in accordance with Paragraph 3.03 of the Facility 2 Lease
Agreement and the National Flood Insurance Act of 1968.
4.01(t)-3
136
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
137
SCHEDULE 5.02(b)
EXISTING LIENS
[None]
5.02(b)-1
138
EXHIBIT A
LAND
A-1
139
EXHIBIT A
PART 1
TRACT 2 LAND
LEGAL DESCRIPTION
3940 NORTH FIRST STREET, 3950 NORTH FIRST STREET
The land situated in the City of San Jose, County of Santa Clara, State of
California, and described as follows:
PARCEL ONE:
Parcel 2 as shown on that certain Parcel Map filed in the office of the Recorder
of the County of Santa Clara, State of California on August 18, 1983 in Book 516
of Maps, page(s) 34 and 35, Santa Clara County Records.
And, in addition thereto, the following area:
Beginning at the Southeasterly corner of said Parcel 2, thence North 52 degrees
27' 12" West, 409.24 feet along the common line of Parcel 1 and Parcel 2 as
shown on said Parcel Map to a common corner thereof; thence leaving said common
line, along the Southerly prolongation of a common line of said Parcels, South
19 degrees 40' 54" West, 32.25 feet; thence South 52 degrees 22' 44" East,
399.34 feet to a point on the Southeasterly line of said Parcel 1; thence North
37 degrees 32' 59" East, 31.22 feet along said Southeasterly line to the Point
of Beginning.
PARCEL ONE-A:
A non-exclusive easement for ingress and egress over PCL. 1, as said parcel is
shown on the Parcel Map recorded in Book 516 of Maps, at pages 34 and 35, Santa
Clara County Records, as granted in an instrument recorded May 23, 1985 in Book
J353, page 1565 and being more particularly described as follows:
Strip 1
A strip of land 26.00 feet wide extending entirely across said PCL. 1 and lying
13.00 feet on each side of a line as follows:
Beginning at the Southerly corner of said PCL. 1, said corner being on the
Northeasterly line of North First Street; thence along said Northeasterly line
N. 52 degrees 27' 12" W., 34.00 feet to the true point of beginning of said
strip of land; thence N. 37 degrees 32' 59" E., 540.00 feet to the Northeasterly
line of said PCL. 1.
(LEGAL DESCRIPTION CONTINUED NEXT PAGE)
A-2
140
LEGAL DESCRIPTION: (Continued)
Strip 2
A strip of land 40.00 feet wide extending entirely across said PCL. 1 and lying
contiguous to and Southeasterly of a line described as follows:
Beginning at the most Southerly corner of said PCL. 1, said corner being on the
Northeasterly line of North First Street; thence along said Northeasterly line
N. 52 degrees 27' 12" W., 429.25 feet to the true point of beginning of said
strip of land; thence N. 37 degrees 32' 48" E., 600.00 feet to the Northeasterly
line of said PCL. 1; the Northerly terminus of said 40 foot wide strip of land
being the Northeasterly line of said PCL. 1.
Strip 3
A strip of land 26.00 feet wide, extending Northeasterly from the Southwesterly
line of said PCL. 1 to the Northwesterly line of the above described and
designated Strip 2 and lying 13.00 feet on each side of a line described as
follows:
Beginning at the Westerly corner of said PCL. 1, said corner being on the
Northeasterly line of North First Street; thence along said Northeasterly line
S. 52 degrees 27' 12" E., 34.00 feet to the true point of beginning of said
strip of land; thence N. 37 degrees 32' 48" E. 566.00 feet; thence S. 52 degrees
27' 12" E., 355.25 feet to said Northwesterly line of said Strip 2.
Strip 4
A strip of land 13.00 feet wide lying contiguous to and Northwesterly of the
Northwesterly line of the above described and designated Strip 2 and extending
Southwesterly from the Northeasterly line of said PCL. 1 approximately 21.00
feet to the Northeasterly line of the above described and designated Strip 3.
PARCEL ONE-B:
The right from time to time to construct, install, maintain, replace, remove,
and use storm drain sewers, together with a right of way therefor, over a
portion of PCL. 1 as said parcel is shown on the Parcel Map recorded in Book 516
of Maps, at pages 34 and 35, Santa Clara County Records, as granted in an
instrument recorded May 23, 1985 in Book J353, page 1565 and being more
particularly described as follows:
Strip 1
A strip of land 10.00 feet wide extending entirely across said PCL. 1 and lying
5.00 feet on each side of a line described as follows:
Beginning at the most Westerly corner of said PCL. 1 said corner being on the
Northeasterly line of North First Street; thence along said Northeasterly line
S. 52 degrees 27' 12" E., 402.75 feet to the true point of beginning of said
strip of land; thence along the centerline of a existing storm drain line the
following courses: thence N. 37 degrees 32' 48" E., 28.00 feet to a point herein
designated Point A; thence N. 52 degrees 27' 12" W., 278.00 feet; thence N. 00
degrees 51' 00" E., 198.30 feet; thence N. 37 degrees 32' 33" E., 279.75 feet;
thence S. 51 degrees 19' 51" E., 89.02 feet; thence N. 50 degrees 06' 47" E.,
133.18 feet; thence N. 37 degrees 32' 48" E., 5.00 feet to the Northeasterly
line of said PCL 1.
(LEGAL DESCRIPTION CONTINUED NEXT PAGE)
A-2
141
LEGAL DESCRIPTION: (Continued)
Strip 2
A strip of land 10 feet wide extending Northeasterly from the Northeasterly line
of the above described and designated Strip 1 and lying 5.00 feet on each side
of a line which begins at said Point A; thence along the centerline of an
existing storm drain line the following courses: thence N. 26 degrees 55' 37"
E., 154.65 feet; thence N. 32 degrees 55' 53" E., 96.31 feet; thence N. 43
degrees 21' 28" E., 113.58 feet; thence N. 54 degrees 44' 21" E., 105.72 feet to
a point herein designated as Point B; thence S. 41 degrees 57' 14" E., 65.85
feet; thence N. 37 degrees 32' 48" E., 62.00 feet to the Northeasterly line of
said PCL 2.
Strip 3
A strip of land 5.00 feet wide lying contiguous to and Southwesterly of the
Northeasterly line of said PCL. 1 and extending Southeasterly from the
Southeasterly line of the above described and designated Strip 2 approximately
225 feet.
Strip 4
A strip of land 10.00 feet wide extending Northeasterly from the Northeasterly
line of the above described and designated Strip 2 to the Northeasterly line of
said PCL. 1 and lying 5.00 feet on each side of a line that begins at said Point
B; thence along the centerline of an existing storm drain line N. 37 degrees 32'
48" E., 50.00 feet to the Northeasterly line of said PCL. 1.
PARCEL ONE-C:
The right from time to time to construct, install, inspect, maintain, replace,
remove and use any and all Public Service Facilities necessary or useful,
together with a right of way therefor, over a portion of PCL. 1 as said parcel
is shown on the Parcel Map recorded in Book 516 of Maps, at pages 34 and 35,
Santa Clara County Records, as granted in an instrument recorded May 23, 1985 in
Book J353, page 1565 and being more particularly described as follows:
Strip 5
A strip of land 15.00 feet wide extending entirely across said PCL. 1 and lying
7.50 feet on each side of a line described as follows:
Beginning at the most Southerly corner of said PCL. 1, said corner being on the
Northeasterly line of North First Street; thence along said Northeasterly line
N. 52 degrees 27' 12" W., 60.50 feet to the true point of beginning of said
strip of land; thence N. 37 degrees 32' 59" E., 394.80 feet to a point herein
designated Point C; thence N. 37 degrees 32' 59" E., 105.20 feet; thence N. 7
degrees 27' 01" W., 56.57 feet to the Northeasterly line of said PCL. 1.
Strip 6
A strip of land 15.00 feet wide extending Northerly from the Northerly line of
the above described and designated Strip 5 to the Northeasterly line of said
PCL. 1 and lying 7.5 feet on each side of a line that begins at said Point C;
thence N. 30 degrees 01' 00" E., 59.5 feet; thence N. 8 degrees 41' 00" E.,
98.44 feet to the Northeasterly line of said PCL. 1.
(LEGAL DESCRIPTION CONTINUED NEXT PAGE)
A-2
142
LEGAL DESCRIPTION: (Continued)
Strip 7
A strip of land 15.00 feet wide extending entirely across said PCL. 1 and lying
7.5 feet and each side of a line described as follows:
Beginning at the most Westerly corner of said PCL. 1 said corner being on the
Northeasterly line of North First Street; thence along said Northeasterly line
S. 52 degrees 27' 12" E., 30.00 feet to the true point of beginning of said
strip of land; thence N. 37 degrees 32' 33" E., 600.00 feet to the Northeasterly
line of said PCL 1.
Strip 8
That area located within those portions of PCL.1, of the Parcel Map mentioned
hereinabove, lying within the easements designated as "P.S.E.", as shown on said
Parcel Map.
PARCEL ONE-D:
A non-exclusive easement for Landscaping, Lighting and Irrigation Facilities
over PCL. 1, as said parcel is shown on the Parcel Map recorded in Book 516 of
Maps, at pages 34 and 35, Santa Clara County Records, as granted in an
instrument recorded May 23, 1985 in Book J353, page 1565 and being more
particularly described as follows:
A strip of land 10.00 feet wide extending Southeasterly from the Northwesterly
line of said PCL. 1 and PCL. 2 and lying 5.00 feet on each side of a line that
begins at the most Northerly corner of said PCL. 1 and runs thence along the
Northeasterly line of said PCL. 1, S. 52 degrees 27' 12" E. 375.00 feet.
Excepting therefrom that portion lying within the bounds of Parcel 2 mentioned
hereinabove.
APN: 097-79-004
ARB: 97-3-x4
A-2
143
EXHIBIT A
PART 2
TRACT 5 LAND
LEGAL DESCRIPTION
90 HEADQUARTERS DRIVE
The land situated in the City of San Jose, County of Santa Clara, State of
California, and described as follows:
Parcel 3, as shown on Parcel Map filed July 13, 1984 in Book 531 of Maps at
pages 41 and 42, Santa Clara County Records.
APN: 097-79-003
ARB: 097-03-005.02
A-3
144
EXHIBIT B(1)
FACILITY 1 LEASE AGREEMENT
B(1)-1
145
Recording requested by and
when recorded return to:
Orrick, Herrington & Sutcliffe
Old Federal Reserve Bank Building
400 Sansome Street
San Francisco, California 94111
Attn: John Rivers
================================================================================
FACILITY 1 LEASE AGREEMENT
DEED OF TRUST WITH ASSIGNMENT OF RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
BETWEEN
NOVELLUS SYSTEMS, INC.
AND
ABN AMRO LEASING, INC.
APRIL 13, 2001
================================================================================
146
PAGE
----
SECTION 1. INTERPRETATION..................................................................2
1.01. Definitions..................................................................2
1.02. Rules of Construction........................................................2
SECTION 2. BASIC PROVISIONS................................................................2
2.01. Lease of the Facility 1 Property.............................................2
2.02. Term.........................................................................2
2.03. Rent.........................................................................3
2.04. Use..........................................................................5
2.05. As Is Lease..................................................................5
2.06. Nature of Transaction........................................................5
2.07. Security, Etc................................................................5
SECTION 3. OTHER LESSEE AND LESSOR RIGHTS AND OBLIGATIONS..................................8
3.01. Maintenance, Repair, Etc.....................................................8
3.02. Risk of Loss.................................................................8
3.03. Insurance....................................................................9
3.04. Casualty and Condemnation...................................................11
3.05. Taxes.......................................................................14
3.06. Environmental Matters.......................................................15
3.07. Liens, Easements, Etc.......................................................16
3.08. Subletting..................................................................17
3.09. Utility Charges.............................................................17
3.10. Removal of Facility 1 Property..............................................17
3.11. Compliance with Governmental Rules and Insurance Requirements...............17
3.12. Permitted Contests..........................................................18
3.13. Lessor Obligations; Right to Perform Lessee Obligations.....................18
3.14. Inspection Rights...........................................................19
SECTION 4. EXPIRATION DATE................................................................19
4.01. Termination by Lessee Prior to Scheduled Expiration Date....................19
4.02. Surrender of Facility 1 Property............................................19
4.03. Holding Over................................................................19
SECTION 5. DEFAULT........................................................................19
5.01. Events of Default...........................................................19
5.02. General Remedies............................................................22
-i-
147
PAGE
----
5.03. Lease Remedies..............................................................23
5.04. Loan Remedies...............................................................24
5.05. Remedies Cumulative.........................................................27
5.06. No Cure or Waiver...........................................................27
5.07. Exercise of Rights and Remedies.............................................27
SECTION 6. MISCELLANEOUS..................................................................27
6.01. Notices.....................................................................27
6.02. Waivers; Amendments.........................................................27
6.03. Successors and Assigns......................................................27
6.04. No Third Party Rights.......................................................27
6.05. Partial Invalidity..........................................................28
6.06. Governing Law...............................................................28
6.07. Counterparts................................................................28
6.08. Nature of Lessee's Obligations..............................................28
SCHEDULE
3.03 Insurance Requirements
EXHIBITS
A Facility 1 Land (2.01(a))
B Related Goods (2.01(d))
C Notice of Rental Period Selection (2.03(a))
-ii-
148
FACILITY 1 LEASE AGREEMENT
DEED OF TRUST WITH ASSIGNMENT OF RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
THIS FACILITY 1 LEASE AGREEMENT, CONSTRUCTION DEED OF TRUST WITH
ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING (this "Agreement"
herein), 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 this Agreement and as trustee under the deed of trust contained
herein ("Lessor").
RECITALS
A. Lessee has requested Lessor and the Persons which are "Participants"
under the Participation Agreement referred to in Recital B below (such Persons
to be referred to collectively as the "Participants") to provide to Lessee a
lease facility pursuant to which:
(1) Lessor would (a) lease certain property designated by Lessee,
(b) sublease such property to Lessee, (c) make advances to finance
certain related expenses, and (d) grant to Lessee the right to purchase
such property; and
(2) The Participants would participate in such lease facility by
(a) funding the advances to be made by Lessor and (b) acquiring
participation interests in the rental and certain other payments to be
made by Lessee.
B. Pursuant to a Participation Agreement dated of even date herewith
(the "Participation Agreement") among Lessee, Lease Plan North America, Inc.
("Head Lessor"), Lessor, the Participants and ABN AMRO Bank N.V., as agent for
the Participants (in such capacity, "Agent"), Lessor and the Participants have
agreed to provide such lease facility upon the terms and subject to the
conditions set forth therein, including without limitation the execution and
delivery of this Agreement setting forth the terms of the lease by Lessor to
Lessee of the property.
AGREEMENT
NOW, THEREFORE, in consideration of the above Recitals and the mutual
covenants herein contained, the parties hereto hereby agree as follows:
SECTION 1. INTERPRETATION.
1.01. Definitions. Unless otherwise indicated in this Agreement or any
other Operative Document, each term set forth in Schedule 1.01 to the
Participation Agreement, when used in
149
this Agreement or any other Operative Document, shall have the respective
meaning given to that term in such Schedule 1.01 or in the provision of this
Agreement or other document, instrument or agreement referenced in such Schedule
1.01.
1.02. Rules of Construction. Unless otherwise indicated in this
Agreement or any other Operative Document, the rules of construction set forth
in Schedule 1.02 to the Participation Agreement shall apply to this Agreement
and the other Operative Documents.
SECTION 2. BASIC PROVISIONS.
2.01. Lease of the Property. Subject to the acquisition thereof by
Lessor pursuant to the Participation Agreement and the Facility 1 Head Lease
Agreement, Lessor agrees to lease to Lessee and Lessee agrees to lease from
Lessor the following property (the "Facility 1 Property") to the extent of
Lessor's estate, right, title and interest therein, thereto or thereunder:
(a) All lots, pieces, tracts and parcels of land described in
Exhibit A (the "Facility 1 Land");
(b) All Improvements to the Facility 1 Land;
(c) All Appurtenant Rights belonging, relating or pertaining to
the Facility 1 Land or the Improvements thereto;
(d) All Related Goods (including those described in Exhibit B),
Related Permits and Related Agreements related to the Facility 1 Land or
any of the foregoing Improvements or Appurtenant Rights; and
(e) All accessions and accretions to and replacements and
substitutions for the foregoing.
(Lessee acknowledges that Lessor's only estate, right, title and interest in the
Facility 1 Land and certain of the other Facility 1 Property is through the
Facility 1 Head Lease Agreement and is a leasehold interest only.)
2.02. Term.
(a) Original Term. The original term of this Agreement shall
commence on the Closing Date (the "Commencement Date") and shall end on
the date five (5) years after the Closing Date (such date as it may be
extended pursuant to Subparagraph 2.02(b) to be referred to as the
"Scheduled Expiration Date").
(b) Extensions. Lessee may request Lessor to extend the Scheduled
Expiration Date in effect at any time for three (3) additional periods
of one (1) year each, as provided in Subparagraph 2.09(b) of the
Participation Agreement. If Lessor and each Participant consents to any
such a request in accordance with such provision, the then current
Scheduled Expiration Date shall be deemed extended by one (1) year in
each instance. Lessee acknowledges that neither Lessor nor any
Participant has any
2
150
obligation or commitment (either express or implied) to extend, or
consent to the extension of, the Scheduled Expiration Date at any time.
2.03. Rent.
(a) Base Rent.
(i) Lessee shall pay to Lessor as base rent hereunder
("Base Rent") for each Rental Period for each Portion of the
Outstanding Lease Amount an amount equal to the sum of the
Interest Component and Principal Component for such Rental Period
determined as follows:
(A) "Interest Component" shall mean, with respect
to any Rental Period and Portion, the product of (1) the
Rental Rate for such Rental Period and Portion, times (2)
the amount of such Portion on the first day of such Rental
Period, times (3) a fraction, the numerator of which is
the number of days in such Rental Period and the
denominator of which is 360. If the Rental Rate shall
change during any Rental Period, the Rental Rate for such
Rental Period shall be the weighted average of the Rental
Rates in effect from time to time during such Rental
Period.
(B) "Principal Component" shall mean, with respect
to any Rental Period, zero Dollars ($0.00).
(ii) Prior to the Commitment Termination Date, the
Outstanding Lease Amount shall consist of a single Portion with
the following Rental Periods:
(A) A Rental Period which begins on the
Commencement Date and ends on the first Business Day in
the first calendar month immediately following the month
in which the Commencement Date occurs; and
(B) Each successive Rental Period thereafter which
begins on the last day of the immediately preceding Rental
Period and ends one (1) month thereafter on the first
Business Day of a calendar month through and including the
Commitment Termination Date.
(iii) On and after the Commitment Termination Date, Lessee
may select the number and amounts of the Portions into which the
Outstanding Lease Amount is to be divided and the Rental Period
for each such Portion by delivering to Lessor, at least three (3)
Business Days prior to the Commitment Termination Date and
thereafter the last day of each Rental Period for a Portion, an
irrevocable written notice in the form of Exhibit C,
appropriately completed (a "Notice of Rental Period Selection"),
subject to the following:
(A) Each Portion shall be in the amount of
$5,000,000 or an integral multiple of $100,000 in excess
thereof; provided, however, that (1) the total number of
Portions outstanding at any time shall not exceed three
(3), and (2) the Outstanding Lease Amount shall consist of
a single
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Portion in the amount of the Outstanding Lease Amount if
the Outstanding Lease Amount is less than $5,000,000).
(B) The initial and each subsequent Rental Period
selected by Lessee for each Portion shall be one (1), two
(2), three (3) or six (6) months; provided, however, that
(1) each Rental Period shall begin and end on the first
Business Day of a calendar month, (2) no Rental Period
shall end after the Scheduled Expiration Date, (3) no
Rental Period shall be longer than one (1) month if a
Default has occurred and is continuing on the date three
(3) Business Days prior to the first day of such Rental
Period and (4) each Rental Period after the initial Rental
Period for any Portion for which Lessee fails to make a
selection by delivering a Notice of Rental Period
Selection in accordance with this clause (iii) shall be
one (1) month.
Lessee shall deliver each Notice of Rental Period Selection by
first-class mail or facsimile as required by Subparagraph 2.02(a)
and Paragraph 7.01 of the Participation Agreement; provided,
however, that Lessee shall promptly deliver the original of any
Notice of Rental Period Selection initially delivered by
facsimile.
(iv) The rental rate for each Rental Period for a Portion
("Rental Rate") shall be the LIBOR Rental Rate for such Rental
Period and Portion, except as follows:
(A) If any Rental Period is less than one (1)
month, the Rental Rate for such Rental Period shall be the
Alternate Rental Rate; or
(B) If the LIBOR Rental Rate is unavailable for any
Rental Period pursuant to Subparagraph 2.12(a) or
Subparagraph 2.12(b) of the Participation Agreement, the
Rental Rate for such Rental Period shall be the Alternate
Rental Rate
(v) Lessee shall pay Base Rent in arrears (A) for each
Portion, on the last day of each Rental Period therefor and, in
the case of any Rental Period which exceeds three (3) months,
each day occurring every three (3) months after the first day of
such Rental Period (individually, a "Scheduled Rent Payment
Date") and (B) for all Portions, on the Expiration Date.
(b) Supplemental Rent. Lessee shall pay as supplemental rent
hereunder ("Supplemental Rent"):
(i) All amounts payable by Lessor as rent or otherwise
under the Facility 1 Head Lease Agreement; and
(ii) All amounts (other than Base Rent, the purchase price
payable by Lessee for any purchase of the Facility 1 Property by
Lessee pursuant to the Facility 1 Purchase Agreement and the
Residual Value Guaranty Amount payable
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under the Facility 1 Purchase Agreement) payable by Lessee under
this Agreement and the other Operative Documents.
Lessee shall pay all Supplemental Rent amounts on the dates specified in
this Agreement and the other Operative Documents for the payment of such
amounts or, if no date is specified for the payment of any such amount,
within five (5) Business Days after demand of Lessor or any other Person
to whom such amount is payable.
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2.04. Use. Lessee may use the Facility 1 Property for office, research
and development, warehouse and manufacturing purposes, and for any other purpose
which is in compliance with applicable zoning laws and ordinances for the
Facility 1 Property.
2.05. As Is Lease. Lessee has conducted, or will conduct from time to
time with regard to Facility 1 Property that may be added hereto after the date
hereof, all due diligence which it deems appropriate regarding the Facility 1
Property and agrees that no Lessor Party has any obligation to conduct any such
due diligence. Lessee is leasing the Facility 1 Property "as is, with all
faults" without any representation, warranty, indemnity or undertaking by any
Lessor Party regarding any aspect of the Facility 1 Property, including (a) the
condition of the Facility 1 Property (including any Improvements to the Facility
1 Property made prior to the Commencement Date or during the Term); (b) title to
the Facility 1 Property (including possession of the Facility 1 Property by any
Person or the existence of any Lien or any other right, title or interest in or
to any of the Facility 1 Property in favor of any Person); (c) the value,
habitability, usability, design, operation or fitness for use of the Facility 1
Property; (d) the availability or adequacy of utilities and other services to
the Facility 1 Property; (e) any latent, hidden or patent defect in the Facility
1 Property; (f) the zoning or status of the Facility 1 Property or any other
restrictions on the use of the Facility 1 Property; (g) the economics of the
Facility 1 Property; (h) any Casualty or Condemnation; or (i) the compliance of
the Facility 1 Property with any applicable Governmental Rule or Insurance
Requirement; provided, however, that Lessor shall be obligated to remove Lessor
Liens to the extent required in Subparagraph 5.04(b) of the Participation
Agreement. Without limiting the generality of the foregoing, Lessee specifically
waives any covenant of quiet enjoyment except as otherwise provided in
Subparagraph 5.04(b) of the Participation Agreement.
2.06. Nature of Transaction. As more fully provided in Paragraph 2.10 of
the Participation Agreement, Lessee and the Lessor Parties intend that the
transaction evidenced by this Agreement and the other Operative Documents
constitute an operating lease in accordance with FASB 13 for accounting purposes
and a loan secured by the Facility 1 Property for all other purposes, including
federal, state and local income tax purposes and commercial, real estate and
bankruptcy law purposes.
2.07. Security, Etc. In order to secure the Lessee Obligations and
otherwise to assure the Lessor Parties the benefits hereof in the event that the
transaction evidenced by this Agreement and the other Operative Documents is,
pursuant to the intent of Lessee and the Lessor Parties, treated as a loan for
certain purposes, Lessee hereby makes the following grants and agrees as
follows:
(a) Real Property Security. As security for the Lessee
Obligations under Facility 1, Lessee hereby irrevocably and
unconditionally grants, conveys, transfers and assigns to Lessor, as
trustee under this deed of trust, for the benefit of Lessor, as
beneficiary (in trust for the benefit of the Lessor Parties), with power
of sale and right of entry and possession, all estate, right, title and
interest of Lessee in the following property, whether now owned or
hereafter acquired, (collectively, the "Real Property Collateral"):
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(i) The Facility 1 Land (including Lessor's leasehold
interest under the Facility 1 Head Lease Agreement);
(ii) All Improvements now or hereafter located on the
Facility 1 Land;
(iii) All Appurtenant Rights belonging, relating or
pertaining to any of the Facility 1 Land or Improvements thereto;
(iv) All Subleases and Issues and Profits accruing from
the Facility 1 Land or any of the foregoing Improvements or
Appurtenant Rights to the extent that such Subleases and Issues
and Profits constitute real property;
(v) All Related Goods, Related Agreements and Related
Permits related to any of the Facility 1 Land or any of the
foregoing Improvements or Appurtenant Rights to the extent that
such Related Goods, Related Agreements and Related Permits
constitute real property;
(vi) All other Facility 1 Property to the extent that such
property constitutes real property; and
(vii) All proceeds of the foregoing, including Casualty
and Condemnation Proceeds.
(b) Personal Property Security. As security for the Lessee
Obligations under Facility 1, Lessee hereby irrevocably and
unconditionally assigns and grants to Lessor, for the benefit of the
Lessor Parties, a security interest in all estate, right, title and
interest of Lessee in the following property, whether now owned or
leased or hereafter acquired, (collectively, the "Personal Property
Collateral"):
(i) All Subleases and Issues and Profits accruing from the
Facility 1 Land or any of the Improvements or Appurtenant Rights
to the extent such to the extent that such Subleases and Issues
and Profits constitute personal property;
(ii) All Related Goods, Related Agreements and Related
Permits related to the Facility 1 Land or any of the Improvements
or Appurtenant Rights to the extent that such Related Goods,
Related Agreements and Related Permits constitute personal
property;
(iii) All Cash Collateral and all other deposit accounts,
instruments, investment property and monies held by any Lessor
Party in connection with this Agreement or any other Operative
Document (including any Repair and Restoration Account);
(iv) All other Facility 1 Property to the extent such
Facility 1 Property constitutes personal property; and
(v) All proceeds of the foregoing, including Casualty and
Condemnation Proceeds.
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This Agreement constitutes a fixture filing for purposes of the
California Commercial Code with respect to the Related Goods which are
or are to become fixtures on the Facility 1 Land or Facility 1
Improvements.
(c) Absolute Assignment of Subleases, Issues and Profits. Lessee
hereby irrevocably assigns to Lessor, for the benefit of the Lessor
Parties, all of Lessee's estate, right, title and interest in, to and
under the Subleases and the Issues and Profits, whether now owned or
hereafter acquired. This is a present and absolute assignment, not an
assignment for security purposes only, and Lessor's right to the
Subleases and Issues and Profits is not contingent upon, and may be
exercised without possession of, the Facility 1 Property.
(i) If no Event of Default has occurred and is continuing,
Lessee shall have a revocable license to collect and retain the
Issues and Profits as they become due. Upon the occurrence and
during the continuance of an Event of Default, such license shall
automatically terminate, and Lessor may collect and apply the
Issues and Profits pursuant to Subparagraph 5.02(d) without
further notice to Lessee or any other Person and without taking
possession of the Facility 1 Property. All Issues and Profits
thereafter collected by Lessee shall be held by Lessee as trustee
in a constructive trust for the benefit of Lessor. Lessee hereby
irrevocably authorizes and directs the sublessees under the
Subleases, without any need on their part to inquire as to
whether an Event of Default has actually occurred or is then
existing, to rely upon and comply with any notice or demand by
Lessor for the payment to Lessor of any rental or other sums
which may become due under the Subleases or for the performance
of any of the sublessees' undertakings under the Subleases.
Collection of any Issues and Profits by Lessor shall not cure or
waive any default or notice of default hereunder or invalidate
any acts done pursuant to such notice.
(ii) The foregoing irrevocable assignment shall not cause
any Lessor Party to be (A) a mortgagee in possession; (B)
responsible or liable for (1) the control, care, management or
repair of the Facility 1 Property or for performing any of
Lessee's obligations or duties under the Subleases, (2) any waste
committed on the Facility 1 Property by the sublessees under any
of the Subleases or by any other Persons, (3) any dangerous or
defective condition of the Facility 1 Property, or (4) any
negligence in the management, upkeep, repair or control of the
Facility 1 Property resulting in loss or injury or death to any
sublessee, licensee, employee, invitee or other Person; or (C)
responsible for or impose upon any Lessor Party any duty to
produce rents or profits. No Lessor Party, in the absence of
gross negligence or willful misconduct on its part, shall be
liable to Lessee as a consequence of (y) the exercise or failure
to exercise any of the rights, remedies or powers granted to
Lessor hereunder or (z) the failure or refusal of Lessor to
perform or discharge any obligation, duty or liability of Lessee
arising under the Subleases.
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SECTION 3. OTHER LESSEE AND LESSOR RIGHTS AND OBLIGATIONS.
3.01. Maintenance, Repair, Etc.
(a) General. Lessee shall not permit any waste of the Facility 1
Property, except for ordinary wear and tear, and shall, at its sole cost
and expense, maintain the Facility 1 Property in good working order,
mechanical condition and repair and shall make all necessary repairs
thereto, of every kind and nature whatsoever, whether interior or
exterior, ordinary or extraordinary, structural or nonstructural or
foreseen or unforeseen, in each case as required by all applicable
Governmental Rules and Insurance Requirements and on a basis consistent
with the operation and maintenance of commercial properties comparable
in type and location to the Facility 1 Property and in compliance with
prudent industry practice.
(c) Modifications. Lessee, at its sole cost and expense, may from
time to time make alterations, renovations, improvements and additions
to the Facility 1 Property and substitutions and replacements therefor
(collectively, "Modifications"); provided that:
(i) No Modification impairs the value, utility or useful
life of the Facility 1 Property or any part thereof from that
which existed immediately prior to such Modification;
(ii) All Modifications are made expeditiously and, in no
case, unless Lessee currently is exercising either the Term
Purchase Option or the Expiration Date Purchase Option, shall
Modifications remain uncompleted later than six (6) months prior
to the Scheduled Expiration Date;
(iii) All Modifications are made in a good and workmanlike
manner and in compliance with all applicable Governmental Rules
and Insurance Requirements;
(iv) Subject to Paragraph 3.12 relating to permitted
contests, Lessee pays all costs and expenses and discharges (or
cause to be insured or bonded over) any Liens arising in
connection with any Modification not later than the earlier of
(A) sixty (60) days after the same shall be filed (or otherwise
becomes effective) and (B) unless Lessee currently is exercising
either the Term Purchase Option or the Expiration Date Purchase
Option, six (6) months prior to the Scheduled Expiration Date;
(v) At least one (1) month prior to the commencement of
(A) any Modifications which are anticipated to cost $500,000 or
more in the aggregate, or (B) any Modifications which cause the
total of all Modifications undertaken during the previous twelve
month period to exceed an aggregate cost of $1,000,000, Lessee
shall deliver to Lessor, with sufficient copies for Agent and
each Participant, a brief written description of such
Modifications; and
(vi) All Modifications otherwise comply with this
Agreement and the other Operative Documents.
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(c) Abandonment. Lessee shall not abandon the Facility 1 Property
or any material portion thereof for any period in excess of thirty (30)
consecutive days during the term hereof, except as a part of any New
Improvements or Modifications as permitted herein or in the other
Operative Documents.
(d) Maintenance. Lessee shall maintain the Facility 1 Property
and each material portion thereof in a manner consistent with other
similar properties in the same area, except as a part of any
Modifications as permitted herein.
3.02. Risk of Loss. Lessee assumes all risks of loss arising from any
Casualty or Condemnation which arises or occurs prior to the Expiration Date or
while Lessee is in possession of the Facility 1 Property and all liability for
all personal injuries and deaths and damages to property suffered by any Person
or property on or in connection with the Facility 1 Property which arises or
occurs prior to the Expiration Date or while Lessee is in possession of the
Facility 1 Property, except in each case to the extent any such loss or
liability is primarily caused by the gross negligence or willful misconduct of a
Lessor Party. Lessee hereby waives the provisions of California Civil Code
Sections 1932(1), 1932(2) and 1933(4), and any and all other applicable existing
or future Governmental Rules permitting the termination of this Agreement as a
result of any Casualty or Condemnation, and Lessor shall in no event be
answerable or accountable for any risk of loss of or decrease in the enjoyment
and beneficial use of the Facility 1 Property as a result of any such event.
3.03. Insurance.
(a) Coverage. Lessee, at its sole cost and expense, shall at all
times carry and maintain insurance coverage not less than set forth in
Schedule 3.03 and such additional insurance of the types (including the
types set forth in Schedule 3.03), in amounts, in a form and with
deductibles customarily carried by a reasonably prudent Person owning or
operating properties similar to the Facility 1 Property in the same
geographic area as the Facility 1 Property.
(b) Carriers. Any insurance carried and maintained by Lessee
pursuant to this Paragraph 3.03 shall be underwritten by an insurance
company which (i) has, at the time such insurance is placed and at the
time of each renewal thereof, a general policyholder rating of "A" and a
financial rating of at least VIII from A.M. Best Company or any
successor thereto (or if there is none, an organization having a similar
national reputation) or (ii) is otherwise approved by Lessor and
Required Participants; provided, however, that, any insurance company
underwriting Lessee's earthquake and flood insurance shall be acceptable
as long as each such insurance company has a general policyholder rating
of "A-" and a financial rating of at least VIII from A.M. Best Company
on the date such insurance is placed.
(c) Terms. Each insurance policy maintained by Lessee pursuant to
this Paragraph 3.03 shall provide as follows, whether through
endorsements or otherwise:
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(i) Lessor and Agent shall be named as additional
insureds, in the case of each policy of liability insurance, and
additional loss payees, in the case of each policy of property
insurance.
(ii) In respect of the interests of Lessor in the policy,
the insurance shall not be invalidated by any action or by
inaction of Lessee or by any Person having temporary possession
of the Facility 1 Property while under contract with Lessee to
perform maintenance, repair, alteration or similar work on the
Facility 1 Property, and shall insure the interests of Lessor
regardless of any breach or violation of any warranty,
declaration or condition contained in the insurance policy by
Lessee, Lessor or any other additional insured (other than by
such additional insured, as to such additional insured);
provided, however, that the foregoing shall not be deemed to (A)
cause such insurance policies to cover matters otherwise excluded
from coverage by the terms of such policies or (B) require any
insurance to remain in force notwithstanding non-payment of
premiums except as provided in clause (iii) below.
(iii) If the insurance policy is cancelled for any reason
whatsoever, or substantial change is made in the coverage that
affects the interests of Lessor, or if the insurance coverage is
allowed to lapse for non-payment of premium, such cancellation,
change or lapse shall not be effective as to Lessor for thirty
(30) days after receipt by Lessor of written notice from the
insurers of such cancellation, change or lapse.
(iv) No Lessor Party shall have any obligation or
liability for premiums, commissions, assessments, or calls in
connection with the insurance.
(v) The insurer shall waive any rights of set-off or
counterclaim or any other deduction, whether by attachment or
otherwise, that it may have against any Lessor Party.
(vi) The insurance shall be primary without right of
contribution from any other insurance that may be carried by any
Lessor Party with respect to its interest in the Facility 1
Property.
(vii) The insurer shall waive any right of subrogation
against any Lessor Party.
(viii) All provisions of the insurance, except the limits
of liability, shall operate in the same manner as if there were a
separate policy covering each insured party.
(ix) The insurance shall not be invalidated should Lessee
or any Lessor Party waive, in writing, prior to a loss, any or
all rights of recovery against any Person for losses covered by
such policy, nor shall the insurance in favor of any Lessor Party
or Lessee, as the case may be, or their respective rights under
and interests in said policies be invalidated or reduced by any
act or omission or
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negligence of any Lessor Party or Lessee, as the case may be, or
any other Person having any interest in the Facility 1 Property.
(x) All insurance proceeds with a value of less than two
million five hundred thousand Dollars ($2,500,000) payable in
respect of any loss or occurrence with respect to the Facility 1
Property shall be paid to and adjusted solely by Lessee. All
other insurance proceeds shall be paid to Lessor and adjusted
jointly by Lessor and Lessee, except that, from and after the
date on which the insurer receives written notice from Lessor
that an Event of Default has occurred and is continuing (and
unless and until such insurer receives written notice from Lessor
that all Events of Default have been cured), all losses shall be
adjusted solely by, and all insurance proceeds shall be paid
solely to, Lessor.
(xi) Each policy of property insurance shall contain a
standard form mortgagee endorsement in favor of Lessor.
(xii) Each insurance policy shall provide that the
coverage to be provided thereunder shall not be invalidated in
the event Lessee or any Lessor Party fails to maintain other
insurance covering losses of a similar type or types.
(xiii) Each insurance policy shall contain a "severability
of interest" provision.
(xiv) Each insurance policy which is written as "excess
insurance" shall contain a provision that it will drop down in
the event that any underlying insurance coverage has been reduced
or exhausted by reason of losses paid thereunder.
(d) Evidence of Insurance. Lessee, at its sole cost and expense,
shall furnish to Lessor (i) not later than the Commencement Date, copies
of all policies of insurance required by this Paragraph 3.03, certified
by the insurers, (ii) upon each renewal of insurance and upon any
material change in the terms thereof, copies of all policies, amendments
and/or endorsements evidencing such renewal or change, certified by the
insurers, and (iii) upon the request of Lessor, such other certificates
or documents as Lessor may reasonably request to evidence Lessee's
compliance with the insurance requirements set forth in this Paragraph
3.03.
(e) Release of Lessor Parties. Lessee hereby waives, releases and
discharges each Lessor Party and its directors, officers, employees,
agents and advisors from all claims whatsoever arising out of any loss,
claim, expense or damage to or destruction covered or coverable by
insurance required under this Paragraph 3.03 notwithstanding that such
loss, claim, expense or damage may have been caused by any such Person,
and, as among Lessee and such Persons, Lessee agrees to look to the
insurance coverage only in the event of such loss.
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3.04. Casualty and Condemnation.
(a) Notice. Lessee shall give Lessor prompt written notice of the
occurrence of any Material Casualty affecting, or the institution of any
proceedings for the Condemnation of, the Facility 1 Property or any
portion thereof.
(b) Repair Obligations. If any Material Casualty or Condemnation
affecting the Facility 1 Property or any portion thereof occurs, Lessee
shall, at its election, either (i) repair and restore the Facility 1
Property as required by Subparagraph 3.04(c) or (ii) exercise the Term
Purchase Option and purchase the Facility 1 Property pursuant to the
Purchase Agreement; provided, however, that Lessee may not elect to
repair and restore the Facility 1 Property if such casualty or
condemnation is a Major Casualty or Condemnation or if an Event of
Default has occurred and is continuing unless Lessor and the Required
Participants shall consent in writing. (If such casualty or condemnation
is a Major Casualty or Major Condemnation that occurs after the
Construction Period, Lessee shall exercise the Term Purchase Option and
purchase the Facility 2 Property pursuant to the Purchase Agreement as
promptly as possible but not later than two (2) months after the
occurrence of such Major Casualty or Major Condemnation, unless Lessor
and the Required Participants shall otherwise consent in writing. If an
Event of Default has occurred and is continuing, Lessor Parties may
exercise the rights provided herein.) Not later than one (1) month after
the occurrence of any Material Casualty or any Condemnation, Lessee
shall deliver to Lessor a written notice indicating whether it elects to
repair and restore or purchase the Facility 1 Property.
(c) Repair and Restoration. If Lessee elects to repair and
restore the Facility 1 Property following any Material Casualty or any
Condemnation, Lessee shall diligently proceed to repair and restore the
Facility 1 Property to the condition in which it existed immediately
prior to such Material Casualty or such Condemnation and shall complete
all such repairs and restoration as soon as reasonably practicable, but
not later than the earlier of (y) six (6) months after the occurrence of
the Material Casualty or the Condemnation, and (z) six (6) months prior
to the Scheduled Expiration Date unless Lessee currently is exercising
either the Term Purchase Option or the Expiration Date Purchase Option.
Lessee shall make such repairs and restoration using its own funds,
except to the extent any Casualty and Condemnation Proceeds are
available and are released to Lessee for such purpose pursuant to
Subparagraph 3.04(f). Lessee's exercise of the repair and restoration
option shall, if Lessor or Required Participants direct, be subject to
satisfaction of the following conditions:
(i) Within one (1) month after the occurrence of the
Material Casualty or the Condemnation, Lessee shall deposit in a
deposit account acceptable to and controlled by Lessor (a "Repair
and Restoration Account") of funds (including any Casualty and
Condemnation Proceeds which are available and are released to
Lessee pursuant to Subparagraph 3.04(f)) in the amount which
Lessor determines is needed to complete and fully pay all costs
of the repair or restoration (including taxes, financing charges,
insurance and rent during the repair period).
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(ii) As soon as reasonably possible and in no event later
than two (2) months after the occurrence of the Material Casualty
or the Condemnation, Lessee shall establish an arrangement for
lien releases and disbursement of funds acceptable to Lessor and
in a manner and upon such terms and conditions as would be
required by a prudent interim construction lender.
(iii) As soon as reasonably possible and in no event later
than two (2) months after the occurrence of the Material Casualty
or the Condemnation, Lessee shall deliver to Lessor the
following, each in form and substance acceptable to Lessor:
(A) Evidence that the Facility 1 Property can, in
Lessor's reasonable judgment, with diligent restoration or
repair, be returned to a condition at least equal to the
condition thereof that existed prior to the Casualty or
partial Condemnation causing the loss or damage within the
earlier to occur of (A) six (6) months after the
occurrence of the Casualty or Condemnation and (B) unless
Lessee currently is exercising either the Term Purchase
Option or the Expiration Date Purchase Option, six (6)
months prior to the Scheduled Expiration Date;
(B) Evidence that all necessary governmental
approvals can be timely obtained to allow the rebuilding
and reoccupancy of the Facility 1 Property;
(C) Copies of all plans and specifications for the
work;
(D) Copies of all contracts for the work, signed by
a contractor reasonably acceptable to Lessor;
(E) A cost breakdown for the work;
(F) A payment and performance bond for the work or
other security satisfactory to Lessor;
(G) Evidence that, upon completion of the work, the
size, capacity and total value of the Facility 1 Property
will be at least as great as it was before the Casualty or
Condemnation occurred; and
(H) Evidence of satisfaction of any additional
conditions that Lessor or Required Participants may
reasonably establish to protect their rights under this
Agreement and the other Operative Documents.
All plans and specifications for the work must be reasonably
acceptable to Lessor, except that Lessor's approval shall not be
required if the restoration work is based on the same plans and
specifications as were originally used to construct the Facility
1 Property. To the extent that the funds in a Repair and
Restoration Account include both Casualty and Condemnation
Proceeds and other funds
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deposited by Lessee, the other funds deposited by Lessee shall be
used first. Lessee acknowledges that the specific conditions
described above are reasonable.
(d) Prosecution of Claims for Casualty and Condemnation Proceeds.
Lessee shall proceed promptly and diligently to prosecute in good faith
the settlement or compromise of any and all claims for Casualty and
Condemnation Proceeds; provided, however, that any settlement or
compromise of any such claim shall, except as otherwise provided in
clause (x) of Subparagraph 3.03(c), be subject to the written consent of
Lessor and Required Participants, which consents shall not be
unreasonably withheld. Lessor may participate in any proceedings
relating to such claims, and, after the occurrence and during the
continuance of any Event of Default, Lessor is hereby authorized, in its
own name or in Lessee's name, to adjust any loss covered by insurance or
any Casualty or Condemnation claim or cause of action, and to settle or
compromise any claim or cause of action in connection therewith, and
Lessee shall from time to time deliver to Lessor any and all further
assignments and other instruments required to permit such participation.
(e) Assignment of Casualty and Condemnation Proceeds. Lessee
hereby absolutely and irrevocably assigns to Lessor all Casualty and
Condemnation Proceeds and all claims relating thereto, subject to the
terms of this Agreement which require Lessor to make such proceeds
available to Lessee for restoration. Except as otherwise provided in
clause (x) of Subparagraph 3.03(c), Lessee agrees that all Casualty and
Condemnation Proceeds are to be paid to Lessor and Lessee hereby
authorizes and directs any insurer, Governmental Authority or other
Person responsible for paying any Casualty and Condemnation Proceeds to
make payment thereof directly to Lessor alone, and not to Lessor and
Lessee jointly. If Lessee receives any Casualty and Condemnation
Proceeds payable to Lessor hereunder, Lessee shall promptly pay over
such Casualty and Condemnation Proceeds to Lessor. Lessee hereby
covenants that until such Casualty and Condemnation Proceeds are so paid
over to Lessor, Lessee shall hold such Casualty and Condemnation
Proceeds in trust for the benefit of Lessor and shall not commingle such
Casualty and Condemnation Proceeds with any other funds or assets of
Lessee or any other Person. Except as otherwise provided in clause (x)
of Subparagraph 3.03(c), Lessor may commence, appear in, defend or
prosecute any assigned right, claim or action, and may adjust,
compromise, settle and collect all rights, claims and actions assigned
to Lessor, but shall not be responsible for any failure to collect any
such right, claim or action, regardless of the cause of the failure.
(f) Use of Casualty and Condemnation Proceeds.
(i) If (A) no Event of Default has occurred and is
continuing, (B) Lessee exercises the repair and restoration
option pursuant to Subparagraphs 3.04(b) and 3.04(c) and (C)
Lessee complies with any conditions imposed pursuant to
Subparagraph 3.04(c); then Lessor shall release any Casualty and
Condemnation Proceeds to Lessee for repair or restoration of the
Facility 1 Property, but may condition such release and use of
the Casualty and Condemnation Proceeds upon deposit of the
Casualty and Condemnation Proceeds in a Repair and Restoration
Account. Lessor shall have the option, upon
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the completion of such restoration of the Facility 1 Property,
to apply any surplus Casualty and Condemnation Proceeds
remaining after the completion of such restoration to the
payment of Rent and/or the reduction of the Outstanding Lease
Amount, notwithstanding that such amounts are not then due and
payable or that such amounts are otherwise adequately secured.
(ii) If (A) an Event of Default has occurred and is
continuing, (B) Lessee fails to or is unable to comply with any
conditions imposed pursuant to Subparagraph 3.04(c) or (C) Lessee
elects to exercise the Term Purchase Option and purchase the
Facility 1 Property pursuant to the Purchase Agreement; then, at
the absolute discretion of Lessor and the Required Participants,
regardless of any impairment of security or lack of impairment of
security, but subject to applicable Governmental Rules governing
the use of Casualty and Condemnation Proceeds, if any, Lessor may
(1) apply all or any of the Casualty and Condemnation Proceeds it
receives to the expenses of Lessor Parties in obtaining such
proceeds; (2) apply the balance to the payment of Rent and/or the
reduction of the Outstanding Lease Amount, notwithstanding that
such amounts are not then due and payable or that such amounts
are otherwise adequately secured and/or (3) release all or any
part of such proceeds to Lessee upon any conditions Lessor and
the Required Participants may elect.
(iii) Lessor shall apply any Casualty and Condemnation
Proceeds which are to be used to reduce the Outstanding Lease
Amount only on the last day of a Rental Period unless an Event of
Default has occurred and is continuing.
(iv) Application of all or any portion of the Casualty and
Condemnation Proceeds, or the release thereof to Lessee, shall
not cure or waive any Default or notice of default or invalidate
any acts done pursuant to such notice.
3.05. Taxes. Subject to Paragraph 3.12 relating to permitted contests,
Lessee shall promptly pay when due all Indemnified Taxes imposed on or payable
by Lessee or any Lessor Party in connection with the Facility 1 Property, this
Agreement or any of the other Operative Documents, or any of the transactions
contemplated hereby or thereby. As promptly as possible after any Indemnified
Taxes are payable by Lessee, Lessee shall send to Lessor for the account of the
applicable Lessor Party a certified copy of an original official receipt
received by Lessee showing payment thereof. If Lessee fails to pay any such
Indemnified Taxes when due to the appropriate taxing authority or fails to remit
to Lessor the required receipts or other required documentary evidence, Lessee
shall indemnify the Lessor Parties for any incremental taxes, interest or
penalties that may become payable by the Lessor Parties as a result of any such
failure. The obligations of Lessee under this Paragraph 3.05 shall survive the
payment and performance of the Lessee Obligations and the termination of this
Agreement.
3.06. Environmental Matters.
(a) Lessee's Covenants. Lessee shall not cause or permit
Hazardous Materials to be used, generated, manufactured, stored,
treated, disposed of, transported or
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present on or released or discharged from the Facility 1 Property in any
manner that is reasonably likely to have a Material Adverse Effect.
Lessee shall immediately notify Lessor in writing of (i) any knowledge
by Lessee that the Facility 1 Property does not comply with any
Environmental Laws; and (ii) any claims against Lessee or the Facility 1
Property relating to Hazardous Materials or pursuant to Environmental
Laws. In response to the presence of any Hazardous Materials on, under
or about the Facility 1 Property, Lessee shall immediately take, at
Lessee's sole expense, all remedial action required by any Environmental
Laws or any judgment, consent decree, settlement or compromise in
respect to any claim based thereon.
(b) Inspection By Lessor. Upon reasonable prior notice to Lessee,
Lessor, its employees and agents, may from time to time (whether before
or after the commencement of a nonjudicial or judicial foreclosure
proceeding), enter and inspect the Facility 1 Property for the purpose
of determining the existence, location, nature and magnitude of any past
or present release or threatened release of any Hazardous Materials
into, onto, beneath or from the Facility 1 Property.
(c) Indemnity. Without in any way limiting any other indemnity
contained in this Agreement or any other Operative Document, Lessee
agrees to defend, indemnify and hold harmless the Lessor Parties and the
other Indemnitees from and against any claim, loss, damage, cost,
expense or liability directly or indirectly arising out of (i) the use,
generation, manufacture, storage, treatment, release, threatened
release, discharge, disposal, transportation or presence of any
Hazardous Materials which are found in, on, under or about the Facility
1 Property or (ii) the breach of any covenant, representation or
warranty of Lessee relating to Hazardous Materials or Environmental Laws
contained in this Agreement or any Operative Document. This indemnity
shall include (A) the costs, whether foreseeable or unforeseeable, of
any investigation, repair, cleanup or detoxification of the Facility 1
Property which is required by any Governmental Authority or is otherwise
necessary to render the Facility 1 Property in compliance with all
Environmental Laws; (B) all other direct or indirect consequential
damages (including any third party claims, claims by any Governmental
Authority, or any fines or penalties against the Indemnitees; and (C)
all court costs and attorneys' fees (including expert witness fees and
the cost of any consultants) paid or incurred by the Indemnitees. Lessee
shall pay immediately upon Lessor's demand any amounts owing under this
indemnity. Lessee shall use legal counsel reasonably acceptable to
Lessor in any action or proceeding arising under this indemnity. The
obligations of Lessee under this Subparagraph 3.06(c) shall survive the
payment and performance of the Lessee Obligations and the termination of
this Agreement.
(d) Legal Effect of Section. Lessee and Lessor agree that (i)
this Paragraph 3.06 and clause (i) of Subparagraph 4.01(t) of the
Participation Agreement are intended as Lessor's written request for
information (and Lessee's response) concerning the environmental
condition of the real property security as required by California Code
of Civil Procedure Section 726.5 and (ii) each representation and
warranty and covenant herein and therein (together with any indemnity
applicable to a breach of any such representation and warranty) with
respect to the environmental condition of the Facility 1
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Property is intended by Lessor and Lessee to be an "environmental
provision" for purposes of California Code of Civil Procedure Section
736.
3.07. Liens, Easements, Etc.
(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 Facility 1
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 3.01 of and Schedule
3.01 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;
(v) Easements granted or created in connection with and
reasonably necessary for the construction of the New Improvements
or for the operation or maintenance of the Facility 1 Property in
the ordinary course of business, in each case as approved by
Lessor; and
(vi) Lessor Liens.
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
Facility 1 Property and (B) discharge, at its sole cost and expense, any
Lien on the Facility 1 Property which is not a Permitted Facility 1
Property Lien.
(b) No Consents. Nothing contained in this Agreement shall be
construed as constituting the consent or request of any Lessor Party,
express 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 1
Property or any part thereof. NOTICE IS HEREBY GIVEN THAT NO LESSOR
PARTY IS OR SHALL BE LIABLE FOR ANY LABOR, SERVICES OR MATERIALS
FURNISHED OR TO BE FURNISHED TO LESSEE, OR TO ANYONE HOLDING THE
FACILITY 1 PROPERTY OR ANY PART THEREOF THROUGH OR UNDER LESSEE, AND
THAT NO MECHANIC'S OR OTHER LIENS FOR ANY SUCH LABOR, SERVICES
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OR MATERIALS SHALL ATTACH TO OR AFFECT THE INTEREST OF ANY LESSOR PARTY
IN AND TO THE FACILITY 1 PROPERTY.
3.08. Subletting. Lessee may, in the ordinary course of business,
sublease the Facility 1 Property or any portion thereof to any Person, provided,
that (a) Lessee remains directly and primarily liable for performing its
obligations under this Agreement and all other Lessee Obligations; (b) each
sublease is subject to and subordinated to this Agreement; (c) each sublease
expressly provides for the surrender of the Facility 1 Property (or portion
thereof) by the sublessee on the Expiration Date; (d) each sublease has a term
which expires on or prior to the Scheduled Expiration Date (or, if longer,
includes a provision that the sublease terminates on the Expiration Date if such
Expiration Date occurs prior to the Scheduled Expiration Date unless Lessee
purchases the Facility 1 Property on the Expiration Date pursuant to the
Purchase Agreement); (e) each sublease prohibits the sublessee from engaging in
any activities on the Facility 1 Property other than those permitted by
Paragraph 2.04; and (f) no sublease has a Material Adverse Effect. Any sublease
which does not satisfy each of the requirements of the immediately preceding
sentence shall be null and void as to the Lessor Parties and their successor and
assigns. Except for such permitted subleases, Lessee shall not assign any of its
rights or interests under this Agreement to any other Person.
3.09. Utility Charges. Lessee shall pay all charges for electricity,
power, gas, oil, water, telephone, sanitary sewer service and all other
utilities and services to, on or in connection with the Facility 1 Property
during the Term.
3.10. Removal of Facility 1 Property. Lessee shall not remove any
Improvements from the Facility 1 Land or any other Facility 1 Property from the
Facility 1 Land or Improvements, except that, during the Term, Lessee may remove
any Modification or any trade fixture, machinery, equipment, inventory or other
personal property if such Modification or property (a) was not financed by an
Advance, (b) is not required by any applicable Governmental Rule or Insurance
Requirement and (c) is readily removable without impairing the value, utility or
remaining useful life of the Facility 1 Property.
3.11. Compliance with Governmental Rules and Insurance Requirements.
Lessee, at its sole cost and expense, shall (a) comply, and cause its agents,
sublessees, assignees, employees, invitees, licensees, contractors and tenants,
and the Facility 1 Property to comply, with all Governmental Rules and Insurance
Requirements relating to the Facility 1 Property (including the construction,
use, operation, maintenance, repair and restoration thereof, whether or not
compliance therewith shall require structural or extraordinary changes in the
Improvements or interfere with the use and enjoyment of the Facility 1
Property), and (b) procure, maintain and comply with all licenses, permits,
orders, approvals, consents and other authorizations required for the
construction, use, maintenance and operation of the Facility 1 Property and for
the use, operation, maintenance, repair and restoration of the Improvements.
3.12. Permitted Contests. Lessee, at its sole cost and expense, may
contest any alleged Lien or easement on any of the Facility 1 Property or any
alleged Governmental Charge, Indebtedness or other obligation which is payable
by Lessee hereunder to Persons other than the Lessor Parties or which, if
unpaid, would give rise to a Lien on any of the Facility 1 Property, provided
that (a) each such contest is diligently pursued in good faith by appropriate
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proceedings; (b) the commencement and continuation of such proceedings suspends
the enforcement of such Lien or easement or the collection of such Governmental
Charge, Indebtedness or obligation; (c) Lessee has established adequate reserves
for the discharge of such Lien or easement or the payment of such Governmental
Charge, Indebtedness or obligation in accordance with GAAP and, if the failure
to discharge such Lien or easement or the failure to pay such Governmental
Charge, Indebtedness or obligation might result in any civil liability for any
Lessor Party, Lessee has provided to such Lessor Party a bond or other security
satisfactory to such Lessor Party; (d) the failure to discharge such Lien or
easement or the failure to pay such Governmental Charge, Indebtedness or
obligation could not result in any criminal liability for any Lessor Party; (e)
the failure to discharge such Lien or easement or the failure to pay such
Governmental Charge, Indebtedness or obligation is not otherwise reasonably
likely to have a Material Adverse Effect; and (f) unless Lessee currently is
exercising the Term Purchase Option or the Expiration Date Purchase Option, any
such contest is completed and such Lien or easement is discharged (either
pursuant to such proceedings or otherwise) or such Governmental Charge,
Indebtedness or obligation is declared invalid, paid or otherwise satisfied not
later than six (6) months prior to the Scheduled Expiration Date.
3.13. Lessor Obligations; Right to Perform Lessee Obligations. No Lessor
Party shall have any obligation to (a) maintain, repair or make any improvements
to the Facility 1 Property, (b) maintain any insurance on the Facility 1
Property, (c) perform any other obligation of Lessee under this Agreement or any
other Lessee Obligation, (d) make any expenditure on account of the Facility 1
Property (except to make Advances as required by the Participation Agreement) or
(e) take any other action in connection with the Facility 1 Property, this
Agreement or any other Operative Document, except as expressly provided herein
or in another Operative Document; provided however, that Lessor may, in its sole
discretion and without any obligation to do so, after written notice to Lessee,
perform any Lessee Obligation not performed by Lessee when required. Lessor may
enter the Facility 1 Property or exercise any other right of Lessee under this
Agreement or any other Operative Document to the extent Lessor determines in
good faith that such entry or exercise is reasonably necessary for Lessor to
perform any such Lessee Obligation not performed by Lessee when required. Lessee
shall reimburse Lessor and the other Lessor Parties, within five (5) Business
Days after demand and delivery of written evidence of payment, for all fees,
costs and expenses reasonably incurred by them in performing any such obligation
or curing any Default.
3.14. Inspection Rights. During the Term, Lessee shall permit any Person
designated by Lessor, upon reasonable notice and during normal business hours,
to visit and inspect any of the Facility 1 Property.
SECTION 4. EXPIRATION DATE.
4.01. Termination by Lessee Prior to Scheduled Expiration Date. Subject
to the terms and conditions of the Purchase Agreement, Lessee may, on any
Scheduled Rent Payment Date prior to the Scheduled Expiration Date, terminate
this Agreement and purchase the Facility 1 Property pursuant to Section II of
the Purchase Agreement. Lessee shall notify Lessor of Lessee's election so to
terminate this Agreement and purchase the Facility 1 Property by
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delivering to Agent a Notice of Term Purchase Option Exercise pursuant to and in
accordance with the provisions of Paragraph 2.02 of the Purchase Agreement.
4.02. Surrender of Facility 1 Property. Unless Lessee purchases the
Facility 1 Property on the Expiration Date pursuant to the Purchase Agreement,
Lessee shall vacate and surrender the Facility 1 Property to Lessor on the
Expiration Date in its then-current condition, subject to compliance by Lessee
on or prior to such date of its obligations under this Agreement and the other
Operative Documents (including, without limitation, the completion of all
Modifications, the completion of all permitted contests and the removal of all
Liens which are not Permitted Property Liens of the types described in clauses
(i), (ii), (iii) or (iv) of Subparagraph 3.07(a)).
4.03. Holding Over. If Lessee does not purchase the Facility 1 Property
on the Expiration Date pursuant to the Purchase Agreement but continues in
possession of any portion of the Facility 1 Property after the Expiration Date,
Lessee shall pay rent for each day it so continues in possession, payable upon
demand of Lessor, at a per annum rate equal to the Alternate Rental Rate plus
two percent (2.0%) and shall pay and perform all of its other Lessee Obligations
under this Agreement and the other Operative Documents in the same manner as
though the Term had not ended; provided, however, that this Paragraph 4.03 shall
not be interpreted to permit such holding over or to limit any right or remedy
of Lessor for such holding over.
SECTION 5. DEFAULT.
5.01. Events of Default. The occurrence or existence of any one or more
of the following shall constitute an "Event of Default" hereunder:
(a) Non-Payment. Lessee shall (i) fail to pay on the Expiration
Date any amount payable by Lessee under this Agreement or any other
Operative Document on such date, (ii) fail to pay within five (5)
business days after any Scheduled Rent Payment Date any Base Rent
payable on such Scheduled Rent Payment Date (other than the Base Rent
payable on the Expiration Date) or (iii) fail to pay within five (5)
business days after the same becomes due, any Supplemental Rent or other
amount required under the terms of this Agreement or any other Operative
Document (other than any such amount payable on the Expiration Date or
Base Rent); or
(b) Specific Defaults. Lessee or any of its Subsidiaries shall
fail to observe or perform any covenant, obligation, condition or
agreement set forth in Subparagraph 3.01(b), Paragraph 3.03 or
Subparagraph 3.07(a) hereof or in Paragraph 5.02 or Paragraph 5.03 of
the Participation Agreement; or
(c) Other Defaults. Lessee or any of its Subsidiaries shall fail
to observe or perform any other covenant, obligation, condition or
agreement contained in this Agreement or any other Operative Document
(except for those covenants described in Paragraph 5.01(d) below) and
such failure shall continue for a period of thirty (30) days after
written notice thereof from Lessor, provided, however, that in the event
that such failure cannot reasonably be cured within such thirty (30) day
period, such failure shall
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not constitute an Event of Default hereunder so long as Lessee shall
have commenced to cure such failure within such thirty (30) day period
and shall thereafter diligently pursue such cure to completion, provided
further that such failure shall in all events be cured by the earlier of
(i) the Expiration Date, if Lessee is exercising the Marketing Option,
(provided that if the Purchase Option is consummated in accordance with
the terms of the Purchase Agreement all outstanding Defaults shall be
deemed waived), or (ii) one hundred and eighty days (180) days after
Lessor's notice thereof; or
(d) Representations and Warranties. Any representation, warranty,
certificate, information or other statement (financial or otherwise)
made or furnished by or on behalf of Lessee or any of its Subsidiaries
to any Lessor Party in or in connection with this Agreement or any other
Operative Document, or as an inducement to any Lessor Party to enter
into this Agreement or any other Operative Document, shall be false,
incorrect, incomplete or misleading in any material respect when made or
furnished and Lessee shall not have cured the facts or circumstances
causing such representation, warranty, certificate or other statement to
be false, incorrect, incomplete or misleading within thirty (30) days of
notice thereof from Lessor; or
(e) Cross-Default. (i) Lessee or any of its Subsidiaries shall
fail to make any payment when due on account of any Indebtedness of such
Person (other than the Lessee Obligations) and such failure shall
continue beyond any period of grace provided with respect thereto, if
the amount of such Indebtedness exceeds $10,000,000 or the effect of
such failure is to cause, or permit the holder or holders thereof to
cause, Indebtedness of Lessee and its Subsidiaries (other than the
Lessee Obligations) in an aggregate amount exceeding $10,000,000 to
become due or (ii) Lessee or any of its Subsidiaries shall otherwise
fail to observe or perform any agreement, term or condition contained in
any agreement or instrument relating to any Indebtedness of such Person
(other than the Lessee Obligations), or any other event shall occur or
condition shall exist, if the effect of such failure, event or condition
is to cause, or permit the holder or holders thereof to cause,
Indebtedness of Lessee and its Subsidiaries (other than the Lessee
Obligations) in an aggregate amount exceeding $10,000,000 to become due
(and/or to be secured by cash collateral); or
(f) Insolvency, Voluntary Proceedings. Lessee or any of its
Material Subsidiaries shall (i) apply for or consent to the appointment
of a receiver, trustee, liquidator or custodian of itself or of all or a
substantial part of its property, (ii) be unable, or admit in writing
its inability, to pay its debts generally as they mature, (iii) make a
general assignment for the benefit of its or any of its creditors, (iv)
be dissolved or liquidated in full or in part, (v) become insolvent (as
such term may be defined or interpreted under any applicable statute),
(vi) commence a voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or its debts under
any bankruptcy, insolvency or other similar law now or hereafter in
effect or consent to any such relief or to the appointment of or taking
possession of its property by any official in an involuntary case or
other proceeding commenced against it, or (vi) take any action for the
purpose of effecting any of the foregoing; or
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(g) Involuntary Proceedings. Proceedings for the appointment of a
receiver, trustee, liquidator or custodian of Lessee or any of its
Material Subsidiaries or of all or a substantial part of the property
thereof, or an involuntary case or other proceedings seeking
liquidation, reorganization or other relief with respect to Lessee or
any of its Material Subsidiaries or the debts thereof under any
bankruptcy, insolvency or other similar law now or hereafter in effect
shall be commenced and an order for relief entered or such proceeding
shall not be dismissed or discharged within thirty (30) days of
commencement; or
(h) Judgments. (i) One or more judgments, orders, decrees or
arbitration awards requiring Lessee and/or its Subsidiaries to pay an
aggregate amount of $10,000,000 or more (exclusive of amounts covered by
insurance issued by an insurer not an Affiliate of Lessee and otherwise
satisfying the requirements set forth in Subparagraph 3.03(b)) shall be
rendered against Lessee and/or any of its Subsidiaries in connection
with any single or related series of transactions, incidents or
circumstances and the same shall not be satisfied, vacated or stayed for
a period of thirty (30) consecutive days after the issue or levy; (ii)
any judgment, writ, assessment, warrant of attachment, tax lien or
execution or similar process shall be issued or levied against a
substantial part of the property of Lessee or any of its Subsidiaries
and the same shall not be released, stayed, vacated or otherwise
dismissed within thirty (30) days after issue or levy; or (iii) any
other judgments, orders, decrees, arbitration awards, writs,
assessments, warrants of attachment, tax liens or executions or similar
processes which, alone or in the aggregate, are reasonably likely to
have a Material Adverse Effect are rendered, issued or levied; or
(i) Operative Documents. Any Operative Document or any material
term thereof shall cease to be, or be asserted by Lessee or any of its
Subsidiaries not to be, a legal, valid and binding obligation of Lessee
or any of its Subsidiaries enforceable in accordance with its terms; or
(j) ERISA. Any Reportable Event which constitutes grounds for the
termination of any Employee Benefit Plan by the PBGC or for the
appointment of a trustee by the PBGC to administer any Employee Benefit
Plan shall occur, or any Employee Benefit Plan shall be terminated
within the meaning of Title IV of ERISA or a trustee shall be appointed
by the PBGC to administer any Employee Benefit Plan; or
(k) Change of Control. Any Change of Control shall occur; or
(l) Material Adverse Effect. Any other event(s) or condition(s)
which is(are) reasonably likely to have a Material Adverse Effect shall
occur and be continuing or exist.
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5.02. General Remedies. In all cases, upon the occurrence or existence
of any Event of Default and at any time thereafter unless such Event of Default
is waived, Lessor may, with the consent of the Required Participants, or shall,
upon instructions from the Required Participants, exercise any one or more of
the following rights and remedies (except that the remedy set forth in the first
sentence of Subparagraph 5.02(a) shall be automatic):
(a) Termination of Commitments. If such Event of Default is an
Event of Default of the type described in Subparagraph 5.01(f) or
Subparagraph 5.01(g) affecting Lessee, immediately and without notice
the obligation of Lessor to make Advances and the obligations of the
Participants to fund Advances shall automatically terminate. If such
Event of Default is any other Event of Default, Lessor may by written
notice to Lessee, terminate the obligation of Lessor to make Advances
and the obligations of the Participants to fund Advances.
(b) Appointment of a Receiver. Lessor may apply to any court of
competent jurisdiction for, and obtain appointment of, a receiver for
the Facility 1 Property.
(c) Specific Performance. Lessor may bring an action in any court
of competent jurisdiction to obtain specific enforcement of any of the
covenants or agreements of Lessee in this Agreement or any of the other
Operative Documents.
(d) Collection of Issues and Profits. Lessor may collect Issues
and Profits as provided in Subparagraph 2.07(c) and apply the proceeds
to pay Lessee Obligations.
(e) Protection of Facility 1 Property. Lessor may enter, take
possession of, manage and operate all or any part of the Facility 1
Property or take any other actions which it reasonably determines are
necessary to protect the Facility 1 Property and the rights and remedies
of the Lessor Parties under this Agreement and the other Operative
Documents, including (i) taking and possessing all of Lessee's books and
records relating to the Facility 1 Property; (ii) entering into,
enforcing, modifying, or canceling subleases on such terms and
conditions as Lessor may consider proper; (iii) obtaining and evicting
tenants; (iv) fixing or modifying sublease rents; (v) collecting and
receiving any payment of money owing to Lessee; (vi) completing any
unfinished Improvements; and/or (vii) contracting for and making repairs
and alterations.
(f) Other Rights and Remedies. In addition to the specific rights
and remedies set forth above in this Paragraph 5.02 and in Paragraph
5.03 and Paragraph 5.04, Lessor may exercise any other right, power or
remedy permitted to it by any applicable Governmental Rule, either by
suit in equity or by action at law, or both.
5.03. Lease Remedies. If the transaction evidenced by this Agreement and
the other Operative Documents is treated as a lease, upon the occurrence or
existence of any Event of Default and at any time thereafter unless such Event
of Default is waived, Lessor may, with the consent of the Required Participants,
or shall, upon instructions from the Required Participants, exercise any one or
more of the following rights and remedies in addition to those rights and
remedies set forth in Paragraph 5.02 provided that prior to exercising any
remedies provided by this Paragraph 5.03, Lessor shall give Lessee not less than
three (3) Business Days notice during
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which time Lessee may exercise the Purchase Option, and provided the Purchase
Option is thereafter consummated in accordance with the terms of the Purchase
Agreement, Lessor shall not exercise any of the remedies under this Paragraph
5.03:
(a) Termination of Lease. Lessor may, by written notice to
Lessee, terminate this Agreement on a Termination Date which is prior to
the Scheduled Expiration Date, subject to Subparagraph 3.02(1) of the
Purchase Agreement. Such Termination Date shall be the last day of a
Rental Period unless Required Participants shall otherwise direct. On
such Termination Date (which shall then be the Expiration Date), Lessee
shall pay all unpaid Base Rent accrued through such date, all
Supplemental Rent due and payable on or prior to such date and all other
amounts payable by Lessee on the Expiration Date pursuant to this
Agreement and the other Operative Documents. Lessee also shall pay to
Lessor, in addition to all accrued Base Rent, the worth at the time of
such payment of the amount by which the unpaid Base Rent through the
Scheduled Expiration Date exceeds the amount of such rental loss for the
same period that Lessee proves could reasonably be avoided.
(b) Continuation of Lease. Lessor may exercise the rights and
remedies provided by California Civil Code Section 1951.4, including the
right to continue this Agreement in effect after Lessee's breach and
abandonment and recover Rent as it becomes due. Acts of maintenance or
preservation, efforts to relet the Facility 1 Property, the appointment
of a receiver upon Lessor's initiative to protect its interest under
this Agreement or withholding consent to or terminating a sublease shall
not of themselves constitute a termination of Lessee's right to
possession.
(c) Removal and Storage of Facility 1 Property. Lessor may enter
the Facility 1 Property and remove therefrom all Persons and property,
store such property in a public warehouse or elsewhere at the cost of
and for the account of Lessee and sell such property and apply the
proceeds therefrom pursuant to applicable California law.
5.04. Loan Remedies. If the transaction evidenced by this Agreement and
the other Operative Documents is treated as a loan, upon the occurrence or
existence of any Event of Default and at any time thereafter unless such Event
of Default is waived, Lessor may, with the consent of the Required Participants,
or shall, upon instructions from the Required Participants, exercise any one or
more of the following rights and remedies in addition to those rights and
remedies set forth in Paragraph 5.02:
(a) Acceleration of Lessee Obligations. Lessor may, by written
notice to Lessee, terminate this Agreement on a Termination Date which
is prior to the Scheduled Expiration Date, subject to Subparagraph
3.02(1) of the Purchase Agreement, and declare all unpaid Lessee
Obligations due and payable on such Termination Date. Such Termination
Date shall be the last day of a Rental Period unless Required
Participants shall otherwise direct. On such Termination Date (which
shall then be the Expiration Date), Lessee shall pay all unpaid Base
Rent accrued through such date, all Supplemental Rent due and payable on
or prior to such date and all other amounts payable by Lessee on the
Expiration Date pursuant to this Agreement and the other Operative
Documents.
25
173
(b) Uniform Commercial Code Remedies. Lessor may exercise any or
all of the remedies granted to a secured party under the California
Uniform Commercial Code.
(c) Judicial Foreclosure. Lessor may bring an action in any court
of competent jurisdiction to foreclose the security interest in the
Facility 1 Property granted to Lessor by this Agreement or any of the
other Operative Documents.
(d) Power of Sale. Lessor may cause some or all of the Facility 1
Property, including any Personal Property Collateral, to be sold or
otherwise disposed of in any combination and in any manner permitted by
applicable Governmental Rules.
(i) Sales of Personal Property. Lessor may dispose of any
Personal Property Collateral separately from the sale of Real
Property Collateral, in any manner permitted by Division 9 of the
California Uniform Commercial Code, including any public or
private sale, or in any manner permitted by any other applicable
Governmental Rule. Any proceeds of any such disposition shall not
cure any Event of Default or reinstate any Lessee Obligation for
purposes of Section 2924c of the California Civil Code. In
connection with any such sale or other disposition, Lessee agrees
that the following procedures constitute a commercially
reasonable sale:
(A) Lessor shall mail written notice of the sale to
Lessee not later than thirty (30) days prior to such sale.
(B) Once per week during the three (3) weeks
immediately preceding such sale, Lessor will publish
notice of the sale in a local daily newspaper of general
circulation.
(C) Upon receipt of any written request, Lessor
will make the Facility 1 Property available to any bona
fide prospective purchaser for inspection during
reasonable business hours.
(D) Notwithstanding, Lessor shall be under no
obligation to consummate a sale if, in its judgment, none
of the offers received by it equals the fair value of the
Facility 1 Property offered for sale.
(E) If Lessor so requests, Lessee shall assemble
all of the Personal Property Collateral and make it
available to Lessor at the site of the Facility 1 Land.
Regardless of any provision of this Agreement or any other
Operative Document, Lessor shall not be considered to have
accepted any property other than cash or immediately
available funds in satisfaction of any Lessee Obligation,
unless Lessor has given express written notice of its
election of that remedy in accordance with California
Uniform Commercial Code Section 9505.
The foregoing procedures do not constitute the only procedures
that may be commercially reasonable.
26
174
(ii) Lessor's Sales of Real Property or Mixed Collateral.
Lessor may choose to dispose of some or all of the Facility 1
Property which consists solely of Real Property Collateral in any
manner then permitted by applicable Governmental Rules, including
without limitation a nonjudicial trustee's sale pursuant to
California Civil Code Sections 2924 et seq. In its discretion,
Lessor may also or alternatively choose to dispose of some or all
of the Facility 1 Property, in any combination consisting of both
Real Property Collateral and Personal Property Collateral,
together in one sale to be held in accordance with the law and
procedures applicable to real property, as permitted by Section
9501(4) of the California Uniform Commercial Code. Lessee agrees
that such a sale of Personal Property Collateral together with
Real Property Collateral constitutes a commercially reasonable
sale of the Personal Property Collateral. (For purposes of this
power of sale, either a sale of Real Property Collateral alone,
or a sale of both Real Property Collateral and Personal Property
Collateral together in accordance with California Uniform
Commercial Code Section 9501(4), will sometimes be referred to as
a "Lessor's Sale.")
(A) Before any Lessor's Sale, Lessor shall give
such notice of default and election to sell as may then be
required by applicable Governmental Rules.
(B) When all time periods then legally mandated
have expired, and after such notice of sale as may then be
legally required has been given, Lessor shall sell the
property being sold at a public auction to be held at the
time and place specified in the notice of sale.
(C) Neither Lessor nor Agent shall have any
obligation to make demand on Lessee before any Lessor's
Sale.
(D) From time to time in accordance with then
applicable law, Lessor may postpone any Lessor's Sale by
public announcement at the time and place noticed for that
sale.
(E) At any Lessor's Sale, Lessor shall sell to the
highest bidder at public auction for cash in lawful money
of the United States.
(F) Lessor shall execute and deliver to the
purchaser(s) a deed or deeds conveying the Facility 1
Property being sold without any covenant or warranty
whatsoever, express or implied. The recitals in any such
deed of any matters or facts, including any facts bearing
upon the regularity or validity of any Lessor's Sale,
shall be conclusive proof of their truthfulness. Any such
deed shall be conclusive against all Persons as to the
facts recited in it.
(e) Foreclosure Sales.
(i) Single or Multiple. If the Facility 1 Property
consists of more than one lot, parcel or item of property, Lessor
may:
27
175
(A) Designate the order in which the lots, parcels
and/or items shall be sold or disposed of or offered for
sale or disposition; and
(B) Elect to dispose of the lots, parcels and/or
items through a single consolidated sale or disposition to
be held or made under the power of sale granted in
Subparagraph 5.04(d), or in connection with judicial
proceedings, or by virtue of a judgment and decree of
foreclosure and sale; or through two or more such sales or
dispositions; or in any other manner Lessor may deem to be
in its best interests (any such sale or disposition, a
"Foreclosure Sale;" any two or more, "Foreclosure Sales").
If Lessor chooses to have more than one Foreclosure Sale, Lessor
at its option may cause the Foreclosure Sales to be held
simultaneously or successively, on the same day, or on such
different days and at such different times and in such order as
it may deem to be in its best interests. No Foreclosure Sale
shall terminate or affect the security interests granted to
Lessor in the Facility 1 Property by this Agreement on any part
of the Facility 1 Property which has not been sold, until all of
the Lessee Obligations have been paid in full.
(ii) Credit Bids. At any Foreclosure Sale, any Person,
including any Lessor Party, may bid for and acquire the Facility
1 Property or any part of it to the extent permitted by then
applicable Governmental Rules. Instead of paying cash for the
Facility 1 Property, Lessor may settle for the purchase price by
crediting the sales price of the Facility 1 Property against the
Lessee Obligations in any order and proportions as Lessor in its
sole discretion may choose.
5.05. Remedies Cumulative. The rights and remedies of Lessor under this
Agreement and the other Operative Documents are cumulative and may be exercised
singularly, successively, or together.
5.06. No Cure or Waiver. Neither the performance by Lessor of any of
Lessee's obligations pursuant to Paragraph 3.13 nor the exercise by Lessor of
any of its other rights and remedies under this Agreement or any other Operative
Document (including the collection of Issues and Profits and the application
thereof to the Lessee Obligations) shall constitute a cure or waiver of any
Default or nullify the effect of any notice of default or sale, unless and until
all Lessee Obligations are paid in full.
5.07. Exercise of Rights and Remedies. The rights and remedies provided
to Lessor under this Agreement may be exercised by Lessor itself, by Agent
pursuant to Subparagraph 2.02(c) of the Participation Agreement, by a
court-appointed receiver or by any other Person appointed by any of the
foregoing to act on its behalf. All of the benefits afforded to Lessor under
this Agreement and the other Operative Documents shall accrue to the benefit of
Agent to the extent provided in Subparagraph 2.02(c) of the Participation
Agreement.
28
176
SECTION 6. MISCELLANEOUS.
6.01. Notices. Except as otherwise specified herein, all notices,
requests, demands, consents, instructions or other communications to or upon
Lessee or Lessor under this Agreement shall be given as provided in Subparagraph
2.02(c) and Paragraph 7.01 of the Participation Agreement.
6.02. Waivers; Amendments. Any term, covenant, agreement or condition of
this Agreement may be amended or waived only as provided in the Participation
Agreement. No failure or delay by any Lessor Party in exercising any right
hereunder shall operate as a waiver thereof or of any other right nor shall any
single or partial exercise of any such right preclude any other further exercise
thereof or of any other right. Unless otherwise specified in any such waiver or
consent, a waiver or consent given hereunder shall be effective only in the
specific instance and for the specific purpose for which given.
6.03. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the Lessor Parties and Lessee and their permitted
successors and assigns; provided, however, that the Lessor Parties and Lessee
shall not sell, assign or delegate their respective rights and obligations
hereunder except as provided in the Participation Agreement.
6.04. No Third Party Rights. Nothing expressed in or to be implied from
this Agreement is intended to give, or shall be construed to give, any Person,
other than the Lessor Parties and Lessee and their permitted successors and
assigns, any benefit or legal or equitable right, remedy or claim under or by
virtue of this Agreement or under or by virtue of any provision herein.
6.05. Partial Invalidity. If at any time any provision of this Agreement
is or becomes illegal, invalid or unenforceable in any respect under the law or
any jurisdiction, neither the legality, validity or enforceability of the
remaining provisions of this Agreement nor the legality, validity or
enforceability of such provision under the law of any other jurisdiction shall
in any way be affected or impaired thereby.
6.06. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of California without reference to
conflicts of law rules.
6.07. Counterparts. This Agreement 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.
6.08. Nature of Lessee's Obligations.
(a) Independent Obligation. The obligation of Lessee to pay the
amounts payable by Lessee under this Agreement and the other Operative
Documents and to perform the other Lessee Obligation are absolute,
unconditional and irrevocable obligations which are separate and
independent of the obligations of the Lessor Parties under this
Agreement and the other Operative Documents and all other events and
circumstances, including the events and circumstances set forth in
Subparagraph 6.08(c).
29
177
(b) No Termination or Abatement. This Agreement and the other
Operative Documents and Lessee's obligation to pay Rent and to pay and
perform all other Lessee Obligations shall continue in full force and
effect without abatement notwithstanding the occurrence or existence of
any event or circumstance, including any event or circumstance set forth
in Subparagraph 6.08(c).
(c) Full Payment and Performance. Lessee shall make all payments
under this Agreement and the other Operative Documents in the full
amounts and at the times required by the terms of this Agreement and the
other Operative Documents without setoff, deduction or reduction of any
kind and shall perform all other Lessee Obligations as and when
required, without regard to any event or circumstances whatsoever,
including (i) the condition of the Facility 1 Property (including any
Improvements to the Facility 1 Property made prior to the Commencement
Date or during the Term); (ii) title to the Facility 1 Property
(including possession of the Facility 1 Property by any Person or the
existence of any Lien or any other right, title or interest in or to any
of the Facility 1 Property in favor of any Person); (iii) the value,
habitability, usability, design, operation or fitness for use of the
Facility 1 Property; (iv) the availability or adequacy of utilities and
other services to the Facility 1 Property; (v) any latent, hidden or
patent defect in the Facility 1 Property; (vi) the zoning or status of
the Facility 1 Property or any other restrictions on the use of the
Facility 1 Property; (g) the economics of the Facility 1 Property; (vii)
any Casualty or Condemnation; (viii) the compliance of the Facility 1
Property with any applicable Governmental Rule or Insurance Requirement;
(ix) any failure by any Lessor Party to perform any of its obligations
under this Agreement or any other Operative Document; or (x) the
exercise by any Lessor Party of any of its remedies under this Agreement
or any other Operative Document; provided, however, that this Paragraph
6.08 shall not abrogate any right which Lessee may have to recover
damages from any Lessor Party for any material breach by such Lessor
Party of its obligations under this Agreement or any other Operative
Document to the extent permitted hereunder or thereunder.
6.09. Construction License. The lease by Lessor to Lessee of the
Facility 1 Property under this Agreement is granted to Lessee reserving to
Lessor and its agents a temporary construction license to enter upon the
Facility 1 Property for purposes of constructing the New Improvements.
[The signature page follows.]
30
178
IN WITNESS WHEREOF, Lessee and Lessor have caused this Agreement 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:_____________________________
31
179
STATE OF CALIFORNIA )
) ss
COUNTY OF __________________ )
On _____________, ____, 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 on behalf of which the person(s) acted,
executed the instrument.
Witness my hand and official seal.
[SEAL]
180
STATE OF CALIFORNIA )
) ss
COUNTY OF __________________ )
On _____________, ____, 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 on behalf of which the person(s) acted,
executed the instrument.
Witness my hand and official seal.
[SEAL]
181
SCHEDULE 3.03
INSURANCE REQUIREMENTS
(i) At all times during the Term, commercial general liability
insurance, umbrella insurance and excess liability insurance, each written on an
"occurrence basis", including products and completed operation hazards, covering
claims for bodily injury, personal injury or death sustained by persons or
damage to property, in an amount of not less than $25,000,000 per occurrence and
$25,000,000 annual aggregate;
(ii) At all times during the Term, workers' compensation insurance for
statutory limits and employer's liability insurance covering injury, death or
disease sustained by employees, in an amount not less than $1,000,000 for
disease and $1,000,000 for bodily injury or death by accident; and
(iii) At all times during the Term, "all risk" property insurance
covering loss or damage in amounts approved by Lessor, Agent and Required
Participants, including (A) loss or damage by flood in an amount of not less
than the then current Outstanding Lease Amount under Facility 1, and (B) loss or
damage by earthquake in an amount of not less than 20.0% of the replacement
value of the Improvements.
3.03-1
182
EXHIBIT A
FACILITY 1 LAND
3940 NORTH FIRST STREET, 3950 NORTH FIRST STREET
(FACILITY 1)
The land situated in the City of San Jose, County of Santa Clara, State of
California, and described as follows:
PARCEL ONE:
Parcel 2 as shown on that certain Parcel Map filed in the office of the Recorder
of the County of Santa Clara, State of California on August 18, 1983 in Book 516
of Maps, page(s) 34 and 35, Santa Clara County Records.
And, in addition thereto, the following area:
Beginning at the Southeasterly corner of said Parcel 2, thence North 52
(degrees) 27' 12" West, 409.24 feet along the common line of Parcel 1 and Parcel
2 as shown on said Parcel Map to a common corner thereof; thence leaving said
common line, along the Southerly prolongation of a common line of said Parcels,
South 19 (degrees) 40' 54" West, 32.25 feet; thence South 52 (degrees) 22' 44"
East, 399.34 feet to a point on the Southeasterly line of said Parcel 1; thence
North 37 (degrees) 32' 59" East, 31.22 feet along said Southeasterly line to the
Point of Beginning.
PARCEL ONE-A:
A non-exclusive easement for ingress and egress over PCL. 1, as said parcel is
shown on the Parcel Map recorded in Book 516 of Maps, at pages 34 and 35, Santa
Clara County Records, as granted in an instrument recorded May 23, 1985 in Book
J353, page 1565 and being more particularly described as follows:
Strip 1
A strip of land 26.00 feet wide extending entirely across said PCL. 1 and lying
13.00 feet on each side of a line as follows:
Beginning at the Southerly corner of said PCL. 1, said corner being on the
Northeasterly line of North First Street; thence along said Northeasterly line
N. 52 (degrees) 27' 12" W., 34.00 feet to the true point of beginning of said
strip of land; thence N. 37 (degrees) 32' 59" E., 540.00 feet to the
Northeasterly line of said PCL. 1.
(LEGAL DESCRIPTION CONTINUED NEXT PAGE)
A-1
183
LEGAL DESCRIPTION: (Continued)
Strip 2
A strip of land 40.00 feet wide extending entirely across said PCL. 1 and lying
contiguous to and Southeasterly of a line described as follows:
Beginning at the most Southerly corner of said PCL. 1, said corner being on the
Northeasterly line of North First Street; thence along said Northeasterly line
N. 52 (degrees) 27' 12" W., 429.25 feet to the true point of beginning of said
strip of land; thence N. 37 (degrees) 32' 48" E., 600.00 feet to the
Northeasterly line of said PCL. 1; the Northerly terminus of said 40 foot wide
strip of land being the Northeasterly line of said PCL. 1.
Strip 3
A strip of land 26.00 feet wide, extending Northeasterly from the Southwesterly
line of said PCL. 1 to the Northwesterly line of the above described and
designated Strip 2 and lying 13.00 feet on each side of a line described as
follows:
Beginning at the Westerly corner of said PCL. 1, said corner being on the
Northeasterly line of North First Street; thence along said Northeasterly line
S. 52 (degrees) 27' 12" E., 34.00 feet to the true point of beginning of said
strip of land; thence N. 37 (degrees) 32' 48" E. 566.00 feet; thence S. 52
(degrees) 27' 12" E., 355.25 feet to said Northwesterly line of said Strip 2.
Strip 4
A strip of land 13.00 feet wide lying contiguous to and Northwesterly of the
Northwesterly line of the above described and designated Strip 2 and extending
Southwesterly from the Northeasterly line of said PCL. 1 approximately 21.00
feet to the Northeasterly line of the above described and designated Strip 3.
PARCEL ONE-B:
The right from time to time to construct, install, maintain, replace, remove,
and use storm drain sewers, together with a right of way therefor, over a
portion of PCL. 1 as said parcel is shown on the Parcel Map recorded in Book 516
of Maps, at pages 34 and 35, Santa Clara County Records, as granted in an
instrument recorded May 23, 1985 in Book J353, page 1565 and being more
particularly described as follows:
Strip 1
A strip of land 10.00 feet wide extending entirely across said PCL. 1 and lying
5.00 feet on each side of a line described as follows:
Beginning at the most Westerly corner of said PCL. 1 said corner being on the
Northeasterly line of North First Street; thence along said Northeasterly line
S. 52 (degrees) 27' 12" E., 402.75 feet to the true point of beginning of said
strip of land; thence along the centerline of a existing storm drain line the
following courses: thence N. 37 (degrees) 32' 48" E., 28.00 feet to a point
herein designated Point A; thence N. 52 (degrees) 27' 12" W., 278.00 feet;
thence N. 00 (degrees) 51' 00" E., 198.30 feet; thence N. 37 (degrees) 32' 33"
E., 279.75 feet; thence S. 51 (degrees) 19' 51" E., 89.02 feet; thence N. 50
(degrees) 06' 47" E., 133.18 feet; thence N. 37 (degrees) 32' 48" E., 5.00 feet
to the Northeasterly line of said PCL 1.
(LEGAL DESCRIPTION CONTINUED NEXT PAGE)
A-2
184
LEGAL DESCRIPTION: (Continued)
Strip 2
A strip of land 10 feet wide extending Northeasterly from the Northeasterly line
of the above described and designated Strip 1 and lying 5.00 feet on each side
of a line which begins at said Point A; thence along the centerline of an
existing storm drain line the following courses: thence N. 26 (degrees) 55' 37"
E., 154.65 feet; thence N. 32 (degrees) 55' 53" E., 96.31 feet; thence N. 43
(degrees) 21' 28" E., 113.58 feet; thence N. 54 (degrees) 44' 21" E., 105.72
feet to a point herein designated as Point B; thence S. 41 (degrees) 57' 14" E.,
65.85 feet; thence N. 37 (degrees) 32' 48" E., 62.00 feet to the Northeasterly
line of said PCL 2.
Strip 3
A strip of land 5.00 feet wide lying contiguous to and Southwesterly of the
Northeasterly line of said PCL. 1 and extending Southeasterly from the
Southeasterly line of the above described and designated Strip 2 approximately
225 feet.
Strip 4
A strip of land 10.00 feet wide extending Northeasterly from the Northeasterly
line of the above described and designated Strip 2 to the Northeasterly line of
said PCL. 1 and lying 5.00 feet on each side of a line that begins at said Point
B; thence along the centerline of an existing storm drain line N. 37 (degrees)
32' 48" E., 50.00 feet to the Northeasterly line of said PCL. 1.
PARCEL ONE-C:
The right from time to time to construct, install, inspect, maintain, replace,
remove and use any and all Public Service Facilities necessary or useful,
together with a right of way therefor, over a portion of PCL. 1 as said parcel
is shown on the Parcel Map recorded in Book 516 of Maps, at pages 34 and 35,
Santa Clara County Records, as granted in an instrument recorded May 23, 1985 in
Book J353, page 1565 and being more particularly described as follows:
Strip 5
A strip of land 15.00 feet wide extending entirely across said PCL. 1 and lying
7.50 feet on each side of a line described as follows:
Beginning at the most Southerly corner of said PCL. 1, said corner being on the
Northeasterly line of North First Street; thence along said Northeasterly line
N. 52 (degrees) 27' 12" W., 60.50 feet to the true point of beginning of said
strip of land; thence N. 37 (degrees) 32' 59" E., 394.80 feet to a point herein
designated Point C; thence N. 37 (degrees) 32' 59" E., 105.20 feet; thence N. 7
(degrees) 27' 01" W., 56.57 feet to the Northeasterly line of said PCL. 1.
Strip 6
A strip of land 15.00 feet wide extending Northerly from the Northerly line of
the above described and designated Strip 5 to the Northeasterly line of said
PCL. 1 and lying 7.5 feet on each side of a line that begins at said Point C;
thence N. 30 (degrees) 01' 00" E., 59.5 feet; thence N. 8 (degrees) 41' 00" E.,
98.44 feet to the Northeasterly line of said PCL. 1.
(LEGAL DESCRIPTION CONTINUED NEXT PAGE)
A-3
185
LEGAL DESCRIPTION: (Continued)
Strip 7
A strip of land 15.00 feet wide extending entirely across said PCL. 1 and lying
7.5 feet and each side of a line described as follows:
Beginning at the most Westerly corner of said PCL. 1 said corner being on the
Northeasterly line of North First Street; thence along said Northeasterly line
S. 52 (degrees) 27' 12" E., 30.00 feet to the true point of beginning of said
strip of land; thence N. 37 (degrees) 32' 33" E., 600.00 feet to the
Northeasterly line of said PCL 1.
Strip 8
That area located within those portions of PCL.1, of the Parcel Map mentioned
hereinabove, lying within the easements designated as "P.S.E.", as shown on said
Parcel Map.
PARCEL ONE-D:
A non-exclusive easement for Landscaping, Lighting and Irrigation Facilities
over PCL. 1, as said parcel is shown on the Parcel Map recorded in Book 516 of
Maps, at pages 34 and 35, Santa Clara County Records, as granted in an
instrument recorded May 23, 1985 in Book J353, page 1565 and being more
particularly described as follows:
A strip of land 10.00 feet wide extending Southeasterly from the Northwesterly
line of said PCL. 1 and PCL. 2 and lying 5.00 feet on each side of a line that
begins at the most Northerly corner of said PCL. 1 and runs thence along the
Northeasterly line of said PCL. 1, S. 52 (degrees) 27' 12" E. 375.00 feet.
Excepting therefrom that portion lying within the bounds of Parcel 2 mentioned
hereinabove.
APN: 097-79-004
ARB: 97-3-x4
A-4
186
SCHEDULE 1
HAZARDOUS MATERIALS USED ON THE FACILITY 1 LAND
As set forth in that certain Hazardous Materials Business Plan (HMBP)
for Novellus Systems, Inc. dated 4/1/97 prepared by Environmental Quality
Solutions.
A(1)-1
187
EXHIBIT B
RELATED GOODS
NONE
B-1
188
EXHIBIT C
NOTICE OF RENTAL PERIOD SELECTION
[Date]
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
1. Reference is made to (a) that certain Participation Agreement, dated
as of April 13, 2001 (the "Participation Agreement"), among Novellus Systems,
Inc. ("Lessee"), Lease Plan North America, Inc. ("Head Lessor"), ABN AMRO
Leasing, Inc. ("Lessor"), the Persons listed in Schedule I to the Participation
Agreement (the "Participants") and ABN AMRO Bank N.V., as agent for the
Participants (in such capacity, "Agent") and (b) that certain Lease Agreement,
dated as of April 13, 2001 (the "Facility 1 Lease Agreement") between Lessee and
Lessor. Unless otherwise indicated, all terms defined in the Participation
Agreement have the same respective meanings when used herein.
2. [Insert one of the following as appropriate]
[Pursuant to Subparagraph 2.03(a) of the Facility 1 Lease
Agreement, Lessee hereby irrevocably selects a new Rental Period for a Portion
of the Outstanding Lease Amount as follows:
(a) The Portion for which a new Rental Period is to be selected
is the Portion in the amount of $__________ with a current Rental Period
which began on ________, ____ and ends on __________, ____; and
(b) The next Rental Period for such Portion shall be __________
month[s].]
[Pursuant to Subparagraph 2.03(a) of the Facility 1 Lease
Agreement, Lessee hereby irrevocably elects to divide a Portion of the
Outstanding Lease Amount into further Portions as follows:
(a) The Portion which is to be divided is the Portion in the
amount of $__________ with a current Rental Period which began on
________, ____ and ends on __________, ____; and
C-1
189
(b) On the last day of the current Rental Period for such
Portion, such Portion is to be divided into the following Portions with
the following initial Rental Periods:
Portion Rental Period
------- -------------
$___________ _______ month[s]
$___________ _______ month[s]
$___________ _______ month[s]
$___________ _______ month[s]]
[Pursuant to Subparagraph 2.03(a) of the Facility 1 Lease
Agreement, Lessee hereby irrevocably elects to combine into a single Portion
certain Portions of the Outstanding Lease Amount as follows:
(a) The Portions which are to be combined are the Portions in the
amounts of $__________, $_________ and $_______, each with a current
Rental Period which ends on __________, ____; and
(b) The initial Rental Period for such newly created Portion
shall be __________ month[s].]
3. Lessee hereby certifies to the Lessor Parties that, on the date of
this Notice of Rental Period Selection and after giving effect to the selection
as described above:
(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
on such date.
IN WITNESS WHEREOF, Lessee has executed this Notice of Rental Period
Selection on the date set forth above.
NOVELLUS SYSTEMS, INC.
By:________________________________
Name: __________________________
Title: _________________________
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Recording requested by and when recorded return to:
Orrick, Herrington & Sutcliffe
Old Federal Reserve Bank Building
400 Sansome Street
San Francisco, California 94111
Attn: John Rivers
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FACILITY 2 LEASE AGREEMENT
CONSTRUCTION DEED OF TRUST WITH ASSIGNMENT OF RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
BETWEEN
NOVELLUS SYSTEMS, INC.
AND
ABN AMRO LEASING, INC.
APRIL 13, 2001
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191
TABLE OF CONTENTS
PAGE
SECTION 1 INTERPRETATION..................................................................2
1.01. Definitions....................................................................2
1.02. Rules of Construction..........................................................2
SECTION 2 BASIC PROVISIONS................................................................2
2.01. Lease of the Facility 2 Property...............................................2
2.02. Term...........................................................................2
2.03. Rent...........................................................................3
2.04. Use............................................................................5
2.05. As Is Lease....................................................................5
2.06. Nature of Transaction..........................................................5
2.07. Security, Etc..................................................................6
SECTION 3 OTHER LESSEE AND LESSOR RIGHTS AND OBLIGATIONS..................................8
3.01. Maintenance, Repair, Etc.......................................................8
3.02. Risk of Loss...................................................................9
3.03. Insurance.....................................................................10
3.04. Casualty and Condemnation.....................................................12
3.05. Taxes.........................................................................15
3.06. Environmental Matters.........................................................16
3.07. Liens, Easements, Etc.........................................................17
3.08. Subletting....................................................................18
3.09. Utility Charges...............................................................18
3.10. Removal of Facility 2 Property................................................18
3.11. Compliance with Governmental Rules and Insurance Requirements.................18
3.12. Permitted Contests............................................................19
3.13. Lessor Obligations; Right to Perform Lessee Obligations.......................19
3.14. Inspection Rights.............................................................19
SECTION 4 EXPIRATION DATE................................................................20
4.01. Termination by Lessee Prior to Scheduled Expiration Date......................20
4.02. Surrender of Facility 2 Property..............................................20
4.03. Holding Over..................................................................20
SECTION 5 DEFAULT........................................................................20
5.01. Events of Default.............................................................20
5.02. General Remedies..............................................................23
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TABLE OF CONTENTS
(CONTINUED)
PAGE
5.03. Lease Remedies................................................................24
5.04. Loan Remedies.................................................................24
5.05. Remedies Cumulative...........................................................27
5.06. No Cure or Waiver.............................................................28
5.07. Exercise of Rights and Remedies...............................................28
SECTION 6 MISCELLANEOUS..................................................................28
6.01. Notices.......................................................................28
6.02. Waivers; Amendments...........................................................28
6.03. Successors and Assigns........................................................28
6.04. No Third Party Rights.........................................................28
6.05. Partial Invalidity............................................................28
6.06. Governing Law.................................................................29
6.07. Counterparts..................................................................29
6.08. Nature of Lessee's Obligations................................................29
SCHEDULE
3.03 Insurance Requirements
EXHIBITS
A Facility 2 Land (2.01(a))
B Related Goods (2.01(d))
C Notice of Rental Period Selection (2.03(a))
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FACILITY 2 LEASE AGREEMENT
CONSTRUCTION DEED OF TRUST WITH ASSIGNMENT OF RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
THIS FACILITY 2 LEASE AGREEMENT, CONSTRUCTION DEED OF TRUST WITH
ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING (this "Agreement"
herein), 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 this Agreement and as trustee under the deed of trust contained
herein ("Lessor").
RECITALS
A. Lessee has requested Lessor and the Persons which are "Participants"
under the Participation Agreement referred to in Recital B below (such Persons
to be referred to collectively as the "Participants") to provide to Lessee a
lease facility pursuant to which:
(1) Lessor would (a) lease certain property designated by
Lessee, (b) sublease such property to Lessee, (c) appoint Lessee as
Lessor's agent to make certain improvements to such property, (d) make
advances to finance such improvements and to pay certain related
expenses and (e) grant to Lessee the right to purchase such parcels of
property; and
(2) The Participants would participate in such lease facility
by (a) funding the advances to be made by Lessor and (b) acquiring
participation interests in the rental and certain other payments to be
made by Lessee.
B. Pursuant to a Participation Agreement dated of even date herewith
(the "Participation Agreement") among Lessee, Lease Plan North America, Inc.
("Head Lessor"), Lessor, the Participants and ABN AMRO Bank N.V., as agent for
the Participants (in such capacity, "Agent"), Lessor and the Participants have
agreed to provide such lease facility upon the terms and subject to the
conditions set forth therein, including without limitation the execution and
delivery of this Agreement setting forth the terms of the lease by Lessor to
Lessee of the property.
AGREEMENT
NOW, THEREFORE, in consideration of the above Recitals and the mutual
covenants herein contained, the parties hereto hereby agree as follows:
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SECTION 1. INTERPRETATION.
1.01. Definitions. Unless otherwise indicated in this Agreement or any
other Operative Document, each term set forth in Schedule 1.01 to the
Participation Agreement, when used in this Agreement or any other Operative
Document, shall have the respective meaning given to that term in such Schedule
1.01 or in the provision of this Agreement or other document, instrument or
agreement referenced in such Schedule 1.01.
1.02. Rules of Construction. Unless otherwise indicated in this
Agreement or any other Operative Document, the rules of construction set forth
in Schedule 1.02 to the Participation Agreement shall apply to this Agreement
and the other Operative Documents.
SECTION 2. BASIC PROVISIONS.
2.01.Lease of the Property. Subject to the acquisition thereof by
Lessor pursuant to the Participation Agreement and the Facility 2 Head Lease
Agreement, Lessor agrees to lease to Lessee and Lessee agrees to lease from
Lessor the following property (the "Facility 2 Property") to the extent of
Lessor's estate, right, title and interest therein, thereto or thereunder:
(a) All lots, pieces, tracts and parcels of land described in
Exhibit A (the "Facility 2 Land");
(b) All Improvements to the Facility 2 Land;
(c) All Appurtenant Rights belonging, relating or pertaining
to the Facility 2 Land or the Improvements thereto;
(d) All Related Goods (including those described in Exhibit B
and in each Exhibit B Supplement), Related Permits and Related
Agreements related to the Facility 2 Land or any of the foregoing
Improvements or Appurtenant Rights; and
(e) All accessions and accretions to and replacements and
substitutions for the foregoing.
(Lessee acknowledges that Lessor's only estate, right, title and interest in the
Facility 2 Land and certain of the other Facility 2 Property is through the
Facility 2 Head Lease Agreement and is a leasehold interest only.)
2.02. Term.
(a) Original Term. The original term of this Agreement shall
commence on the Closing Date (the "Commencement Date") and shall end on
the date five (5) years after the Closing Date (such date as it may be
extended pursuant to Subparagraph 2.02(b) to be referred to as the
"Scheduled Expiration Date").
(b) Extensions. Lessee may request Lessor to extend the
Scheduled Expiration Date in effect at any time for three (3)
additional periods of one (1) year each,
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as provided in Subparagraph 2.09(b) of the Participation Agreement. If
Lessor and each Participant consents to any such a request in
accordance with such provision, the then current Scheduled Expiration
Date shall be deemed extended by one (1) year in each instance. Lessee
acknowledges that neither Lessor nor any Participant has any obligation
or commitment (either express or implied) to extend, or consent to the
extension of, the Scheduled Expiration Date at any time.
2.03. Rent.
(a) Base Rent.
(i) Lessee shall pay to Lessor as base rent hereunder
("Base Rent") for each Rental Period for each Portion of the
Outstanding Lease Amount an amount equal to the sum of the
Interest Component and Principal Component for such Rental
Period determined as follows:
(A) "Interest Component" shall mean, with
respect to any Rental Period and Portion, the product
of (1) the Rental Rate for such Rental Period and
Portion, times (2) the amount of such Portion on the
first day of such Rental Period, times (3) a
fraction, the numerator of which is the number of
days in such Rental Period and the denominator of
which is 360. If the Rental Rate shall change during
any Rental Period, the Rental Rate for such Rental
Period shall be the weighted average of the Rental
Rates in effect from time to time during such Rental
Period.
(B) "Principal Component" shall mean, with
respect to any Rental Period, zero Dollars ($0.00).
(ii) Prior to the Commitment Termination Date, the
Outstanding Lease Amount shall consist of a single Portion
with the following Rental Periods:
(A) A Rental Period which begins on the
Commencement Date and ends on the first Business Day
in the first calendar month immediately following the
month in which the Commencement Date occurs; and
(B) Each successive Rental Period thereafter
which begins on the last day of the immediately
preceding Rental Period and ends one (1) month
thereafter on the first Business Day of a calendar
month through and including the Commitment
Termination Date.
(iii) On and after the Commitment Termination Date,
Lessee may select the number and amounts of the Portions into
which the Outstanding Lease Amount is to be divided and the
Rental Period for each such Portion by delivering to Lessor,
at least three (3) Business Days prior to the Commitment
Termination Date and thereafter the last day of each Rental
Period for a Portion, an irrevocable written notice in the
form of Exhibit C, appropriately completed (a "Notice of
Rental Period Selection"), subject to the following:
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(A) Each Portion shall be in the amount of
$5,000,000 or an integral multiple of $100,000 in
excess thereof; provided, however, that (1) the total
number of Portions outstanding at any time shall not
exceed three (3), and (2) the Outstanding Lease
Amount shall consist of a single Portion in the
amount of the Outstanding Lease Amount if the
Outstanding Lease Amount is less than $5,000,000).
(B) The initial and each subsequent Rental
Period selected by Lessee for each Portion shall be
one (1), two (2), three (3) or six (6) months;
provided, however, that (1) each Rental Period shall
begin and end on the first Business Day of a calendar
month, (2) no Rental Period shall end after the
Scheduled Expiration Date, (3) no Rental Period shall
be longer than one (1) month if a Default has
occurred and is continuing on the date three (3)
Business Days prior to the first day of such Rental
Period and (4) each Rental Period after the initial
Rental Period for any Portion for which Lessee fails
to make a selection by delivering a Notice of Rental
Period Selection in accordance with this clause (iii)
shall be one (1) month.
Lessee shall deliver each Notice of Rental Period Selection by
first-class mail or facsimile as required by Subparagraph
2.02(a) and Paragraph 7.01 of the Participation Agreement;
provided, however, that Lessee shall promptly deliver the
original of any Notice of Rental Period Selection initially
delivered by facsimile.
(iv) The rental rate for each Rental Period for a
Portion ("Rental Rate") shall be the LIBOR Rental Rate for
such Rental Period and Portion, except as follows:
(A) If any Rental Period is less than one
(1) month, the Rental Rate for such Rental Period
shall be the Alternate Rental Rate; or
(B) If the LIBOR Rental Rate is unavailable
for any Rental Period pursuant to Subparagraph
2.12(a) or Subparagraph 2.12(b) of the Participation
Agreement, the Rental Rate for such Rental Period
shall be the Alternate Rental Rate
(v) Lessee shall pay Base Rent in arrears (A) for
each Portion, on the last day of each Rental Period therefor
and, in the case of any Rental Period which exceeds three (3)
months, each day occurring every three (3) months after the
first day of such Rental Period (individually, a "Scheduled
Rent Payment Date") and (B) for all Portions, on the
Expiration Date.
(b) Supplemental Rent. Lessee shall pay as supplemental rent
hereunder ("Supplemental Rent"):
(i) All amounts payable by Lessor as rent or
otherwise under the Facility 2 Head Lease Agreement; and
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(ii) All amounts (other than Base Rent, the purchase
price payable by Lessee for any purchase of the Facility 2
Property by Lessee pursuant to the Facility 2 Purchase
Agreement and the Residual Value Guaranty Amount payable under
the Facility 2 Purchase Agreement) payable by Lessee under
this Agreement and the other Operative Documents.
Lessee shall pay all Supplemental Rent amounts on the dates specified
in this Agreement and the other Operative Documents for the payment of
such amounts or, if no date is specified for the payment of any such
amount, within five (5) Business Days after demand of Lessor or any
other Person to whom such amount is payable; provided, however, that
all Supplemental Rent payable pursuant to clause (i) above during the
Commitment Period shall be capitalized as provided in clause (i) of
Subparagraph 2.03(c) of the Participation Agreement.
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2.04. Use. Lessee may use the Facility 2 Property for office, research
and development, warehouse and manufacturing purposes, and for any other purpose
which is in compliance with applicable zoning laws and ordinances for the
Facility 2 Property.
2.05. As Is Lease. Lessee has conducted, or will conduct from time to
time with regard to Facility 2 Property that may be added hereto after the date
hereof, all due diligence which it deems appropriate regarding the Facility 2
Property and agrees that no Lessor Party has any obligation to conduct any such
due diligence. Lessee is leasing the Facility 2 Property "as is, with all
faults" without any representation, warranty, indemnity or undertaking by any
Lessor Party regarding any aspect of the Facility 2 Property, including (a) the
condition of the Facility 2 Property (including any Improvements to the Facility
2 Property made prior to the Commencement Date or during the Term); (b) title to
the Facility 2 Property (including possession of the Facility 2 Property by any
Person or the existence of any Lien or any other right, title or interest in or
to any of the Facility 2 Property in favor of any Person); (c) the value,
habitability, usability, design, operation or fitness for use of the Facility 2
Property; (d) the availability or adequacy of utilities and other services to
the Facility 2 Property; (e) any latent, hidden or patent defect in the Facility
2 Property; (f) the zoning or status of the Facility 2 Property or any other
restrictions on the use of the Facility 2 Property; (g) the economics of the
Facility 2 Property; (h) any Casualty or Condemnation; or (i) the compliance of
the Facility 2 Property with any applicable Governmental Rule or Insurance
Requirement; provided, however, that Lessor shall be obligated to remove Lessor
Liens to the extent required in Subparagraph 5.04(b) of the Participation
Agreement. Without limiting the generality of the foregoing, Lessee specifically
waives any covenant of quiet enjoyment except as otherwise provided in
Subparagraph 5.04(b) of the Participation Agreement.
2.06. Nature of Transaction. As more fully provided in Paragraph 2.10
of the Participation Agreement, Lessee and the Lessor Parties intend that the
transaction evidenced by this Agreement and the other Operative Documents
constitute an operating lease in accordance with FASB 13 for accounting purposes
and a loan secured by the Facility 2 Property for all other purposes, including
federal, state and local income tax purposes and commercial, real estate and
bankruptcy law purposes.
2.07. Security, Etc. In order to secure the Lessee Obligations and
otherwise to assure the Lessor Parties the benefits hereof in the event that the
transaction evidenced by this Agreement and the other Operative Documents is,
pursuant to the intent of Lessee and the Lessor Parties, treated as a loan for
certain purposes, Lessee hereby makes the following grants and agrees as
follows:
(a) Real Property Security. As security for the Lessee
Obligations under Facility 2, Lessee hereby irrevocably and
unconditionally grants, conveys, transfers and assigns to Lessor, as
trustee under this deed of trust, for the benefit of Lessor, as
beneficiary (in trust for the benefit of the Lessor Parties), with
power of sale and right of entry and possession, all estate, right,
title and interest of Lessee in the following property, whether now
owned or hereafter acquired, (collectively, the "Real Property
Collateral"):
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(i) The Facility 2 Land (including Lessor's leasehold
interest under the Facility 2 Head Lease Agreement);
(ii) All Improvements now or hereafter located on the
Facility 2 Land;
(iii) All Appurtenant Rights belonging, relating or
pertaining to any of the Facility 2 Land or Improvements
thereto;
(iv) All Subleases and Issues and Profits accruing
from the Facility 2 Land or any of the foregoing Improvements
or Appurtenant Rights to the extent that such Subleases and
Issues and Profits constitute real property;
(v) All Related Goods, Related Agreements and Related
Permits related to any of the Facility 2 Land or any of the
foregoing Improvements or Appurtenant Rights to the extent
that such Related Goods, Related Agreements and Related
Permits constitute real property;
(vi) All other Facility 2 Property to the extent that
such property constitutes real property; and
(vii) All proceeds of the foregoing, including
Casualty and Condemnation Proceeds.
(b) Personal Property Security. As security for the Lessee
Obligations under Facility 2, Lessee hereby irrevocably and
unconditionally assigns and grants to Lessor, for the benefit of the
Lessor Parties, a security interest in all estate, right, title and
interest of Lessee in the following property, whether now owned or
leased or hereafter acquired, (collectively, the "Personal Property
Collateral"):
(i) All Subleases and Issues and Profits accruing
from the Facility 2 Land or any of the Improvements or
Appurtenant Rights to the extent that such Subleases and
Issues and Profits constitute personal property;
(ii) All Related Goods, Related Agreements and
Related Permits related to the Facility 2 Land or any of the
Improvements or Appurtenant Rights to the extent that such
Related Goods, Related Agreements and Related Permits
constitute personal property;
(iii) All Cash Collateral and all other deposit
accounts, instruments, investment property and monies held by
any Lessor Party in connection with this Agreement or any
other Operative Document (including any Repair and Restoration
Account);
(iv) All other Facility 2 Property to the extent such
Facility 2 Property constitutes personal property; and
(v) All proceeds of the foregoing, including Casualty
and Condemnation Proceeds.
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This Agreement constitutes a fixture filing for purposes of the
California Commercial Code with respect to the Related Goods which are
or are to become fixtures on the Facility 2 Land or Facility 2
Improvements.
(c) Absolute Assignment of Subleases, Issues and Profits.
Lessee hereby irrevocably assigns to Lessor, for the benefit of the
Lessor Parties, all of Lessee's estate, right, title and interest in,
to and under the Subleases and the Issues and Profits, whether now
owned or hereafter acquired. This is a present and absolute assignment,
not an assignment for security purposes only, and Lessor's right to the
Subleases and Issues and Profits is not contingent upon, and may be
exercised without possession of, the Facility 2 Property.
(i) If no Event of Default has occurred and is
continuing, Lessee shall have a revocable license to collect
and retain the Issues and Profits as they become due. Upon the
occurrence and during the continuance of an Event of Default,
such license shall automatically terminate, and Lessor may
collect and apply the Issues and Profits pursuant to
Subparagraph 5.02(d) without further notice to Lessee or any
other Person and without taking possession of the Facility 2
Property. All Issues and Profits thereafter collected by
Lessee shall be held by Lessee as trustee in a constructive
trust for the benefit of Lessor. Lessee hereby irrevocably
authorizes and directs the sublessees under the Subleases,
without any need on their part to inquire as to whether an
Event of Default has actually occurred or is then existing, to
rely upon and comply with any notice or demand by Lessor for
the payment to Lessor of any rental or other sums which may
become due under the Subleases or for the performance of any
of the sublessees' undertakings under the Subleases.
Collection of any Issues and Profits by Lessor shall not cure
or waive any default or notice of default hereunder or
invalidate any acts done pursuant to such notice.
(ii) The foregoing irrevocable assignment shall not
cause any Lessor Party to be (A) a mortgagee in possession;
(B) responsible or liable for (1) the control, care,
management or repair of the Facility 2 Property or for
performing any of Lessee's obligations or duties under the
Subleases, (2) any waste committed on the Facility 2 Property
by the sublessees under any of the Subleases or by any other
Persons, (3) any dangerous or defective condition of the
Facility 2 Property, or (4) any negligence in the management,
upkeep, repair or control of the Facility 2 Property resulting
in loss or injury or death to any sublessee, licensee,
employee, invitee or other Person; or (C) responsible for or
impose upon any Lessor Party any duty to produce rents or
profits. No Lessor Party, in the absence of gross negligence
or willful misconduct on its part, shall be liable to Lessee
as a consequence of (y) the exercise or failure to exercise
any of the rights, remedies or powers granted to Lessor
hereunder or (z) the failure or refusal of Lessor to perform
or discharge any obligation, duty or liability of Lessee
arising under the Subleases.
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SECTION 3. OTHER LESSEE AND LESSOR RIGHTS AND OBLIGATIONS.
3.01. Maintenance, Repair, Etc.
(a) General. Lessee shall not permit any waste of the Facility
2 Property, except for ordinary wear and tear, and shall, at its sole
cost and expense, maintain the Facility 2 Property in good working
order, mechanical condition and repair and make all necessary repairs
thereto, of every kind and nature whatsoever, whether interior or
exterior, ordinary or extraordinary, structural or nonstructural or
foreseen or unforeseen, in each case as required by all applicable
Governmental Rules and Insurance Requirements and on a basis consistent
with the operation and maintenance of commercial properties comparable
in type and location to the Facility 2 Property and in compliance with
prudent industry practice.
(b) New Improvements. Lessee shall make or cause to be made
all of the New Improvements authorized and required by the Facility 2
Construction Agency Agreement in accordance with the Facility 2
Construction Agency Agreement.
(c) Other Modifications. After the Completion of the New
Improvements, Lessee, at its sole cost and expense, may from time to
time make alterations, renovations, improvements and additions to the
Facility 2 Property and substitutions and replacements therefor
(collectively, "Modifications") in addition to the New Improvements;
provided that:
(i) No Modification impairs the value, utility or
useful life of the Facility 2 Property or any part thereof
from that which existed immediately prior to such
Modification;
(ii) All Modifications are made expeditiously and, in
no case, unless Lessee currently is exercising either the Term
Purchase Option or the Expiration Date Purchase Option, shall
Modifications remain uncompleted later than six (6) months
prior to the Scheduled Expiration Date;
(iii) All Modifications are made in a good and
workmanlike manner and in compliance with all applicable
Governmental Rules and Insurance Requirements;
(iv) Subject to Paragraph 3.12 relating to permitted
contests, Lessee pays all costs and expenses and discharges
(or cause to be insured or bonded over) any Liens arising in
connection with any Modification not later than the earlier of
(A) sixty (60) days after the same shall be filed (or
otherwise becomes effective) and (B) unless Lessee currently
is exercising either the Term Purchase Option or the
Expiration Date Purchase Option, six (6) months prior to the
Scheduled Expiration Date;
(v) At least one (1) month prior to the commencement
of (A) any Modifications which are anticipated to cost
$500,000 or more in the aggregate, or (B) any Modifications
which cause the total of all Modifications undertaken
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during the previous twelve month period to exceed an aggregate
cost of $1,000,000, Lessee shall deliver to Lessor, with
sufficient copies for Agent and each Participant, a brief
written description of such Modifications; and
(vi) All Modifications otherwise comply with this
Agreement and the other Operative Documents.
(d) Abandonment. Lessee shall not abandon the Facility 2
Property or any material portion thereof for any period in excess of
thirty (30) consecutive days during the term hereof, except as a part
of any New Improvements or Modifications as permitted herein or in the
other Operative Documents.
(e) Maintenance. Lessee shall maintain the Facility 2 Property
and each material portion thereof in a manner consistent with other
similar properties in the same area, except as a part of any New
Improvements or Modifications as permitted herein.
3.02. Risk of Loss. Lessee assumes all risks of loss arising from any
Casualty or Condemnation which arises or occurs prior to the Expiration Date or
while Lessee is in possession of the Facility 2 Property and all liability for
all personal injuries and deaths and damages to property suffered by any Person
or property on or in connection with the Facility 2 Property which arises or
occurs prior to the Expiration Date or while Lessee is in possession of the
Facility 2 Property, except in each case to the extent any such loss or
liability is primarily caused by the gross negligence or willful misconduct of a
Lessor Party; provided, however, that Lessee shall have no obligation under this
Paragraph 3.02 on account of any such loss or liability arising under Facility 2
during the Construction Period except as follows:
(a) Lessee shall be liable under this Paragraph 3.02 for all
such losses and liabilities arising under Facility 2 during the
Construction Period if caused by or arising from any failure by Lessee
to comply with any of its obligations under the Operative Documents
(including its insurance obligations), any representation by Lessee in
any of the Operative Documents not being true, any negligence or
willful misconduct of Lessee, or any claim by any third-party against
Lessee (or against any Lessor Party) based upon any alleged action or
inaction by Lessee.
(b) If any Lessor Party incurs any such loss or liability
arising under Facility 2 during the Construction Period for which
Lessee is not liable pursuant to Subparagraph 3.02(a), the amount of
such loss or liability shall, if such Lessor Party shall so request by
a written notice to Lessor, be capitalized pursuant to clause (ii) of
Subparagraph 2.03(c) of the Participation Agreement.
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Lessee hereby waives the provisions of California Civil Code Sections 1932(1),
1932(2) and 1933(4), and any and all other applicable existing or future
Governmental Rules permitting the termination of this Agreement as a result of
any Casualty or Condemnation, and Lessor shall in no event be answerable or
accountable for any risk of loss of or decrease in the enjoyment and beneficial
use of the Facility 2 Property as a result of any such event.
3.03. Insurance.
(a) Coverage.
(i) During the Construction Period, Lessee shall
arrange for insurance as agent for Lessor and the incremental
cost of such insurance shall be capitalized as a project cost.
Such insurance coverage, during the Construction Period, shall
be not less than set forth in Schedule 3.03 and such
additional insurance of the types (including the types set
forth in Schedule 3.03), in amounts and in a form acceptable
to Lessor. The deductibles for all such insurance shall be
limited to $25,000 for flood coverage, $-0- deductible for
earthquake coverage, and $10,000 for all other coverage.
(ii) After the Construction Period, Lessee, at its
sole cost and expense, shall at all times carry and maintain
insurance coverage. Such insurance coverage, after the
Construction Period, shall be not less than set forth in
Schedule 3.03 and such additional insurance of the types
(including the types set forth in Schedule 3.03), in amounts,
in a form and with deductibles customarily carried by a
reasonably prudent Person owning or operating properties
similar to the Facility 2 Property in the same geographic area
as the Facility 2 Property.
(b) Carriers. Any insurance carried and maintained by Lessee
pursuant to this Paragraph 3.03 shall be underwritten by an insurance
company which (i) has, at the time such insurance is placed and at the
time of each renewal thereof, a general policyholder rating of "A" and
a financial rating of at least VIII from A.M. Best Company or any
successor thereto (or if there is none, an organization having a
similar national reputation) or (ii) is otherwise approved by Lessor
and Required Participants; provided, however, that, any insurance
company underwriting Lessee's earthquake and flood insurance shall be
acceptable as long as each such insurance company has a general
policyholder rating of "A-" and a financial rating of at least VIII
from A.M. Best Company on the date such insurance is placed.
(c) Terms. Each insurance policy maintained by Lessee pursuant
to this Paragraph 3.03 shall provide as follows, whether through
endorsements or otherwise:
(i) Lessor and Agent shall be named as additional
insureds, in the case of each policy of liability insurance,
and additional loss payees, in the case of each policy of
property insurance.
(ii) In respect of the interests of Lessor in the
policy, the insurance shall not be invalidated by any action
or by inaction of Lessee or by any Person having temporary
possession of the Facility 2 Property while under contract
with
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Lessee to perform maintenance, repair, alteration or similar
work on the Facility 2 Property, and shall insure the
interests of Lessor regardless of any breach or violation of
any warranty, declaration or condition contained in the
insurance policy by Lessee, Lessor or any other additional
insured (other than by such additional insured, as to such
additional insured); provided, however, that the foregoing
shall not be deemed to (A) cause such insurance policies to
cover matters otherwise excluded from coverage by the terms of
such policies or (B) require any insurance to remain in force
notwithstanding non-payment of premiums except as provided in
clause (iii) below.
(iii) If the insurance policy is cancelled for any
reason whatsoever, or substantial change is made in the
coverage that affects the interests of Lessor, or if the
insurance coverage is allowed to lapse for non-payment of
premium, such cancellation, change or lapse shall not be
effective as to Lessor for thirty (30) days after receipt by
Lessor of written notice from the insurers of such
cancellation, change or lapse.
(iv) No Lessor Party shall have any obligation or
liability for premiums, commissions, assessments, or calls in
connection with the insurance.
(v) The insurer shall waive any rights of set-off or
counterclaim or any other deduction, whether by attachment or
otherwise, that it may have against any Lessor Party.
(vi) The insurance shall be primary without right of
contribution from any other insurance that may be carried by
any Lessor Party with respect to its interest in the Facility
2 Property.
(vii) The insurer shall waive any right of
subrogation against any Lessor Party.
(viii) All provisions of the insurance, except the
limits of liability, shall operate in the same manner as if
there were a separate policy covering each insured party.
(ix) The insurance shall not be invalidated should
Lessee or any Lessor Party waive, in writing, prior to a loss,
any or all rights of recovery against any Person for losses
covered by such policy, nor shall the insurance in favor of
any Lessor Party or Lessee, as the case may be, or their
respective rights under and interests in said policies be
invalidated or reduced by any act or omission or negligence of
any Lessor Party or Lessee, as the case may be, or any other
Person having any interest in the Facility 2 Property.
(x) All insurance proceeds with a value of less than
five hundred thousand Dollars ($500,000) payable in respect of
any loss or occurrence with respect to the Facility 2 Property
during the Construction Period shall be paid to and adjusted
solely by Lessee. All insurance proceeds with a value of less
than two million five hundred thousand Dollars ($2,500,000)
payable in respect of any
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loss or occurrence with respect to the Facility 2 Property
after the Construction Period shall be paid to and adjusted
solely by Lessee. All other insurance proceeds shall be paid
to Lessor and adjusted jointly by Lessor and Lessee, except
that, from and after the date on which the insurer receives
written notice from Lessor that an Event of Default has
occurred and is continuing (and unless and until such insurer
receives written notice from Lessor that all Events of Default
have been cured), all losses shall be adjusted solely by, and
all insurance proceeds shall be paid solely to, Lessor.
(xi) Each policy of property insurance shall contain
a standard form mortgagee endorsement in favor of Lessor.
(xii) Each insurance policy shall provide that the
coverage to be provided thereunder shall not be invalidated in
the event Lessee or any Lessor Party fails to maintain other
insurance covering losses of a similar type or types.
(xiii) Each insurance policy shall contain a
"severability of interest" provision.
(xiv) Each insurance policy which is written as
"excess insurance" shall contain a provision that it will drop
down in the event that any underlying insurance coverage has
been reduced or exhausted by reason of losses paid thereunder.
(d) Evidence of Insurance. Lessee, at its sole cost and
expense, shall furnish to Lessor (i) not later than the Commencement
Date, copies of all policies of insurance required by this Paragraph
3.03, certified by the insurers, (ii) upon each renewal of insurance
and upon any material change in the terms thereof, copies of all
policies, amendments and/or endorsements evidencing such renewal or
change, certified by the insurers, and (iii) upon the request of
Lessor, such other certificates or documents as Lessor may reasonably
request to evidence Lessee's compliance with the insurance requirements
set forth in this Paragraph 3.03.
(e) Release of Lessor Parties. Lessee hereby waives, releases
and discharges each Lessor Party and its directors, officers,
employees, agents and advisors from all claims whatsoever arising out
of any loss, claim, expense or damage to or destruction covered or
coverable by insurance required under this Paragraph 3.03
notwithstanding that such loss, claim, expense or damage may have been
caused by any such Person, and, as among Lessee and such Persons,
Lessee agrees to look to the insurance coverage only in the event of
such loss.
3.04. Casualty and Condemnation.
(a) Notice. Lessee shall give Lessor prompt written notice of
the occurrence of any Material Casualty affecting, or the institution
of any proceedings for the Condemnation of, the Facility 2 Property or
any portion thereof.
(b) Repair Obligations.
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(i) If any Material Casualty or Condemnation
affecting the Facility 2 Property or any portion thereof
occurs during the Construction Period, Lessee shall, if so
directed by Lessor and Required Participants in writing,
repair and restore the Facility 2 Property as required by
Subparagraph 3.04(c).
(ii) If any Material Casualty or Condemnation
affecting the Facility 2 Property or any portion thereof
occurs after the Construction Period, Lessee shall, at its
election, either (A) repair and restore the Facility 2
Property as required by Subparagraph 3.04(c) or (B) exercise
the Term Purchase Option and purchase the Facility 2 Property
pursuant to the Purchase Agreement; provided, however, that
Lessee may not elect to repair and restore the Facility 2
Property if such casualty or condemnation is a Major Casualty
or Major Condemnation or if an Event of Default has occurred
and is continuing unless Lessor and the Required Participants
shall consent in writing. (If such casualty or condemnation is
a Major Casualty or Major Condemnation that occurs after the
Construction Period, Lessee shall exercise the Term Purchase
Option and purchase the Facility 2 Property pursuant to the
Purchase Agreement as promptly as possible but not later than
two (2) months after the occurrence of such Major Casualty or
Major Condemnation, unless Lessor and the Required
Participants shall otherwise consent in writing. If an Event
of Default has occurred and is continuing, Lessor Parties may
exercise the rights provided herein.) Not later than one (1)
month after the occurrence of any Material Casualty or any
Condemnation occurring after the Construction Period, Lessee
shall deliver to Lessor a written notice indicating whether it
elects to repair and restore or purchase the Facility 2
Property.
(c) Repair and Restoration. If Lessee is required to repair
and restore the Facility 2 Property following any Material Casualty or
any Condemnation, Lessee shall diligently proceed to repair and restore
the Facility 2 Property to the condition in which it existed
immediately prior to such Material Casualty or such Condemnation and
shall complete all such repairs and restoration as soon as reasonably
practicable, but not later than the earlier of (y) six (6) months after
the occurrence of the Material Casualty or the Condemnation, and (z)
six (6) months prior to the Scheduled Expiration Date unless Lessee
currently is exercising either the Term Purchase Option or the
Expiration Date Purchase Option. In the case of a Casualty or
Condemnation occurring during the Construction Period, Lessee shall
make such repairs and restoration using, to the extent available, any
Casualty and Condemnation Proceeds that are available and are released
to Lessee for such purpose pursuant to Subparagraph 3.04(f) and
Advances. In the case of a Casualty or Condemnation occurring after the
Construction Period, Lessee shall make such repairs using its own
funds, except to the extent any Casualty and Condemnation Proceeds are
available and are released to Lessee for such purpose pursuant to
Subparagraph 3.04(f). Lessee's exercise of the repair and restoration
option shall, if Lessor or Required Participants direct, be subject to
satisfaction of the following conditions:
(i) Within one (1) month after the occurrence of the
Material Casualty or the Condemnation, Lessee shall deposit in
a deposit account acceptable to and
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controlled by Lessor (a "Repair and Restoration Account")
funds (including any Casualty and Condemnation Proceeds which
are available and are released to Lessee pursuant to
Subparagraph 3.04(f)) in the amount which Lessor determines is
needed to complete and fully pay all costs of the repair or
restoration (including taxes, financing charges, insurance and
rent during the repair period).
(ii) As soon as reasonably possible and in no event
later than two (2) months after the occurrence of the Material
Casualty or the Condemnation, Lessee shall establish an
arrangement for lien releases and disbursement of funds
acceptable to Lessor and in a manner and upon such terms and
conditions as would be required by a prudent interim
construction lender.
(iii) As soon as reasonably possible and in no event
later than two (2) months after the occurrence of the Material
Casualty or the Condemnation, Lessee shall deliver to Lessor
the following, each in form and substance acceptable to
Lessor:
(A) Evidence that the Facility 2 Property
can, in Lessor's reasonable judgment, with diligent
restoration or repair, be returned to a condition at
least equal to the condition thereof that existed
prior to the Casualty or partial Condemnation causing
the loss or damage within the earlier to occur of (A)
six (6) months after the occurrence of the Casualty
or Condemnation and (B) unless Lessee currently is
exercising either the Term Purchase Option or the
Expiration Date Purchase Option, six (6) months prior
to the Scheduled Expiration Date;
(B) Evidence that all necessary governmental
approvals can be timely obtained to allow the
rebuilding and reoccupancy of the Facility 2
Property;
(C) Copies of all plans and specifications
for the work;
(D) Copies of all contracts for the work,
signed by a contractor reasonably acceptable to
Lessor;
(E) A cost breakdown for the work;
(F) A payment and performance bond for the
work or other security satisfactory to Lessor;
(G) Evidence that, upon completion of the
work, the size, capacity and total value of the
Facility 2 Property will be at least as great as it
was before the Casualty or Condemnation occurred; and
(H) Evidence of satisfaction of any
additional conditions that Lessor or Required
Participants may reasonably establish to protect
their rights under this Agreement and the other
Operative Documents.
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All plans and specifications for the work must be reasonably
acceptable to Lessor, except that Lessor's approval shall not
be required if the restoration work is based on the same plans
and specifications as were originally used to construct the
Facility 2 Property. To the extent that the funds in a Repair
and Restoration Account include both Casualty and Condemnation
Proceeds and other funds deposited by Lessee, the other funds
deposited by Lessee shall be used first. Lessee acknowledges
that the specific conditions described above are reasonable.
(d) Prosecution of Claims for Casualty and Condemnation
Proceeds. Lessee shall proceed promptly and diligently to prosecute in
good faith the settlement or compromise of any and all claims for
Casualty and Condemnation Proceeds; provided, however, that any
settlement or compromise of any such claim shall, except as otherwise
provided in clause (x) of Subparagraph 3.03(c), be subject to the
written consent of Lessor and Required Participants, which consents
shall not be unreasonably withheld. Lessor may participate in any
proceedings relating to such claims, and, after the occurrence and
during the continuance of any Event of Default, Lessor is hereby
authorized, in its own name or in Lessee's name, to adjust any loss
covered by insurance or any Casualty or Condemnation claim or cause of
action, and to settle or compromise any claim or cause of action in
connection therewith, and Lessee shall from time to time deliver to
Lessor any and all further assignments and other instruments required
to permit such participation.
(e) Assignment of Casualty and Condemnation Proceeds. Lessee
hereby absolutely and irrevocably assigns to Lessor all Casualty and
Condemnation Proceeds and all claims relating thereto, subject to the
terms of this Agreement which require Lessor to make such proceeds
available to Lessee for restoration. Except as otherwise provided in
clause (x) of Subparagraph 3.03(c), Lessee agrees that all Casualty and
Condemnation Proceeds are to be paid to Lessor and Lessee hereby
authorizes and directs any insurer, Governmental Authority or other
Person responsible for paying any Casualty and Condemnation Proceeds to
make payment thereof directly to Lessor alone, and not to Lessor and
Lessee jointly. If Lessee receives any Casualty and Condemnation
Proceeds payable to Lessor hereunder, Lessee shall promptly pay over
such Casualty and Condemnation Proceeds to Lessor. Lessee hereby
covenants that until such Casualty and Condemnation Proceeds are so
paid over to Lessor, Lessee shall hold such Casualty and Condemnation
Proceeds in trust for the benefit of Lessor and shall not commingle
such Casualty and Condemnation Proceeds with any other funds or assets
of Lessee or any other Person. Except as otherwise provided in clause
(x) of Subparagraph 3.03(c), Lessor may commence, appear in, defend or
prosecute any assigned right, claim or action, and may adjust,
compromise, settle and collect all rights, claims and actions assigned
to Lessor, but shall not be responsible for any failure to collect any
such right, claim or action, regardless of the cause of the failure.
(f) Use of Casualty and Condemnation Proceeds.
(i) If (A) no Event of Default has occurred and is
continuing, (B) Lessee exercises the repair and restoration
option pursuant to Subparagraphs 3.04(b) and 3.04(c) and (C)
Lessee complies with any conditions imposed
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pursuant to Subparagraph 3.04(c); then Lessor shall release
any Casualty and Condemnation Proceeds to Lessee for repair or
restoration of the Facility 2 Property, but may condition such
release and use of the Casualty and Condemnation Proceeds upon
deposit of the Casualty and Condemnation Proceeds in a Repair
and Restoration Account. Lessor shall have the option, upon
the completion of such restoration of the Facility 2 Property,
to apply any surplus Casualty and Condemnation Proceeds
remaining after the completion of such restoration to the
payment of Rent and/or the reduction of the Outstanding Lease
Amount, notwithstanding that such amounts are not then due and
payable or that such amounts are otherwise adequately secured.
(ii) If (A) an Event of Default has occurred and is
continuing, (B) Lessee fails to or is unable to comply with
any conditions imposed pursuant to Subparagraph 3.04(c) or (C)
Lessee elects to exercise the Term Purchase Option and
purchase the Facility 2 Property pursuant to the Purchase
Agreement; then, at the absolute discretion of Lessor and the
Required Participants, regardless of any impairment of
security or lack of impairment of security, but subject to
applicable Governmental Rules governing the use of Casualty
and Condemnation Proceeds, if any, Lessor may (1) apply all or
any of the Casualty and Condemnation Proceeds it receives to
the expenses of Lessor Parties in obtaining such proceeds; (2)
apply the balance to the payment of Rent and/or the reduction
of the Outstanding Lease Amount, notwithstanding that such
amounts are not then due and payable or that such amounts are
otherwise adequately secured and/or (3) release all or any
part of such proceeds to Lessee upon any conditions Lessor and
the Required Participants may elect.
(iii) Lessor shall apply any Casualty and
Condemnation Proceeds which are to be used to reduce the
Outstanding Lease Amount only on the last day of a Rental
Period unless an Event of Default has occurred and is
continuing.
(iv) Application of all or any portion of the
Casualty and Condemnation Proceeds, or the release thereof to
Lessee, shall not cure or waive any Default or notice of
default or invalidate any acts done pursuant to such notice.
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3.05. Taxes. Subject to Paragraph 3.12 relating to permitted contests,
Lessee shall promptly pay when due all Indemnified Taxes imposed on or payable
by Lessee or any Lessor Party in connection with the Facility 2 Property, this
Agreement or any of the other Operative Documents, or any of the transactions
contemplated hereby or thereby. As promptly as possible after any Indemnified
Taxes are payable by Lessee, Lessee shall send to Lessor for the account of the
applicable Lessor Party a certified copy of an original official receipt
received by Lessee showing payment thereof. If Lessee fails to pay any such
Indemnified Taxes when due to the appropriate taxing authority or fails to remit
to Lessor the required receipts or other required documentary evidence, Lessee
shall indemnify the Lessor Parties for any incremental taxes, interest or
penalties that may become payable by the Lessor Parties as a result of any such
failure. The obligations of Lessee under this Paragraph 3.05 shall survive the
payment and performance of the Lessee Obligations and the termination of this
Agreement.
3.06. Environmental Matters.
(a) Lessee's Covenants. Lessee shall not cause or permit
Hazardous Materials to be used, generated, manufactured, stored,
treated, disposed of, transported or present on or released or
discharged from the Facility 2 Property in any manner that is
reasonably likely to have a Material Adverse Effect. Lessee shall
immediately notify Lessor in writing of (i) any knowledge by Lessee
that the Facility 2 Property does not comply with any Environmental
Laws; and (ii) any claims against Lessee or the Facility 2 Property
relating to Hazardous Materials or pursuant to Environmental Laws. In
response to the presence of any Hazardous Materials on, under or about
the Facility 2 Property, Lessee shall immediately take, at Lessee's
sole expense, all remedial action required by any Environmental Laws or
any judgment, consent decree, settlement or compromise in respect to
any claim based thereon.
(b) Inspection By Lessor. Upon reasonable prior notice to
Lessee, Lessor, its employees and agents, may from time to time
(whether before or after the commencement of a nonjudicial or judicial
foreclosure proceeding), enter and inspect the Facility 2 Property for
the purpose of determining the existence, location, nature and
magnitude of any past or present release or threatened release of any
Hazardous Materials into, onto, beneath or from the Facility 2
Property.
(c) Indemnity. Without in any way limiting any other indemnity
contained in this Agreement or any other Operative Document, Lessee
agrees to defend, indemnify and hold harmless the Lessor Parties and
the other Indemnitees from and against any claim, loss, damage, cost,
expense or liability directly or indirectly arising out of (i) the use,
generation, manufacture, storage, treatment, release, threatened
release, discharge, disposal, transportation or presence of any
Hazardous Materials which are found in, on, under or about the Facility
2 Property or (ii) the breach of any covenant, representation or
warranty of Lessee relating to Hazardous Materials or Environmental
Laws contained in this Agreement or any Operative Document. This
indemnity shall include (A) the costs, whether foreseeable or
unforeseeable, of any investigation, repair, cleanup or detoxification
of the Facility 2 Property which is required by any Governmental
Authority or is otherwise necessary to render the Facility 2 Property
in compliance with all Environmental Laws; (B) all other direct or
indirect consequential damages (including
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any third party claims, claims by any Governmental Authority, or any
fines or penalties against the Indemnitees; and (C) all court costs and
attorneys' fees (including expert witness fees and the cost of any
consultants) paid or incurred by the Indemnitees. Lessee shall pay
immediately upon Lessor's demand any amounts owing under this
indemnity. Lessee shall use legal counsel reasonably acceptable to
Lessor in any action or proceeding arising under this indemnity. The
obligations of Lessee under this Subparagraph 3.06(c) shall survive the
payment and performance of the Lessee Obligations and the termination
of this Agreement.
(d) Legal Effect of Section. Lessee and Lessor agree that (i)
this Paragraph 3.06 and clause (i) of Subparagraph 4.01(t) of the
Participation Agreement are intended as Lessor's written request for
information (and Lessee's response) concerning the environmental
condition of the real property security as required by California Code
of Civil Procedure Section 726.5 and (ii) each representation and
warranty and covenant herein and therein (together with any indemnity
applicable to a breach of any such representation and warranty) with
respect to the environmental condition of the Facility 2 Property is
intended by Lessor and Lessee to be an "environmental provision" for
purposes of California Code of Civil Procedure Section 736.
3.07. Liens, Easements, Etc.
(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 Facility 2
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
3.01 of and Schedule 3.01 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;
(v) Easements granted or created in connection with
and reasonably necessary for the construction of the New
Improvements or for the operation or maintenance of the
Facility 2 Property in the ordinary course of business, in
each case 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
Facility 2 Property and (B) discharge, at its sole cost and expense,
any Lien on the Facility 2 Property which is not a Permitted Property
Lien.
(b) No Consents. Nothing contained in this Agreement shall be
construed as constituting the consent or request of any Lessor Party,
express 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 2
Property or any part thereof. NOTICE IS HEREBY GIVEN THAT NO LESSOR
PARTY IS OR SHALL BE LIABLE FOR ANY LABOR, SERVICES OR MATERIALS
FURNISHED OR TO BE FURNISHED TO LESSEE, OR TO ANYONE HOLDING THE
FACILITY 2 PROPERTY OR ANY PART 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 ANY LESSOR PARTY IN
AND TO THE FACILITY 2 PROPERTY.
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3.08. Subletting. Lessee may, in the ordinary course of business,
sublease the Facility 2 Property or any portion thereof to any Person, provided,
that (a) Lessee remains directly and primarily liable for performing its
obligations under this Agreement and all other Lessee Obligations; (b) each
sublease is subject to and subordinated to this Agreement; (c) each sublease
expressly provides for the surrender of the Facility 2 Property (or portion
thereof) by the sublessee on the Expiration Date; (d) each sublease has a term
which expires on or prior to the Scheduled Expiration Date (or, if longer,
includes a provision that the sublease terminates on the Expiration Date if such
Expiration Date occurs prior to the Scheduled Expiration Date unless Lessee
purchases the Facility 2 Property on the Expiration Date pursuant to the
Purchase Agreement); (e) each sublease prohibits the sublessee from engaging in
any activities on the Facility 2 Property other than those permitted by
Paragraph 2.04; and (f) no sublease has a Material Adverse Effect. Any sublease
which does not satisfy each of the requirements of the immediately preceding
sentence shall be null and void as to the Lessor Parties and their successor and
assigns. Except for such permitted subleases, Lessee shall not assign any of its
rights or interests under this Agreement to any other Person.
3.09. Utility Charges. Lessee shall pay all charges for electricity,
power, gas, oil, water, telephone, sanitary sewer service and all other
utilities and services to, on or in connection with the Facility 2 Property
during the Term.
3.10. Removal of Facility 2 Property. Lessee shall not remove any
Improvements from the Facility 2 Land or any other Facility 2 Property from the
Facility 2 Land or Improvements, except that, during the Term, Lessee may remove
any Modification or any trade fixture, machinery, equipment, inventory or other
personal property if such Modification or property (a) was not financed by an
Advance, (b) is not required by any applicable Governmental Rule or Insurance
Requirement and (c) is readily removable without impairing the value, utility or
remaining useful life of the Facility 2 Property.
3.11. Compliance with Governmental Rules and Insurance Requirements.
Lessee, at its sole cost and expense, shall (a) comply, and cause its agents,
sublessees, assignees, employees, invitees, licensees, contractors and tenants,
and the Facility 2 Property to comply, with all Governmental Rules and Insurance
Requirements relating to the Facility 2 Property (including the construction,
use, operation, maintenance, repair and restoration thereof, whether or not
compliance therewith shall require structural or extraordinary changes in the
Improvements or interfere with the use and enjoyment of the Facility 2
Property), and (b) procure, maintain and comply with all licenses, permits,
orders, approvals, consents and other authorizations required for the
construction, use, maintenance and operation of the Facility 2 Property and for
the use, operation, maintenance, repair and restoration of the Improvements.
3.12. Permitted Contests. Lessee, at its sole cost and expense, may
contest any alleged Lien or easement on any of the Facility 2 Property or any
alleged Governmental Charge, Indebtedness or other obligation which is payable
by Lessee hereunder to Persons other than the Lessor Parties or which, if
unpaid, would give rise to a Lien on any of the Facility 2 Property, provided
that (a) each such contest is diligently pursued in good faith by appropriate
proceedings; (b) the commencement and continuation of such proceedings suspends
the enforcement of such Lien or easement or the collection of such Governmental
Charge, Indebtedness or obligation; (c) Lessee has established adequate reserves
for the discharge of such
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Lien or easement or the payment of such Governmental Charge, Indebtedness or
obligation in accordance with GAAP and, if the failure to discharge such Lien or
easement or the failure to pay such Governmental Charge, Indebtedness or
obligation might result in any civil liability for any Lessor Party, Lessee has
provided to such Lessor Party a bond or other security satisfactory to such
Lessor Party; (d) the failure to discharge such Lien or easement or the failure
to pay such Governmental Charge, Indebtedness or obligation could not result in
any criminal liability for any Lessor Party; (e) the failure to discharge such
Lien or easement or the failure to pay such Governmental Charge, Indebtedness or
obligation is not otherwise reasonably likely to have a Material Adverse Effect;
and (f) unless Lessee currently is exercising the Term Purchase Option or the
Expiration Date Purchase Option, any such contest is completed and such Lien or
easement is discharged (either pursuant to such proceedings or otherwise) or
such Governmental Charge, Indebtedness or obligation is declared invalid, paid
or otherwise satisfied not later than six (6) months prior to the Scheduled
Expiration Date.
3.13. Lessor Obligations; Right to Perform Lessee Obligations. No
Lessor Party shall have any obligation to (a) maintain, repair or make any
improvements to the Facility 2 Property, (b) maintain any insurance on the
Facility 2 Property, (c) perform any other obligation of Lessee under this
Agreement or any other Lessee Obligation, (d) make any expenditure on account of
the Facility 2 Property (except to make Advances as required by the
Participation Agreement) or (e) take any other action in connection with the
Facility 2 Property, this Agreement or any other Operative Document, except as
expressly provided herein or in another Operative Document; provided however,
that Lessor may, in its sole discretion and without any obligation to do so,
after written notice to Lessee, perform any Lessee Obligation not performed by
Lessee when required. Lessor may enter the Facility 2 Property or exercise any
other right of Lessee under this Agreement or any other Operative Document to
the extent Lessor determines in good faith that such entry or exercise is
reasonably necessary for Lessor to perform any such Lessee Obligation not
performed by Lessee when required. Lessee shall reimburse Lessor and the other
Lessor Parties, within five (5) Business Days after demand and delivery of
written evidence of payment, for all fees, costs and expenses reasonably
incurred by them in performing any such obligation or curing any Default.
3.14. Inspection Rights. During the Term, Lessee shall permit any
Person designated by Lessor, upon reasonable notice and during normal business
hours, to visit and inspect any of the Facility 2 Property.
SECTION 4. EXPIRATION DATE.
4.01 Termination by Lessee Prior to Scheduled Expiration Date. Subject
to the terms and conditions of the Purchase Agreement, Lessee may, on any
Scheduled Rent Payment Date prior to the Scheduled Expiration Date, terminate
this Agreement and purchase the Facility 2 Property pursuant to Section 2 of the
Purchase Agreement. Lessee shall notify Lessor of Lessee's election so to
terminate this Agreement and purchase the Facility 2 Property by delivering to
Agent a Notice of Term Purchase Option Exercise pursuant to and in accordance
with the provisions of Paragraph 2.02 of the Purchase Agreement.
4.02. Surrender of Facility 2 Property. Unless Lessee purchases the
Facility 2 Property on the Expiration Date pursuant to the Purchase Agreement,
Lessee shall vacate and surrender
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the Facility 2 Property to Lessor on the Expiration Date in its then-current
condition, subject to compliance by Lessee on or prior to such date of its
obligations under this Agreement and the other Operative Documents (including
the completion of the New Improvements and all Modifications, the completion of
all permitted contests and the removal of all Liens which are not Permitted
Property Liens of the types described in clauses (i), (ii), (iii) or (iv) of
Subparagraph 3.07(a)).
4.03. Holding Over. If Lessee does not purchase the Facility 2 Property
on the Expiration Date pursuant to the Purchase Agreement but continues in
possession of any portion of the Facility 2 Property after the Expiration Date,
Lessee shall pay rent for each day it so continues in possession, payable upon
demand of Lessor, at a per annum rate equal to the Alternate Rental Rate plus
two percent (2.0%) and shall pay and perform all of its other Lessee Obligations
under this Agreement and the other Operative Documents in the same manner as
though the Term had not ended; provided, however, that this Paragraph 4.03 shall
not be interpreted to permit such holding over or to limit any right or remedy
of Lessor for such holding over.
SECTION 5. DEFAULT.
5.01 Events of Default. The occurrence or existence of any one or more
of the following shall constitute an "Event of Default" hereunder:
(a) Non-Payment. Lessee shall (i) fail to pay on the
Expiration Date any amount payable by Lessee under this Agreement or
any other Operative Document on such date, (ii) fail to pay within five
(5) business days after any Scheduled Rent Payment Date any Base Rent
payable on such Scheduled Rent Payment Date (other than the Base Rent
payable on the Expiration Date) or (iii) fail to pay within five (5)
business days after the same becomes due, any Supplemental Rent or
other amount required under the terms of this Agreement or any other
Operative Document (other than any such amount payable on the
Expiration Date or Base Rent); or
(b) Specific Defaults. Lessee or any of its Subsidiaries shall
fail to observe or perform any covenant, obligation, condition or
agreement set forth in Subparagraph 3.01(d), Paragraph 3.03 or
Subparagraph 3.07(a) hereof, in Paragraph 5.02 or Paragraph 5.03 of the
Participation Agreement or in Paragraph 3.01 or Paragraph 3.02 of the
Facility 2 Construction Agency Agreement; or
(c) Other Defaults. Lessee or any of its Subsidiaries shall
fail to observe or perform any other covenant, obligation, condition or
agreement contained in this Agreement or any other Operative Document
(except for those covenants described in Paragraph 5.01(d) below) and
such failure shall continue for a period of thirty (30) days after
written notice thereof from Lessor, provided, however, that in the
event that such failure cannot reasonably be cured within such thirty
(30) day period, such failure shall not constitute an Event of Default
hereunder so long as Lessee shall have commenced to cure such failure
within such thirty (30) day period and shall thereafter diligently
pursue such cure to completion, provided further that such failure
shall in all events be cured by the earlier of (i) the Expiration Date,
if Lessee is exercising the Marketing Option,
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(provided that if the Purchase Option is consummated in accordance with
the terms of the Purchase Agreement all outstanding Defaults shall be
deemed waived), or (ii) one hundred and eighty days (180) days after
Lessor's notice thereof; or
(d) Representations and Warranties. Any representation,
warranty, certificate, information or other statement (financial or
otherwise) made or furnished by or on behalf of Lessee or any of its
Subsidiaries to any Lessor Party in or in connection with this
Agreement or any other Operative Document, or as an inducement to any
Lessor Party to enter into this Agreement or any other Operative
Document, shall be false, incorrect, incomplete or misleading in any
material respect when made or furnished and Lessee shall not have cured
the facts or circumstances causing such representation, warranty,
certificate or other statement to be false, incorrect, incomplete or
misleading within thirty (30) days of notice thereof from Lessor; or
(e) Cross-Default. (i) Lessee or any of its Subsidiaries shall
fail to make any payment when due on account of any Indebtedness of
such Person (other than the Lessee Obligations) and such failure shall
continue beyond any period of grace provided with respect thereto, if
the amount of such Indebtedness exceeds $10,000,000 or the effect of
such failure is to cause, or permit the holder or holders thereof to
cause, Indebtedness of Lessee and its Subsidiaries (other than the
Lessee Obligations) in an aggregate amount exceeding $10,000,000 to
become due or (ii) Lessee or any of its Subsidiaries shall otherwise
fail to observe or perform any agreement, term or condition contained
in any agreement or instrument relating to any Indebtedness of such
Person (other than the Lessee Obligations), or any other event shall
occur or condition shall exist, if the effect of such failure, event or
condition is to cause, or permit the holder or holders thereof to
cause, Indebtedness of Lessee and its Subsidiaries (other than the
Lessee Obligations) in an aggregate amount exceeding $10,000,000 to
become due (and/or to be secured by cash collateral); or
(f) Insolvency, Voluntary Proceedings. Lessee or any of its
Material Subsidiaries shall (i) apply for or consent to the appointment
of a receiver, trustee, liquidator or custodian of itself or of all or
a substantial part of its property, (ii) be unable, or admit in writing
its inability, to pay its debts generally as they mature, (iii) make a
general assignment for the benefit of its or any of its creditors, (iv)
be dissolved or liquidated in full or in part, (v) become insolvent (as
such term may be defined or interpreted under any applicable statute),
(vi) commence a voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or its debts
under any bankruptcy, insolvency or other similar law now or hereafter
in effect or consent to any such relief or to the appointment of or
taking possession of its property by any official in an involuntary
case or other proceeding commenced against it, or (vi) take any action
for the purpose of effecting any of the foregoing; or
(g) Involuntary Proceedings. Proceedings for the appointment
of a receiver, trustee, liquidator or custodian of Lessee or any of its
Material Subsidiaries or of all or a substantial part of the property
thereof, or an involuntary case or other proceedings seeking
liquidation, reorganization or other relief with respect to Lessee or
any of its Material Subsidiaries or the debts thereof under any
bankruptcy, insolvency or other
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similar law now or hereafter in effect shall be commenced and an order
for relief entered or such proceeding shall not be dismissed or
discharged within thirty (30) days of commencement; or
(h) Judgments. (i) One or more judgments, orders, decrees or
arbitration awards requiring Lessee and/or its Subsidiaries to pay an
aggregate amount of $10,000,000 or more (exclusive of amounts covered
by insurance issued by an insurer not an Affiliate of Lessee and
otherwise satisfying the requirements set forth in Subparagraph
3.03(b)) shall be rendered against Lessee and/or any of its
Subsidiaries in connection with any single or related series of
transactions, incidents or circumstances and the same shall not be
satisfied, vacated or stayed for a period of thirty (30) consecutive
days after the issue or levy; (ii) any judgment, writ, assessment,
warrant of attachment, tax lien or execution or similar process shall
be issued or levied against a substantial part of the property of
Lessee or any of its Subsidiaries and the same shall not be released,
stayed, vacated or otherwise dismissed within thirty (30) days after
issue or levy; or (iii) any other judgments, orders, decrees,
arbitration awards, writs, assessments, warrants of attachment, tax
liens or executions or similar processes which, alone or in the
aggregate, are reasonably likely to have a Material Adverse Effect are
rendered, issued or levied; or
(i) Operative Documents. Any Operative Document or any
material term thereof shall cease to be, or be asserted by Lessee or
any of its Subsidiaries not to be, a legal, valid and binding
obligation of Lessee or any of its Subsidiaries enforceable in
accordance with its terms; or
(j) ERISA. Any Reportable Event which constitutes grounds for
the termination of any Employee Benefit Plan by the PBGC or for the
appointment of a trustee by the PBGC to administer any Employee Benefit
Plan shall occur, or any Employee Benefit Plan shall be terminated
within the meaning of Title IV of ERISA or a trustee shall be appointed
by the PBGC to administer any Employee Benefit Plan; or
(k) Change of Control. Any Change of Control shall occur; or
(l) Construction Termination Event. Any Construction
Termination Event shall occur or exist; or
(m) Material Casualty or Condemnation. Any Material Casualty
or Material Condemnation affecting the Facility 2 Property and not
fully covered by insurance meeting the requirements set forth herein
shall occur during the Construction Period, unless Required
Participants and Lessor direct Lessee to repair and restore the
Facility 2 Property following such Casualty or Condemnation pursuant to
clause (i) of Subparagraph 3.04(b); or
(n) Material Adverse Effect. Any other event(s) or
condition(s) which is(are) reasonably likely to have a Material Adverse
Effect shall occur and be continuing or exist.
5.02. General Remedies. In all cases, upon the occurrence or existence
of any Event of Default and at any time thereafter unless such Event of Default
is waived, Lessor may, with the
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consent of the Required Participants, or shall, upon instructions from the
Required Participants, exercise any one or more of the following rights and
remedies (except that the remedy set forth in the first sentence of Subparagraph
5.02(a) shall be automatic):
(a) Termination of Commitments. If such Event of Default is an
Event of Default of the type described in Subparagraph 5.01(f) or
Subparagraph 5.01(g) affecting Lessee, immediately and without notice
the obligation of Lessor to make Advances and the obligations of the
Participants to fund Advances shall automatically terminate. If such
Event of Default is any other Event of Default, Lessor may by written
notice to Lessee, terminate the obligation of Lessor to make Advances
and the obligations of the Participants to fund Advances.
(b) Appointment of a Receiver. Lessor may apply to any court
of competent jurisdiction for, and obtain appointment of, a receiver
for the Facility 2 Property.
(c) Specific Performance. Lessor may bring an action in any
court of competent jurisdiction to obtain specific enforcement of any
of the covenants or agreements of Lessee in this Agreement or any of
the other Operative Documents.
(d) Collection of Issues and Profits. Lessor may collect
Issues and Profits as provided in Subparagraph 2.07(c) and apply the
proceeds to pay Lessee Obligations.
(e) Protection of Facility 2 Property. Lessor may enter, take
possession of, manage and operate all or any part of the Facility 2
Property or take any other actions which it reasonably determines are
necessary to protect the Facility 2 Property and the rights and
remedies of the Lessor Parties under this Agreement and the other
Operative Documents, including (i) taking and possessing all of
Lessee's books and records relating to the Facility 2 Property; (ii)
entering into, enforcing, modifying, or canceling subleases on such
terms and conditions as Lessor may consider proper; (iii) obtaining and
evicting tenants; (iv) fixing or modifying sublease rents; (v)
collecting and receiving any payment of money owing to Lessee; (vi)
completing any unfinished Improvements; and/or (vii) contracting for
and making repairs and alterations.
(f) Other Rights and Remedies. In addition to the specific
rights and remedies set forth above in this Paragraph 5.02 and in
Paragraph 5.03 and Paragraph 5.04, Lessor may exercise any other right,
power or remedy permitted to it by any applicable Governmental Rule,
either by suit in equity or by action at law, or both.
5.03. Lease Remedies. If the transaction evidenced by this Agreement
and the other Operative Documents is treated as a lease, upon the occurrence or
existence of any Event of Default and at any time thereafter unless such Event
of Default is waived, Lessor may, with the consent of the Required Participants,
or shall, upon instructions from the Required Participants, exercise any one or
more of the following rights and remedies in addition to those rights and
remedies set forth in Paragraph 5.02, provided that prior to exercising any
remedies provided by this Paragraph 5.03, Lessor shall give Lessee not less than
three (3) Business Days notice during which time Lessee may exercise the
Purchase Option and provided the Purchase Option is
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consummated in accordance with the terms of the Purchase Agreement, Lessor shall
not exercise any of the remedies under this Paragraph 5.03:
(a) Termination of Lease. Lessor may, by written notice to
Lessee, terminate this Agreement on a Termination Date which is prior
to the Scheduled Expiration Date, subject to Subparagraph 3.02(1) of
the Purchase Agreement. Such Termination Date shall be the last day of
a Rental Period unless Required Participants shall otherwise direct. On
such Termination Date (which shall then be the Expiration Date), Lessee
shall pay all unpaid Base Rent accrued through such date, all
Supplemental Rent due and payable on or prior to such date and all
other amounts payable by Lessee on the Expiration Date pursuant to this
Agreement and the other Operative Documents. Lessee also shall pay to
Lessor, in addition to all accrued Base Rent, the worth at the time of
such payment of the amount by which the unpaid Base Rent through the
Scheduled Expiration Date exceeds the amount of such rental loss for
the same period that Lessee proves could reasonably be avoided.
(b) Continuation of Lease. Lessor may exercise the rights and
remedies provided by California Civil Code Section 1951.4, including
the right to continue this Agreement in effect after Lessee's breach
and abandonment and recover Rent as it becomes due. Acts of maintenance
or preservation, efforts to relet the Facility 2 Property, the
appointment of a receiver upon Lessor's initiative to protect its
interest under this Agreement or withholding consent to or terminating
a sublease shall not of themselves constitute a termination of Lessee's
right to possession.
(c) Removal and Storage of Facility 2 Property. Lessor may
enter the Facility 2 Property and remove therefrom all Persons and
property, store such property in a public warehouse or elsewhere at the
cost of and for the account of Lessee and sell such property and apply
the proceeds therefrom pursuant to applicable California law.
5.04. Loan Remedies. If the transaction evidenced by this Agreement and
the other Operative Documents is treated as a loan, upon the occurrence or
existence of any Event of Default and at any time thereafter unless such Event
of Default is waived, Lessor may, with the consent of the Required Participants,
or shall, upon instructions from the Required Participants, exercise any one or
more of the following rights and remedies in addition to those rights and
remedies set forth in Paragraph 5.02:
(a) Acceleration of Lessee Obligations. Lessor may, by written
notice to Lessee, terminate this Agreement on a Termination Date which
is prior to the Scheduled Expiration Date, subject to Subparagraph
3.02(1) of the Purchase Agreement, and declare all unpaid Lessee
Obligations due and payable on such Termination Date. Such Termination
Date shall be the last day of a Rental Period unless Required
Participants shall otherwise direct. On such Termination Date (which
shall then be the Expiration Date), Lessee shall pay all unpaid Base
Rent accrued through such date, all Supplemental Rent due and payable
on or prior to such date and all other amounts payable by Lessee on the
Expiration Date pursuant to this Agreement and the other Operative
Documents.
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(b) Uniform Commercial Code Remedies. Lessor may exercise any
or all of the remedies granted to a secured party under the California
Uniform Commercial Code.
(c) Judicial Foreclosure. Lessor may bring an action in any
court of competent jurisdiction to foreclose the security interest in
the Facility 2 Property granted to Lessor by this Agreement or any of
the other Operative Documents.
(d) Power of Sale. Lessor may cause some or all of the
Facility 2 Property, including any Personal Property Collateral, to be
sold or otherwise disposed of in any combination and in any manner
permitted by applicable Governmental Rules.
(i) Sales of Personal Property. Lessor may dispose of
any Personal Property Collateral separately from the sale of
Real Property Collateral, in any manner permitted by Division
9 of the California Uniform Commercial Code, including any
public or private sale, or in any manner permitted by any
other applicable Governmental Rule. Any proceeds of any such
disposition shall not cure any Event of Default or reinstate
any Lessee Obligation for purposes of Section 2924c of the
California Civil Code. In connection with any such sale or
other disposition, Lessee agrees that the following procedures
constitute a commercially reasonable sale:
(A) Lessor shall mail written notice of the
sale to Lessee not later than thirty (30) days prior
to such sale.
(B) Once per week during the three (3) weeks
immediately preceding such sale, Lessor will publish
notice of the sale in a local daily newspaper of
general circulation.
(C) Upon receipt of any written request,
Lessor will make the Facility 2 Property available to
any bona fide prospective purchaser for inspection
during reasonable business hours.
(D) Notwithstanding, Lessor shall be under
no obligation to consummate a sale if, in its
judgment, none of the offers received by it equals
the fair value of the Facility 2 Property offered for
sale.
(E) If Lessor so requests, Lessee shall
assemble all of the Personal Property Collateral and
make it available to Lessor at the site of the
Facility 2 Land. Regardless of any provision of this
Agreement or any other Operative Document, Lessor
shall not be considered to have accepted any property
other than cash or immediately available funds in
satisfaction of any Lessee Obligation, unless Lessor
has given express written notice of its election of
that remedy in accordance with California Uniform
Commercial Code Section 9505.
The foregoing procedures do not constitute the only procedures
that may be commercially reasonable.
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(ii) Lessor's Sales of Real Property or Mixed
Collateral. Lessor may choose to dispose of some or all of the
Facility 2 Property which consists solely of Real Property
Collateral in any manner then permitted by applicable
Governmental Rules, including without limitation a nonjudicial
trustee's sale pursuant to California Civil Code
Sections 2924 et SEq. In its discretion, Lessor may also
or alternatively choose to dispose of some or all of the
Facility 2 Property, in any combination consisting of both
Real Property Collateral and Personal Property Collateral,
together in one sale to be held in accordance with the law and
procedures applicable to real property, as permitted by
Section 9501(4) of the California Uniform Commercial Code.
Lessee agrees that such a sale of Personal Property Collateral
together with Real Property Collateral constitutes a
commercially reasonable sale of the Personal Property
Collateral. (For purposes of this power of sale, either a sale
of Real Property Collateral alone, or a sale of both Real
Property Collateral and Personal Property Collateral together
in accordance with California Uniform Commercial Code Section
9501(4), will sometimes be referred to as a "Lessor's Sale.")
(A) Before any Lessor's Sale, Lessor shall
give such notice of default and election to sell as
may then be required by applicable Governmental
Rules.
(B) When all time periods then legally
mandated have expired, and after such notice of sale
as may then be legally required has been given,
Lessor shall sell the property being sold at a public
auction to be held at the time and place specified in
the notice of sale.
(C) Neither Lessor nor Agent shall have any
obligation to make demand on Lessee before any
Lessor's Sale.
(D) From time to time in accordance with
then applicable law, Lessor may postpone any Lessor's
Sale by public announcement at the time and place
noticed for that sale.
(E) At any Lessor's Sale, Lessor shall sell
to the highest bidder at public auction for cash in
lawful money of the United States.
(F) Lessor shall execute and deliver to the
purchaser(s) a deed or deeds conveying the Facility 2
Property being sold without any covenant or warranty
whatsoever, express or implied. The recitals in any
such deed of any matters or facts, including any
facts bearing upon the regularity or validity of any
Lessor's Sale, shall be conclusive proof of their
truthfulness. Any such deed shall be conclusive
against all Persons as to the facts recited in it.
(e) Foreclosure Sales.
(i) Single or Multiple. If the Facility 2 Property
consists of more than one lot, parcel or item of property,
Lessor may:
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(A) Designate the order in which the lots,
parcels and/or items shall be sold or disposed of or
offered for sale or disposition; and
(B) Elect to dispose of the lots, parcels
and/or items through a single consolidated sale or
disposition to be held or made under the power of
sale granted in Subparagraph 5.04(d), or in
connection with judicial proceedings, or by virtue of
a judgment and decree of foreclosure and sale; or
through two or more such sales or dispositions; or in
any other manner Lessor may deem to be in its best
interests (any such sale or disposition, a
"Foreclosure Sale;" any two or more, "Foreclosure
Sales").
If Lessor chooses to have more than one Foreclosure Sale,
Lessor at its option may cause the Foreclosure Sales to be
held simultaneously or successively, on the same day, or on
such different days and at such different times and in such
order as it may deem to be in its best interests. No
Foreclosure Sale shall terminate or affect the security
interests granted to Lessor in the Facility 2 Property by this
Agreement on any part of the Facility 2 Property which has not
been sold, until all of the Lessee Obligations have been paid
in full.
(ii) Credit Bids. At any Foreclosure Sale, any
Person, including any Lessor Party, may bid for and acquire
the Facility 2 Property or any part of it to the extent
permitted by then applicable Governmental Rules. Instead of
paying cash for the Facility 2 Property, Lessor may settle for
the purchase price by crediting the sales price of the
Facility 2 Property against the Lessee Obligations in any
order and proportions as Lessor in its sole discretion may
choose.
5.05. Remedies Cumulative. The rights and remedies of Lessor under this
Agreement and the other Operative Documents are cumulative and may be exercised
singularly, successively, or together.
5.06. No Cure or Waiver. Neither the performance by Lessor of any of
Lessee's obligations pursuant to Paragraph 3.13 nor the exercise by Lessor of
any of its other rights and remedies under this Agreement or any other Operative
Document (including the collection of Issues and Profits and the application
thereof to the Lessee Obligations) shall constitute a cure or waiver of any
Default or nullify the effect of any notice of default or sale, unless and until
all Lessee Obligations are paid in full.
5.07. Exercise of Rights and Remedies. The rights and remedies provided
to Lessor under this Agreement may be exercised by Lessor itself, by Agent
pursuant to Subparagraph 2.02(c) of the Participation Agreement, by a
court-appointed receiver or by any other Person appointed by any of the
foregoing to act on its behalf. All of the benefits afforded to Lessor under
this Agreement and the other Operative Documents shall accrue to the benefit of
Agent to the extent provided in Subparagraph 2.02(c) of the Participation
Agreement.
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SECTION 6. MISCELLANEOUS.
6.01. Notices. Except as otherwise specified herein, all notices,
requests, demands, consents, instructions or other communications to or upon
Lessee or Lessor under this Agreement shall be given as provided in Subparagraph
2.02(c) and Paragraph 7.01 of the Participation Agreement.
6.02. Waivers; Amendments. Any term, covenant, agreement or condition
of this Agreement may be amended or waived only as provided in the Participation
Agreement. No failure or delay by any Lessor Party in exercising any right
hereunder shall operate as a waiver thereof or of any other right nor shall any
single or partial exercise of any such right preclude any other further exercise
thereof or of any other right. Unless otherwise specified in any such waiver or
consent, a waiver or consent given hereunder shall be effective only in the
specific instance and for the specific purpose for which given.
6.03. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the Lessor Parties and Lessee and their permitted
successors and assigns; provided, however, that the Lessor Parties and Lessee
shall not sell, assign or delegate their respective rights and obligations
hereunder except as provided in the Participation Agreement.
6.04. No Third Party Rights. Nothing expressed in or to be implied from
this Agreement is intended to give, or shall be construed to give, any Person,
other than the Lessor Parties and Lessee and their permitted successors and
assigns, any benefit or legal or equitable right, remedy or claim under or by
virtue of this Agreement or under or by virtue of any provision herein.
6.05 Partial Invalidity. If at any time any provision of this Agreement
is or becomes illegal, invalid or unenforceable in any respect under the law or
any jurisdiction, neither the legality, validity or enforceability of the
remaining provisions of this Agreement nor the legality, validity or
enforceability of such provision under the law of any other jurisdiction shall
in any way be affected or impaired thereby.
6.06. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of California without reference to
conflicts of law rules.
6.07. Counterparts. This Agreement 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.
6.08. Nature of Lessee's Obligations.
(a) Independent Obligation. The obligation of Lessee to pay
the amounts payable by Lessee under this Agreement and the other
Operative Documents and to perform the other Lessee Obligation are
absolute, unconditional and irrevocable obligations which are separate
and independent of the obligations of the Lessor Parties under this
Agreement and the other Operative Documents and all other events and
circumstances, including the events and circumstances set forth in
Subparagraph 6.08(c).
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(b) No Termination or Abatement. This Agreement and the other
Operative Documents and Lessee's obligation to pay Rent and to pay and
perform all other Lessee Obligations shall continue in full force and
effect without abatement notwithstanding the occurrence or existence of
any event or circumstance, including any event or circumstance set
forth in Subparagraph 6.08(c).
(c) Full Payment and Performance. Lessee shall make all
payments under this Agreement and the other Operative Documents in the
full amounts and at the times required by the terms of this Agreement
and the other Operative Documents without setoff, deduction or
reduction of any kind and shall perform all other Lessee Obligations as
and when required, without regard to any event or circumstances
whatsoever, including (i) the condition of the Facility 2 Property
(including any Improvements to the Facility 2 Property made prior to
the Commencement Date or during the Term); (ii) title to the Facility 2
Property (including possession of the Facility 2 Property by any Person
or the existence of any Lien or any other right, title or interest in
or to any of the Facility 2 Property in favor of any Person); (iii) the
value, habitability, usability, design, operation or fitness for use of
the Facility 2 Property; (iv) the availability or adequacy of utilities
and other services to the Facility 2 Property; (v) any latent, hidden
or patent defect in the Facility 2 Property; (vi) the zoning or status
of the Facility 2 Property or any other restrictions on the use of the
Facility 2 Property; (g) the economics of the Facility 2 Property;
(vii) any Casualty or Condemnation; (viii) the compliance of the
Facility 2 Property with any applicable Governmental Rule or Insurance
Requirement; (ix) any failure by any Lessor Party to perform any of its
obligations under this Agreement or any other Operative Document; or
(x) the exercise by any Lessor Party of any of its remedies under this
Agreement or any other Operative Document; provided, however, that this
Paragraph 6.08 shall not abrogate any right which Lessee may have to
recover damages from any Lessor Party for any material breach by such
Lessor Party of its obligations under this Agreement or any other
Operative Document to the extent permitted hereunder or thereunder.
6.09. Construction License. The lease by Lessor to Lessee of the
Facility 2 Property under this Agreement is granted to Lessee reserving to
Lessor and its agents a temporary construction license to enter upon the
Facility 2 Property for purposes of constructing the New Improvements.
[The signature page follows.]
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IN WITNESS WHEREOF, Lessee and Lessor have caused this Agreement 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 CALIFORNIA )
) ss
COUNTY OF __________________ )
On _____________, ____, 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 on behalf of which the person(s) acted,
executed the instrument.
Witness my hand and official seal.
[SEAL]
227
STATE OF CALIFORNIA )
) ss
COUNTY OF __________________ )
On _____________, ____, 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 on behalf of which the person(s) acted,
executed the instrument.
Witness my hand and official seal.
_________________________________
[SEAL]
228
SCHEDULE 3.03
INSURANCE REQUIREMENTS
(i) At all times during the Term, commercial general liability
insurance, umbrella insurance and excess liability insurance, each written on an
"occurrence basis", including products and completed operation hazards, covering
claims for bodily injury, personal injury or death sustained by persons or
damage to property, in an amount of not less than $25,000,000 per occurrence and
$25,000,000 annual aggregate;
(ii) At all times during the Term, workers' compensation insurance for
statutory limits and employer's liability insurance covering injury, death or
disease sustained by employees, in an amount not less than $1,000,000 for
disease and $1,000,000 for bodily injury or death by accident;
(iii) At all times during the Construction Period portion of the Term,
"all risk" builders' risk insurance, or equivalent property insurance, covering
course of construction risks (whether on-site or off-site), including risks of
collapse, flood and earthquake, in an amount of not less than the value of the
Facility 2 Property upon the Completion of the New Improvements; and
(iv) At all times during the Term after the Construction Period, "all
risk" property insurance covering loss or damage in amounts approved by Lessor,
Agent and Required Participants, including (A) loss or damage by flood in an
amount of not less than the then current Outstanding Lease Amount, and (B) loss
or damage by earthquake in an amount of not less than 20.0% of the replacement
value of the Improvements.
3.03-1
229
EXHIBIT A
FACILITY 2 LAND
90 HEADQUARTERS DRIVE
(FACILITY 2)
The land situated in the City of San Jose, County of Santa Clara, State of
California, and described as follows:
Parcel 3, as shown on Parcel Map filed July 13, 1984 in Book 531 of Maps at
pages 41 and 42, Santa Clara County Records.
APN: 097-79-003
ARB: 097-03-005.02
A-1
230
EXHIBIT B
RELATED GOODS
NONE
B-1
231
EXHIBIT B(1)
SUPPLEMENT TO EXHIBIT B TO LEASE AGREEMENT
[Date]
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
1. Reference is made to (a) that certain Participation Agreement, dated
as of April 13, 2001 (the "Participation Agreement"), among Novellus Systems,
Inc. ("Lessee"), Lease Plan North America, Inc. ("Head Lessor"), ABN AMRO
Leasing, Inc. ("Lessor"), the Persons listed in Schedule I to the Participation
Agreement (the "Participants") and ABN AMRO Bank N.V., as agent for the
Participants (in such capacity, "Agent") and (b) that certain Lease Agreement,
dated as of April 13, 2001 (the "Facility 2 Lease Agreement") between Lessee and
Lessor. Unless otherwise indicated, all terms defined in the Participation
Agreement have the same respective meanings when used herein.
2. Lessee hereby agrees that the description of "Related Goods" set
forth in Exhibit B to the Lease Agreement shall be supplemented by adding
thereto the Related Goods described in Attachment 1 hereto. Lessee hereby
accepts all such Related Goods and agrees that such Related Goods constitute
part of the Facility 2 Property subject to the Lease Agreement.
IN WITNESS WHEREOF, Lessee has executed this Supplement to Exhibit B on
the date set forth above.
LESSEE: NOVELLUS SYSTEMS, INC.
By: ___________________________________
Name: __________________________
Title: _________________________
LESSOR: ABN AMRO LEASING, INC.
By: ___________________________________
Name: __________________________
Title: _________________________
B(1)-1
232
ATTACHMENT 1
TO
SUPPLEMENT TO EXHIBIT B
B(1)-2
233
SCHEDULE 1
HAZARDOUS MATERIALS USED ON THE FACILITY 2 PROPERTY
As set forth in that certain Hazardous Materials Business Plan
(HMBP) for Novellus Systems, Inc. dated 4/1/97 prepared by Environmental Quality
Solutions.
B (Sch-1)-1
234
EXHIBIT C
NOTICE OF RENTAL PERIOD SELECTION
[Date]
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
1. Reference is made to (a) that certain Participation Agreement, dated
as of April 13, 2001 (the "Participation Agreement"), among Novellus Systems,
Inc. ("Lessee"), Lease Plan North America, Inc. ("Head Lessor"), ABN AMRO
Leasing, Inc. ("Lessor"), the Persons listed in Schedule I to the Participation
Agreement (the "Participants") and ABN AMRO Bank N.V., as agent for the
Participants (in such capacity, "Agent") and (b) that certain Lease Agreement,
dated as of April 13, 2001 (the "Facility 2 Lease Agreement") between Lessee and
Lessor. Unless otherwise indicated, all terms defined in the Participation
Agreement have the same respective meanings when used herein.
2. [Insert one of the following as appropriate]
[Pursuant to Subparagraph 2.03(a) of the Facility 2 Lease
Agreement, Lessee hereby irrevocably selects a new Rental Period for a Portion
of the Outstanding Lease Amount as follows:
(a) The Portion for which a new Rental Period is to be
selected is the Portion in the amount of $__________ with a current
Rental Period which began on ________, ____ and ends on __________,
____; and
(b) The next Rental Period for such Portion shall be
__________ month[s].]
[Pursuant to Subparagraph 2.03(a) of the Facility 2 Lease
Agreement, Lessee hereby irrevocably elects to divide a Portion of the
Outstanding Lease Amount into further Portions as follows:
(a) The Portion which is to be divided is the Portion in the
amount of $__________ with a current Rental Period which began on
________, ____ and ends on __________, ____; and
C-1
235
(b) On the last day of the current Rental Period for such
Portion, such Portion is to be divided into the following Portions with
the following initial Rental Periods:
Portion Rental Period
$___________ _______ month[s]
$___________ _______ month[s]
$___________ _______ month[s]
$___________ _______ month[s]]
[Pursuant to Subparagraph 2.03(a) of the Facility 2 Lease
Agreement, Lessee hereby irrevocably elects to combine into a single Portion
certain Portions of the Outstanding Lease Amount as follows:
(a) The Portions which are to be combined are the Portions in
the amounts of $__________, $_________ and $_______, each with a
current Rental Period which ends on __________, ____; and
(b) The initial Rental Period for such newly created Portion
shall be __________ month[s].]
3. Lessee hereby certifies to the Lessor Parties that, on the date of
this Notice of Rental Period Selection and after giving effect to the selection
as described above:
(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 on such date.
IN WITNESS WHEREOF, Lessee has executed this Notice of Rental Period
Selection on the date set forth above.
NOVELLUS SYSTEMS, INC.
By: _____________________________
Name: ____________________
Title: ___________________
C-2
236
EXHIBIT C(1)
FACILITY 1 LEASE AGREEMENT
C(1)-1
237
================================================================================
FACILITY 1 PURCHASE AGREEMENT
BETWEEN
NOVELLUS SYSTEMS, INC.
AND
ABN AMRO LEASING, INC.
APRIL 13, 2001
================================================================================
238
TABLE OF CONTENTS
PAGE
----
SECTION 1. INTERPRETATION............................................................1
1.01. Definitions..................................................................1
1.02. Rules of Construction........................................................2
SECTION 2. OPTIONAL PURCHASE BY LESSEE DURING THE TERM...............................2
2.01. Term Purchase Option.........................................................2
2.02. Notice of Term Purchase Option Exercise......................................2
2.03. Purchase Price...............................................................2
SECTION 3. OBLIGATIONS OF LESSEE ON THE EXPIRATION DATE..............................2
3.01. Alternative..................................................................2
3.02. Marketing Option.............................................................3
3.03. Expiration Date Purchase Option..............................................9
SECTION 4. TERMS OF ALL PURCHASES....................................................9
4.01. Representations and Warranties of Parties....................................9
4.02. "As Is" Purchase............................................................11
4.03. Release.....................................................................11
4.04. Permits, Approvals, Etc.....................................................12
4.05. Costs.......................................................................12
4.06. Lessee's Expiration Date Payment Obligations................................12
4.07. Lessor Liens................................................................12
4.08. Transfer Documents..........................................................13
4.09. Casualty and Condemnation Proceeds..........................................13
4.10. Payments....................................................................13
4.11. Environmental Reports.......................................................13
4.12. Further Assurances..........................................................14
SECTION 5. MISCELLANEOUS............................................................14
5.01. Notices.....................................................................14
5.02. Waivers; Amendments.........................................................14
5.03. Successors and Assigns......................................................14
5.04. No Third Party Rights.......................................................14
5.05. Partial Invalidity..........................................................15
5.06. Governing Law...............................................................15
5.07. Counterparts................................................................15
i
239
TABLE OF CONTENTS
(CONTINUED)
PAGE
----
5.08. Nature of Lessee's Obligations..............................................15
EXHIBITS
A Notice of Term Purchase Option Exercise (2.02)
B Notice of Marketing Option Exercise (3.01)
C Notice of Expiration Date Purchase Option Exercise (3.01)
D(1) Deed (Lessor) (4.08(a))
D(2) Acknowledgement and Disclaimer of Representations and Warranties
(4.08(a))
E Bill of Sale (Lessor) (4.08(a))
F Deed (Lessee) (4.08(b))
G Bill of Sale (Lessee) (4.08(b))
-ii-
240
FACILITY 1 PURCHASE AGREEMENT
THIS FACILITY 1 PURCHASE AGREEMENT (this "Agreement" herein), 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 ("Lessor").
RECITALS
A. Lessee has requested Lessor and the Persons which are "Participants"
under the Participation Agreement referred to in Recital B below (such Persons
to be referred to collectively as the "Participants") to provide to Lessee a
lease facility pursuant to which:
(1) Lessor would (a) lease certain property designated by Lessee,
(b) sublease such property to Lessee, (c) make advances to finance certain
related expenses, and (d) grant to Lessee the right to purchase such
property; and
(2) The Participants would participate in such lease facility by (a)
funding the advances to be made by Lessor and (b) acquiring participation
interests in the rental and certain other payments to be made by Lessee.
B. Pursuant to a Participation Agreement dated of even date herewith (the
"Participation Agreement") among Lessee, Lease Plan North America, Inc. ("Head
Lessor"), Lessor, the Participants and ABN AMRO Bank N.V., as agent for the
Participants (in such capacity, "Agent"), Lessor and the Participants have
agreed to provide such lease facility upon the terms and subject to the
conditions set forth therein, including without limitation the execution and
delivery of this Agreement setting forth the terms for the purchase of the
property by Lessee.
AGREEMENT
NOW, THEREFORE, in consideration of the above Recitals and the mutual
covenants herein contained, the parties hereto hereby agree as follows:
SECTION 1. INTERPRETATION.
1.01. Definitions. Unless otherwise indicated in this Agreement or any
other Operative Document, each term set forth in Schedule 1.01 to the
Participation Agreement, when used in this Agreement or any other Operative
Document, shall have the respective meaning given to that term in such Schedule
1.01 or in the provision of this Agreement or other document, instrument or
agreement referenced in such Schedule 1.01.
1
241
1.02. Rules of Construction. Unless otherwise indicated in this Agreement
or any other Operative Document, the rules of construction set forth in Schedule
1.02 to the Participation Agreement shall apply to this Agreement and the other
Operative Documents.
SECTION 2. OPTIONAL PURCHASE BY LESSEE DURING THE TERM.
2.01. Term Purchase Option. Subject to the terms and conditions of this
Agreement and the other Operative Documents (including those set forth below in
this Paragraph 2.01), Lessee may, at its option on any Scheduled Rent Payment
Date prior to the Scheduled Expiration Date of the Facility 1 Lease Agreement,
terminate the Facility 1 Lease Agreement and purchase all of the Facility 1
Property (the "Term Purchase Option").
(a) Notice of Term Purchase Option Exercise. Lessee shall notify
Lessor of Lessee's exercise of the Term Purchase Option by delivering to
Lessor an irrevocable written notice in the form of Exhibit A(1),
appropriately completed (the "Notice of Term Purchase Option Exercise"),
which states that Lessee is exercising its right to terminate the Facility
1 Lease Agreement prior to the Scheduled Expiration Date thereof pursuant
to Paragraph 4.01 of the Facility 1 Lease Agreement and purchase all of
the Facility 1 Property pursuant to this Paragraph 2.01 and specifies the
Scheduled Rent Payment Date on which such termination and purchase are to
occur (which date, after the delivery of such notice, shall be the
Expiration Date). Lessee shall give the Notice of Term Purchase Option
Exercise to Lessor at least one (1) month prior to the Scheduled Rent
Payment Date on which such termination and purchase are to occur. The
Notice of Term Purchase Option Exercise shall be delivered as required by
Subparagraph 2.02(c) and Paragraph 7.01 of the Participation Agreement;
provided, however, that Lessee shall promptly deliver the original of any
Notice of Term Purchase Option Exercise initially delivered by facsimile.
After delivering to Lessor the Notice of Term Purchase Option Exercise,
Lessee may, upon not less than ten (10) Business Days prior written notice
to Lessor, extend the date on which the termination of the Facility 1
Lease Agreement and Lessee's purchase of the Facility 1 Property is to
occur to a Business Day not more than ten (10) Business Days after the
date specified in the Notice of Term Purchase Option Exercise, provided
that Lessee may so extend such date only once.
(b) Term Purchase Option Purchase Price. Lessee or its designee
shall pay to Lessor on the Expiration Date, as the purchase price for the
Facility 1 Property, an amount equal to the Outstanding Lease Amount on
such date.
2.02. Partial Purchase Option. Subject to the terms and conditions of this
Agreement and the other Operative Documents (including those set forth below in
this Paragraph 2.02), Lessee may, at its option on any Scheduled Rent Payment
Date prior to the Scheduled Expiration Date of the Facility 1 Lease Agreement,
without terminating the Facility 1 Lease Agreement, purchase one or more Tracts
(but not less than all of any such Tract) of the Facility 1 Property (the
"Partial Purchase Option").
(a) Notice of Partial Purchase Option Exercise. Lessee shall notify
Lessor of Lessee's exercise of the Partial Purchase Option by delivering
to Lessor an irrevocable
2
242
written notice in the form of Exhibit A(2), appropriately completed (a
"Notice of Partial Purchase Option Exercise"), which states that Lessee is
exercising its right to purchase one or more Tracts of the Facility 1
Property prior to the Scheduled Expiration Date pursuant to this Paragraph
2.02 and specifies (i) the Tract(s) so to be purchased and (ii) the
Scheduled Rent Payment Date on which such purchase is to occur (a "Partial
Purchase Date"). Lessee shall give each Notice of Partial Purchase Option
Exercise to Lessor at least two (2) months prior to the Partial Purchase
Date on which a purchase is to occur. Each Notice of Partial Purchase
Option Exercise shall be delivered as required by Subparagraph 2.02(c) and
Paragraph 7.01 of the Participation Agreement; provided, however, that
Lessee shall promptly deliver the original of any Notice of Partial
Purchase Option Exercise initially delivered by facsimile.
(b) Partial Purchase Option Purchase Price. Lessee shall pay to
Lessor on each Partial Purchase Date, as the purchase price for each Tract
of Facility 1 Property to be purchased on such date, an amount equal to
the portion of the Outstanding Lease Amount under Facility 1 on such date
attributable to such Tract of Facility 1 Property.
(c) Conditions to Exercise of Partial Purchase Option. The purchase
by Lessee on any Partial Purchase Date of any Tract of Facility 1 Property
pursuant to this Paragraph 2.02 is subject to the following conditions:
(i) Lessor shall have received the Notice of Partial Purchase
Option Exercise for such purchase pursuant to Subparagraph 2.02(a);
(ii) Lessor shall have received, on or prior to such Partial
Purchase Date:
(A) New Expiration Date Appraisals for all Tracts of
Facility 1 Property that are to remain subject to the Facility
1 Lease Agreement after such Partial Purchase Date, which
appraisals (1) each shall be dated a recent date prior to such
Partial Purchase Date and (2) together shall assess the
aggregate Fair Market Value of all such remaining Tracts of
Facility 1 Property at not less than the Outstanding Lease
Amount under Facility 1 that will remain after application of
all amounts to be applied thereto on such Partial Purchase
Date; and
(B) The purchase price payable by Lessee for such Tract
of Facility 1 Property pursuant to Subparagraph 2.02(b) and
any other amounts payable by Lessee pursuant to Subparagraph
4.06(b); and
(iii) No Default shall have occurred and be continuing on such
Partial Purchase Date or will occur as a result of such purchase by
Lessee.
SECTION 3. OBLIGATIONS OF LESSEE ON THE EXPIRATION DATE.
3.01. Alternative. Unless Lessee has exercised the Term Purchase Option,
on the Expiration Date of the Facility 1 Lease Agreement, Lessee shall either:
3
243
(a) Marketing Option. Cause another Person to complete the purchase
of the Facility 1 Property pursuant to Paragraph 3.02 (the "Marketing
Option"); or
(b) Expiration Date Purchase Option. Purchase the Facility 1
Property itself pursuant to Paragraph 3.03 (the "Expiration Date Purchase
Option").
Lessee shall elect either the Marketing Option or the Expiration Date Purchase
Option by delivering to Lessor, not more than nine (9) months nor less than six
(6) months prior to the Scheduled Expiration Date for the Facility 1 Lease
Agreement, either (i) a written notice in the form of Exhibit B, appropriately
completed (the "Notice of Marketing Option Exercise"), or (ii) a written notice
in the form of Exhibit C, appropriately completed (the "Notice of Expiration
Date Purchase Option Exercise"); provided, however, that (A) Lessee shall be
deemed to have elected the Expiration Date Purchase Option if it fails to
deliver either notice as required by this sentence; (B) Lessee's election of the
Expiration Date Purchase Option (whether expressly by a notice so delivered or
implicitly by the failure to deliver any notice) shall be irrevocable; and (C)
Lessee may not elect the Marketing Option if (1) the Expiration Date has been
accelerated to an earlier Termination Date following a Marketing Option Event of
Default under the Facility 1 Lease Agreement or (2) the conditions set forth in
Paragraph 3.03 of the Participation Agreement are not satisfied on the date
Lessee delivers its election notice or on the Expiration Date of the Facility 1
Lease Agreement (unless, in each case, the only event or condition causing such
conditions not to be so satisfied is the occurrence of a Non-Marketing Option
Event of Default under the Facility 1 Lease Agreement). The Notice of Marketing
Option Exercise or the Notice of Expiration Date Purchase Option Exercise shall
be delivered as required by Subparagraph 2.02(c) and Paragraph 7.01 of the
Participation Agreement; provided, however, that Lessee shall promptly deliver
to Lessor the original of any such notice initially delivered by facsimile.
3.02. Marketing Option.
(a) General. If Lessee elects to exercise the Marketing Option by
delivering to Lessor a Notice of Marketing Option Exercise pursuant to
Paragraph 3.01, Lessee shall use reasonable efforts, in accordance with
Paragraph 3.2(b) below, to (i) locate a purchaser which satisfies the
requirements set forth in this Paragraph 3.02, (ii) arrange for such
purchaser to purchase the Land Portion of the Facility 1 Property on the
Expiration Date for a purchase price which is not less than the lesser of
(A) the Outstanding Lease Amount under Facility 1 attributable to the Land
Portion of the Facility 1 Property, and (B) the Fair Market Value of the
Land Portion of the Facility 1 Property, (iii) arrange for such purchaser
to purchase the Improvement Portion of the Facility 1 Property on the
Expiration Date for a purchase price which is not less than the lesser of
(A) the difference between the Outstanding Lease Amount and Residual Value
Guaranty Amount under Facility 1 attributable to the Improvement Portion
of the Facility 1 Property, and (B) the Fair Market Value of the
Improvement Portion of the Facility 1 Property and (iv) otherwise comply,
or cause compliance with, the requirements of this Paragraph 3.02 and the
other applicable provisions of this Agreement.
(b) Lessee's Marketing Obligations.
4
244
(i) Initial Marketing Period. During the period beginning on
the date Lessee delivers the Notice of Marketing Option Exercise and
ending on the date which is four (4) months prior to the Expiration
Date of the Facility 1 Lease Agreement (the "Initial Marketing
Period"), Lessee shall use reasonable efforts to solicit Conforming
Bids from potential purchasers of the Facility 1 Property. On or
prior to the last day of the Initial Marketing Period, Lessee shall
deliver to Lessor any Conforming Bid selected by Lessee (the
"Initial Bid"). If (A) the portion of the purchase price
attributable to the Land Portion of the Facility 1 Property
specified in the Initial Bid is equal to or greater than the
Outstanding Lease Amount under Facility 1 attributable to the Land
Portion of the Facility 1 Property and (B) the portion of the
purchase price attributable to the Improvement Portion of the
Facility 1 Property specified in the Initial Bid is equal to or
greater than the difference between the Outstanding Lease Amount and
Residual Value Guaranty Amount under Facility 1 attributable to the
Improvement Portion of the Facility 1 Property, Lessor shall accept
such bid and Lessee shall have no further obligations to solicit
additional bids.
(ii) Secondary Marketing Period. If Lessee does not submit an
Initial Bid or if either the Land Portion or Improvement Portion of
the purchase price specified in the Initial Bid is less than the
applicable amount required in the immediately preceding clause (i),
Lessor may reject such bid and Lessee shall, during the period which
begins on the day following the Initial Marketing Period and ends on
the date two (2) months prior to the Expiration Date of the Facility
1 Lease Agreement (the "Secondary Marketing Period"):
(A) Use its best efforts to solicit additional
Conforming Bids, including the engagement of experienced and
knowledgeable brokers;
(B) Furnish to each Lessor Party copies of all bids and
otherwise provide each Lessor Party with such information
relating to the marketing of the Facility 1 Property as such
Person may reasonably request in writing;
(C) Agree to provide to all potential purchasers all
customary seller's indemnities (including environmental
indemnities), representations and warranties regarding the
Facility 1 Property (including the title to, except for Lessor
Liens, and condition of the Facility 1 Property);
(D) Furnish to each Lessor Party copies of environmental
reports, architect's certificates, licenses, permits and other
evidence reasonably requested by such Person to establish that
no Default has occurred and is continuing under the Facility 1
Lease Agreement;
(E) Permit any Lessor Party or potential purchaser to
inspect the Facility 1 Property and the maintenance records
for the Property upon reasonable prior written notice and
during normal business hours and
5
245
provide to each such Person all information regarding the
Facility 1 Property reasonably requested by such Person in
writing;
(F) Take all other commercially reasonable steps to
secure the best price for the Facility 1 Property; and
(G) If any Conforming Bids were received by Lessee,
submit to Lessor on or prior to the last day of the Secondary
Marketing Period any Conforming Bid selected by Lessee with a
purchase price which meets the Land Portion and Improvement
Portion amount requirements of the immediately preceding
clause (i) or, if no such Conforming Bid was received by
Lessee, the highest Conforming Bid for each portion received
by Lessee during the Secondary Marketing Period.
During the Secondary Marketing Period, any Lessor Party shall have
the right to submit one or more bids or solicit bids from other
Persons.
(c) Conforming Bids. Each bid must meet each of the following
requirements (each such bid to be referred to herein as a "Conforming
Bid"):
(i) The bid may be submitted by any Person other than (A) a
Person which is an Affiliate of Lessee or (B) a Person which has an
agreement (whether express or implied) with Lessee or any of its
Affiliates to sell, lease or otherwise make available to Lessee or
any of its Affiliates any portion of the Facility 1 Property;
(ii) The bidder must agree in writing to purchase the Facility
1 Property on the Expiration Date of the Facility 1 Lease Agreement
for a purchase price to be paid in cash, that is not less than (A)
in the case of the portion of the purchase price attributable to the
Land Portion of the Facility 1 Property, the lesser of (1) the
Outstanding Lease Amount under Facility 1 attributable to the Land
Portion of the Facility 1 Property and (2) the Fair Market Value of
the Land Portion of the Facility 1 Property; and (B) in the case of
the portion of the purchase price attributable to the Improvement
Portion of the Facility 1 Property, the lesser of (1) the difference
between the Outstanding Lease Amount and Residual Value Guaranty
Amount under Facility 1 attributable to the Improvement Portion of
the Facility 1 Property and (2) the Fair Market Value of the
Improvement Portion of the Facility 1 Property;
(iii) The bidder must agree to purchase the Property "as is"
without any representations, warranties or indemnities, except for
(A) any representations, warranties or indemnities provided by
Lessor and Lessee pursuant to Subparagraph 4.01(b) and (B) any
representations, warranties or indemnities provided by Lessee
pursuant to clause (ii)(C) of Subparagraph 3.02(b); and
(iv) The bidder must agree to be bound by the other terms and
conditions of this Agreement applicable to bidders.
6
246
(d) Lessor's Obligation to Accept Bids. If, at any time on or prior
to the last day of the Secondary Marketing Period, Lessee submits to
Lessor a Conforming Bid under this Paragraph 3.02 with a purchase price
which meets the Land Portion and Improvement Portion amount requirements
set forth in clause (i) of Subparagraph 3.02(b), Lessor shall accept such
bid. If Lessee submits to Lessor a Conforming Bid under this Paragraph
3.02 with a purchase price which does not meet such amount requirements,
Lessor shall not accept such bid unless approved by Lessor and Required
Participants. If Lessee fails to submit a bid to Lessor on or prior to the
last day of the Secondary Marketing Period which Lessor is so required to
accept, Lessor shall (unless it elects to accept another bid which it is
not required to accept, in which case Lessee's obligations shall be
limited to the amounts payable pursuant to clause (ii) of Subparagraph
4.06(a)) retain the Facility 1 Property after the Expiration Date of the
Facility 1 Lease Agreement; provided, however, that Lessee's payment
obligations on such Expiration Date shall be limited to the amounts
payable pursuant to clause (iii) of Subparagraph 4.06(a) if (i) Lessor
retains the Facility 1 Property after Lessee submits a Conforming Bid on
or prior to the last day of the Secondary Marketing Period in accordance
with clause (ii) of Subparagraph 3.02(b) and (ii) the Marketing Option has
not terminated prior to such Expiration Date pursuant to Subparagraph
3.02(f). If Lessee fails to obtain a Conforming Bid prior to the last day
of the Secondary Marketing Period which Lessor is required to accept or
another bid which Lessor elects to accept (notwithstanding that it is not
required to do so) despite Lessee's timely and complete compliance with
Lessee's marketing obligations as described in Subparagraph 3.02(a) and
Subparagraph 3.02(b), and such failure is not caused by any negligence or
willful misconduct of Lessee, then Lessee's payment obligations on the
Expiration Date of the Facility 1 Lease Agreement shall be limited to the
amounts payable pursuant to clause (ii) or clause (iii) of Subparagraph
4.06(a), as applicable. Lessor shall notify Lessee of Lessor's election to
retain the Facility 1 Property by delivering to Lessee, at least ten (10)
days prior to the Expiration Date of the Facility 1 Lease Agreement, a
written notice of such election.
(e) Purchase Price. If Lessor accepts any bid by any Person, such
Person (the "Designated Purchaser") shall pay to Lessor on the Expiration
Date of the Facility 1 Lease Agreement, as the purchase price for the
Property, the amounts set forth in such bid as the purchase prices for the
Land Portion and the Improvement Portion of the Facility 1 Property. The
Designated Purchaser shall pay the amount for the Land Portion and the
amount for the Improvement Portion separately, and Lessor shall keep such
amounts separate and not commingle them.
(f) Termination of the Marketing Option. Lessee's right to exercise
the Marketing Option shall immediately terminate and Lessee shall purchase
the Facility 1 Property on the Expiration Date of the Facility 1 Lease
Agreement pursuant to Paragraph 3.03 if (i) Lessee fails to comply with
any of its obligations under this Paragraph 3.02; (ii) a Marketing Option
Event of Default under the Facility 1 Lease Agreement occurs after Lessee
delivers the Notice of Marketing Option Exercise; (iii) the conditions
precedent set forth in Paragraph 3.03 of the Participation Agreement are
not satisfied on the Expiration Date of the Facility 1 Lease Agreement
(unless the only event or condition causing such conditions not to be so
satisfied is the occurrence of a Non-Marketing
7
247
Option Event of Default under the Facility 1 Lease Agreement); or (iv) the
Designated Purchaser fails to consummate the purchase of the Facility 1
Property on the Expiration Date of the Facility 1 Lease Agreement in
accordance with its accepted bid and this Agreement, without regard to the
reason for such failure (except as otherwise provided in the following
proviso); provided, however, that, if the Designated Purchaser fails to
consummate the purchase of the Property on the Expiration Date solely due
to Lessor's failure to remove Lessor Liens or deliver the required deed
and bill of sale or other documents required to be delivered by Lessor
hereunder, Lessee's right to exercise the Marketing Option shall not
terminate, Lessee shall not be required to purchase the Property on the
Expiration Date and Lessee's payment obligations on the Expiration Date
shall be limited to the amounts set forth in Subparagraph 4.06(b)
(determined as if the purchase by the Designated Purchaser had been
consummated).
(g) Residual Value Guaranty Amount and Indemnity Amount. Unless
Lessee's right to exercise the Marketing Option has terminated and Lessee
is required to purchase the Facility 1 Property on the Expiration Date of
the Facility 1 Lease Agreement pursuant to Paragraph 3.03, Lessee shall
pay to Lessor on such Expiration Date the Residual Value Guaranty Amounts
and the Indemnity Amounts attributable to the Land Portion and Improvement
Portion of the Facility 1 Property calculated as follows:
(i) The "Residual Value Guaranty Amount" shall be (A) with
respect to the Land Portion of the Facility 1 Property, an amount
equal to the total Outstanding Lease Amount under Facility 1
attributable to the Land Portion on the Expiration Date, and (B)
with respect to the Improvement Portion of the Facility 1 Property,
an amount equal to the total Tranche A Proportionate Share (for the
Improvement Portion) of the Outstanding Lease Amount under Facility
1 attributable to the Improvement Portion on the Expiration Date.
(ii) The "Indemnity Amount" shall be, with respect to the Land
Portion or Improvement Portion of the Facility 1 Property, an amount
equal to the decrease, if any, between the Commencement Date and the
Expiration Date of the Facility 1 Lease Agreement in the Fair Market
Value of such portion caused by (A) any representation or warranty
of Lessee or any of its Affiliates regarding the Facility 1 Property
set forth in any of the Operative Documents proving to be false or
inaccurate when made, (B) the existence of, or the failure of Lessee
to pay any Governmental Charge, Indebtedness or other obligation
which might give rise to, any Liens in the Facility 1 Property
(other than Permitted Property Liens), (C) the failure of Lessee to
complete any New Improvements or any Modifications or (D) any other
failure of Lessee to comply with any of its obligations regarding
the Facility 1 Property set forth in any of the Operative Documents;
(h) Determination of Fair Market Value and Indemnity Amount. If the
purchase price specified in the Initial Bid does not meet the Land Portion
and Improvement Portion amount requirements set forth in clause (i) of
Subparagraph 3.02(b), Lessor may, on or prior to the last day of the
Secondary Marketing Period (if Lessee has not previously delivered to
Lessor a Conforming Bid with a purchase price that meets such
requirements), deliver to Lessee a written notice of Lessor's
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determination of the current Fair Market Value of the Land Portion and
Improvement Portion of the Facility 1 Property and the Indemnity Amount
attributable to the Land Portion and Improvement Portion of the Facility 1
Property. To determine such amounts, Lessor shall obtain Appraisals of
each portion of the Facility 1 Property which set forth:
(i) A current Appraisal of the Fair Market Value of each such
portion in its then existing condition (the "Current Appraisal");
and
(ii) An Appraisal of the Fair Market Value of each such
portion which assumes that (A) all representations and warranties
regarding the Facility 1 Property made by Lessee or any of its
Affiliates in any of the Operative Documents were true and correct
when made; (B) Lessee has maintained the Facility 1 Property in
compliance with all applicable Governmental Rules, Insurance
Requirements and the Operative Documents; (C) Lessee has completed
all Modifications and any other New Improvements in a good and
workmanlike manner and otherwise as required by the Operative
Documents; (D) Lessee has repaired the Facility 1 Property as
required by the Operative Documents following any Casualty; (E)
Lessee has restored the Facility 1 Property as required by the
Operative Documents following any Condemnation; (F) Lessee has paid
all Governmental Charges, Indebtedness and other obligations which,
if unpaid, might give rise to a Lien (other than a Lessor Lien) on
the Facility 1 Property; (G) Lessee has removed all Liens on the
Facility 1 Property except for Permitted Property Liens and Lessor
Liens; and (H) Lessee has performed all of its other obligations as
required by the Operative Documents (the "Assumed Appraisal").
In the absence of manifest error, (A) the Current Appraisal shall
constitute the current Fair Market Value of the Facility 1 Property and
(B) the difference between the Current Appraisal and the Assumed Appraisal
shall constitute the Indemnity Amount if the Current Appraisal is less
than the Assumed Appraisal.
(i) Lessee not an Agent. Lessee shall not be an agent for any of the
Lessor Parties in arranging for a purchaser of the Facility 1 Property. No
Lessor Party shall be bound by any acts of Lessee.
(j) Excess Proceeds.
(i) If, on the Expiration Date of the Facility 1 Lease
Agreement, after the application by Lessor of all amounts received
by Lessor on such date that are attributable to the Land Portion of
the Facility 1 Property to the Outstanding Lease Amount attributable
to the Land Portion of the Facility 1 Property, all unpaid Rent
attributable to the Land Portion of the Facility 1 Property accrued
through or due and payable on or prior to such date and all other
amounts attributable to the Land Portion of the Facility 1 Property,
if any, due and payable by Lessee under the Operative Documents on
or prior to such date, any excess amount remains, Lessor promptly
shall pay such excess amount to Lessee.
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(ii) If, on the Expiration Date of the Facility 1 Lease
Agreement, after the application by Lessor of all amounts received
by Lessor on such date that are attributable to the Improvement
Portion of the Facility 1 Property to the Outstanding Lease Amount
attributable to the Improvement Portion of the Facility 1 Property,
all unpaid Rent attributable to the Improvement Portion of the
Facility 1 Property accrued through or due and payable on or prior
to such date and all other amounts attributable to the Improvement
Portion of the Facility 1 Property, if any, due and payable by
Lessee under the Operative Documents on or prior to such date, any
excess amount remains, Lessor promptly shall pay such excess amount
to Lessee.
(k) Creditworthiness of Designated Purchaser. Lessee assumes all
responsibility for determining the creditworthiness of any potential
purchaser on any bid submitted by Lessee to Lessor hereunder. If, after
any purchase by a Designated Purchaser hereunder, the purchase price paid
by such Designated Purchaser is recovered from any Lessor Party, Lessee
shall reimburse such Lessor Party for such recovery unless such recovery
is due solely to a material misrepresentation or covenant breach by such
Lessor Party.
(l) Exercise of Marketing Option After Non-Marketing Option Event of
Default. If Lessor notifies Lessee pursuant to Subparagraph 5.03(a) or
Subparagraph 5.04(a) of the Lease Agreement that Lessor is terminating the
Lease Agreement on a Termination Date which is prior to the Scheduled
Expiration Date of the Facility 1 Lease Agreement and the only basis for
such early termination is the occurrence of a Non-Marketing Option Event
of Default, Lessee may, subject to Paragraph 3.01, elect to exercise the
Marketing Option if, not later than ten (10) Business Days after it
receives from Lessor such notice of early termination, it (i) delivers to
Lessor a Notice of Marketing Option Exercise, (ii) delivers to Lessor Cash
Collateral in the amount required by clause (ii) of Subparagraph 2.11(a)
of the Participation Agreement, and (iii) takes such other actions as may
be required by Subparagraph 2.11(a) of the Participation Agreement. Upon
the delivery by Lessee to Lessor of a Notice of Marketing Option Exercise
and satisfaction of the other requirements set forth in the preceding
sentence of this Subparagraph 3.02(l), the Expiration Date of the Facility
1 Lease Agreement shall, if the conditions to the exercise of the
Marketing Option set forth in Paragraph 3.01 are satisfied, be extended to
the first Business Day of the first full calendar month that is six (6)
months after the date of receipt by Lessor of such Notice of Marketing
Option Exercise. Any exercise by Lessee of the Marketing Option pursuant
to this Subparagraph 3.02(l) shall be subject to the terms and conditions
otherwise set forth in this Agreement.
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3.03. Expiration Date Purchase Option.
(a) General. If (i) Lessee elects to exercise the Expiration Date
Purchase Option by delivering to Lessor a Notice of Expiration Date
Purchase Option Exercise pursuant to Paragraph 3.01; (ii) Lessee elects to
exercise the Marketing Option by delivering to Lessor a Notice of
Marketing Option Exercise pursuant to Paragraph 3.01 but the Marketing
Option terminates pursuant to Subparagraph 3.02(f); or (iii) Lessee fails
to deliver to Lessor either notice as required by Paragraph 3.01; Lessee
shall purchase the Facility 1 Property on the Expiration Date of the
Facility 1 Lease Agreement and otherwise comply, or cause compliance with,
the requirements of this Paragraph 3.03 and the other applicable
provisions of this Agreement.
(b) Purchase Price. If Lessee is purchasing the Facility 1 Property
pursuant to the Expiration Date Purchase Option, Lessee shall pay to
Lessor on the Expiration Date of the Facility 1 Lease Agreement, as the
purchase price for the Facility 1 Property, an amount equal to the
Outstanding Lease Amount under Facility 1 on such date.
SECTION 4. TERMS OF ALL PURCHASES.
4.01. Representations and Warranties of Parties.
(a) Representations and Warranties of Purchaser. The purchaser of
the Facility 1 Property, whether Lessee, an Assignee Purchaser or a
Designated Purchaser ("Purchaser"), shall represent and warrant to Lessor
on the Expiration Date of the Facility 1 Lease Agreement (or, in the case
of a purchase of a portion of the Facility 1 Property pursuant to the
Partial Purchase Option, on the applicable Partial Purchase Date) as
follows:
(i) Such Person is a legal entity duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization or an individual with legal capacity to purchase the
Facility 1 Property (or, in the case of a purchase of a portion of
the Facility 1 Property pursuant to the Partial Purchase Option, the
portion to be purchased).
(ii) The execution, delivery and performance by such Person of
each document, instrument and agreement executed, or to be executed,
by such Person in connection with its purchase of the Facility 1
Property (or, in the case of a purchase of a portion of the Facility
1 Property pursuant to the Partial Purchase Option, the portion to
be purchased) (the "Purchase Documents") and the consummation of the
transactions contemplated thereby (A) are within the power of such
Person and (B) have been duly authorized by all necessary actions on
the part of such Person.
(iii) Each Purchase Document executed, or to be executed, by
such Person has been, or will be, duly executed and delivered by
such Person and constitutes, or will constitute, a legal, valid and
binding obligation of such Person, enforceable against such Person
in accordance with its terms, except as limited by
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bankruptcy, insolvency or other laws of general application relating
to or affecting the enforcement of creditors' rights generally and
general principles of equity.
(iv) Such Person has not (A) made a general assignment for the
benefit of creditors, (B) filed any voluntary petition in bankruptcy
or suffered the filing of any involuntary petition by such Person's
creditors, (C) suffered the appointment of a receiver to take
possession of all, or substantially all, of such Person's assets,
(D) suffered the attachment or other judicial seizure of all, or
substantially all, of such Person's assets, (E) admitted in writing
its inability to pay its debts as they come due, or (F) made an
offer of settlement, extension or composition to its creditors
generally.
(v) Such Person is not a "party in interest" within the
meaning of Section 3(14) of the ERISA, with respect to any investor
in or beneficiary of Lessor.
(b) Representations and Warranties of Lessor and Lessee. Each of
Lessor and Lessee shall represent and warrant to Purchaser (and Lessee
also shall represent and warrant to Lessor if Lessor is to retain the
Facility 1 Property) on the Expiration Date of the Facility 1 Lease
Agreement as follows:
(i) Such Person is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization.
(ii) The execution, delivery and performance by such Person of
each Purchase Document executed, or to be executed, by such Person
and the consummation of the transactions contemplated thereby (A)
are within the power of such Person and (B) have been duly
authorized by all necessary actions on the part of such Person.
(iii) Each Purchase Document executed, or to be executed, by
such Person has been, or will be, duly executed and delivered by
such Person and constitutes, or will constitute, a legal, valid and
binding obligation of such Person, enforceable against such Person
in accordance with its terms, except as limited by bankruptcy,
insolvency or other laws of general application relating to or
affecting the enforcement of creditors' rights generally and general
principles of equity.
(iv) Such Person has not (A) made a general assignment for the
benefit of creditors, (B) filed any voluntary petition in bankruptcy
or suffered the filing of any involuntary petition by such Person's
creditors, (C) suffered the appointment of a receiver to take
possession of all, or substantially all, of such Person's assets,
(D) suffered the attachment or other judicial seizure of all, or
substantially all, of such Person's assets, (E) admitted in writing
its inability to pay its debts as they come due, or (F) made an
offer of settlement, extension or composition to its creditors
generally.
In addition to the foregoing, (A) Lessee shall represent and warrant to
the Designated Purchaser (or Lessor if Lessor is to retain the Facility 1
Property) on the Expiration Date
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of the Facility 1 Lease Agreement that no Liens are attached to the
Facility 1 Property, except for Permitted Property Liens, and (B) Lessor
shall represent and warrant to Purchaser on the Expiration Date of the
Facility 1 Lease Agreement (or, in the case of a purchase of a portion of
the Facility 1 Property pursuant to the Partial Purchase Option, on the
applicable Partial Purchase Date) that no Lessor Liens are attached to the
Facility 1 Property (or, in the case of a purchase of a portion of the
Facility 1 Property pursuant to the Partial Purchase Option, the portion
to be purchased). Except for the foregoing representations and warranties
to be made by Lessor on the Expiration Date of the Facility 1 Lease
Agreement (or, in the case of a purchase of a portion of the Facility 1
Property pursuant to the Partial Purchase Option, on the applicable
Partial Purchase Date), no Lessor Party shall make any representation or
warranty regarding the Facility 1 Property or the sale of the Facility 1
Property. Lessee shall make such additional representations and warranties
as it may be required to make pursuant to clause (ii) of Subparagraph
3.02(b).
(c) Survival of Representations and Warranties. The representations
and warranties of Purchaser, Lessor and Lessee shall survive for a period
of twelve (12) months after the Expiration Date of the Facility 1 Lease
Agreement (or, in the case of a purchase of a portion of the Facility 1
Property pursuant to the Partial Purchase Option, after the applicable
Partial Purchase Date). Any claim which any such party may have at any
time against any other such party for a breach of any such representation
or warranty, whether known or unknown, which is not asserted by written
notice within such twelve (12) month period shall not be valid or
effective, and the party shall have no liability with respect thereto.
4.02. "As Is" Purchase. All purchases of the Facility 1 Property hereunder
shall be "as is, with all faults" and without any representations, warranties or
indemnities except for any representations, warranties or indemnities provided
by Lessee pursuant to clause (ii)(C) of Subparagraph 3.02(b) or by Lessor or
Lessee pursuant to Subparagraph 4.01(b). Each Purchaser shall specifically
acknowledge and agree that Lessor is selling and such Purchaser is purchasing
the Facility 1 Property on an "as is, with all faults" basis and that such
Purchaser is not relying on any representations or warranties of any kind
whatsoever, express or implied, from any Lessor Party, its agents, or brokers as
to any matters concerning the Facility 1 Property (except for any
representations and warranties provided by Lessor pursuant to Subparagraph
4.01(b)), including (a) the condition of the Facility 1 Property (including any
Improvements to the Facility 1 Property made prior to the Commencement Date or
during the Term of the Facility 1 Lease Agreement); (b) title to the Facility 1
Property (including possession of the Facility 1 Property by any Person or the
existence of any Lien or any other right, title or interest in or to any of the
Facility 1 Property in favor of any Person); (c) the value, habitability,
usability, design, operation or fitness for use of the Facility 1 Property; (d)
the availability or adequacy of utilities and other services to the Facility 1
Property; (e) any latent, hidden or patent defect in the Facility 1 Property;
(f) the zoning or status of the Facility 1 Property or any other restrictions on
the use of the Facility 1 Property; (g) the economics of the Facility 1
Property; (h) any Casualty or Condemnation; or (i) the compliance of the
Facility 1 Property with any applicable Governmental Rule or Insurance
Requirement.
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4.03. Release. Without limiting the foregoing, each Purchaser shall, on
behalf of itself and its successors and assigns, waive its right to recover
from, and forever release and discharge, Lessor and the other Indemnitees from
any and all demands, claims, legal or administrative proceedings, losses,
liabilities, damages, penalties, fines, liens, judgments, costs or expenses
whatsoever (including attorneys' fees and costs), whether direct or indirect,
known or unknown, foreseen or unforeseen, that may arise on account of or in any
way be connected with the physical condition of the Facility 1 Property or any
Governmental Rule applicable thereto, including any Environment Law. Each
Purchaser shall expressly waive the benefits of Section 1542 of the California
Civil Code, which provides that, "a general release does not extend to claims
which the creditor does not know or expect to exist in his favor at the time of
executing the release, which if known to him must have materially affected the
settlement with the debtor."
4.04. Permits, Approvals, Etc. Lessee shall obtain all permits, licenses
and approvals from and make all filings with Governmental Authorities and other
Persons, comply and cause compliance with all applicable Governmental Rules and
take all other actions required for the marketing, purchase and sale of the
Facility 1 Property.
4.05. Costs. Lessee shall pay directly, without deduction from the
purchase price or any other amount payable to Lessor hereunder, all costs and
expenses of Lessee and Lessor associated with the marketing and sale of the
Facility 1 Property, including brokers' fees and commissions; title insurance
premiums; survey charges; utility, tax and other prorations; fees and expenses
of environmental consultants and attorneys; appraisal costs; escrow fees;
recording fees; documentary, transfer and other taxes; and all other fees, costs
and expenses which might otherwise be deducted from the purchase price or any
other amount payable to Lessor hereunder.
4.06. Lessee's Payment Obligations.
(a) Expiration Date. On the Expiration Date of the Facility 1 Lease
Agreement, Lessee shall pay to Lessor the following:
(i) Purchase by Lessee. If the Facility 1 Property is to be
purchased by Lessee or an Assignee Purchaser on such date, (A) the
purchase price payable by Lessee, (B) all unpaid Rent accrued
through or due and payable on or prior to such date and (C) all
other amounts, if any, due and payable by Lessee under the Operative
Documents on or prior to such date;
(ii) Purchase by a Designated Purchaser. If the Facility 1
Property is to be purchased by a Designated Purchaser on such date,
(A) the Residual Value Guaranty Amounts, (B) the Indemnity Amounts,
(C) all unpaid Rent accrued through or due and payable on or prior
to such date and (D) all other amounts, if any, due and payable by
Lessee under the Operative Documents on or prior to such date; or
(iii) Retention by Lessor. If the Facility 1 Property is to be
retained by Lessor on such date pursuant to Subparagraph 3.02(d),
(A) the Residual Value Guaranty Amounts, (B) the Indemnity Amounts,
(C) all unpaid Rent accrued through or due and payable on or prior
to such date and (D) all other amounts, if
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any, due and payable by Lessee under the Operative Documents on or
prior to such date.
(b) Partial Purchase Date. On any Partial Purchase Date, Lessee
shall pay to Lessor (i) the purchase price for the Tracts of Facility 1
Property to be purchased on such date, (ii) all unpaid Rent attributable
to such Tracts of Facility 1 Property accrued through or due and payable
on or prior to such date and (iii) all other amounts attributable to such
Tracts of Facility 1 Property, if any, due and payable by Lessee under the
Operative Documents on or prior to such date.
4.07. Lessor Liens. Lessor shall remove all Lessor Liens from the Facility
1 Property before the Expiration Date of the Facility 1 Lease Agreement (or, in
the case of a purchase of a portion of the Facility 1 Property pursuant to the
Partial Purchase Option, from the portion to be purchased before the applicable
Partial Purchase Date).
4.08. Transfer Documents.
(a) Expiration Date.
(i) Lessor. Subject to receipt by Lessor on the Expiration
Date of the Facility 1 Lease Agreement of the full amount of the
following, without any setoff, deduction or reduction of any kind:
(A) In the case of a transfer to Lessee or an Assignee
Purchaser, all amounts payable by Lessee pursuant to clause
(i) of Subparagraph 4.06(a); or
(B) In the case of a transfer to a Designated Purchaser,
(1) the purchase price payable by the Designated Purchaser and
(2) all amounts payable by Lessee pursuant to clause (ii) of
Subparagraph 4.06(a);
Lessor shall transfer its interest in the Facility 1 Property to
Purchaser on the Expiration Date of the Facility 1 Lease Agreement
(unless Lessor is to retain the Facility 1 Property) by executing
and delivering to Purchaser a Deed in substantially the form of
Exhibit D(1), an Acknowledgment of Disclaimer of Representations and
Warranties in substantially the form of Exhibit D(2), a Bill of Sale
in substantially the form of Exhibit E, and shall assign to
Purchaser Lessor's option to purchase its interest in the Facility 1
Property as provided in Section 6 of the Facility 1 Head Lease
Agreement.
(ii) Lessee. On the Expiration Date of the Facility 1 Lease
Agreement, unless Lessee is to purchase the Facility 1 Property,
Lessee shall transfer its interest in the Facility 1 Property to the
Designated Purchaser or an Assignee Purchaser (or Lessor if Lessor
is to retain the Facility 1 Property) by executing and delivering to
such Person a Deed in substantially the form of Exhibit F, a Bill of
Sale in substantially the form of Exhibit G and such other
documents, instruments and agreements as such Person may reasonably
request.
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(b) Partial Purchase Date. Subject to receipt by Lessor on any
Partial Purchase Date of all amounts payable by Lessee pursuant to
Subparagraph 4.06(b), without any setoff, deduction or reduction of any
kind, Lessor shall transfer its interest in the Tracts of Facility 1
Property to be purchased on such date to Lessee by executing and
delivering to Lessee a Deed in substantially the form of Exhibit D(1), a
Bill of Sale in substantially the form of Exhibit E, shall assign to
Lessee Lessor's option to purchase its interest in such Tracts of Facility
1 Property as provided in Section 6 of the Facility 1 Head Lease
Agreement, and such other documents, instruments and agreements as Lessee
may reasonably request.
4.09. Casualty and Condemnation Proceeds. If, on the Expiration Date of
the Facility 1 Lease Agreement, any Casualty and Condemnation Proceeds are held
by Lessor in a Repair and Restoration Account or otherwise, Lessor shall (a) if
Lessee is to purchase the Facility 1 Property on the Expiration Date of the
Facility 1 Lease Agreement and Lessee shall so direct, apply such proceeds to
the purchase price to be paid by Lessee or (b) in all other cases, release such
proceeds to Lessee; provided, however, that Lessor shall not have any obligation
so to apply or release such proceeds unless Lessee and/or any Designated
Purchaser has complied with all of the terms and conditions of this Agreement.
4.10. Payments. Purchaser, Lessor and Lessee shall make all payments in
lawful money of the United States and in same day or immediately available funds
not later than 12:00 noon on the date due.
4.11. Environmental Reports. Lessee shall obtain and deliver to Lessor,
not later than one (1) month prior to the Expiration Date of the Lease Agreement
(or, in the case of a purchase of a portion of the Facility 1 Property pursuant
to the Partial Purchase Option, prior to the applicable Partial Purchase Date),
environmental reports with respect to the Facility 1 Property (or, in the case
of a purchase of a portion of the Facility 1 Property pursuant to the Partial
Purchase Option, with respect to the applicable portion thereof) prepared by
environmental consultants acceptable to Lessor.
4.12. Further Assurances. Lessee shall, and shall cause any Designated
Purchaser to, execute and deliver such documents, instruments and agreements and
take such other actions as Lessor may reasonably request to effect the purposes
of this Agreement and comply with the terms hereof. Similarly, Lessor shall
execute and deliver such documents, instruments and agreements and take such
other actions as Lessee or a Designated Purchaser may reasonably request to
effect the purposes of this Agreement and comply with the terms hereof.
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SECTION 5. MISCELLANEOUS.
5.01. Notices. Except as otherwise specified herein, all notices,
requests, demands, consents, instructions or other communications to or upon
Lessee or Lessor under this Agreement shall be given as provided in Subparagraph
2.02(c) and Paragraph 7.01 of the Participation Agreement.
5.02. Waivers; Amendments. Any term, covenant, agreement or condition of
this Agreement may be amended or waived only as provided in the Participation
Agreement. No failure or delay by any Lessor Party in exercising any right
hereunder shall operate as a waiver thereof or of any other right nor shall any
single or partial exercise of any such right preclude any other further exercise
thereof or of any other right. Unless otherwise specified in any such waiver or
consent, a waiver or consent given hereunder shall be effective only in the
specific instance and for the specific purpose for which given.
5.03. Successors and Assigns.
(a) General. This Agreement shall be binding upon and inure to the
benefit of the Lessor Parties and Lessee and their permitted successors
and assigns; provided, however, that the Lessor Parties and Lessee shall
not sell, assign or delegate their respective rights and obligations
hereunder except as provided in the Participation Agreement and in
Subparagraph 5.03(b).
(b) Assignment by Lessee of Purchase Rights. Lessee may assign to a
third party (an "Assignee Purchaser") its right to purchase the Facility 1
Property pursuant to the Term Purchase Option, the Partial Purchase Option
or the Expiration Date Purchase Option; provided, however, that (i) such
an assignment shall not relieve Lessee of its obligations to consummate or
cause the consummation of any such purchase in accordance with the terms
of this Agreement and (ii) Lessee assumes all responsibility for
determining the creditworthiness of any such Assignee Purchaser. If, after
any purchase by an Assignee Purchaser hereunder, the purchase price paid
by such Assignee Purchaser is recovered from any Lessor Party, Lessee
shall reimburse such Lessor Party for such recovery unless such recovery
is due solely to a material misrepresentation or covenant breach by such
Lessor Party.
5.04. No Third Party Rights. Nothing expressed in or to be implied from
this Agreement is intended to give, or shall be construed to give, any Person,
other than the Lessor Parties and Lessee and their permitted successors and
assigns, any benefit or legal or equitable right, remedy or claim under or by
virtue of this Agreement or under or by virtue of any provision herein.
5.05. Partial Invalidity. If at any time any provision of this Agreement
is or becomes illegal, invalid or unenforceable in any respect under the law or
any jurisdiction, neither the legality, validity or enforceability of the
remaining provisions of this Agreement nor the legality, validity or
enforceability of such provision under the law of any other jurisdiction shall
in any way be affected or impaired thereby.
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5.06. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California without reference to
conflicts of law rules.
5.07. Counterparts. This Agreement 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.
5.08. Nature of Lessee's Obligations.
(a) Independent Obligation. The obligation of Lessee to pay the
amounts payable by Lessee under this Agreement and the other Operative
Documents and to perform the other Lessee Obligation are absolute,
unconditional and irrevocable obligations which are separate and
independent of the obligations of the Lessor Parties under this Agreement
and the other Operative Documents and all other events and circumstances,
including the events and circumstances set forth in Subparagraph 5.08(c).
(b) No Termination or Abatement. This Agreement and the other
Operative Documents and Lessee's obligation to pay all amounts hereunder
and to pay and perform all other Lessee Obligations shall continue in full
force and effect without abatement notwithstanding the occurrence or
existence of any event or circumstance, including any event or
circumstance set forth in Subparagraph 5.08(c).
(c) Full Payment and Performance. Lessee shall make all payments
under this Agreement and the other Operative Documents in the full amounts
and at the times required by the terms of this Agreement and the other
Operative Documents without setoff, deduction or reduction of any kind and
shall perform all other Lessee Obligations as and when required, without
regard to any event or circumstances whatsoever, including (i) the
condition of the Facility 1 Property (including any Improvements to the
Facility 1 Property made prior to the Commencement Date or during the Term
of the Facility 1 Lease Agreement); (ii) title to the Facility 1 Property
(including possession of the Facility 1 Property by any Person or the
existence of any Lien or any other right, title or interest in or to any
of the Facility 1 Property in favor of any Person); (iii) the value,
habitability, usability, design, operation or fitness for use of the
Facility 1 Property; (iv) the availability or adequacy of utilities and
other services to the Facility 1 Property; (v) any latent, hidden or
patent defect in the Facility 1 Property; (vi) the zoning or status of the
Facility 1 Property or any other restrictions on the use of the Facility 1
Property; (g) the economics of the Facility 1 Property; (vii) any Casualty
or Condemnation; (viii) the compliance of the Facility 1 Property with any
applicable Governmental Rule or Insurance Requirement; (ix) any failure by
any Lessor Party to perform any of its obligations under this Agreement or
any other Operative Document; or (x) the exercise by any Lessor Party of
any of its remedies under this Agreement or any other Operative Document;
provided, however, that this Paragraph 5.08 shall not abrogate any right
which Lessee may have to recover damages from any Lessor Party for any
material breach by such Lessor Party of its obligations under this
Agreement or any other Operative Document to the extent permitted
hereunder or thereunder.
[The signature page follows.]
18
258
IN WITNESS WHEREOF, Lessee and Lessor have caused this Agreement 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:
-----------------------------
19
259
EXHIBIT A(1)
NOTICE OF TERM PURCHASE OPTION EXERCISE
[Date]
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
1. Reference is made to the following:
(a) The Participation Agreement, dated as of April 13, 2001 (the
"Participation Agreement"), among Novellus Systems, Inc. ("Lessee"), Lease
Plan North America, Inc. ("Head Lessor"), ABN AMRO Leasing, Inc.
("Lessor"), the Persons listed in Schedule I to the Participation
Agreement (the "Participants") and ABN AMRO Bank N.V., as agent for the
Participants (in such capacity, "Agent"); and
(b) The Facility 1 Lease Agreement, dated as of April 13, 2001 (the
"Lease Agreement"), between Lessee and Lessor; and
(c) The Facility 1 Purchase Agreement, dated as of April 13, 2001
(the "Lease Agreement"), between Lessee and Lessor.
Unless otherwise indicated, all terms defined in the Participation Agreement
have the same respective meanings when used herein.
2. Pursuant to Paragraph 4.01 of the Facility 1 Lease Agreement and
Paragraph 2.01 of the Facility 1 Purchase Agreement, Lessee hereby irrevocably
notifies Lessor that Lessee is exercising its right to terminate the Facility 1
Lease Agreement prior to the Scheduled Expiration Date of the Facility 1 Lease
Agreement and purchase the Facility 1 Property on [_________, ____] (which date
is a Scheduled Rent Payment Date and which date, after the delivery of this
notice, shall be the Expiration Date of the Facility 1 Lease Agreement).
IN WITNESS WHEREOF, Lessee has executed this Notice of Term Purchase
Option Exercise on the date set forth above.
NOVELLUS SYSTEMS, INC.
By:
------------------------------------
Name:
------------------------------
Title:
-----------------------------
A(1)-1
260
EXHIBIT A(2)
NOTICE OF PARTIAL PURCHASE OPTION EXERCISE
[Date]
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
1. Reference is made to the following:
(a) The Participation Agreement, dated as of April 13, 2001 (the
"Participation Agreement"), among Novellus Systems, Inc. ("Lessee"), Lease
Plan North America, Inc. ("Head Lessor"), ABN AMRO Leasing, Inc.
("Lessor"), the Persons listed in Schedule I to the Participation
Agreement (the "Participants") and ABN AMRO Bank N.V., as agent for the
Participants (in such capacity, "Agent"); and
(b) The Facility 1 Purchase Agreement, dated as of April 13, 2001
(the "Lease Agreement"), between Lessee and Lessor.
Unless otherwise indicated, all terms defined in the Participation Agreement
have the same respective meanings when used herein.
2. Pursuant to Paragraph 2.02 of the Facility 1 Purchase Agreement, Lessee
hereby irrevocably notifies Lessor that Lessee is exercising its right to
purchase a portion of the Facility 1 Property as follows:
(a) The Tract[s] of Facility 1 Property to be purchased is [are]
________________; and
(b) The date on which such purchase is to occur is [_________, ____]
(which date is a Scheduled Rent Payment Date ).
3. Lessee hereby certifies to Lessor, Agent and the Participants that, on
the date of this notice:
(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
A(2)-1
261
(c) All of the Operative Documents are in full force and effect.
IN WITNESS WHEREOF, Lessee has executed this Notice of Partial Purchase
Option Exercise on the date set forth above.
NOVELLUS SYSTEMS, INC.
By:
------------------------------------
Name:
------------------------------
Title:
-----------------------------
A(2)-2
262
EXHIBIT B
NOTICE OF MARKETING OPTION EXERCISE
[Date]
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
1. Reference is made to the following:
(a) The Participation Agreement, dated as of April 13, 2001 (the
"Participation Agreement"), among Novellus Systems, Inc. ("Lessee"), Lease
Plan North America, Inc. ("Head Lessor"), ABN AMRO Leasing, Inc.
("Lessor"), the Persons listed in Schedule I to the Participation
Agreement (the "Participants") and ABN AMRO Bank N.V., as agent for the
Participants (in such capacity, "Agent"); and
(b) The Facility 1 Purchase Agreement, dated as of April 13, 2001
(the "Purchase Agreement"), between Lessee and Lessor.
Unless otherwise indicated, all terms defined in the Participation Agreement
have the same respective meanings when used herein.
2. Pursuant to Paragraph 3.01 of the Purchase Agreement, Lessee hereby
notifies Lessor that Lessee is electing to exercise the Marketing Option on the
Scheduled Expiration Date of the Facility 1 Lease Agreement of [_____, ____].
3. Lessee hereby certifies to Lessor, Agent and the Participants that, on
the date of this notice:
(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 (other than a Non-Marketing Option Event of Default
under the Facility 1 Lease Agreement) has occurred and is continuing; and
(c) All of the Operative Documents are in full force and effect on
such date.
B-1
263
IN WITNESS WHEREOF, Lessee has executed this Notice of Marketing Option
Exercise on the date set forth above.
NOVELLUS SYSTEMS, INC.
By:
------------------------------------
Name:
------------------------------
Title:
-----------------------------
B-2
264
EXHIBIT C
NOTICE OF EXPIRATION DATE PURCHASE OPTION EXERCISE
[Date]
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
1. Reference is made to the following:
(a) The Participation Agreement, dated as of April 13, 2001 (the
"Participation Agreement"), among Novellus Systems, Inc. ("Lessee"), Lease
Plan North America, Inc. ("Head Lessor"), ABN AMRO Leasing, Inc.
("Lessor"), the Persons listed in Schedule I to the Participation
Agreement (the "Participants") and ABN AMRO Bank N.V., as agent for the
Participants (in such capacity, "Agent"); and
(b) The Facility 1 Purchase Agreement, dated as of April 13, 2001
(the "Purchase Agreement"), between Lessee and Lessor.
Unless otherwise indicated, all terms defined in the Participation Agreement
have the same respective meanings when used herein.
2. Pursuant to Paragraph 3.01 of the Purchase Agreement, Lessee hereby
notifies Lessor that Lessee is electing to exercise the Expiration Date Purchase
Option on the Scheduled Expiration Date of the Facility 1 Lease Agreement of
[_____, ____].
IN WITNESS WHEREOF, Lessee has executed this Notice of Expiration Date
Purchase Option Exercise on the date set forth above.
NOVELLUS SYSTEMS, INC.
By:
------------------------------------
Name:
------------------------------
Title:
-----------------------------
C-1
265
EXHIBIT D(1)
RECORDING REQUESTED BY
WHEN RECORDED RETURN TO
AND MAIL TAX STATEMENTS TO:
[Purchaser]
- ----------------------------------------
- ----------------------------------------
- ----------------------------------------
Documentary Transfer Tax is not of public record and is shown on a separate
sheet attached to this deed.
- --------------------------------------------------------------------------------
QUITCLAIM DEED
FOR VALUABLE CONSIDERATION, the receipt of which is hereby acknowledged,
ABN AMRO LEASING, INC. ("Grantor"), hereby releases, remises and forever
quitclaims to [PURCHASER], a _____________ ("Grantee"), the real property
located in the City of [__________], State of California, described on EXHIBIT A
attached hereto and made a part hereof (the "Property").
Executed as of _____, ____.
ABN AMRO LEASING, INC.,
By:
------------------------------------
Its:
-----------------------------------
D(1)-1
266
EXHIBIT A
LEGAL DESCRIPTION
Assessor's Parcel No.:
------------------------------
D(1)[A]-1
267
State of _____________
County of _____________________
On ___________________ before me, _________________________,
Date Name, Title of Officer
personally appeared ________________________________________________,
Name(s) of signer(s)
(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.
-----------------------------------------------
D(1)-2
268
,
-------------- ---
Santa Clara County Recorder
Re: Request That Statement of Documentary
Transfer Tax Not be Recorded
Dear Sir:
Request is hereby made in accordance with Section 11932 of the Revenue and
Taxation Code that this statement of tax due not be recorded with the attached
deed but be affixed to the deed after recordation and before return as directed
on the deed.
The attached deed names ABN AMRO Leasing, Inc., as grantor, and
[PURCHASER], a _________________, as grantee.
The property being transferred and described in the attached deed is
located in the City of San Jose and County of [__________], State of California.
The amount of Documentary Transfer Tax due on the attached deed is
$__________, computed on full value of the property conveyed.
ABN AMRO LEASING, INC.,
By:
------------------------------------
Its:
-----------------------------------
D(1)-3
269
EXHIBIT D(2)
ACKNOWLEDGMENT AND DISCLAIMER OF REPRESENTATIONS AND
WARRANTIES
THIS ACKNOWLEDGMENT OF DISCLAIMER OF REPRESENTATIONS AND WARRANTIES (this
"Certificate") is made as of ___________, ____ by [PURCHASER], a _____________
("Grantee").
Contemporaneously with execution of this Acknowledgement, ABN AMRO
Leasing, Inc., an Illinois corporation ("AALI"), is executing and delivering to
Grantee a Quitclaim Deed and a Bill of Sale (the foregoing documents and any
other documents to be executed and delivered to Grantee in connection therewith
are herein called the "Conveyancing Documents" and any of the properties, rights
or other matters assigned, transferred or conveyed pursuant thereto are herein
collectively called the "Property") pursuant to the terms of a Facility 1
Purchase Agreement dated as of April 13, 2001 by and between AALI and Novellus
Systems, Inc., a California corporation ("Novellus").
Notwithstanding any provision contained in the Conveyancing Documents to
the contrary, Grantee acknowledges that AALI is selling and Grantee is
purchasing the Property on an "as is, with all faults" basis and that Grantee is
not relying on any representations or warranties of any kind whatsoever, express
or implied, from AALI, its agents, or brokers as to any matters concerning the
Property including (a) the condition of the Property (including any improvements
to the Property); (b) title to the Property (including possession of the
Property by any individual or entity or the existence of any lien or any other
right, title or interest in or to any of the Property in favor of any person,
but excluding any Lessor Liens as defined in that certain Participation
Agreement dated as of April 13, 2001 among AALI, Novellus, the Participants and
ABN AMRO Bank N.V., as agent for the Participants (in such capacity, "Agent"));
(c) the value, habitability, usability, design, operation or fitness for use of
the Property; (d) the availability or adequacy of utilities and other services
to the Property; (e) any latent, hidden or patent defect in the Property; (f)
the zoning or status of the Property or any other restrictions on the use of the
Property; (g) the economics of the Property; (h) any damage to, destruction or,
or decrease in the value of all or any portion of the Property or any
condemnation or other taking or sale of all or any portion of the Property, by
or on account of any actual or threatened eminent domain proceeding or other
taking of action by any governmental authority or other person have the power of
eminent domain; or (i) the compliance of the Property with any applicable law,
rule, regulation, ordinance, order, code, judgment or similar form of decision
of any governmental authority or any terms, conditions or requirements imposed
by any policies of insurance relating to the Property.
[See next page]
D(2)-1
270
The provisions of this Acknowledgement shall be binding on Grantee, its
successors and assigns and any other party claiming through Grantee. Grantee
hereby acknowledges that AALI N.A. is entitled to rely and is relying on this
Certificate.
EXECUTED as of ____________, _______.
[PURCHASER]
By:
Name:
Title:
D(2)-2
271
EXHIBIT E
BILL OF SALE
FOR GOOD AND VALUABLE CONSIDERATION, the receipt of which is hereby
acknowledged, ABN AMRO LEASING, INC., an Illinois corporation ("Seller"), does
hereby sell, transfer and convey to [PURCHASER], a _________________________
("Purchaser"), the personal property owned by Seller in connection with that
certain real property commonly known as _______________, San Jose, California,
including, without limitation, the personal property itemized on SCHEDULE 1
attached hereto and incorporated herein by this reference (the "Property").
Seller is selling and Purchaser is purchasing the Property on an "as is,
with all faults" basis and Purchaser is not relying on any representations or
warranties of any kind whatsoever, express or implied, from Seller, its agents,
or brokers as to any matters concerning the Property including (a) the condition
of the Property; (b) title to the Property (including possession of the Property
by any individual or entity or the existence of any lien or any other right,
title or interest in or to any of the Property in favor of any person); (c) the
value, habitability, usability, design, operation or fitness for use of the
Property; or (d) any latent, hidden or patent defect in the Property.
Dated: SELLER:
-----------, ----------
ABN AMRO LEASING, INC.,
By:
------------------------------------
Its:
-----------------------------------
PURCHASER:
[PURCHASER]
a
--------------------------------------
By:
------------------------------------
Its:
-----------------------------------
E-1
272
SCHEDULE 1
PROPERTY
E(1)-1
273
EXHIBIT F
RECORDING REQUESTED BY
WHEN RECORDED RETURN TO
AND MAIL TAX STATEMENTS TO:
- ----------------------------------------
- ----------------------------------------
Attention:
-----------------------------
Documentary Transfer Tax is not of public record and is shown on a separate
sheet attached to this deed.
- --------------------------------------------------------------------------------
GRANT DEED
FOR VALUABLE CONSIDERATION, the receipt of which is hereby acknowledged,
NOVELLUS SYSTEMS, INC., a California corporation ("Grantor"), hereby releases,
remises and forever grants to [PURCHASER] ("Grantee"), the real property located
in the City of San Jose, County of Santa Clara, State of California, described
on EXHIBIT A attached hereto and made a part hereof (the "Property").
Executed as of __________, ___.
NOVELLUS SYSTEMS, INC.,
a California corporation
By:
------------------------------------
Its:
-----------------------------------
F-1
274
EXHIBIT A
LEGAL DESCRIPTION
Assessor's Parcel No.:
----------------------------
F(A)-1
275
State of _________________
County of _____________________
On ___________________ before me, _________________________,
Date Name, Title of Officer
personally appeared ________________________________________________,
Name(s) of signer(s)
( 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.
- --------------------------------------------------------------------------------
F(A)-2
276
,
----------- ----
Santa Clara County Recorder
Re: Request That Statement of Documentary
Transfer Tax Not be Recorded
Dear Sir:
Request is hereby made in accordance with Section 11932 of the Revenue and
Taxation Code that this statement of tax due not be recorded with the attached
deed but be affixed to the deed after recordation and before return as directed
on the deed.
The attached deed names NOVELLUS SYSTEMS, INC., a California corporation,
as grantor, and [PURCHASER], as grantee.
The property being transferred and described in the attached deed is
located in the City of San Jose and County of Santa Clara, State of California.
The amount of Documentary Transfer Tax due on the attached deed is
$__________, computed on full value of the property conveyed.
NOVELLUS SYSTEMS, INC.,
a __________________
By:
------------------------------------
Its:
-----------------------------------
F(A)-3
277
EXHIBIT G
BILL OF SALE
For good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Novellus Systems, Inc., a California corporation
("Seller"), does hereby sell, transfer, and convey unto [PURCHASER] ("Buyer"),
the personal property owned by Seller in connection with that certain real
property commonly known as _______________, San Jose, California, which Seller
warrants to be free and clear of all liens and encumbrances, including, without
limitation, the personal property itemized on SCHEDULE 1 attached hereto and
incorporated herein by this reference.
Seller does hereby covenant with Buyer that Seller is the lawful owner of
such personal property, and that the undersigned has good right to sell the same
as aforesaid and will warrant and defend the title thereto unto Buyer, its
successors and assigns, against the claims and demands of all persons
whomsoever.
DATED this ____ day of __________, ____.
SELLER: Novellus Systems, Inc.,
a California corporation
By:
------------------------------------
Its:
-----------------------------------
G-1
278
SCHEDULE 1
PROPERTY
279
FACILITY 2 PURCHASE AGREEMENT
BETWEEN
NOVELLUS SYSTEMS, INC.
AND
ABN AMRO LEASING, INC.
APRIL 13, 2001
280
TABLE OF CONTENTS
PAGE
SECTION 1. INTERPRETATION........................................................... 1
1.01. Definitions................................................................. 1
1.02. Rules of Construction....................................................... 2
SECTION 2. OPTIONAL PURCHASE BY LESSEE DURING THE TERM.............................. 2
2.01. Term Purchase Option........................................................ 2
2.02. Notice of Term Purchase Option Exercise..................................... 2
2.03. Purchase Price.............................................................. 2
SECTION 3. OBLIGATIONS OF LESSEE ON THE EXPIRATION DATE............................. 2
3.01. Alternative................................................................. 2
3.02. Marketing Option............................................................ 3
3.03. Expiration Date Purchase Option............................................. 9
SECTION 4. TERMS OF ALL PURCHASES................................................... 9
4.01. Representations and Warranties of Parties................................... 9
4.02. "As Is" Purchase............................................................ 11
4.03. Release..................................................................... 11
4.04. Permits, Approvals, Etc..................................................... 12
4.05. Costs....................................................................... 12
4.06. Lessee's Expiration Date Payment Obligations................................ 12
4.07. Lessor Liens................................................................ 12
4.08. Transfer Documents.......................................................... 13
4.09. Casualty and Condemnation Proceeds.......................................... 13
4.10. Payments.................................................................... 13
4.11. Environmental Reports....................................................... 13
4.12. Further Assurances.......................................................... 14
SECTION 5. MISCELLANEOUS............................................................ 14
5.01. Notices..................................................................... 14
5.02. Waivers; Amendments......................................................... 14
5.03. Successors and Assigns...................................................... 14
5.04. No Third Party Rights....................................................... 14
5.05. Partial Invalidity.......................................................... 15
5.06. Governing Law............................................................... 15
5.07. Counterparts................................................................ 15
5.08. Nature of Lessee's Obligations.............................................. 15
EXHIBITS
A Notice of Term Purchase Option Exercise (2.02)
B Notice of Marketing Option Exercise (3.01)
C Notice of Expiration Date Purchase Option Exercise (3.01)
D(1) Deed (Lessor) (4.08(a))
D(2) Acknowledgement and Disclaimer of Representations and Warranties (4.08(a))
E Bill of Sale (Lessor) (4.08(a))
F Deed (Lessee)(4.08(b))
G Bill of Sale (Lessee) (4.08(b))
-i-
281
FACILITY 2 PURCHASE AGREEMENT
THIS FACILITY 2 PURCHASE AGREEMENT (this "Agreement" herein), 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 ("Lessor").
RECITALS
A. Lessee has requested Lessor and the Persons which are "Participants"
under the Participation Agreement referred to in Recital B below (such Persons
to be referred to collectively as the "Participants") to provide to Lessee a
lease facility pursuant to which:
(1) Lessor would (a) lease certain property designated by Lessee,
(b) sublease such property to Lessee, (c) appoint Lessee as Lessor's agent
to make certain improvements to such property, (d) make advances to
finance such improvements and to pay certain related expenses and (e)
grant to Lessee the right to purchase such property; and
(2) The Participants would participate in such lease facility by (a)
funding the advances to be made by Lessor and (b) acquiring participation
interests in the rental and certain other payments to be made by Lessee.
B. Pursuant to a Participation Agreement dated of even date herewith (the
"Participation Agreement") among Lessee, Lease Plan North America, Inc. ("Head
Lessor"), Lessor, the Participants and ABN AMRO Bank N.V., as agent for the
Participants (in such capacity, "Agent"), Lessor and the Participants have
agreed to provide such lease facility upon the terms and subject to the
conditions set forth therein, including without limitation the execution and
delivery of this Agreement setting forth the terms for the purchase of the
property by Lessee.
AGREEMENT
NOW, THEREFORE, in consideration of the above Recitals and the mutual
covenants herein contained, the parties hereto hereby agree as follows:
SECTION 1. INTERPRETATION.
1.01. Definitions. Unless otherwise indicated in this Agreement or any
other Operative Document, each term set forth in Schedule 1.01 to the
Participation Agreement, when used in this Agreement or any other Operative
Document, shall have the respective meaning given to
282
that term in such Schedule 1.01 or in the provision of this Agreement or other
document, instrument or agreement referenced in such Schedule 1.01.
1.02. Rules of Construction. Unless otherwise indicated in this Agreement
or any other Operative Document, the rules of construction set forth in Schedule
1.02 to the Participation Agreement shall apply to this Agreement and the other
Operative Documents.
SECTION 2. OPTIONAL PURCHASE BY LESSEE DURING THE TERM.
2.01. Term Purchase Option. Subject to the terms and conditions of this
Agreement and the other Operative Documents (including those set forth below in
this Paragraph 2.01), Lessee may, at its option on any Scheduled Rent Payment
Date prior to the Scheduled Expiration Date of the Facility 2 Lease Agreement,
terminate the Facility 2 Lease Agreement and purchase all of the Facility 2
Property (the "Term Purchase Option").
(a) Notice of Term Purchase Option Exercise. Lessee shall notify
Lessor of Lessee's exercise of the Term Purchase Option by delivering to
Lessor an irrevocable written notice in the form of Exhibit A(1),
appropriately completed (the "Notice of Term Purchase Option Exercise"),
which states that Lessee is exercising its right to terminate the Facility
2 Lease Agreement prior to the Scheduled Expiration Date thereof pursuant
to Paragraph 4.01 of the Facility 2 Lease Agreement and purchase all of
the Facility 2 Property pursuant to this Paragraph 2.01 and specifies the
Scheduled Rent Payment Date on which such termination and purchase are to
occur (which date, after the delivery of such notice, shall be the
Expiration Date). Lessee shall give the Notice of Term Purchase Option
Exercise to Lessor at least one (1) month prior to the Scheduled Rent
Payment Date on which such termination and purchase are to occur. The
Notice of Term Purchase Option Exercise shall be delivered as required by
Subparagraph 2.02(c) and Paragraph 7.01 of the Participation Agreement;
provided, however, that Lessee shall promptly deliver the original of any
Notice of Term Purchase Option Exercise initially delivered by facsimile.
After delivering to Lessor the Notice of Term Purchase Option Exercise,
Lessee may, upon not less than ten (10) Business Days prior written notice
to Lessor, extend the date on which the termination of the Facility 2
Lease Agreement and Lessee's purchase of the Facility 2 Property is to
occur to a Business Day not more than ten (10) Business Days after the
date specified in the Notice of Term Purchase Option Exercise, provided
that Lessee may so extend such date only once.
(b) Term Purchase Option Purchase Price. Lessee or its designee
shall pay to Lessor on the Expiration Date, as the purchase price for the
Property, an amount equal to the Outstanding Lease Amount on such date.
2.02. Partial Purchase Option. Subject to the terms and conditions of this
Agreement and the other Operative Documents (including those set forth below in
this Paragraph 2.02), Lessee may, at its option on any Scheduled Rent Payment
Date prior to the Scheduled Expiration Date of the Facility 2 Lease Agreement,
without terminating the Facility 2 Lease Agreement, purchase one or more Tracts
(but not less than all of any such Tract) of the Facility 2 Property (the
"Partial Purchase Option").
2
283
(a) Notice of Partial Purchase Option Exercise. Lessee shall notify
Lessor of Lessee's exercise of the Partial Purchase Option by delivering
to Lessor an irrevocable written notice in the form of Exhibit A(2),
appropriately completed (a "Notice of Partial Purchase Option Exercise"),
which states that Lessee is exercising its right to purchase one or more
Tracts of the Facility 2 Property prior to the Scheduled Expiration Date
pursuant to this Paragraph 2.02 and specifies (i) the Tract(s) so to be
purchased and (ii) the Scheduled Rent Payment Date on which such purchase
is to occur (a "Partial Purchase Date"). Lessee shall give each Notice of
Partial Purchase Option Exercise to Lessor at least two (2) months prior
to the Partial Purchase Date on which a purchase is to occur. Each Notice
of Partial Purchase Option Exercise shall be delivered as required by
Subparagraph 2.02(c) and Paragraph 7.01 of the Participation Agreement;
provided, however, that Lessee shall promptly deliver the original of any
Notice of Partial Purchase Option Exercise initially delivered by
facsimile.
(b) Partial Purchase Option Purchase Price. Lessee shall pay to
Lessor on each Partial Purchase Date, as the purchase price for each Tract
of Facility 2 Property to be purchased on such date, an amount equal to
the portion of the Outstanding Lease Amount under Facility 2 on such date
attributable to such Tract of Facility 2 Property.
(c) Conditions to Exercise of Partial Purchase Option. The purchase
by Lessee on any Partial Purchase Date of any Tract of Facility 2 Property
pursuant to this Paragraph 2.02 is subject to the following conditions:
(i) Lessor shall have received the Notice of Partial Purchase
Option Exercise for such purchase pursuant to Subparagraph 2.02(a);
(ii) Lessor shall have received, on or prior to such Partial
Purchase Date:
(A) New Expiration Date Appraisals for all Tracts of
Facility 2 Property that are to remain subject to the Facility
2 Lease Agreement after such Partial Purchase Date, which
appraisals (1) each shall be dated a recent date prior to such
Partial Purchase Date and (2) together shall assess the
aggregate Fair Market Value of all such remaining Tracts of
Facility 2 Property at not less than the Outstanding Lease
Amount under Facility 2 that will remain after application of
all amounts to be applied thereto on such Partial Purchase
Date; and
(B) The purchase price payable by Lessee for such Tract
of Facility 2 Property pursuant to Subparagraph 2.02(b) and
any other amounts payable by Lessee pursuant to Subparagraph
4.06(b); and
(iii) No Default shall have occurred and be continuing on such
Partial Purchase Date or will occur as a result of such purchase by
Lessee.
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284
SECTION 3. OBLIGATIONS OF LESSEE ON THE EXPIRATION DATE.
3.01. Alternative. Unless Lessee has exercised the Term Purchase Option,
on the Expiration Date of the Facility 2 Lease Agreement, Lessee shall either:
(a) Marketing Option. Cause another Person to complete the purchase
of the Facility 2 Property pursuant to Paragraph 3.02 (the "Marketing
Option"); or
(b) Expiration Date Purchase Option. Purchase the Facility 2
Property itself pursuant to Paragraph 3.03 (the "Expiration Date Purchase
Option").
Lessee shall elect either the Marketing Option or the Expiration Date Purchase
Option by delivering to Lessor, not more than nine (9) months nor less than six
(6) months prior to the Scheduled Expiration Date for the Facility 2 Lease
Agreement, either (i) a written notice in the form of Exhibit B, appropriately
completed (the "Notice of Marketing Option Exercise"), or (ii) a written notice
in the form of Exhibit C, appropriately completed (the "Notice of Expiration
Date Purchase Option Exercise"); provided, however, that (A) Lessee shall be
deemed to have elected the Expiration Date Purchase Option if it fails to
deliver either notice as required by this sentence; (B) Lessee's election of the
Expiration Date Purchase Option (whether expressly by a notice so delivered or
implicitly by the failure to deliver any notice) shall be irrevocable; and (C)
Lessee may not elect the Marketing Option if (1) the Expiration Date has been
accelerated to an earlier Termination Date following a Marketing Option Event of
Default under the Facility 2 Lease Agreement or (2) the conditions set forth in
Paragraph 3.03 of the Participation Agreement are not satisfied on the date
Lessee delivers its election notice or on the Expiration Date of the Facility 2
Lease Agreement (unless, in each case, the only event or condition causing such
conditions not to be so satisfied is the occurrence of a Non-Marketing Option
Event of Default under the Facility 2 Lease Agreement). The Notice of Marketing
Option Exercise or the Notice of Expiration Date Purchase Option Exercise shall
be delivered as required by Subparagraph 2.02(c) and Paragraph 7.01 of the
Participation Agreement; provided, however, that Lessee shall promptly deliver
to Lessor the original of any such notice initially delivered by facsimile.
3.02. Marketing Option.
(a) General. If Lessee elects to exercise the Marketing Option by
delivering to Lessor a Notice of Marketing Option Exercise pursuant to
Paragraph 3.01, Lessee shall use reasonable efforts, in accordance with
Section 3.2(b) below, to (i) locate a purchaser which satisfies the
requirements set forth in this Paragraph 3.02, (ii) arrange for such
purchaser to purchase the Facility 2 Property on the Expiration Date for a
purchase price which is not less than the lesser of (A) the difference
between the Outstanding Lease Amount and Residual Value Guaranty Amount
under Facility 2 and (B) the Fair Market Value of the Facility 2 Property
and (iii) otherwise comply, or cause compliance with, the requirements of
this Paragraph 3.02 and the other applicable provisions of this Agreement.
(b) Lessee's Marketing Obligations.
(i) Initial Marketing Period. During the period beginning on
the date Lessee delivers the Notice of Marketing Option Exercise and
ending on the date
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which is four (4) months prior to the Expiration Date of the
Facility 2 Lease Agreement (the "Initial Marketing Period"), Lessee
shall use reasonable efforts to solicit Conforming Bids from
potential purchasers of the Facility 2 Property. On or prior to the
last day of the Initial Marketing Period, Lessee shall deliver to
Lessor any Conforming Bid selected by Lessee (the "Initial Bid"). If
the purchase price specified in the Initial Bid is equal to or
greater than the difference between the Outstanding Lease Amount and
Residual Value Guaranty Amount under Facility 2, Lessor shall accept
such bid and Lessee shall have no further obligations to solicit
additional bids.
(ii) Secondary Marketing Period. If Lessee does not submit an
Initial Bid or if the purchase price specified in the Initial Bid is
less than the difference between the Outstanding Lease Amount and
Residual Value Guaranty Amount under Facility 2, Lessor may reject
such bid and Lessee shall, during the period which begins on the day
following the Initial Marketing Period and ends on the date two (2)
months prior to the Expiration Date of the Facility 2 Lease
Agreement (the "Secondary Marketing Period"):
(A) Use its best efforts to solicit additional
Conforming Bids, including the engagement of experienced and
knowledgeable brokers;
(B) Furnish to each Lessor Party copies of all bids and
otherwise provide each Lessor Party with such information
relating to the marketing of the Facility 2 Property as such
Person may reasonably request in writing;
(C) Agree to provide to all potential purchasers all
customary seller's indemnities (including environmental
indemnities), representations and warranties regarding the
Facility 2 Property (including the title to, except for Lessor
Liens, and condition of the Facility 2 Property);
(D) Furnish to each Lessor Party copies of environmental
reports, architect's certificates, licenses, permits and other
evidence reasonably requested by such Person to establish that
no Default has occurred and is continuing under the Facility 2
Lease Agreement;
(E) Permit any Lessor Party or potential purchaser to
inspect the Facility 2 Property and the maintenance records
for the Property upon reasonable prior written notice and
during normal business hours and provide to each such Person
all information regarding the Facility 2 Property reasonably
requested by such Person in writing;
(F) Take all other commercially reasonable steps to
secure the best price for the Facility 2 Property; and
(G) If any Conforming Bids were received by Lessee,
submit to Lessor on or prior to the last day of the Secondary
Marketing Period any Conforming Bid selected by Lessee with a
purchase price which is equal
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to or greater than the difference between the Outstanding
Lease Amount and Residual Value Guaranty Amount under Facility
2 or, if no such Conforming Bid was received by Lessee, the
highest Conforming Bid received by Lessee during the Secondary
Marketing Period.
During the Secondary Marketing Period, any Lessor Party shall have the
right to submit one or more bids or solicit bids from other Persons.
(c) Conforming Bids. Each bid must meet each of the following
requirements (each such bid to be referred to herein as a "Conforming
Bid"):
(i) The bid may be submitted by any Person other than (A) a
Person which is an Affiliate of Lessee or (B) a Person which has an
agreement (whether express or implied) with Lessee or any of its
Affiliates to sell, lease or otherwise make available to Lessee or
any of its Affiliates any portion of the Facility 2 Property;
(ii) The bidder must agree in writing to purchase the Facility
2 Property on the Expiration Date of the Facility 2 Lease Agreement
for a purchase price to be paid in cash which is not less than the
lesser of (A) the difference between the Outstanding Lease Amount
and Residual Value Guaranty Amount under Facility 2 on such date and
(B) the Fair Market Value of the Facility 2 Property on such date;
(iii) The bidder must agree to purchase the Property "as is"
without any representations, warranties or indemnities, except for
(A) any representations, warranties or indemnities provided by
Lessor and Lessee pursuant to Subparagraph 4.01(b) and (B) any
representations, warranties or indemnities provided by Lessee
pursuant to clause (ii)(C) of Subparagraph 3.02(b); and
(iv) The bidder must agree to be bound by the other terms and
conditions of this Agreement applicable to bidders.
(d) Lessor's Obligation to Accept Bids. If, at any time on or prior
to the last day of the Secondary Marketing Period, Lessee submits to
Lessor a Conforming Bid under this Paragraph 3.02 with a purchase price
which is equal to or greater than the difference between the Outstanding
Lease Amount and Residual Value Guaranty Amount under Facility 2, Lessor
shall accept such bid. If Lessee submits to Lessor a Conforming Bid under
this Paragraph 3.02 with a purchase price which is less than the
difference between the Outstanding Lease Amount and Residual Value
Guaranty Amount under Facility 2, Lessor shall not accept such bid unless
approved by Lessor and Required Participants. If Lessee fails to submit a
bid to Lessor on or prior to the last day of the Secondary Marketing
Period which Lessor is so required to accept, Lessor shall (unless it
elects to accept another bid which it is not required to accept, in which
case Lessee's obligations shall be limited to the amounts payable pursuant
to clause (ii) of Subparagraph 4.06(a)) retain the Facility 2 Property
after the Expiration Date of the Facility 2 Lease Agreement; provided,
however, that Lessee's payment obligations on
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such Expiration Date shall be limited to the amounts payable pursuant to
clause (iii) of Subparagraph 4.06(a) if (i) Lessor retains the Facility 2
Property after Lessee submits a Conforming Bid on or prior to the last day
of the Secondary Marketing Period in accordance with clause (ii) of
Subparagraph 3.02(b) and (ii) the Marketing Option has not terminated
prior to such Expiration Date pursuant to Subparagraph 3.02(f). If Lessee
fails to obtain a Conforming Bid prior to the last day of the Secondary
Marketing Period which Lessor is required to accept or another bid which
Lessor elects to accept (notwithstanding that it is not required to do so)
despite Lessee's timely and complete compliance with Lessee's marketing
obligations as described in Subparagraph 3.02(a) and Subparagraph 3.02(b),
and such failure is not caused by any negligence or willful misconduct of
Lessee, then Lessee's payment obligations on the Expiration Date of the
Facility 2 Lease Agreement shall be limited to the amounts payable
pursuant to clause (ii) or clause (iii) of Subparagraph 4.06(a), as
applicable. Lessor shall notify Lessee of Lessor's election to retain the
Facility 2 Property by delivering to Lessee, at least ten (10) days prior
to the Expiration Date of the Facility 2 Lease Agreement, a written notice
of such election.
(e) Purchase Price. If Lessor accepts any bid by any Person, such
Person (the "Designated Purchaser") shall pay to Lessor on the Expiration
Date of the Facility 2 Lease Agreement, as the purchase price for the
Property, the amount set forth in such bid as the purchase price.
(f) Termination of the Marketing Option. Lessee's right to exercise
the Marketing Option shall immediately terminate and Lessee shall purchase
the Facility 2 Property on the Expiration Date of the Facility 2 Lease
Agreement pursuant to Paragraph 3.03 if (i) Lessee fails to comply with
any of its obligations under this Paragraph 3.02; (ii) a Marketing Option
Event of Default under the Facility 2 Lease Agreement occurs after Lessee
delivers the Notice of Marketing Option Exercise; (iii) the conditions
precedent set forth in Paragraph 3.03 of the Participation Agreement are
not satisfied on the Expiration Date of the Facility 2 Lease Agreement
(unless the only event or condition causing such conditions not to be so
satisfied is the occurrence of a Non-Marketing Option Event of Default
under the Facility 2 Lease Agreement); or (iv) the Designated Purchaser
fails to consummate the purchase of the Facility 2 Property on the
Expiration Date of the Facility 2 Lease Agreement in accordance with its
accepted bid and this Agreement, without regard to the reason for such
failure (except as otherwise provided in the following proviso); provided,
however, that, if the Designated Purchaser fails to consummate the
purchase of the Property on the Expiration Date solely due to Lessor's
failure to remove Lessor Liens or deliver the required deed and bill of
sale or other documents required to be delivered by Lessor hereunder,
Lessee's right to exercise the Marketing Option shall not terminate,
Lessee shall not be required to purchase the Property on the Expiration
Date and Lessee's payment obligations on the Expiration Date shall be
limited to the amounts set forth in Subparagraph 4.06(b) (determined as if
the purchase by the Designated Purchaser had been consummated).
(g) Residual Value Guaranty Amount and Indemnity Amount. Unless
Lessee's right to exercise the Marketing Option has terminated and Lessee
is required to purchase the Facility 2 Property on the Expiration Date of
the Facility 2 Lease Agreement
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pursuant to Paragraph 3.03, Lessee shall pay to Lessor on such Expiration
Date the Residual Value Guaranty Amount and the Indemnity Amount
calculated as follows:
(i) The "Residual Value Guaranty Amount" shall be an amount
equal to the total Tranche A Proportionate Share of the Outstanding
Lease Amount under Facility 2 on the Expiration Date; provided,
however, that:
(A) If Lessee has paid any Prepaid Rent or if the
Outstanding Lease Amount under Facility 2 on the Expiration
Date includes any Ineligible Project Costs, then the Residual
Value Guaranty Amount prior to the Completion Date shall be an
amount equal to the sum of (1) 100% of the Facility 2 Land
Portion Cost, plus (2) the remainder of (y) the total Tranche
A Proportionate Share of the Eligible Project Costs (other
than the Facility 2 Land Portion Cost included in Eligible
Project Costs), minus (z) the accreted value of the aggregate
amount of all Prepaid Rent; and
(B) If Lessee has paid any Prepaid Rent or if the
Outstanding Lease Amount under Facility 2 on the Completion
Date includes any Ineligible Project Costs, then the Tranche A
Proportionate Share under Facility 2 after the Completion Date
shall be recomputed and set at the maximum percentage such
that the (1) Lessee is not deemed under GAAP to be the owner
of the Facility 2 Property prior to the Completion Date, and
(2) from the Lessee's perspective, the Facility 2 Lease
Agreement qualifies as an operating lease in accordance with
GAAP in effect on the date of the Participation Agreement. If,
as a result of such recomputation, the Tranche A Proportionate
Share under Facility 2 after the Completion Date is changed,
corresponding changes shall be made to the Tranche B
Proportionate Share, the Tranche A Percentages and the Tranche
B Percentages under Facility 2 after the Completion Date (such
that the sum of the Tranche A Proportionate Shares and the
Tranche B Proportionate Shares and percentages after such
recomputation equal the sum of such Proportionate Shares and
percentages prior to such recomputation).
(ii) The "Indemnity Amount" shall be applicable after the
Completion Date and shall be an amount equal to the decrease, if
any, between the Commencement Date and the Expiration Date of the
Facility 2 Lease Agreement in the Fair Market Value of the Facility
2 Property caused by (A) any representation or warranty of Lessee or
any of its Affiliates regarding the Facility 2 Property set forth in
any of the Operative Documents proving to be false or inaccurate
when made, (B) the existence of, or the failure of Lessee to pay any
Governmental Charge, Indebtedness or other obligation which might
give rise to, any Liens in the Facility 2 Property (other than
Permitted Property Liens), (C) the failure of Lessee to complete any
New Improvements or any Modifications or (D) any other failure of
Lessee to comply with any of its obligations regarding the Facility
2 Property set forth in any of the Operative Documents.
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(h) Determination of Fair Market Value and Indemnity Amount. If the
purchase price specified in the Initial Bid is less than the difference
between the Outstanding Lease Amount and Residual Value Guaranty Amount
under Facility 2, Lessor may, on or prior to the last day of the Secondary
Marketing Period (if Lessee has not previously delivered to Lessor a
Conforming Bid with a purchase price equal to or greater than the
difference between the Outstanding Lease Amount and Residual Value
Guaranty Amount under Facility 2), deliver to Lessee a written notice of
Lessor's determination of the current Fair Market Value of the Facility 2
Property and the Indemnity Amount. To determine such amounts, Lessor shall
obtain Appraisals of the Facility 2 Property which set forth:
(i) A current Appraisal of the Fair Market Value of the
Facility 2 Property in its then existing condition (the "Current
Appraisal"); and
(ii) An Appraisal of the Fair Market Value of the Facility 2
Property which assumes that (A) all representations and warranties
regarding the Facility 2 Property made by Lessee or any of its
Affiliates in any of the Operative Documents were true and correct
when made; (B) Lessee has maintained the Facility 2 Property in
compliance with all applicable Governmental Rules, Insurance
Requirements and the Operative Documents; (C) Lessee has completed
all Modifications and any other New Improvements in a good and
workmanlike manner and otherwise as required by the Operative
Documents; (D) Lessee has repaired the Facility 2 Property as
required by the Operative Documents following any Casualty; (E)
Lessee has restored the Facility 2 Property as required by the
Operative Documents following any Condemnation; (F) Lessee has paid
all Governmental Charges, Indebtedness and other obligations which,
if unpaid, might give rise to a Lien (other than a Lessor Lien) on
the Facility 2 Property; (G) Lessee has removed all Liens on the
Facility 2 Property except for Permitted Property Liens and Lessor
Liens; and (H) Lessee has performed all of its other obligations as
required by the Operative Documents (the "Assumed Appraisal").
In the absence of manifest error, (A) the Current Appraisal shall
constitute the current Fair Market Value of the Facility 2 Property and
(B) the difference between the Current Appraisal and the Assumed Appraisal
shall constitute the Indemnity Amount if the Current Appraisal is less
than the Assumed Appraisal.
(i) Lessee not an Agent. Lessee shall not be an agent for any of the
Lessor Parties in arranging for a purchaser of the Facility 2 Property. No
Lessor Party shall be bound by any acts of Lessee.
(j) Application of Proceeds. After the exercise by Lessee of the
Marketing Option, Lessor shall apply and distribute all amounts received
by Lessor on the Expiration Date as follows:
(i) First, Lessor shall apply such amounts to the portion of
the Outstanding Lease Amount under Facility 2 not constituting
Ineligible Project
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Costs to the extent necessary to pay such portion of the Outstanding
Lease Amount;
(ii) Second, to the extent any amounts then remain, Lessor
shall apply such amounts to the portion of all unpaid Rent under
Facility 2 accrued through or due and payable on or prior to such
date not constituting Ineligible Project Costs to the extent
necessary to pay such portion of the unpaid Rent;
(iii) Third, to the extent any amounts then remain, Lessor
shall apply such amounts to the portion of all other amounts, if
any, due and payable by Lessee under the Operative Documents on
account of Facility 2 on or prior to such date not constituting
Ineligible Project Costs to the extent necessary to pay such portion
of the unpaid amounts;
(iv) Fourth, to the extent any amounts then remain, Lessor
shall distribute to Lessee (A) such amounts as are necessary to pay
all Prepaid Rent paid by Lessee, except for any such Prepaid Rent
caused by or arising from any failure by Lessee to comply with any
of its obligations under the Operative Documents (including its
insurance obligations), any representation by Lessee in any of the
Operative Documents not being true, any negligence or willful
misconduct of Lessee, or any claim by any third-party against Lessee
(or against any Lessor Party) based upon any alleged action or
inaction by Lessee, and (B) an amount equal to the Residual Value
Guaranty Amount paid by Lessee hereunder.
(v) Fifth, to the extent any amounts then remain, Lessor shall
apply such amounts to all Ineligible Project Costs paid or incurred
by Lessor Parties.
(vi) Finally, to the extent any amounts then remain, Lessor
shall promptly distribute all such remaining proceeds to Lessee.
(k) Creditworthiness of Designated Purchaser. Lessee assumes all
responsibility for determining the creditworthiness of any potential
purchaser on any bid submitted by Lessee to Lessor hereunder. If, after
any purchase by a Designated Purchaser hereunder, the purchase price paid
by such Designated Purchaser is recovered from any Lessor Party, Lessee
shall reimburse such Lessor Party for such recovery unless such recovery
is due solely to a material misrepresentation or covenant breach by such
Lessor Party.
(l) Exercise of Marketing Option After Non-Marketing Option Event of
Default. If Lessor notifies Lessee pursuant to Subparagraph 5.03(a) or
Subparagraph 5.04(a) of the Lease Agreement that Lessor is terminating the
Lease Agreement on a Termination Date which is prior to the Scheduled
Expiration Date of the Facility 2 Lease Agreement and the only basis for
such early termination is the occurrence of a Non-Marketing Option Event
of Default, Lessee may, subject to Paragraph 3.01, elect to exercise the
Marketing Option if, not later than ten (10) Business Days after it
receives from Lessor such notice of early termination, it (i) delivers to
Lessor a Notice of Marketing Option Exercise, (ii) delivers to Lessor Cash
Collateral in the amount required
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by clause (ii) of Subparagraph 2.11(a) of the Participation Agreement, and
(iii) takes such other actions as may be required by Subparagraph 2.11(a)
of the Participation Agreement. Upon the delivery by Lessee to Lessor of a
Notice of Marketing Option Exercise and satisfaction of the other
requirements set forth in the preceding sentence of this Subparagraph
3.02(l), the Expiration Date of the Facility 2 Lease Agreement shall, if
the conditions to the exercise of the Marketing Option set forth in
Paragraph 3.01 are satisfied, be extended to (A) the date determined
pursuant clause (ii) of Subparagraph 3.05(d) of the Facility 2
Construction Agency Agreement if the Non-Marketing Option Event of Default
was a Construction Termination Event or (B) the first Business Day of the
first full calendar month that is six (6) months after the date of receipt
by Lessor of such Notice of Marketing Option Exercise in all other cases.
Any exercise by Lessee of the Marketing Option pursuant to this
Subparagraph 3.02(l) shall be subject to the terms and conditions
otherwise set forth in this Agreement.
3.03. Expiration Date Purchase Option.
(a) General. If (i) Lessee elects to exercise the Expiration Date
Purchase Option by delivering to Lessor a Notice of Expiration Date
Purchase Option Exercise pursuant to Paragraph 3.01; (ii) Lessee elects to
exercise the Marketing Option by delivering to Lessor a Notice of
Marketing Option Exercise pursuant to Paragraph 3.01 but the Marketing
Option terminates pursuant to Subparagraph 3.02(f); or (iii) Lessee fails
to deliver to Lessor either notice as required by Paragraph 3.01; Lessee
shall purchase the Facility 2 Property on the Expiration Date of the
Facility 2 Lease Agreement and otherwise comply, or cause compliance with,
the requirements of this Paragraph 3.03 and the other applicable
provisions of this Agreement.
(b) Purchase Price. If Lessee is purchasing the Facility 2 Property
pursuant to the Expiration Date Purchase Option, Lessee shall pay to
Lessor on the Expiration Date of the Facility 2 Lease Agreement, as the
purchase price for the Facility 2 Property, an amount equal to the
Outstanding Lease Amount under Facility 2 on such date.
SECTION 4. TERMS OF ALL PURCHASES.
4.01. Representations and Warranties of Parties.
(a) Representations and Warranties of Purchaser. The purchaser of
the Facility 2 Property, whether Lessee, an Assignee Purchaser or a
Designated Purchaser ("Purchaser"), shall represent and warrant to Lessor
on the Expiration Date of the Facility 2 Lease Agreement (or, in the case
of a purchase of a portion of the Facility 2 Property pursuant to the
Partial Purchase Option, on the applicable Partial Purchase Date) as
follows:
(i) Such Person is a legal entity duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization or an individual with legal capacity to purchase the
Facility 2 Property (or, in the case of a
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purchase of a portion of the Facility 2 Property pursuant to the
Partial Purchase Option, the portion to be purchased).
(ii) The execution, delivery and performance by such Person of
each document, instrument and agreement executed, or to be executed,
by such Person in connection with its purchase of the Facility 2
Property (or, in the case of a purchase of a portion of the Facility
2 Property pursuant to the Partial Purchase Option, the portion to
be purchased) (the "Purchase Documents") and the consummation of the
transactions contemplated thereby (A) are within the power of such
Person and (B) have been duly authorized by all necessary actions on
the part of such Person.
(iii) Each Purchase Document executed, or to be executed, by
such Person has been, or will be, duly executed and delivered by
such Person and constitutes, or will constitute, a legal, valid and
binding obligation of such Person, enforceable against such Person
in accordance with its terms, except as limited by bankruptcy,
insolvency or other laws of general application relating to or
affecting the enforcement of creditors' rights generally and general
principles of equity.
(iv) Such Person has not (A) made a general assignment for the
benefit of creditors, (B) filed any voluntary petition in bankruptcy
or suffered the filing of any involuntary petition by such Person's
creditors, (C) suffered the appointment of a receiver to take
possession of all, or substantially all, of such Person's assets,
(D) suffered the attachment or other judicial seizure of all, or
substantially all, of such Person's assets, (E) admitted in writing
its inability to pay its debts as they come due, or (F) made an
offer of settlement, extension or composition to its creditors
generally.
(v) Such Person is not a "party in interest" within the
meaning of Section 3(14) of the ERISA, with respect to any investor
in or beneficiary of Lessor.
(b) Representations and Warranties of Lessor and Lessee. Each of
Lessor and Lessee shall represent and warrant to Purchaser (and Lessee
also shall represent and warrant to Lessor if Lessor is to retain the
Facility 2 Property) on the Expiration Date of the Facility 2 Lease
Agreement as follows:
(i) Such Person is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization.
(ii) The execution, delivery and performance by such Person of
each Purchase Document executed, or to be executed, by such Person
and the consummation of the transactions contemplated thereby (A)
are within the power of such Person and (B) have been duly
authorized by all necessary actions on the part of such Person.
(iii) Each Purchase Document executed, or to be executed, by
such Person has been, or will be, duly executed and delivered by
such Person and
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constitutes, or will constitute, a legal, valid and binding
obligation of such Person, enforceable against such Person in
accordance with its terms, except as limited by bankruptcy,
insolvency or other laws of general application relating to or
affecting the enforcement of creditors' rights generally and general
principles of equity.
(iv) Such Person has not (A) made a general assignment for the
benefit of creditors, (B) filed any voluntary petition in bankruptcy
or suffered the filing of any involuntary petition by such Person's
creditors, (C) suffered the appointment of a receiver to take
possession of all, or substantially all, of such Person's assets,
(D) suffered the attachment or other judicial seizure of all, or
substantially all, of such Person's assets, (E) admitted in writing
its inability to pay its debts as they come due, or (F) made an
offer of settlement, extension or composition to its creditors
generally.
In addition to the foregoing, (A) Lessee shall represent and warrant to
the Designated Purchaser (or Lessor if Lessor is to retain the Facility 2
Property) on the Expiration Date of the Facility 2 Lease Agreement that no
Liens are attached to the Facility 2 Property, except for Permitted
Property Liens, and (B) Lessor shall represent and warrant to Purchaser on
the Expiration Date of the Facility 2 Lease Agreement (or, in the case of
a purchase of a portion of the Facility 2 Property pursuant to the Partial
Purchase Option, on the applicable Partial Purchase Date) that no Lessor
Liens are attached to the Facility 2 Property (or, in the case of a
purchase of a portion of the Facility 2 Property pursuant to the Partial
Purchase Option, the portion to be purchased). Except for the foregoing
representations and warranties to be made by Lessor on the Expiration Date
of the Facility 2 Lease Agreement (or, in the case of a purchase of a
portion of the Facility 2 Property pursuant to the Partial Purchase
Option, on the applicable Partial Purchase Date), no Lessor Party shall
make any representation or warranty regarding the Facility 2 Property or
the sale of the Facility 2 Property. Lessee shall make such additional
representations and warranties as it may be required to make pursuant to
clause (ii) of Subparagraph 3.02(b).
(c) Survival of Representations and Warranties. The representations
and warranties of Purchaser, Lessor and Lessee shall survive for a period
of twelve (12) months after the Expiration Date of the Facility 2 Lease
Agreement (or, in the case of a purchase of a portion of the Facility 2
Property pursuant to the Partial Purchase Option, after the applicable
Partial Purchase Date). Any claim which any such party may have at any
time against any other such party for a breach of any such representation
or warranty, whether known or unknown, which is not asserted by written
notice within such twelve (12) month period shall not be valid or
effective, and the party shall have no liability with respect thereto.
4.02. "As Is" Purchase. All purchases of the Facility 2 Property hereunder
shall be "as is, with all faults" and without any representations, warranties or
indemnities except for any representations, warranties or indemnities provided
by Lessee pursuant to clause (ii)(C) of Subparagraph 3.02(b) or by Lessor or
Lessee pursuant to Subparagraph 4.01(b). Each Purchaser shall specifically
acknowledge and agree that Lessor is selling and such Purchaser is purchasing
the Facility 2 Property on an "as is, with all faults" basis and that such
Purchaser is not relying
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on any representations or warranties of any kind whatsoever, express or implied,
from any Lessor Party, its agents, or brokers as to any matters concerning the
Facility 2 Property (except for any representations and warranties provided by
Lessor pursuant to Subparagraph 4.01(b)), including (a) the condition of the
Facility 2 Property (including any Improvements to the Facility 2 Property made
prior to the Commencement Date or during the Term of the Facility 2 Lease
Agreement); (b) title to the Facility 2 Property (including possession of the
Facility 2 Property by any Person or the existence of any Lien or any other
right, title or interest in or to any of the Facility 2 Property in favor of any
Person); (c) the value, habitability, usability, design, operation or fitness
for use of the Facility 2 Property; (d) the availability or adequacy of
utilities and other services to the Facility 2 Property; (e) any latent, hidden
or patent defect in the Facility 2 Property; (f) the zoning or status of the
Facility 2 Property or any other restrictions on the use of the Facility 2
Property; (g) the economics of the Facility 2 Property; (h) any Casualty or
Condemnation; or (i) the compliance of the Facility 2 Property with any
applicable Governmental Rule or Insurance Requirement.
4.03. Release. Without limiting the foregoing, each Purchaser shall, on
behalf of itself and its successors and assigns, waive its right to recover
from, and forever release and discharge, Lessor and the other Indemnitees from
any and all demands, claims, legal or administrative proceedings, losses,
liabilities, damages, penalties, fines, liens, judgments, costs or expenses
whatsoever (including attorneys' fees and costs), whether direct or indirect,
known or unknown, foreseen or unforeseen, that may arise on account of or in any
way be connected with the physical condition of the Facility 2 Property or any
Governmental Rule applicable thereto, including any Environment Law. Each
Purchaser shall expressly waive the benefits of Section 1542 of the California
Civil Code, which provides that, "a general release does not extend to claims
which the creditor does not know or expect to exist in his favor at the time of
executing the release, which if known to him must have materially affected the
settlement with the debtor."
4.04. Permits, Approvals, Etc. Lessee shall obtain all permits, licenses
and approvals from and make all filings with Governmental Authorities and other
Persons, comply and cause compliance with all applicable Governmental Rules and
take all other actions required for the marketing, purchase and sale of the
Facility 2 Property.
4.05. Costs. Lessee shall pay directly, without deduction from the
purchase price or any other amount payable to Lessor hereunder, all costs and
expenses of Lessee and Lessor associated with the marketing and sale of the
Facility 2 Property, including brokers' fees and commissions; title insurance
premiums; survey charges; utility, tax and other prorations; fees and expenses
of environmental consultants and attorneys; appraisal costs; escrow fees;
recording fees; documentary, transfer and other taxes; and all other fees, costs
and expenses which might otherwise be deducted from the purchase price or any
other amount payable to Lessor hereunder.
4.06. Lessee's Payment Obligations.
(a) Expiration Date. On the Expiration Date of the Facility 2 Lease
Agreement, Lessee shall pay to Lessor the following:
(i) Purchase by Lessee. If the Facility 2 Property is to be
purchased by Lessee or an Assignee Purchaser on such date, (A) the
purchase price payable
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by Lessee, (B) all unpaid Rent accrued through or due and payable on
or prior to such date and (C) all other amounts, if any, due and
payable by Lessee under the Operative Documents on or prior to such
date;
(ii) Purchase by a Designated Purchaser. If the Facility 2
Property is to be purchased by a Designated Purchaser on such date,
(A) the Residual Value Guaranty Amount, (B) the Indemnity Amount,
(C) all unpaid Rent accrued through or due and payable on or prior
to such date and (D) all other amounts, if any, due and payable by
Lessee under the Operative Documents on or prior to such date; or
(iii) Retention by Lessor. If the Facility 2 Property is to be
retained by Lessor on such date pursuant to Subparagraph 3.02(d),
(A) the Residual Value Guaranty Amount, (B) the Indemnity Amount,
(C) all unpaid Rent accrued through or due and payable on or prior
to such date and (D) all other amounts, if any, due and payable by
Lessee under the Operative Documents on or prior to such date.
(b) Partial Purchase Date. On any Partial Purchase Date, Lessee
shall pay to Lessor (i) the purchase price for the Tracts of Facility 2
Property to be purchased on such date, (ii) all unpaid Rent attributable
to such Tracts of Facility 2 Property accrued through or due and payable
on or prior to such date and (iii) all other amounts attributable to such
Tracts of Facility 2 Property, if any, due and payable by Lessee under the
Operative Documents on or prior to such date.
4.07. Lessor Liens. Lessor shall remove all Lessor Liens from the Facility
2 Property before the Expiration Date of the Facility 2 Lease Agreement (or, in
the case of a purchase of a portion of the Facility 2 Property pursuant to the
Partial Purchase Option, from the portion to be purchased before the applicable
Partial Purchase Date).
4.08. Transfer Documents.
(a) Expiration Date.
(i) Lessor. Subject to receipt by Lessor on the Expiration
Date of the Facility 2 Lease Agreement of the full amount of the
following, without any setoff, deduction or reduction of any kind:
(A) In the case of a transfer to Lessee or an Assignee
Purchaser, all amounts payable by Lessee pursuant to clause
(i) of Subparagraph 4.06(a); or
(B) In the case of a transfer to a Designated Purchaser,
(1) the purchase price payable by the Designated Purchaser and
(2) all amounts payable by Lessee pursuant to clause (ii) of
Subparagraph 4.06(a);
Lessor shall transfer its interest in the Facility 2 Property to
Purchaser on the Expiration Date of the Facility 2 Lease Agreement
(unless Lessor is to retain the
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Facility 2 Property) by executing and delivering to Purchaser a Deed
in substantially the form of Exhibit D(1), an Acknowledgment of
Disclaimer of Representations and Warranties in substantially the
form of Exhibit D(2), a Bill of Sale in substantially the form of
Exhibit E, and shall assign to Purchaser Lessor's option to purchase
its interest in the Facility 2 Property as provided in Section 6 of
the Facility 2 Head Lease Agreement.
(ii) Lessee. On the Expiration Date of the Facility 2 Lease
Agreement, unless Lessee is to purchase the Facility 2 Property,
Lessee shall transfer its interest in the Facility 2 Property to the
Designated Purchaser or an Assignee Purchaser (or Lessor if Lessor
is to retain the Facility 2 Property) by executing and delivering to
such Person a Deed in substantially the form of Exhibit F, a Bill of
Sale in substantially the form of Exhibit G and such other
documents, instruments and agreements as such Person may reasonably
request.
(b) Partial Purchase Date. Subject to receipt by Lessor on any
Partial Purchase Date of all amounts payable by Lessee pursuant to
Subparagraph 4.06(b), without any setoff, deduction or reduction of any
kind, Lessor shall transfer its interest in the Tracts of Facility 2
Property to be purchased on such date to Lessee by executing and
delivering to Lessee a Deed in substantially the form of Exhibit D(1), a
Bill of Sale in substantially the form of Exhibit E, shall assign to
Lessee Lessor's option to purchase its interest in such Tracts of Facility
2 Property as provided in Section 6 of the Facility 2 Head Lease
Agreement, and such other documents, instruments and agreements as Lessee
may reasonably request.
4.09. Casualty and Condemnation Proceeds. If, on the Expiration Date of
the Facility 2 Lease Agreement, any Casualty and Condemnation Proceeds are held
by Lessor in a Repair and Restoration Account or otherwise, Lessor shall (a) if
Lessee is to purchase the Facility 2 Property on the Expiration Date of the
Facility 2 Lease Agreement and Lessee shall so direct, apply such proceeds to
the purchase price to be paid by Lessee or (b) in all other cases, release such
proceeds to Lessee; provided, however, that Lessor shall not have any obligation
so to apply or release such proceeds unless Lessee and/or any Designated
Purchaser has complied with all of the terms and conditions of this Agreement.
4.10. Payments. Purchaser, Lessor and Lessee shall make all payments in
lawful money of the United States and in same day or immediately available funds
not later than 12:00 noon on the date due.
4.11. Environmental Reports. Lessee shall obtain and deliver to Lessor,
not later than one (1) month prior to the Expiration Date of the Lease Agreement
(or, in the case of a purchase of a portion of the Facility 2 Property pursuant
to the Partial Purchase Option, prior to the applicable Partial Purchase Date),
environmental reports with respect to the Facility 2 Property (or, in the case
of a purchase of a portion of the Facility 2 Property pursuant to the Partial
Purchase Option, with respect to the applicable portion thereof) prepared by
environmental consultants acceptable to Lessor.
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4.12. Further Assurances. Lessee shall, and shall cause any Designated
Purchaser to, execute and deliver such documents, instruments and agreements and
take such other actions as Lessor may reasonably request to effect the purposes
of this Agreement and comply with the terms hereof. Similarly, Lessor shall
execute and deliver such documents, instruments and agreements and take such
other actions as Lessee or a Designated Purchaser may reasonably request to
effect the purposes of this Agreement and comply with the terms hereof.
SECTION 5. MISCELLANEOUS.
5.01. Notices. Except as otherwise specified herein, all notices,
requests, demands, consents, instructions or other communications to or upon
Lessee or Lessor under this Agreement shall be given as provided in Subparagraph
2.02(c) and Paragraph 7.01 of the Participation Agreement.
5.02. Waivers; Amendments. Any term, covenant, agreement or condition of
this Agreement may be amended or waived only as provided in the Participation
Agreement. No failure or delay by any Lessor Party in exercising any right
hereunder shall operate as a waiver thereof or of any other right nor shall any
single or partial exercise of any such right preclude any other further exercise
thereof or of any other right. Unless otherwise specified in any such waiver or
consent, a waiver or consent given hereunder shall be effective only in the
specific instance and for the specific purpose for which given.
5.03. Successors and Assigns.
(a) General. This Agreement shall be binding upon and inure to
the benefit of the Lessor Parties and Lessee and their permitted
successors and assigns; provided, however, that the Lessor Parties and
Lessee shall not sell, assign or delegate their respective rights and
obligations hereunder except as provided in the Participation Agreement
and in Subparagraph 5.03(b).
(b) Assignment by Lessee of Purchase Rights. Lessee may assign to
a third party (an "Assignee Purchaser") its right to purchase the
Facility 2 Property pursuant to the Term Purchase Option, the Partial
Purchase Option or the Expiration Date Purchase Option; provided,
however, that (i) such an assignment shall not relieve Lessee of its
obligations to consummate or cause the consummation of any such purchase
in accordance with the terms of this Agreement and (ii) Lessee assumes
all responsibility for determining the creditworthiness of any such
Assignee Purchaser. If, after any purchase by an Assignee Purchaser
hereunder, the purchase price paid by such Assignee Purchaser is
recovered from any Lessor Party, Lessee shall reimburse such Lessor
Party for such recovery unless such recovery is due solely to a material
misrepresentation or covenant breach by such Lessor Party.
5.04. No Third Party Rights. Nothing expressed in or to be implied from
this Agreement is intended to give, or shall be construed to give, any Person,
other than the Lessor Parties and Lessee and their permitted successors and
assigns, any benefit or legal or equitable
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298
right, remedy or claim under or by virtue of this Agreement or under or by
virtue of any provision herein.
5.05. Partial Invalidity. If at any time any provision of this Agreement
is or becomes illegal, invalid or unenforceable in any respect under the law or
any jurisdiction, neither the legality, validity or enforceability of the
remaining provisions of this Agreement nor the legality, validity or
enforceability of such provision under the law of any other jurisdiction shall
in any way be affected or impaired thereby.
5.06. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California without reference to
conflicts of law rules.
5.07. Counterparts. This Agreement 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.
5.08. Nature of Lessee's Obligations.
(a) Independent Obligation. The obligation of Lessee to pay the
amounts payable by Lessee under this Agreement and the other Operative
Documents and to perform the other Lessee Obligation are absolute,
unconditional and irrevocable obligations which are separate and
independent of the obligations of the Lessor Parties under this Agreement
and the other Operative Documents and all other events and circumstances,
including the events and circumstances set forth in Subparagraph 5.08(c).
(b) No Termination or Abatement. This Agreement and the other
Operative Documents and Lessee's obligation to pay all amounts hereunder
and to pay and perform all other Lessee Obligations shall continue in full
force and effect without abatement notwithstanding the occurrence or
existence of any event or circumstance, including any event or
circumstance set forth in Subparagraph 5.08(c).
(c) Full Payment and Performance. Lessee shall make all payments
under this Agreement and the other Operative Documents in the full amounts
and at the times required by the terms of this Agreement and the other
Operative Documents without setoff, deduction or reduction of any kind and
shall perform all other Lessee Obligations as and when required, without
regard to any event or circumstances whatsoever, including (i) the
condition of the Facility 2 Property (including any Improvements to the
Facility 2 Property made prior to the Commencement Date or during the Term
of the Facility 2 Lease Agreement); (ii) title to the Facility 2 Property
(including possession of the Facility 2 Property by any Person or the
existence of any Lien or any other right, title or interest in or to any
of the Facility 2 Property in favor of any Person); (iii) the value,
habitability, usability, design, operation or fitness for use of the
Facility 2 Property; (iv) the availability or adequacy of utilities and
other services to the Facility 2 Property; (v) any latent, hidden or
patent defect in the Facility 2 Property; (vi) the zoning or status of the
Facility 2 Property or any other restrictions on the use of the Facility 2
Property; (g) the economics of the Facility 2 Property; (vii) any Casualty
or Condemnation; (viii) the compliance of the Facility 2 Property with any
applicable Governmental Rule or
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Insurance Requirement; (ix) any failure by any Lessor Party to perform any
of its obligations under this Agreement or any other Operative Document;
or (x) the exercise by any Lessor Party of any of its remedies under this
Agreement or any other Operative Document; provided, however, that this
Paragraph 5.08 shall not abrogate any right which Lessee may have to
recover damages from any Lessor Party for any material breach by such
Lessor Party of its obligations under this Agreement or any other
Operative Document to the extent permitted hereunder or thereunder.
[The signature page follows.]
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300
IN WITNESS WHEREOF, Lessee and Lessor have caused this Agreement 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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301
EXHIBIT A(1)
NOTICE OF TERM PURCHASE OPTION EXERCISE
[Date]
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
1. Reference is made to the following:
(a) The Participation Agreement, dated as of April 13, 2001 (the
"Participation Agreement"), among Novellus Systems, Inc. ("Lessee"), Lease
Plan North America, Inc. ("Head Lessor"), ABN AMRO Leasing, Inc.
("Lessor"), the Persons listed in Schedule I to the Participation
Agreement (the "Participants") and ABN AMRO Bank N.V., as agent for the
Participants (in such capacity, "Agent"); and
(b) The Facility 2 Lease Agreement, dated as of April 13, 2001 (the
"Lease Agreement"), between Lessee and Lessor; and
(c) The Facility 2 Purchase Agreement, dated as of April 13, 2001
(the "Purchase Agreement"), between Lessee and Lessor.
Unless otherwise indicated, all terms defined in the Participation Agreement
have the same respective meanings when used herein.
2. Pursuant to Paragraph 4.01 of the Facility 2 Lease Agreement and
Paragraph 2.01 of the Facility 2 Purchase Agreement, Lessee hereby irrevocably
notifies Lessor that Lessee is exercising its right to terminate the Facility 2
Lease Agreement prior to the Scheduled Expiration Date of the Facility 2 Lease
Agreement and purchase the Facility 2 Property on [_________, ____] (which date
is a Scheduled Rent Payment Date and which date, after the delivery of this
notice, shall be the Expiration Date of the Facility 2 Lease Agreement).
IN WITNESS WHEREOF, Lessee has executed this Notice of Term Purchase
Option Exercise on the date set forth above.
NOVELLUS SYSTEMS, INC.
By:___________________________
Name:______________________
Title:_______________________
A(1)-1
302
EXHIBIT A(2)
NOTICE OF PARTIAL PURCHASE OPTION EXERCISE
[Date]
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
1. Reference is made to the following:
(a) The Participation Agreement, dated as of April 13, 2001 (the
"Participation Agreement"), among Novellus Systems, Inc. ("Lessee"), Lease
Plan North America, Inc. ("Head Lessor"), ABN AMRO Leasing, Inc.
("Lessor"), the Persons listed in Schedule I to the Participation
Agreement (the "Participants") and ABN AMRO Bank N.V., as agent for the
Participants (in such capacity, "Agent"); and
(b) The Facility 2 Purchase Agreement, dated as of April 13, 2001
(the "Purchase Agreement"), between Lessee and Lessor.
Unless otherwise indicated, all terms defined in the Participation Agreement
have the same respective meanings when used herein.
2. Pursuant to Paragraph 2.02 of the Facility 2 Purchase Agreement, Lessee
hereby irrevocably notifies Lessor that Lessee is exercising its right to
purchase a portion of the Facility 2 Property as follows:
(a) The Tract[s] of Facility 2 Property to be purchased is [are]
________________; and
(b) The date on which such purchase is to occur is [_________, ____]
(which date is a Scheduled Rent Payment Date ).
3. Lessee hereby certifies to Lessor, Agent and the Participants that, on
the date of this notice:
(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
A(2)-1
303
(c) All of the Operative Documents are in full force and effect.
IN WITNESS WHEREOF, Lessee has executed this Notice of Partial Purchase
Option Exercise on the date set forth above.
NOVELLUS SYSTEMS, INC.
By:___________________________
Name:______________________
Title:_______________________
A(2)-2
304
EXHIBIT B
NOTICE OF MARKETING OPTION EXERCISE
[Date]
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
1. Reference is made to the following:
(a) The Participation Agreement, dated as of April 13, 2001 (the
"Participation Agreement"), among Novellus Systems, Inc. ("Lessee"), Lease
Plan North America, Inc. ("Head Lessor"), ABN AMRO Leasing, Inc.
("Lessor"), the Persons listed in Schedule I to the Participation
Agreement (the "Participants") and ABN AMRO Bank N.V., as agent for the
Participants (in such capacity, "Agent"); and
(b) The Facility 2 Purchase Agreement, dated as of April 13, 2001
(the "Purchase Agreement"), between Lessee and Lessor.
Unless otherwise indicated, all terms defined in the Participation Agreement
have the same respective meanings when used herein.
2. Pursuant to Paragraph 3.01 of the Purchase Agreement, Lessee hereby
notifies Lessor that Lessee is electing to exercise the Marketing Option on the
Scheduled Expiration Date of the Facility 2 Lease Agreement of [_____, ____].
3. Lessee hereby certifies to Lessor, Agent and the Participants that, on
the date of this notice:
(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 (other than a Non-Marketing Option Event of Default
under the Facility 2 Lease Agreement) has occurred and is continuing; and
(c) All of the Operative Documents are in full force and effect on
such date.
B-1
305
IN WITNESS WHEREOF, Lessee has executed this Notice of Marketing Option
Exercise on the date set forth above.
NOVELLUS SYSTEMS, INC.
By:___________________________
Name:______________________
Title:_______________________
B-2
306
EXHIBIT C
NOTICE OF EXPIRATION DATE PURCHASE OPTION EXERCISE
[Date]
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
1. Reference is made to the following:
(a) The Participation Agreement, dated as of April 13, 2001 (the
"Participation Agreement"), among Novellus Systems, Inc. ("Lessee"), Lease
Plan North America, Inc. ("Head Lessor"), ABN AMRO Leasing, Inc.
("Lessor"), the Persons listed in Schedule I to the Participation
Agreement (the "Participants") and ABN AMRO Bank N.V., as agent for the
Participants (in such capacity, "Agent"); and
(b) The Facility 2 Purchase Agreement, dated as of April 13, 2001
(the "Purchase Agreement"), between Lessee and Lessor.
Unless otherwise indicated, all terms defined in the Participation Agreement
have the same respective meanings when used herein.
2. Pursuant to Paragraph 3.01 of the Purchase Agreement, Lessee hereby
notifies Lessor that Lessee is electing to exercise the Expiration Date Purchase
Option on the Scheduled Expiration Date of the Facility 2 Lease Agreement of
[_____, ____].
IN WITNESS WHEREOF, Lessee has executed this Notice of Expiration Date
Purchase Option Exercise on the date set forth above.
NOVELLUS SYSTEMS, INC.
By:___________________________
Name:______________________
Title:_______________________
C-1
307
EXHIBIT D(1)
RECORDING REQUESTED BY
WHEN RECORDED RETURN TO
AND MAIL TAX STATEMENTS TO:
[Purchaser]
___________________
___________________
___________________
Documentary Transfer Tax is not of public record and is shown on a separate
sheet attached to this deed.
_____________________________________________________________________________
QUITCLAIM DEED
FOR VALUABLE CONSIDERATION, the receipt of which is hereby
acknowledged, ABN AMRO Leasing, Inc. ("Grantor"), hereby releases, remises and
forever quitclaims to [PURCHASER], a _____________ ("Grantee"), the real
property located in the City of [__________], State of California, described on
EXHIBIT A attached hereto and made a part hereof (the "Property").
[See Next Page]
D(1)-1
308
Executed as of _____, ____.
ABN AMRO LEASING, INC.,
By: _________________________
Its: _________________________
D(1)-2
309
EXHIBIT A
LEGAL DESCRIPTION
Assessor's Parcel No.: _______________
D(1)(A)-1
310
State of _____________
County of _____________________
On ___________________ before me, _________________________,
Date Name, Title of Officer
personally appeared ________________________________________________,
Name(s) of signer(s)
(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.
_________________________________________________
D(1)(A)-2
311
________, ______
Santa Clara County Recorder
Re: Request That Statement of Documentary
Transfer Tax Not be Recorded
Dear Sir:
Request is hereby made in accordance with Section 11932 of the Revenue and
Taxation Code that this statement of tax due not be recorded with the attached
deed but be affixed to the deed after recordation and before return as directed
on the deed.
The attached deed names ABN AMRO Leasing, Inc., as grantor, and
[PURCHASER], a _________________, as grantee.
The property being transferred and described in the attached deed is
located in the City of San Jose and County of [__________], State of California.
The amount of Documentary Transfer Tax due on the attached deed is
$__________, computed on full value of the property conveyed.
ABN AMRO LEASING, INC.,
By:___________________________
Its: ___________________________
D(1)(A)-3
312
EXHIBIT D(2)
ACKNOWLEDGMENT AND DISCLAIMER OF REPRESENTATIONS AND WARRANTIES
THIS ACKNOWLEDGMENT OF DISCLAIMER OF REPRESENTATIONS AND WARRANTIES (this
"Certificate") is made as of ___________, ____ by [PURCHASER], a _____________
("Grantee").
Contemporaneously with execution of this Acknowledgement, ABN AMRO
Leasing, Inc., an Illinois corporation ("AALI"), is executing and delivering to
Grantee a Quitclaim Deed and a Bill of Sale (the foregoing documents and any
other documents to be executed and delivered to Grantee in connection therewith
are herein called the "Conveyancing Documents" and any of the properties, rights
or other matters assigned, transferred or conveyed pursuant thereto are herein
collectively called the "Property") pursuant to the terms of a Facility 2
Purchase Agreement dated as of April 13, 2001 by and between AALI and Novellus
Systems, Inc., a California corporation ("Novellus").
Notwithstanding any provision contained in the Conveyancing Documents to
the contrary, Grantee acknowledges that AALI is selling and Grantee is
purchasing the Property on an "as is, with all faults" basis and that Grantee is
not relying on any representations or warranties of any kind whatsoever, express
or implied, from AALI, its agents, or brokers as to any matters concerning the
Property including (a) the condition of the Property (including any improvements
to the Property); (b) title to the Property (including possession of the
Property by any individual or entity or the existence of any lien or any other
right, title or interest in or to any of the Property in favor of any person,
but excluding any Lessor Liens as defined in that certain Participation
Agreement dated as of April 13, 2001 among AALI, Novellus, the Participants and
ABN AMRO Bank N.V., as agent for the Participants (in such capacity, "Agent"));
(c) the value, habitability, usability, design, operation or fitness for use of
the Property; (d) the availability or adequacy of utilities and other services
to the Property; (e) any latent, hidden or patent defect in the Property; (f)
the zoning or status of the Property or any other restrictions on the use of the
Property; (g) the economics of the Property; (h) any damage to, destruction or,
or decrease in the value of all or any portion of the Property or any
condemnation or other taking or sale of all or any portion of the Property, by
or on account of any actual or threatened eminent domain proceeding or other
taking of action by any governmental authority or other person have the power of
eminent domain; or (i) the compliance of the Property with any applicable law,
rule, regulation, ordinance, order, code, judgment or similar form of decision
of any governmental authority or any terms, conditions or requirements imposed
by any policies of insurance relating to the Property.
[See next page]
D(2)-1
313
The provisions of this Acknowledgement shall be binding on Grantee, its
successors and assigns and any other party claiming through Grantee. Grantee
hereby acknowledges that AALI N.A. is entitled to rely and is relying on this
Certificate.
EXECUTED as of ____________, _______.
[PURCHASER]
By:___________________________________
Name:______________________________
Title: ____________________________
D(2)-2
314
EXHIBIT E
BILL OF SALE
FOR GOOD AND VALUABLE CONSIDERATION, the receipt of which is hereby
acknowledged, ABN AMRO LEASING, INC., an Illinois corporation ("Seller"), does
hereby sell, transfer and convey to [PURCHASER], a _________________________
("Purchaser"), the personal property owned by Seller in connection with that
certain real property commonly known as _______________, San Jose, California,
including, without limitation, the personal property itemized on SCHEDULE 1
attached hereto and incorporated herein by this reference (the "Property").
Seller is selling and Purchaser is purchasing the Property on an "as is,
with all faults" basis and Purchaser is not relying on any representations or
warranties of any kind whatsoever, express or implied, from Seller, its agents,
or brokers as to any matters concerning the Property including (a) the condition
of the Property; (b) title to the Property (including possession of the Property
by any individual or entity or the existence of any lien or any other right,
title or interest in or to any of the Property in favor of any person); (c) the
value, habitability, usability, design, operation or fitness for use of the
Property; or (d) any latent, hidden or patent defect in the Property.
Dated: ________, ____ SELLER:
ABN AMRO LEASING, INC.,
By:___________________________
Its: ___________________________
PURCHASER:
[PURCHASER]
a __________________________
By:___________________________
Its: ___________________________
E-1
315
SCHEDULE 1
PROPERTY
E(1)-2
316
EXHIBIT F
RECORDING REQUESTED BY
WHEN RECORDED RETURN TO
AND MAIL TAX STATEMENTS TO:
_________________________
_________________________
Attention: _____________
Documentary Transfer Tax is not of public record and is shown on a separate
sheet attached to this deed.
______________________________________________________________________________
GRANT DEED
FOR VALUABLE CONSIDERATION, the receipt of which is hereby acknowledged,
NOVELLUS SYSTEMS, INC., a California corporation ("Grantor"), hereby releases,
remises and forever grants to [PURCHASER] ("Grantee"), the real property located
in the City of San Jose, County of Santa Clara, State of California, described
on EXHIBIT A attached hereto and made a part hereof (the "Property").
Executed as of __________, ____.
NOVELLUS SYSTEMS, INC.,
a California corporation
By: _______________________________________
Its:_______________________________________
F-1
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EXHIBIT A
LEGAL DESCRIPTION
Assessor's Parcel No.: ____________________
F(A)-1
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State of _________________
County of _____________________
On ___________________ before me, _________________________,
Date Name, Title of Officer
personally appeared ________________________________________________,
Name(s) of signer(s)
(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.
___________________________________
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________, _______
Santa Clara County Recorder
Re: Request That Statement of Documentary
Transfer Tax Not be Recorded
Dear Sir:
Request is hereby made in accordance with Section 11932 of the Revenue and
Taxation Code that this statement of tax due not be recorded with the attached
deed but be affixed to the deed after recordation and before return as directed
on the deed.
The attached deed names NOVELLUS SYSTEMS, INC., a California corporation,
as grantor, and [PURCHASER], as grantee.
The property being transferred and described in the attached deed is
located in the City of San Jose and County of Santa Clara, State of California.
The amount of Documentary Transfer Tax due on the attached deed is
$__________, computed on full value of the property conveyed.
NOVELLUS SYSTEMS, INC.,
a __________________
By: __________________________
Its:__________________________
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EXHIBIT G
BILL OF SALE
For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Novellus Systems, Inc., a California corporation
("Seller"), does hereby sell, transfer, and convey unto [PURCHASER] ("Buyer"),
the personal property owned by Seller in connection with that certain real
property commonly known as _______________, San Jose, California, which Seller
warrants to be free and clear of all liens and encumbrances, including, without
limitation, the personal property itemized on SCHEDULE 1 attached hereto and
incorporated herein by this reference.
Seller does hereby covenant with Buyer that Seller is the lawful owner
of such personal property, and that the undersigned has good right to sell the
same as aforesaid and will warrant and defend the title thereto unto Buyer, its
successors and assigns, against the claims and demands of all persons
whomsoever.
DATED this ____ day of __________, ____.
SELLER: Novellus Systems, Inc.,
a California corporation
By:_____________________________
Its:_____________________________
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SCHEDULE 1
PROPERTY
G(1)-1
322
============================================================================
FACILITY 2 CONSTRUCTION AGENCY AGREEMENT
BETWEEN
NOVELLUS SYSTEMS, INC.
AND
ABN AMRO LEASING, INC.
APRIL 13, 2001
==========================================================================
323
TABLE OF CONTENTS
PAGE
SECTION 1. INTERPRETATION............................................................................. 1
1.01. Definitions.................................................................................... 1
1.02. Rules of Construction.......................................................................... 2
SECTION 2. APPOINTMENT; AUTHORITY..................................................................... 2
2.01. Appointment.................................................................................... 2
2.02. Scope of Authority............................................................................. 2
2.03. Delegation of Duties........................................................................... 2
SECTION 3. LESSEE'S OBLIGATIONS AND DUTIES............................................................ 2
3.01. Plans and Specifications and Other Construction Agreements..................................... 2
3.02. Modification to Construction Agreements........................................................ 3
3.03. Permits, Approvals, Etc........................................................................ 3
3.04. Material and Supplies.......................................................................... 3
3.05. Construction................................................................................... 4
3.06. Insurance...................................................................................... 6
3.07. Fees, Costs and Expenses....................................................................... 6
3.08. Books and Records.............................................................................. 6
3.09. Additional Obligations and Duties.............................................................. 7
SECTION 4. MISCELLANEOUS.............................................................................. 7
4.01. Notices........................................................................................ 7
4.02. Waivers; Amendments............................................................................ 7
4.03. Successors and Assigns......................................................................... 7
4.04. No Third Party Rights.......................................................................... 7
4.05. Partial Invalidity............................................................................. 7
4.06. Governing Law.................................................................................. 7
4.07. Counterparts................................................................................... 8
4.08. Nature of Lessee's Obligations................................................................. 8
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324
EXHIBITS
A Lessee's Completion Certificate (3.05(c))
B Architect's Completion Certificate (3.05(c))
325
FACILITY 2 CONSTRUCTION AGENCY AGREEMENT
THIS FACILITY 2 CONSTRUCTION AGENCY AGREEMENT (this "Agreement"
herein), 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
("Lessor").
RECITALS
A. Lessee has requested Lessor and the Persons which are "Participants"
under the Participation Agreement referred to in Recital B below (such Persons
to be referred to collectively as the "Participants") to provide to Lessee a
lease facility pursuant to which:
(1) Lessor would (a) lease certain property designated by
Lessee, (b) sublease such property to Lessee, (c) appoint Lessee as
Lessor's agent to make certain improvements to such property, (d) make
advances to finance such improvements and to pay certain related
expenses and (e) grant to Lessee the right to purchase such parcels of
property; and
(2) The Participants would participate in such lease facility
by (a) funding the advances to be made by Lessor and (b) acquiring
participation interests in the rental and certain other payments to be
made by Lessee.
B. Pursuant to a Participation Agreement dated of even date herewith
(the "Participation Agreement") among Lessee, Lease Plan North America, Inc.
("Head Lessor"), Lessor, the Participants and ABN AMRO Bank N.V., as agent for
the Participants (in such capacity, "Agent"), Lessor and the Participants have
agreed to provide such lease facility upon the terms and subject to the
conditions set forth therein, including without limitation the execution and
delivery of this Agreement setting forth the terms of Lessee's construction
obligations.
AGREEMENT
NOW, THEREFORE, in consideration of the above Recitals and the mutual
covenants herein contained, the parties hereto hereby agree as follows:
SECTION 1. INTERPRETATION.
1.01. Definitions. Unless otherwise indicated in this Agreement or any other
Operative Document, each term set forth in Schedule 1.01 to the Participation
Agreement, when used in this Agreement or any other Operative Document, shall
have the respective meaning given to
326
that term in such Schedule 1.01 or in the provision of this Agreement or other
document, instrument or agreement referenced in such Schedule 1.01.
1.02. Rules of Construction. Unless otherwise indicated in this
Agreement or any other Operative Document, the rules of construction set forth
in Schedule 1.02 to the Participation Agreement shall apply to this Agreement
and the other Operative Documents.
SECTION 2. APPOINTMENT; AUTHORITY.
2.01. Appointment. Lessor hereby appoints Lessee and Lessee hereby
agrees to act as Lessor's agent for the construction of the New Improvements to
the Facility 2 Property.
2.02. Scope of Authority. Lessee shall have the authority to perform
all acts expressly delegated to or undertaken by Lessee under this Agreement and
all other acts reasonably necessary to complete the construction of the New
Improvements in accordance with the Plans and Specifications, the Budget, this
Agreement, the other Operative Documents, all applicable Governmental Rules and
all applicable Insurance Requirements; provided, however, that no Lessor Party
shall have any obligation to pay any fees, costs or expenses related to such
construction (except to the extent of Lessor's obligation to make, and the
Participants' obligations to fund, Advances pursuant to the Participation
Agreement) and Lessee shall have no authority to, and shall not, enter into any
agreement which would, directly or indirectly, require any Lessor Party to pay
any such fees, costs or expenses or otherwise impose upon any Lessor Party any
liability or obligation. Subject to the terms and conditions of this Agreement
and the other Operative Documents, Lessee shall have sole management and control
over the construction means, methods, sequences and procedures with respect to
the construction of the New Improvements.
2.03. Delegation of Duties. Lessee may employ such architects,
engineers, contractors, consultants, agents, employees and other Persons as
Lessee determines are necessary or appropriate to construct the New Improvements
and perform its other obligations and duties hereunder and may delegate to such
Persons any or all of such obligations and duties; provided, however, that no
such employment or delegation shall limit or reduce in any way Lessee's
obligations and duties under this Agreement. Lessor understands that Lessee is
not a licensed contractor and that Lessee will engage licensed contractors to
perform any obligations under this Agreement which require a license.
SECTION 3. LESSEE'S OBLIGATIONS AND DUTIES.
3.01. Plans and Specifications and Other Construction Agreements.
Pursuant to Paragraph 3.01 of the Participation Agreement, Lessee has delivered
to Lessor the Plans and Specifications for all new improvements to be made to
the Property, a certificate of the architect for such new improvements
certifying that such Plans and Specifications are complete and the Budget for
the new improvements. Lessee has entered or shall, on a timely basis, enter into
such agreements with architects, engineers, contractors, consultants,
materialmen, suppliers, agents, employees and other Persons as are necessary or
appropriate to complete the construction of the
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New Improvements in accordance with the Budget and this Agreement prior to the
Outside Completion Date and to perform Lessee's other obligations and duties
hereunder in connection therewith (together with the Plans and Specifications,
the "Construction Agreements"). Each Construction Agreement shall expressly
permit (a) the assignment of Lessee's rights thereunder to Lessor without the
consent of the other party(ies) to such agreement and (b) the termination of
such agreement without cause for a termination payment included in the Budget.
Upon Lessor's request, Lessee shall deliver to Lessor copies of any or all
Construction Agreements.
3.02. Modifications to Construction Agreements. Lessee shall not agree
to or permit any revision, amendment, supplementation or other modification to
the Plans and Specifications or any other Construction Agreement without the
written consent of Lessor if such revision, amendment, supplementation or
modification (either alone or together with all prior revisions, amendments,
supplementations and modifications to the Plans and Specifications and the other
Construction Agreements) is reasonably likely to:
(a) Cause the costs and expenses of acquiring the Facility 2
Property and constructing all of the New Improvements in accordance
with this Agreement (including all Permitted Improvement Costs and
Permitted Transaction Expenses paid or to be paid with Advances) to
exceed the lesser of (i) the Total Facility 2 Commitment and (ii) the
Expiration Date Appraisal for the Facility 2 Property;
(b) Make it difficult or impossible to Complete the
construction of all the New Improvements in accordance with this
Agreement on or prior to the Outside Completion Date; or
(c) Cause the Fair Market Value of the Facility 2 Property to
be less than the Expiration Date Appraisal for the Facility 2 Property
or otherwise decrease in any material amount.
Lessee shall notify Lessor promptly in writing of any such revision, amendment,
supplementation or other modification to the Plans and Specifications and the
other Construction Agreements.
3.03. Permits, Approvals, Etc. Prior to the time they are required,
Lessee shall obtain from Governmental Authorities and other Persons all
licenses, approvals, authorizations, consents, permits, easements and
rights-of-way that are necessary for the construction of any New Improvements in
accordance with this Agreement. Upon Lessor's request, Lessee shall deliver to
Lessor copies of any or all such licenses, approvals, authorizations, consents,
permits, easements and rights-of-way.
3.04. Material and Supplies. Lessee shall obtain all materials and
supplies necessary to construct the New Improvements. Lessee shall cause all
such materials and supplies (a) to be purchased in a manner that will result in
the ownership thereof vesting unconditionally in Lessor, free from all Liens
(other than Liens that attach in favor of the materialmen or subcontractors that
supply and/or install such materials and supplies); (b) to be stored at the
applicable Land under adequate safeguards to minimize the possibility of loss,
theft, damage or commingling with other materials or projects; and (c) to be
covered by the insurance policies required under
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this Agreement and the other Operative Documents. Upon Lessor's request, Lessee
shall deliver to Lessor copies of any contracts, bills of sale, statements,
receipts, vouchers or agreements for the materials and supplies used or to be
used in the construction of the New Improvements.
3.05. Construction.
(a) Commencement. Lessee shall commence construction of the
New Improvements for each Tract of Land for which New Improvements are
contemplated not later than one (1) month after the Closing Date and
shall diligently proceed with such construction.
(b) Manner. Lessee shall construct the New Improvements
(including all foundations and structural portions thereof; all
plumbing, heating, air conditioning and electrical systems; and all
water, sewer, electric, gas, telephone and drainage facilities) in a
good and workmanlike manner, free from any material defect in design or
construction, in accordance with the Plans and Specifications, the
Budget, this Agreement, the other Operative Documents, all applicable
Governmental Rules and all applicable Insurance Requirements.
(c) Completion. Subject to Subparagraph 3.05(d), Lessee shall
Complete the construction of the New Improvements on or prior to the
Outside Completion Date. "Completion" shall occur for the New
Improvements when Substantial Completion occurs pursuant to clause (i)
below and Lessee delivers to Lessor each item required by clause (ii)
below:
(i) "Substantial Completion" shall occur when the New
Improvements have been substantially completed in accordance
with this Agreement, are new and in good working condition and
are ready for occupancy and use as a facility as described in
clause (ii) of Subparagraph 4.01(t) of the Participation
Agreement. This shall require, without limiting the generality
of the preceding sentence, that (A) all utilities required to
adequately service the New Improvements for their intended use
are available and "tapped on" and hooked up pursuant to
adequate permits (including any that may be required under
applicable Environmental Laws) and (B) access to the New
Improvements for pedestrians and motor vehicles from publicly
dedicated streets and public highways are available.
(ii) Lessee shall furnish to Lessor each of the
following:
(A) A certificate of Lessee in the form of
Exhibit A, duly executed by Lessee;
(B) A certificate of an architect acceptable
to Lessor in the form of Exhibit B, duly executed by
such architect, together with copies of each of the
documents referred to therein;
(C) A date-down endorsement to or reissued
title insurance policies or binders delivered by
Lessee pursuant to Paragraph 3.02 of the
Participation Agreement;
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(D) Copies of all mechanic's or
materialman's lien waivers and releases as required
by Lessor; and
(E) Certificate of final occupancy issued by
the appropriate Governmental Authority.
(d) Construction Termination Events.
(i) Notice. As soon as possible and in no event later
than five (5) Business Days after learning of any Cost Overrun
Event or Completion Delay Event, Lessee shall deliver to
Lessor a written notice of such event that sets forth in
detail the nature of such event and Lessee's estimate of the
effect that such event will have on the costs to Complete the
New Improvements and/or the likely Completion Date.
(ii) Exercise of Marketing Option. If Lessor notifies
Lessee pursuant to Subparagraph 5.03(a) or Subparagraph
5.04(a) of the Facility 2 Lease Agreement that Lessor is
terminating the Facility 2 Lease Agreement on a Termination
Date which is prior to the Scheduled Expiration Date of the
Facility 2 Lease Agreement and the only basis for such early
termination is the occurrence of a Construction Termination
Event, Lessee may elect to exercise the Marketing Option as
provided in Subparagraph 3.02(l) of the Facility 2 Purchase
Agreement if:
(A) Such Construction Termination Event was
not caused by any failure by Lessee to comply with
any of its obligations under the Operative Documents
(including its insurance obligations), any
representation by Lessee in any of the Operative
Documents not being true, any negligence or willful
misconduct of Lessee, or any claim by any third-party
against Lessee (or against any Lessor Party) based
upon any alleged action or inaction by Lessee; and
(B) Lessee delivers to Lessor a Notice of
Marketing Option Exercise as required by Subparagraph
3.02(l) of the Facility 2 Purchase Agreement.
If Lessee elects to exercise the Marketing Option pursuant to
this clause (ii) and the Construction Termination Event was
not a Completion Delay Event, the Termination Date specified
by Lessor in the notice of early termination delivered by
Lessor to Lessee pursuant to Subparagraph 5.03(a) or
Subparagraph 5.04(a) of the Facility 2 Lease Agreement shall
be extended to the Outside Completion Date or, if later, the
date that is six (6) months after the Termination Date
specified by Lessor in its notice of early termination. If
Lessee elects to exercise the Marketing Option pursuant to
this clause (ii) and the Construction Termination Event was a
Completion Delay Event, both the Termination Date specified by
Lessor in its notice of early termination and the Outside
Completion Date shall be extended to the first Business Day of
the first full calendar month after the date
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specified by Lessee in the notice delivered by Lessee to
Lessor pursuant clause (i); provided, however, that neither
the Termination Date nor the Outside Completion Date shall be
extended to a date that is more than six (6) months after the
early Termination Date initially specified by Lessor in its
notice of early termination if Lessor directs Lessee to cease
construction prior to such date pursuant to clause (iii)
below. Notwithstanding the foregoing provisions of this clause
(ii), if a Marketing Option Event of Default shall occur,
Lessee's right to exercise the Marketing Option pursuant to
this clause (ii) shall terminate and Lessor shall have the
right to terminate the Facility 2 Lease Agreement on an
earlier date. If Lessee delivers to Lessor a Notice of
Marketing Option Exercise as provided in this clause (ii),
Lessee shall comply with the provisions of the Facility 2
Purchase Agreement and the other Operative Documents governing
the Marketing Option.
(iii) Continuation of Construction. After the
occurrence of a Construction Termination Event (without regard
to whether Lessor has notified Lessee that Lessor is
terminating the Facility 2 Lease Agreement or whether Lessee
has elected to exercise the Marketing Option as provided in
clause (ii) above), Lessee shall continue diligently to
construct the New Improvements in accordance with this
Agreement until the Completion thereof; provided, however,
that:
(A) Lessee shall cease such construction as
of any date specified by Lessor;
(B) Subject to the amount limitations set
forth herein, the right of Lessor and the
Participants to terminate their commitments hereunder
upon the occurrence of any other Default and the
other terms and conditions of the Operative
Documents, Lessor shall continue to make (and
Participants shall continue to fund) Advances;
(C) If Advances are no longer available
under the Participation Agreement, Lessee shall pay
Prepaid Rent if the Construction Termination Event
was caused by or arose from any failure by Lessee to
comply with any of its obligations under the
Operative Documents (including its insurance
obligations), any representation by Lessee in any of
the Operative Documents not being true, any
negligence or willful misconduct of Lessee, or any
claim by any third-party against Lessee (or against
any Lessor Party) based upon any alleged action or
inaction by Lessee; and
(D) If Lessee incurs any Prepaid Rent, the
Residual Value Guaranty Amount shall be calculated as
provided in the proviso to clause (i) of Subparagraph
3.02(g) of the Facility 2 Purchase Agreement.
3.06. Insurance. Lessee (and its general contractor) shall maintain
policies of casualty and liability insurance as required by Paragraph 3.03 of
the Facility 2 Lease Agreement.
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3.07. Fees, Costs and Expenses.
(a) Limitation of Responsibility. Lessee shall use the
Advances made by Lessor and funded by Participants under the
Participation Agreement for Permitted Improvement Costs and Permitted
Transaction Expenses to pay such costs and expenses. Except for their
obligations to make and fund Advances pursuant to the Participation
Agreement, neither Lessor nor any other Lessor Party shall have any
obligation to pay any fees, costs or expenses of constructing the New
Improvements.
(b) Prompt Payment. Lessee shall pay when due all fees, costs
and expenses of architects, engineers, contractors, materialmen,
suppliers, consultants, agents, employees and other Persons which
provide services, materials or supplies in connection with the
construction of the New Improvements and all other fees, costs and
expenses related to such construction.
(c) No Lessee Fee. Lessee shall not be entitled to any fee for
the performance of its obligations and duties hereunder or any other
compensation in connection with this Agreement.
3.08. Books and Records. Lessee shall maintain accurate books and
records, in reasonable detail, relating to the construction of the New
Improvements and shall permit Lessor to inspect the same and make copies
thereof, at Lessee's expense, upon reasonable notice to Lessee.
3.09. Additional Obligations and Duties. In addition to the obligations
and duties set forth above in this Section 3, Lessee shall perform all other
acts reasonably necessary to achieve Completion of the construction of the New
Improvements in accordance with the Plans and Specifications, the Budget, this
Agreement, the other Operative Documents, all applicable Governmental Rules and
all applicable Insurance Requirements. Lessee shall, from time to time at the
request of Lessor, deliver to Lessor such evidence as Lessor may reasonably
request to establish that the New Improvements are being constructed in
accordance with the Plans and Specifications, the Budget, this Agreement, the
other Operative Documents, all applicable Governmental Rules and all applicable
Insurance Requirements and that Completion is likely to occur on or prior to the
Outside Completion Date.
SECTION 4. MISCELLANEOUS.
4.01. Notices. Except as otherwise specified herein, all notices,
requests, demands, consents, instructions or other communications to or upon
Lessee or Lessor under this Agreement shall be given as provided in Subparagraph
2.02(c) and Paragraph 7.01 of the Participation Agreement.
4.02. Waivers; Amendments. Any term, covenant, agreement or condition
of this Agreement may be amended or waived only as provided in the Participation
Agreement. No failure or delay by any Lessor Party in exercising any right
hereunder shall operate as a waiver thereof or of any other right nor shall any
single or partial exercise of any such right preclude any other further exercise
thereof or of any other right. Unless otherwise specified in any such
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waiver or consent, a waiver or consent given hereunder shall be effective only
in the specific instance and for the specific purpose for which given.
4.03. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the Lessor Parties and Lessee and their permitted
successors and assigns; provided, however, that the Lessor Parties and Lessee
shall not sell, assign or delegate their respective rights and obligations
hereunder except as provided in the Participation Agreement.
4.04. No Third Party Rights. Nothing expressed in or to be implied from
this Agreement is intended to give, or shall be construed to give, any Person,
other than the Lessor Parties and Lessee and their permitted successors and
assigns, any benefit or legal or equitable right, remedy or claim under or by
virtue of this Agreement or under or by virtue of any provision herein.
4.05. Partial Invalidity. If at any time any provision of this
Agreement is or becomes illegal, invalid or unenforceable in any respect under
the law or any jurisdiction, neither the legality, validity or enforceability of
the remaining provisions of this Agreement nor the legality, validity or
enforceability of such provision under the law of any other jurisdiction shall
in any way be affected or impaired thereby.
4.06. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of California without reference to
conflicts of law rules.
4.07. Counterparts. This Agreement 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.
4.08. Nature of Lessee's Obligations.
(a) Independent Obligation. The obligation of Lessee to
construct the New Improvements or to cause the construction of the New
Improvements pursuant to this Agreement and the other Operative
Documents and to perform the other Lessee Obligations are absolute,
unconditional and irrevocable obligations which are separate and
independent of the obligations of the Lessor Parties under this
Agreement and the other Operative Documents and all other events and
circumstances, including the events and circumstances set forth in
Subparagraph 4.08(c).
(b) No Termination or Abatement. This Agreement and the other
Operative Documents and Lessee's obligation to construct the New
Improvements and to pay and perform all other Lessee Obligations shall
continue in full force and effect without abatement notwithstanding the
occurrence or existence of any event or circumstance, including any
event or circumstance set forth in Subparagraph 4.08(c).
(c) Full Payment and Performance. Lessee shall perform all of
its obligations under this Agreement and the other Operative Documents
in the manner and at the times required by the terms of this Agreement
and the other Operative Documents without setoff, deduction or
reduction of any kind and shall perform all other Lessee Obligations as
and when required, without regard to any event or circumstances
whatsoever,
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including (i) the condition of the Property (including any Improvements
to the Property made prior to the Commencement Date or during the
Term); (ii) title to the Property (including possession of the Property
by any Person or the existence of any Lien or any other right, title or
interest in or to any of the Property in favor of any Person); (iii)
the value, habitability, usability, design, operation or fitness for
use of the Property; (iv) the availability or adequacy of utilities and
other services to the Property; (v) any latent, hidden or patent defect
in the Property; (vi) the zoning or status of the Property or any other
restrictions on the use of the Property; (g) the economics of the
Property; (vii) any Casualty or Condemnation; (viii) the compliance of
the Property with any applicable Governmental Rule or Insurance
Requirement; (ix) any failure by any Lessor Party to perform any of its
obligations under this Agreement or any other Operative Document; or
(x) the exercise by any Lessor Party of any of its remedies under this
Agreement or any other Operative Document; provided, however, that this
Paragraph 4.08 shall not abrogate any right which Lessee may have to
recover damages from any Lessor Party for any material breach by such
Lessor Party of its obligations under this Agreement or any other
Operative Document to the extent permitted hereunder or thereunder.
[The signature page follows.]
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IN WITNESS WHEREOF, Lessee and Lessor have caused this Agreement 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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EXHIBIT A
LESSEE'S COMPLETION CERTIFICATE
[Date]
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
1. Reference is made to the following:
(a) The Participation Agreement, dated as of April 13, 2001
(the "Participation Agreement"), among Novellus Systems, Inc.
("Lessee"), ABN AMRO Leasing, Inc. ("Lessor"), the Persons listed in
Schedule I to the Participation Agreement (the "Participants") and ABN
AMRO Bank N.V., as agent for the Participants (in such capacity,
"Agent"); and
(b) The Facility 2 Construction Agency Agreement, dated as of
April 13, 2001 (the "Construction Agency Agreement"), between Lessee
and Lessor.
Unless otherwise indicated, all terms defined in the Participation Agreement
have the same respective meanings when used herein.
2. Lessee hereby certifies to Lessor, for the benefit of all of
the Lessor Parties, as follows:
(a) Lessee has completed all of the New Improvements to the
Property substantially in accordance with the Plans and Specifications,
the Budget, the Construction Agency Agreement, the other Operative
Documents, all applicable Governmental Rules and all applicable
Insurance Requirements and the New Improvements now are ready for use
and occupancy as a facility described in clause (ii) of Schedule
4.01(t) to the Participation Agreement.
(b) All amounts payable to third parties for the construction
of such New Improvements have been paid in full (other than amounts
which Lessee is contesting in accordance with the Facility 2 Lease
Agreement).
(c) No changes or modifications that have had an adverse
effect on the value, use or useful life of the Property were made to
the Plans and Specifications after the Closing Date, except for any
such changes and modifications as were permitted by Paragraph 3.02 of
the Facility 2 Construction Agency Agreement.
(d) The representations and warranties relating to the
Property set forth in Subparagraph 4.01(t) of and Schedule 4.01(t) to
the Participation Agreement and the
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other representations and warranties of Lessee set forth in the
Operative Documents are true and correct in all material respects on
the date hereof (except for representations and warranties expressly
made as of a specified date, which shall be true as of such date).
(e) No Default has occurred and is continuing.
IN WITNESS WHEREOF, Lessee has executed this Lessee's Completion
Certificate on the date set forth above.
NOVELLUS SYSTEMS, INC.
By: __________________________________
Name: ____________________________
Title: ___________________________
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EXHIBIT B
ARCHITECT'S COMPLETION CERTIFICATE
[Date]
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
1. Reference is made to the following:
(a) The [____________] Agreement, dated as of [____] (the
"Architect's Agreement"), between Novellus Systems, Inc. ("Lessee") and
[__________] ("Architect"); and
(b) The plans and specifications dated as of [_______]
prepared by Architect for certain improvements to the property located
at [____________________] (the "Plans and Specifications").
2. The undersigned hereby certifies to you as follows:
(a) The improvements contemplated by the Plans and
Specifications (the "Improvements") have been completed substantially
in accordance with such Plans and Specifications, a final certificate
of occupancy has been issued by the appropriate governmental agency,
and the Improvements are ready for use and occupancy.
(b) To the best of [my][our] knowledge, the Improvements as so
completed comply with all applicable laws, rule, regulations and
ordinances pertaining to the construction and occupancy thereof,
including applicable building and zoning laws, rule, regulations and
ordinances, and the Americans with Disabilities Act of 1990, 42 U.S.C.
Section 1210 et seq.
(c) No changes or modifications were made to the Plans and
Specifications after the date thereof that have had an adverse effect
on the value, use or useful life of the Property.
(d) Attached hereto are true and complete copies of an "as
built" or "record" set of the plans and specifications for the
Improvements, and an ALTA survey of the property "as built" showing all
paving, driveways, fences and exterior improvements.
B-1
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IN WITNESS WHEREOF, the undersigned has executed this Architect's
Completion Certificate on the date set forth above.
[Name of Architectural Firm]
By: _________________________________
Name: ___________________________
Title: __________________________
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EXHIBIT D
FACILITY 2 CONSTRUCTION AGENCY AGREEMENT
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EXHIBIT E
ADVANCE REQUEST
[Date]
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
1. Reference is made to that certain Participation Agreement, dated as
of April 13, 2001 (the "Participation Agreement"), among Novellus Systems, Inc.
("Lessee"), Lease Plan North America, Inc. ("Head Lessor"), ABN AMRO Leasing,
Inc. ("Lessor"), the Persons listed in Schedule I to the Participation Agreement
(the "Participants") and ABN AMRO Bank N.V., as agent for the Participants (in
such capacity, "Agent"). Unless otherwise indicated, all terms defined in the
Participation Agreement have the same respective meanings when used herein.
2. Pursuant to Subparagraph 2.03(a) of the Participation Agreement,
Lessee hereby irrevocably requests Lessor to make an Advance under Facility [_]
as follows:
(a) Such Advance shall be in the aggregate amount of
$________[, of which amount, $__________ is for the Land Portion and
$________ is for the Improvement Portion][insert and complete preceding
bracketed clause if Advance is under Facility 1] ; and
(b) The date of such Advance shall be ____________, ____ (the
"Advance Date").
[Add the following language for each of the Initial Advances: This Advance
Request is for the Initial Advance under Facility [_], and the Advance Date
shall be the Closing Date. Lessee hereby requests Lessor to enter into the
Facility [_] Head Lease Agreement on the Closing Date and to disburse to Head
Lessor such portion of the Initial Advance as is necessary to pay the rent
payable under the Facility [_] Head Lease Agreement on the Closing Date.]
3. [Lessee will use $________ of the proceeds of the requested Advance
to pay the costs for the Related Goods described in the Supplement to Exhibit B
to the Lease Agreement which is attached hereto. Bills of sale for all such
Related Goods, each showing Lessor as the purchaser, also are attached
hereto.] [Whenever the requested Advance is to be used to pay for Related Goods,
include the preceding two sentences, complete and attach an Exhibit B Supplement
describing the Related Goods and attach the applicable bills of sale.] Lessee
will use the [remaining] proceeds of such Advance to pay the costs and expenses
set forth in Attachment 1 hereto. All such costs and expenses are Permitted
Improvement Costs and/or Permitted
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Transaction Expenses which are now due and payable. No prior Advance has been
requested to pay any such costs and expenses.
4. Lessee hereby certifies to the Lessor Parties that, on the date of
this Advance Request and after giving effect to the requested Advance:
(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 on such date.
[Add one of the following, as appropriate, for each Advance:]
[Lessee further certifies to the Lessor Parties that (i) construction of the New
Improvements is proceeding in accordance with the Plans and Specifications, the
Budget, the Facility 2 Construction Agency Agreement, the other Operative
Documents, all applicable Governmental Rules and all applicable Insurance
Requirements and (ii) no Cost Overrun Event or Completion Delay Event has
occurred.]
[Lessee further certifies to the Lessor Parties that the New Improvements have
been Completed in accordance with the Plans and Specifications, the Budget, the
Facility 2 Construction Agency Agreement, the other Operative Documents, all
applicable Governmental Rules and all applicable Insurance Requirements.]
5. Please disburse the proceeds of the Advance to
IN WITNESS WHEREOF, Lessee has executed this Advance Request on the
date set forth above.
NOVELLUS SYSTEMS, INC.
By:_____________________________
Name ________________________
Title:_______________________
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EXHIBIT F(1)
COMMITMENT EXTENSION REQUEST
[Date]
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
1. Reference is made to that certain Participation Agreement, dated as
of April 13, 2001 (the "Participation Agreement"), among Novellus Systems, Inc.
("Lessee"), Lease Plan North America, Inc. ("Head Lessor"), ABN AMRO Leasing,
Inc. ("Lessor"), the Persons listed in Schedule I to the Participation Agreement
(the "Participants") and ABN AMRO Bank N.V., as agent for the Participants (in
such capacity, "Agent"). Unless otherwise indicated, all terms defined in the
Participation Agreement have the same respective meanings when used herein.
2. Pursuant to Subparagraph 2.09(a) of the Participation Agreement,
Lessee hereby irrevocably requests Lessor to extend (and the Participants to
consent to such extension) the Unused Total Commitment ($___________) for an
additional [______ (_)] month[s] by extending the current Outside Completion
Date from [__________] to [__________].
3. Lessee hereby certifies to the Lessor Parties that, on the date of
this Commitment Extension Request and after giving effect to the extension
requested hereby:
(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.
F(1)-1
343
IN WITNESS WHEREOF, Lessee has executed this Commitment Extension
Request on the date set forth above.
NOVELLUS SYSTEMS, INC.
By:_____________________________
Name: _______________________
Title: ______________________
CONSENT
The undersigned hereby consents to the extension of the Outside
Completion Date requested above upon the terms set forth in the attachment
hereto.
_________________________________
By: _____________________________
Name: _______________________
Title: ______________________
Date: ___________________________
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344
EXHIBIT F(2)
LEASE EXTENSION REQUEST
[Date]
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
1. Reference is made to that certain Participation Agreement, dated as
of April 13, 2001 (the "Participation Agreement"), among Novellus Systems, Inc.
("Lessee") Lease Plan North America, Inc. ("Head Lessor"), ABN AMRO Leasing,
Inc. ("Lessor"), the Persons listed in Schedule I to the Participation Agreement
(the "Participants") and ABN AMRO Bank N.V., as agent for the Participants (in
such capacity, "Agent"). Unless otherwise indicated, all terms defined in the
Participation Agreement have the same respective meanings when used herein.
2. Pursuant to Subparagraph 2.09(b) of the Participation Agreement,
Lessee hereby irrevocably requests Lessor to extend (and the Participants to
consent to such extension) the Term of the Lease Agreement for an additional one
(1) year by extending the current Scheduled Expiration Date from [__________] to
[__________].
3. Lessee hereby certifies to the Lessor Parties that, on the date of
this Lease Extension Request and after giving effect to the extension requested
hereby:
(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 on such date.
F(2)-1
345
IN WITNESS WHEREOF, Lessee has executed this Lease Extension Request on
the date set forth above.
NOVELLUS SYSTEMS, INC.
By: __________________________
Name: ____________________
Title: ___________________
CONSENT
The undersigned hereby consents to the extension of the Scheduled
Expiration Date requested above upon the terms set forth in the attachment
hereto.
______________________________
By: __________________________
Name: ____________________
Title: ___________________
Date: ________________________
F(2)-2
346
EXHIBIT G
ASSIGNMENT OF CONSTRUCTION AGREEMENTS
G-1
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================================================================================
ASSIGNMENT OF CONSTRUCTION AGREEMENTS
BY
NOVELLUS SYSTEMS, INC.
IN FAVOR OF
ABN AMRO LEASING, INC.
APRIL 13, 2001
================================================================================
348
ASSIGNMENT OF CONSTRUCTION AGREEMENTS
THIS ASSIGNMENT OF CONSTRUCTION AGREEMENTS (this "Agreement" herein),
dated as of April 13, 2001, is executed by
(1) NOVELLUS SYSTEMS, INC., a California corporation ("Lessee"),
in favor of
(2) ABN AMRO LEASING, INC., an Illinois corporation ("Lessor").
RECITALS
A. Lessee has requested Lessor and the financial institutions which are
"Participants" under the Participation Agreement referred to in Recital B below
(such financial institutions to be referred to collectively as the
"Participants") to provide to Lessee lease facilities pursuant to which:
(1) Lessor would (a) lease from Head Lessor (as defined below)
certain land, (b) sublease to Lessee such land and lease to Lessee
certain improvements to be constructed on such land, (c) appoint Lessee
as Lessor's agent to make such improvements (which improvements will be
owned by Lessor), (d) make advances to finance such improvements and to
pay certain related expenses and (e) grant to Lessee the right to
purchase such improvements; and
(2) The Participants would participate in such facilities by (a)
funding the purchase price and other advances to be made by Lessor and
(b) acquiring participation interests in the rental and certain other
payments to be made by Lessee.
B. Pursuant to a Participation Agreement dated as of April 13, 2001 (the
"Participation Agreement") among Lessee, Lease Plan North America, Inc. ("Head
Lessor"), Lessor, the Participants and ABN AMRO Bank N.V., as agent for the
Participants (in such capacity, "Agent"), Lessor and the Participants have
agreed to provide such facilities upon the terms and subject to the conditions
set forth therein.
C. One of the conditions to the effectiveness of the Participation
Agreement is the execution and delivery of this Agreement by the parties hereto
setting forth the terms of the assignment by Lessee to Lessor of certain
construction agreements and contracts.
AGREEMENT
NOW, THEREFORE, in consideration of the above Recitals and the mutual
covenants herein contained, the parties hereto hereby agree as follows:
349
SECTION 1. INTERPRETATION.
1.01. Definitions. Unless otherwise indicated in this Agreement or any
other Operative Document, each term set forth in Schedule 1.01 to the
Participation Agreement, when used in this Agreement or any other Operative
Document, shall have the respective meaning given to that term in such Schedule
1.01 or in the provision of this Agreement or other document, instrument or
agreement referenced in such Schedule 1.01.
1.02. Rules of Construction. Unless otherwise indicated in this
Agreement or any other Operative Document, the rules of construction set forth
in Schedule 1.02 to the Participation Agreement shall apply to this Agreement
and the other Operative Documents.
SECTION 2. ASSIGNMENT.
2.01. Assignment. Lessee hereby assigns to Lessor all of Lessee's right,
title and interest in, to and under all agreements and contracts between Lessee
and any other Person (collectively, the "Construction Agreements") relating to
the construction of any and all New Improvements on any portion of the Facility
2 Land, including, without limitation, the agreements and contracts described in
Exhibit A and all future Construction Agreements which may be entered into by
Lessee prior to the termination of this Agreement. Upon execution of any new
Construction Agreement, Lessee shall promptly notify Lessor of such Construction
Agreement. Upon Lessor's request, Lessee shall provide Lessor with copies of the
Construction Agreements.
2.02. Absolute Assignment. This Agreement constitutes a present and
absolute assignment to Lessor; provided, however, that Lessor may not enforce
the terms of the Construction Agreements unless and until an Event of Default
occurs. Upon the occurrence of any Event of Default, Lessor may, in its sole
discretion, give notice to any of the contractors referred to in the
Construction Agreements or any other party to the Construction Agreements
(collectively, the "Contractors") of its intent to enforce the rights of Lessee
under the Construction Agreements and may initiate or participate in any legal
proceedings respecting the enforcement of said rights. Lessee acknowledges that,
by accepting this assignment, Lessor does not assume any of Lessee's obligations
under the Construction Agreements.
2.03. Contractor's Consent. In connection with the execution and
delivery to Lessor of this Agreement, with respect to each Construction
Agreement with an anticipated cost of $1,000,000.00 or more, Lessee shall obtain
and deliver to Lessor consents from each Contractor under each Construction
Agreement in the form attached hereto as Exhibit B (a "Contractor's Consent to
Assignment"). Lessee shall obtain and provide to Lessor a Contractor's Consent
to Assignment for any new Construction Agreements entered into by Lessee after
the date hereof.
SECTION 3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF LESSEE.
3.01. Representations and Warranties. Lessee represents and warrants to
Lessor that (a) all Construction Agreements entered into by Lessee are in full
force and effect and are enforceable in accordance with their terms (subject to
applicable laws regarding insolvency and
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350
principles of equity) and no default, or event which would constitute a default
after notice or the passage of time, or both, exists with respect to said
Construction Agreements; (b) all copies of the Construction Agreements delivered
to Lessor are complete and correct; and (c) Lessee has not assigned any of its
rights under the Construction Agreements.
3.02. Covenants. Lessee agrees (a) to pay and perform all obligations of
Lessee under the Construction Agreements; (b) to enforce the payment and
performance of all obligations of any other Person under the Construction
Agreements except as provided in the Facility 2 Construction Agency Agreement;
(c) not to modify the existing Construction Agreements nor to enter into any
future Construction Agreements without Lessor's prior written approval which
shall not be unreasonably withheld, except as otherwise may be permitted by the
Operative Documents; and (d) not to further assign, for security or any other
purposes, its rights under the Construction Agreements without Lessor's prior
written approval.
SECTION 4. MISCELLANEOUS.
4.01. Notices. Except as otherwise specified herein, all notices,
requests, demands, consents, instructions or other communications to or upon
Lessee or Lessor under this Agreement shall be given as provided in Subparagraph
2.02(c) and Paragraph 7.01 of the Participation Agreement.
4.02. Waivers; Amendments. Any term, covenant, agreement or condition of
this Agreement may be amended or waived only as provided in the Participation
Agreement. No failure or delay by any Lessor Party in exercising any right
hereunder shall operate as a waiver thereof or of any other right nor shall any
single or partial exercise of any such right preclude any other further exercise
thereof or of any other right. Unless otherwise specified in any such waiver or
consent, a waiver or consent given hereunder shall be effective only in the
specific instance and for the specific purpose for which given.
4.03. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the Lessor Parties and Lessee and their permitted
successors and assigns; provided, however, that the Lessor Parties and Lessee
shall not sell, assign or delegate their respective rights and obligations
hereunder except as provided in the Participation Agreement.
4.04. No Third Party Rights. Nothing expressed in or to be implied from
this Agreement is intended to give, or shall be construed to give, any Person,
other than the Lessor Parties and Lessee and their permitted successors and
assigns, any benefit or legal or equitable right, remedy or claim under or by
virtue of this Agreement or under or by virtue of any provision herein.
4.05. Partial Invalidity. If at any time any provision of this Agreement
is or becomes illegal, invalid or unenforceable in any respect under the law or
any jurisdiction, neither the legality, validity or enforceability of the
remaining provisions of this Agreement nor the legality, validity or
enforceability of such provision under the law of any other jurisdiction shall
in any way be affected or impaired thereby.
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351
4.06. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of California without reference to
conflicts of law rules.
4.07. Termination. After the expiration of both Sublease Agreements and
the satisfaction in full of all Lessee Obligations, the assignment of the
Construction Agreements set forth herein shall terminate, Lessor shall re-assign
to Lessee its interests in such Construction Agreements and this Agreement shall
terminate.
[The signature page follows.]
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352
IN WITNESS WHEREOF, Lessee has caused this Agreement to be executed as
of the day and year first above written.
LESSEE: NOVELLUS SYSTEMS, INC.
By:______________________________________
Name:_________________________________
Title:________________________________
5
353
EXHIBIT A
CONSTRUCTION AGREEMENTS
A-1
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EXHIBIT B
CONTRACTOR'S CONSENT TO ASSIGNMENT
1. Reference is made to (a) the property located at [___________] (the
"Property") and (b) the agreement[s] described in Attachment 1 hereto between
Novellus Systems, Inc. ("Lessee") and the undersigned ("Contractor").
2. Lessee has notified Contractor that, pursuant to an Assignment of
Construction Agreements dated as of April 13, 2001 between Lessee and ABN AMRO
Leasing, Inc., an Illinois corporation ("Lessor") (the "Assignment"), Lessee has
assigned to Lessor the agreement[s] described in Attachment 1 hereto and all
future agreements and contracts between Lessee and Contractor relating to the
construction, maintenance or repair of any improvements to the Property
(collectively, the "Construction Agreements").
3. Contractor hereby consents to the Assignment and agrees as follows
for the benefit of Lessor:
(a) Except with the prior written approval of Lessor, Contractor
shall not perform any construction work pursuant to any change in the
plans and specifications as set forth or attached to the Construction
Agreements where such change (i) would result in an increase, alone or
in the aggregate, in the total construction cost under the Construction
Agreements of more than $250,000.00 or (b) would adversely affect the
structural integrity, quality of building material or equipment or
overall efficiency of operating systems or utility systems of the
improvements. The liens of Lessor's security interests shall have
priority over any claim of lien of Contractor arising out of or in any
way connected with any construction work performed by Contractor on the
Property.
(b) If requested by Lessor in the exercise of Lessor's rights
under the Assignment, Contractor shall continue to perform its
obligations under the Construction Agreements in accordance with the
terms thereof. Contractor acknowledges that Lessor may have no means of
discovering when or if Contractor claims a default under the
Construction Agreements and agrees that it will give Lessor prior
written notice of any default claimed by Contractor under the
Construction Agreements. Said notice shall set forth a description of
the default and a request to Lessor to cure the same within thirty (30)
days. Said notice shall be deemed served upon delivery or, if mailed,
upon the first to occur of receipt or the expiration of seventy-two (72)
hours after deposit in United States Postal Service certified mail,
postage prepaid and addressed to the address of Lessor appearing below.
No termination of the Construction Agreements by Contractor shall be
binding upon Lessor unless Lessor has received such notice and has
failed to cure the described default within said thirty (30) days.
Contractor further acknowledges that, unless and until Lessor elects to
exercise its rights under the Assignment and requests Contractor's
performance under the Construction Agreements in writing, Lessor neither
undertakes nor assumes any obligations or liability under the
Construction Agreements.
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(c) Contractor shall hold in trust all money disbursed to or
otherwise received by Contractor from or on account of Lessee in
connection with the construction of the improvements and shall use such
money solely for the payment of costs incurred in the construction of
the improvements, including Contractor's fees, and for no other purpose,
until all bills, claims and demands for such costs have been paid in
full.
IN WITNESS WHEREOF, Contractor has executed this Consent on this
___________ day of __________, ____.
[________________________________]
By:________________________________
Name:___________________________
Title:__________________________
Contractor's Address:
[____________________]
[____________________]
[____________________]
[____________________]
Lessor's Address:
ABN AMRO Leasing, Inc.
135 South LaSalle Street, Suite 740
Chicago, Illinois 60603
Attn: David M. Shipley
B-2
356
EXHIBIT H
[RESERVED]
H-1
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EXHIBIT I
ASSIGNMENT OF LEASE
I-1
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RECORDING REQUESTED BY AND
WHEN RECORDED RETURN TO:
John Rivers, Esq.
Orrick, Herrington & Sutcliffe LLP
Old Federal Reserve Bank Building
400 Sansome Street
San Francisco, California 94111
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ASSIGNMENT OF HEAD LEASE AGREEMENTS,
SUBLEASE AGREEMENTS
AND PURCHASE AGREEMENTS
BY
ABN AMRO LEASING, INC.
IN FAVOR OF
ABN AMRO BANK N.V.,
AS AGENT
April 13, 2001
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
359
ASSIGNMENT OF HEAD LEASE AGREEMENTS, SUBLEASE AGREEMENTS AND
PURCHASE AGREEMENTS
THIS ASSIGNMENT OF HEAD LEASE AGREEMENTS, SUBLEASE AGREEMENTS AND
PURCHASE AGREEMENTS (this "Assignment" herein), dated as of April 13, 2001 is
executed by:
(1) ABN AMRO LEASING, INC., an Illinois corporation ("Lessor")
in favor of
(2) ABN AMRO BANK N.V., as agent for the Participants under
the Participation Agreement referred to in Recital B below
(in such capacity, "Agent").
RECITALS
A. Novellus Systems, Inc., a California corporation ("Lessee"), has
requested essor and the financial institutions which are "Participants" under
the Participation Agreement referred to in Recital B below (such financial
institutions to be referred to collectively as the "Participants") to provide to
Lessee lease facilities pursuant to which:
(1) Lessor would (a) lease from Head Lessor (as defined below)
certain land currently leased by Lessee, (b) sublease to Lessee such
land and lease to Lessee certain improvements to be constructed on such
land, (c) appoint Lessee as Lessor's agent to make such improvements
(which improvements will be owned by Lessor), (d) make advances to
finance such improvements and to pay certain related expenses and (e)
grant to Lessee the right to purchase such improvements; and
(2) The Participants would participate in such facilities by (a)
funding the advances to be made by Lessor and (b) acquiring
participation interests in the rental and certain other payments to be
made by Lessee.
B. Pursuant to a Participation Agreement dated as of April 13, 2001 (the
"Participation Agreement") among Lessee, Lease Plan North America, Inc. ("Head
Lessor"), Lessor, the Participants and Agent, Lessor and the Participants have
agreed to provide such lease facility upon the terms and subject to the
conditions set forth therein.
C. One of the conditions to the effectiveness of the Participation
Agreement is the execution and delivery by the parties thereto of (1) the
Facility 1 Head Lease Agreement and the Facility 2 Head Lease Agreement, each
dated as of April 13, 2001, between Head Lessor and Lessor (collectively, the
"Head Lease Agreements"), pursuant to which Lessor has leased from Head Lessor
the lots, pieces, tracts and parcels of land described in Exhibit A (the "Land")
and the other property described in the Head Lease Agreements, (2) the Facility
1 Lease Agreement, Deed of Trust with Assignment of Rents, Security Agreement
and Fixture Filing and the Facility 2 Lease Agreement, Construction Deed of
Trust with Assignment of Rents, Security Agreement and Fixture Filing, each
dated as of April 13, 2001, between Lessee and Lessor (collectively, the
360
"Sublease Agreements"), pursuant to which Lessor has subleased to Lessee the
Land and the other property described in the Sublease Agreements (the
"Property"), (3) the Facility 1 Purchase Agreement and the Facility 2 Purchase
Agreement, each dated as of April 13, 2001, between Lessee and Lessor
(collectively, the "Purchase Agreements"), pursuant to which Lessee may purchase
the Property from Lessor under certain circumstances, and (4) this Assignment.
D. Lessee has consented to this Assignment and executed Lessee's Consent
to Assignment of Head Lease Agreements, Sublease Agreements and Purchase
Agreements in the form of Exhibit B hereto.
AGREEMENT
NOW, THEREFORE, in consideration of the above Recitals and the mutual
covenants herein contained, the parties hereto hereby agree as follows:
SECTION 1. INTERPRETATION.
1.01. Definitions. Unless otherwise indicated in this Assignment or any
other Operative Document, each term set forth in Schedule 1.01 to the
Participation Agreement, when used in this Assignment or any other Operative
Document, shall have the respective meaning given to that term in such Schedule
1.01 or in the provision of this Assignment or other document, instrument or
agreement referenced in such Schedule 1.01.
1.02. Rules of Construction. Unless otherwise indicated in this
Assignment or any other Operative Document, the rules of construction set forth
in Schedule 1.02 to the Participation Agreement shall apply to this Assignment
and the other Operative Documents.
SECTION 2. ASSIGNMENT.
2.01. Assignment. As security for the Lessor Obligations, Lessor hereby
irrevocably and unconditionally grants, conveys, transfers and assigns to Agent,
for the benefit of the Participants and Agent, all estate, right, title and
interest of Lessor, whether now owned or hereafter acquired, in each Head Lease
Agreement, each Sublease Agreement and each Purchase Agreement, including all
claims and rights to the payment of money at any time arising in connection with
any repudiation, rejection or breach of either agreement by Lessee or a trustee
or receiver of Lessee in any bankruptcy, insolvency or similar proceeding.
2.02. Receipt of Rents, Etc. Lessor hereby irrevocably designates Agent
(or its designee) to receive all Rents and other payments to be made by Lessee
or Head Lessor under the Head Lease Agreements, the Sublease Agreements and the
Purchase Agreements. Lessor shall direct (and hereby directs) Lessee to deliver
to Agent (or its designee), at its address set forth in the Participation
Agreement or at such other address or to such other Person as Agent shall
designate, all such payments, and no delivery thereof by Lessee shall be of any
force or effect unless made to Agent (or its designee), as herein provided.
Lessor and Agent agree that Lessee and Head Lessor, in making such payments to
Agent pursuant to the directions contained
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361
in this Assignment and in reliance on such directions shall be deemed to have
satisfied its obligation for such payments under the Head Lease Agreements, the
Sublease Agreements or the Purchase Agreements, as applicable.
2.03. Irrevocability; Supplemental Instruments. Lessor agrees that (a)
this Assignment is irrevocable, (b) Lessor will not take any action under the
Head Lease Agreements, the Sublease Agreements or the Purchase Agreements or
otherwise which is inconsistent with this Assignment, (c) any action,
assignment, designation or direction inconsistent herewith shall be void and (d)
Lessor will from time to time execute and deliver all instruments of further
assurance and do such further acts as may be reasonably necessary or proper to
carry out more effectively the purpose of this Assignment.
2.04. Validity. Lessor represents, warrants, covenants and agrees that
(a) Lessor has not assigned or executed any assignment of, and will not assign
or execute any assignment of, Lessor's estate, right, title or interest in the
Head Lease Agreements, the Sublease Agreements or the Purchase Agreements to
anyone other than Agent, (b) any such assignment is void, and (c) Lessor has not
taken any action that impairs the rights of Agent hereunder.
2.05. Lessor Remains Liable. The assignment made hereby is made for the
purpose of securing the Lessor Obligations only and does not (a) impair or
diminish in any way the obligations of Lessor under the Head Lease Agreements,
the Sublease Agreements or the Purchase Agreements or (b) obligate Agent (or its
designee) or any Participant to perform any of the obligations of Lessor under
the Head Lease Agreements, the Sublease Agreements or the Purchase Agreements.
This Assignment shall not operate to cause Agent (or its designee) to be
regarded as a mortgagee in possession.
2.06. Effect of Amendments. If the Head Lease Agreements, the Sublease
Agreements or the Purchase Agreements shall be amended, they shall continue to
be subject to the provisions hereof without the necessity of any further act by
any of the parties hereto.
2.07. Absolute Assignment. Lessor has, subject to and in accordance with
the terms and conditions of this Assignment, assigned and transferred unto Agent
all of Lessor's right, title and interest in and to all Rents and other amounts
now or hereafter payable by Lessee under the Sublease Agreements and the
Purchase Agreements, it being intended to establish an absolute transfer and
assignment, subject to and in accordance with the terms and conditions of this
Assignment, of all such Rents and other amounts to Agent and not merely to grant
a security interest therein. Subject to the Sublease Agreements, Agent (or its
designee) may, in Lessor's name and stead, operate the Property and rent, lease
or let all or any portion of the Property to any party or parties at such rental
and upon such terms as Agent (or its designee) shall, in its discretion,
determine.
2.08. Receivers. If, notwithstanding the terms of this Assignment, a
petition or order for sequestration of rents, or the appointment of a receiver
or some similar judicial action or order is deemed required under applicable
California law to allow Agent to continue to collect the Rents and other amounts
payable by Lessee under the Sublease Agreements or the Purchase Agreements, then
it is agreed by Lessor that any proof of claim or similar document filed by
Agent in connection with the breach or rejection of the Sublease Agreements or
the Purchase
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362
Agreements by Lessee thereunder or the trustee of any lessee under any federal
or state bankruptcy, insolvency or other similar law shall, for the purpose of
perfecting Agent's rights, be deemed to constitute action required under such
California law. Upon the occurrence and during the continuance of an Event of
Default, Lessor hereby consents to the appointment of a receiver for Lessor's
interest in the Property without regard to the solvency of Lessor or to the
collateral that may be available for the satisfaction of the Lessor Obligations.
SECTION 3. MISCELLANEOUS.
3.01. Notices. Except as otherwise specified herein, all notices,
requests, demands, consents, instructions or other communications to or upon
Lessor or Agent under this Assignment shall be given as provided in Paragraph
7.01 of the Participation Agreement.
3.02. Waivers; Amendments. Any term, covenant, agreement or condition of
this Assignment may be amended or waived only as provided in the Participation
Agreement. No failure or delay by Agent in exercising any right hereunder shall
operate as a waiver thereof or of any other right nor shall any single or
partial exercise of any such right preclude any other further exercise thereof
or of any other right. Unless otherwise specified in any such waiver or consent,
a waiver or consent given hereunder shall be effective only in the specific
instance and for the specific purpose for which given.
3.03. Successors and Assigns. This Assignment shall be binding upon and
inure to the benefit of the Lessor Parties and their permitted successors and
assigns; provided, however, that the Lessor Parties shall not sell, assign or
delegate their respective rights and obligations hereunder except as provided in
the Participation Agreement.
3.04. No Third Party Rights. Nothing expressed in or to be implied from
this Assignment is intended to give, or shall be construed to give, any Person,
other than the Lessor Parties and their permitted successors and assigns, any
benefit or legal or equitable right, remedy or claim under or by virtue of this
Assignment or under or by virtue of any provision herein.
3.05. Partial Invalidity. If at any time any provision of this
Assignment is or becomes illegal, invalid or unenforceable in any respect under
the law or any jurisdiction, neither the legality, validity or enforceability of
the remaining provisions of this Assignment nor the legality, validity or
enforceability of such provision under the law of any other jurisdiction shall
in any way be affected or impaired thereby.
3.06. Governing Law. This Assignment shall be governed by and construed
in accordance with the laws of the State of California without reference to
conflicts of law rules.
3.07. Counterparts. This Assignment 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.
[The signature page follows.]
4
363
IN WITNESS WHEREOF, Lessor has caused this Assignment to be executed as
of the day and year first above written.
LESSOR: ABN AMRO LEASING, INC.
By: _____________________________
Name: _______________________
Title: ______________________
5
364
EXHIBIT A
LAND
LEGAL DESCRIPTION
3940 NORTH FIRST STREET, 3950 NORTH FIRST STREET
(FACILITY 1)
The land situated in the City of San Jose, County of Santa Clara, State of
California, and described as follows:
PARCEL ONE:
Parcel 2 as shown on that certain Parcel Map filed in the office of the Recorder
of the County of Santa Clara, State of California on August 18, 1983 in Book 516
of Maps, page(s) 34 and 35, Santa Clara County Records.
And, in addition thereto, the following area:
Beginning at the Southeasterly corner of said Parcel 2, thence North 52 degrees
27' 12" West, 409.24 feet along the common line of Parcel 1 and Parcel 2 as
shown on said Parcel Map to a common corner thereof; thence leaving said common
line, along the Southerly prolongation of a common line of said Parcels, South
19 degrees 40' 54" West, 32.25 feet; thence South 52 degrees 22' 44" East,
399.34 feet to a point on the Southeasterly line of said Parcel 1; thence North
37 degrees 32' 59" East, 31.22 feet along said Southeasterly line to the Point
of Beginning.
PARCEL ONE-A:
A non-exclusive easement for ingress and egress over PCL. 1, as said parcel is
shown on the Parcel Map recorded in Book 516 of Maps, at pages 34 and 35, Santa
Clara County Records, as granted in an instrument recorded May 23, 1985 in Book
J353, page 1565 and being more particularly described as follows:
Strip 1
A strip of land 26.00 feet wide extending entirely across said PCL. 1 and lying
13.00 feet on each side of a line as follows:
Beginning at the Southerly corner of said PCL. 1, said corner being on the
Northeasterly line of North First Street; thence along said Northeasterly line
N. 52 degrees 27' 12" W., 34.00 feet to the true point of beginning of said
strip of land; thence N. 37 degrees 32' 59" E., 540.00 feet to the Northeasterly
line of said PCL. 1.
(LEGAL DESCRIPTION CONTINUED NEXT PAGE)
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365
LEGAL DESCRIPTION: (Continued)
Strip 2
A strip of land 40.00 feet wide extending entirely across said PCL. 1 and lying
contiguous to and Southeasterly of a line described as follows:
Beginning at the most Southerly corner of said PCL. 1, said corner being on the
Northeasterly line of North First Street; thence along said Northeasterly line
N. 52 degrees 27' 12" W., 429.25 feet to the true point of beginning of said
strip of land; thence N. 37 degrees 32' 48" E., 600.00 feet to the Northeasterly
line of said PCL. 1; the Northerly terminus of said 40 foot wide strip of land
being the Northeasterly line of said PCL. 1.
Strip 3
A strip of land 26.00 feet wide, extending Northeasterly from the Southwesterly
line of said PCL. 1 to the Northwesterly line of the above described and
designated Strip 2 and lying 13.00 feet on each side of a line described as
follows:
Beginning at the Westerly corner of said PCL. 1, said corner being on the
Northeasterly line of North First Street; thence along said Northeasterly line
S. 52 degrees 27' 12" E., 34.00 feet to the true point of beginning of said
strip of land; thence N. 37 degrees 32' 48" E. 566.00 feet; thence S. 52 degrees
27' 12" E., 355.25 feet to said Northwesterly line of said Strip 2.
Strip 4
A strip of land 13.00 feet wide lying contiguous to and Northwesterly of the
Northwesterly line of the above described and designated Strip 2 and extending
Southwesterly from the Northeasterly line of said PCL. 1 approximately 21.00
feet to the Northeasterly line of the above described and designated Strip 3.
PARCEL ONE-B:
The right from time to time to construct, install, maintain, replace, remove,
and use storm drain sewers, together with a right of way therefor, over a
portion of PCL. 1 as said parcel is shown on the Parcel Map recorded in Book 516
of Maps, at pages 34 and 35, Santa Clara County Records, as granted in an
instrument recorded May 23, 1985 in Book J353, page 1565 and being more
particularly described as follows:
Strip 1
A strip of land 10.00 feet wide extending entirely across said PCL. 1 and lying
5.00 feet on each side of a line described as follows:
Beginning at the most Westerly corner of said PCL. 1 said corner being on the
Northeasterly line of North First Street; thence along said Northeasterly line
S. 52 degrees 27' 12" E., 402.75 feet to the true point of beginning of said
strip of land; thence along the centerline of a existing storm drain line the
following courses: thence N. 37 degrees 32' 48" E., 28.00 feet to a point herein
designated Point A; thence N. 52 degrees 27' 12" W., 278.00 feet; thence N. 00
degrees 51' 00" E., 198.30 feet; thence N. 37 degrees 32' 33" E., 279.75 feet;
thence S. 51 degrees 19' 51" E., 89.02 feet; thence N. 50 degrees 06' 47" E.,
133.18 feet; thence N. 37 degrees 32' 48" E., 5.00 feet to the Northeasterly
line of said PCL 1.
(LEGAL DESCRIPTION CONTINUED NEXT PAGE)
A-2
366
LEGAL DESCRIPTION: (Continued)
Strip 2
A strip of land 10 feet wide extending Northeasterly from the Northeasterly line
of the above described and designated Strip 1 and lying 5.00 feet on each side
of a line which begins at said Point A; thence along the centerline of an
existing storm drain line the following courses: thence N. 26 degrees 55' 37"
E., 154.65 feet; thence N. 32 degrees 55' 53" E., 96.31 feet; thence N. 43
degrees 21' 28" E., 113.58 feet; thence N. 54 degrees 44' 21" E., 105.72 feet to
a point herein designated as Point B; thence S. 41 degrees 57' 14" E., 65.85
feet; thence N. 37 degrees 32' 48" E., 62.00 feet to the Northeasterly line of
said PCL 2.
Strip 3
A strip of land 5.00 feet wide lying contiguous to and Southwesterly of the
Northeasterly line of said PCL. 1 and extending Southeasterly from the
Southeasterly line of the above described and designated Strip 2 approximately
225 feet.
Strip 4
A strip of land 10.00 feet wide extending Northeasterly from the Northeasterly
line of the above described and designated Strip 2 to the Northeasterly line of
said PCL. 1 and lying 5.00 feet on each side of a line that begins at said Point
B; thence along the centerline of an existing storm drain line N. 37 degrees 32'
48" E., 50.00 feet to the Northeasterly line of said PCL. 1.
PARCEL ONE-C:
The right from time to time to construct, install, inspect, maintain, replace,
remove and use any and all Public Service Facilities necessary or useful,
together with a right of way therefor, over a portion of PCL. 1 as said parcel
is shown on the Parcel Map recorded in Book 516 of Maps, at pages 34 and 35,
Santa Clara County Records, as granted in an instrument recorded May 23, 1985 in
Book J353, page 1565 and being more particularly described as follows:
Strip 5
A strip of land 15.00 feet wide extending entirely across said PCL. 1 and lying
7.50 feet on each side of a line described as follows:
Beginning at the most Southerly corner of said PCL. 1, said corner being on the
Northeasterly line of North First Street; thence along said Northeasterly line
N. 52 degrees 27' 12" W., 60.50 feet to the true point of beginning of said
strip of land; thence N. 37 degrees 32' 59" E., 394.80 feet to a point herein
designated Point C; thence N. 37 degrees 32' 59" E., 105.20 feet; thence N. 7
degrees 27' 01" W., 56.57 feet to the Northeasterly line of said PCL. 1.
Strip 6
A strip of land 15.00 feet wide extending Northerly from the Northerly line of
the above described and designated Strip 5 to the Northeasterly line of said
PCL. 1 and lying 7.5 feet on each side of a line that begins at said Point C;
thence N. 30 degrees 01' 00" E., 59.5 feet; thence N. 8 degrees 41' 00" E.,
98.44 feet to the Northeasterly line of said PCL. 1.
(LEGAL DESCRIPTION CONTINUED NEXT PAGE)
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367
LEGAL DESCRIPTION: (Continued)
Strip 7
A strip of land 15.00 feet wide extending entirely across said PCL. 1 and lying
7.5 feet and each side of a line described as follows:
Beginning at the most Westerly corner of said PCL. 1 said corner being on the
Northeasterly line of North First Street; thence along said Northeasterly line
S. 52 degrees 27' 12" E., 30.00 feet to the true point of beginning of said
strip of land; thence N. 37 degrees 32' 33" E., 600.00 feet to the Northeasterly
line of said PCL 1.
Strip 8
That area located within those portions of PCL.1, of the Parcel Map mentioned
hereinabove, lying within the easements designated as "P.S.E.", as shown on said
Parcel Map.
PARCEL ONE-D:
A non-exclusive easement for Landscaping, Lighting and Irrigation Facilities
over PCL. 1, as said parcel is shown on the Parcel Map recorded in Book 516 of
Maps, at pages 34 and 35, Santa Clara County Records, as granted in an
instrument recorded May 23, 1985 in Book J353, page 1565 and being more
particularly described as follows:
A strip of land 10.00 feet wide extending Southeasterly from the Northwesterly
line of said PCL. 1 and PCL. 2 and lying 5.00 feet on each side of a line that
begins at the most Northerly corner of said PCL. 1 and runs thence along the
Northeasterly line of said PCL. 1, S. 52 degrees 27' 12" E. 375.00 feet.
Excepting therefrom that portion lying within the bounds of Parcel 2 mentioned
hereinabove.
APN: 097-79-004
ARB: 97-3-x4
A-4
368
LEGAL DESCRIPTION
90 HEADQUARTERS DRIVE
(FACILITY 2)
The land situated in the City of San Jose, County of Santa Clara, State of
California, and described as follows:
Parcel 3, as shown on Parcel Map filed July 13, 1984 in Book 531 of Maps at
pages 41 and 42, Santa Clara County Records.
APN: 097-79-003
ARB: 097-03-005.02
A-5
369
EXHIBIT B
LESSEE'S CONSENT TO ASSIGNMENT OF HEAD LEASE AGREEMENTS,
SUBLEASE AGREEMENTS AND PURCHASE AGREEMENTS
[Date]
ABN AMRO Leasing, Inc.
135 South LaSalle Street, Suite 740
Chicago, IL 60603
ABN AMRO Bank N.V.
as Agent
Agency Services
208 South LaSalle Street, Suite 1500
Chicago, IL 60604
1. Reference is made to the following:
(a) The Participation Agreement, dated as of April 13, 2001 (the
"Participation Agreement"), among Novellus Systems, Inc. ("Lessee"), ABN
AMRO Leasing, Inc. ("Lessor"), the financial institutions listed in
Schedule I to the Participation Agreement (the "Participants") and ABN
AMRO Bank N.V., as agent for the Participants (in such capacity,
"Agent");
(b) The Facility 1 Lease Agreement, Deed of Trust with Assignment
of Rents, Security Agreement and Fixture Filing and the Facility 2 Lease
Agreement, Construction Deed of Trust with Assignment of Rents, Security
Agreement and Fixture Filing, each dated as of April 13, 2001
(collectively, the "Sublease Agreements"), between Lessee and Lessor;
(c) The Facility 1 Purchase Agreement and the Facility 2 Purchase
Agreement, each dated as of April 13, 2001 (collectively, the "Purchase
Agreements"), between Lessee and Lessor; and
(d) The Assignment of Head Lease Agreements, Sublease Agreements
and Purchase Agreements, dated as of April 13, 2001 (the "Assignment of
Lease"), executed by Lessor in favor of Agent.
Unless otherwise indicated, all terms defined in the Participation Agreement
have the same respective meanings when used in this consent ("Consent").
2. Consent. Lessee hereby consents to the Assignment of Lease.
3. Payments. Lessee agrees to pay and deliver to Agent (or its designee)
all Rents and other amounts payable by Lessee under the Sublease Agreements and
the Purchase Agreements in accordance with the terms thereof. Lessee will not,
for any reason whatsoever,
B-1
370
seek to recover from Agent (or its designee) any moneys paid to Agent (or its
designee) by virtue of the Assignment of Lease except for sums due and payable
to Lessee as expressly provided in the Purchase Agreements.
4. Lessee's Other Agreements. Lessee hereby further agrees with Lessor
and Agent as follows:
(a) Lessee agrees (i) to deliver to Agent (or its designee) and
Lessor, at their addresses set forth in the Participation Agreement or
at such other addresses as Agent or Lessor, as the case may be, may
designate, duplicate originals or copies of all notices, undertakings,
demands, statements, documents and other communications which Lessee is
required or permitted to deliver pursuant to the Sublease Agreements,
the Purchase Agreements or the Assignment of Lease; (ii) that any notice
delivered or declaration made to Lessee by Agent (or its designee)
pursuant to the Sublease Agreements or the Purchase Agreements shall be
effective as a notice given or declaration made to Lessee by Lessor;
(iii) that Agent (or its designee) shall not by reason of the Assignment
of Lease be subject to any liability or obligation under the Sublease
Agreements or the Purchase Agreements except as set forth in the
Assignment of Lease; and (iv) that any waiver, consent or approval by
Lessor under the Sublease Agreements or the Purchase Agreements shall
not be valid unless approved in writing by Agent (or its designee).
(b) Lessee agrees to remain obligated under the Sublease
Agreements and the Purchase Agreements in accordance with their
respective terms, and to take no action to terminate (other than in
accordance with the terms thereof), annul, rescind or avoid the Sublease
Agreements, the Purchase Agreements or this Consent or to abate, reduce,
offset, suspend or defer or make any counterclaim or raise any defense
(other than the defense of payment to Agent (or its designee)) with
respect to the Rents or other amounts payable thereunder or to cease
paying such amounts to Agent (or its designee) as provided herein.
(c) Lessee hereby agrees that upon the occurrence of any Event of
Default, Agent (or its designee) shall have the right to deliver a
notice of default under the Sublease Agreements, which shall be
effective for all purposes under the Sublease Agreements as if sent by
Lessor.
(d) Lessee shall notify Agent (or its designee) at its address
specified in the Participation Agreement, or such other address as Agent
may designate, of any default by Lessor under the Sublease Agreements
and agrees that no such default shall entitle Lessee to terminate (other
than in accordance with the terms of the Sublease Agreements), annul,
rescind or avoid the Sublease Agreements, as the case may be, or to
reduce or abate the Rents or other amounts payable thereunder.
5. Amendment or Termination; Agent's Designation. Lessee agrees that it
will not, unilaterally or by agreement, subordinate, amend, supplement, modify,
extend (except in accordance with the express terms thereof), discharge, waive
or terminate (other than in accordance with the terms thereof) the Sublease
Agreements, the Purchase Agreements or this Consent without Agent's prior
written consent, and that any attempted subordination,
B-2
371
amendment, supplement, modification, extension, discharge, waiver or termination
in violation of this Paragraph 5 without such consent shall be null and void. In
the event that the Sublease Agreements or the Purchase Agreements shall be
amended or supplemented as herein permitted, the Sublease Agreements or the
Purchase Agreements, as so amended or supplemented, shall continue to be subject
to the provisions of the Assignment of Lease and this Consent without the
necessity of any further act by any of the parties thereto or hereto.
6. Continuing Obligations of Lessor and Lessee. Neither the execution
and delivery of the Assignment of Lease, nor any action or inaction on the part
of Agent shall impair or diminish any obligations of Lessor or Lessee under the
Sublease Agreements or the Purchase Agreements, and shall not impose on Agent
(or its designee) any such obligations, nor shall it impose on Agent (or its
designee) a duty to produce Rents or cause Agent to be a mortgagee or pledgee in
possession for any purpose. Except as specifically set forth in this Consent,
none of the terms of the Assignment of Lease shall impose upon Lessee any
greater obligations than those set forth in the Sublease Agreements, the
Purchase Agreements and the other Operative Documents.
7. Partial Invalidity. If at any time any provision of this Consent is
or becomes illegal, invalid or unenforceable in any respect under the law of any
jurisdiction, neither the legality, validity or enforceability of the remaining
provisions of this Consent nor the legality, validity or enforceability of such
provision under the law of any other jurisdiction shall in any way be affected
or impaired thereby.
8. Governing Law. This Consent 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.]
B-3
372
IN WITNESS WHEREOF, Lessee has executed this Consent on the date set
forth above.
LESSEE: NOVELLUS SYSTEMS, INC.
By: _____________________________
Name: _______________________
Title: ______________________
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373
EXHIBIT J
LESSOR DEED OF TRUST
J-1
374
RECORDING REQUESTED BY
AND WHEN RECORDED RETURN TO:
John Rivers, Esq.
Orrick, Herrington & Sutcliffe LLP
Old Federal Reserve Bank Building
400 Sansome Street
San Francisco, California 94111
================================================================================
CONSTRUCTION DEED OF TRUST
BY
ABN AMRO LEASING, INC.,
AS TRUSTOR
TO
FIRST AMERICAN TITLE INSURANCE COMPANY,
AS TRUSTEE
FOR THE BENEFIT OF
ABN AMRO BANK N.V., AS AGENT,
AS BENEFICIARY
APRIL 13, 2001
Relating to Property situated in:
County of Santa Clara, California
================================================================================
THIS CONSTRUCTION DEED OF TRUST IS JUNIOR AND SUBORDINATE TO THAT CERTAIN
FACILITY 1 LEASE AGREEMENT, DEED OF TRUST WITH ASSIGNMENT OF RENTS, SECURITY
AGREEMENT AND FIXTURE FILING DATED OF EVEN DATE HEREWITH BETWEEN NOVELLUS
SYSTEMS, INC. AND ABN AMRO LEASING, INC., AND THAT CERTAIN FACILITY 2 LEASE
AGREEMENT, CONSTRUCTION DEED OF TRUST WITH ASSIGNMENT OF RENTS, SECURITY
AGREEMENT AND FIXTURE FILING DATED OF EVEN DATE HEREWITH BETWEEN NOVELLUS
SYSTEMS, INC. AND ABN AMRO LEASING, INC.
375
CONSTRUCTION DEED OF TRUST
THIS CONSTRUCTION DEED OF TRUST (this "Deed of Trust" herein), dated as
of April 13, 2001, is executed by:
(1) ABN AMRO LEASING, INC., an Illinois corporation, as trustor
("Lessor") with an address at 135 South LaSalle Street, Suite 740,
Chicago, IL 60603;
to
(2) FIRST AMERICAN TITLE INSURANCE COMPANY, as trustee
("Trustee");
in favor of
(3) ABN AMRO BANK N.V., with an address at Agency Services, 208
South LaSalle Street, Suite 1500, Chicago, IL 60604, in its capacity as
Agent, as beneficiary (in such capacity, "Agent"), under the
Participation Agreement, dated as of April 13, 2001 (as amended,
supplemented or otherwise modified from time to time, the "Participation
Agreement"), among Novellus Systems, Inc., a California corporation
("Lessee"), Lessor, Agent, and the financial institutions that are from
time to time parties to the Participation Agreement (the
"Participants").
SECTION 1. INTERPRETATION.
1.01. Definitions. Unless otherwise indicated in this Deed of Trust or
any other Operative Document, each term set forth in Schedule 1.01 to the
Participation Agreement, when used in this Deed of Trust or any other Operative
Document, shall have the respective meaning given to that term in such Schedule
1.01 or in the provision of this Deed of Trust or other document, instrument or
agreement referenced in such Schedule 1.01. All terms defined in the California
Uniform Commercial Code ("UCC") shall have the respective meanings given to
those terms in the UCC.
1.02. Rules of Construction. Unless otherwise indicated in this Deed of
Trust or any other Operative Document, the rules of construction set forth in
Schedule 1.02 to the Participation Agreement shall apply to this Deed of Trust
and the other Operative Documents.
SECTION 2. GRANT IN TRUST.
2.01. Property. To secure payment of the Secured Obligations (as defined
below), Lessor does hereby GRANT, CONVEY, SELL, TRANSFER, ASSIGN AND SET OVER
UNTO TRUSTEE, IN TRUST FOR THE BENEFIT OF AGENT, WITH POWER OF SALE AND RIGHT OF
ENTRY AND POSSESSION, all of Lessor's right, title and interest, whether now
owned or hereafter acquired, in or to the following property and rights listed
below
376
(hereinafter collectively referred to as the "Property") to the extent of
Lessor's estate, right, title and interest therein, thereto or thereunder:
(a) All lots, pieces, tracts and parcels of land described in
Exhibit A together with such additional parcels of real property as may
be added to Exhibit A from time to time during the term hereof (the
"Land");
(b) All Improvements and Appurtenant Rights;
(c) All Related Goods (including those described in Exhibit B
and in each Exhibit B Supplement), Related Permits and Related
Agreements; and
(d) All accessions and accretions to and replacements and
substitutions for the foregoing.
SECTION 3. OBLIGATIONS SECURED.
3.01. Obligations Secured. Lessor makes this grant and assignment for
the purpose of securing the following obligations (the "Secured Obligations"):
(a) Full and punctual payment, performance and observance by
Lessor of the Lessor Obligations; and
(b) All modifications, extensions and renewals of any of the
obligations secured hereby, however evidenced, including, without
limitation: (i) modifications of the required payment, deferring or
accelerating payment dates wholly or partly; or (ii) amendments,
modifications, extensions or renewals of this Deed of Trust, the
Participation Agreement or any of the other Operative Documents.
SECTION 4. REPRESENTATIONS, WARRANTIES, COVENANTS AND DUTIES OF THE PARTIES.
4.01. Representations and Warranties. Lessor represents and warrants to
Agent as follows:
(a) Lessor is the legal and beneficial owner of the Property
(or, in the case of after-acquired Property, at the time Lessor acquires
rights in the Property, will be the legal and beneficial owner thereof).
(b) Lessor has not transferred to any other Person any of its
right, title or interest in the Property, whether by way of Lien or
otherwise.
(c) Lessor's chief executive office is located at 135 South
LaSalle Street, Suite 740, Chicago, IL 60603.
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377
4.02. Covenants. Lessor hereby covenants to Agent as follows:
(a) Lessor shall promptly procure, execute and deliver to Agent
all documents, instruments and agreements and perform all acts which are
necessary or desirable, or which Agent may request, to establish,
maintain, preserve, protect and perfect the Property, the Lien granted
to Agent therein and the first priority of such Lien or to enable Agent
to exercise and enforce its rights and remedies hereunder with respect
to any Property.
(b) Lessor shall not sell, transfer or assign any of its right,
title or interest in the Property to any Person (other than Agent),
whether by way of Lien or otherwise, except in accordance with the
Purchase Agreements.
(c) Without prompt written notice to Agent, Lessor shall not
change Lessor's name or chief executive office.
4.03. Damages; Insurance and Condemnation Proceeds.
(a) Lessor shall give Agent prompt written notice of the
occurrence of any casualty affecting, or the institution of any
proceedings for eminent domain or for the condemnation of, the Property
or any portion thereof. Agent may participate in any such claims or
proceedings, and Agent is hereby authorized, in its own name or in
Lessor's name, to adjust any loss covered by insurance or any
condemnation claim or cause of action, and to settle or compromise any
claim or cause of action in connection therewith, and Lessor shall from
time to time deliver to Agent any and all further assignments and other
instruments required to permit such participation. The provisions
regarding the adjustment of any loss covered by insurance or any
condemnation claim or cause of action, and to settlement or compromise
of any claim or cause of action in connection therewith provided in this
Subparagraph 4.03(a) are subject to the adjustment, settlement and
compromise provisions set forth in the Lease Agreement. In the event of
any conflict, the adjustment, settlement and compromise provisions as
provided in the Lease Agreement shall govern.
(b) The following rights, claims and amounts are hereby
absolutely and irrevocably assigned to and shall be paid to Agent: (i)
all awards of damages and all other compensation payable directly or
indirectly by reason of a condemnation or proposed condemnation for
public or private use affecting all or any part of, or any interest in,
the Property; (ii) all other claims and awards for damages to or
decrease in value of all or any part of, or any interest in, the
Property; (iii) all proceeds of any insurance policies payable by reason
of loss sustained to all or any part of the Property; and (iv) all
interest which may accrue on any of the foregoing (collectively, "Loss
Proceeds"). The provisions regarding Loss Proceeds provided in this
Subparagraph 4.03(b) are subject to the insurance and condemnation
provisions set forth in the Lease Agreement. In the event of any
conflict, the insurance and condemnation provisions as provided in the
Lease Agreement shall govern.
3
378
4.04. Acceptance of Trust; Powers and Duties of Trustee. Trustee accepts
this trust when this Deed of Trust is recorded. From time to time upon written
request of Agent and presentation of this Deed of Trust, or a certified copy
thereof, for endorsement, and without affecting the personal liability of any
person for payment of any indebtedness or performance of any Secured Obligation,
Trustee may, without liability therefor and without notice: (a) reconvey all or
any part of the Property; (b) consent to the making of any map or plat thereof;
(c) join in granting any easement thereon; (d) join in any declaration of
covenants and restrictions; or (e) join in any extension agreement or any
agreement subordinating the lien or charge hereof. Except as may otherwise be
required by applicable law, Trustee or Agent may from time to time apply to any
court of competent jurisdiction for aid and direction in the execution of the
trusts hereunder and the enforcement of the rights and remedies available
hereunder, and Trustee or Agent may obtain orders or decrees directing or
confirming or approving acts in the execution of said trusts and the enforcement
of said remedies. Trustee has no obligation to notify any party of any pending
sale or any action or proceeding (including, without limitation, actions in
which Lessor, Agent or Trustee shall be a party) unless held or commenced and
maintained by Trustee under this Deed of Trust. Trustee shall not be obligated
to perform any act required of it hereunder unless the performance of the act is
requested in writing and Trustee is reasonably indemnified and held harmless
against loss, cost, liability and expense.
4.05. Substitution of Trustee. From time to time, by a writing signed
and acknowledged by Agent and recorded in the Office of the Recorder of the
County in which the Property is situated, Agent may appoint another trustee to
act in the place and stead of Trustee or any successor. Such writing shall set
forth any information required by law. The recordation of such instrument of
substitution shall discharge Trustee herein named and shall appoint the new
trustee as the trustee hereunder with the same effect as if originally named
trustee herein. A writing recorded pursuant to the provisions of this paragraph
shall be conclusive proof of the proper substitution of such new trustee.
4.06. Partial and Full Reconveyance. Agent may release, for such
consideration or none, as it may require, any portion of the Property without,
as to the remainder of the Property, in any way impairing or affecting the lien,
security interest and priority herein provided to the Agent as to any other lien
holder or secured party. Further, upon satisfaction in full of the Secured
Obligations, a sale of all or a portion of the Property in accordance with the
terms of the Purchase Agreements, or upon Agent's written request, and upon
surrender of this Deed of Trust or certified copy thereof and any note,
instrument or instruments setting forth all obligations secured hereby to
Trustee for cancellation, Trustee shall reconvey, without warranty, the Property
or that portion thereof then held hereunder. The recitals of any matters or
facts in any reconveyance executed hereunder shall be conclusive proof of the
truthfulness thereof. To the extent permitted by law, the reconveyance may
describe the grantee as "the person or persons legally entitled thereto".
Neither Agent nor Trustee shall have any duty to determine the rights of persons
claiming to be rightful grantees of any reconveyance.
4.07. Releases, Extensions, Modifications and Additional Security. Agent
may, from time to time, release any person or entity from liability for the
payment or performance of any Secured Obligation, take any action or make any
agreement extending the maturity or otherwise altering the terms or increasing
the amount of any Secured Obligation, or accept additional security or release
all or a portion of the Property and other security for the Secured Obligations.
4
379
None of the foregoing actions shall release or impair the priority of the lien
of this Deed of Trust upon the Property.
SECTION 5. DEFAULT; REMEDIES.
5.01. Event of Default. The occurrence of any of the following events
shall be deemed an event of default ("Event of Default") hereunder:
(a) The occurrence of an Event of Default as defined in the
Lease Agreement; or
(b) Lessor shall fail to observe, perform or discharge any of
Lessor's Obligations, and (i) such failure shall remain uncured for
thirty (30) days after written notice thereof shall have been given to
Lessor by Agent, or (ii) if such failure is of such a nature that it
cannot be cured within such thirty (30) day period, Lessor shall fail to
commence to cure such failure within such thirty (30) day period or
shall fail to diligently prosecute such curative action thereafter.
5.02. Rights and Remedies. At any time after the occurrence and during
the continuance of an Event of Default, Agent and Trustee shall each have all of
the following rights and remedies:
(a) Appointment of a Receiver. Agent may apply to any court of
competent jurisdiction for, and obtain appointment of, a receiver for
the Property.
(b) Specific Performance. Agent may bring an action in any court
of competent jurisdiction to obtain specific enforcement of any of the
covenants or agreements of Lessor in this Deed of Trust or any of the
other Operative Documents.
(c) Collection of Issues and Profits. Agent may collect Issues
and Profits.
(d) Protection of Property. Agent may enter, take possession of,
manage and operate all or any part of the Property or take any other
actions which they reasonably determine are necessary to protect the
Property and the rights and remedies of Agent under this Deed of Trust
and the other Operative Documents, including (i) taking and possessing
all of Lessor's books and records; (ii) entering into, enforcing,
modifying, or canceling subleases on such terms and conditions as Agent
may consider proper; (iii) obtaining and evicting tenants; (iv) fixing
or modifying sublease rents; (v) collecting and receiving any payment of
money owing to Lessee; (vi) completing any unfinished Improvements;
and/or (vii) contracting for and making repairs and alterations.
(e) Uniform Commercial Code Remedies. Agent may exercise any or
all of the remedies granted to a secured party under the UCC.
(f) Judicial Foreclosure. Agent may bring an action in any court
of competent jurisdiction to foreclose the security interest in the
Property granted to Agent by this Deed of Trust or any of the other
Operative Documents.
5
380
(g) Power of Sale. Agent may cause some or all of the Property,
including any Personal Property Collateral, to be sold or otherwise
disposed of in any combination and in any manner permitted by applicable
Governmental Rules.
(i) Sales of Personal Property. Agent may dispose of any
Personal Property Collateral separately from the sale of Real
Property Collateral, in any manner permitted by Division 9 of
the UCC, including any public or private sale, or in any manner
permitted by any other applicable Governmental Rule. In
connection with any such sale or other disposition, Lessor
agrees that the following procedures constitute a commercially
reasonable sale:
(A) Agent shall mail written notice of the sale
to Lessor not later than thirty (30) days prior to such
sale.
(B) Once per week during the three weeks
immediately preceding such sale, Agent will publish
notice of the sale in a local daily newspaper of general
circulation.
(C) Upon receipt of any written request, Agent
will make the Property available to any bona fide
prospective purchaser for inspection during reasonable
business hours.
(D) Notwithstanding, Agent shall be under no
obligation to consummate a sale if, in its judgment,
none of the offers received by it equals the fair value
of the Property offered for sale.
(E) If Agent so requests, Lessor shall assemble
all of the Personal Property Collateral and make it
available to Agent at the site of the Land. Regardless
of any provision of this Deed of Trust or any other
Operative Document, Agent shall not be considered to
have accepted any property other than cash or
immediately available funds in satisfaction of any
Lessor Obligation, unless Agent has given express
written notice of its election of that remedy in
accordance with UCC Section 9505.
The foregoing procedures do not constitute the only procedures
that may be commercially reasonable.
(ii) Agent's Sales of Real Property or Mixed Collateral.
Agent may choose to dispose of some or all of the Property which
consists solely of Real Property Collateral in any manner then
permitted by applicable Governmental Rules, including without
limitation a nonjudicial trustee's sale pursuant to California
Civil Code Sections 2924 et seq. In its discretion, Agent may
also or alternatively choose to dispose of some or all of the
Property, in any combination consisting of both Real Property
Collateral and Personal Property Collateral, together in one
sale to be held in accordance with the law and procedures
applicable to real property, as permitted by Section 9501(4) of
the UCC. Lessor agrees that such a sale of Personal Property
Collateral together with Real Property Collateral constitutes a
commercially reasonable sale of the Personal Property
6
381
Collateral. (For purposes of this power of sale, either a sale
of Real Property Collateral alone, or a sale of both Real
Property Collateral and Personal Property Collateral together in
accordance with UCC Section 9501(4), will sometimes be referred
to as an "Agent's Sale.")
(A) Before any Agent's Sale, Agent shall give
such notice of default and election to sell as may then
be required by applicable Governmental Rules.
(B) When all time periods then legally mandated
have expired, and after such notice of sale as may then
be legally required has been given, Agent shall sell the
Property being sold at a public auction to be held at
the time and place specified in the notice of sale.
(C) Agent shall have no obligation to make
demand on Lessor before any Agent's Sale.
(D) From time to time in accordance with then
applicable law, Agent may postpone any Agent's Sale by
public announcement at the time and place noticed for
that sale.
(E) At any Agent's Sale, Agent shall sell to the
highest bidder at public auction for cash in lawful
money of the United States.
(F) Agent shall execute and deliver to the
purchaser(s) a deed or deeds conveying the Property
being sold without any covenant or warranty whatsoever,
express or implied. The recitals in any such deed of any
matters or facts, including any facts bearing upon the
regularity or validity of any Agent's Sale, shall be
conclusive proof of their truthfulness. Any such deed
shall be conclusive against all Persons as to the facts
recited in it.
(h) Foreclosure Sales.
(i) Single or Multiple. If the Property consists of more
than one lot, parcel or item of property, Agent may:
(A) Designate the order in which the lots,
parcels and/or items shall be sold or disposed of or
offered for sale or disposition; and
(B) Elect to dispose of the lots, parcels and/or
items through a single consolidated sale or disposition
to be held or made under the power of sale granted under
this Deed of Trust, or in connection with judicial
proceedings, or by virtue of a judgment and decree of
foreclosure and sale; or through two or more such sales
or dispositions; or in any other manner Agent may deem
to be in its best interests (any such sale or
disposition, a "Foreclosure Sale;" any two or more,
"Foreclosure Sales").
7
382
If Agent chooses to have more than one Foreclosure Sale,
Agent at its option may cause the Foreclosure Sales to
be held simultaneously or successively, on the same day,
or on such different days and at such different times
and in such order as it may deem to be in its best
interests. No Foreclosure Sale shall terminate or affect
the security interests granted to Agent in the Property
by this Deed of Trust on any part of the Property which
has not been sold, until all of the Lessor Obligations
have been performed in full.
(ii) Credit Bids. At any Foreclosure Sale, any
Person, Participant or Agent may bid for and acquire the
Property or any part of it to the extent permitted by
then applicable Governmental Rules. Instead of paying
cash for that property, Agent may settle for the
purchase price by crediting the sales price of the
Property against the Lessor Obligations in any order and
proportions as Agent in its sole discretion may choose.
(i) Other Rights and Remedies. To exercise any other
right, power or remedy permitted to it by any applicable
Governmental Rule, either by suit in equity or by action at law,
or both.
5.03. Remedies Cumulative. The rights and remedies of Agent under this
Deed of Trust and the other Operative Documents are cumulative and may be
exercised singularly, successively, or together.
5.04. No Cure or Waiver. The exercise by Agent of any of its other
rights and remedies under this Deed of Trust or any other Operative Document
(including the collection of Issues and Profits) shall not constitute a cure or
waiver of any Event of Default or nullify the effect of any notice of default or
sale, unless and until all Lessor Obligations are performed in full.
5.05. Exercise of Rights and Remedies. The rights and remedies provided
to Agent under this Deed of Trust may be exercised by Agent itself, by a
court-appointed receiver or by any other Person appointed by any of the
foregoing to act on its behalf. All of the benefits afforded to Agent under this
Deed of Trust and the other Operative Documents shall accrue to the benefit of
the Participants to the extent provided in Subparagraph 2.02(c) of the
Participation Agreement.
SECTION 6. MISCELLANEOUS.
6.01. Notices. Except as otherwise specified herein, all notices,
requests, demands, consents, instructions or other communications to or upon
Lessor or Agent under this Deed of Trust shall be given as provided in Paragraph
7.01 of the Participation Agreement.
6.02. Waivers; Amendments. Any term, covenant, agreement or condition of
this Deed of Trust may be amended or waived only as provided in the
Participation Agreement. No failure or delay by Agent in exercising any right
hereunder shall operate as a waiver thereof or of any other right nor shall any
single or partial exercise of any such right preclude any other further exercise
thereof or of any other right. Unless otherwise specified in any such waiver or
consent,
8
383
a waiver or consent given hereunder shall be effective only in the specific
instance and for the specific purpose for which given.
6.03. Successors and Assigns. This Deed of Trust shall be binding upon
and inure to the benefit of the Lessor Parties and their permitted successors
and assigns; provided, however, that the Lessor Parties shall not sell, assign
or delegate their respective rights and obligations hereunder except as provided
in the Participation Agreement.
6.04. No Third Party Rights. Nothing expressed in or to be implied from
this Deed of Trust is intended to give, or shall be construed to give, any
Person, other than the Lessor Parties and their permitted successors and
assigns, any benefit or legal or equitable right, remedy or claim under or by
virtue of this Deed of Trust or under or by virtue of any provision herein.
6.05. Partial Invalidity. If at any time any provision of this Deed of
Trust is or becomes illegal, invalid or unenforceable in any respect under the
law or any jurisdiction, neither the legality, validity or enforceability of the
remaining provisions of this Deed of Trust nor the legality, validity or
enforceability of such provision under the law of any other jurisdiction shall
in any way be affected or impaired thereby.
6.06. Governing Law. This Deed of Trust shall be governed by and
construed in accordance with the laws of the State of California without
reference to conflicts of law rules.
6.07. Counterparts. This Deed of Trust 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.
6.08. Further Assurances. Lessor shall, upon demand by Agent or Trustee,
execute, acknowledge (if appropriate) and deliver any and all documents and
instruments and do or cause to be done all further acts reasonably necessary or
appropriate to effectuate the provisions hereof.
6.09. Merger. No merger shall occur as a result of Agent's acquiring any
other estate in, or any other lien on, the Property unless Agent consents to a
merger in writing.
6.10. Waiver of Marshalling Rights. Lessor, for itself and for all
parties claiming through or under Lessor, and for all parties who may acquire a
lien on or interest in the Property, hereby waives all rights to have the
Property and/or any other property which is now or later may be security for any
Secured Obligation marshalled upon any foreclosure of this Deed of Trust or on a
foreclosure of any other security for any of the Secured Obligations.
6.11. Exhibits. Exhibit A and Exhibit B are incorporated into this Deed
of Trust by this reference.
[The signature page follows.]
9
384
IN WITNESS WHEREOF, Lessor has executed this Construction Deed of Trust
as of the day and year set forth above.
ABN AMRO LEASING, INC.
By:
--------------------------------------
Name:
---------------------------------
Title:
--------------------------------
(ALL SIGNATURES MUST BE ACKNOWLEDGED)
10
385
STATE OF CALIFORNIA )
)
COUNTY OF SAN FRANCISCO )
On April ____, 2001 before me, Mary K. Olson, 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]
386
EXHIBIT A
LEGAL DESCRIPTION OF THE LAND
LEGAL DESCRIPTION
3940 NORTH FIRST STREET, 3950 NORTH FIRST STREET
(FACILITY 1)
The land situated in the City of San Jose, County of Santa Clara, State of
California, and described as follows:
PARCEL ONE:
Parcel 2 as shown on that certain Parcel Map filed in the office of the Recorder
of the County of Santa Clara, State of California on August 18, 1983 in Book 516
of Maps, page(s) 34 and 35, Santa Clara County Records.
And, in addition thereto, the following area:
Beginning at the Southeasterly corner of said Parcel 2, thence North 52~ 27' 12"
West, 409.24 feet along the common line of Parcel 1 and Parcel 2 as shown on
said Parcel Map to a common corner thereof; thence leaving said common line,
along the Southerly prolongation of a common line of said Parcels, South 19~ 40'
54" West, 32.25 feet; thence South 52~ 22' 44" East, 399.34 feet to a point on
the Southeasterly line of said Parcel 1; thence North 37~ 32' 59" East, 31.22
feet along said Southeasterly line to the Point of Beginning.
PARCEL ONE-A:
A non-exclusive easement for ingress and egress over PCL. 1, as said parcel is
shown on the Parcel Map recorded in Book 516 of Maps, at pages 34 and 35, Santa
Clara County Records, as granted in an instrument recorded May 23, 1985 in Book
J353, page 1565 and being more particularly described as follows:
Strip 1
A strip of land 26.00 feet wide extending entirely across said PCL. 1 and lying
13.00 feet on each side of a line as follows:
Beginning at the Southerly corner of said PCL. 1, said corner being on the
Northeasterly line of North First Street; thence along said Northeasterly line
N. 52~ 27' 12" W., 34.00 feet to the true point of beginning of said strip of
land; thence N. 37~ 32' 59" E., 540.00 feet to the Northeasterly line of said
PCL. 1.
(LEGAL DESCRIPTION CONTINUED NEXT PAGE)
A-1
387
LEGAL DESCRIPTION: (Continued)
Strip 2
A strip of land 40.00 feet wide extending entirely across said PCL. 1 and lying
contiguous to and Southeasterly of a line described as follows:
Beginning at the most Southerly corner of said PCL. 1, said corner being on the
Northeasterly line of North First Street; thence along said Northeasterly line
N. 52~ 27' 12" W., 429.25 feet to the true point of beginning of said strip of
land; thence N. 37~ 32' 48" E., 600.00 feet to the Northeasterly line of said
PCL. 1; the Northerly terminus of said 40 foot wide strip of land being the
Northeasterly line of said PCL. 1.
Strip 3
A strip of land 26.00 feet wide, extending Northeasterly from the Southwesterly
line of said PCL. 1 to the Northwesterly line of the above described and
designated Strip 2 and lying 13.00 feet on each side of a line described as
follows:
Beginning at the Westerly corner of said PCL. 1, said corner being on the
Northeasterly line of North First Street; thence along said Northeasterly line
S. 52~ 27' 12" E., 34.00 feet to the true point of beginning of said strip of
land; thence N. 37~ 32' 48" E. 566.00 feet; thence S. 52~ 27' 12" E., 355.25
feet to said Northwesterly line of said Strip 2.
Strip 4
A strip of land 13.00 feet wide lying contiguous to and Northwesterly of the
Northwesterly line of the above described and designated Strip 2 and extending
Southwesterly from the Northeasterly line of said PCL. 1 approximately 21.00
feet to the Northeasterly line of the above described and designated Strip 3.
PARCEL ONE-B:
The right from time to time to construct, install, maintain, replace, remove,
and use storm drain sewers, together with a right of way therefor, over a
portion of PCL. 1 as said parcel is shown on the Parcel Map recorded in Book 516
of Maps, at pages 34 and 35, Santa Clara County Records, as granted in an
instrument recorded May 23, 1985 in Book J353, page 1565 and being more
particularly described as follows:
Strip 1
A strip of land 10.00 feet wide extending entirely across said PCL. 1 and lying
5.00 feet on each side of a line described as follows:
Beginning at the most Westerly corner of said PCL. 1 said corner being on the
Northeasterly line of North First Street; thence along said Northeasterly line
S. 52~ 27' 12" E., 402.75 feet to the true point of beginning of said strip of
land; thence along the centerline of a existing storm drain line the following
courses: thence N. 37~ 32' 48" E., 28.00 feet to a point herein designated Point
A; thence N. 52~ 27' 12" W., 278.00 feet; thence N. 00~ 51' 00" E., 198.30 feet;
thence N. 37~ 32' 33" E., 279.75 feet; thence S. 51~ 19' 51" E., 89.02 feet;
thence N. 50~ 06' 47" E., 133.18 feet; thence N. 37~ 32' 48" E., 5.00 feet to
the Northeasterly line of said PCL 1.
(LEGAL DESCRIPTION CONTINUED NEXT PAGE)
A-2
388
LEGAL DESCRIPTION: (Continued)
Strip 2
A strip of land 10 feet wide extending Northeasterly from the Northeasterly line
of the above described and designated Strip 1 and lying 5.00 feet on each side
of a line which begins at said Point A; thence along the centerline of an
existing storm drain line the following courses: thence N. 26~ 55' 37" E.,
154.65 feet; thence N. 32~ 55' 53" E., 96.31 feet; thence N. 43~ 21' 28" E.,
113.58 feet; thence N. 54~ 44' 21" E., 105.72 feet to a point herein designated
as Point B; thence S. 41~ 57' 14" E., 65.85 feet; thence N. 37~ 32' 48" E.,
62.00 feet to the Northeasterly line of said PCL 2.
Strip 3
A strip of land 5.00 feet wide lying contiguous to and Southwesterly of the
Northeasterly line of said PCL. 1 and extending Southeasterly from the
Southeasterly line of the above described and designated Strip 2 approximately
225 feet.
Strip 4
A strip of land 10.00 feet wide extending Northeasterly from the Northeasterly
line of the above described and designated Strip 2 to the Northeasterly line of
said PCL. 1 and lying 5.00 feet on each side of a line that begins at said Point
B; thence along the centerline of an existing storm drain line N. 37~ 32' 48"
E., 50.00 feet to the Northeasterly line of said PCL. 1.
PARCEL ONE-C:
The right from time to time to construct, install, inspect, maintain, replace,
remove and use any and all Public Service Facilities necessary or useful,
together with a right of way therefor, over a portion of PCL. 1 as said parcel
is shown on the Parcel Map recorded in Book 516 of Maps, at pages 34 and 35,
Santa Clara County Records, as granted in an instrument recorded May 23, 1985 in
Book J353, page 1565 and being more particularly described as follows:
Strip 5
A strip of land 15.00 feet wide extending entirely across said PCL. 1 and lying
7.50 feet on each side of a line described as follows:
Beginning at the most Southerly corner of said PCL. 1, said corner being on the
Northeasterly line of North First Street; thence along said Northeasterly line
N. 52~ 27' 12" W., 60.50 feet to the true point of beginning of said strip of
land; thence N. 37~ 32' 59" E., 394.80 feet to a point herein designated Point
C; thence N. 37~ 32' 59" E., 105.20 feet; thence N. 7~ 27' 01" W., 56.57 feet to
the Northeasterly line of said PCL. 1.
Strip 6
A strip of land 15.00 feet wide extending Northerly from the Northerly line of
the above described and designated Strip 5 to the Northeasterly line of said
PCL. 1 and lying 7.5 feet on each side of a line that begins at said Point C;
thence N. 30~ 01' 00" E., 59.5 feet; thence N. 8~ 41' 00" E., 98.44 feet to the
Northeasterly line of said PCL. 1.
(LEGAL DESCRIPTION CONTINUED NEXT PAGE)
A-3
389
LEGAL DESCRIPTION: (Continued)
Strip 7
A strip of land 15.00 feet wide extending entirely across said PCL. 1 and lying
7.5 feet and each side of a line described as follows:
Beginning at the most Westerly corner of said PCL. 1 said corner being on the
Northeasterly line of North First Street; thence along said Northeasterly line
S. 52~ 27' 12" E., 30.00 feet to the true point of beginning of said strip of
land; thence N. 37~ 32' 33" E., 600.00 feet to the Northeasterly line of said
PCL 1.
Strip 8
That area located within those portions of PCL.1, of the Parcel Map mentioned
hereinabove, lying within the easements designated as "P.S.E.", as shown on said
Parcel Map.
PARCEL ONE-D:
A non-exclusive easement for Landscaping, Lighting and Irrigation Facilities
over PCL. 1, as said parcel is shown on the Parcel Map recorded in Book 516 of
Maps, at pages 34 and 35, Santa Clara County Records, as granted in an
instrument recorded May 23, 1985 in Book J353, page 1565 and being more
particularly described as follows:
A strip of land 10.00 feet wide extending Southeasterly from the Northwesterly
line of said PCL. 1 and PCL. 2 and lying 5.00 feet on each side of a line that
begins at the most Northerly corner of said PCL. 1 and runs thence along the
Northeasterly line of said PCL. 1, S. 52~ 27' 12" E. 375.00 feet.
Excepting therefrom that portion lying within the bounds of Parcel 2 mentioned
hereinabove.
APN: 097-79-004
ARB: 97-3-x4
A-4
390
LEGAL DESCRIPTION
90 HEADQUARTERS DRIVE
(FACILITY 2)
The land situated in the City of San Jose, County of Santa Clara, State of
California, and described as follows:
Parcel 3, as shown on Parcel Map filed July 13, 1984 in Book 531 of Maps at
pages 41 and 42, Santa Clara County Records.
APN: 097-79-003
ARB: 097-03-005.02
A-5
391
EXHIBIT B
RELATED GOODS, PERMITS AND AGREEMENTS
NONE
392
EXHIBIT K
LESSOR SECURITY AGREEMENT
K-1
393
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
LESSOR SECURITY AGREEMENT
BY
ABN AMRO LEASING, INC.
IN FAVOR OF
ABN AMRO BANK N.V.,
AS AGENT
APRIL 13, 2001
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
394
LESSOR SECURITY AGREEMENT
THIS LESSOR SECURITY AGREEMENT (this "Agreement" herein), dated as of
April 13, 2001, is executed by:
(1) ABN AMRO LEASING, INC., an Illinois corporation ("Lessor"),
in favor of
(2) ABN AMRO BANK N.V., as agent for the Participants under the
Participation Agreement referred to in Recital B below (in such
capacity, "Agent").
RECITALS
A. Novellus Systems, Inc., a California corporation ("Lessee"), has
requested Lessor and the financial institutions which are "Participants" under
the Participation Agreement referred to in Recital B below (such financial
institutions to be referred to collectively as the "Participants") to provide to
Lessee lease facilities pursuant to which:
(1) Lessor would (a) lease from Head Lessor (as defined below)
certain land, (b) sublease to Lessee such land and lease to Lessee
certain improvements to be constructed on such land, (c) appoint Lessee
as Lessor's agent to make such improvements (which improvements will be
owned by Lessor), (d) make advances to finance such improvements and to
pay certain related expenses and (e) grant to Lessee the right to
purchase such improvements; and
(2) The Participants would participate in such facilities by (a)
funding the purchase price and other advances to be made by Lessor and
(b) acquiring participation interests in the rental and certain other
payments to be made by Lessee.
B. Pursuant to a Participation Agreement dated as of April 13, 2001 (the
"Participation Agreement") among Lessee, Lease Plan North America, Inc. ("Head
Lessor"), Lessor, the Participants and Agent, Lessor and the Participants have
agreed to provide such facilities upon the terms and subject to the conditions
set forth therein.
C. One of the conditions to the effectiveness of the Participation
Agreement is the execution and delivery of this Agreement by the parties hereto
setting forth the terms of the grant by Lessor to Agent of a security interest
in certain of Lessor's property.
AGREEMENT
NOW, THEREFORE, in consideration of the above Recitals and the mutual
covenants herein contained, the parties hereto hereby agree as follows:
395
SECTION 1. INTERPRETATION.
1.01. Definitions. Unless otherwise indicated in this Agreement or any
other Operative Document, each term set forth in Schedule 1.01 to the
Participation Agreement, when used in this Agreement or any other Operative
Document, shall have the respective meaning given to that term in such Schedule
1.01 or in the provision of this Agreement or other document, instrument or
agreement referenced in such Schedule 1.01. All terms defined in the UCC shall
have the respective meanings given to those terms in the UCC.
1.02. Rules of Construction. Unless otherwise indicated in this
Agreement or any other Operative Document, the rules of construction set forth
in Schedule 1.02 to the Participation Agreement shall apply to this Agreement
and the other Operative Documents.
SECTION 2. GRANT OF SECURITY INTEREST.
2.01. Grant. As security for the Lessor Obligations, Lessor hereby
irrevocably and unconditionally pledges and assigns to Agent, for the benefit of
the Participants and Agent, and grants to Agent, for the benefit of the
Participants and Agent, a security interest in all estate, right, title and
interest of Lessor, whether now owned or hereafter acquired, in and to the
following property (herein, collectively and severally, the "Lessor
Collateral"):
(a) Operative Documents. The Participation Agreement, the
Construction Agency Agreement, the Purchase Agreement, the Lessee
Security Documents and all other Operative Documents; all exhibits,
schedules and other attachments thereto; and all documents, instruments
or agreements issued or executed in replacement thereof; each as
amended, modified and supplemented from time to time and in effect at
any given time;
(b) Collateral. All Collateral for the Lessee Obligations under
the Operative Documents; and
(c) Proceeds. All proceeds of the foregoing (including, without
limitation, whatever is receivable or received when Lessor Collateral or
proceeds is sold, collected, exchanged, returned, substituted or
otherwise disposed of, whether such disposition is voluntary or
involuntary, including rights to payment and return premiums and
insurance proceeds under insurance with respect to any Lessor
Collateral, and all rights to payment with respect to any cause of
action affecting or relating to the Lessor Collateral).
SECTION 3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF LESSOR.
3.01. Representations and Warranties. Lessor represents and warrants to
Agent and the Participants as follows:
(a) Lessor is the legal and beneficial owner of the Lessor
Collateral (or, in the case of after-acquired Lessor Collateral, at the
time Lessor acquires rights in the Lessor Collateral, will be the legal
and beneficial owner thereof).
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396
(b) Lessor has not transferred to any other Person any of its
right, title or interest in the Lessor Collateral, whether by way of
Lien or otherwise.
(c) Lessor's chief executive office is located at 135 South
LaSalle Street, Suite 740, Chicago, Illinois 60603.
3.02. Covenants. Lessor hereby covenants to Agent and the Participants
as follows:
(a) Lessor shall promptly procure, execute and deliver to Agent
all documents, instruments and agreements and perform all acts which are
necessary or desirable, or which Agent may request, to establish,
maintain, preserve, protect and perfect the Lessor Collateral, the Lien
granted to Agent therein and the first priority of such Lien or to
enable Agent to exercise and enforce its rights and remedies hereunder
with respect to any Lessor Collateral.
(b) Lessor shall not sell, transfer or assign any of its right,
title or interest in the Lessor Collateral to any Person (other than
Agent), whether by way of Lien or otherwise, except in accordance with
the Purchase Agreements.
(c) Without prompt written notice to Agent, Lessor shall not
change Lessor's name or chief executive office.
SECTION 4. RIGHTS AND REMEDIES OF AGENT.
4.01. Authorized Action by Agent. Lessor hereby irrevocably appoints
Agent as its attorney-in-fact and agrees that Agent may perform (but Agent shall
not be obligated to and shall incur no liability to Lessor or any third party
for failure so to do) any act which Lessor is obligated by this Agreement to
perform, and to exercise such rights and powers as Lessor might exercise with
respect to the Lessor Collateral, including, without limitation, the right to
(a) collect by legal proceedings or otherwise and endorse, receive and receipt
for all dividends, interest, payments, proceeds and other sums and property now
or hereafter payable on or on account of the Lessor Collateral; (b) enter into
any extension, reorganization, deposit, merger, consolidation or other agreement
pertaining to, or deposit, surrender, accept, hold or apply other property in
exchange for the Lessor Collateral; (c) insure, process, preserve and enforce
the Lessor Collateral; (d) make any compromise or settlement, and take any
action it deems advisable, with respect to the Lessor Collateral; (e) pay any
Indebtedness of Lessor relating to the Lessor Collateral; and (f) execute UCC
financing statements. Lessor agrees that such care as Agent gives to the
safekeeping of its own property of like kind shall constitute reasonable care of
the Lessor Collateral when in Agent's possession; provided, however, that Agent
shall not be required to make any presentment, demand or protest, or give any
notice and need not take any action to preserve any rights against any prior
party or any other Person in connection with the Lessor Obligations or with
respect to the Lessor Collateral.
4.02. Other Rights and Remedies Upon Default. In addition to all other
rights and remedies granted to Agent by this Agreement and the other Operative
Documents, the UCC and other applicable Governmental Rules, Agent may, if Lessor
fails to perform any of the Lessor Obligations, exercise any one or more of the
following rights and remedies: (a) collect, receive,
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397
appropriate or realize upon the Lessor Collateral or otherwise foreclose or
enforce Agent's security interests in any or all Lessor Collateral in any manner
permitted by applicable Governmental Rules or in this Security Agreement; (b)
notify Lessee to make any or all payments to be made by Lessee under the
Operative Documents to Agent; (c) sell or otherwise dispose of any or all Lessor
Collateral at one or more public or private sales, whether or not such Lessor
Collateral is present at the place of sale, for cash or credit or future
delivery, on such terms and in such manner as Agent may determine; (d) require
Lessor to assemble the Lessor Collateral and make it available to Agent at a
place to be designated by Agent; and (e) prior to the disposition of the Lessor
Collateral, store, process, repair or recondition any Lessor Collateral
consisting of goods, perform any obligations and enforce any rights of Lessor
under any Operative Documents or otherwise prepare and preserve Lessor
Collateral for disposition in any manner and to the extent Agent deems
appropriate. In any case where notice of any sale or disposition of any Lessor
Collateral is required, Lessor hereby agrees that thirty (30) days notice of
such sale or disposition is reasonable.
SECTION 5. MISCELLANEOUS.
5.01. Notices. Except as otherwise specified herein, all notices,
requests, demands, consents, instructions or other communications to or upon
Lessor or Agent under this Agreement shall be given as provided in Paragraph
7.01 of the Participation Agreement.
5.02. Waivers; Amendments. Any term, covenant, agreement or condition of
this Agreement may be amended or waived only as provided in the Participation
Agreement. No failure or delay by Agent in exercising any right hereunder shall
operate as a waiver thereof or of any other right nor shall any single or
partial exercise of any such right preclude any other further exercise thereof
or of any other right. Unless otherwise specified in any such waiver or consent,
a waiver or consent given hereunder shall be effective only in the specific
instance and for the specific purpose for which given.
5.03. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the Lessor Parties and their permitted successors and
assigns; provided, however, that the Lessor Parties shall not sell, assign or
delegate their respective rights and obligations hereunder except as provided in
the Participation Agreement.
5.04. No Third Party Rights. Nothing expressed in or to be implied from
this Agreement is intended to give, or shall be construed to give, any Person,
other than the Lessor Parties and their permitted successors and assigns, any
benefit or legal or equitable right, remedy or claim under or by virtue of this
Agreement or under or by virtue of any provision herein.
5.05. Partial Invalidity. If at any time any provision of this Agreement
is or becomes illegal, invalid or unenforceable in any respect under the law or
any jurisdiction, neither the legality, validity or enforceability of the
remaining provisions of this Agreement nor the legality, validity or
enforceability of such provision under the law of any other jurisdiction shall
in any way be affected or impaired thereby.
5.06. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of California without reference to
conflicts of law rules.
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398
5.07. Counterparts. This Agreement 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.
[The signature page follows.]
5
399
IN WITNESS WHEREOF, Lessor has caused this Agreement to be executed as
of the day and year first above written.
LESSOR: ABN AMRO LEASING, INC.
By:___________________________
Name:______________________
Title:_____________________
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400
EXHIBIT L
ASSIGNMENT AGREEMENT
THIS ASSIGNMENT AGREEMENT, dated as of the date set forth at the top of
Attachment 1 hereto, by and among:
(1) The party designated under item A of Attachment I hereto
as the Assignor Participant ("Assignor Participant"); and
(2) Each party designated under item B of Attachment I hereto
as an Assignee Participant (individually, an "Assignee Participant").
RECITALS
A. Assignor Participant is one of the "Participants" in a Participation
Agreement dated as of April 13, 2001, among Novellus Systems, Inc. ("Lessee"),
Lease Plan North America, Inc. ("Head Lessor"), ABN AMRO Leasing, Inc.
("Lessor"), Assignor Participant and the other institutions parties thereto as
"Participants" (collectively, the "Participants") and ABN AMRO Bank N.V., as
agent for the Participants (in such capacity, "Agent"). (Such Participation
Agreement, as amended, supplemented or otherwise modified in accordance with its
terms from time to time to be referred to herein as the "Participation
Agreement").
B. Assignor Participant wishes to sell, and each Assignee Participant
wishes to purchase, all or a portion of Assignor Participant's rights under the
Participation Agreement pursuant to Subparagraph 7.05(b) of the Participation
Agreement.
AGREEMENT
Now, therefore, the parties hereto hereby agree as follows:
1. Definitions. Except as otherwise defined in this Assignment
Agreement, all capitalized terms used herein and defined in the Participation
Agreement have the respective meanings given to those terms in the Participation
Agreement.
2. Sale and Assignment. Subject to the terms and conditions of this
Assignment Agreement, Assignor Participant hereby agrees to sell, assign and
delegate to each Assignee Participant and each Assignee Participant hereby
agrees to purchase, accept and assume the rights, obligations and duties of a
Participant under the Participation Agreement and the other Operative Documents
equal to the Tranche A Percentage, Tranche B Percentage, Tranche C Percentage
and Proportionate Share under each Facility set forth under the captions
"Tranche Percentages and Proportionate Shares Assigned" opposite such Assignee
Participant's name on Part A of Attachment I hereto. Such sale, assignment and
delegation shall become effective on the date designated in Part C of Attachment
I hereto (the "Assignment Effective Date"), which
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date shall be, unless Agent shall otherwise consent, at least five (5) Business
Days after the date following the date counterparts of this Assignment Agreement
are delivered to Agent in accordance with Paragraph 3 hereof.
3. Assignment Effective Notice. Upon (a) receipt by Agent of five (5)
counterparts of this Assignment Agreement (to each of which is attached a fully
completed Attachment 1), each of which has been executed by Assignor Participant
and each Assignee Participant (and, to the extent required by clause (i) of
Subparagraph 7.05(b) of the Participation Agreement, by Lessor, Lessee and
Agent) and (b) payment to Agent of the registration and processing fee specified
in clause (iii) of Subparagraph 7.05(b) of the Participation Agreement, Agent
will transmit to Lessor, Lessee, Assignor Participant and each Assignee
Participant an Assignment Effective Notice substantially in the form of
Attachment 2 hereto, fully completed (an "Assignment Effective Notice").
4. Assignment Effective Date. At or before 12:00 noon (local time of
Assignor Participant) on the Assignment Effective Date, each Assignee
Participant shall pay to Assignor Participant, in immediately available or same
day funds, an amount equal to the purchase price, as agreed between Assignor
Participant and such Assignee Participant (the "Assignment Purchase Price"), for
the respective Tranche A Percentage, Tranche B Percentage, Tranche C Percentage
and Proportionate Share under each Facility purchased by such Assignee
Participant hereunder. Effective upon receipt by Assignor Participant of the
Assignment Purchase Price payable by each Assignee Participant, the sale,
assignment and delegation to such Assignee Participant of such Proportionate
Share as described in Paragraph 2 hereof shall become effective.
5. Payments After the Assignment Effective Date. Assignor Participant
and each Assignee Participant hereby agree that Agent shall, and hereby
authorize and direct Agent to, allocate amounts payable under the Participation
Agreement and the other Operative Documents as follows:
(a) All payments applied to reduce the Outstanding Lease
Amount after the Assignment Effective Date with respect to each Tranche
A Percentage, Tranche B Percentage, Tranche C Percentage and
Proportionate Share assigned to an Assignee Participant pursuant to
this Assignment Agreement shall be payable to such Assignee
Participant.
(b) All Base Rent, interest, fees and other amounts accrued
after the Assignment Effective Date with respect to each Tranche A
Percentage, Tranche B Percentage, Tranche C Percentage and
Proportionate Share assigned to an Assignee Participant pursuant to
this Assignment Agreement shall be payable to such Assignee
Participant.
Assignor Participant and each Assignee Participant shall make any separate
arrangements between themselves which they deem appropriate with respect to
payments between them of amounts paid under the Operative Documents on account
of the Tranche A Percentage, Tranche B Percentage, Tranche C Percentage and
Proportionate Share assigned to such Assignee
L-2
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Participant, and neither Agent nor Lessee shall have any responsibility to
effect or carry out such separate arrangements.
6. Delivery of Copies of Operative Documents. Concurrently with the
execution and delivery hereof, Assignor Participant will provide to each
Assignee Participant (if it is not already a party to the Participation
Agreement) conformed copies of all documents delivered to Assignor Participant
on or prior to the Closing Date in satisfaction of the conditions precedent set
forth in the Participation Agreement.
7. Further Assurances. Each of the parties to this Assignment Agreement
agrees that at any time and from time to time upon the written request of any
other party, it will execute and deliver such further documents and do such
further acts and things as such other party may reasonably request in order to
effect the purposes of this Assignment Agreement.
8. Further Representations, Warranties and Covenants. Assignor
Participant and each Assignee Participant further represent and warrant to and
covenant with each other, Lessor, Agent and the other Participants as follows:
(a) Other than the representation and warranty that it is the
legal and beneficial owner of the interest being assigned hereby free
and clear of any adverse claim, Assignor Participant makes no
representation or warranty and assumes no responsibility with respect
to any statements, warranties or representations made in or in
connection with the Participation Agreement or the other Operative
Documents or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of the Participation Agreement or the
other Operative Documents furnished or the Collateral or any security
interest therein.
(b) Assignor Participant makes no representation or warranty
and assumes no responsibility with respect to the financial condition
of Lessee or any of its obligations under the Participation Agreement
or any other Operative Documents.
(c) Each Assignee Participant confirms that it has received a
copy of the Participation Agreement and such other documents and
information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment Agreement.
(d) Each Assignee Participant will, independently and without
reliance upon Lessor, Agent, Assignor Participant or any other
Participant and based upon such documents and information as it shall
deem appropriate at the time, continue to make its own credit decisions
in taking or not taking action under the Participation Agreement and
the other Operative Documents.
(e) Each Assignee Participant appoints and authorizes Agent to
take such action as Agent on its behalf and to exercise such powers
under the Participation Agreement and the other Operative Documents as
Agent is authorized to exercise by the
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terms thereof, together with such powers as are reasonably incidental
thereto, all in accordance with Section VI of the Participation
Agreement.
(f) Each Assignee Participant (i) affirms that each of the
representations and warranties set forth in Paragraph 4.03 of the
Participation Agreement is true and correct with respect to such
Participant and (ii) agrees that it will perform in accordance with
their terms all of the obligations which by the terms of the
Participation Agreement and the other Operative Documents are required
to be performed by it as a Participant.
(g) Each Assignee Participant represents and warrants that, as
of the date hereof, it would not have any basis for demanding any
payment under Subparagraph 2.12(c) or Subparagraph 2.12(d) of the
Participation Agreement or, to its knowledge, under Subparagraph
2.13(a) of the Participation Agreement.
(h) Part B of Attachment 1 hereto sets forth administrative
information with respect to each Assignee Participant.
9. Effect of this Assignment Agreement. On and after the Assignment
Effective Date, (a) each Assignee Participant shall be a Participant with a
Tranche A Percentage, Tranche B Percentage, Tranche C Percentage and
Proportionate Share under each Facility as set forth under the caption "Tranche
Percentages and Proportionate Shares After Assignment" opposite such Assignee
Participant's name in Part A of Attachment 1 hereto and shall have the rights,
duties and obligations of such a Participant under the Participation Agreement
and the other Operative Documents and (b) Assignor Participant shall be a
Participant with a Tranche A Percentage, Tranche B Percentage, Tranche C
Percentage and Proportionate Share under each Facility as set forth under the
caption "Tranche Percentages and Proportionate Shares After Assignment" opposite
Assignor Participant's name in Part A of Attachment 1 hereto and shall have the
rights, duties and obligations of such a Participant under the Participation
Agreement and the other Operative Documents, or, if the Proportionate Share of
Assignor Participant has been reduced to zero, Assignor Participant shall cease
to be a Participant and shall have no further obligation to fund any portion of
any Advance.
10. Miscellaneous. This Assignment Agreement shall be governed by, and
construed in accordance with, the laws of the State of California. Paragraph
headings in this Assignment Agreement are for convenience of reference only and
are not part of the substance hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Assignment
Agreement to be executed by their respective duly authorized officers as of the
date set forth in Attachment 1 hereto.
______________________________, as
Assignor Participant
By: _______________________________
Name: _________________________
Title: ________________________
____________________________, as an
Assignee Participant
By: _______________________________
Name: _________________________
Title: ________________________
____________________________, as an
Assignee Participant
By: _______________________________
Name: _________________________
Title: ________________________
____________________________, as an
Assignee Participant
By: _______________________________
Name: _________________________
Title: ________________________
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405
CONSENTED TO AND ACKNOWLEDGED BY:
_________________________________
as Lessee
By: _____________________________
Name: _______________________
Title: ______________________
_________________________________
as Agent
By: _____________________________
Name: _______________________
Title: ______________________
_________________________________
As Lessor
By: _____________________________
Name: _______________________
Title: ______________________
ACCEPTED FOR RECORDATION IN REGISTER:
_________________________________,
As Agent
By: _____________________________
Name: _______________________
Title: ______________________
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ATTACHMENT 1
TO ASSIGNMENT AGREEMENT
PART A(1) - TRANCHE PERCENTAGES AND PROPORTIONATE SHARES FOR LAND PORTION UNDER
FACILITY 1
Tranche Percentages and
Proportionate Shares Assigned
-------------------------------------------------------------------
Tranche A Tranche B Tranche C Proportionate
Percentage Percentage Percentage Share
---------- ---------- ---------- -----
Assignor Participant:
- --------------------
- --------- --. -------% --. -------% --. -------% --. -------%
- --------- --. -------% --. -------% --. -------% --. -------%
- --------- --. -------% --. -------% --. -------% --. -------%
Assignee Participants:
- ---------------------
- --------- --. -------% --. -------% --. -------% --. -------%
- --------- --. -------% --. -------% --. -------% --. -------%
- --------- --. -------% --. -------% --. -------% --. -------%
- --------- --. -------% --. -------% --. -------% --. -------%
Tranche Percentages and
Proportionate Shares After Assignment
-------------------------------------------------------------------------
Tranche A Tranche B Tranche C Proportionate
Percentage Percentage Percentage Share
---------- ---------- ---------- -----
Assignor Participant:
- --------------------
- --------- --. -------% --. -------% --. --------% --. --------%
- --------- --. -------% --. -------% --. --------% --. --------%
- --------- --. -------% --. -------% --. --------% --. --------%
Assignee Participants:
- ---------------------
- --------- --. -------% --. -------% --. --------% --. --------%
- --------- --. -------% --. -------% --. --------% --. --------%
- --------- --. -------% --. -------% --. --------% --. --------%
- --------- --. -------% --. -------% --. --------% --. --------%
L(1)-1
407
ATTACHMENT 1
TO ASSIGNMENT AGREEMENT
PART A(2) - TRANCHE PERCENTAGES AND PROPORTIONATE SHARES FOR IMPROVEMENT PORTION
UNDER FACILITY 1
Tranche Percentages and
Proportionate Shares Assigned
-------------------------------------------------------------------
Tranche A Tranche B Tranche C Proportionate
Percentage Percentage Percentage Share
---------- ---------- ---------- -----
Assignor Participant:
- --------------------
- --------- --. -------% --. -------% --. -------% --. -------%
- --------- --. -------% --. -------% --. -------% --. -------%
- --------- --. -------% --. -------% --. -------% --. -------%
Assignee Participants:
- ---------------------
- --------- --. -------% --. -------% --. -------% --. -------%
- --------- --. -------% --. -------% --. -------% --. -------%
- --------- --. -------% --. -------% --. -------% --. -------%
- --------- --. -------% --. -------% --. -------% --. -------%
Tranche Percentages and
Proportionate Shares After Assignment
-------------------------------------------------------------------------
Tranche A Tranche B Tranche C Proportionate
Percentage Percentage Percentage Share
---------- ---------- ---------- -----
Assignor Participant:
- --------------------
- --------- --. -------% --. -------% --. --------% --. --------%
- --------- --. -------% --. -------% --. --------% --. --------%
- --------- --. -------% --. -------% --. --------% --. --------%
Assignee Participants:
- ---------------------
- --------- --. -------% --. -------% --. --------% --. --------%
- --------- --. -------% --. -------% --. --------% --. --------%
- --------- --. -------% --. -------% --. --------% --. --------%
- --------- --. -------% --. -------% --. --------% --. --------%
L(1)-2
408
ATTACHMENT 1
TO ASSIGNMENT AGREEMENT
PART A(3) - TRANCHE PERCENTAGES AND PROPORTIONATE SHARES UNDER FACILITY 2 PRIOR
TO COMPLETION DATE
Tranche Percentages and
Proportionate Shares Assigned
-------------------------------------------------------------------
Tranche A Tranche B Tranche C Proportionate
Percentage Percentage Percentage Share
---------- ---------- ---------- -----
Assignor Participant:
- --------------------
- --------- --. -------% --. -------% --. -------% --. -------%
- --------- --. -------% --. -------% --. -------% --. -------%
- --------- --. -------% --. -------% --. -------% --. -------%
Assignee Participants:
- ---------------------
- --------- --. -------% --. -------% --. -------% --. -------%
- --------- --. -------% --. -------% --. -------% --. -------%
- --------- --. -------% --. -------% --. -------% --. -------%
- --------- --. -------% --. -------% --. -------% --. -------%
Tranche Percentages and
Proportionate Shares After Assignment
-------------------------------------------------------------------------
Tranche A Tranche B Tranche C Proportionate
Percentage Percentage Percentage Share
---------- ---------- ---------- -----
Assignor Participant:
- --------------------
- --------- --. -------% --. -------% --. --------% --. --------%
- --------- --. -------% --. -------% --. --------% --. --------%
- --------- --. -------% --. -------% --. --------% --. --------%
Assignee Participants:
- ---------------------
- --------- --. -------% --. -------% --. --------% --. --------%
- --------- --. -------% --. -------% --. --------% --. --------%
- --------- --. -------% --. -------% --. --------% --. --------%
- --------- --. -------% --. -------% --. --------% --. --------%
L(1)-3
409
ATTACHMENT 1
TO ASSIGNMENT AGREEMENT
PART A(4) - TRANCHE PERCENTAGES AND PROPORTIONATE SHARES UNDER FACILITY 2 ON
AND AFTER COMPLETION DATE
Tranche Percentages and
Proportionate Shares Assigned
----------------------------------------------------------------
Tranche A Tranche B Tranche C Proportionate
Percentage Percentage Percentage Share
---------- ---------- ---------- -----
Assignor Participant:
- --------------------
- --------- --. -------% --. -------% --. -------% --. -------%
- --------- --. -------% --. -------% --. -------% --. -------%
- --------- --. -------% --. -------% --. -------% --. -------%
Assignee Participants:
- ---------------------
- --------- --. -------% --. -------% --. -------% --. -------%
- --------- --. -------% --. -------% --. -------% --. -------%
- --------- --. -------% --. -------% --. -------% --. -------%
- --------- --. -------% --. -------% --. -------% --. -------%
Tranche Percentages and
Proportionate Shares After Assignment
---------------------------------------------------------------------
Tranche A Tranche B Tranche C Proportionate
Percentage Percentage Percentage Share
---------- ---------- ---------- -----
Assignor Participant:
- --------------------
- --------- --. -------% --. -------% --. --------% --. --------%
- --------- --. -------% --. -------% --. --------% --. --------%
- --------- --. -------% --. -------% --. --------% --. --------%
Assignee Participants:
- ---------------------
- --------- --. -------% --. -------% --. --------% --. --------%
- --------- --. -------% --. -------% --. --------% --. --------%
- --------- --. -------% --. -------% --. --------% --. --------%
- --------- --. -------% --. -------% --. --------% --. --------%
L(1)-4
410
PART B
[Assignee Participant]
Applicable Participating Office:
_________________________________
_________________________________
_________________________________
Address for notices:
_________________________________
_________________________________
_________________________________
Telephone No: ___________________
Telecopier No: __________________
Wiring Instructions:
_________________________________
_________________________________
_________________________________
[Assignee Participant]
Applicable Participating Office:
_________________________________
_________________________________
_________________________________
Address for notices:
_________________________________
_________________________________
_________________________________
Telephone No: ___________________
Telecopier No: __________________
Wiring Instructions:
_________________________________
_________________________________
L(1)-5
411
PART C
ASSIGNMENT EFFECTIVE DATE ________, ____
L(1)-6
412
ATTACHMENT 2
TO ASSIGNMENT AGREEMENT
FORM OF
ASSIGNMENT EFFECTIVE NOTICE
Reference is made to the Participation Agreement, dated as of April 13,
2001, among Novellus Systems, Inc. ("Lessee"), Lease Plan North America, Inc.
("Head Lessor"), ABN AMRO Leasing, Inc. ("Lessor"), the institutions parties
thereto as "Participants" (the "Participants") and ABN AMRO Bank N.V., as agent
for the Participants (in such capacity, "Agent"). Agent hereby acknowledges
receipt of five executed counterparts of a completed Assignment Agreement, a
copy of which is attached hereto. [Note: Attach copy of Assignment Agreement.]
Terms defined in such Assignment Agreement are used herein as therein defined.
1. Pursuant to such Assignment Agreement, you are advised that the
Assignment Effective Date will be __________.
2. Pursuant to such Assignment Agreement, each Assignee Participant is
required to pay its Purchase Price to Assignor Participant at or before 12:00
Noon on the Assignment Effective Date in immediately available funds.
Very truly yours,
ABN AMRO Bank N.V.,
as Agent
By: _____________________________
Name: _______________________
Title: ______________________
L(2)-1
413
EXHIBIT M(1)
FACILITY 1 HEAD LEASE AGREEMENT
M(1)-1
414
================================================================================
FACILITY 1 HEAD LEASE AGREEMENT
BETWEEN
LEASE PLAN NORTH AMERICA, INC.
AND
ABN AMRO LEASING, INC.
APRIL 13, 2001
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TABLE OF CONTENTS
PAGE
SECTION 1. INTERPRETATION...............................................................1
1.01. Definitions..................................................................1
1.02. Rules of Construction........................................................1
SECTION 2. BASIC PROVISIONS.............................................................2
2.01. Lease of the Property........................................................2
2.02. Term.........................................................................2
2.03. Rent.........................................................................2
2.04. Use..........................................................................2
2.05. Title; Quiet Enjoyment.......................................................2
SECTION 3. OTHER LESSEE AND LESSOR RIGHTS AND OBLIGATIONS...............................3
3.01. Maintenance, Repair, Etc. ...................................................3
3.02. Risk of Loss.................................................................3
3.03. Insurance....................................................................3
3.04. Casualty and Condemnation....................................................3
3.05. Property Taxes and Other Governmental Charges................................4
3.06. Liens, Easements, Etc........................................................4
3.07. Leasehold Mortgages..........................................................4
3.08. Assignments and Subletting...................................................5
3.09. Utility Charges..............................................................5
3.10. Removal of Property..........................................................5
3.11. Estoppel Certificates........................................................5
3.12. Recordation of Agreement.....................................................6
SECTION 4. TERMINATION..................................................................6
4.01. Termination Date.............................................................6
4.02. Surrender of Facility 1 Property.............................................6
SECTION 5. DEFAULT......................................................................6
5.01. Head Lease Events of Default.................................................6
5.02. Remedies.....................................................................7
5.03. Limited Recourse.............................................................7
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TABLE OF CONTENTS
(CONTINUED)
PAGE
SECTION 6. PURCHASE OPTION..............................................................7
6.01. Grant of Option..............................................................7
6.02. Terms........................................................................7
SECTION 7. MISCELLANEOUS................................................................8
7.01. Notices......................................................................8
7.02. Waivers; Amendments..........................................................8
7.03. Successors and Assigns.......................................................8
7.04. No Third Party Rights........................................................9
7.05. Partial Invalidity...........................................................9
7.06. Governing Law................................................................9
7.07. Counterparts.................................................................9
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FACILITY 1 HEAD LEASE AGREEMENT
THIS FACILITY 1 HEAD LEASE AGREEMENT (this "Agreement" herein), dated as
of April 13, 2001 is entered into by and between:
(1) LEASE PLAN NORTH AMERICA, INC., an Illinois corporation
("Head Lessor"); and
(2) ABN AMRO LEASING, INC., an Illinois corporation ("Head
Lessee").
RECITALS
A. Pursuant to a Participation Agreement dated as of June 6, 1997
(the "Original Participation Agreement") among Novellus Systems, Inc.
("Lessee"), Head Lessor, the Participants thereto and AMRO Bank N.V., as agent
for such Participants, Head Lessor acquired certain property and leased such
property to Lessee pursuant to two Lease Agreements dated as of June 9, 1997
between Lessee and Head Lessor (the "Original Lease Agreements").
B. Pursuant to a Participation Agreement dated as of August 31, 1998
(as amended, the "Novellus I Participation Agreement") among Lessee, Head
Lessor, Head Lessee, the Participants thereto and AMRO Bank N.V., as agent for
such Participants, (1) Head Lessor and Lessee terminated the Original Lease
Agreements and (2) Head Lessor leased the property to Head Lessee pursuant to
(a) a Facility 1 Head Lease Agreement dated as of August 31, 1998 between Head
Lessor and Head Lessee and (b) a Facility 2 Head Lease Agreement dated as of
August 31, 1998 between Head Lessor and Head Lessee (the "Novellus I Facility 2
Head Lease Agreement").
C. Pursuant to a Participation Agreement dated as of April 13, 2001
(the "Participation Agreement") among Lessee, Head Lessor, Head Lessee, the
Participants thereto and AMRO Bank N.V., as agent for such Participants (in such
capacity, "Agent"), (1) Head Lessor and Head Lessee have agreed to remove
certain property from the Novellus I Facility 2 Head Lease Agreement and (2)
Head Lessor has agreed to lease such removed property to Head Lessee pursuant to
this agreement and a Facility 2 Head Lease Agreement of even date herewith.
AGREEMENT
NOW, THEREFORE, in consideration of the above Recitals and the mutual
covenants herein contained, the parties hereto hereby agree as follows:
SECTION 1. INTERPRETATION.
1.01. Definitions. Unless otherwise indicated in this Agreement or any
other Operative Document, each term set forth in Schedule 1.01 to the
Participation Agreement, when used in this Agreement or any other Operative
Document, shall have the respective meaning given to that
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term in such Schedule 1.01 or in the provision of this Agreement or other
document, instrument or agreement referenced in such Schedule 1.01.
1.02. Rules of Construction. Unless otherwise indicated in this
Agreement or any other Operative Document, the rules of construction set forth
in Schedule 1.02 to the Participation Agreement shall apply to this Agreement
and the other Operative Documents.
SECTION 2. BASIC PROVISIONS.
2.01. Lease of the Property. For good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Head Lessor agrees to
lease to Head Lessee and Head Lessee agrees to lease from Head Lessor the
following property (the "Facility 1 Property") to the extent of Head Lessor's
estate, right, title and interest therein, thereto or thereunder:
(a) All lots, pieces, tracts and parcels of land described in
Exhibit A (the "Facility 1 Land");
(b) All Improvements to the Facility 1 Land;
(c) All Appurtenant Rights belonging, relating or pertaining
to the Facility 1 Land or the Improvements thereto;
(d) All Related Goods (including those described in Exhibit
B), Related Permits and Related Agreements related to the Facility 1
Land or any of the foregoing Improvements or Appurtenant Rights; and
(e) All accessions and accretions to and replacements and
substitutions for the foregoing.
2.02. Term. The original term of this Agreement shall commence on the
Closing Date (the "Head Lease Commencement Date") and shall end on the first
Business Day of April 2035 (the "Head Lease Scheduled Expiration Date"), subject
to the terms of Subparagraph 4.01(a) below.
2.03. Rent. Head Lessor hereby acknowledges that it has already been
paid in full for the rent hereunder for the entire term of this Agreement in
connection with the Novellus I Facility 2 Head Lease Agreement.
2.04. Use. Head Lessee may use the Facility 1 Property for any lawful
purpose.
2.05. Title; Quiet Enjoyment.
(a) Title. Head Lessor represents and warrants to Head Lessee
that, except as contemplated by the Existing Participation Agreement,
Head Lessor has not previously sold, leased, transferred or otherwise
disposed of any right, title or interest of Head Lessor in the Facility
1 Property. Head Lessor shall not sell, lease, transfer or otherwise
dispose
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of its right, title and interest in the Facility 1 Property or this
Agreement prior to the Head Lease Expiration Date.
(b) No Merger. The leasehold estate in the Facility 1 Property
created by this Agreement shall not be merged with the fee estate or any
other interest in the Facility 1 Property as a result of the same Person
acquiring, owning or holding, directly or indirectly, in whole or in
part, (i) the leasehold estate in the Facility 1 Property created hereby
or any interest in such leasehold estate and (ii) the fee estate in the
Facility 1 Property or any interest in such fee estate, unless all
parties with an interest in the Facility 1 Property that would be
adversely affected by any such merger specifically agree in writing that
such a merger shall occur.
(c) Quiet Enjoyment. Neither Head Lessor nor any other Person
lawfully claiming any right or interest in the Facility 1 Property
through Head Lessor shall, prior to the Head Lease Expiration Date,
disturb Head Lessee's peaceable and quiet enjoyment of the Facility 1
Property; provided, however, that such enjoyment shall be subject to the
terms of this Agreement.
SECTION 3. OTHER LESSEE AND LESSOR RIGHTS AND OBLIGATIONS.
3.01. Maintenance, Repair, Etc. Head Lessee, at its sole cost and
expense, may from time to time make alterations, renovations, additions and
other Improvements to the Facility 1 Property and substitutions and replacements
therefor.
3.02. Risk of Loss. Head Lessee assumes all risks of loss arising from
any Casualty or Condemnation and all liability for all personal injuries and
deaths and damages to property suffered by any Person or property on or in
connection with the Facility 1 Property, except that Head Lessor assumes such
risks of loss and such liability to the extent any such loss or liability is
primarily caused by the gross negligence or willful misconduct of Head Lessor.
3.03. Insurance. Until the Expiration Date of the Facility 1 Lease
Agreement, Head Lessee shall cause to be carried and maintained liability
insurance coverage for the Facility 1 Property as provided in Paragraph 3.03 of
the Facility 1 Lease Agreement for the Property upon the same terms as set forth
therein and otherwise shall comply with the provisions of such paragraph.
3.04. Casualty and Condemnation. Head Lessor hereby absolutely and
irrevocably assigns to Head Lessee all Casualty and Condemnation Proceeds and
all claims relating thereto. Head Lessor agrees that all Casualty and
Condemnation Proceeds are to be paid to Head Lessee and Head Lessor hereby
authorizes and directs any insurer, Governmental Authority or other Person
responsible for paying any Casualty and Condemnation Proceeds to make payment
thereof directly to Head Lessee alone, and not to Head Lessor and Head Lessee
jointly. If Head Lessor receives any Casualty and Condemnation Proceeds payable
to Head Lessee hereunder, Head Lessor shall promptly pay over such Casualty and
Condemnation Proceeds to Head Lessee. Head Lessor hereby covenants that until
such Casualty and Condemnation Proceeds are so paid
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over to Head Lessee, Head Lessor shall hold such Casualty and Condemnation
Proceeds in trust for the benefit of Head Lessee and shall not commingle such
Casualty and Condemnation Proceeds with any other funds or assets of Head Lessor
or any other Person. Head Lessee may commence, appear in, defend or prosecute
any assigned right, claim or action, and may adjust, compromise, settle and
collect all rights, claims and actions assigned to Head Lessee, but shall not be
responsible for any failure to collect any such right, claim or action,
regardless of the cause of the failure.
3.05. Property Taxes and Other Governmental Charges. Head Lessee shall
pay or cause to be paid all taxes and other Governmental Charges imposed on or
payable by Head Lessee in connection with the Facility 1 Property, this
Agreement or any of the transactions contemplated hereby or thereby.
3.06. Liens, Easements, Etc. During the term of this Agreement, Head
Lessor shall not create, incur, assume or permit to exist any Lien or easement
on or with respect to any of the Facility 1 Property of any character, whether
now owned or hereafter acquired, without the prior written approval of Head
Lessee. During the term of this Agreement, and provided a Head Lease Event of
Default has not occurred and is continuing, Head Lessor agrees that Head Lessee
may, and Head Lessor hereby consents in each instance to the following actions
by Head Lessee for the following purposes, but at Head Lessee's sole cost and
expense: (a) the granting of licenses and other rights and privileges reasonably
necessary or desirable for the use, repair, or maintenance of the Facility 1
Property; (b) the release of existing easements or other rights in the nature of
easements which are for the benefit of the Facility 1 Property; (c) the seeking
of any zoning variances or modifications to existing zoning; and (d) the
imposition of and the execution of amendments to, or waivers or releases of any
covenants, easements, licenses, and restrictions affecting the Facility 1
Property; provided, however that in each case (1) such grant, release,
dedication, transfer or amendment does not impair the value, operation or
remaining useful life of the Facility 1 Property or materially and adversely
affect Head Lessee's ability to perform its obligations hereunder, except such
impairments which are not material, (2) such grant, release, dedication,
transfer or amendment is reasonably necessary or desirable in connection with
the use, maintenance, alteration or improvement of the Facility 1 Property, (3)
such grant, release, dedication, transfer or amendment will not cause the
Facility 1 Property or any portion thereof to fail to comply with the provisions
of this Agreement or any other Operative Document or any Governmental Rule
(including all applicable zoning, planning, building and subdivision ordinances,
all applicable restrictive covenants and all applicable architectural approval
requirements), (4) all governmental and other consents or approvals required
prior to such grant, release, dedication, transfer, annexation or amendment or
other action have been obtained, and all filings required prior to such action
have been made, (5) Head Lessee shall remain obligated under this Agreement as
though such grant, release, dedication, transfer or amendment had not been
effected, and (6) Head Lessee shall pay and perform any obligations of Head
Lessor under such grant, release, dedication, transfer or amendment. Head Lessor
shall, upon the request of Head Lessee, and at Head Lessee's sole cost and
expense, execute and deliver any instruments necessary or appropriate to confirm
any such grant, release, dedication, transfer, annexation or amendment to any
Person permitted under this Paragraph 3.06.
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3.07. Leasehold Mortgages.
(a) Head Lessor hereby consents to the transactions
contemplated by the Participation Agreement, including all Liens granted
to Agent, as security for the Lessor Obligations, in the Facility 1
Property, this Agreement or any of the other Operative Documents. After
the Expiration Date of the Facility 1 Lease Agreement, Head Lessee may,
as security for any indebtedness of Head Lessee, grant to any holder of
such indebtedness a Lien in its leasehold interest in the Facility 1
Property (any such Liens, together with the Liens granted to Agent
pursuant to the Operative Documents, to be referred to herein as
"Leasehold Mortgages").
(b) Any Person may become the legal owner and holder of the
leasehold interest in the Facility 1 Property created by this Agreement
by foreclosure of a Leasehold Mortgage or as a result of an assignment
or conveyance in lieu of such foreclosure and, upon becoming such an
owner, shall become the Head Lessee hereunder with the rights and
obligations thereof.
(c) Head Lessor shall notify each holder of a Leasehold
Mortgage (a "Leasehold Mortgagee") of any default by Head Lessee
hereunder. No notice of a default by Head Lessee shall be deemed
effective until so served. Any Leasehold Mortgagee shall have the right
to correct or cure any such default within the same period of time after
receipt of such notice as is given to Head Lessee under this Agreement
to correct or cure defaults, plus an additional period of thirty (30)
days thereafter. Head Lessor will accept performance by any Leasehold
Mortgagee of any covenant, condition or agreement on Head Lessee's part
to be performed hereunder with the same force and effect as though
performed by Head Lessee.
(d) If this Agreement should terminate by reason of a
disaffirmance or rejection of this Agreement by Head Lessee or any
receiver, liquidator or trustee for the property of Head Lessee, or by
any Governmental Authority that has taken possession of the business or
property of Head Lessee by reason of the insolvency or alleged
insolvency of Head Lessee, then:
(i) Head Lessor shall give notice thereof to each
Leasehold Mortgagee and, upon request of any Leasehold Mortgagee
made within sixty (60) days after Head Lessor has given such
notice, Head Lessor shall enter into a new lease of the Facility
1 Property with such Leasehold Mortgagee for the remainder of the
term hereof on the same terms and conditions as contained in this
Agreement. (If more than one Leasehold Mortgagee shall request
Head Lessor to enter into a new lease, Head Lessor shall enter
into such a new lease with the requesting Leasehold Mortgagee
holding the highest priority Leasehold Mortgage. If two or more
requesting Leasehold Mortgagees share the highest priority, the
new lease shall name all such Leasehold Mortgagees as co-tenants
thereunder.)
(ii) The estate of any Leasehold Mortgagee, as lessee
under such a new lease, shall have the same priority as the
estate of Head Lessee created under this
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Agreement. If the Facility 1 Lease Agreement or Facility 1
Purchase Agreement are in effect at the time of execution of such
new lease, such new lease shall be made subject to Lessee's
rights under the Facility 1 Lease Agreement and the Facility 1
Purchase Agreement.
(e) No modification or early termination of this Agreement
shall be effective without the consent of a Leasehold Mortgagee if (A)
Head Lessee has agreed with such Leasehold Mortgagee that such Leasehold
Mortgagee's consent will be required for any such modification or early
termination and (B) Head Lessor has been notified of such agreement.
(f) No Leasehold Mortgagee will assume any liability under
this Agreement either by virtue of its Leasehold Mortgage or by any
subsequent receipt or collection of rents or profits generated from the
Facility 1 Property, unless and until the Leasehold Mortgagee acquires
Head Lessee's leasehold interest in the Facility 1 Property at
foreclosure or by deed in lieu of foreclosure.
3.08. Assignments and Subletting. Head Lessee may sublease the
Facility 1 Property and sell or assign its rights under this Agreement at any
time during the term of this Agreement.
3.09. Utility Charges. Head Lessee shall pay or cause to be paid all
charges for electricity, power, gas, oil, water, telephone, sanitary sewer
service and all other utilities and services to, on or in connection with the
Facility 1 Property during the term of this Agreement.
3.10. Removal of Property. All Improvements to the Facility 1 Property
and all other Property (other than the Facility 1 Land) may be removed by Head
Lessee at any time at or prior to the termination of this Agreement.
3.11. Estoppel Certificates. Each party shall, within ten (10) Business
Days after receipt of a written request from the other party, deliver a written
statement to the requesting party stating the date to which the rent and other
charges have been paid, whether this Agreement is unmodified and in full force
and effect, and any other matters that may reasonably be requested.
3.12. Recordation of Agreement. Neither Head Lessor nor Head Lessee
shall file or record this Agreement without the prior written consent of the
other party, but the parties will execute a good and sufficient memorandum of
lease for purposes of recording. Upon the expiration or earlier termination of
this Agreement, Head Lessee shall promptly execute, acknowledge and deliver to
Head Lessor any quitclaim deed or other document required by Head Lessor or a
title company to evidence the termination of Head Lessee's interests in the
Facility 1 Property.
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SECTION 4. TERMINATION.
4.01. Termination Date.
(a) Early Termination. This Agreement shall continue in full
force and effect until the Head Lease Scheduled Expiration Date, except
that Head Lessee may terminate this Agreement at any time upon one (1)
month's prior written notice to Head Lessor; provided, however, in no
event shall Head Lessee exercise the right of termination prior to the
Expiration Date of the Facility 1 Lease Agreement unless an Event of
Default has occurred and is continuing under the Facility 1 Lease
Agreement and Lessee's right to remain in possession is terminated.
(b) No Other Early Termination Date. Except as provided in
Subparagraph 4.01(a), this Agreement shall not terminate prior to the
Head Lease Scheduled Expiration Date for any reason including, without
limitation, (i) any Casualty to or Condemnation of all or any part of
the Facility 1 Property, (ii) the occurrence of any Head Lease Event of
Default or any other default by Head Lessee under this Agreement or
(iii) any other cause whether similar or dissimilar to the foregoing,
any existing or future law to the contrary notwithstanding; provided,
however, that this Subparagraph 4.01(b) shall not abrogate any right
Head Lessor may have to recover damages or seek an injunction pursuant
to Paragraph 5.02. It is the intention of the parties hereto that the
obligations of Head Lessor hereunder shall be separate and independent
of the covenants and agreements of Head Lessee.
4.02. Surrender of Facility 1 Property. Unless Head Lessee (or an
assignee of Head Lessee) purchases the Facility 1 Property prior thereto, Head
Lessee shall vacate and surrender the Facility 1 Property to Head Lessor in its
then-current condition on the date (the "Head Lease Expiration Date") that is
the earlier of (a) the Head Lease Scheduled Expiration Date and (b) any earlier
date on which this Agreement is terminated pursuant to Subparagraph 4.01(a).
SECTION 5. DEFAULT.
5.01. Head Lease Events of Default. The occurrence or existence of any
one or more of the following shall constitute a "Head Lease Event of Default"
hereunder:
(a) Non-Payment. Head Lessee shall fail to pay the rent
payable hereunder within sixty (60) days after the Head Lease
Commencement Date; or
(b) Other Defaults. Head Lessee shall fail to observe or
perform any other covenant, obligation, condition or agreement contained
in this Agreement and such failure shall continue for a period of sixty
(60) days after written notice thereof from Head Lessor; provided,
however, that in the event that such failure cannot reasonably be cured
within such sixty (60) day period, such failure shall not constitute an
Event of Default hereunder so long as Head Lessee shall have commenced
to cure such failure within such sixty (60) day period and shall
thereafter diligently pursue such cure to completion, provided further
that such failure shall in all events be cured by the earlier of (i) the
Head
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Lease Scheduled Expiration Date and (ii) one hundred and eighty days
(180) days after Head Lessor's notice thereof.
5.02. Remedies. Upon the occurrence or existence of any Head Lease
Event of Default and at any time thereafter unless such Head Lease Event of
Default is waived, Head Lessor may sue Head Lessee for the collection of any
amount due under this Agreement or to enjoin the continuation of the Head Lease
Event of Default; provided, however, that such remedies are the sole and
exclusive remedies of Head Lessor hereunder. Head Lessor may not terminate this
Agreement or Head Lessee's right to possession under this Agreement except as
expressly provided herein.
5.03. Limited Recourse. Neither a Head Lessee that is a Lessor Party
nor any of its Affiliates or any of their respective directors, officers,
employees, agents, attorneys and advisors shall have any personal liability for
the payment of or performance of any obligations of Head Lessee under this
Agreement. Any judgment which Head Lessor may obtain against a Head Lessee that
is a Lessor Party for amounts due under this Agreement may be collected only
through resort to a judgment lien against Head Lessee's interest in the
Facility 1 Property.
SECTION 6. PURCHASE OPTION.
6.01. Grant of Options
(a) All of the Property. Head Lessor hereby grants to Head
Lessee (or its assignee) the right to purchase all of the Facility 1
Property at any time upon one (1) month's prior written notice following
the occurrence of any one of the following events:
(i) Lessee exercises the Term Purchase Option, the
Expiration Date Purchase Option or the Marketing Option pursuant
to the Facility 1 Purchase Agreement; or
(ii) An Event of Default occurs under the Facility 1
Lease Agreement.
Head Lessee (or its assignee) shall pay a purchase price for the
Facility 1 Property under this Subparagraph 6.01(a) in an amount of
$1,000.00 (the "Head Lease Option Price").
(b) Partial Purchase. Head Lessor hereby grants to Head Lessee
(or its assignee) the right to purchase a portion of the Facility 1
Property at any time upon one (1) months' prior written notice following
any exercise by Lessee of the Partial Purchase Option pursuant to the
Facility 1 Purchase Agreement. If Head Lessee exercises the purchase
option under this Subparagraph 6.01(b), (i) Head Lessee may purchase the
portion of the Facility 1 Property for which Lessee is exercising the
Partial Purchase Option and (ii) Head Lessee shall pay a purchase price
for such portion in an amount (the "Head Lease Partial Purchase Option
Price") equal to the product of (A) $1,000.00 times (B) a fraction, the
numerator of which is the amount to be paid by Lessee for such portion
under the Facility 1 Purchase Agreement and the denominator of which is
the Outstanding Lease Amount under Facility 1 immediately prior to such
payment.
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6.02. Terms.
(a) Upon Head Lessee's (or its assignee's) tender of the Head
Lease Option Price or the Head Lease Partial Purchase Option Price, as
the case may be, to Head Lessor, Head Lessor will convey and assign good
and marketable title to the Facility 1 Property or the applicable
portion thereof, as the case may be, to Head Lessee (or its assignee)
subject only to the Permitted Property Liens of the types described in
clauses (i), (ii), (iii) and (v) of Subparagraph 3.07(a) of the Facility
1 Lease Agreement.
(b) Head Lessee's (or its assignee's) obligation to close the
purchase shall be subject to the following terms and conditions, all of
which are for the benefit of Head Lessee (or its assignee):
(i) Head Lessee (or its assignee) shall have been
furnished with evidence satisfactory to Head Lessee (or its
assignee) that Head Lessor can convey title as required by the
preceding subparagraph.
(ii) Nothing shall have occurred or been discovered
after Head Lessee exercised the Head Lease Purchase Option that
could adversely affect the title to or value of the Facility 1
Property or the applicable portion thereof, as the case may be,
or the Head Lessee's (or its assignee's) use thereof.
SECTION 7. MISCELLANEOUS.
7.01. Notices. Except as otherwise specified herein, (a) all notices,
requests, demands, consents, instructions or other communications to or upon
Head Lessee or Head Lessor under this Agreement given on or prior to the
Expiration Date of the Facility 1 Lease Agreement shall be given as provided in
Subparagraph 2.02(c) and Paragraph 7.01 of the Participation Agreement and (b)
all notices, requests, demands, consents, instructions or other communications
to or upon Head Lessee or Head Lessor under this Agreement given after the
Expiration Date of the Facility 1 Lease Agreement shall be in writing and faxed,
mailed or delivered to its respective facsimile number or address set forth in
Paragraph 7.01 of the Participation Agreement (or to such other facsimile number
or address for either party as indicated in any notice given by that party to
the other party). All such notices and communications shall be effective (i)
when sent by Federal Express or other overnight service of recognized standing,
on the Business Day following the deposit with such service; (ii) when mailed,
first class postage prepaid and addressed as aforesaid through the United States
Postal Service, upon receipt; (iii) when delivered by hand, upon delivery; and
(iv) when faxed, upon confirmation of receipt.
7.02. Waivers; Amendments. Until the Expiration Date of the Facility 1
Lease Agreement and the satisfaction in full of all Lessee Obligations or, if
earlier, the date on which Head Lessee sells or assigns this Agreement, any
term, covenant, agreement or condition of this Agreement may be amended or
waived only as provided in the Participation Agreement. Thereafter, any term,
covenant, agreement or condition of this Agreement may be amended or waived if
such amendment or waiver is in writing and is signed by Head Lessor and Head
Lessee.
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No failure or delay by either party in exercising any right hereunder shall
operate as a waiver thereof or of any other right nor shall any single or
partial exercise of any such right preclude any other further exercise thereof
or of any other right. Unless otherwise specified in any such waiver or consent,
a waiver or consent given hereunder shall be effective only in the specific
instance and for the specific purpose for which given.
7.03. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the Head Lessor and Head Lessee and their permitted
successors and assigns; provided, however, that Head Lessor and Head Lessee
shall not sell, assign or delegate their respective rights and obligations
hereunder except as provided in this Agreement or the Participation Agreement.
7.04. No Third Party Rights. Nothing expressed in or to be implied from
this Agreement is intended to give, or shall be construed to give, any Person,
other than Head Lessor, Head Lessee and the Lessor Parties Lessee and their
permitted successors and assigns, any benefit or legal or equitable right,
remedy or claim under or by virtue of this Agreement or under or by virtue of
any provision herein.
7.05. Partial Invalidity. If at any time any provision of this
Agreement is or becomes illegal, invalid or unenforceable in any respect under
the law or any jurisdiction, neither the legality, validity or enforceability of
the remaining provisions of this Agreement nor the legality, validity or
enforceability of such provision under the law of any other jurisdiction shall
in any way be affected or impaired thereby.
7.06. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of California without reference to
conflicts of law rules.
7.07. Counterparts. This Agreement 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.
[The signature page follows.]
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IN WITNESS WHEREOF, Head Lessor and Head Lessee have caused this
Agreement to be executed as of the day and year first above written.
HEAD LESSOR: LEASE PLAN NORTH AMERICA, INC.
By:___________________________________
Name:______________________________
Title:_____________________________
HEAD LESSEE: ABN AMRO LEASING, INC.
By:___________________________________
Name:______________________________
Title:_____________________________
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EXHIBIT A
FACILITY 1 LAND
LEGAL DESCRIPTION
3940 NORTH FIRST STREET, 3950 NORTH FIRST STREET
(FACILITY 1)
The land situated in the City of San Jose, County of Santa Clara, State of
California, and described as follows:
PARCEL ONE:
Parcel 2 as shown on that certain Parcel Map filed in the office of the Recorder
of the County of Santa Clara, State of California on August 18, 1983 in Book 516
of Maps, page(s) 34 and 35, Santa Clara County Records.
And, in addition thereto, the following area:
Beginning at the Southeasterly corner of said Parcel 2, thence North 52(Degree)
27' 12" West, 409.24 feet along the common line of Parcel 1 and Parcel 2 as
shown on said Parcel Map to a common corner thereof; thence leaving said common
line, along the Southerly prolongation of a common line of said Parcels, South
19(Degree) 40' 54" West, 32.25 feet; thence South 52(Degree) 22' 44" East,
399.34 feet to a point on the Southeasterly line of said Parcel 1; thence North
37(Degree) 32' 59" East, 31.22 feet along said Southeasterly line to the Point
of Beginning.
PARCEL ONE-A:
A non-exclusive easement for ingress and egress over PCL. 1, as said parcel is
shown on the Parcel Map recorded in Book 516 of Maps, at pages 34 and 35, Santa
Clara County Records, as granted in an instrument recorded May 23, 1985 in Book
J353, page 1565 and being more particularly described as follows:
Strip 1
A strip of land 26.00 feet wide extending entirely across said PCL. 1 and lying
13.00 feet on each side of a line as follows:
Beginning at the Southerly corner of said PCL. 1, said corner being on the
Northeasterly line of North First Street; thence along said Northeasterly line
N. 52(Degree) 27' 12" W., 34.00 feet to the true point of beginning of said
strip of land; thence N. 37(Degree) 32' 59" E., 540.00 feet to the Northeasterly
line of said PCL. 1.
(LEGAL DESCRIPTION CONTINUED NEXT PAGE)
B(1)-12
429
LEGAL DESCRIPTION: (Continued)
Strip 2
A strip of land 40.00 feet wide extending entirely across said PCL. 1 and lying
contiguous to and Southeasterly of a line described as follows:
Beginning at the most Southerly corner of said PCL. 1, said corner being on the
Northeasterly line of North First Street; thence along said Northeasterly line
N. 52(Degree) 27' 12" W., 429.25 feet to the true point of beginning of said
strip of land; thence N. 37(Degree) 32' 48" E., 600.00 feet to the Northeasterly
line of said PCL. 1; the Northerly terminus of said 40 foot wide strip of land
being the Northeasterly line of said PCL. 1.
Strip 3
A strip of land 26.00 feet wide, extending Northeasterly from the Southwesterly
line of said PCL. 1 to the Northwesterly line of the above described and
designated Strip 2 and lying 13.00 feet on each side of a line described as
follows:
Beginning at the Westerly corner of said PCL. 1, said corner being on the
Northeasterly line of North First Street; thence along said Northeasterly line
S. 52(Degree) 27' 12" E., 34.00 feet to the true point of beginning of said
strip of land; thence N. 37(Degree) 32' 48" E. 566.00 feet; thence S. 52(Degree)
27' 12" E., 355.25 feet to said Northwesterly line of said Strip 2.
Strip 4
A strip of land 13.00 feet wide lying contiguous to and Northwesterly of the
Northwesterly line of the above described and designated Strip 2 and extending
Southwesterly from the Northeasterly line of said PCL. 1 approximately 21.00
feet to the Northeasterly line of the above described and designated Strip 3.
PARCEL ONE-B:
The right from time to time to construct, install, maintain, replace, remove,
and use storm drain sewers, together with a right of way therefor, over a
portion of PCL. 1 as said parcel is shown on the Parcel Map recorded in Book 516
of Maps, at pages 34 and 35, Santa Clara County Records, as granted in an
instrument recorded May 23, 1985 in Book J353, page 1565 and being more
particularly described as follows:
Strip 1
A strip of land 10.00 feet wide extending entirely across said PCL. 1 and lying
5.00 feet on each side of a line described as follows:
Beginning at the most Westerly corner of said PCL. 1 said corner being on the
Northeasterly line of North First Street; thence along said Northeasterly line
S. 52(Degree) 27' 12" E., 402.75 feet to the true point of beginning of said
strip of land; thence along the centerline of a existing storm drain line the
following courses: thence N. 37(Degree) 32' 48" E., 28.00 feet to a point herein
designated Point A; thence N. 52(Degree) 27' 12" W., 278.00 feet; thence N.
00(Degree) 51' 00" E., 198.30 feet; thence N. 37(Degree) 32' 33" E., 279.75
feet; thence S. 51(Degree) 19' 51" E., 89.02 feet; thence N. 50(Degree) 06' 47"
E., 133.18 feet; thence N. 37(Degree) 32' 48" E., 5.00 feet to the Northeasterly
line of said PCL 1.
(LEGAL DESCRIPTION CONTINUED NEXT PAGE)
B(1)-13
430
LEGAL DESCRIPTION: (Continued)
Strip 2
A strip of land 10 feet wide extending Northeasterly from the Northeasterly line
of the above described and designated Strip 1 and lying 5.00 feet on each side
of a line which begins at said Point A; thence along the centerline of an
existing storm drain line the following courses: thence N. 26(Degree) 55' 37"
E., 154.65 feet; thence N. 32(Degree) 55' 53" E., 96.31 feet; thence N.
43(Degree) 21' 28" E., 113.58 feet; thence N. 54(Degree) 44' 21" E., 105.72 feet
to a point herein designated as Point B; thence S. 41(Degree) 57' 14" E., 65.85
feet; thence N. 37(Degree) 32' 48" E., 62.00 feet to the Northeasterly line of
said PCL 2.
Strip 3
A strip of land 5.00 feet wide lying contiguous to and Southwesterly of the
Northeasterly line of said PCL. 1 and extending Southeasterly from the
Southeasterly line of the above described and designated Strip 2 approximately
225 feet.
Strip 4
A strip of land 10.00 feet wide extending Northeasterly from the Northeasterly
line of the above described and designated Strip 2 to the Northeasterly line of
said PCL. 1 and lying 5.00 feet on each side of a line that begins at said Point
B; thence along the centerline of an existing storm drain line N. 37(Degree) 32'
48" E., 50.00 feet to the Northeasterly line of said PCL. 1.
PARCEL ONE-C:
The right from time to time to construct, install, inspect, maintain, replace,
remove and use any and all Public Service Facilities necessary or useful,
together with a right of way therefor, over a portion of PCL. 1 as said parcel
is shown on the Parcel Map recorded in Book 516 of Maps, at pages 34 and 35,
Santa Clara County Records, as granted in an instrument recorded May 23, 1985 in
Book J353, page 1565 and being more particularly described as follows:
Strip 5
A strip of land 15.00 feet wide extending entirely across said PCL. 1 and lying
7.50 feet on each side of a line described as follows:
Beginning at the most Southerly corner of said PCL. 1, said corner being on the
Northeasterly line of North First Street; thence along said Northeasterly line
N. 52(Degree) 27' 12" W., 60.50 feet to the true point of beginning of said
strip of land; thence N. 37(Degree) 32' 59" E., 394.80 feet to a point herein
designated Point C; thence N. 37(Degree) 32' 59" E., 105.20 feet; thence N.
7(Degree) 27' 01" W., 56.57 feet to the Northeasterly line of said PCL. 1.
Strip 6
A strip of land 15.00 feet wide extending Northerly from the Northerly line of
the above described and designated Strip 5 to the Northeasterly line of said
PCL. 1 and lying 7.5 feet on each side of a line that begins at said Point C;
thence N. 30(Degree) 01' 00" E., 59.5 feet; thence N. 8(Degree) 41' 00" E.,
98.44 feet to the Northeasterly line of said PCL. 1.
(LEGAL DESCRIPTION CONTINUED NEXT PAGE)
B(1)-14
431
LEGAL DESCRIPTION: (Continued)
Strip 7
A strip of land 15.00 feet wide extending entirely across said PCL. 1 and lying
7.5 feet and each side of a line described as follows:
Beginning at the most Westerly corner of said PCL. 1 said corner being on the
Northeasterly line of North First Street; thence along said Northeasterly line
S. 52(Degree) 27' 12" E., 30.00 feet to the true point of beginning of said
strip of land; thence N. 37(Degree) 32' 33" E., 600.00 feet to the Northeasterly
line of said PCL 1.
Strip 8
That area located within those portions of PCL.1, of the Parcel Map mentioned
hereinabove, lying within the easements designated as "P.S.E.", as shown on said
Parcel Map.
PARCEL ONE-D:
A non-exclusive easement for Landscaping, Lighting and Irrigation Facilities
over PCL. 1, as said parcel is shown on the Parcel Map recorded in Book 516 of
Maps, at pages 34 and 35, Santa Clara County Records, as granted in an
instrument recorded May 23, 1985 in Book J353, page 1565 and being more
particularly described as follows:
A strip of land 10.00 feet wide extending Southeasterly from the Northwesterly
line of said PCL. 1 and PCL. 2 and lying 5.00 feet on each side of a line that
begins at the most Northerly corner of said PCL. 1 and runs thence along the
Northeasterly line of said PCL. 1, S. 52(Degree) 27' 12" E. 375.00 feet.
Excepting therefrom that portion lying within the bounds of Parcel 2 mentioned
hereinabove.
APN: 097-79-004
ARB: 97-3-x4
B(1)-15
432
EXHIBIT B
RELATED GOODS
NONE
B-1
433
EXHIBIT B(1)
SUPPLEMENT TO EXHIBIT B TO LEASE AGREEMENT
[Date]
Lease Plan North America, 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
1. Reference is made to that certain Facility 1 Head Lease
Agreement, dated as of April 13, 2001 (the "Lease Agreement"), between Lease
Plan North America, Inc. ("Head Lessor") and ABN AMRO Leasing, Inc. ("Head
Lessee").
2. Head Lessee hereby agrees that the description of "Related Goods"
set forth in Exhibit B to the Lease Agreement shall be supplemented by adding
thereto the Related Goods described in Attachment 1 hereto. Head Lessee hereby
accepts all such Related Goods and agrees that such Related Goods constitute
part of the Facility 1 Property subject to the Lease Agreement.
IN WITNESS WHEREOF, Head Lessee has executed this Supplement to Exhibit
B on the date set forth above.
LESSEE: LEASE PLAN NORTH AMERICA, INC.
By: ___________________________________
Name: _____________________________
Title: ____________________________
LESSOR: ABN AMRO LEASING, INC.
By: ___________________________________
Name: _____________________________
Title: ____________________________
B(1)-1
434
ATTACHMENT 1
TO
SUPPLEMENT TO EXHIBIT B
B(1)-2
435
SCHEDULE 1
HAZARDOUS MATERIALS USED ON THE FACILITY 1 PROPERTY
As set forth in that certain Hazardous Materials Business Plan
(HMBP) for Novellus Systems, Inc. dated 4/1/97 prepared by Environmental Quality
Solutions.
B(1)-1
436
EXHIBIT M(2)
FACILITY 2 HEAD LEASE AGREEMENT
M(2)-1
437
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FACILITY 2 HEAD LEASE AGREEMENT
BETWEEN
LEASE PLAN NORTH AMERICA, INC.
AND
ABN AMRO LEASING, INC.
APRIL 13, 2001
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
438
TABLE OF CONTENTS
PAGE
SECTION 1. INTERPRETATION..............................................................1
1.01. Definitions..................................................................1
1.02. Rules of Construction........................................................1
SECTION 2. BASIC PROVISIONS............................................................2
2.01. Lease of the Property........................................................2
2.02. Term.........................................................................2
2.03. Rent.........................................................................2
2.04. Use..........................................................................2
2.05. Title; Quiet Enjoyment.......................................................2
SECTION 3. OTHER LESSEE AND LESSOR RIGHTS AND OBLIGATIONS..............................3
3.01. Maintenance, Repair, Etc.....................................................3
3.02. Risk of Loss.................................................................3
3.03. Insurance....................................................................3
3.04. Casualty and Condemnation....................................................3
3.05. Property Taxes and Other Governmental Charges................................4
3.06. Liens, Easements, Etc........................................................4
3.07. Leasehold Mortgages..........................................................4
3.08. Assignments and Subletting...................................................5
3.09. Utility Charges..............................................................5
3.10. Removal of Property..........................................................5
3.11. Estoppel Certificates........................................................5
3.12. Recordation of Agreement.....................................................6
SECTION 4. TERMINATION.................................................................6
4.01. Termination Date.............................................................6
4.02. Surrender of Facility 2 Property.............................................6
SECTION 5. DEFAULT.....................................................................6
5.01. Head Lease Events of Default.................................................6
5.02. Remedies.....................................................................7
5.03. Limited Recourse.............................................................7
-i-
439
TABLE OF CONTENTS
(CONTINUED)
PAGE
SECTION 6. PURCHASE OPTION.............................................................7
6.01. Grant of Option..............................................................7
6.02. Terms........................................................................7
SECTION 7. MISCELLANEOUS...............................................................8
7.01. Notices......................................................................8
7.02. Waivers; Amendments..........................................................8
7.03. Successors and Assigns.......................................................8
7.04. No Third Party Rights........................................................9
7.05. Partial Invalidity...........................................................9
7.06. Governing Law................................................................9
7.07. Counterparts.................................................................9
-ii-
440
FACILITY 2 HEAD LEASE AGREEMENT
THIS FACILITY 2 HEAD LEASE AGREEMENT (this "Agreement" herein), dated as
of April 13, 2001 is entered into by and between:
(1) LEASE PLAN NORTH AMERICA, INC., an Illinois corporation
("Head Lessor"); and
(2) ABN AMRO LEASING, INC., an Illinois corporation ("Head
Lessee").
RECITALS
A. Pursuant to a Participation Agreement dated as of June 6, 1997 (the
"Original Participation Agreement") among Novellus Systems, Inc. ("Lessee"),
Head Lessor, the Participants thereto and AMRO Bank N.V., as agent for such
Participants, Head Lessor acquired certain property and leased such property to
Lessee pursuant to two Lease Agreements dated as of June 9, 1997 between Lessee
and Head Lessor (the "Original Lease Agreements").
B. Pursuant to a Participation Agreement dated as of August 31, 1998 (as
amended, the "Novellus I Participation Agreement") among Lessee, Head Lessor,
Head Lessee, the Participants thereto and AMRO Bank N.V., as agent for such
Participants, (1) Head Lessor and Lessee terminated the Original Lease
Agreements and (2) Head Lessor leased the property to Head Lessee pursuant to
(a) a Facility 1 Head Lease Agreement dated as of August 31, 1998 between Head
Lessor and Head Lessee and (b) a Facility 2 Head Lease Agreement dated as of
August 31, 1998 between Head Lessor and Head Lessee (the "Novellus I Facility 2
Head Lease Agreement").
C. Pursuant to a Participation Agreement dated as of April 13, 2001 (the
"Participation Agreement") among Lessee, Head Lessor, Head Lessee, the
Participants thereto and AMRO Bank N.V., as agent for such Participants (in such
capacity, "Agent"), (1) Head Lessor and Head Lessee have agreed to remove
certain property from the Novellus I Facility 2 Head Lease Agreement and (2)
Head Lessor has agreed to lease such removed property to Head Lessee pursuant to
this agreement and a Facility 1 Head Lease Agreement of even date herewith.
AGREEMENT
NOW, THEREFORE, in consideration of the above Recitals and the mutual
covenants herein contained, the parties hereto hereby agree as follows:
SECTION 1. INTERPRETATION.
1.01. Definitions. Unless otherwise indicated in this Agreement or any
other Operative Document, each term set forth in Schedule 1.01 to the
Participation Agreement, when used in this Agreement or any other Operative
Document, shall have the respective meaning given to that
441
term in such Schedule 1.01 or in the provision of this Agreement or other
document, instrument or agreement referenced in such Schedule 1.01.
1.02. Rules of Construction. Unless otherwise indicated in this
Agreement or any other Operative Document, the rules of construction set forth
in Schedule 1.02 to the Participation Agreement shall apply to this Agreement
and the other Operative Documents.
SECTION 2. BASIC PROVISIONS.
2.01. Lease of the Property. For good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Head Lessor agrees to
lease to Head Lessee and Head Lessee agrees to lease from Head Lessor the
following property (the "Facility 2 Property") to the extent of Head Lessor's
estate, right, title and interest therein, thereto or thereunder:
(a) All lots, pieces, tracts and parcels of land described in
Exhibit A (the "Facility 2 Land");
(b) All Improvements to the Facility 2 Land;
(c) All Appurtenant Rights belonging, relating or pertaining to
the Facility 2 Land or the Improvements thereto;
(d) All Related Goods (including those described in Exhibit B and
in each Exhibit B Supplement), Related Permits and Related Agreements
related to the Facility 2 Land or any of the foregoing Improvements or
Appurtenant Rights; and
(e) All accessions and accretions to and replacements and
substitutions for the foregoing.
2.02. Term. The original term of this Agreement shall commence on the
Closing Date (the "Head Lease Commencement Date") and shall end on the first
Business Day of April 2035 (the "Head Lease Scheduled Expiration Date"), subject
to the terms of Subparagraph 4.01(a) below.
2.03. Rent. Head Lessor hereby acknowledges that it has already been
paid in full for the rent hereunder for the entire term of this Agreement in
connection with the Novellus I Facility 2 Head Lease Agreement.
2.04. Use. Head Lessee may use the Facility 2 Property for any lawful
purpose.
2.05. Title; Quiet Enjoyment.
(a) Title. Head Lessor represents and warrants to Head Lessee
that, except as contemplated by the Existing Participation Agreement,
Head Lessor has not previously sold, leased, transferred or otherwise
disposed of any right, title or interest of Head Lessor in the Facility
2 Property. Head Lessor shall not sell, lease, transfer or otherwise
dispose
2
442
of its right, title and interest in the Facility 2 Property or this
Agreement prior to the Head Lease Expiration Date.
(b) No Merger. The leasehold estate in the Facility 2 Property
created by this Agreement shall not be merged with the fee estate or any
other interest in the Facility 2 Property as a result of the same Person
acquiring, owning or holding, directly or indirectly, in whole or in
part, (i) the leasehold estate in the Facility 2 Property created hereby
or any interest in such leasehold estate and (ii) the fee estate in the
Facility 2 Property or any interest in such fee estate, unless all
parties with an interest in the Facility 2 Property that would be
adversely affected by any such merger specifically agree in writing that
such a merger shall occur.
(c) Quiet Enjoyment. Neither Head Lessor nor any other Person
lawfully claiming any right or interest in the Facility 2 Property
through Head Lessor shall, prior to the Head Lease Expiration Date,
disturb Head Lessee's peaceable and quiet enjoyment of the Facility 2
Property; provided, however, that such enjoyment shall be subject to the
terms of this Agreement.
SECTION 3. OTHER LESSEE AND LESSOR RIGHTS AND OBLIGATIONS.
3.01. Maintenance, Repair, Etc. Head Lessee, at its sole cost and
expense, may from time to time make alterations, renovations, additions and
other Improvements to the Facility 2 Property and substitutions and replacements
therefor.
3.02. Risk of Loss. Head Lessee assumes all risks of loss arising from
any Casualty or Condemnation and all liability for all personal injuries and
deaths and damages to property suffered by any Person or property on or in
connection with the Facility 2 Property, except that Head Lessor assumes such
risks of loss and such liability to the extent any such loss or liability is
primarily caused by the gross negligence or willful misconduct of Head Lessor.
3.03. Insurance. Until the Expiration Date of the Facility 2 Lease
Agreement, Head Lessee shall cause to be carried and maintained liability
insurance coverage for the Facility 2 Property as provided in Paragraph 3.03 of
the Facility 2 Lease Agreement for the Property upon the same terms as set forth
therein and otherwise shall comply with the provisions of such paragraph.
3.04. Casualty and Condemnation. Head Lessor hereby absolutely and
irrevocably assigns to Head Lessee all Casualty and Condemnation Proceeds and
all claims relating thereto. Head Lessor agrees that all Casualty and
Condemnation Proceeds are to be paid to Head Lessee and Head Lessor hereby
authorizes and directs any insurer, Governmental Authority or other Person
responsible for paying any Casualty and Condemnation Proceeds to make payment
thereof directly to Head Lessee alone, and not to Head Lessor and Head Lessee
jointly. If Head Lessor receives any Casualty and Condemnation Proceeds payable
to Head Lessee hereunder, Head Lessor shall promptly pay over such Casualty and
Condemnation Proceeds to Head Lessee. Head Lessor hereby covenants that until
such Casualty and Condemnation Proceeds are so paid
3
443
over to Head Lessee, Head Lessor shall hold such Casualty and Condemnation
Proceeds in trust for the benefit of Head Lessee and shall not commingle such
Casualty and Condemnation Proceeds with any other funds or assets of Head Lessor
or any other Person. Head Lessee may commence, appear in, defend or prosecute
any assigned right, claim or action, and may adjust, compromise, settle and
collect all rights, claims and actions assigned to Head Lessee, but shall not be
responsible for any failure to collect any such right, claim or action,
regardless of the cause of the failure.
3.05. Property Taxes and Other Governmental Charges. Head Lessee shall
pay or cause to be paid all taxes and other Governmental Charges imposed on or
payable by Head Lessee in connection with the Facility 2 Property, this
Agreement or any of the transactions contemplated hereby or thereby.
3.06. Liens, Easements, Etc. During the term of this Agreement, Head
Lessor shall not create, incur, assume or permit to exist any Lien or easement
on or with respect to any of the Facility 2 Property of any character, whether
now owned or hereafter acquired, without the prior written approval of Head
Lessee. During the term of this Agreement, and provided a Head Lease Event of
Default has not occurred and is continuing, Head Lessor agrees that Head Lessee
may, and Head Lessor hereby consents in each instance to the following actions
by Head Lessee for the following purposes, but at Head Lessee's sole cost and
expense: (a) the granting of licenses and other rights and privileges reasonably
necessary or desirable for the use, repair, or maintenance of the Facility 2
Property; (b) the release of existing easements or other rights in the nature of
easements which are for the benefit of the Facility 2 Property; (c) the seeking
of any zoning variances or modifications to existing zoning; and (d) the
imposition of and the execution of amendments to, or waivers or releases of any
covenants, easements, licenses, and restrictions affecting the Facility 2
Property; provided, however that in each case (1) such grant, release,
dedication, transfer or amendment does not impair the value, operation or
remaining useful life of the Facility 2 Property or materially and adversely
affect Head Lessee's ability to perform its obligations hereunder, except such
impairments which are not material, (2) such grant, release, dedication,
transfer or amendment is reasonably necessary or desirable in connection with
the use, maintenance, alteration or improvement of the Facility 2 Property, (3)
such grant, release, dedication, transfer or amendment will not cause the
Facility 2 Property or any portion thereof to fail to comply with the provisions
of this Agreement or any other Operative Document or any Governmental Rule
(including all applicable zoning, planning, building and subdivision ordinances,
all applicable restrictive covenants and all applicable architectural approval
requirements), (4) all governmental and other consents or approvals required
prior to such grant, release, dedication, transfer, annexation or amendment or
other action have been obtained, and all filings required prior to such action
have been made, (5) Head Lessee shall remain obligated under this Agreement as
though such grant, release, dedication, transfer or amendment had not been
effected, and (6) Head Lessee shall pay and perform any obligations of Head
Lessor under such grant, release, dedication, transfer or amendment. Head Lessor
shall, upon the request of Head Lessee, and at Head Lessee's sole cost and
expense, execute and deliver any instruments necessary or appropriate to confirm
any such grant, release, dedication, transfer, annexation or amendment to any
Person permitted under this Paragraph 3.06.
4
444
3.07. Leasehold Mortgages.
(a) Head Lessor hereby consents to the transactions contemplated
by the Participation Agreement, including all Liens granted to Agent, as
security for the Lessor Obligations, in the Facility 2 Property, this
Agreement or any of the other Operative Documents. After the Expiration
Date of the Facility 2 Lease Agreement, Head Lessee may, as security for
any indebtedness of Head Lessee, grant to any holder of such
indebtedness a Lien in its leasehold interest in the Facility 2 Property
(any such Liens, together with the Liens granted to Agent pursuant to
the Operative Documents, to be referred to herein as "Leasehold
Mortgages").
(b) Any Person may become the legal owner and holder of the
leasehold interest in the Facility 2 Property created by this Agreement
by foreclosure of a Leasehold Mortgage or as a result of an assignment
or conveyance in lieu of such foreclosure and, upon becoming such an
owner, shall become the Head Lessee hereunder with the rights and
obligations thereof.
(c) Head Lessor shall notify each holder of a Leasehold Mortgage
(a "Leasehold Mortgagee") of any default by Head Lessee hereunder. No
notice of a default by Head Lessee shall be deemed effective until so
served. Any Leasehold Mortgagee shall have the right to correct or cure
any such default within the same period of time after receipt of such
notice as is given to Head Lessee under this Agreement to correct or
cure defaults, plus an additional period of thirty (30) days thereafter.
Head Lessor will accept performance by any Leasehold Mortgagee of any
covenant, condition or agreement on Head Lessee's part to be performed
hereunder with the same force and effect as though performed by Head
Lessee.
(d) If this Agreement should terminate by reason of a
disaffirmance or rejection of this Agreement by Head Lessee or any
receiver, liquidator or trustee for the property of Head Lessee, or by
any Governmental Authority that has taken possession of the business or
property of Head Lessee by reason of the insolvency or alleged
insolvency of Head Lessee, then:
(i) Head Lessor shall give notice thereof to each
Leasehold Mortgagee and, upon request of any Leasehold Mortgagee
made within sixty (60) days after Head Lessor has given such
notice, Head Lessor shall enter into a new lease of the Facility
2 Property with such Leasehold Mortgagee for the remainder of the
term hereof on the same terms and conditions as contained in this
Agreement. (If more than one Leasehold Mortgagee shall request
Head Lessor to enter into a new lease, Head Lessor shall enter
into such a new lease with the requesting Leasehold Mortgagee
holding the highest priority Leasehold Mortgage. If two or more
requesting Leasehold Mortgagees share the highest priority, the
new lease shall name all such Leasehold Mortgagees as co-tenants
thereunder.)
(ii) The estate of any Leasehold Mortgagee, as lessee
under such a new lease, shall have the same priority as the
estate of Head Lessee created under this
5
445
Agreement. If the Facility 2 Lease Agreement or Facility 2
Purchase Agreement are in effect at the time of execution of such
new lease, such new lease shall be made subject to Lessee's
rights under the Facility 2 Lease Agreement and the Facility 2
Purchase Agreement.
(e) No modification or early termination of this Agreement shall
be effective without the consent of a Leasehold Mortgagee if (A) Head
Lessee has agreed with such Leasehold Mortgagee that such Leasehold
Mortgagee's consent will be required for any such modification or early
termination and (B) Head Lessor has been notified of such agreement.
(f) No Leasehold Mortgagee will assume any liability under this
Agreement either by virtue of its Leasehold Mortgage or by any
subsequent receipt or collection of rents or profits generated from the
Facility 2 Property, unless and until the Leasehold Mortgagee acquires
Head Lessee's leasehold interest in the Facility 2 Property at
foreclosure or by deed in lieu of foreclosure.
3.08. Assignments and Subletting. Head Lessee may sublease the Facility
2 Property and sell or assign its rights under this Agreement at any time during
the term of this Agreement.
3.09. Utility Charges. Head Lessee shall pay or cause to be paid all
charges for electricity, power, gas, oil, water, telephone, sanitary sewer
service and all other utilities and services to, on or in connection with the
Facility 2 Property during the term of this Agreement.
3.10. Removal of Property. All Improvements to the Facility 2 Property
and all other Property (other than the Facility 2 Land) may be removed by Head
Lessee at any time at or prior to the termination of this Agreement.
3.11. Estoppel Certificates. Each party shall, within ten (10) Business
Days after receipt of a written request from the other party, deliver a written
statement to the requesting party stating the date to which the rent and other
charges have been paid, whether this Agreement is unmodified and in full force
and effect, and any other matters that may reasonably be requested.
3.12. Recordation of Agreement. Neither Head Lessor nor Head Lessee
shall file or record this Agreement without the prior written consent of the
other party, but the parties will execute a good and sufficient memorandum of
lease for purposes of recording. Upon the expiration or earlier termination of
this Agreement, Head Lessee shall promptly execute, acknowledge and deliver to
Head Lessor any quitclaim deed or other document required by Head Lessor or a
title company to evidence the termination of Head Lessee's interests in the
Facility 2 Property.
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SECTION 4. TERMINATION.
4.01. Termination Date.
(a) Early Termination. This Agreement shall continue in full
force and effect until the Head Lease Scheduled Expiration Date, except
that Head Lessee may terminate this Agreement at any time upon one (1)
month's prior written notice to Head Lessor; provided, however, in no
event shall Head Lessee exercise the right of termination prior to the
Expiration Date of the Facility 2 Lease Agreement unless an Event of
Default has occurred and is continuing under the Facility 2 Lease
Agreement and Lessee's right to remain in possession is terminated.
(b) No Other Early Termination Date. Except as provided in
Subparagraph 4.01(a), this Agreement shall not terminate prior to the
Head Lease Scheduled Expiration Date for any reason including, without
limitation, (i) any Casualty to or Condemnation of all or any part of
the Facility 2 Property, (ii) the occurrence of any Head Lease Event of
Default or any other default by Head Lessee under this Agreement or
(iii) any other cause whether similar or dissimilar to the foregoing,
any existing or future law to the contrary notwithstanding; provided,
however, that this Subparagraph 4.01(b) shall not abrogate any right
Head Lessor may have to recover damages or seek an injunction pursuant
to Paragraph 5.02. It is the intention of the parties hereto that the
obligations of Head Lessor hereunder shall be separate and independent
of the covenants and agreements of Head Lessee.
4.02. Surrender of Facility 2 Property. Unless Head Lessee (or an
assignee of Head Lessee) purchases the Facility 2 Property prior thereto, Head
Lessee shall vacate and surrender the Facility 2 Property to Head Lessor in its
then-current condition on the date (the "Head Lease Expiration Date") that is
the earlier of (a) the Head Lease Scheduled Expiration Date and (b) any earlier
date on which this Agreement is terminated pursuant to Subparagraph 4.01(a).
SECTION 5. DEFAULT.
5.01. Head Lease Events of Default. The occurrence or existence of any
one or more of the following shall constitute a "Head Lease Event of Default"
hereunder:
(a) Non-Payment. Head Lessee shall fail to pay the rent payable
hereunder within sixty (60) days after the Head Lease Commencement Date;
or
(b) Other Defaults. Head Lessee shall fail to observe or perform
any other covenant, obligation, condition or agreement contained in this
Agreement and such failure shall continue for a period of sixty (60)
days after written notice thereof from Head Lessor; provided, however,
that in the event that such failure cannot reasonably be cured within
such sixty (60) day period, such failure shall not constitute an Event
of Default hereunder so long as Head Lessee shall have commenced to cure
such failure within such sixty (60) day period and shall thereafter
diligently pursue such cure to completion, provided further that such
failure shall in all events be cured by the earlier of (i) the Head
7
447
Lease Scheduled Expiration Date and (ii) one hundred and eighty days
(180) days after Head Lessor's notice thereof.
5.02. Remedies. Upon the occurrence or existence of any Head Lease Event
of Default and at any time thereafter unless such Head Lease Event of Default is
waived, Head Lessor may sue Head Lessee for the collection of any amount due
under this Agreement or to enjoin the continuation of the Head Lease Event of
Default; provided, however, that such remedies are the sole and exclusive
remedies of Head Lessor hereunder. Head Lessor may not terminate this Agreement
or Head Lessee's right to possession under this Agreement except as expressly
provided herein.
5.03. Limited Recourse. Neither a Head Lessee that is a Lessor Party nor
any of its Affiliates or any of their respective directors, officers, employees,
agents, attorneys and advisors shall have any personal liability for the payment
of or performance of any obligations of Head Lessee under this Agreement. Any
judgment which Head Lessor may obtain against a Head Lessee that is a Lessor
Party for amounts due under this Agreement may be collected only through resort
to a judgment lien against Head Lessee's interest in the Facility 2 Property.
SECTION 6. PURCHASE OPTION.
6.01. Grant of Options
(a) All of the Property. Head Lessor hereby grants to Head Lessee
(or its assignee) the right to purchase all of the Facility 2 Property
at any time upon one (1) month's prior written notice following the
occurrence of any one of the following events:
(i) Lessee exercises the Term Purchase Option, the
Expiration Date Purchase Option or the Marketing Option pursuant
to the Facility 2 Purchase Agreement; or
(ii) An Event of Default occurs under the Facility 2 Lease
Agreement.
Head Lessee (or its assignee) shall pay a purchase price for the
Facility 2 Property under this Subparagraph 6.01(a) in an amount of
$1,000.00 (the "Head Lease Option Price").
(b) Partial Purchase. Head Lessor hereby grants to Head Lessee
(or its assignee) the right to purchase a portion of the Facility 2
Property at any time upon one (1) months' prior written notice following
any exercise by Lessee of the Partial Purchase Option pursuant to the
Facility 2 Purchase Agreement. If Head Lessee exercises the purchase
option under this Subparagraph 6.01(b), (i) Head Lessee may purchase the
portion of the Facility 2 Property for which Lessee is exercising the
Partial Purchase Option and (ii) Head Lessee shall pay a purchase price
for such portion in an amount (the "Head Lease Partial Purchase Option
Price") equal to the product of (A) $1,000.00 times (B) a fraction, the
numerator of which is the amount to be paid by Lessee for such portion
under the Facility 2 Purchase Agreement and the denominator of which is
the Outstanding Lease Amount under Facility 2 immediately prior to such
payment.
8
448
6.02. Terms.
(a) Upon Head Lessee's (or its assignee's) tender of the Head
Lease Option Price or the Head Lease Partial Purchase Option Price, as
the case may be, to Head Lessor, Head Lessor will convey and assign good
and marketable title to the Facility 2 Property or the applicable
portion thereof, as the case may be, to Head Lessee (or its assignee)
subject only to the Permitted Property Liens of the types described in
clauses (i), (ii), (iii) and (v) of Subparagraph 3.07(a) of the Facility
2 Lease Agreement.
(b) Head Lessee's (or its assignee's) obligation to close the
purchase shall be subject to the following terms and conditions, all of
which are for the benefit of Head Lessee (or its assignee):
(i) Head Lessee (or its assignee) shall have been
furnished with evidence satisfactory to Head Lessee (or its
assignee) that Head Lessor can convey title as required by the
preceding subparagraph.
(ii) Nothing shall have occurred or been discovered after
Head Lessee exercised the Head Lease Purchase Option that could
adversely affect the title to or value of the Facility 2 Property
or the applicable portion thereof, as the case may be, or the
Head Lessee's (or its assignee's) use thereof.
SECTION 7. MISCELLANEOUS.
7.01. Notices. Except as otherwise specified herein, (a) all notices,
requests, demands, consents, instructions or other communications to or upon
Head Lessee or Head Lessor under this Agreement given on or prior to the
Expiration Date of the Facility 2 Lease Agreement shall be given as provided in
Subparagraph 2.02(c) and Paragraph 7.01 of the Participation Agreement and (b)
all notices, requests, demands, consents, instructions or other communications
to or upon Head Lessee or Head Lessor under this Agreement given after the
Expiration Date of the Facility 2 Lease Agreement shall be in writing and faxed,
mailed or delivered to its respective facsimile number or address set forth in
Paragraph 7.01 of the Participation Agreement (or to such other facsimile number
or address for either party as indicated in any notice given by that party to
the other party). All such notices and communications shall be effective (i)
when sent by Federal Express or other overnight service of recognized standing,
on the Business Day following the deposit with such service; (ii) when mailed,
first class postage prepaid and addressed as aforesaid through the United States
Postal Service, upon receipt; (iii) when delivered by hand, upon delivery; and
(iv) when faxed, upon confirmation of receipt.
7.02. Waivers; Amendments. Until the Expiration Date of the Facility 2
Lease Agreement and the satisfaction in full of all Lessee Obligations or, if
earlier, the date on which Head Lessee sells or assigns this Agreement, any
term, covenant, agreement or condition of this Agreement may be amended or
waived only as provided in the Participation Agreement. Thereafter, any term,
covenant, agreement or condition of this Agreement may be amended or waived if
such amendment or waiver is in writing and is signed by Head Lessor and Head
Lessee.
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449
No failure or delay by either party in exercising any right hereunder shall
operate as a waiver thereof or of any other right nor shall any single or
partial exercise of any such right preclude any other further exercise thereof
or of any other right. Unless otherwise specified in any such waiver or consent,
a waiver or consent given hereunder shall be effective only in the specific
instance and for the specific purpose for which given.
7.03. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the Head Lessor and Head Lessee and their permitted
successors and assigns; provided, however, that Head Lessor and Head Lessee
shall not sell, assign or delegate their respective rights and obligations
hereunder except as provided in this Agreement or the Participation Agreement.
7.04. No Third Party Rights. Nothing expressed in or to be implied from
this Agreement is intended to give, or shall be construed to give, any Person,
other than Head Lessor, Head Lessee and the Lessor Parties Lessee and their
permitted successors and assigns, any benefit or legal or equitable right,
remedy or claim under or by virtue of this Agreement or under or by virtue of
any provision herein.
7.05. Partial Invalidity. If at any time any provision of this Agreement
is or becomes illegal, invalid or unenforceable in any respect under the law or
any jurisdiction, neither the legality, validity or enforceability of the
remaining provisions of this Agreement nor the legality, validity or
enforceability of such provision under the law of any other jurisdiction shall
in any way be affected or impaired thereby.
7.06. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of California without reference to
conflicts of law rules.
7.07. Counterparts. This Agreement 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.
[The signature page follows.]
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450
IN WITNESS WHEREOF, Head Lessor and Head Lessee have caused this
Agreement to be executed as of the day and year first above written.
HEAD LESSOR: LEASE PLAN NORTH AMERICA, INC.
By:_____________________________________
Name:________________________________
Title:_______________________________
HEAD LESSEE: ABN AMRO LEASING, INC.
By:_____________________________________
Name:________________________________
Title:_______________________________
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EXHIBIT A
FACILITY 2 LAND
LEGAL DESCRIPTION
90 HEADQUARTERS DRIVE
(FACILITY 2)
The land situated in the City of San Jose, County of Santa Clara, State of
California, and described as follows:
Parcel 3, as shown on Parcel Map filed July 13, 1984 in Book 531 of Maps at
pages 41 and 42, Santa Clara County Records.
APN: 097-79-003
ARB: 097-03-005.02
A-1
452
EXHIBIT B
RELATED GOODS
NONE
B-1
453
EXHIBIT B(1)
SUPPLEMENT TO EXHIBIT B TO LEASE AGREEMENT
[Date]
Lease Plan North America, 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
1. Reference is made to that certain Facility 2 Head Lease Agreement,
dated as of April 13, 2001 (the "Lease Agreement"), between Lease Plan North
America, Inc. ("Head Lessor") and ABN AMRO Leasing, Inc. ("Head Lessee").
2. Head Lessee hereby agrees that the description of "Related Goods" set
forth in Exhibit B to the Lease Agreement shall be supplemented by adding
thereto the Related Goods described in Attachment 1 hereto. Head Lessee hereby
accepts all such Related Goods and agrees that such Related Goods constitute
part of the Facility 2 Property subject to the Lease Agreement.
IN WITNESS WHEREOF, Head Lessee has executed this Supplement to Exhibit
B on the date set forth above.
LESSEE: LEASE PLAN NORTH AMERICA, INC.
By:_____________________________________
Name:________________________________
Title:_______________________________
LESSOR: ABN AMRO LEASING, INC.
By:_____________________________________
Name:________________________________
Title:_______________________________
B(1)-1
454
ATTACHMENT 1
TO
SUPPLEMENT TO EXHIBIT B
B(1)-2
455
SCHEDULE 1
HAZARDOUS MATERIALS USED ON THE FACILITY 2 PROPERTY
As set forth in that certain Hazardous Materials Business Plan
(HMBP) for Novellus Systems, Inc. dated 4/1/97 prepared by Environmental Quality
Solutions.
B(1)-1