1
EXHIBIT 10.6
EXECUTION COPY
[Novellus V]
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PARTICIPATION AGREEMENT
AMONG
NOVELLUS SYSTEMS, INC.
AND
ABN AMRO LEASING, INC.
AND
THE PARTICIPANTS NAMED HEREIN
AND
ABN AMRO BANK N.V.,
AS AGENT FOR THE PARTICIPANTS
APRIL 18, 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 FACILITY................................................ 2
2.01. Acquisition, Lease, Amount Limitations, Etc...................... 2
2.02. Participation Agreement.......................................... 3
2.03. Advance Requests................................................. 4
2.04. Fees............................................................. 6
2.05. Funding of Advances.............................................. 7
2.06. Sharing of Payments.............................................. 8
2.07. Other Payment Terms.............................................. 10
2.08. Commitment Reductions............................................ 11
2.09 Extensions....................................................... 12
2.10. Nature of the Transaction........................................ 13
2.11. Security......................................................... 14
2.12. Change of Circumstances.......................................... 16
2.13. Taxes on Payments................................................ 19
2.14. Funding Loss Indemnification..................................... 20
2.15. Replacement of Participants...................................... 21
SECTION 3. CONDITIONS PRECEDENT.......................................... 21
3.01. Initial Advance.................................................. 21
3.02. Subsequent Advances.............................................. 22
3.03. Other Conditions Precedent....................................... 22
3.04. Covenant to Deliver.............................................. 22
SECTION 4. REPRESENTATIONS AND WARRANTIES................................ 22
4.01. Lessee's Representations and Warranties.......................... 22
4.02. Lessor's Representations and Warranties.......................... 28
4.03. Participants' Representations and Warranties..................... 29
SECTION 5. COVENANTS..................................................... 31
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TABLE OF CONTENTS
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5.01. Lessee's Affirmative Covenants................................... 31
5.02. Lessee's Negative Covenants...................................... 34
5.03. Lessee's Financial Covenants..................................... 40
5.04. Lessor's Covenants............................................... 42
5.05. Participants' Covenants.......................................... 43
SECTION 6. LESSOR, AGENT AND THEIR RELATIONS WITH PARTICIPANTS........... 43
6.01. Appointment of Agent............................................. 43
6.02. Powers and Immunities............................................ 43
6.03. Reliance......................................................... 44
6.04. Defaults......................................................... 44
6.05. Indemnification.................................................. 44
6.06. Non-Reliance..................................................... 44
6.07. Resignation or Removal of Agent.................................. 45
6.08. Authorization.................................................... 45
6.09. Lessor and Agent in their Individual Capacities.................. 45
SECTION 7. MISCELLANEOUS................................................. 46
7.01. Notices.......................................................... 46
7.02. Expenses......................................................... 47
7.03. Indemnification.................................................. 48
7.04. Waivers; Amendments.............................................. 48
7.05. Successors and Assigns........................................... 49
7.06. Setoff........................................................... 54
7.07. No Third Party Rights............................................ 54
7.08. Partial Invalidity............................................... 54
7.09. JURY TRIAL....................................................... 54
7.10. Counterparts..................................................... 54
7.11. No Joint Venture, Etc. .......................................... 54
7.12. Usury Savings Clause............................................. 54
7.13. Confidentiality.................................................. 55
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TABLE OF CONTENTS
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7.14. Governing Law.................................................... 55
7.15. Consent to Jurisdiction.......................................... 55
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TABLE OF CONTENTS
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SCHEDULES
I Participants
1.01 Definitions
1.02 Rules of Construction
3.01 Conditions Precedent to Initial Advance
4.01(g) Litigation
4.01(q) Subsidiaries
4.01(t) Hazardous Materials
5.02(a) Existing Indebtedness
5.02(b) Existing Liens
5.02(e) Existing Investments
EXHIBITS
A Land (Recital A; 4.01(t); Schedule 1.01))
B Lease Agreement (2.01(a))
C Purchase Agreement (2.01(a))
D Construction Agency Agreement (2.01(a))
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 Cash Collateral Agreement (2.11(a))
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 Ground Lease Agreement (2.01(a))
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PARTICIPATION AGREEMENT
THIS PARTICIPATION AGREEMENT (this "Agreement" herein), dated as of
April 18, 2001, is entered into by and among:
(1) NOVELLUS SYSTEMS, INC., a California corporation
("Lessee" or "Novellus");
(2) ABN AMRO LEASING, INC., an Illinois corporation
("Lessor");
(3) 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
(4) ABN AMRO BANK N.V., as agent for the Participants (in
such capacity, "Agent").
RECITALS
A. Lessee currently owns the land described in Exhibit A (as more
fully defined in Schedule 1.01, the "Land").
B. Lessee has requested Lessor and the Participants to provide to
Lessee a lease facility pursuant to which:
(1) Lessor would (a) lease the Land from Lessee, (b)
sublease back to Lessee the Land and lease to Lessee certain
improvements to be constructed on the 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 Lessor's leasehold interest in the Land and Lessor's interest
in such improvements; 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.
C. Lessor and the Participants are willing to provide such lease
facility upon the terms and subject to the conditions set forth herein.
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, 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.
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 FACILITY.
2.01. Acquisition, Lease, Amount Limitations, Etc.
(a) Acquisition, Lease, Etc. Subject to the terms and
conditions of this Agreement (including the limitations set forth in
Subparagraph 2.01(b)):
(i) On the date specified by Lessee pursuant to
Subparagraph 2.03(a) for the initial advance hereunder (the
"Closing Date"):
(A) Lessor and Lessee shall execute a
ground lease in the form of Exhibit M (the "Ground
Lease"), pursuant to which Lessee leases to Lessor
the Land; and
(B) Immediately upon the execution by
Lessor and Lessee of the Ground Lease, Lessor and
Lessee shall execute (1) a Lease Agreement in the
form of Exhibit B (the "Lease Agreement"), pursuant
to which Lessor subleases back to Lessee Lessor's
leasehold interest in the Land and leases to Lessee
Lessor's rights in the improvements to the Land; (2)
a Purchase Agreement in the form of Exhibit C (the
"Purchase Agreement"), pursuant to which Lessor
grants to Lessee the right to purchase such
improvements to the Land together with Lessor's
leasehold interest in the Land, and (3) a
Construction Agency Agreement in the form of Exhibit
D (the "Construction Agency Agreement"), pursuant to
which Lessee agrees to construct such improvements to
the Land; and
(ii) 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 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 advances to Lessee (with funds
provided by the Participants) to pay Permitted Improvement
Costs and Permitted Transaction Expenses ("Advances").
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(b) Amount Limitations. The aggregate amount of all
Advances made by Lessor shall not exceed the lesser of (A) One Hundred,
Seventy Million Dollars ($170,000,000) (the "Total Commitment") and (B)
the Expiration Date Appraisal for the Property.
(c) 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 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 (other than
Novellus) 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 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
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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 (A)
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 and (B) any right,
title or interest held by Lessee in its capacity as such and
not by Novellus as a Participant.
(d) Participation by Novellus. On the Completion Date,
ABN AMRO shall sell and assign and Novellus shall purchase and assume
pursuant to Subparagraph 7.05(b) ABN AMRO's Outstanding Tranche A
Participation Amount and all of ABN AMRO's other rights and obligations
under this Agreement and the other Operative Documents relating
thereto, and the Tranche A Percentage and Tranche A Portion. Except as
otherwise expressly provided in this Agreement or the other Operative
Documents, Novellus, upon such purchase, shall become a Participant
with the rights, duties and obligations thereof as provided in
Subparagraph 7.05(b) and, in its capacity as such, shall be included in
the term "Participant," "Tranche A Participant" and "Lessor Party."
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 amount of such Advance, which
shall be in the minimum amount of $10,000 or an
integral multiple of $10,000 in excess thereof;
(B) 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 Advance and (2) the
first Business Day of a calendar month in the case of
all other Advances; and
(C) 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
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
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(B) Bills of sale for all such Related
Goods showing Lessor as the purchaser.
Lessee shall not request more than one (1) Advance in any calendar
month.
(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 pursuant to the terms of the
Operative Documents:
(A) Any Base Rent payable by Lessee
during the Construction Period under the 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
(C) Any increased costs or reduced
amounts that would be payable by Lessee during the
Construction Period 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 and shall be included in the Outstanding Lease
Amount for all purposes, including the calculation of the Base
Rent payable by Lessee under the Lease Agreement after the
Construction Period and the calculation of the Residual Value
Guaranty Amount under the Purchase Agreement.
(ii) Lessee also shall not be required to pay the
following amounts unless Lessee purchases the 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 pursuant to Paragraph
7.03 but for the proviso to such paragraph;
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(B) Any losses or liabilities not
constituting Project Costs and not covered by
insurance that would be payable by Lessee during the
Construction Period pursuant to Paragraph 3.02 of the
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, 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 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 and shall be included in the
Outstanding Lease Amount; provided, however, that, if Lessee
exercises the Marketing Option in accordance with the 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 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.
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
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"Commitment Fees") equal to the Commitment Fee Percentage of the daily
average Unused Total 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. Each
Participant shall, before 11:00 a.m. 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 directed by Lessee in the Advance
Request for such Advance.
(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
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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.
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 as follows:
(i) Each payment of the Outstanding Lease Amount
derived from the purchase price paid by Lessee (or an Assignee
Purchaser) to purchase the Property pursuant to the Purchase
Agreement shall be shared by the Participants pro rata
according to their respective Outstanding Participation
Amounts at the time of such payment.
(ii) Each payment of the Outstanding Lease Amount
derived from:
(A) the Residual Value Guaranty Amount
paid by Lessee pursuant to the Purchase Agreement; or
(B) the Principal Component of Base
Rent;
Shall be shared first by the Tranche A Participants pro rata
according to their respective Outstanding Tranche A
Participation Amounts at the time of such payment; second, if
any amounts remain after all Outstanding Tranche A
Participation Amounts are paid in full, by the Tranche B
Participants pro rata according to their respective
Outstanding Tranche B Participation Amounts at the time of
such payment; and third, if any amounts remain after all
Outstanding Tranche A Participation Amounts and all
Outstanding Tranche B Participation Amounts are paid in full,
by the Tranche C Participants pro rata according to their
respective Outstanding Tranche C Participation Amounts at the
time of such payment.
(iii) Each payment of the Outstanding Lease Amount
derived from:
(A) the purchase price paid by a
Designated Purchaser to purchase the Property
pursuant to the Purchase Agreement;
(B) the Indemnity Amount paid by Lessee
pursuant to the Purchase Agreement;
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(C) Casualty Proceeds or Condemnation
Proceeds related to any of the Property; or
(D) the purchase price paid by any
other Person (except as otherwise provided in clause
(i) above) to purchase the Property (whether after
the retention of such Property by Lessor following
the Expiration Date of the Lease Agreement, upon
foreclosure or otherwise);
Shall be shared first by the Tranche B Participants pro rata
according to their respective Outstanding Tranche B
Participation Amounts at the time of such payment; second, if
any amounts remain after all Outstanding Tranche B
Participation Amounts are paid in full, by the Tranche A
Participants pro rata according to their respective
Outstanding Tranche A Participation Amounts at the time of
such payment; and third, if any amounts remain after all
Outstanding Tranche B Participation Amounts and all
Outstanding Tranche A Participation Amounts are paid in full,
by the Tranche C Participants pro rata according to their
respective 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 is sold to a Designated Purchaser
pursuant to the Marketing Option in the Purchase Agreement,
any proceeds of Cash Collateral shall be applied as follows:
(A) prior to the Completion Date, such
proceeds shall be applied only in satisfaction of the
obligations of Lessee in respect of the Residual
Value Guaranty Amount applicable to such Property 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 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; and
(B) following the Completion Date, such
proceeds shall be applied only in satisfaction of the
obligations of Lessee in respect of the Residual
Value Guaranty Amount 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
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such other Lessee Obligations as are then due and
owing; provided that any portion of such proceeds
which are applied to the Residual Value Guaranty
Amount shall be shared only among the Tranche A
Participants, if any, other than Novellus, pro rata
in accordance with their respective Tranche A
Outstanding Amounts. Any 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 among the
Participants which funded the Outstanding Lease Amount 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 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 Commitment Fees
shall be shared by the Participants pro rata according to (A)
their respective Proportionate Shares and (B) in the case of
each Participant which becomes a Participant hereunder after
the date hereof, the date upon which such Participant so
became a 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.
(vi) All other payments under this Agreement and
the other Operative Documents shall be for the benefit of the
Person or Persons specified.
(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
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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 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 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,
second to the accrued Interest Component of Base Rent then due and
payable under this Agreement or any other Operative Document and
finally to the Principal Component of Base Rent or otherwise to reduce
the Outstanding Lease Amount.
(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
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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.
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
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 Commitment in its entirety.
(b) Effect of Commitment Reductions. From the effective
date of any reduction of the Total Commitment, the Commitment Fees
shall be computed on the basis of the Total Commitment as so reduced.
Once reduced or cancelled, the Total Commitment may not be increased or
reinstated without the prior written consent of Lessor and all
Participants. Any reduction of the Total Commitment pursuant to this
Paragraph 2.08 shall be applied ratably to reduce each Participant's
Commitment pro rata in accordance with its 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
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Subparagraph 2.09(a), then not later than ten (10) Business Days prior
to the original 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 the 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 (other than Novellus) three (3) copies of
each Lease Extension Request received by Agent. If Lessor or a
Participant (other than Novellus), 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. Any failure by Lessor or any Participant (other than
Novellus) 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, Agent shall notify Lessee, Lessor and the Participants (other
than Novellus) in writing whether (i) Agent has received a copy of the
Lease Extension Request executed by Lessor and each Participant (other
than Novellus), in which case the definition of "Scheduled Expiration
Date" set forth in Subparagraph 2.02(a) of the 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 (other than Novellus), 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
at any time.
2.10. Nature of the Transaction. Lessee and the Lessor Parties
intend that the transaction evidenced by this Agreement and the other Operative
Documents constitute an operating lease pursuant to FASB 13 for accounting
purposes and a loan 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 transaction evidenced by the Operative
Documents shall be treated as a loan 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 transaction evidenced by the
Operative Documents shall be treated as a loan 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 Expiration Date only the Residual Value Guaranty Amount, the
Indemnity Amount and the other amounts required by Subparagraph 4.06(b)
of the Purchase Agreement (or Subparagraph 4.06(c) if Lessor is
retaining the Property) if Lessee exercises the Marketing Option in
accordance with the Purchase Agreement; and (v) Lessee be required to
pay on the Expiration Date the 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
Purchase Agreement) if the Lease Agreement is terminated prior to its
Scheduled Expiration Date after an Event of Default occurs under the
Lease Agreement or if Lessee fails to or is otherwise not entitled to
exercise the Marketing Option in accordance with the Purchase
Agreement.
(c) No Reliance by Lessee. Lessee acknowledges and agrees
that no Lessor Parties 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.
2.11. Security.
(a) Lessee Obligations.
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(i) To the extent that the transaction evidenced
by the Lease Agreement, Purchase Agreement and other Operative
Documents is treated as a loan by the Participants (through
Lessor) to Lessee secured by the Property, with Lessee as
owner of the Property pursuant to Paragraph 2.10, the Lessee
Obligations shall be secured by the Real Property Collateral
and the Personal Property Collateral (collectively, the
"Property Collateral") as provided in Subparagraphs 2.07(a)
and 2.07(b) of the Lease Agreement and in an Assignment of
Construction Agreements in the form of Exhibit G, duly
executed by Lessee (the "Assignment of Construction
Agreements").
(ii) In addition to the Property Collateral, the
Lessee Obligations shall be secured by a Cash Collateral
Agreement in the form of Exhibit H duly executed by Lessee
(the "Cash Collateral Agreement") and Cash Collateral as
provided below:
(A) Until the purchase by Novellus of
ABN AMRO's Outstanding Tranche A Participation Amount
pursuant to Subparagraph 2.02(d), Lessee shall, as
security for the Lessee Obligations, maintain with a
third-party custodian (which is not an Affiliate of
Lessee, Lessor or any of the Participants) pursuant
to the Cash Collateral Agreement Cash Collateral in
the form of United States Treasury Securities that
have an aggregate market value not less at any time
than 111% of the Outstanding Lease Amount at such
time.
(B) After the purchase by Novellus of
ABN AMRO's Outstanding Tranche A Participation Amount
pursuant to Subparagraph 2.02(d) and until the
Expiration Date of the Lease Agreement and the
satisfaction in full by Lessee of all Lessee
Obligations, Lessee shall, as security for the
Outstanding Tranche B Participation Amounts and
Outstanding Tranche C Participation Amounts, maintain
with Agent, Tranche B Participants and Lessor
pursuant to the Cash Collateral Agreement Cash
Collateral that has an aggregate market value not
less at any time than 100% of the sum of the
Outstanding Tranche B Participation Amounts and
Outstanding Tranche C Participation Amounts at such
time.
At the time Lessee first delivers any Cash Collateral to Agent
or Participants pursuant to this clause (ii) and as a
condition precedent to the obligation of Lessor to make any
subsequent Advance following the initial Advance set forth in
Paragraph 3.01, Lessee also shall deliver to Lessor 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.
(iii) Lessee shall deliver to Lessor and Agent
such additional mortgages, deeds of trust, security
agreements, pledge agreements, control
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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 Cash Collateral
prior to the Liens or other interests of 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 Ground Lease,
Lease Agreement and Purchase Agreement 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.
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(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 such Rental Period and Portion does not
adequately and fairly reflect the cost to such Participants of
funding their shares of such Portion, 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 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 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, 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; or
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(iii) Shall impose on Lessor or any
Participant any other condition related to the
Outstanding Lease Amount, Base Rent or Lessor's or
such Participant's commitments hereunder;
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 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 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 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 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
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computation of any such increased costs, delivered by such Person to
Lessee shall 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 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 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 by Lessee 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 (in its capacity as such) 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 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. 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 (other than
Novellus) 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 (other than
Novellus) 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 Advance. The obligation of Lessor to enter into the
Ground Lease and to make the initial Advance hereunder (and the obligations of
the Participants to fund their respective Proportionate Shares of the initial
Advance 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. The amount of the
initial Advance shall be limited to the amount of costs incurred by Lessee on or
prior to the Closing Date which are described in clauses (c), (e), (f), (g) and
(i) of the definition of Permitted Transaction Expenses set forth in Schedule
1.01.
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; (c) receipt by Agent of
date-down endorsements to Agent's and Lessor's title insurance policies or
binders acceptable to Agent and Lessor; and (d) delivery by Lessee of Cash
Collateral as required by Subparagraph 2.11(a) and the Cash Collateral Agreement
(and, if appropriate, any necessary Securities Account Control Agreement or
Deposit Account Control Agreement, duly executed by the appropriate parties).
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 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. The representations and warranties set forth in Schedule
4.01(g) are true and correct.
(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
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filed by 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 presently subject to grievance procedure, arbitration or
litigation under any of
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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.
(i) The Land consists of approximately 23.018
acres located in the City of Tualatin, Washington County,
Oregon, more particularly described in Exhibit A.
(ii) Upon the completion of the New Improvements
on the Land, the Improvements on the Land will consist of a
two-story, 154,459 square foot manufacturing building, a
two-story, 68,660 square foot engineering/R&D/applications
building, a four-story, 129,095 square foot technical site
services building, a 26,752 square foot CUB mechanical
building, and a bulk gas storage area, together with parking,
landscaping, recreational and related facilities, amenities
and improvements.
(iii) Access to the Land for pedestrians and motor
vehicles from publicly dedicated streets and public highways
is available.
(iv) No portion of the 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 Lease Agreement and the National Flood Insurance
Act of 1968.
(v) 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. Except as set forth in Schedule 4.01
(t)(v), 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. All listed
Hazardous Materials were used, stored, and transported in
accordance with Applicable Laws. Other than as listed on
Schedule 4.01(t), 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
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Authority or any other Person relating to Hazardous Materials
or pursuant to any Environmental Laws.
(vi) 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.
(vii) 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.
(viii) Lessee has a good and valid fee simple title
to the Property, subject to no Liens except for Permitted
Property Liens. After the execution by Lessor and Lessee of
the Ground Lease on the Closing Date, Lessor will have good
and valid leasehold interest in the Property, subject to no
Liens except for Permitted Property Liens.
(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
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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 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
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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 organization 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 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.
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(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:
(a) Financial Statements, Reports, etc. Lessee shall
furnish to Agent, with sufficient copies for Lessor and each
Participant (other than Novellus), 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
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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 possible and in no event later
than five (5) Business Days after any Senior Officer of Lessee
knows of the occurrence or existence of (A) any Reportable
Event (excluding any Reportable Event for which the provision
of a 30-day notice to the PBGC has been waived by regulation)
under any Employee Benefit Plan or Multiemployer Plan; (B) any
actual or threatened litigation, suits, claims or disputes
against Lessee or any of its Subsidiaries involving potential
monetary damages payable by Lessee or its Subsidiaries of
$10,000,000 or more (alone or in the aggregate); (C) any other
event or condition which is reasonably likely to have a
Material Adverse Effect; or (D) any Default; the statement of
the president or chief financial officer of Lessee setting
forth details of such event, condition or Default and the
action which Lessee proposes to take with respect thereto;
(v) 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;
(vi) 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;
(vii) 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
(viii) 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.
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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.
(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 Agreement 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
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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
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 Amount 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);
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40
(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
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 Lessor
Parties (other than Novellus) 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;
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41
(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;
(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
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such Permitted Indebtedness and (C) such rights do not secure
any Indebtedness other than such Permitted Indebtedness;
(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 Lessor Parties (other than
Novellus) 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;
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43
(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;
(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:
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(i) Any Subsidiary of Lessee may merge or
consolidate with any other Subsidiary of Lessee;
(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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45
(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 of the IRC or section 302 of ERISA), (v) fail to
make full payment when due of all
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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 any 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 the Purchase Agreement or 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 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
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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 (other than
Novellus). 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 (other than Novellus).
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 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
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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
(other than Novellus), 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
(other than Novellus), 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 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.
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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.
c/o ABN AMRO Bank N.V.
135 South LaSalle Street, Suite 740
Chicago, IL 60603
Attn: David M. Shipley
Telephone: (312) 904-2183
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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 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
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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 (other than Novellus) in the enforcement or
attempted enforcement of any of the Lessee Obligations or in exercising or
preserving any of the Lessor Parties' (other than Novellus') 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' (other than Novellus) 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 attorneys' 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 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 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 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 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
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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, (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 the 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 the Purchase Agreement in accordance with Paragraph 2.02
of such Purchase Agreement, Lessee 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
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 (other than Novellus) 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.
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.
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(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 (except that ABN AMRO may make an Assignment
to Novellus pursuant to Subparagraph 2.02(d)).
(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).
(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 which does
not assign and delegate an equal pro rata interest in
(1) such Participant's Tranche A Percentage, and (2)
such Participant's other rights, duties and
obligations relating to the Tranche A Portion under
this Agreement and the other Operative Documents.
(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
Participant may make any Assignment of its
Outstanding Tranche B Participation Amount which does
not assign and delegate an equal pro rata interest in
(1) such Participant's Tranche B Percentage, and (2)
such Participant's other rights, duties and
obligations relating to the Tranche B Portion under
this Agreement and the other Operative Documents.
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(E) 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 which does
not assign and delegate an equal pro rata interest in
(1) such Participant's Tranche C Percentage, and (2)
such Participant's other rights, duties and
obligations relating to the Tranche C Portion under
this Agreement and the other Operative Documents.
(F) Without the written consent of
Lessor and Agent (which consent of Lessor and Agent
shall not be unreasonably withheld), Novellus may not
make any Assignment of its Outstanding Tranche A
Participation Amount, its Tranche A Percentage or its
other rights, duties and obligations relating to the
Tranche A Portion under this Agreement and the other
Operative Documents. In the event of such a permitted
Assignment, the assignee shall acquire such interest
without being subject to any of the limitations which
may have applied to the rights of the holder thereof
while such holder was Novellus.
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 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 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%, 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% 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
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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 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 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 (other
than Novellus except in compliance with Subparagraph 7.05(b)(F)) may at
any time sell to one or more Persons ("Subparticipants")
subparticipation interests in the rights and interests of such
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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 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 transaction evidenced by this Agreement and the
other Operative Documents to lose its treatment as an
operating lease 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,
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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 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 (other than Novellus) 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. This Agreement and the other Operative
Documents were accepted by the Lessor Parties in the state of California, which
state the parties agree has a substantial relationship to the parties and to the
underlying transaction embodied hereby. Accordingly, in all respects, including,
without limiting the generality of the foregoing, matters of construction,
validity, enforceability and performance, this Agreement and the other Operative
Documents and the obligations arising hereunder and thereunder shall be governed
by, and construed in accordance with, the laws of the state of California
applicable to contracts made and performed in such state and any applicable law
of the United States of America, except that at all times the provisions for
enforcement of Lessor's STATUTORY POWER OF SALE granted under the Lease
Agreement and the creation, perfection and enforcement of the real property and
security interests created pursuant thereto and pursuant to the other Operative
Documents shall be governed by and construed according to the law of the state
where the Property is located.
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Except as provided in the immediately preceding sentence, Lessee hereby
unconditionally and irrevocably waives, to the fullest extent permitted by law,
any claim to assert that the law of any jurisdiction other than California
governs this Agreement and the other Operative Documents.
7.15. Consent to Jurisdiction. Lessee irrevocably submits to the
jurisdiction of: (a) any state or federal court sitting in the state of
California over any suit, action, or proceeding, brought by Lessee against
Lessor Parties, arising out of or relating to this Agreement or the other
Operative Documents; (b) any state or federal court sitting in the state where
the Property is located or the state in which Lessee's principal place of
business is located over any suit, action or proceeding, brought by Lessor
Parties against Lessee, arising out of or relating to this Agreement or the
other Operative Documents; and (c) any state court sitting in the county of the
state where the Property is located over any suit, action, or proceeding,
brought by Lessor Parties to exercise their STATUTORY POWER OF SALE under this
Agreement or any action brought by Lessor Parties to enforce their rights with
respect to the Collateral. Lessee irrevocably waives, to the fullest extent
permitted by law, any objection that Lessee may now or hereafter have to the
laying of venue of any such suit, action, or proceeding brought in any such
court and any claim that any such suit, action, or proceeding brought in any
such court has been brought in an inconvenient forum.
UNDER OREGON LAW, MOST AGREEMENTS, PROMISES AND COMMITMENTS MADE BY A
LENDER AFTER OCTOBER 3, 1989, CONCERNING LOANS AND OTHER CREDIT EXTENSIONS THAT
ARE NOT FOR PERSONAL, FAMILY OR HOUSEHOLD PURPOSES OR SECURED SOLELY BY THE
BORROWER'S RESIDENCE MUST BE IN WRITING, EXPRESS CONSIDERATION AND BE SIGNED BY
THE LENDER TO BE ENFORCEABLE.
[The first signature page follows.]
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IN WITNESS WHEREOF, Lessee, 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:_____________________________
LESSOR: ABN AMRO LEASING, INC.
By:______________________________________
Name:______________________________
Title:_____________________________
AGENT: ABN AMRO BANK N.V.
By:______________________________________
Name:______________________________
Title:_____________________________
By:______________________________________
Name:______________________________
Title:_____________________________
PARTICIPANTS: ABN AMRO BANK N.V.
By:______________________________________
Name:______________________________
Title:_____________________________
By:______________________________________
Name:______________________________
Title:_____________________________
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SCHEDULE I
PARTICIPANTS
PART A(1)
TRANCHE PERCENTAGES AND PROPORTIONATE SHARES
PRIOR TO THE COMPLETION DATE
TRANCHE A TRANCHE B TRANCHE C PROPORTIONATE
PARTICIPANT PERCENTAGE PERCENTAGE PERCENTAGE SHARE
----------- ---------- ---------- ---------- -----
ABN AMRO Bank N.V.(1) 89.90000000% 7.10000000% 0% 97.00000000%
ABN AMRO Leasing, Inc. 0% 0% 3.00000000% 3.00000000%
TOTAL 89.90000000% 7.10000000% 3.00000000% 100.00000000%
PART A(2)
TRANCHE PERCENTAGES AND PROPORTIONATE SHARES
ON AND AFTER THE COMPLETION DATE
TRANCHE A TRANCHE B TRANCHE C PROPORTIONATE
PARTICIPANT PERCENTAGE PERCENTAGE PERCENTAGE SHARE
----------- ---------- ---------- ---------- -----
ABN AMRO Bank N.V. 86.00000000% 11.00000000% 0% 97.00000000%
ABN AMRO Leasing, Inc. 0% 0% 3.00000000% 3.00000000%
TOTAL 86.00000000% 11.00000000% 3.00000000% 100.00000000%
- --------
(1) On the Completion Date, ABN AMRO shall sell and assign the Outstanding
Tranche A Participation Amount, Tranche A Percentage and Tranche A Portion to
Novellus in accordance with Paragraph 2.02(d) of this Agreement.
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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.
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
ABN AMRO Bank N.V.
101 California Street, Suite 4550
San Francisco, CA 94111
Attn: Joe Endoso
Tel. No: (415) 984-3718
Fax No: (415) 362-3524
ABN AMRO North America, Inc.
Capital Markets-Syndications Group
1325 Avenue of the Americas, 9th Floor
New York, NY 10019
Attn: Linda Boardman
Tel. No: (212) 314-1724
Fax No: (212) 314-1709
Wiring Instructions:
I-2
65
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 V
I-3
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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.: 071-000-505
Account Name: ABN AMRO Leasing, Inc.
Account No.: 2226951
Reference: Novellus Systems, Inc. Synthetic Lease V
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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(a) 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 (other
than Novellus) 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.
1.01-1
68
"Agent" shall mean ABN AMRO, acting in its capacity as Agent for the
Participants under the Operative Documents.
"Agent's Fee Letter" shall mean the letter agreement dated as of April
11, 2001, 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. With respect to the Outstanding Tranche A
Participation Amounts:
(i) During all periods on or prior to the Completion
Date, (A) 0.20% per annum with respect to the LIBOR Rental Rate,
or (B) 0% per annum with respect to the Alternate Rental Rate;
(ii) During all periods after the Completion Date, 0%
per annum;
(b) Tranche B. With respect to the Outstanding Tranche B
Participation Amounts:
(i) During all periods on or prior to the Completion
Date, (A) 0.35% per annum with respect to the LIBOR Rental Rate,
or (B) 0% per annum with respect to the Alternate Rental Rate;
(ii) During all periods after the Completion Date, 0.35%
per annum;
(c) Tranche C. With respect to the Outstanding Tranche C
Participation Amounts, during all periods, whether prior to, on or after
the Completion Date, (i) 1.80% per annum with respect to the LIBOR
Rental Rate, or (ii) 0% per annum with respect to the Alternate Rental
Rate;
provided, however, that each Applicable Margin set forth in subparagraphs
(a)(i), (b) and (c) 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)
1.01-2
69
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.
"Appraisal" shall mean an appraisal of an interest in 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 the meaning given to that term in
Subparagraph 5.03(b)of the 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 the meaning given to that term in
Subparagraph 3.02(h) of the 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%).
1.01-3
70
"Base Rent" shall have the meaning given to that term in Subparagraph
2.03(a) of the Lease Agreement.
"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) United States Treasury Securities that mature not later than
one year from the date of acquisition; and
(b) Deposit accounts held or maintained by a commercial bank
located in the United States and otherwise reasonably acceptable to
Lessor and Agent with cash balances in the lawful currency of the United
States and immediately available funds and that mature not later than
the earlier of (i) one year from the date of acquisition and (ii) the
Scheduled Expiration Date;
to the extent such securities and accounts are held and maintained in accordance
with the Cash Collateral Agreement and Lessor has a first priority perfected
security interest therein securing the Lessee Obligations.
1.01-4
71
"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
72
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 (other than Novellus) has a Lien to
secure any of the Lessee Obligations.
"Commencement Date" shall have the meaning given to that term in
Subparagraph 2.02(a) of the Lease Agreement.
"Commitment" shall mean, with respect to any Participant at any time,
such Participant's Proportionate Share of the Total 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 0.30% per annum.
"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(a) of the Participation Agreement.
"Commitment Termination Date" shall have the meaning given to that term
in Subparagraph 2.01(a) of the Participation Agreement.
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73
"Completion" shall have the meaning given to that term in Subparagraph
3.05(c) of the 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 Construction Agency
Agreement are satisfied.
"Completion Date Appraisal" shall mean, with respect to the 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 Lessor's interest
in 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 (other than Novellus) 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 the meaning given to that term in
Subparagraph 3.02(c) of the Purchase Agreement.
"Construction Agency Agreement" shall have the meaning given to that
term in Subparagraph 2.01(a) of the Participation Agreement.
"Construction Agreements" shall have the meaning given to that term in
Paragraph 3.01 of the Construction Agency Agreement.
"Construction Period" shall mean the period that begins on the Closing
Date and ends on the earlier of (a) the first date on which Substantial
Completion occurs and (b) the Outside Completion Date.
"Construction Period Ground Lease Fair Market Rent" shall have the
meaning given to that term in Subparagraph 2.03(a) of the Ground Lease.
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74
"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 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 the 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 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 Commitment and (ii) the fair
market value of the 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 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 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
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75
Completion of the New Improvements at such time will exceed the Unused Total
Commitment at such time.
"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 the Purchase Agreement.
"Current Appraisal" shall have the meaning given to that term in
Subparagraph 3.02(h) of the 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 the Lease Agreement but excluding any Base Rent or other
rental expenses that are capitalized by the lessor during such period),
and (iii) 25% of all payments of principal (or, in the case of Capital
Leases, amounts attributable to principal) of Funded Indebtedness
(excluding Synthetic Lease Obligations) paid or scheduled to be paid by
Lessee and its Subsidiaries due within one year.
"Default" shall mean any Event of Default under the Lease Agreement or
any event or circumstance not yet constituting an Event of Default under the
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 the 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.
"Deposit Account Control Agreement" shall have the meaning given to that
term in Subparagraph 2.01(b) of the Cash Collateral Agreement.
"Deposit Accounts" shall have the meaning given to that term in
Subparagraph 2.01(a) of the Cash Collateral Agreement.
"Depositary Bank" shall have the meaning given to that term in Paragraph
2.02 of the Cash Collateral Agreement.
"Designated Purchaser" shall have the meaning given to that term in
Subparagraph 3.02(e) of the Purchase Agreement.
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76
"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.
"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). Notwithstanding the foregoing, Novellus is
an Eligible Assignee of the Tranche A Percentage, Tranche A Proportionate Share
and Outstanding Tranche A Participation Amount.
"Eligible Project Costs" shall mean, on any date, the remainder of:
(a) The sum of (i) the Outstanding Lease Amount 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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77
"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 the meaning given to that term in
Paragraph 5.01 of the Lease Agreement.
"Exhibit B Supplement" shall have the meaning given to that term in
Subparagraph 2.03(a) of the Participation Agreement.
"Expiration Date" shall mean the earlier of (a) the Scheduled Expiration
Date under the Lease Agreement, as such date may be extended pursuant to this
Agreement, and (b) the Termination Date for the Lease Agreement, if the Lease
Agreement is terminated prior to its Scheduled Expiration Date in accordance
with its terms.
"Expiration Date Appraisal" shall mean, with respect to the Property or
any portion thereof on a recent date prior to the Closing Date, an Appraisal
that assesses at such time the Fair Market Value of Lessor's interest in such
Property on the Scheduled Expiration Date and as improved in accordance with the
Plans and Specifications for the New Improvements.
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78
"Expiration Date Purchase Option" shall have the meaning given to that
term in Subparagraph 3.01(b) of the Purchase 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 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);
1.01-12
79
(b) All obligations of such Person for the deferred purchase
price of property or services (including obligations under letters of
credit and other credit facilities which secure or finance such purchase
price but excluding trade payables incurred by such Person in the
ordinary course of its business on ordinary terms and not overdue) and
all Synthetic Lease Obligations of such Person (excluding the
Economically Defeased Portion of Synthetic Lease Obligations);
(c) All obligations of such Person under conditional sale or
other title retention agreements with respect to property acquired by
such Person (to the extent of the value of such property if the rights
and remedies of the seller or lender under such agreement in the event
of default are limited solely to repossession or sale of such property);
and
(d) All obligations of such Person as lessee under or with
respect to Capital Leases.
"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.
"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.
"Ground Lease" shall have the meaning given to that term in Subparagraph
2.01(a) of the Participation Agreement.
"Ground Lease Commencement Date" shall have the meaning given to that
term in Paragraph 2.02 of the Ground Lease.
1.01-13
80
"Ground Lease Event of Default" shall have the meaning given to that
term in Paragraph 5.01 of the Ground Lease.
"Ground Lease Expiration Date" shall have the meaning given to that term
in Paragraph 4.02 of the Ground Lease.
"Ground Lease Property" shall have the meaning given to that term in
Paragraph 2.01 of the Ground Lease.
"Ground Lease Scheduled Expiration Date" shall have the meaning given to
that term in Paragraph 2.02 of the Ground Lease.
"Ground Lessee" shall have the meaning given to that term in the
introductory paragraph of the Ground Lease.
"Ground Lessor" shall have the meaning given to that term in the
introductory paragraph of the Ground Lease.
"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 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.
"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
1.01-14
81
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 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:
1.01-15
82
(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 the 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.
"Indemnity Amount" shall have the meaning given to that term in
Subparagraph 3.02(g) of the Purchase Agreement.
"Ineligible Project Costs" shall have the meaning given to that term in
Subparagraph 2.03(c) of the Participation Agreement.
"Initial Bid" shall have the meaning given to that term in Subparagraph
3.02(b) of the Purchase Agreement.
"Initial Marketing Period" shall have the meaning given to that term in
Subparagraph 3.02(b) of the 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 the meaning given to that term in
Subparagraph 2.03(a) of the 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.
"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
1.01-16
83
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 all lots, pieces, tracts or parcels of land described
in Exhibit A to the Lease Agreement and leased by Lessee pursuant to the Lease
Agreement.
"Lease Agreement" shall have the meaning given to that term in
Subparagraph 2.01(a) of the Participation 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 the meaning given to that term in
Paragraph 3.07 of the Ground Lease.
"Leasehold Mortgages" shall have the meaning given to that term in
Paragraph 3.07 of the Ground Lease.
"Lease Reduction Payments" shall mean each of the following to the
extent applied to reduce the Outstanding Lease Amount pursuant to the Operative
Documents:
(a) The Principal Component of Base Rent;
(b) Casualty and Condemnation Proceeds;
(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;
(d) The Residual Value Guaranty and Indemnity Amount paid by
Lessee pursuant to the Purchase Agreement;
(e) Any proceeds received by Lessee from any sale of the
Property after the Expiration Date if such Property is retained by
Lessor after such Expiration Date pursuant to the Purchase Agreement;
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(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; and
(g) Any other amount received by Lessor that Lessee, Lessor and
Agent agree shall be applied to reduce the Outstanding Lease Amount.
"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 Amount, Indemnity Amount and/or Outstanding Lease Amount
and to pay all interest, fees, charges, expenses, attorneys' fees and
accountants' fees chargeable to Lessee or payable by Lessee under the Operative
Documents.
"Lessee Security Documents" shall mean and include the Lease Agreement,
the Cash Collateral Agreement, the Assignment of Construction Agreements, the
Ground Lease 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.
"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 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.
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"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.
"Major Casualty" shall mean, with respect to the Property, any Casualty
affecting the Property where (a) the damage to the Property is treated by any
insurer of the Property as a total loss; (b) the Property cannot reasonably be
repaired and restored prior to the expiration of the Term of the Lease to the
condition in which it existed immediately prior to such Casualty; or (c) the
reasonably anticipated cost to repair and restore the Property to the condition
in which it existed immediately prior to such Casualty would exceed forty
percent (40%) of the Outstanding Lease Amount.
"Major Condemnation" shall mean, with respect to the Property, any
Condemnation affecting the Property where (a) all or substantially all of the
Property is taken by such Condemnation; (b) the 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
the Property to the condition in which it existed immediately prior to such
Condemnation would exceed forty percent (40%) of the Outstanding Lease Amount.
"Majority Participants" shall mean (a) at any time the aggregate
Outstanding Lease Amount is greater than $0, Participants (other than Novellus)
whose aggregate Outstanding Participation Amounts exceed fifty percent (50%) of
the aggregate Outstanding Participation Amounts of all Participants (other than
Novellus) at such time and (b) at any time the aggregate
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Outstanding Lease Amount is $0, Participants (other than Novellus) whose
Proportionate Shares exceed fifty percent (50%) of the aggregate Proportionate
Shares of all Participants (other than Novellus) at such time.
"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 the meaning given to that term in
Subparagraph 3.01(a) of the Purchase Agreement.
"Marketing Option Event of Default" shall mean any Event of Default
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 (other than Novellus) 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 (other than Novellus') 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 the Property that alone,
or in combination with any prior Casualties to the Property for which repairs to
restore the Property to its prior condition have not been completed, will
require repairs costing (a) during the Construction Period, $500,000 or more to
restore the Property to its prior condition, or (b) after the Construction
Period, $2,500,000 or more to restore the Property to its prior condition .
"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 the meaning given to that term in
Subparagraph 3.01(c) of the 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
1.01-20
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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, with respect to the Land, all new
Improvements to the Land contemplated by the Plans and Specifications.
"Non-Marketing Option Event of Default" shall mean an Event of Default
under Subparagraph 5.01(m), 5.01(n) or 5.01(o) of the Lease Agreement if 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 the
meaning given to that term in Paragraph 3.01 of the Purchase Agreement.
"Notice of Ground Lease Purchase Option Exercise" shall have the meaning
given to that term in Paragraph 6.01 of the Ground Lease.
"Notice of Ground Lease Rent Increase" shall have the meaning given to
that term in Paragraph 2.03 of the Ground Lease.
"Notice of Marketing Option Exercise" shall have the meaning given to
that term in Paragraph 3.01 of the Purchase Agreement.
"Notice of Partial Purchase Option Exercise" shall have the meaning
given to that term in Subparagraph 2.02(a) of the Purchase Agreement.
"Notice of Rental Period Selection" shall have the meaning given to that
term in Subparagraph 2.03(a) of the Lease Agreement.
"Notice of Term Purchase Option Exercise" shall have the meaning given
to that term in Subparagraph 2.01(a) of the Purchase Agreement.
"Novellus" shall mean Novellus Systems, Inc., acting in its capacity as
a Participant under the Operative Documents.
"Operative Documents" shall mean and include the Participation
Agreement, the Ground Lease, the Lease Agreement, the Construction Agency
Agreement, the Purchase Agreement, the Lessee Security Documents, the Lessor
Deed of Trust, the Lessor Security Agreement, the Assignment of Lease 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,
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 (other than Novellus) to hedge against fluctuations in the LIBOR
Rental Rate under either or both Lease Agreements. (Without limiting the
generality of the preceding
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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.)
"Option Exercise Notification Date" shall have the meaning given to that
term in Paragraph 6.01 of the Ground Lease.
"Outside Completion Date" shall mean the date that is one (1) year 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 Construction
Agency Agreement, the date to which so extended.
"Outstanding Lease Amount" shall mean, on any date, the remainder of (a)
the sum of all Advances made by Lessor on or prior to such date, minus (b) the
sum of all Lease Reduction Payments applied by Lessor on or prior to such date.
"Outstanding Participation Amount" shall mean, with respect to any
Participant on any date, the remainder of (a) the sum of the portions of all
Advances 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 on or prior to such date.
"Outstanding Tranche A Participation Amount" shall mean, with respect to
any Tranche A Participant on any date, the remainder of (a) such Participant's
Tranche A Portion of all Advances made by Lessor 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 on or prior to such date.
"Outstanding Tranche B Participation Amount" shall mean, with respect to
any Tranche B Participant on any date, the remainder of (a) such Participant's
Tranche B Portion of all Advances made by Lessor on or prior to such date, minus
(b) such Participant's share of all Lease Reduction Payments applied to the
Tranche B Portion of the Advances on or prior to such date.
"Outstanding Tranche C Participation Amount" shall mean, with respect to
any Tranche C Participant on any date, the remainder of (a) such Participant's
Tranche C Portion of all Advances made by Lessor 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 on or prior to such date.
"Partial Purchase Date" shall have the meaning given to that term in
Subparagraph 2.02(a) of the Purchase Agreement.
"Partial Purchase Option" shall have the meaning given to that term in
Paragraph 2.02 of the 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.
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89
"Participation Agreement" shall mean the Participation Agreement, dated
as of April 18, 2001, among Lessee and the Lessor Parties.
"PBGC" shall mean the Pension Benefit Guaranty Corporation.
"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 to the Land and
the acquisition of the Property, 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.
"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) All rent payable under the Ground Lease during the
Commitment Period;
(c) All Commitment Fees, Agent's structuring 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;
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(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
$475,000; 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.
"Personal Property Collateral" shall have the meaning given to that term
in Subparagraph 2.07(b) of the Lease Agreement.
"Plans and Specifications" shall mean the architectural, engineering and
construction plans, specifications and drawings for the New Improvements to be
constructed on the Land delivered to Agent on or prior to the Closing Date
pursuant to Paragraph 3.01 and Schedule 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 Construction Agency Agreement.
"Portion" shall mean a portion of the Outstanding Lease Amount. 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.
"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.
"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
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91
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 have the meaning given to that term in Paragraph 2.01
of the Lease Agreement.
"Property Collateral" shall have the meaning given to that term in
Subparagraph 2.11(a) of the Participation Agreement.
"Proportionate Share" shall mean (a) with respect to each Participant 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(1) of
Schedule I and (b) with respect to each Participant 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(2) of Schedule I; or in the
case of either such percentage, if changed, such percentage as may be set forth
for such Participant in the Register. The Proportionate Share of each
Participant at any time shall equal the sum of such Participant's Tranche A
Percentage, Tranche B Percentage and Tranche C Percentage at such time.
"Purchase Agreement" shall have the meaning given to that term in
Subparagraph 2.01(a) of the Participation Agreement.
"Purchase Documents" shall have the meaning given to that term in
Subparagraph 4.01(a) of the Purchase Agreement.
"Purchaser" shall have the meaning given to that term in Subparagraph
4.01(a) of the 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 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.)
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"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 the meaning given to that term in
Subparagraph 2.07(a) of the Lease Agreement.
"Reference Banks" shall mean ABN AMRO or, at any time other banks are
Participants, ABN AMRO and an additional bank Participant or additional bank
Participants (but not more than two additional bank 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.
"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 Lease Agreement and in each Exhibit B
Supplement delivered by Lessee; and
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93
(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 the 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 Base Rent and Supplemental Rent.
"Rental Periods" shall mean:
(a) With respect to the entire Outstanding Lease Amount during
the period beginning on the Commencement Date for the 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 the Lease
Agreement; and
(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 the 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 the Lease Agreement.
Each Rental Period 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 the Lease Agreement.
"Rent Increase Notification Date" shall have the meaning given to that
term in Paragraph 2.03 of the Ground Lease.
"Repair and Restoration Account" shall have the meaning given to that
term in Subparagraph 3.04(c) of the Lease Agreement.
"Reportable Event" shall have the meaning given to that term in ERISA.
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94
"Required Participants" shall mean (a) at any time the aggregate
Outstanding Lease Amount is greater than $0, Participants (other than Novellus)
whose aggregate Outstanding Participation Amounts equal or exceed sixty-six and
two-thirds percent (66-2/3%) of the aggregate Outstanding Participation Amounts
of all Participants (other than Novellus) at such time and (b) at any time the
aggregate Outstanding Lease Amount is $0, Participants (other than Novellus)
whose Proportionate Shares equal or exceed sixty-six and two-thirds percent
(66-2/3%) of the aggregate Proportionate Shares of all Participants (other than
Novellus) at such time.
"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 the meaning given to that
term in Subparagraph 3.02(g) of the Purchase Agreement.
"Scheduled Expiration Date" shall have the meaning given to that term in
Subparagraph 2.02(a) of the Lease Agreement.
"Scheduled Rent Payment Date" shall have the meaning given to that term
in Subparagraph 2.03(a) of the Lease Agreement.
"Secondary Marketing Period" shall have the meaning given to that term
in Subparagraph 3.02(b) of the Purchase Agreement.
"Securities Account Control Agreement" shall have the meaning given to
that term in Subparagraph 2.01(a) of the Cash Collateral Agreement.
"Securities Accounts" shall have the meaning given to that term in
Subparagraph 2.01(a) of the Cash Collateral Agreement.
"Securities Intermediary" shall have the meaning given to that term in
Paragraph 2.02 of the Cash Collateral 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.
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95
"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 Construction Agency Agreement.
"Supplemental Rent" shall have the meaning given to such term in
Subparagraph 2.03(b) of the 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).
1.01-29
96
"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 the period beginning on the Commencement Date of the
Lease Agreement and ending on the Expiration Date of the Lease Agreement.
"Termination Date" shall mean (a) the date set forth in a Notice of Term
Purchase Option as the Scheduled Rent Payment Date on which the Lease Agreement
will be terminated by Lessee pursuant to Paragraph 4.01 of the Lease Agreement
and the Property will be purchased by Lessee pursuant to Section 2 of the
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 the Lease
Agreement after the occurrence of an Event of Default thereunder as the date on
which the Lease Agreement will be terminated; or (c) the date determined
pursuant to clause (ii) of Subparagraph 3.05(d) of the Construction Agency
Agreement if Lessee exercises the Marketing Option pursuant to such clause.
"Term Purchase Option" shall have the meaning given to that term in
Paragraph 2.01 of the Purchase Agreement.
"Total Commitment" shall mean the amount set forth as such in
Subparagraph 2.01(b) 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, if any, described as a separate tract in Exhibit A to
the 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.
"Tranche A Participant" shall mean, at any time, any Participant having
an Outstanding Tranche A Participation Amount at such time.
"Tranche A Percentage" shall mean (a) with respect to each Participant
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(1) of
Schedule I and (b) with respect to each
1.01-30
97
Participant 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(2) of Schedule I; or in the case of either such percentage, if
changed, such percentage as may be set forth for such Participant in the
Register.
"Tranche A Portion" shall mean, (a) with respect to any Advance without
reference to any Participant, the portion of such Advance equal to the Tranche A
Proportionate Share of such Advance and (b) with respect to any Advance with
reference to any Participant, the portion of such Advance equal to such
Participant's Tranche A Percentage of such Advance.
"Tranche A Proportionate Share" shall mean (a) at any time prior to the
Completion Date, eighty-nine and nine-tenths percent (89.9%) and (b) at any time
on or after the Completion Date, eighty-six percent (86.0%).
"Tranche B Participant" shall mean, at any time, any Participant having
an Outstanding Tranche B Participation Amount at such time.
"Tranche B Percentage" shall mean (a) with respect to each Participant
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(1) of
Schedule I and (b) with respect to each Participant 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(2) of Schedule I; or in
the case of either 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 without
reference to any Participant, the portion of such Advance equal to the Tranche B
Proportionate Share of such Advance and (b) with respect to any Advance with
reference to any Participant, the portion of such Advance equal to such
Participant's Tranche B Percentage of such Advance.
"Tranche B Proportionate Share" shall mean (a) at any time prior to the
Completion Date, seven and one tenth percent (7.1%) and (b) at any time on or
after the Completion Date, eleven percent (11.0%).
"Tranche C Participant" shall mean, at any time, any Participant having
an Outstanding Tranche C Participation Amount at such time.
"Tranche C Percentage" shall mean (a) with respect to each Participant
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(1) of
Schedule I and (b) with respect to each Participant 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(2) of Schedule I; or in
the case of either 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 without
reference to any Participant, the portion of such Advance equal to the Tranche C
Proportionate Share of such
1.01-31
98
Advance and (b) with respect to any Advance with reference to any Participant,
the portion of such Advance equal to such Participant's Tranche C Percentage of
such Advance.
"Tranche C Proportionate Share" shall mean, at all times (whether
before, on or after the Completion Date), three percent (3.0%).
"Trustee" shall have the meaning given to that term in the introductory
paragraph of the Lease Agreement.
"UCC" shall mean the California Uniform Commercial Code.
"Unused" shall mean, with respect to the Total Commitment at any time,
the remainder of (a) the Total Commitment at such time minus (b) the aggregate
amount of all Advances made prior to such time.
1.01-32
99
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.
1.02-1
100
Accordingly, 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 (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 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.
1.02-2
101
SCHEDULE 3.01
CONDITIONS PRECEDENT TO INITIAL ADVANCE
A. PRINCIPAL OPERATIVE DOCUMENTS.
(1) The Participation Agreement, duly executed by Lessee,
Lessor, each Participant and Agent;
(2) The Ground Lease, duly executed by Lessor and Lessee;
(3) The Lease Agreement, duly executed by Lessee and Lessor and
appropriately notarized;
(4) The Purchase Agreement, duly executed by Lessee and Lessor;
(5) The Construction Agency Agreement, duly executed by Lessee
and Lessor;
(6) The Assignment of Construction Agreements, duly executed by
Lessee;
(7) The Cash Collateral Agreement, duly executed by Lessee,
Lessor and Agent;
(8) The Assignment of Lease, duly executed by Lessor and
appropriately notarized;
(9) The Lessor Deed of Trust, duly executed by Lessor and
appropriately notarized; and
(10) 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
3.01-1
102
Operative Documents executed or to be executed by Lessee and the
consummation of the 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 certificate)
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; and
(3) 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 Ground Lease, appropriately completed and
duly executed by Lessor and Lessee and appropriately notarized for
recording;
(2) A Memorandum of Purchase Agreement, appropriately completed
and duly executed by Lessee and Lessor and appropriately notarized for
recording;
(3) Evidence that the Lease Agreement, the Assignment of Lease,
the Lessor Deed of Trust, the Memorandum of Ground Lease and the
Memorandum of Purchase Agreement delivered pursuant to items A(3), A(8),
A(9), D(1) and D(2) have been properly recorded in the Official Records
of the County of Washington, Oregon;
(4) An ALTA extended coverage owner's policy or binder of title
insurance (or a commitment therefor) for the Property insuring Lessor's
leasehold estate to the
3.01-2
103
Property (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 Property insuring the validity and
priority of the Lease Agreement (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 Property insuring the validity and
priority of the Lessor Deed of Trust (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 Property and all other
documents, instruments and agreements recorded against or otherwise
affecting the 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 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;
(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
3.01-3
104
by the Operative Documents to be prior or (b) for which Agent has
received a termination statement pursuant to item D(11) above;
(13) A Securities Account Control Agreement duly executed by
Lessee, Lessor and the applicable Securities Intermediary and evidence
that Cash Collateral in the form of United States Treasury Securities in
the amounts required by Subparagraph 2.11(a) have been delivered to such
Securities Intermediary and are subject to the Securities Account
Control Agreement as required by the Cash Collateral Agreement;
(14) 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
(15) 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 (other than the opinions with respect to the perfection of the
Cash Collateral under the Cash Collateral Agreement which shall be
delivered as provided in Subparagraph 2.11 (a)(ii)) 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
the initial Advance, duly executed by Lessee;
(2) Bills of sale for all Related Goods to be acquired with the
Advance to be made on the Closing Date, each reflecting Lessor as the
purchaser of such Related Goods;
(3) A Completion Date Appraisal for the Property, dated as of a
recent date prior to the Closing Date, that appraises the Property at
not less than the Total Commitment;
(4) An Expiration Date Appraisal for the Property, dated as of a
recent date prior to the Closing Date, that appraises the Property at
not less than the Total Commitment;
3.01-4
105
(5) A copy of the Plans and Specifications for the New
Improvements;
(6) 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 $ 170,000,000 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;
(7) An as-built survey of the Property (a) prepared and dated
not more than two (2) months prior to the 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;
(8) If requested by Lessor, Agent or any Participant, a list of
and copies of all Construction Agreements;
(9) Environmental reports and assessments of the Property
satisfactory to Agent issued by environmental consultants acceptable to
Agent;
(10) Certificates of insurance evidencing the insurance Lessee
is required to maintain pursuant to Paragraph 3.03 of the Lease
Agreement;
(11) 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; and
(c) All of the Operative Documents are in full force and
effect on such date.
(12) All fees and expenses payable to the Lessor Parties on or
prior to the Closing Date (including all Agent's Fees);
3.01-5
106
(13) All fees and expenses of Lessor's and Agent's counsels
through the Closing Date; and
(14) 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
107
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
108
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
109
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
110
SCHEDULE 5.02(b)
EXISTING LIENS
None
5.02(b)-1
111
EXHIBIT A
LAND
NOVELLUS SITE
PARCEL 2
PROPERTY DESCRIPTION
Parcel A:
A parcel of land containing 23.018 Acres, more or less, located in a portion of
the Northeast Quarter of Section 22, Township Two South, Range One West,
Willamette Meridian, City of Tualatin, Washington County, Oregon, being more
particularly described as follows:
Beginning at a 2" Brass Disk in a monument box marking the one-quarter corner
common to Sections 15 and 22; thence South 000 06' 18" West 30.00 feet to a
point on the south right-of-way line of S.W. Tualatin Road; thence following the
East line of that Parcel of land shown as Parcel 2 on Washington County Survey
#23,036 South 000 06' 18" West 451.01 feet to the "TRUE POINT OF BEGINNING" for
this described tract; thence South 890 35' 19" East 1129.99 feet; thence South
000 24' 41 " West 134.46 feet; thence North 890 35' 19" West 162.59 feet; thence
South 000 24' 41" West 311.68 feet; thence South 890 35' 19" East 411.63 feet;
thence South 000 24' 41" West 406.45 feet to a point on the north right-of-way
line (being 30.00 feet from centerline) of S.W. Leveton Drive; thence following
the north right-of-way line of S.W. Leveton Drive North 890 41' 51 " West 48.66
feet to an angle point in the north right-of-way line of said S.W. Leveton
Drive; thence North 890 35' 19" West 1325.84 feet to a found 3/4" brass washer
marked "PLS 2351" per survey #23,991 marking the Southeast corner of that said
Parcel of land shown as Parcel 2 on Washington County Survey #23,036; thence
following the East line of said Parcel 2 as shown on Washington County Survey
#23,036 North 000 06' 18" East 845.79 feet to the "TRUE POINT OF BEGINNING".
Subject to: All easements, restrictions and rights-of-way of record and those
common and apparent on the land.
A-1
112
EXHIBIT B
LEASE AGREEMENT
B-1
113
EXECUTION COPY
Novellus V
Recording requested by and
when recorded return to:
Orrick, Herrington & Sutcliffe LLP
Old Federal Reserve Bank Building
400 Sansome Street
San Francisco, California 94111
Attn: John Rivers, Esq.
LINE OF CREDIT INSTRUMENT
LEASE AGREEMENT,
CONSTRUCTION DEED OF TRUST WITH ASSIGNMENT OF RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
BY AND AMONG
NOVELLUS SYSTEMS, INC.
AND
ABN AMRO LEASING, INC.
AND
CHICAGO TITLE COMPANY
APRIL 18, 2001
THIS LEASE IS NOT INTENDED TO CONSTITUTE
A TRUE LEASE FOR INCOME TAX PURPOSES
(SEE PARAGRAPH 2.06)
MATURITY DATE: APRIL 2006
MAXIMUM PRINCIPAL AMOUNT TO BE ADVANCED: $170,000,000 (WHICH MAY BE
EXCEEDED TO COMPLETE CONSTRUCTION PURSUANT TO ORS 85.155):
114
TABLE OF CONTENTS
PAGE
SECTION 1. INTERPRETATION................................................3
1.01. Definitions...................................................3
1.02. Rules of Construction.........................................3
SECTION 2. BASIC PROVISIONS..............................................3
2.01. Lease of the Property.........................................3
2.02. Term..........................................................3
2.03. Rent..........................................................4
2.04. Use...........................................................6
2.05. As Is Lease...................................................6
2.06. Nature of Transaction.........................................7
2.07. Security, Etc.................................................7
SECTION 3. OTHER LESSEE AND LESSOR RIGHTS AND OBLIGATIONS................9
3.01. Maintenance, Repair, Etc......................................9
3.02. Risk of Loss.................................................10
3.03. Insurance....................................................11
3.04. Casualty and Condemnation....................................15
3.05. Taxes........................................................18
3.06. Environmental Matters........................................19
3.07. Liens, Easements, Etc........................................20
3.08. Subletting...................................................21
3.09. Utility Charges..............................................21
3.10. Removal of Property..........................................21
3.11. Compliance with Governmental Rules and Insurance
Requirements.................................................21
3.12. Permitted Contests...........................................22
3.13. Lessor Obligations; Right to Perform Lessee Obligations......22
3.14. Inspection Rights............................................22
SECTION 4. EXPIRATION DATE..............................................22
4.01. Termination by Lessee Prior to Scheduled Expiration Date.....22
4.02. Surrender of Property........................................23
4.03. Holding Over.................................................23
SECTION 5. DEFAULT......................................................23
-i-
115
TABLE OF CONTENTS
(CONTINUED)
PAGE
5.01. Events of Default............................................23
5.02. General Remedies.............................................26
5.03. Lease Remedies...............................................27
5.04. Loan Remedies................................................27
5.05. Remedies Cumulative..........................................30
5.06. No Cure or Waiver............................................30
5.07. Exercise of Rights and Remedies..............................30
SECTION 6. MISCELLANEOUS................................................32
6.01. Notices......................................................32
6.02. Waivers; Amendments..........................................32
6.03. Successors and Assigns.......................................32
6.04. No Third Party Rights........................................32
6.05. Partial Invalidity...........................................32
6.06. Governing Law................................................32
6.07. Counterparts.................................................32
6.08. Nature of Lessee's Obligations...............................32
6.09. Construction License.........................................33
6.10. Non-Residential Trust Deed...................................33
SCHEDULE
- --------
3.03 Insurance Requirements
EXHIBITS
- --------
A Land (2.01(a))
B Related Goods (2.01(d))
C Notice of Rental Period Selection (2.03(a))
-ii-
116
LINE OF CREDIT INSTRUMENT
LEASE AGREEMENT,
CONSTRUCTION DEED OF TRUST WITH ASSIGNMENT OF RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
THIS LEASE AGREEMENT, CONSTRUCTION DEED OF TRUST WITH ASSIGNMENT OF RENTS,
SECURITY AGREEMENT AND FIXTURE FILING (this "Agreement" herein), dated as of
April 18, 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").
(3) CHICAGO TITLE COMPANY, as trustee under the deed of trust
contained herein (in such capacity, "Trustee").
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 from Lessee certain land currently
owned by Lessee, (b) sublease back 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 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, 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:
117
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 ground lease thereof by Lessor
pursuant to the Participation Agreement and the Ground Lease, Lessor agrees to
lease to Lessee and Lessee agrees to lease (or in the case of the Land,
sublease) from Lessor the following property (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 (the "Land");
(b) All Improvements now or hereafter located on the Land;
(c) All Appurtenant Rights belonging, relating or pertaining to
the 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 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
Land and certain of the other Property is through the Ground Lease 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"). (For purposes of Oregon law, the Scheduled
Expiration Date shall be the maturity date if this Agreement is construed
as the parties intend.)
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(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 (other than
Novellus) 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
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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 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) The rental rate for any part of a Portion
attributable to Outstanding Tranche A Participation Amounts or
Outstanding Tranche B Participation Amounts after the
Completion Date shall be the Applicable Margins therefor.
(B) Except as otherwise provided in clause (A) above
for Outstanding Tranche A Participation Amounts and
Outstanding Tranche B Participation Amounts after the
Completion Date, if any Rental Period is less than one (1)
month, the Rental Rate for such Rental Period shall be the
Alternate Rental Rate; or
(C) Except as otherwise provided in clause (A) above
for Outstanding Tranche A Participation Amounts and
Outstanding Tranche B Participation Amounts after the
Completion Date, if the LIBOR Rental Rate is unavailable for
any Rental Period pursuant to Subparagraph
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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 Ground Lease; and
(ii) All other amounts (other than Base Rent, the purchase
price payable by Lessee for any purchase of the Property by Lessee
pursuant to the Purchase Agreement and the Residual Value Guaranty
Amount payable under the 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.
(c) Construction Period Ground Lease Fair Market Rent. On the
first day after the expiration of the Construction Period, Lessor shall
advance and pay to Lessee the Construction Period Ground Lease Fair Market
Rent as rental for the Ground Lease Property during the Construction
Period, such amount to be treated and capitalized as a Project Cost and
added to the Outstanding Lease Amount. On such date, Lessee shall pay to
Lessor as Base Rent an amount equal to the Construction Period Ground
Lease Fair Market Rent, such amount constituting a Principal Component to
be applied to reduce the Outstanding Lease Amount. If Completion of the
New Improvements does not occur and this Agreement is terminated prior to
its Scheduled Expiration Date in accordance with its terms, Lessee shall
be entitled to offset any accrued and unpaid portion of the Construction
Period Ground Lease Fair Market Rent owed by Lessor to Lessee against the
Residual Value Guaranty Amount, unpaid Rent, or any other amounts, if any,
due and payable by Lessee to Lessor under the Operative Documents.
2.04. Use. Lessee may use the 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
Property.
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2.05. As Is Lease. Lessee has conducted, or will conduct from time to time
with regard to property that may be added hereto after the date hereof, all due
diligence which it deems appropriate regarding the Property and agrees that no
Lessor Party (other than Novellus in its capacity as Lessee) has any obligation
to conduct any such due diligence. Lessee is leasing the Property "as is, with
all faults" without any representation, warranty, indemnity or undertaking by
any Lessor Party (other than Novellus) regarding any aspect of the Property,
including (a) the condition of the Property (including any Improvements to the
Property made prior to the Commencement Date or during the Term); (b) 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); (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 Casualty or Condemnation; or (i) the compliance of the
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 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, Lessee hereby irrevocably and unconditionally grants,
conveys, transfers and assigns to Trustee, 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 leased or hereafter acquired,
(collectively, the "Real Property Collateral"):
(i) The Land (including Lessor's leasehold interest under
the Ground Lease);
(ii) All Improvements now or hereafter located on the Land;
(iii) All Appurtenant Rights belonging, relating or pertaining
to any of the Land or Improvements thereto;
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(iv) All Subleases and Issues and Profits accruing from the
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 Land or foregoing Improvements or
Appurtenant Rights to the extent that such Related Goods, Related
Agreements and Related Permits constitute real property;
(vi) All other 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, 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
Land or any of the foregoing 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 Land or any of the foregoing 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
(other than Novellus) in connection with this Agreement or any other
Operative Document (including any Repair and Restoration Account);
(iv) All other Property to the extent such Property
constitutes personal property; and
(v) All proceeds of the foregoing, including Casualty and
Condemnation Proceeds.
For purpose of the provisions of this Agreement related to the creation
and enforcement of this Agreement as a security agreement and a fixture
filing with respect to the Related Goods, Lessee is the "debtor" and
Lessor is the "secured party," acting for the benefit of the Lessor
Parties. This Agreement constitutes a fixture filing for purposes of the
Oregon Commercial Code with respect to the Related Goods which are or are
to become fixtures on the Land or Improvements. The mailing addresses of
Lessee and of Lessor from which information concerning security interests
hereunder may be obtained are as set forth on
7
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the signature page of this Agreement. A carbon, photographic or other
reproduction of this Agreement or of any financing statement related to
this Agreement shall be sufficient as a financing statement for any of the
purposes referenced herein.
(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, for
security purposes in accordance with Oregon Revised Statute ("ORS")
Section 93.805, and Lessor's right to the Subleases and Issues and Profits
is not contingent upon, and may be exercised without possession of, the
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
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 (other than Novellus in its capacity as Lessee and in
accordance with the Operative Documents) to be (A) a mortgagee in
possession; (B) responsible or liable for (1) the control, care,
management or repair of the Property or for performing any of
Lessee's obligations or duties under the Subleases, (2) any waste
committed on the Property by the sublessees under any of the
Subleases or by any other Persons, (3) any dangerous or defective
condition of the Property, or (4) any negligence in the management,
upkeep, repair or control of the 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
(other than Novellus in its capacity as Lessee and in accordance
with the Operative Documents) 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 Property,
except for ordinary wear and tear, and shall, at its sole cost and
expense, maintain the 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 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 Construction Agency
Agreement in accordance with the 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 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 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
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$1,000,000, Lessee shall deliver to Lessor, with sufficient copies
for Agent and each Participant (other than Novellus), 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 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 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 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 Property which arises or occurs prior to the
Expiration Date or while Lessee is in possession of the 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 during the Construction Period except as follows:
(a) Lessee shall be liable under this Paragraph 3.02 for all such
losses and liabilities arising 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
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.
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 Property as a result of any such event.
3.03. Insurance.
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(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 $-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 Property in the same geographic
area as the 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 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 Property
while under contract with Lessee to perform maintenance, repair,
alteration or similar work on the 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
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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 (other than Novellus in its capacity as
Lessee and in accordance with the Operative Documents) 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 (other than
Novellus).
(vi) The insurance shall be primary without right of
contribution from any other insurance that may be carried by any
Lessor Party (other than Novellus) with respect to its interest in
the Property.
(vii) The insurer shall waive any right of subrogation against
any Lessor Party (other than Novellus).
(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 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 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 loss or occurrence
with respect to the 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
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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.
(f) Forced Placement of Insurance. Pursuant to Oregon Revised
Statutes Section 746.201, Lessor hereby provides Lessee with the following
notice:
"WARNING"
Unless you provide us with evidence of the insurance coverage
as required by our contract or loan agreement, we may purchase
insurance at your expense to protect our interest. This insurance
may, but need not, also protect your interest. If the collateral
becomes damaged, the coverage we purchase may not pay any claim you
make or any claim made against you. You may later cancel this
coverage by providing evidence that you have obtained property
coverage elsewhere.
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You are responsible for the cost of any insurance purchased by
us. The cost of this insurance may be added to your contract or loan
balance. If the cost is added to your contract or loan balance, the
interest rate on the underlying contract or loan will apply to this
added amount. The effective date of coverage may be the date your
prior coverage lapsed or the date you failed to provide proof of
coverage.
The coverage that we purchase may be considerably more
expensive than insurance you can obtain on your own and may not
satisfy any need for property damage coverage or any mandatory
liability insurance requirements imposed by applicable law.
As used in the above notice, (i) "you" and "your" shall refer to
Lessee, (ii) "we", "us" and "our" shall refer to Lessor, (iii) "contract
or loan agreement" shall refer to the Participation Agreement, this
Agreement and the other Operative Documents, (iv) "collateral" shall refer
to the Property, (v) "contract or loan balance" shall refer to the
Outstanding Lease Amount and (vi) "interest rate" shall refer to Rental
Rate.
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 Property or any portion thereof.
(b) Repair Obligations.
(i) If any Material Casualty or Condemnation affecting the
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 Property as required
by Subparagraph 3.04(c).
(ii) If any Material Casualty or Condemnation affecting the
Property or any portion thereof occurs after the Construction
Period, Lessee shall, at its election, either (A) repair and restore
the Property as required by Subparagraph 3.04(c) or (B) exercise the
Term Purchase Option and purchase the Property pursuant to the
Purchase Agreement; provided, however, that Lessee may not elect to
repair and restore the 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 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
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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 Property.
(c) Repair and Restoration. If Lessee is required to repair and
restore the Property following any Material Casualty or any Condemnation,
Lessee shall diligently proceed to repair and restore the 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 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 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
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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 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 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 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
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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 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 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
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 (other than Novellus) 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
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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 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 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 Property does not comply with any Environmental Laws; and
(ii) any claims against Lessee or the Property relating to Hazardous
Materials or pursuant to Environmental Laws. In response to the presence
of any Hazardous Materials on, under or about the 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 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 Property.
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(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 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 Property which is required by any Governmental
Authority or is otherwise necessary to render the 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 (v) 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 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 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;
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(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 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 Property
and (B) discharge, at its sole cost and expense, any Lien on the 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
(other than Novellus), 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
Property or any part thereof. NOTICE IS HEREBY GIVEN THAT NO LESSOR PARTY
(OTHER THAN NOVELLUS) IS OR SHALL BE LIABLE FOR ANY LABOR, SERVICES OR
MATERIALS FURNISHED OR TO BE FURNISHED TO LESSEE, OR TO ANYONE HOLDING THE
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
PROPERTY.
3.08. Subletting. Lessee may, in the ordinary course of business, sublease
the 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 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 Property on the Expiration
Date pursuant to the Purchase Agreement); (e) each sublease prohibits the
sublessee from engaging in any activities on the 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.
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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 Property during the
Term.
3.10. Removal of Property. Lessee shall not remove any Improvements from
the Land or any other Property from the 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
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 Property to comply, with all Governmental Rules and Insurance
Requirements relating to the 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 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 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 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 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 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 (other than Novellus), 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 (other than Novellus); (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 (other than Novellus) shall have any obligation to (a) maintain, repair or
make any improvements to the Property, (b) maintain any insurance on the
Property, (c) perform any other obligation of Lessee
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under this Agreement or any other Lessee Obligation, (d) make any expenditure on
account of the Property (except to make Advances as required by the
Participation Agreement) or (e) take any other action in connection with the
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 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 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 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 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 Property. Unless Lessee purchases the Property on the
Expiration Date pursuant to the Purchase Agreement, Lessee shall vacate and
surrender the 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 Property on the
Expiration Date pursuant to the Purchase Agreement but continues in possession
of any portion of the 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.
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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
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, (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
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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 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
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(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) Ground Lease. Lessee's failure to observe or perform any
agreement, term or condition contained in the Ground Lease 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;
or
(l) Change of Control. Any Change of Control shall occur; or
(m) Construction Termination Event. Any Construction Termination
Event shall occur or exist; or
(n) Material Casualty or Condemnation. Any Material Casualty or
Material Condemnation affecting the 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 Property following such Casualty or Condemnation
pursuant to clause (i) of Subparagraph 3.04(b); or
(o) 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 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.
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(b) Appointment of a Receiver. Lessor may apply to any court of
competent jurisdiction for, and obtain appointment of, a receiver for the
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 Property. Lessor may enter, take possession of,
manage and operate all or any part of the Property or take any other
actions which it reasonably determines are necessary to protect the
Property and the rights and remedies of the Lessor Parties (other than
Novellus) under this Agreement and the other Operative Documents,
including (i) taking and possessing all of Lessee's books and records
relating to the 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 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
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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 Oregon law, 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 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 Property. Lessor may enter the 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 Oregon 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.
(b) Uniform Commercial Code Remedies. Lessor may exercise any or
all of the remedies granted to a secured party under the Oregon Uniform
Commercial Code.
(c) Judicial Foreclosure. Lessor may bring an action in any court
of competent jurisdiction to foreclose the security interest in the
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 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 Chapter 79 of the
Oregon Uniform Commercial Code, including any public or private
sale, or in any manner permitted by any other
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applicable Governmental Rule. Any proceeds of any such disposition
shall not cure any Event of Default or reinstate any Lessee
Obligation. 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 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
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 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
Oregon Uniform Commercial Code Section 9505 (ORS Section
79.5050).
The foregoing procedures do not constitute the only procedures that
may be commercially reasonable.
(ii) Lessor's Sales of Real Property or Mixed Collateral.
Lessor 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. In its discretion,
Lessor 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 Oregon Uniform
Commercial Code (ORS Section 79.510(4)). 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 Oregon Uniform Commercial Code Section 9501(4)
(ORS Section 79.510(4)), will sometimes be referred to as a
"Lessor's Sale.")
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(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 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 Property consists of more
than one lot, parcel or item of property, Lessor 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 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 Property by this
Agreement
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on any part of the Property which has not been sold, until all of
the Lessee Obligations have been paid in full.
(ii) Third Party Bids and Credit Bids. At any Foreclosure
Sale, any Person, including any Lessor Party, 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 the
Property, Lessor (and no other Lessor Party) may settle for the
purchase price by crediting the sales price of the 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 (other than Novellus) 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, except as otherwise provided in Paragraph 7.14 of the
Participation Agreement.
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 (other than Novellus)
under this Agreement and the other Operative Documents and all
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other events and circumstances, including the events and circumstances set
forth in Subparagraph 6.08(c).
(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 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 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 Property
under this Agreement is granted to Lessee reserving to Lessor and its agents a
temporary construction license to enter upon the Property for purposes of
constructing the Improvements.
6.10. Non-Residential Trust Deed. Lessee as grantor warrants that this
Agreement, as a deed of trust or trust deed under Oregon law, is not and will
not at anytime constitute a residential trust deed, as that term is defined in
ORS 86.705 or its successor statutes. Lessee warrants that it is engaging in
this transaction exclusively for business, commercial or investment purposes.
[The signature page follows.]
32
148
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:________________________________
Novellus Systems, Inc.
4000 North First Street
San Jose, California 95134
Attn: Treasurer
Telephone: (408) 432-5339
Fax Number: (408) 545-3009
LESSOR: ABN AMRO LEASING, INC.
By:______________________________________
Name:_________________________________
Title:________________________________
ABN AMRO Leasing, Inc.
c/o ABN AMRO Bank N.V.
135 South LaSalle Street, Suite 740
Chicago, Illinois 60603
Attn: David Shipley
Telephone: (312) 904-2183
Fax Number: (312) 904-6217
33
149
STATE OF CALIFORNIA )
) ss
COUNTY OF __________________)
On _____________, 2001, before me, ___________________ a Notary Public in
and for the State of California, personally appeared ___________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s) or the entity on behalf of which the person(s) acted,
executed the instrument.
Witness my hand and official seal.
[SEAL]
_____________________________________
150
STATE OF CALIFORNIA )
) ss
COUNTY OF __________________)
On _____________, 2001, before me, ___________________ a Notary Public in
and for the State of California, personally appeared ___________________,
personally known to me (or proved to me on the basis of satisfactory evidence)
to be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s) or the entity on behalf of which the person(s) acted,
executed the instrument.
Witness my hand and official seal.
[SEAL]
_____________________________________
151
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 and earthquake, in an amount of not less than the value of the 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 loss or damage by earthquake in an
amount of not less than 20.0% of the replacement value of the Improvements.
Notwithstanding the foregoing, the maximum amount of any casualty insurance
policy required to be maintained after the Construction Period shall not exceed
the Outstanding Lease Amount less the Outstanding Tranche A Participation Amount
held by Novellus.
152
EXHIBIT A
LAND
A-1
153
EXHIBIT B
RELATED GOODS
NONE
B-1
154
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 18, 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) that
certain Lease Agreement, dated as of April 18, 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. 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 Property subject to the Lease Agreement.
IN WITNESS WHEREOF, Lessee has executed this Supplement to Exhibit B on
the date set forth above.
NOVELLUS SYSTEMS, INC.
By: _____________________________
Name: _______________________
Title: ______________________
B(1)-1
155
ATTACHMENT 1
TO
SUPPLEMENT TO EXHIBIT B
B(1)(1)-1
156
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 18, 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) that
certain Lease Agreement, dated as of April 18, 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. [Insert one of the following as appropriate]
[Pursuant to Subparagraph 2.03(a) of the 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 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
157
(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 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 (other than Novellus)
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
158
EXHIBIT C
PURCHASE AGREEMENT
C-1
159
EXECUTION COPY
Novellus V
==============================================================================
PURCHASE AGREEMENT
BETWEEN
NOVELLUS SYSTEMS, INC.
AND
ABN AMRO LEASING, INC.
APRIL 18, 2001
==============================================================================
160
TABLE OF CONTENTS
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................................. 11
4.05. Costs................................................... 12
4.06. Lessee's Expiration Date Payment Obligations............ 12
4.07. Lessor Liens............................................ 12
4.08. Transfer Documents...................................... 12
4.09. Casualty and Condemnation Proceeds...................... 13
4.10. Payments................................................ 13
4.11. Environmental Reports................................... 13
4.12. Further Assurances...................................... 13
SECTION 5. MISCELLANEOUS........................................... 13
5.01. Notices................................................. 13
5.02. Waivers, Amendments..................................... 13
5.03. Successors and Assigns.................................. 14
5.04. No Third Party Rights................................... 14
5.05. Partial Invalidity...................................... 14
5.06. Governing Law........................................... 14
5.07. Counterparts............................................ 14
-i-
161
PAGE
5.08. Nature of Lessee's Obligations.......................... 14
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 (3.02)
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-
162
PURCHASE AGREEMENT
THIS PURCHASE AGREEMENT (this "Agreement" herein), dated as of April
18, 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 from Lessee certain land currently
owned by Lessee, (b) sublease back 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 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, 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
163
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 Lease Agreement, terminate
the Lease Agreement and purchase all of the 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 Lease Agreement prior to the Scheduled Expiration Date
thereof pursuant to Paragraph 4.01 of the Lease Agreement and purchase
all of the 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 Lease Agreement and Lessee's purchase of the
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 Lease Agreement,
without terminating the Lease Agreement, purchase one or more Tracts (but not
less than all of any such Tract) of the Property (the "Partial Purchase
Option").
2
164
(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 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 Property to be purchased on such date, an amount equal to the
portion of the Outstanding Lease Amount on such date attributable to
such Tract of Property.
(c) Conditions to Exercise of Partial Purchase Option. The
purchase by Lessee on any Partial Purchase Date of any Tract of
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 Property that are to remain subject to the
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 Property at not less
than the Outstanding Lease Amount 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 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.
3
165
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 Lease Agreement, Lessee shall either:
(a) Marketing Option. Cause another Person to complete the
purchase of the Property pursuant to Paragraph 3.02 (the "Marketing
Option"); or
(b) Expiration Date Purchase Option. Purchase the 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 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 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 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 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 Subparagraph 3.02(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 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 and (B) the Fair Market Value of the 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 which is four (4)
months prior to the Expiration Date of the Lease Agreement
(the
4
166
"Initial Marketing Period"), Lessee shall use reasonable
efforts to solicit Conforming Bids from potential purchasers
of the 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, 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,
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 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 (other than
Novellus) copies of all bids and otherwise provide
each Lessor Party (other than Novellus) with such
information relating to the marketing of the 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 Property
(including the title to, except for Lessor Liens, and
condition of the Property);
(D) Furnish to each Lessor Party (other than
Novellus) 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 Lease Agreement;
(E) Permit any Lessor Party or potential
purchaser to inspect the 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 Property reasonably requested by such Person in
writing;
(F) Take all other commercially reasonable
steps to secure the best price for the 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 to or greater than the difference between the
Outstanding Lease Amount
5
167
and Residual Value Guaranty Amount 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 (other
than Novellus) 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 Property;
(ii) The bidder must agree in writing to purchase the
Property on the Expiration Date of the 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 on such date and (B)
the Fair Market Value of the 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, 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, 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 Property after the
Expiration Date of the 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 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
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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
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 Property
by delivering to Lessee, at least ten (10) days prior to the Expiration
Date of the 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 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 Property on the Expiration Date of the 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 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 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 Lease Agreement); or (iv) the Designated Purchaser fails to
consummate the purchase of the Property on the Expiration Date of the
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 Property on the Expiration Date
of the Lease Agreement 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 on the Expiration Date; provided,
however, that:
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(A) If Lessee has paid any Prepaid Rent or
if the Outstanding Lease Amount 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
remainder of (1) the total Tranche A Proportionate
Share of the Eligible Project Costs, minus (2) 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 on the Completion
Date includes any Ineligible Project Costs, then the
Tranche A Proportionate Share after the Completion
Date shall be recomputed and set at the maximum
percentage such that (1) Lessee is not deemed under
GAAP to be the owner of the Property prior to the
Completion Date, and (2) from the Lessee's
perspective, the 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 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 and
percentages after the Completion Date (such that the
sum of the Tranche A Proportionate Shares and the
Tranche B Proportionate Shares 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 Lease Agreement in the Fair Market
Value of the Property caused by (A) any representation or
warranty of Lessee or any of its Affiliates regarding the
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 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 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 is less than the
difference between the Outstanding Lease Amount and Residual Value
Guaranty Amount, 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), deliver to Lessee a written notice of Lessor's
determination of the current Fair Market Value of the Property and the
Indemnity Amount. To determine such amounts, Lessor shall obtain
Appraisals of the Property which set forth:
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(i) A current Appraisal of the Fair Market Value of
the Property in its then existing condition (the "Current
Appraisal"); and
(ii) An Appraisal of the Fair Market Value of the
Property which assumes that (A) all representations and
warranties regarding the 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 Property in
compliance with all applicable Governmental Rules, Insurance
Requirements and the Operative Documents; (C) Lessee has
completed all Modifications and any New Improvements in a good
and workmanlike manner and otherwise as required by the
Operative Documents; (D) Lessee has repaired the Property as
required by the Operative Documents following any Casualty;
(E) Lessee has restored the 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 Property; (G) Lessee has removed
all Liens on the 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 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 Property. No
Lessor Party (other than Novellus) 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 not constituting
Ineligible Project 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 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 or prior to such date not constituting Ineligible
Project Costs to the extent necessary to pay such portion of
the unpaid amounts;
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(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 (other than Novellus), 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 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)(C) 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 or the Cash Collateral 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 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
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.
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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 Property on the Expiration
Date of the 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 Property
pursuant to the Expiration Date Purchase Option, Lessee shall pay to
Lessor on the Expiration Date of the Lease Agreement, as the purchase
price for the Property, an amount equal to the Outstanding Lease Amount
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 Property, whether Lessee, an Assignee Purchaser or a Designated
Purchaser ("Purchaser") shall represent and warrant to Lessor on the
Expiration Date of the Lease Agreement (or, in the case of a purchase
of a portion of the 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 Property (or, in the case of a
purchase of a portion of the 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 Property (or, in the case of a purchase of a portion of
the 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.
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(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 Property) on the Expiration Date of the 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
Property) on the Expiration Date of the Lease Agreement that no Liens
are attached to the Property, except for Permitted Property Liens, and
(B) Lessor shall represent and warrant to Purchaser on the Expiration
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Date of the Lease Agreement (or, in the case of a purchase of a portion
of the Property pursuant to the Partial Purchase Option, on the
applicable Partial Purchase Date) that no Lessor Liens are attached to
the Property. Except for the foregoing representations and warranties
to be made by Lessor on the Expiration Date of the Lease Agreement (or,
in the case of a purchase of a portion of the Property pursuant to the
Partial Purchase Option, on the applicable Partial Purchase Date), no
Lessor Party (other than Novellus in its capacity as Lessee in
accordance with the Operative Documents) shall make any representation
or warranty regarding the Property or the sale of the 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 Lease Agreement (or, in the case of a purchase of a portion of the
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 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 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 (other than Novellus in its capacity as Lessee in
accordance with the Operative Documents), its agents, or brokers as to any
matters concerning the Property (except for any representations and warranties
provided by Lessor pursuant to Subparagraph 4.01(b)), including (a) the
condition of the Property (including any Improvements to the Property made prior
to the Commencement Date or during the Term of the Lease Agreement); (b) 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); (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 Casualty or Condemnation; or (i) the compliance of the
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
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physical condition of the 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 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
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 Lease
Agreement, Lessee shall pay to Lessor the following:
(i) Purchase by Lessee. If the 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
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 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
Property to be purchased on such date, (ii) all unpaid Rent
attributable to such Tracts of Property accrued through or due and
payable on or prior to such date and (iii) all other amounts
attributable to such Tracts of
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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
Property before the Expiration Date of the Lease Agreement (or, in the case of a
purchase of a portion of the 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 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 Property to
Purchaser on the Expiration Date of the Lease Agreement
(unless Lessor is to retain the 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 Property as provided in the
Ground Lease.
(ii) Lessee. On the Expiration Date of the Lease
Agreement, unless Lessee is to purchase the Property, Lessee
shall transfer its interest in the Property to the Designated
Purchaser or an Assignee Purchaser (or Lessor if Lessor is to
retain the 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 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 Property as provided
in the Ground Lease, and such other documents, instruments and
agreements as Lessee may reasonably request.
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4.09. Casualty and Condemnation Proceeds. If, on the Expiration Date of
the 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 Property on the Expiration Date of the 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 Property pursuant to the
Partial Purchase Option, prior to the applicable Partial Purchase Date),
environmental reports with respect to the Property (or, in the case of a
purchase of a portion of the 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.
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 (other than Novellus) 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
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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
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 (other than Novellus), 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.
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 except as otherwise provided in Paragraph 7.14 of the
Participation Agreement.
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
17
179
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 Property (including any
Improvements to the Property made prior to the Commencement Date or
during the Term of the Lease Agreement); (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 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.
5.09. Oregon Statutory Notice. Pursuant to Oregon Revised Statutes
Section 93.040(2), Lessor hereby provides Lessee with the following notice:
THE PROPERTY DESCRIBED IN THIS INSTRUMENT MAY NOT BE WITHIN A
FIRE PROTECTION DISTRICT PROTECTING STRUCTURES. THE PROPERTY IS SUBJECT
TO LAND USE LAWS AND REGULATIONS, WHICH, IN FARM OR FOREST ZONES, MAY
NOT AUTHORIZE CONSTRUCTION OR SITING OF A RESIDENCE AND WHICH LIMIT
LAWSUITS AGAINST FARMING OR FOREST PRACTICES AS DEFINED IN OREGON
REVISED STATUTES SECTION 30.930 IN ALL ZONES. BEFORE SIGNING OR
ACCEPTING THIS INSTRUMENT, THE PERSON ACQUIRING FEE TITLE TO THE
PROPERTY SHOULD CHECK WITH THE APPROPRIATE CITY OR COUNTY PLANNING
DEPARTMENT TO VERIFY APPROVED USES AND EXISTENCE OF FIRE PROTECTION
FOR STRUCTURES.
[The signature page follows.]
18
180
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
181
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 18,
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");
(b) The Lease Agreement, dated as of April 18, 2001(the "Lease
Agreement"), between Lessee and Lessor; and
(c) The Purchase Agreement, dated as of April 18, 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 Lease Agreement and
Paragraph 2.01 of the Purchase Agreement, Lessee hereby irrevocably notifies
Lessor that Lessee is exercising its right to terminate the Lease Agreement
prior to the Scheduled Expiration Date of the Lease Agreement and purchase the
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 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
182
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 18,
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 Purchase Agreement, dated as of April 18, 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 Purchase Agreement, Lessee hereby
irrevocably notifies Lessor that Lessee is exercising its right to purchase a
portion of the Property as follows:
(a) The Tract[s] of 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
(c) All of the Operative Documents are in full force and
effect.
A(2)-1
183
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
184
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 18,
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 Purchase Agreement, dated as of April 18, 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 Lease Agreement of [_____, ____].
3. Lessee hereby certifies to Lessor, Agent and the Participants
(other than Novellus) 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 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
185
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
186
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 18,
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 Purchase Agreement, dated as of April 18, 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 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
187
EXHIBIT D(1)
After recording return to: Until a change is requested, all tax
statements shall be sent to the
following address:
____________________________________ ____________________________________
____________________________________ ____________________________________
____________________________________ ____________________________________
____________________________________ ____________________________________
QUITCLAIM DEED - STATUTORY FORM
__________________, grantor, releases and quitclaims to ______________,
grantee, all of grantor's right, title and interest in and to the real property
in Washington County, Oregon, described in Exhibit A attached hereto and by this
reference made a part hereof.
The true consideration for this conveyance consists in whole of other
value given.
REQUIRED NOTICE: THIS INSTRUMENT WILL NOT ALLOW USE OF THE PROPERTY
DESCRIBED IN THIS INSTRUMENT IN VIOLATION OF APPLICABLE LAND USE LAWS AND
REGULATIONS. BEFORE SIGNING OR ACCEPTING THIS INSTRUMENT, THE PERSON ACQUIRING
FEE TITLE TO THE PROPERTY SHOULD CHECK WITH THE APPROPRIATE CITY OR COUNTY
PLANNING DEPARTMENT TO VERIFY APPROVED USES AND TO DETERMINE ANY LIMITS ON
LAWSUITS AGAINST FARMING OR FOREST PRACTICES AS DEFINED IN ORS 30.930.
DATED this _______ day of __________________, _______.
____________________________________________
[Grantor]
[Notary acknowledgment on following page]
D(1)-1
188
EXHIBIT A
LEGAL DESCRIPTION
Assessor's Parcel No.: _______________
D(1)(A)-1
189
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.
_____________________________________
190
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 Purchase
Agreement dated as of April 18, 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 18, 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
191
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 is entitled to rely and is relying on this
Certificate.
EXECUTED as of ____________, _______.
[PURCHASER]
By:___________________________
Name:______________________
Title:_____________________
D(2)-2
192
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 _______________, _________, Oregon,
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: ________, ____
ABN AMRO LEASING, INC.
By:___________________________
Name:______________________
Title:_____________________
[PURCHASER]
By:___________________________
Name:______________________
Title:_____________________
E-1
193
SCHEDULE 1
PROPERTY
E(1)-1
194
EXHIBIT F
DEED
After recording return to: Until a change is requested, all tax
statements shall be sent to the
following address:
____________________________________ ____________________________________
____________________________________ ____________________________________
____________________________________ ____________________________________
____________________________________ ____________________________________
BARGAIN AND SALE DEED - STATUTORY FORM
_________________, grantor, conveys to _____________, grantee, the real
property in Washington County, Oregon, described in Exhibit A attached hereto
and by this reference made a part hereof.
CONSIDERATION: The true and actual consideration for this conveyance is
$_______________.
REQUIRED NOTICE: THIS INSTRUMENT WILL NOT ALLOW USE OF THE PROPERTY
DESCRIBED IN THIS INSTRUMENT IN VIOLATION OF APPLICABLE LAND USE LAWS AND
REGULATIONS. BEFORE SIGNING OR ACCEPTING THIS INSTRUMENT, THE PERSON ACQUIRING
FEE TITLE TO THE PROPERTY SHOULD CHECK WITH THE APPROPRIATE CITY OR COUNTY
PLANNING DEPARTMENT TO VERIFY APPROVED USES AND TO DETERMINE ANY LIMITS ON
LAWSUITS AGAINST FARMING OR FOREST PRACTICES AS DEFINED IN ORS 30.930.
DATED this _______ day of __________________, _______.
____________________________________________
[Grantor]
[Notary acknowledgment on following page]
F-1
195
EXHIBIT A
LEGAL DESCRIPTION
Assessor's Parcel No.: ____________________
F(A)-1
196
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.
197
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 _______________, ________, Oregon, 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 __________, ____.
NOVELLUS SYSTEMS, INC.
By:___________________________
Name:______________________
Title:_____________________
G-1
198
SCHEDULE 1
PROPERTY
G(1)-1
199
EXHIBIT D
CONSTRUCTION AGENCY AGREEMENT
D-1
200
EXECUTION COPY
Novellus V
================================================================================
CONSTRUCTION AGENCY AGREEMENT
BETWEEN
NOVELLUS SYSTEMS, INC.
AND
ABN AMRO LEASING, INC.
APRIL 18, 2001
================================================================================
201
TABLE OF CONTENTS
PAGE
SECTION 1. INTERPRETATION........................................... 2
1.01. Definitions................................................. 2
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.................................... 2
3.02. Construction Agreements..................................... 3
3.03. Permits, Approvals, Etc..................................... 3
3.04. Material and Supplies....................................... 3
3.05. Construction................................................ 3
3.06. Insurance................................................... 5
3.07. Fees, Costs and Expenses.................................... 5
3.08. Books and Records........................................... 7
3.09. Additional Obligations and Duties........................... 8
SECTION 4. MISCELLANEOUS............................................ 8
4.01. Notices..................................................... 8
4.02. Waivers; Amendments......................................... 8
4.03. Successors and Assigns...................................... 8
4.04. No Third Party Rights....................................... 8
4.05. Partial Invalidity.......................................... 8
4.06. Governing Law............................................... 8
4.07. Counterparts................................................ 8
4.08. Nature of Lessee's Obligations.............................. 9
EXHIBITS
A Lessee's Completion Certificate (3.05(c))
B Architect's Completion Certificate (3.05(c))
-i-
202
CONSTRUCTION AGENCY AGREEMENT
THIS CONSTRUCTION AGENCY AGREEMENT (this "Agreement" herein), dated as
of April 18, 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 from Lessee certain land currently
owned by Lessee, (b) sublease back 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 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, 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
203
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 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
(other than Novellus in its capacity as Lessee and in accordance with the
Operative Documents) 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 (other than Novellus in its capacity as Lessee and in accordance
with the Operative Documents) to pay any such fees, costs or expenses or
otherwise impose upon any Lessor Party (other than Novellus in its capacity as
Lessee and in accordance with the Operative Documents) 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
2
204
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 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 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 Commitment and (ii) the Expiration Date
Appraisal for the 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 Property to be less
than the Expiration Date Appraisal for the 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 Land
under
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205
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 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 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;
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206
(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;
(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 Lease Agreement that Lessor is terminating the
Lease Agreement on a Termination Date which is prior to the
Scheduled Expiration Date of the 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 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 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 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 specified by Lessee in the
notice delivered by Lessee to Lessor pursuant to clause (i);
provided, however, that neither the Termination Date nor the
Outside Completion Date shall be
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207
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 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 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 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 (other than
Novellus) 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 (other than Novellus) 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
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209
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.
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, except as otherwise provided in Paragraph 7.14 of the
Participation Agreement.
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
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210
as and when required, without regard to any event or circumstances
whatsoever, 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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211
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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212
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 18,
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 Construction Agency Agreement, dated as of April 18,
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 (other than Novellus), 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 Subparagraph
4.01(t) of 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 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 Construction Agency Agreement.
A-1
213
(d) The representations and warranties relating to the
Property set forth in Subparagraph 4.01(t) of the Participation
Agreement and the 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:_________________________
A-2
214
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.
215
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:_________________________
216
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 18, 2001(the "Participation Agreement"), among Novellus
Systems, Inc. ("Lessee"), ABN AMRO Leasing, Inc. ("Lessor"), the Person 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 as
follows:
(a) Such Advance shall be in the aggregate amount of
$________; and
(b) The date of such Advance shall be ____________, ____ (the
"Advance Date").
[Add the following language for the initial Advance: This Advance Request is for
the initial Advance under the Participation Agreement and the Advance Date shall
be the Closing Date. Lessee hereby requests Lessor to enter into the Ground
Lease 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 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:
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217
(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 to be made after the
date set forth in the Construction Agency Agreement for commencement of
construction of the New Improvements:
[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 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
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: _________________________
E-2
218
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 18, 2001(the "Participation Agreement"), among Novellus Systems, Inc.
("Lessee"), ABN AMRO Leasing, Inc. ("Lessor"), the Person 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
219
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: ________________________
F(1)-2
220
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 18, 2001(the "Participation Agreement"), among Novellus Systems, Inc.
("Lessee"), ABN AMRO Leasing, Inc. ("Lessor"), the Person 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
221
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
222
EXHIBIT G
ASSIGNMENT OF CONSTRUCTION AGREEMENTS
G-1
223
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ASSIGNMENT OF CONSTRUCTION AGREEMENTS
BY
NOVELLUS SYSTEMS, INC.
IN FAVOR OF
ABN AMRO LEASING, INC.
APRIL 18, 2001
================================================================================
224
ASSIGNMENT OF CONSTRUCTION AGREEMENTS
THIS ASSIGNMENT OF CONSTRUCTION AGREEMENTS (this "Agreement" herein),
dated as of April 18, 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 a certain lease facility pursuant to which:
(1) Lessor would (a) lease from Lessee certain land currently owned
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 lease facility 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 18, 2001 (the
"Participation Agreement") among Lessee, 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.
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
225
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 Land
described in Exhibit A to the Lease Agreement, 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 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
2
226
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 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.
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, except as otherwise provided in Subparagraph 7.14 of the
Participation Agreement.
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227
4.07. Termination. After the expiration of the Lease Agreement 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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228
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
229
EXHIBIT A
CONSTRUCTION AGREEMENTS
A-1
230
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 18, 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 any Construction
Agreement 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.
B-1
231
(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.
c/o ABN AMRO Bank N.V.
135 South LaSalle Street, Suite 740
Chicago, Illinois 60603
Attn: David M. Shipley
B-2
232
EXHIBIT H
CASH COLLATERAL AGREEMENT
H-1
233
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CASH COLLATERAL AGREEMENT
BETWEEN
NOVELLUS SYSTEMS, INC.
AND
ABN AMRO LEASING, INC.
APRIL 18, 2001
================================================================================
234
TABLE OF CONTENTS
PAGE
----
SECTION 1. INTERPRETATION............................................................2
1.01. Definitions..................................................................2
1.02. Rules of Construction........................................................2
SECTION 2. DELIVERY, MAINTENANCE AND PLEDGE OF CASH COLLATERAL.......................2
2.01. Grant of Security Interest...................................................2
2.02. Depositary Banks.............................................................3
2.03. Delivery and Maintenance of Cash Collateral..................................3
2.04. Withdrawal of Cash Collateral................................................4
2.05. Obligations of Depositary Banks to Lessor....................................6
2.06. Possession by Lessor.........................................................6
2.07. Valuation of Cash Collateral.................................................7
SECTION 3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF LESSEE.......................7
3.01. Representations and Warranties...............................................7
3.02. Covenants....................................................................7
SECTION 4. RIGHTS AND REMEDIES OF LESSOR.............................................8
4.01. Authorized Actions by Lessor.................................................8
4.02. Other Rights and Remedies Upon an Event of Default...........................9
SECTION 5. MISCELLANEOUS............................................................10
5.01. Notices.....................................................................10
5.02. Waivers; Amendments.........................................................10
5.03. Successors and Assigns......................................................10
5.04. No Third Party Rights.......................................................10
5.05. Partial Invalidity..........................................................10
5.06. Governing Law...............................................................10
5.07. Counterparts................................................................10
5.08. Cumulative Rights, etc. ....................................................10
5.09. Termination.................................................................11
-i-
235
TABLE OF CONTENTS
(CONTINUED)
PAGE
----
EXHIBITS
A Securities Account Control Agreement (2.01(a))
B Deposit Account Control Agreement (2.01(b))
-ii-
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CASH COLLATERAL AGREEMENT
THIS CASH COLLATERAL AGREEMENT (this "Agreement" herein), dated as of
April 18, 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 from Lessee certain land currently owned
by Lessee, (b) sublease back 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 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 April 18, 2001 (the
"Participation Agreement") among Lessee, 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.
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, (a) 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 and (b) each term defined in the
237
California Uniform Commercial Code (the "UCC"), when used in this Agreement,
shall have the respective meaning given to that term 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. DELIVERY, MAINTENANCE AND PLEDGE OF CASH COLLATERAL.
2.01. Grant of Security Interest. As security for the Lessee Obligations,
Lessee hereby pledges and assigns to Lessor (for the ratable benefit of the
Lessor Parties, other than Novellus, as provided in the Participation Agreement)
and grants to Lessor (for the ratable benefit of the Lessor Parties, other than
Novellus, as provided in the Participation Agreement) a security interest in all
right, title and interest of Lessee in and to the following property, whether
now owned or hereafter acquired (collectively and severally, the "Cash
Collateral"):
(a) Securities Accounts. All securities accounts described in each
Securities Account Control Agreement in the form of Exhibit A, or other
control agreement in a form acceptable to Lessor and Agent, executed by
Lessee, Lessor and a Securities Intermediary (a "Securities Account
Control Agreement"); all securities (including United States Treasury
Securities) maintained in or credited to such accounts; all other
financial assets and property maintained in or credited to such accounts;
all security entitlements and other investment property relating thereto;
all documents, instruments and agreements evidencing the foregoing; all
extensions, renewals, modifications and replacements of the foregoing; all
interest and other amounts payable in connection therewith; and all
security entitlements and other rights of Lessee with respect to the
foregoing (collectively, the "Securities Accounts");
(b) Deposit Accounts. All deposit accounts described in each Deposit
Account Control Agreement in the form of Exhibit B, or other control
agreement in a form acceptable to Lessor and Agent, executed by Lessee,
Lessor and a Depositary Bank (a "Deposit Account Control Agreement"); all
certificates of deposit issued by any Depositary Bank for the account or
credit of Lessee (including without limitation all such certificates of
deposit described in each Deposit Account Control Agreement); all cash and
other property maintained in or credited to such accounts and certificates
of deposit; all documents, instruments and agreements evidencing the
foregoing; all extensions, renewals, modifications and replacements of the
foregoing; all interest and other amounts payable in connection therewith;
and all other rights of Lessee with respect to the foregoing
(collectively, the "Deposit Accounts"); and
(c) Proceeds. All proceeds of the foregoing (including, without
limitation, whatever is receivable or received when Cash 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 Cash Collateral, and all rights to
payment with respect to any cause of action affecting or relating to the
Cash Collateral).
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238
2.02. Securities Intermediaries; Depositary Banks. Lessee may maintain
Securities Accounts only with Wells Fargo Bank, National Association and other
securities intermediaries (as defined in the UCC) that are approved by Lessor
and Agent (a "Securities Intermediary") and may maintain Deposit Accounts only
with Wells Fargo Bank, National Association and other banks (as defined in the
UCC) that are approved by Lessor and Agent (a "Depositary Bank").
2.03. Delivery and Maintenance of Cash Collateral. Lessee shall deliver
and maintain Cash Collateral with Securities Intermediaries and Depositary Banks
to the extent required by Subparagraph 2.11(a) of the Participation Agreement,
subject in each case to the following terms and conditions:
(a) Advance Dates. On the date of each Advance, and prior to such
Advance, Lessee shall deliver all Cash Collateral necessary to satisfy the
Cash Collateral amount requirement set forth in Subparagraph 2.11(a) of
the Participation Agreement after giving effect to such Advance.
(b) Other Times. If, at any time, the market value of the Cash
Collateral is less than the amount requirement therefor set forth in
Subparagraph 2.11(a) of the Participation Agreement, Lessee shall, within
five (5) Business Days after demand by Lessor, deliver such additional
Cash Collateral as is necessary to cure such deficiency.
(c) Notice to Lessor. Lessee shall deliver to Lessor, at least three
(3) Business Days prior to Lessee's delivery of any Cash Collateral, a
written notice of its intention to deliver such Cash Collateral, in a form
reasonably acceptable to Lessor, setting forth, among other things, (i)
the total amount of such Cash Collateral to be delivered, (ii) the
Securities Intermediaries and/or Depositary Banks to which such Cash
Collateral is to be delivered and the amount to be delivered to each,
(iii) the proposed date of delivery and (iv) the form in which such Cash
Collateral is to be delivered. Each such notice 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.
(d) Control Agreements. No Securities Intermediary or Depositary
Bank may maintain Cash Collateral unless, at or prior to the time such
Securities Intermediary or Depositary Bank receives Cash Collateral,
Lessee, Lessor and such Securities Intermediary or Depositary Bank have
completed, executed and delivered to Lessor a Securities Account Control
Agreement or Deposit Account Control Agreement, as appropriate, which
specifically identifies each Securities Account and Deposit Account,
respectively, to be maintained by such Securities Intermediary or
Depositary Bank.
(e) Control of Accounts. Lessee may not withdraw any Cash Collateral
from the Securities Intermediaries or Depositary Banks holding the same
except as provided in Paragraph 2.04. Except as otherwise provided in
Subparagraph 2.11(a) of the Participation Agreement, if no Default has
occurred and is continuing, Lessee may direct each Securities Intermediary
or Depositary Bank maintaining Cash Collateral to hold such Cash
Collateral in the form of United States Treasury Securities or deposit
accounts and may elect the term of each such investment; provided,
however, that all such
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239
investments shall be subject to the term limitations set forth in the
definition of Cash Collateral. If a Default has occurred and is
continuing, (i) all new Cash Collateral shall be maintained in time
deposit accounts with terms not exceeding one (1) week and (ii) any
existing Cash Collateral shall, at the end of the current terms of all
investments thereof, be maintained in time deposit accounts with terms not
exceeding one (1) week.
2.04. Withdrawal of Cash Collateral. Lessee may not withdraw Cash
Collateral from Depositary Banks, except as follows:
(a) Interest. If no Default has occurred and is continuing and the
value of all Cash Collateral then equals or exceeds the amount required by
Subparagraph 2.11(a) of the Participation Agreement, Lessee shall be
entitled to receive all interest payable on Cash Collateral as and when
payable, free and clear of all liens and security interests hereunder.
(b) Principal. If no Default has occurred and is continuing and the
market value of all Cash Collateral then exceeds the amount requirement
set forth in Subparagraph 2.11(a) of the Participation Agreement, Lessee
shall be entitled to withdraw the principal portion of Cash Collateral to
the extent of such excess, free and clear of all liens and security
interests hereunder, provided that:
(i) Lessee may not withdraw any required Cash Collateral
delivered pursuant to clause (ii)(C) of Subparagraph 2.11(a) of the
Participation Agreement until the Expiration Date of the Lease
Agreement and the satisfaction in full of all Lessee Obligations,
except as otherwise permitted by Subparagraph 2.11(a) of the
Participation Agreement;
(ii) Lessee shall request each withdrawal by delivering to
Lessor, not less than three (3) Business Days prior to the proposed
date of such withdrawal, a written request in a form acceptable to
Lessor that specifies (A) the proposed date of withdrawal, (B) the
Securities Intermediary or Depositary Bank from which such Cash
Collateral will be withdrawn and (C) the quantity, form and current
market value of the Cash Collateral to be withdrawn; and
(iii) Lessee may not make more than one (1) withdrawal in any
calendar month.
Upon Lessee's request and provided that Lessee is entitled to withdraw
Cash Collateral as provided herein, Lessor shall execute and deliver to
Securities Intermediaries and Depositary Banks such written instructions
as Lessee may reasonably request to authorize withdrawals permitted
hereby.
2.05. Possession by Lessor. Lessee and Lessor agree that (a) the
possession by a Securities Intermediary or Depositary Bank of any money,
certificated securities, instruments, chattel paper or other property
constituting Cash Collateral or evidencing Cash Collateral shall be deemed to be
possession by Lessor or a person designated by Lessor, for purposes of
perfecting the security interest granted to Lessor hereunder, and (b)
notifications to a Securities Intermediary or Depositary Bank by other Persons
holding any such property, and
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240
acknowledgements, receipts or confirmations from any such Persons delivered to a
Securities Intermediary or Depositary Bank, shall be deemed notifications to, or
acknowledgements, receipts or confirmations from, securities intermediaries,
bailees or agents (as applicable) of such Securities Intermediary or Depositary
Bank for the benefit of Lessor for the purposes of perfecting such security
interests under applicable law.
SECTION 3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF LESSEE.
3.01. Representations and Warranties. Lessee represents and warrants to
the Lessor Parties (other than Novellus) as follows:
(a) Owner, Etc. Lessee is the legal and beneficial owner of the Cash
Collateral (or, in the case of after-acquired Cash Collateral, at the time
Lessee acquires rights in the Cash Collateral, will be the legal and
beneficial owner thereof). No other Person has (or, in the case of
after-acquired Cash Collateral, at the time Lessee acquires rights
therein, will have) any right, title, claim or interest (by way of Lien,
purchase option or otherwise) in, against or to the Cash Collateral.
(b) First Priority Perfected Security Interest. Lessor has (or in
the case of after-acquired Cash Collateral, at the time Lessee acquires
rights therein, will have), upon delivery of the applicable Securities
Account Control Agreement or Deposit Account Control Agreement, a first
priority perfected security interest in the Cash Collateral.
(c) Originals, Etc. Lessee has delivered to Securities
Intermediaries or Depositary Banks, together with all necessary stock
powers, endorsements, assignments and other necessary instruments of
transfer, the originals of all documents, instruments and agreements
evidencing Cash Collateral.
(d) Chief Executive Office. Lessee's chief executive office is
located at the address set forth in Subparagraph 4.01(s) of the
Participation Agreement.
(e) Information True and Correct. All information furnished by
Lessee to any Lessor Party regarding the Cash Collateral is true and
correct.
3.02. Covenants. Lessee hereby agrees with the Lessor Parties (other than
Novellus) as follows:
(a) Further Assurances. Lessee, at Lessee's expense, shall promptly
procure, execute and deliver to Lessor all documents, instruments and
agreements and perform all acts which are reasonably necessary or
desirable, or which Lessor may request, to establish, maintain, preserve,
protect and perfect the Cash Collateral, the security interest granted to
Lessor therein and the first priority of such security interest or to
enable Lessor to exercise and enforce its rights and remedies hereunder
with respect to any Cash Collateral.
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241
(b) No Violation. Lessee shall not use or permit any Cash Collateral
to be used in violation of (i) any provision of any Operative Document or
(B) any applicable Governmental Rule where such use might have a Material
Adverse Effect.
(c) Taxes, Etc. Lessee shall pay promptly when due all taxes and
other Governmental Charges, all Liens and all other charges now or
hereafter imposed upon, relating to or affecting any Cash Collateral.
(d) Chief Executive Office. Without thirty (30) days' prior written
notice to Lessor, Lessee shall not change Lessee's name or place of
business (or, if Lessee has more than one place of business, its chief
executive office).
(e) Liens. Lessee shall not create, incur, assume or permit to exist
any Lien on or with respect to any of the Cash Collateral other than Liens
in favor of Agent created hereunder.
(f) Defense of Title. Lessee shall appear in and defend any action
or proceeding which may affect its title to or Lessor's interest in the
Cash Collateral.
(g) Sale, Etc. Subject to Lessee's withdrawal rights hereunder,
Lessee shall not surrender or lose possession of (other than to Lessor or
a Depositary Bank pursuant hereto), sell, encumber, lease, rent, option,
or otherwise dispose of or transfer any Cash Collateral or right or
interest therein.
SECTION 4. RIGHTS AND REMEDIES OF LESSOR.
4.01. Authorized Actions by Lessor. Lessee hereby irrevocably appoints
Lessor as its attorney-in-fact and agrees that Lessor may perform (but Lessor
shall not be obligated to and shall incur no liability to Lessee or any third
party for failure so to do) any act which Lessee is obligated by this Cash
Collateral Agreement to perform, and to exercise such rights and powers as
Lessee might exercise with respect to the Cash Collateral, including 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 Cash 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 Cash Collateral; (c) insure, process,
preserve and enforce the Cash Collateral; (d) make any compromise or settlement,
and take any action it deems advisable, with respect to the Cash Collateral; (e)
pay any indebtedness of Lessee relating to the Cash Collateral; and (f) execute
UCC financing statements and other documents, instruments and agreements
required hereunder; provided, however, that Lessor may not exercise such powers
unless an Event of Default has occurred and is continuing. Lessee agrees to
reimburse Lessor upon demand for all reasonable costs and expenses, including
attorneys' fees, Lessor may incur while acting as Lessee's attorney-in-fact
hereunder, all of which costs and expenses are included in the Lessee
Obligations. Lessee agrees that such care as Lessor gives to the safekeeping of
its own property of like kind shall constitute reasonable care of the Cash
Collateral when in Lessor's possession; provided, however, that Lessor shall not
be required to make any presentment, demand or
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242
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 Lessee
Obligations or with respect to the Cash Collateral.
4.02. Other Rights and Remedies Upon an Event of Default. In addition to
all other rights and remedies granted to Lessor and the other Lessor Parties
(other than Novellus) by this Agreement, the Participation Agreement, the other
Operative Documents, the UCC and other applicable Governmental Rules, Lessor
may, upon the occurrence and during the continuance of any Event of Default,
exercise any one or more of the following rights and remedies:
(a) Collection, Foreclosure, Etc. Lessor may collect, receive,
appropriate or realize upon the Cash Collateral or otherwise foreclose or
enforce Lessor's security interests in any or all Cash Collateral in any
manner permitted by applicable Governmental Rules or by this Agreement.
(b) Delivery by Securities Intermediaries or Depositary Banks.
Lessor may notify any or all Securities Intermediaries and/or Depositary
Banks to deliver or pay all or any portion of the Cash Collateral held by
such Securities Intermediaries and/or Depositary Banks directly to Lessor.
Lessor shall distribute the proceeds of all Cash Collateral received by Lessor
after the occurrence of an Event of Default to the Lessor Parties (other than
Novellus) for application to the Lessee Obligations owed to such Persons
pursuant to the Participation Agreement. If any proceeds of Cash Collateral
remain after all Lessee Obligations have been paid in full, Lessor and any
Securities Intermediaries and/or Depositary Banks holding such proceeds shall
deliver the same to Lessee or other Person entitled thereto. In any case where
notice of any sale or disposition of any Cash Collateral is required, Lessee
hereby agrees that ten (10) days notice of such sale or disposition is
reasonable.
4.03. Application of Cash Collateral. Lessor may apply Cash Collateral to
pay Lessee Obligations only after the same become due pursuant to the terms of
the Operative Documents, whether by acceleration or otherwise. The parties
hereto do not intend for the Cash Collateral to constitute advance payment of
any of the Lessee Obligations or liquidated damages nor do the parties intend
for the Cash Collateral to increase the Lessee Obligations. Without limiting the
generality of the foregoing, the parties acknowledge and agree that, upon the
exercise by Lessee of the Marketing Option in accordance with the Purchase
Agreement, the Lessee Obligations thereunder shall be limited as provided
therein.
SECTION 5. MISCELLANEOUS.
5.01. Notices. Except as otherwise specified herein, all notices,
requests, demands, consents, instructions or other communications to or upon the
parties hereto 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
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243
failure or delay by any Lessor Party (other than Novellus) 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 (other than Novellus) and Lessee and
their permitted successors and assigns; provided, however, that the Lessor
Parties (other than Novellus) and Lessee 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 (other than Novellus) 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.
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. Cumulative Rights, etc. The rights, powers and remedies of Lessor
and the Participants (other than Novellus) under this Cash Collateral Agreement
shall be in addition to all rights, powers and remedies given to Lessor and the
Participants by virtue of any Applicable Law, the Participation Agreement, any
other Operative Document or any other agreement, all of which rights, powers,
and remedies shall be cumulative and may be exercised successively or
concurrently without impairing Lessor's rights hereunder. Lessee waives any
right to require Lessor or any Participant to proceed against any Person or to
exhaust any Cash Collateral or to pursue any remedy in Lessor's or such
Participant's power.
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5.09. Termination. After the Expiration Date of the Lease Agreement and
the satisfaction in full of all Lessee Obligations, Lessor's security interest
in any Cash Collateral then held by any Securities Intermediaries and/or
Depositary Banks shall terminate, the Securities Intermediaries and/or
Depositary Banks shall return any such Cash Collateral to Lessee and this
Agreement shall terminate.
[The signature page follows.]
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245
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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246
EXHIBIT A
SECURITIES ACCOUNT CONTROL AGREEMENT
THIS SECURITIES ACCOUNT CONTROL AGREEMENT, dated as of [________], 2001
(this "Control Agreement") is entered into by and among:
(1) NOVELLUS SYSTEMS, INC., a California corporation ("Grantor");
(2) ABN AMRO LEASING, INC., an Illinois corporation ("Secured
Party"); and
(3) [_______________________], a [___________________]
("Securities Intermediary").
RECITALS
A. Intermediary and Grantor have entered into a customer agreement (as
from time to time amended, modified, supplemented, or restated, the "Customer
Agreement"), pursuant to which Securities Intermediary has established its
securities account number(s) [__________________] in the name of Grantor (such
account(s), together with any all securities maintained in or credited to such
accounts; all other financial assets and property maintained in or credited to
such accounts; all security entitlements and other investment property relating
thereto; all documents, instruments and agreements evidencing the foregoing; all
extensions, renewals, modifications and replacements of the foregoing; all
interest and other amounts payable in connection therewith; and all security
entitlements and other rights of Lessee with respect to the foregoing financial
assets and credit balances from time to time credited thereto and any and all
proceeds thereof, the "Securities Account").
B. Grantor and Secured Party have entered into a Cash Collateral Agreement
dated as of April 18, 2001 (as from time to time amended, modified,
supplemented, or restated, the "Cash Collateral Agreement"), in which Grantor
has granted Secured Party a security interest in the Securities Account.
C. Secured Party, Grantor and Securities Intermediary are entering into
this Control Agreement to provide for the control of the Securities Account and
to perfect the security interest of Secured Party in the Securities Account as
more fully described in the Cash Collateral Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the above Recitals and the mutual
covenants herein contained, the parties hereto hereby agree as follows:
Section 1. The Securities Account. Securities Intermediary hereby
represents and warrants to Secured Party and Grantor that (a) the Securities
Account has been established in the name of Grantor as recited above, (b) the
Customer Agreement, the security entitlements arising
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247
out of the financial assets carried in the Securities Account and any free
credit balances are valid and legally binding obligations of Securities
Intermediary, and (c) except for the claims and interest of Secured Party and of
Grantor in the Securities Account, Securities Intermediary does not know of any
claim to or interest in the Securities Account or in any financial asset carried
therein. Securities Intermediary will treat all property held by it in the
Securities Account as financial assets under Division 8 of the Uniform
Commercial Code of [California].
Section 2. Control. Securities Intermediary shall comply with all
withdrawal, transfer, payment and redemption instructions and all other
entitlement orders (collectively, "orders") received from Secured Party
concerning the Securities Account without further consent from Grantor. Until
Securities Intermediary receives written notice from Secured Party to the
contrary, Securities Intermediary may comply with any orders it receives from
Grantor to pay to Grantor any interest paid on financial assets in the
Securities Account.
Section 3. Priority of Lien. Securities Intermediary hereby acknowledges
that it has received notice of the existence of the Cash Collateral Agreement
and of the security interest of Secured Party in the Securities Account and
recognizes the security interest granted therein to Secured Party by Grantor.
Securities Intermediary hereby confirms that the Securities Account is a cash
Securities Account and that it will not advance any margin or other credit to
Grantor therein, either directly or by allowing it to trade in instruments such
as options and commodities contracts that create similar obligations, nor
hypothecate any securities carried in the Securities Account. Securities
Intermediary hereby waives and releases all liens, encumbrances, claims and
rights of setoff it may have against the Securities Account or any financial
asset carried in the Securities Account or any credit balance in the Securities
Account and agrees that, except for payment of its customary fees and
commissions pursuant to the Customer Agreement, it will not assert any such
lien, encumbrance, claim or right against the Securities Account or any
financial asset carried in the Securities Account or any credit balance in the
Securities Account. Securities Intermediary will not agree with any third party
that Securities Intermediary will comply with orders concerning the Securities
Account originated by such third party without the prior written consent of
Secured Party and Grantor.
Section 4. Statements, Confirmations and Notices of Adverse Claims.
Securities Intermediary will send copies of all statements, confirmations and
other correspondence concerning the Securities Account simultaneously to each of
Grantor and Secured Party at the address set forth below the signature of each
below. If Securities Intermediary acquires knowledge that any person asserts any
lien, encumbrance or adverse claim against the Securities Account or in any
financial asset carried therein, Securities Intermediary will promptly notify
Secured Party and Grantor thereof.
Section 5. Responsibility of Securities Intermediary. Securities
Intermediary shall have no responsibility or liability to Grantor for complying
with orders concerning the Securities Account originated by Secured Party.
Securities Intermediary shall have no independent duty to investigate or make
any determination as to whether Secured Party is entitled to give any orders
under the Cash Collateral Agreement and shall comply with any orders given by
Secured Party. Neither this Control Agreement nor the Cash Collateral Agreement
imposes or creates any obligation or duty of Securities Intermediary other than
those expressly set forth herein.
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248
Section 6. Indemnity. Grantor shall at all times indemnify and hold
harmless the Securities Intermediary (and Securities Intermediary's directors,
officers, employees and agents) from and against any and all claims, actions and
suits arising out of the terms of this Control Agreement or the Cash Collateral
Agreement, or the compliance of the Securities Intermediary with the terms
thereof, and from and against any and all liabilities, losses, damages, costs,
charges, counsel fees and disbursements and other expenses of every nature and
character arising by reason of same, except to the extent that such arises from
the Securities Intermediary's gross negligence or willful misconduct.
Section 7. Tax Reporting. All items of income, gain, expense and loss
recognized in the Securities Account shall be reported to the Internal Revenue
Service and all state and local taxing authorities under the name and taxpayer
identification number of Grantor.
Section 8. Customer Agreement. This Control Agreement supplements the
Customer Agreement between Grantor and Securities Intermediary. In the event of
a conflict between this Control Agreement and the Customer Agreement, the terms
of this Control Agreement will prevail. Regardless of any provision in the
Customer Agreement, the State of [California] shall be deemed to be the
Securities Intermediary's location for the purposes of this Control Agreement
and the perfection and priority of Secured Party's security interest in the
Securities Account.
Section 9. Termination. The rights and powers granted herein to Secured
Party have been granted in order to perfect its security interest in the
Securities Account, are powers coupled with an interest and will neither be
affected by the dissolution or bankruptcy of Grantor nor by the lapse of time.
The obligations of Securities Intermediary under Sections 2, 3 and 4 above shall
continue in effect until the security interest of Secured Party in the
Securities Account has been terminated pursuant to the terms of the Cash
Collateral Agreement and Secured Party has notified Securities Intermediary of
such termination in writing, which Secured Party agrees to do promptly upon
request of Grantor following such termination. Upon receipt of such notice the
obligations of Securities Intermediary under Sections 2, 3 and 4 above with
respect to the operation and maintenance of the Securities Account after the
receipt of such notice shall terminate, Secured Party shall have no further
right to originate entitlement orders concerning the Securities Account and
Securities Intermediary may take such steps as Grantor may request to vest full
ownership and control of the Securities Account in Grantor, including, but not
limited to, removing the name of Secured Party from the Securities Account or
transferring all of the financial assets and credit balances in the Securities
Account to another securities account in the name of Grantor or its designee.
Section 10. This Control Agreement. This Control Agreement, the schedules
and exhibits hereto and the agreements and instruments required to be executed
and delivered hereunder set forth the entire agreement of the parties with
respect to the subject matter hereof and supersede and discharge all prior
agreements (written or oral) and negotiations and all contemporaneous oral
agreements concerning such subject matter and negotiations. There are no oral
conditions precedent to the effectiveness of this Control Agreement.
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249
Section 11. Amendments. No amendment, modification or termination of this
Control Agreement or waiver of any right hereunder shall be binding on any party
hereto unless it is in writing and is signed by the party to be charged.
Section 12. Severability. If any term or provision set forth in this
Control Agreement shall be invalid or unenforceable, the remainder of this
Control Agreement, or the application of such terms or provisions to persons or
circumstances, other than those to which it is held invalid or unenforceable,
shall be construed in all respects if such invalid or unenforceable term or
provision were omitted.
Section 13. Successors. The terms of this Control Agreement shall be
binding upon, and shall inure to the benefit of, the parties hereto and their
respective corporate successors or heirs and personal representatives.
Section 14. Rules of Construction. In this Control Agreement, words in the
singular number include the plural, and in the plural include the singular;
words of the masculine gender include the feminine and the neuter, and when the
sense so indicates words of the neuter gender may refer to any gender and the
word "or" is disjunctive but not exclusive. The captions and section numbers
appearing in this Control Agreement are inserted only as a matter of
convenience. They do not define, limit or describe the scope or intent of the
provisions of this Control Agreement.
Section 15. Notices. Any notice, request or other communication required
or permitted to be given under this Control Agreement shall be in writing and
faxed, mailed or delivered addressed to the party at the address set forth below
its signature below. All such notices, requests and communications shall be
effective (a) when sent by Federal Express or other overnight service of
recognized standing, on the first [California] 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. Any party may change its address for notices in the manner set forth
above.
Section 16. Counterparts. This Control Agreement may be executed in any
number counterparts, all of which shall constitute one and the same instrument,
and any party hereto may execute this Control Agreement by signing and
delivering one or more counterparts.
Section 17. Choice of Law. This Control Agreement shall be governed by and
construed in accordance with the laws of the State of [California] without
reference to any conflicts of law rules.
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250
IN WITNESS WHEREOF, the parties hereto have duly executed this Control
Agreement, as of the date first above written.
NOVELLUS SYSTEMS, INC.
By:
------------------------------------
Name:
------------------------------
Title:
-----------------------------
Address:
[_______________________________________]
[_______________________________________]
[_______________________________________]
[_______________________________________]
ABN AMRO LEASING, INC.
By:
------------------------------------
Name:
------------------------------
Title:
-----------------------------
Address:
[_______________________________________]
[_______________________________________]
[_______________________________________]
[_______________________________________]
[_______________________________________]
By:
------------------------------------
Name:
------------------------------
Title:
-----------------------------
Address:
[_______________________________________]
[_______________________________________]
[_______________________________________]
[_______________________________________]
251
EXHIBIT B
DEPOSIT ACCOUNT CONTROL AGREEMENT
THIS DEPOSIT ACCOUNT CONTROL AGREEMENT, dated as of [________], 2001 (this
"Control Agreement") is entered into by and among:
(1) NOVELLUS SYSTEMS, INC., a California corporation ("Grantor");
(2) ABN AMRO LEASING, INC., an Illinois corporation ("Secured
Party"); and
(3) [_______________________], a [___________________]
("Depositary Bank").
RECITALS
A. Depositary Bank has established deposit account number(s)
[__________________] in the name of Grantor (such account(s), together with all
cash and other property maintained in or credited to such accounts; all
documents, instruments and agreements evidencing the foregoing; all extensions,
renewals, modifications and replacements of the foregoing; all interest and
other amounts payable in connection therewith; all other rights of Grantor with
respect to the foregoing and any and all proceeds thereof, the "Deposit
Account").
B. Grantor and Secured Party have entered into a Cash Collateral Agreement
dated as of April 18, 2001 (as from time to time amended, modified,
supplemented, or restated, the "Cash Collateral Agreement"), in which Grantor
has granted Secured Party a security interest in the Deposit Account; and
C. Secured Party, Grantor and Depositary Bank are entering into this
Control Agreement to provide for the control of the Deposit Account and to
perfect the security interest of Secured Party in the Deposit Account as more
fully described in the Cash Collateral Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the above Recitals and the mutual
covenants herein contained, the parties hereto hereby agree as follows:
Section 1. The Deposit Account. Depositary Bank hereby represents and
warrants to Secured Party and Grantor that (a) the Deposit Account has been
established in the name of Grantor as recited above, (b) any balances in the
Deposit Account are valid and legally binding obligations of Depositary Bank,
and (c) except for the claims and interest of Secured Party and of Grantor in
the Deposit Account, Depositary Bank does not know of any claim to or interest
in the Deposit Account or in any balances maintained therein.
B-1
252
Section 2. Control. Depositary Bank shall comply with all withdrawal,
transfer, payment and other instructions (collectively, "instructions") received
from Secured Party concerning the Deposit Account without further consent from
Grantor. Until Depositary Bank receives written notice from Secured Party to the
contrary, Depositary Bank Intermediary may comply with any instructions it
receives from Grantor to pay to Grantor any interest paid on financial assets in
the Deposit Account.
Section 3. Priority of Lien. Depositary Bank hereby acknowledges that it
has received notice of the existence of the Cash Collateral Agreement and of the
security interest of Secured Party in the Deposit Account and recognizes the
security interest granted therein to Secured Party by Grantor. Depositary Bank
hereby waives and releases all liens, encumbrances, claims and rights of setoff
it may have against the Deposit Account or any balance in the Deposit Account
and agrees that, except for payment of its customary fees and commissions
pursuant to the Customer Agreement, it will not assert any such lien,
encumbrance, claim or right against the Deposit Account or any balance in the
Deposit Account. Depositary Bank will not agree with any third party that
Depositary Bank will comply with instructions concerning the Deposit Account
originated by such third party without the prior written consent of Secured
Party and Grantor.
Section 4. Statements, Confirmations and Notices of Adverse Claims.
Depositary Bank will send copies of all statements, confirmations and other
correspondence concerning the Deposit Account simultaneously to each of Grantor
and Secured Party at the address set forth below its signature below. If
Depositary Bank acquires knowledge that any person asserts any lien, encumbrance
or adverse claim against the Deposit Account or in any balance maintained
therein, Depositary Bank will promptly notify Secured Party and Grantor thereof.
Section 5. Responsibility of Depositary Bank. Depositary Bank shall have
no responsibility or liability to Grantor for complying with instructions
concerning the Deposit Account given by Secured Party, including the giving of
stop payment orders for items being presented to the Deposit Account for payment
and instructions to transfer the balances in the Deposit Account to Secured
Party or as Secured Party directs. Depositary Bank shall have no independent
duty to investigate or make any determination as to whether Secured Party is
entitled to give any instructions under the Cash Collateral Agreement, and shall
comply with any instructions given by Secured Party. Neither this Control
Agreement nor the Cash Collateral Agreement imposes or creates any obligation or
duty of Depositary Bank other than those expressly set forth herein.
Section 6. Indemnity. Grantor shall at all times indemnify and hold
harmless the Depositary Bank (and Depositary Bank's directors, officers,
employees and agents) from and against any and all claims, actions and suits
arising out of the terms of this Control Agreement or the Cash Collateral
Agreement, or the compliance of the Depositary Bank with the terms thereof, and
from and against any and all liabilities, losses, damages, costs, charges,
counsel fees and disbursements and other expenses of every nature and character
arising by reason of same, except to the extent that such arises from the
Depositary Bank's gross negligence or willful misconduct.
B-2
253
Section 7. Tax Reporting. All items of income, gain, expense and loss
recognized in the Deposit Account shall be reported to the Internal Revenue
Service and all state and local taxing authorities under the name and taxpayer
identification number of Grantor.
Section 8. Deposit Account Agreement. This Control Agreement supplements
any other agreement between Grantor and Depositary Bank relating to the Deposit
Account (collectively, the "Deposit Account Agreement"). In the event of a
conflict between this Control Agreement and the Deposit Account Agreement, the
terms of this Control Agreement will prevail. Regardless of any provision in the
Deposit Account Agreement, the State of [California] shall be deemed to be the
Depositary Bank's location for the purposes of this Control Agreement and the
perfection and priority of Secured Party's security interest in the Deposit
Account.
Section 9. Termination. The rights and powers granted herein to Secured
Party have been granted in order to perfect its security interest in the Deposit
Account, are powers coupled with an interest and will neither be affected by the
dissolution or bankruptcy of Grantor nor by the lapse of time. The obligations
of Depositary Bank under Sections 2, 3 and 4 above shall continue in effect
until the security interest of Secured Party in the Deposit Account has been
terminated pursuant to the terms of the Cash Collateral Agreement and Secured
Party has notified Depositary Bank of such termination in writing, which Secured
Party agrees to do promptly upon request of Grantor following such termination.
Upon receipt of such notice the obligations of Depositary Bank under Sections 2,
3 and 4 above with respect to the operation and maintenance of the Deposit
Account after the receipt of such notice shall terminate, Secured Party shall
have no further right to give instructions concerning the Deposit Account and
Depositary Bank may take such steps as Grantor may request to vest full
ownership and control of the Deposit Account in Grantor, including, but not
limited to, removing the name of Secured Party from the Deposit Account or
transferring all of the balances in the Deposit Account to another Deposit
Account in the name of Grantor or its designee.
Section 10. This Control Agreement. This Control Agreement, the schedules
and exhibits hereto and the agreements and instruments required to be executed
and delivered hereunder set forth the entire agreement of the parties with
respect to the subject matter hereof and supersede and discharge all prior
agreements (written or oral) and negotiations and all contemporaneous oral
agreements concerning such subject matter and negotiations. There are no oral
conditions precedent to the effectiveness of this Control Agreement.
Section 11. Amendments. No amendment, modification or termination of this
Control Agreement or waiver of any right hereunder shall be binding on any party
hereto unless it is in writing and is signed by the party to be charged.
Section 12. Severability. If any term or provision set forth in this
Control Agreement shall be invalid or unenforceable, the remainder of this
Control Agreement, or the application of such terms or provisions to persons or
circumstances, other than those to which it is held invalid or unenforceable,
shall be construed in all respects if such invalid or unenforceable term or
provision were omitted.
B-3
254
Section 13. Successors. The terms of this Control Agreement shall be
binding upon, and shall inure to the benefit of, the parties hereto and their
respective corporate successors or heirs and personal representatives.
Section 14. Rules of Construction. In this Control Agreement, words in the
singular number include the plural, and in the plural include the singular;
words of the masculine gender include the feminine and the neuter, and when the
sense so indicates words of the neuter gender may refer to any gender and the
word "or" is disjunctive but not exclusive. The captions and section numbers
appearing in this Control Agreement are inserted only as a matter of
convenience. They do not define, limit or describe the scope or intent of the
provisions of this Control Agreement.
Section 15. Notices. Any notice, request or other communication required
or permitted to be given under this Control Agreement shall be in writing and
faxed, mailed or delivered addressed to the party at the address set forth below
its signature below. All such notices, requests and communications shall be
effective (a) when sent by Federal Express or other overnight service of
recognized standing, on the first [California] 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. Any party may change its address for notices in the manner set forth
above.
Section 16. Counterparts. This Control Agreement may be executed in any
number counterparts, all of which shall constitute one and the same instrument,
and any party hereto may execute this Control Agreement by signing and
delivering one or more counterparts.
Section 17. Choice of Law. This Control Agreement shall be governed by and
construed in accordance with the laws of the State of [California] without
reference to any conflicts of law rules.
IN WITNESS WHEREOF, the parties hereto have duly executed this Control
Agreement, as of the date first above written.
NOVELLUS SYSTEMS, INC.
By:
------------------------------------
Name:
------------------------------
Title:
-----------------------------
Address:
[_______________________________________]
[_______________________________________]
[_______________________________________]
[_______________________________________]
B-4
255
ABN AMRO LEASING, INC.
By:
------------------------------------
Name:
------------------------------
Title:
-----------------------------
Address:
[_______________________________________]
[_______________________________________]
[_______________________________________]
[_______________________________________]
[_______________________________________]
By:
------------------------------------
Name:
------------------------------
Title:
-----------------------------
Address:
[_______________________________________]
[_______________________________________]
[_______________________________________]
[_______________________________________]
B-5
256
EXHIBIT I
ASSIGNMENT OF LEASE
I-1
257
RECORDING REQUESTED BY AND
WHEN RECORDED RETURN TO:
Thomas Y. Coleman, Esq.
Orrick, Herrington & Sutcliffe LLP
Old Federal Reserve Bank Building
400 Sansome Street
San Francisco, California 94111
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ASSIGNMENT OF GROUND LEASE, LEASE AGREEMENT
AND PURCHASE AGREEMENT
BY
ABN AMRO LEASING, INC.
IN FAVOR OF
ABN AMRO BANK N.V.,
AS AGENT
APRIL 18, 2001
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
258
ASSIGNMENT OF GROUND LEASE, LEASE AGREEMENT AND PURCHASE
AGREEMENT
THIS ASSIGNMENT OF GROUND LEASE, LEASE AGREEMENT AND PURCHASE AGREEMENT
(this "Assignment" herein), dated as of April 18, 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 a certain lease facility pursuant to which:
(1) Lessor would (a) lease from Lessee certain land currently
owned 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 lease facility 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 18, 2001 (the
"Participation Agreement") among Lessee, 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, including, without
limitation, the execution and delivery of (1) the Ground Lease dated as of April
18, 2001 between Lessee and Lessor (the "Ground Lease"), pursuant to which
Lessor has leased from Lessee the lots, pieces, tracts and parcels of land
described in Exhibit A (the "Land") and the other property described in the
Ground Lease (2) the Lease Agreement dated as of April 18, 2001 between Lessee
and Lessor (the "Lease Agreement"), pursuant to which Lessor has leased back to
Lessee the Land and the other property described in the Lease Agreement (the
"Property"), (3) the Purchase Agreement dated as of April 18, 2001 between
Lessee and Lessor (the "Purchase Agreement"), pursuant to which Lessee may
purchase the Property from Lessor under certain circumstances, and (4) this
Assignment.
259
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 the Ground
Lease, the Lease Agreement and the 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
under the Ground Lease, the Lease Agreement and the Purchase Agreement. 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, in
making such payments to Agent pursuant to the directions contained in this
Assignment and in reliance on such directions shall be deemed to have satisfied
its obligation for such payments under the Lease Agreement.
2.03. Irrevocability; Supplemental Instruments. Lessor agrees that (a)
this Assignment is irrevocable, (b) Lessor will not take any action under the
Ground Lease, the Lease Agreement or the Purchase Agreement 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.
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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
Ground Lease, the Lease Agreement or the Purchase Agreement 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 Ground Lease, the Lease
Agreement or the Purchase Agreement or (b) obligate Agent (or its designee) or
any Participant to perform any of the obligations of Lessor under the Ground
Lease, the Lease Agreement or the Purchase Agreement. 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 Ground Lease, the Lease Agreement or
the Purchase Agreement shall be amended, it 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 Ground Lease, the Lease Agreement
and the Purchase Agreement, 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 Lease Agreement, 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
Oregon law to allow Agent to continue to collect the Rents and other amounts
payable by Lessee under the Ground Lease, the Lease Agreement or the Purchase
Agreement, 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 Ground
Lease, the Lease Agreement or the Purchase Agreement 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 Oregon 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.
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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, except as otherwise provided in Subparagraph 7.14 of the
Participation Agreement.
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.]
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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: ______________________
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EXHIBIT A
LAND
NOVELLUS SITE
PARCEL 2
PROPERTY DESCRIPTION
Parcel A:
A parcel of land containing 23.018 Acres, more or less, located in a portion of
the Northeast Quarter of Section 22, Township Two South, Range One West,
Willamette Meridian, City of Tualatin, Washington County, Oregon, being more
particularly described as follows:
Beginning at a 2" Brass Disk in a monument box marking the one-quarter corner
common to Sections 15 and 22; thence South 00 degrees 06' 18" West 30.00 feet to
a point on the south right-of-way line of S.W. Tualatin Road; thence following
the East line of that Parcel of land shown as Parcel 2 on Washington County
Survey #23,036 South 00 degrees 06' 18" West 451.01 feet to the "TRUE POINT OF
BEGINNING" for this described tract; thence South 89 degrees 35' 19" East
1129.99 feet; thence South 00 degrees 24' 41" West 134.46 feet; thence North 89
degrees 35' 19" West 162.59 feet; thence South 00 degrees 24' 41" West 311.68
feet; thence South 89 degrees 35' 19" East 411.63 feet; thence South 00 degrees
24' 41" West 406.45 feet to a point on the north right-of-way line (being 30.00
feet from centerline) of S.W. Leveton Drive; thence following the north
right-of-way line of S.W. Leveton Drive North 89 degree 41' 51" West 48.66 feet
to an angle point in the north right-ofway line of said S.W. Leveton Drive;
thence North 89 degrees 35' 19" West 1325.84 feet to a found 3/4" brass washer
marked "PLS 2351" per survey #23,991 marking the Southeast corner of that said
Parcel of land shown as Parcel 2 on Washington County Survey #23,036; thence
following the East line of said Parcel 2 as shown on Washington County Survey
#23,036 North 00 degrees 06' 18" East 845.79 feet to the "TRUE POINT OF
BEGINNING".
Subject to: All easements, restrictions and rights-of-way of record and those
common and apparent on the land.
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EXHIBIT B
LESSEE'S CONSENT TO
ASSIGNMENT OF GROUND LEASE, LEASE AGREEMENT AND PURCHASE
AGREEMENT
April 18, 2001
ABN AMRO Leasing, Inc.
c/o ABN AMRO Bank N.V.
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 18, 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 Ground Lease, dated as of April 18, 2001 (the "Ground
Lease"), between Lessee and Lessor;
(c) The Lease Agreement, dated as of April 18, 2001 (the "Lease
Agreement"), between Lessee and Lessor;
(d) The Purchase Agreement, dated as of April 18, 2001 (the
"Purchase Agreement"), between Lessee and Lessor; and
(e) The Assignment of Ground Lease, Lease Agreement and Purchase
Agreement, dated as of April 18, 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 Ground Lease, the Lease
Agreement and the Purchase Agreement in accordance with the terms thereof.
Lessee will not, for any reason
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whatsoever, 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 Agreement.
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 Ground Lease, the Lease
Agreement, the Purchase Agreement or the Assignment of Lease; (ii) that
any notice delivered or declaration made to Lessee by Agent (or its
designee) pursuant to the Ground Lease, the Lease Agreement or the
Purchase Agreement 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 Ground Lease, the Lease Agreement or the Purchase
Agreement except as set forth in the Assignment of Lease; and (iv) that
any waiver, consent or approval by Lessor under the Ground Lease, the
Lease Agreement or the Purchase Agreement shall not be valid unless
approved in writing by Agent (or its designee).
(b) Lessee agrees to remain obligated under the Ground Lease, the
Lease Agreement and the Purchase Agreement 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 Ground
Lease, the Lease Agreement, the Purchase Agreement 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 Lease Agreement, which shall be effective
for all purposes under the Lease Agreement 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 Ground Lease or the
Lease Agreement and agrees that no such default shall entitle Lessee to
terminate (other than in accordance with the terms of the Ground Lease
or the Lease Agreement, as the case may be), annul, rescind or avoid the
Ground Lease or the Lease Agreement, 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
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accordance with the terms thereof) the Ground Lease, the Lease Agreement, the
Purchase Agreement or this Consent without Agent's prior written consent, and
that any attempted subordination, 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 Ground Lease,
the Lease Agreement or the Purchase Agreement shall be amended or supplemented
as herein permitted, the Ground Lease, the Lease Agreement or the Purchase
Agreement, 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
Ground Lease, the Lease Agreement or the Purchase Agreement, 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 Ground Lease, the
Lease Agreement, the Purchase Agreement 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.]
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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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EXHIBIT J
LESSOR DEED OF TRUST
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RECORDING REQUESTED BY
AND WHEN RECORDED RETURN TO:
Thomas Y. Coleman, Esq.
Orrick, Herrington & Sutcliffe LLP
Old Federal Reserve Bank Building
400 Sansome Street
San Francisco, California 94111
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
LINE OF CREDIT INSTRUMENT
CONSTRUCTION DEED OF TRUST AND SECURITY AGREEMENT
DATED AS OF APRIL 18, 2001
BY
ABN AMRO LEASING, INC.,
AS GRANTOR
TO
CHICAGO TITLE COMPANY,
AS TRUSTEE
FOR THE BENEFIT OF
ABN AMRO BANK N.V., AS AGENT,
AS BENEFICIARY
Relating to Property situated in:
City of Tualatin, County of Washington, Oregon
- -------------------------------------------------------------------------------
MATURITY DATE: APRIL, 2006
MAXIMUM PRINCIPAL AMOUNT TO BE ADVANCED: $170,000,000 (which may be
exceeded to complete construction pursuant to Oregon Revised Statute
Section 86.155):
- -------------------------------------------------------------------------------
THIS CONSTRUCTION DEED OF TRUST AND SECURITY AGREEMENT IS JUNIOR AND SUBORDINATE
TO THAT CERTAIN 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.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
270
LINE OF CREDIT INSTRUMENT
CONSTRUCTION DEED OF TRUST AND SECURITY AGREEMENT
THIS CONSTRUCTION DEED OF TRUST AND SECURITY AGREEMENT (this "Deed of
Trust" herein), dated as of April 18, 2001, is executed by:
(1) ABN AMRO LEASING, INC., an Illinois corporation, as
trustor/grantor ("Lessor") with an address at 135 South LaSalle Street,
Suite 740, Chicago, IL 60603;
to
(2) CHICAGO TITLE 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, Illinois, 60604, in its
capacity as Agent, as beneficiary (in such capacity, "Agent"), under the
Participation Agreement, dated as of April 18, 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 Oregon
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
271
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 (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
(including Lessee's leasehold interest in the Property under the Ground
Lease) (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 (hereinafter, the "Secured
Obligations"):
(a) Full and punctual payment, performance and observance by
Lessor of the Lessor Obligations, the final maturity date of which is
April 23, 2006; 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 a leasehold
interest in the Land and the owner of all other 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.
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272
(c) Lessor's chief executive office is located at 135 South
LaSalle Street, Suite 740, Chicago, IL 60603.
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 Agreement.
(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
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273
any conflict, the insurance and condemnation provisions as provided in
the Lease Agreement shall govern.
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 Agreement, 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
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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. 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. To apply to any court of competent
jurisdiction for, and obtain appointment of, a receiver for the
Property.
(b) Specific Performance. To 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. To collect Issues and
Profits.
(d) Protection of Property. To enter, take possession of, manage
and operate all or any part of the Property or take any other actions
which it reasonably determines 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. To exercise any or all of
the remedies granted to a secured party under the UCC.
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(f) Judicial Foreclosure. To 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.
(g) Power of Sale. To 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 Chapter 79 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 79505.
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. 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
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procedures applicable to real property, as permitted by Oregon
Revised Statute ("ORS") Section 79.5010(4). Lessor 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 ORS Section 79.5010(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
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Agent may deem to be in its best interests (any such sale or
disposition, a "Foreclosure Sale;" any two or more,
"Foreclosure Sales").
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
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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 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, except as otherwise provided in
Subparagraph 7.14 of the Participation Agreement.
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.
6.12. Oregon Recitals and Provisions.
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(a) Non-residential Trust Deed; Business Purpose. Lessee as
grantor warrants that this agreement, as a deed of trust or
trust deed under Oregon law, is not and will not at anytime
constitute a residential trust deed, as that term is defined
in ORS Section 86.705 or its successor statutes. Lessee
warrants that it is engaging in t his transaction exclusively
for business, commercial or investment purposes.
(b) Statutory Notice Concerning Insurance. Effective January 1,
1996, Chapter 313 of Oregon Laws 1995 amends ORS Section
746.201 to require that in loans in which the lender has the
right to purchase insurance in the event the borrower fails
to carry insurance, the loan document must contain a warning
in substantially the following form in 10-point type:
"WARNING
Unless you provide us with evidence of the insurance coverage
as required by our contract or loan agreement, we may
purchase insurance at your expense to protect our interest.
This insurance may, but need not, also protect your interest.
If the collateral becomes damaged, the coverage we purchase
may not pay any claim you make or any claim made against you.
You may later cancel this coverage by providing evidence that
you have obtained property coverage elsewhere.
You are responsible for the cost of any insurance purchased
by us. The cost of this insurance may be added to your
contract or loan balance. If the cost is added to your
contract or loan balance, the interest rate on the underlying
contract or loan will apply to this added amount. The
effective date of coverage may be the date your prior
coverage lapsed or the date you failed to provide proof of
coverage.
The coverage we purchase may be considerably more expensive
than insurance you can obtain on your own and may not satisfy
any need for property damage coverage or any mandatory
liability insurance requirements imposed by applicable law."
(c) Statutory Notice Concerning Written Agreements. UNDER OREGON
LAW, MOST AGREEMENTS, PROMISES AND COMMITMENTS MADE BY
LENDERS AFTER OCTOBER 3, 1989 CONCERNING LOANS AND OTHER
CREDIT EXTENSIONS WHICH ARE NOT FOR PERSONAL, FAMILY OR
HOUSEHOLD PURPOSES OR SECURED SOLELY BY THE BORROWER'S
RESIDENCE MUST BE IN WRITING, EXPRESS CONSIDERATION AND BE
SIGNED BY LENDERS TO BE ENFORCEABLE.
(d) Security Agreement. For purposes of provisions of this
instrument related to the creation and enforcement of this
Deed of Trust as a security
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agreement, Lessor is the debtor and Agent is the secured
party, and the collateral covered by the security interest in
favor of Agent is all or any portion of the Property, the
Loss Proceeds and other collateral granted to Trustee or
Agent hereunder that may be deemed to be personal property
under applicable state law. The mailing address of the debtor
(Lessor) and of the secured party (Agent) from whom
information can be obtained about such security interest are
as set forth on page 1 of this instrument.
[The signature page follows.]
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IN WITNESS WHEREOF, Lessor has executed this Deed of Trust as of the day
and year set forth above.
ABN AMRO LEASING, INC.
By:___________________________
Name:______________________
Title:_____________________
(ALL SIGNATURES MUST BE ACKNOWLEDGED)
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STATE OF CALIFORNIA )
)
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 upon
behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
[SEAL]
283
EXHIBIT A
LEGAL DESCRIPTION OF THE LAND
NOVELLUS SITE
PARCEL 2
Parcel A:
A parcel of land containing 23.018 Acres, more or less, located in a portion of
the Northeast Quarter of Section 22, Township Two South, Range One West,
Willamette Meridian, City of Tualatin, Washington County, Oregon, being more
particularly described as follows:
Beginning at a 2" Brass Disk in a monument box marking the one-quarter corner
common to Sections 15 and 22; thence South 00 degrees 06' 18" West 30.00 feet to
a point on the south right-of-way line of S.W. Tualatin Road; thence following
the East line of that Parcel of land shown as Parcel 2 on Washington County
Survey #23,036 South 00 degrees 06' 18" West 451.01 feet to the "TRUE POINT OF
BEGINNING" for this described tract; thence South 89 degrees 35' 19" East
1129.99 feet; thence South 000 24' 41" West 134.46 feet; thence North 89 degrees
35' 19" West 162.59 feet; thence South 00 degrees 24' 41" West 311.68 feet;
thence South 89 degrees 35' 19" East 411.63 feet; thence South 00 degrees 24'
41" West 406.45 feet to a point on the north right-of-way line (being 30.00 feet
from centerline) of S.W. Leveton Drive; thence following the north right-of-way
line of S.W. Leveton Drive North 89 degrees 41' 51" West 48.66 feet to an angle
point in the north right-ofway line of said S.W. Leveton Drive; thence North 89
degrees 35' 19" West 1325.84 feet to a found 3/4" brass washer marked "PLS 2351"
per survey #23,991 marking the Southeast corner of that said Parcel of land
shown as Parcel 2 on Washington County Survey #23,036; thence following the East
line of said Parcel 2 as shown on Washington County Survey #23,036 North 00
degrees 06' 18" East 845.79 feet to the "TRUE POINT OF BEGINNING".
Subject to: All easements, restrictions and rights-of-way of record and those
common and apparent on the land.
A-1
284
EXHIBIT B
RELATED GOODS, PERMITS AND AGREEMENTS
NONE
285
EXHIBIT K
LESSOR SECURITY AGREEMENT
K-1
286
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
LESSOR SECURITY AGREEMENT
BY
ABN AMRO LEASING, INC.
IN FAVOR OF
ABN AMRO BANK N.V.,
AS AGENT
APRIL 18, 2001
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
287
LESSOR SECURITY AGREEMENT
THIS LESSOR SECURITY AGREEMENT (this "Agreement" herein), dated as of
April 18, 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 a certain lease facility pursuant to which:
(1) Lessor would (a) lease from Lessee certain land currently owned
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 lease facility 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 18, 2001 (the
"Participation Agreement") among Lessee, 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, including, without
limitation, the execution and delivery of this Agreement.
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
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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).
(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.
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289
(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 Agreement.
(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, 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
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290
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, except as otherwise provided in Subparagraph 7.14 of the
Participation Agreement.
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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. Financing Statement. This Agreement will also constitute a
financing statement, under which Lessor is the debtor and Agent is the secured
party. The mailing address of debtor (the Lessor herein) and of the secured
party (the Agent herein) from which information concerning the security interest
hereunder may be obtained is as follows:
Lessor:
ABN AMRO Leasing, Inc.
c/o ABN AMRO Bank N.V.
135 South LaSalle Street, Suite 740
Chicago, Illinois 60603
Attn: David M. Shipley
Tel: (312) 904-2183
Fax: (312) 904-6217
Agent:
ABN AMRO Bank, N.V.
Agency Services
208 South LaSalle Street, Suite 1500
Chicago, Illinois 60604
Attn: Josephine O'Brien
Tel: (312) 992-5091
Fax: (312) 992-5157
A carbon, photographic or other reproduction of this Agreement or of any
financing statement related to this Agreement shall be sufficient as a financing
statement for any of the purposes referenced herein.
[The signature page follows.]
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292
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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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 18, 2001, among Novellus Systems, Inc. ("Lessee"),
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 set forth under the captions "Tranche Percentages and
Proportionate Shares Assigned" opposite such Assignee Participant's name on Part
A of
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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 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 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
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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 terms thereof, together with
such powers as are reasonably incidental thereto, all in accordance
with Section VI of the Participation Agreement.
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(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 as set forth under the caption "Tranche Percentages and
Proportionate Share 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 as set forth under the caption "Tranche Percentages and
Proportionate Share 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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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 PRIOR TO COMPLETION DATE
Tranche Percentages and Tranche Percentages and
Proportionate Shares Assigned Proportionate Shares After Assignment
---------------------------------------------------- ----------------------------------------------------
Tranche A Tranche B Tranche C Proportionate Tranche A Tranche B Tranche C Proportionate
Percentage Percentage Percentage Share Percentage Percentage Percentage Share
----------- ----------- ----------- ------------- ----------- ----------- ----------- -------------
Assignor Participant:
_________ __. ______% __. ______% __. ______% __. _______% __. ______% __. ______% __. ______% __. _______%
_________ __. ______% __. ______% __. ______% __. _______% __. ______% __. ______% __. ______% __. _______%
_________ __. ______% __. ______% __. ______% __. _______% __. ______% __. ______% __. ______% __. _______%
Assignee Participants:
_________ __. ______% __. ______% __. ______% __. _______% __. ______% __. ______% __. ______% __. _______%
_________ __. ______% __. ______% __. ______% __. _______% __. ______% __. ______% __. ______% __. _______%
_________ __. ______% __. ______% __. ______% __. _______% __. ______% __. ______% __. ______% __. _______%
_________ __. ______% __. ______% __. ______% __. _______% __. ______% __. ______% __. ______% __. _______%
L(1)-1
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ATTACHMENT 1
TO ASSIGNMENT AGREEMENT
PART A(2) TRANCHE PERCENTAGES AND PROPORTIONATE SHARES ON AND
AFTER COMPLETION DATE
Tranche Percentages and Tranche Percentages and
Proportionate Shares Assigned Proportionate Shares After Assignment
---------------------------------------------------- ----------------------------------------------------
Tranche A Tranche B Tranche C Proportionate Tranche A Tranche B Tranche C Proportionate
Percentage Percentage Percentage Share Percentage Percentage Percentage Share
----------- ----------- ----------- ------------- ----------- ----------- ----------- -------------
Assignor Participant:
_________ __. ______% __. ______% __. ______% __. _______% __. ______% __. ______% __. ______% __. _______%
_________ __. ______% __. ______% __. ______% __. _______% __. ______% __. ______% __. ______% __. _______%
_________ __. ______% __. ______% __. ______% __. _______% __. ______% __. ______% __. ______% __. _______%
Assignee Participants:
_________ __. ______% __. ______% __. ______% __. _______% __. ______% __. ______% __. ______% __. _______%
_________ __. ______% __. ______% __. ______% __. _______% __. ______% __. ______% __. ______% __. _______%
_________ __. ______% __. ______% __. ______% __. _______% __. ______% __. ______% __. ______% __. _______%
_________ __. ______% __. ______% __. ______% __. _______% __. ______% __. ______% __. ______% __. _______%
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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)-3
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PART C
ASSIGNMENT EFFECTIVE DATE: ________, ____
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ATTACHMENT 2
TO ASSIGNMENT AGREEMENT
FORM OF
ASSIGNMENT EFFECTIVE NOTICE
Reference is made to the Participation Agreement, dated as of April 18,
2001, among Novellus Systems, Inc. ("Lessee"), ABN AMRO Leasing, Inc.
("Lessor"), the Person 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: _________________________
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EXHIBIT M
GROUND LEASE AGREEMENT
M-1
305
RECORDING REQUESTED BY
AND WHEN RECORDED RETURN TO:
Thomas Y. Coleman, Esq.
Orrick, Herrington & Sutcliffe LLP
Old Federal Reserve Bank Building
400 Sansome Street
San Francisco, California 94111
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
GROUND LEASE AGREEMENT
BETWEEN
NOVELLUS SYSTEMS, INC.
AND
ABN AMRO LEASING, INC.
APRIL 18, 2001
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
306
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 Property......................................2
2.02. Term.......................................................2
2.03. Rent.......................................................2
2.04. Use........................................................4
2.05. Title; Quiet Enjoyment.....................................4
SECTION 3. OTHER LESSEE AND LESSOR RIGHTS AND OBLIGATIONS.............4
3.01. Maintenance, Repair, Etc...................................4
3.02. Risk of Loss...............................................5
3.03. Insurance..................................................5
3.04. Casualty and Condemnation..................................5
3.05. Taxes......................................................7
3.06. Environmental Matters......................................7
3.07. Liens, Easements, Etc......................................7
3.08. Assignments and Subletting.................................9
3.09. Utility Charges...........................................10
3.10. Removal of Property.......................................10
3.11. Permitted Contests........................................10
3.12. Estoppel Certificates.....................................10
3.13. Recordation of Agreement..................................10
SECTION 4. TERMINATION...............................................13
4.01. Termination Date..........................................13
4.02. Surrender of Ground Lease Property........................14
SECTION 5. DEFAULT...................................................14
5.01. Ground Lease Events of Default............................14
5.02. Remedies..................................................14
5.03. Limited Recourse..........................................14
SECTION 6. MISCELLANEOUS.............................................17
6.01. Notices...................................................17
6.02. Waivers; Amendments.......................................17
6.03. Successors and Assigns....................................17
6.04. No Third Party Rights.....................................17
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307
TABLE OF CONTENTS
(CONTINUED)
PAGE
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6.05. Partial Invalidity........................................18
6.06. Governing Law.............................................18
6.07. Counterparts..............................................18
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GROUND LEASE AGREEMENT
THIS GROUND LEASE AGREEMENT (this "Agreement" herein), dated as of April
18, 2001 is entered into by and between:
(1) NOVELLUS SYSTEMS, INC., a California corporation ("Ground
Lessor"); and
(2) ABN AMRO LEASING, INC., an Illinois corporation ("Ground
Lessee").
RECITALS
A. Ground Lessor is the fee owner of the land described in Exhibit A (as
more fully defined below, the "Land").
B. Ground Lessor has requested Ground Lessee and the financial
institutions which are "Participants" under the Participation Agreement referred
to in Recital C below (such financial institutions to be referred to
collectively as the "Participants") to provide to Ground Lessor a lease facility
pursuant to which:
(1) Ground Lessee would (a) lease from Ground Lessor the Land, (b)
sublease back to Ground Lessor the Land and lease to Ground Lessor
certain improvements to be constructed on the Land, (c) appoint Ground
Lessor as Ground Lessee's agent to make such improvements (which
improvements will be owned by Ground Lessee), (d) make advances to
finance such improvements and to pay certain related expenses, and (e)
grant to Ground Lessor the right to purchase such improvements; and
(2) The Participants would participate in such lease facility by (a)
funding the advances to be made by Ground Lessor and (b) acquiring
participation interests in the rental and certain other payments to be
made by Ground Lessor.
C. Pursuant to a Participation Agreement dated of even date herewith
(the "Participation Agreement") among Ground Lessee, Ground Lessor, the
Participants and ABN AMRO Bank N.V., as agent for the Participants (in such
capacity, "Agent"), Ground Lessee 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 Ground Lessor to Ground Lessee
of the Land.
AGREEMENT
NOW, THEREFORE, in consideration of the above Recitals and the mutual
covenants herein contained, the parties hereto hereby agree as follows:
309
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. For good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Ground Lessor agrees
to lease to Ground Lessee and Ground Lessee agrees to lease from Ground Lessor
the following property (the "Ground Lease Property") to the extent of Ground
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 "Land");
(b) All Improvements now or hereafter located on the Land;
(c) All Appurtenant Rights belonging, relating or pertaining to
the 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 Land or any of the foregoing Improvements or Appurtenant
Rights; and
(e) All accessions and accretions to and replacements and
substitutions for the foregoing.
Pursuant to the Participation Agreement, Ground Lessee has agreed to make
Advances to construct certain Improvements to the Land and to purchase certain
related property. Ground Lessor and Ground Lessee agree that Ground Lessee will
own the Improvements and such other property and that Ground Lessor's only
interest in the Improvements and such other property is the leasehold interest
granted to Ground Lessor therein in the Lease Agreement.
2.02. Term. The original term of this Agreement shall commence on the
Closing Date (the "Ground Lease Commencement Date") and shall end on the first
Business Day of May 2051 (the "Ground Lease Scheduled Expiration Date"), subject
to the terms of Subparagraph 4.01(a) below.
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310
2.03. Rent. On or before the Ground Lease Commencement Date, Ground
Lessee shall pay to Ground Lessor as rent hereunder the following amounts:
(a) During the Construction Period or earlier termination thereof,
monthly rent equal to the fair market value of the Ground Lease Property
as of the Closing Date in the amount of $33,333.33 per month (prorated
for each partial month based on the number of days for such partial
months) (such total fair market value rent referred to as the
"Construction Period Ground Lease Fair Market Rent"). The Construction
Period Ground Lease Fair Market Rent shall accrue and shall be due and
payable by Ground Lessee to Ground Lessor on the first day after the
expiration or earlier termination of the Construction Period; and
(b) For the period commencing after the Construction Period
through the remaining term of this Agreement the sum of Ten Dollars
($10.00); provided, however, that Ground Lessor may, after the
Expiration Date of the Lease Agreement and the satisfaction in full of
all Lessee Obligations, increase the rent payable by Ground Lessee for
the remaining term hereof to the "market rent," by delivering to Ground
Lessee not less than forty-five (45) days prior to the proposed date of
such increase, a written notice (a "Notice of Ground Lease Rent
Increase"). The "market rent" for the remainder of the term shall be the
rent that would be agreed upon between a willing lessee, under no
compulsion to lease, and a willing lessor, under no compulsion to lease,
for unimproved land comparable in size and location to the Land,
exclusive of any Improvements, at the time of Ground Lessor's exercise
of its rights under this Subparagraph 2.03(b) and taking into
consideration, among other relevant factors, the condition of the Land
and the encumbrances affecting the title to the Land at the time of the
exercise of such rights and the obligations of the Ground Lessor under
this Agreement, including its obligation to pay taxes. If Ground Lessor
and Ground Lessee cannot agree upon such "market rent" within seven (7)
days after the date Ground Lessor delivers the Notice of Ground Lease
Rent Increase (the "Rent Increase Notification Date"), the "market rent"
shall be determined as follows:
(i) Not later than fourteen (14) days after the Rent Increase
Notification Date, Ground Lessor and Ground Lessee each shall appoint a
real estate appraiser familiar with properties in the vicinity of the
Land and shall notify the other party of its appointment. If the two
appraisers agree upon the "market rent" within twenty-one (21) days
after the Rent Increase Notification Date, such rent will be binding
upon Ground Lessor and Ground Lessee. If the two appraisers cannot agree
upon the "market rent" within such time period, then, not later than
twenty-eight (28) days after the Rent Increase Notification Date, such
appraisers shall appoint a third real estate appraiser familiar with
properties in the vicinity of the Land. Immediately after such
appointment (and in no event later than thirty (30) days after the Rent
Increase Notification Date), each of the first two appraisers will
submit his/her best estimate of the "market rent", together with a
written report supporting such estimate, to the third appraiser. Not
later than thirty-five (35) days after the Rent Increase Notification
Date, the third appraiser will select the estimate of the "market rent"
he/she concludes to be the closest to the definition thereof set forth
above in this Subparagraph 2.03(b) and shall notify Ground Lessor and
Ground
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Lessee of such selection. The estimate so selected by the third
appraiser will be binding upon Ground Lessor and Ground Lessee.
(ii) If a third appraiser must be chosen pursuant to Subparagraph
2.03(b) and the first two appraisers cannot agree upon the third
appraiser within the prescribed time, either Ground Lessor or Ground
Lessee may require each of the first two appraisers immediately to
submit its choice for the third appraiser to the American Arbitration
Association ("AAA") in San Francisco, California for selection in
accordance with the then rules of said association within thirty-five
(35) days after the Rent Increase Notification Date. If such a procedure
is necessary to appoint the third appraiser, then (i) the deadline for
the two appraisers to submit to the third appraiser their estimates of
the "market rent" and supporting report pursuant to Subparagraph 2.03(b)
shall be not later than thirty-seven (37) days (rather than thirty (30)
days) after the Rent Increase Notification Date and (ii) the deadline
for the third appraiser to select one of the two estimates pursuant to
Subparagraph 2.03(b) shall be not later than forty-two (42) days (rather
than thirty-five (35) days) after the Rent Increase Notification Date.
(iii) If either party or its appraiser fails to comply with the
procedures (including deadlines) set forth above, then the other party's
appraiser will determine the "market rent".
(iv) Ground Lessor and Ground Lessee each shall bear the expense
of the appraiser appointed by it, and the expenses of the third
appraiser and the AAA will be shared equally by Ground Lessor and Ground
Lessee.
(v) All appraisers selected for the appraisal process set out in
this Subparagraph 2.03(b) will be disinterested, reputable, qualified
real estate appraisers with the designation of MAI or equivalent and
with at least five (5) years experience in appraising properties
comparable to the Land. If a third appraiser must be chosen pursuant to
Subparagraph 2.03(b), such appraiser will be chosen on the basis of
objectivity and competence, not on the basis of such appraiser's
relationship with the other appraisers or the parties to this Agreement.
2.04. Use. Ground Lessee may use the Ground Lease Property for any
lawful purpose.
2.05. Title; Quiet Enjoyment.
(a) Title. Ground Lessor represents and warrants to Ground Lessee
that Ground Lessor has good and marketable title to the Ground Lease
Property. Ground Lessor shall not sell, lease, transfer or otherwise
dispose of its right, title and interest in the Ground Lease Property or
this Agreement prior to the Expiration Date of the Lease Agreement and
the satisfaction in full of all Lessee Obligations.
(b) No Merger. The leasehold estate in the Ground Lease Property
created by this Agreement shall not be merged with the fee estate or any
other interest in the Ground Lease Property as a result of the same
Person acquiring, owning or holding, directly or
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indirectly, in whole or in part, (i) the leasehold estate in the Ground
Lease Property created hereby or any interest in such leasehold estate
and (ii) the fee estate in the Ground Lease Property or any interest in
such fee estate, unless all parties with an interest in the Ground Lease
Property that would be adversely affected by any such merger
specifically agree in writing that such a merger shall occur.
(c) Quiet Enjoyment. Neither Ground Lessor nor any other Person
lawfully claiming any right or interest in the Ground Lease Property
shall, prior to the Ground Lease Expiration Date, disturb Ground
Lessee's peaceable and quiet enjoyment of the Ground Lease Property;
provided, however, that such enjoyment shall be subject to the terms of
this Agreement.
(d) Partition of Land. Ground Lessor and Ground Lessee
acknowledge that the Land currently is a portion of a larger 58-acre
parcel of land owned by Ground Lessor. Ground Lessor submitted to the
City of Tualatin, Oregon, on November 29, 2000, a Development
Application seeking approval of a 3-lot partition of the 58-acre parcel
(the "Development Application"). In the Development Application, the
Land is identified as Parcel 1, consisting of approximately 23.018
acres. On January 22, 2001, the City Council of the City of Tualatin,
Oregon, adopted Resolution No. 3806-01 (the "Resolution"), granting
approval of the partition as requested in the Development Application,
subject to the conditions set forth in the Resolution. Ground Lessor
covenants and agrees that it shall promptly take all necessary steps,
including the recording of a final approved plat, and in no event later
than ninety (90) days after the Closing Date, to complete the partition
of the 58-acre parcel as approved by the Resolution.
SECTION 3. OTHER LESSEE AND LESSOR RIGHTS AND OBLIGATIONS.
3.01. Maintenance, Repair, Etc.
(a) General. Until the Expiration Date of the Lease Agreement,
Ground Lessor shall maintain the Ground Lease Property in accordance
with the terms and provisions of the Lease Agreement. Following the
Expiration Date of the Lease Agreement and until the Ground Lease
Expiration Date, Ground Lessee shall maintain the Ground Lease Property
on a basis consistent with the operation and maintenance of commercial
properties comparable in type and location to the Ground Lease Property
and in compliance with prudent industry practice.
(b) Improvements. Ground Lessee, at its sole cost and expense, may
from time to time make alterations, renovations, additions and other
Improvements to the Ground Lease Property and substitutions and
replacements therefor; provided, however, that, unless an Event of
Default has occurred and is continuing under the Lease Agreement, Ground
Lessee shall not make any such alterations, renovations, additions or
other Improvements prior to the Expiration Date of the Lease Agreement,
except pursuant to the terms of the Construction Agency Agreement.
Unless purchased by Ground Lessor
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pursuant to the Purchase Agreement, all Improvements to the Ground Lease
Property, whether constructed before or during the term of this
Agreement, shall be the property of Ground Lessee and may be removed by
Ground Lessee at any time at or prior to the termination of this
Agreement; provided, however, that Ground Lessee shall not remove any
such property prior to the Expiration Date of the Lease Agreement unless
an Event of Default has occurred and is continuing under the Lease
Agreement.
3.02. Risk of Loss. Until the Expiration Date of the Lease Agreement,
Ground Lessor 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
Ground Lease Property in accordance with the terms and provisions of the Lease
Agreement. If Ground Lessor exercises the Expiration Date Purchase Option
pursuant to the Purchase Agreement and (b) Ground Lessee elects to retain the
Property pursuant to Subparagraph 3.02(d) of the Purchase Agreement, Ground
Lessee assumes such risks of loss and such liability arising after the Scheduled
Expiration Date, except to the extent any such loss or liability is primarily
caused by the gross negligence or willful misconduct of Ground Lessor or the
breach by Ground Lessor of its obligations under the Operative Documents.
3.03. Insurance. Until the Expiration Date of the Lease Agreement,
Ground Lessor shall carry and maintain liability insurance coverage for the
Ground Lease Property as provided in Paragraph 3.03 of the 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.
(a) Repair. Until the Expiration Date of the Lease Agreement,
Ground Lessor, at its sole cost and expense, shall diligently proceed to
repair and restore the Ground Lease Property in accordance with the
terms and provisions of the Lease Agreement. If any Casualty or
Condemnation affecting the Ground Lease Property (except for any
Casualty primarily caused by the gross negligence or willful misconduct
of Ground Lessor or the breach by Ground Lessor of its obligations under
the Operative Documents) shall occur after the Scheduled Expiration
Date, Ground Lessee, at its sole cost and expense, shall diligently
proceed to repair and restore the Ground Lease Property as near as
practically possible to the condition in which it existed immediately
prior to such Casualty or Condemnation and shall complete all such
repairs and restoration not later than six (6) months after the
occurrence of the Casualty or Condemnation.
(b) Prosecution of Claims for Casualty and Condemnation Proceeds.
Until the Expiration Date of the Lease Agreement, Ground Lessor shall
proceed promptly and diligently to prosecute in good faith the
settlement or compromise of any and all claims for Casualty and
Condemnation Proceeds in accordance with the terms and provisions of the
Lease Agreement. Following the Expiration Date of the Lease Agreement
and until the Ground Lease Expiration Date, Ground 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
with respect to the Ground Lease Property and Ground Lessee is hereby
authorized, in its own name or in Ground Lessor's name, to adjust any
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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.
(c) Assignment of Casualty and Condemnation Proceeds. Ground
Lessor hereby absolutely and irrevocably assigns to Ground Lessee all
Casualty and Condemnation Proceeds and all claims relating thereto,
which Casualty and Condemnation Proceeds will be applied to repair and
restore the Ground Lease Property pursuant to Subparagraph 3.04(a).
3.05. Taxes. Ground Lessor shall promptly pay when due all taxes and
other Governmental Charges imposed on or payable by Ground Lessee in connection
with the Ground Lease Property, this Agreement or any of the transactions
contemplated hereby or thereby. Upon request of Ground Lessee, as promptly as
possible after any such taxes or other Governmental Charges are payable by
Ground Lessor, Ground Lessor shall send to Ground Lessee a certified copy of an
original official receipt received by Ground Lessor showing payment thereof. If
Ground Lessor fails to pay any such taxes or other Governmental Charges when due
to the appropriate taxing authority or fails to remit to Ground Lessee the
required receipts or other required documentary evidence, Ground Lessor shall
indemnify Ground Lessee for any incremental taxes, interest or penalties that
may become payable by Ground Lessee as a result of any such failure. The
obligations of Ground Lessor under this Paragraph 3.05 shall survive the
termination of this Agreement.
3.06. Environmental Matters. Ground Lessee shall not cause or permit the
Ground Lease Property to be used as a site for the use, generation, manufacture,
storage, treatment, release, discharge, disposal or transportation of any
Hazardous Materials in a manner that would materially decrease the value of the
Ground Lease Property or that would constitute a material violation of any
Environmental Laws.
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3.07. Liens, Easements, Etc.
(a) Ground Lessor's Covenants. Until the Expiration Date of the
Lease Agreement and the satisfaction in full of all Lessee Obligations,
Ground Lessor shall not create, incur, assume or permit to exist any
Lien or easement on or with respect to any of the Ground Lease Property
of any character, whether now owned or hereafter acquired, except for
Permitted Property Liens of the types described in Subparagraph 3.07(a)
of the Lease Agreement. Following the Expiration Date of the Lease
Agreement and for the remainder of the term of this Agreement until the
Ground Lease Expiration Date, Ground Lessor agrees that Ground Lessee
may, and Ground Lessor hereby consents in each instance to the following
actions by Ground Lessee for the following purposes: (i) the granting of
licenses and other rights and privileges reasonably necessary or
desirable for the use, repair, or maintenance of the Ground Lease
Property; (ii) the release of existing easements or other rights in the
nature of easements which are for the benefit of the Ground Lease
Property; (iii) the seeking of any zoning variances or modifications to
existing zoning; and (iv) the imposition of and the execution of
amendments to, or waivers or releases of any covenants, easements,
licenses, and restrictions affecting the Ground Lease 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 Ground Lease Property or materially and adversely
affect Ground 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 Ground Lease Property, (3) such grant, release, dedication, transfer
or amendment will not cause the Ground Lease 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) Ground Lessee
shall remain obligated under this Agreement as though such grant,
release, dedication, transfer or amendment had not been effected, and
(6) Ground Lessee shall pay and perform, or caused to be paid and
performed, any obligations of Ground Lessor under such grant, release,
dedication, transfer or amendment. Ground Lessor shall, upon the request
of Ground Lessee, and at Ground 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 3.07.
(b) Ground Lessee's Covenants. Except for Leasehold Mortgages
permitted by Subparagraph 3.07(c) and subject to Paragraph 3.11 relating
to permitted contests, Ground Lessee shall not (i) transfer or assign to
any Person any of Ground Lessee's interests in the Ground Lease Property
in violation of any of the Operative Documents or (ii) create, incur,
assume or permit to exist any Lien in the Ground Lease Property arising
as a result of any claim against Ground Lessee by any Person unrelated
to any of the Operative Documents or the transactions contemplated
thereby.
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(c) Leasehold Mortgages.
(i) Ground Lessor 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. After the Expiration Date of the Lease
Agreement, Ground Lessee may, as security for any indebtedness of
Ground Lessee, grant to any holder of such indebtedness a Lien in
its leasehold interest in the Ground Lease Property (any such
Liens, together with the Liens granted to Agent pursuant to the
Operative Documents, to be referred to herein as "Leasehold
Mortgages").
(ii) Any Person may become the legal owner and holder of the
leasehold interest in the Ground Lease 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 Ground Lessee hereunder
with the rights and obligations thereof.
(iii) Ground Lessor shall notify each holder of a Leasehold
Mortgage (a "Leasehold Mortgagee") of any default by Ground Lessee
hereunder. No notice of a default by Ground 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 Ground Lessee
under this Agreement to correct or cure defaults, plus an
additional period of thirty (30) days thereafter. Ground Lessor
will accept performance by any Leasehold Mortgagee of any
covenant, condition or agreement on Ground Lessee's part to be
performed hereunder with the same force and effect as though
performed by Ground Lessee.
(iv) If this Agreement should terminate by reason of a
disaffirmance or rejection of this Agreement by Ground Lessee or
any receiver, liquidator or trustee for the property of Ground
Lessee, or by any Governmental Authority that has taken possession
of the business or property of Ground Lessee by reason of the
insolvency or alleged insolvency of Ground Lessee, then:
(A) Ground Lessor shall give notice thereof to each
Leasehold Mortgagee and, upon request of any Leasehold
Mortgagee made within sixty (60) days after Ground Lessor has
given such notice, Ground Lessor shall enter into a new ground
lease of the Ground Lease 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 Ground Lessor to
enter into a new ground lease, Ground Lessor shall enter into
such a new ground lease with the requesting Leasehold
Mortgagee holding the highest priority Leasehold Mortgage. If
two or more requesting Leasehold Mortgagees share the
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highest priority, the new ground lease shall name all such
Leasehold Mortgagees as co-tenants thereunder.)
(B) The estate of any Leasehold Mortgagee, as lessee
under such a new ground lease, shall have the same priority as
the estate of Ground Lessee created under this Agreement. If
the Lease Agreement or Purchase Agreement are in effect at the
time of execution of such new ground lease, such new ground
lease shall be made subject to the Lease Agreement and the
Purchase Agreement.
(v) No modification or early termination of this Agreement
shall be effective without the consent of a Leasehold Mortgagee if
(A) Ground 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) Ground Lessor has been
notified of such agreement.
(vi) No Leasehold Mortgagee will assume any liability under
this Ground Lease either by virtue of its Leasehold Mortgage or by
any subsequent receipt or collection of rents or profits generated
from the Ground Lease Property, unless and until the Leasehold
Mortgagee acquires Ground Lessee's leasehold interest in the
Ground Lease Property at foreclosure or by deed in lieu of
foreclosure.
3.08. Assignments and Subletting.
(a) Permitted Assignments and Subleases. Ground Lessee may:
(i) Prior to the Expiration Date of the Lease Agreement,
sublease the Ground Lease Property to Ground Lessor pursuant to
the Lease Agreement; and
(ii) On or after the Expiration Date of the Lease Agreement,
unless Ground Lessor purchases the Property on the Expiration Date
pursuant to the Term Purchase Option or the Expiration Date
Purchase Option in the Purchase Agreement and satisfies in full
all Lessee Obligations, sublease the Ground Lease Property to any
Person pursuant to a lease agreement that is subject to the terms
of this Agreement or sell or assign this Agreement to any Person.
Ground Lessee shall notify Ground Lessor in writing of any such
sublease, sale or assignment on or after the Expiration Date of
the Lease Agreement.
Except as permitted by clause (i) or (ii) above or by Subparagraph
2.11(b) or Subparagraph 7.05(d) of the Participation Agreement, Ground
Lessee shall not sell or assign this Agreement or sublease the Ground
Lease Property.
(b) Assumption of Ground Lessee Obligation. All obligations of
Ground Lessee under this Agreement shall be assumed by (i) Ground Lessor
during the Term of the Lease Agreement and while Ground Lessor is in
possession of the Ground Lease Property, (ii) each other Person to whom
Ground Lessee subleases the Ground Lease
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Property pursuant to Subparagraph 3.08(a) during the term of such
sublease and while such Person is in possession of the Ground Lease
Property and (iii) by any Person to whom Ground Lessee sells or assigns
this Agreement pursuant to Subparagraph 3.08(a) at all times after such
sale or assignment, and each such Person shall be deemed so to have
assumed such obligations by entering into such sublease or by purchasing
or taking assignment of this Agreement. Ground Lessor agrees that Ground
Lessee shall have no duty to perform any of its obligations under this
Agreement and shall be fully released from all such obligations during
the periods when such obligations are so assumed by other Persons
pursuant to clauses (i) and (ii) of the first sentence of this
Subparagraph 3.08(b) and at all times after any sale or assignment of
this Agreement.
3.09. Utility Charges. Ground Lessor 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 Ground Lease
Property during the term of this Agreement.
3.10. Removal of Property. Unless purchased by Ground Lessor pursuant to
the Term Purchase Option or the Expiration Date Purchase Option in the Purchase
Agreement, all Improvements to the Ground Lease Property and all other Property
(other than the Land) may be removed by Ground Lessee at any time at or prior to
the termination of this Agreement; provided, however, that Ground Lessee shall
not remove any such property prior to the Expiration Date of the Lease Agreement
unless an Event of Default has occurred and is continuing under the Lease
Agreement.
3.11. Permitted Contests. Ground Lessee may contest any alleged Lien on
any of the Ground Lease Property in violation of Subparagraph 3.07(b), provided
that any such contest is completed and such Lien is discharged (either pursuant
to such proceedings or otherwise) not later than the Ground Lease Expiration
Date.
3.12. 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 the Ground Lease is unmodified and in full force
and effect, and any other matters that may reasonably be requested.
3.13. Recordation of Agreement. Neither Ground Lessor nor Ground 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, Ground Lessee shall promptly execute, acknowledge and deliver to
Ground Lessor any quitclaim deed or other document required by Ground Lessor or
a title company to evidence the termination of Ground Lessee's interests in the
Ground Lease Property.
SECTION 4. TERMINATION.
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4.01. Termination Date.
(a) Early Termination. This Agreement shall continue in full force
and effect until the Ground Lease Scheduled Expiration Date except as
follows:
(i) This Agreement may be terminated by Ground Lessee at any
time upon one (1) month's prior written notice to Ground Lessor;
provided, however, in no event shall Ground Lessee exercise the
right of termination prior to the Expiration Date of the Lease
Agreement unless an Event of Default has occurred and is
continuing under the Lease Agreement and Ground Lessor's right as
Lessee thereunder to remain in possession is terminated.
(ii) This Agreement may be terminated by Ground Lessor on the
Expiration Date of the Lease Agreement upon one (1) month's prior
written notice to Ground Lessee if Ground Lessor purchases the
Property on such date pursuant to the Term Purchase Option or the
Expiration Date Purchase Option in the Purchase Agreement and
satisfies in full all Lessee Obligations on or prior to such date;
provided, however, that, if this Agreement is so terminated on the
Expiration Date but any amounts paid by Ground Lessor are
thereafter recovered, Ground Lessor shall, at the request of
Ground Lessee, enter a new Ground Lease in the form of this
Agreement for the remaining term of this Agreement.
(b) No Other Early Termination Date. Except as provided in
Subparagraph 4.01(a), this Agreement shall not terminate prior to the
Ground Lease Scheduled Expiration Date for any reason including, without
limitation, (i) any Casualty to or Condemnation of all or any part of
the Ground Lease Property, (ii) the occurrence of any Ground Lease Event
of Default or any other default by Ground 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
Ground 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 Ground Lessor hereunder shall be separate and independent
of the covenants and agreements of Ground Lessee.
4.02. Surrender of Ground Lease Property. Ground Lessee shall vacate and
surrender the Ground Lease Property to Ground Lessor in its then-current
condition on the date (the "Ground Lease Expiration Date") that is the earlier
of (a) the Ground Lease Scheduled Expiration Date and (b) any earlier date on
which this Agreement is terminated pursuant to Subparagraph 4.01(a).
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SECTION 5. DEFAULT.
5.01. Ground Lease Events of Default. The occurrence or existence of any
one or more of the following shall constitute a "Ground Lease Event of Default"
hereunder:
(a) Non-Payment. Ground Lessee shall fail to pay any installment
of rent payable hereunder within sixty (60) days after such installment
is due; or
(b) Other Defaults. Ground 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 Ground 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 Ground 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 Ground
Lease Scheduled Expiration Date and (ii) one hundred and eighty days
(180) days after Ground Lessor's notice thereof.
5.02. Remedies. Upon the occurrence or existence of any Ground Lease
Event of Default and at any time thereafter unless such Ground Lease Event of
Default is waived, Ground Lessor may sue Ground Lessee for the collection of any
amount due under this Agreement or to enjoin the continuation of the Ground
Lease Event of Default; provided, however, that such remedies are the sole and
exclusive remedies of Ground Lessor hereunder. Ground Lessor may not terminate
this Agreement or Ground Lessee's right to possession under this Agreement
except as expressly provided herein.
5.03. Limited Recourse. Neither a Ground 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 Ground Lessee under this
Agreement. Any judgment which Ground Lessor may obtain against a Ground Lessee
that is a Lessor Party for amounts due under this Agreement may be collected
only through resort to a judgment lien against Ground Lessee's interest in the
Ground Lease Property.
SECTION 6. MISCELLANEOUS.
6.01. Notices. Except as otherwise specified herein, (a) all notices,
requests, demands, consents, instructions or other communications to or upon
Ground Lessee or Ground Lessor under this Agreement given on or prior to the
Expiration Date of the 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 Ground Lessee or Ground Lessor under this Agreement given after the
Expiration Date of the 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
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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.
6.02. Waivers; Amendments. Until the Expiration Date of the Lease
Agreement and the satisfaction in full of all Lessee Obligations or, if earlier,
the date on which Ground 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 Ground Lessor and Ground
Lessee. 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.
6.03. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the Ground Lessor and Ground Lessee and their permitted
successors and assigns; provided, however, that Ground Lessor and Ground Lessee
shall not sell, assign or delegate their respective rights and obligations
hereunder except as provided in this Agreement or 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 Ground Lessor, Ground Lessee, the Lessor Parties, Lessee and each of
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 except as otherwise provided in Paragraph 7.14 of the
Participation Agreement.
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.
[The signature page follows.]
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IN WITNESS WHEREOF, Ground Lessee and Ground Lessor have caused this
Agreement to be executed as of the day and year first above written.
GROUND LESSOR: NOVELLUS SYSTEMS, INC.
By:_________________________________
Name:____________________________
Title:___________________________
GROUND LESSEE: ABN AMRO LEASING, INC.
By:_________________________________
Name:____________________________
Title:___________________________
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EXHIBIT A
LEGAL DESCRIPTION
NOVELLUS SITE
PARCEL 2
Parcel A:
A parcel of land containing 23.018 Acres, more or less, located in a portion of
the Northeast Quarter of Section 22, Township Two South, Range One West,
Willamette Meridian, City of Tualatin, Washington County, Oregon, being more
particularly described as follows:
Beginning at a 2" Brass Disk in a monument box marking the one-quarter corner
common to Sections 15 and 22; thence South 00 degrees 06' 18" West 30.00 feet to
a point on the south right-of-way line of S.W. Tualatin Road; thence following
the East line of that Parcel of land shown as Parcel 2 on Washington County
Survey #23,036 South 00 degrees 06' 18" West 451.01 feet to the "TRUE POINT OF
BEGINNING" for this described tract; thence South 89 degrees 35' 19" East
1129.99 feet; thence South 00 degrees 24' 41" West 134.46 feet; thence North 89
degrees 35' 19" West 162.59 feet; thence South 00 degrees 24' 41" West 311.68
feet; thence South 89 degrees 35' 19" East 411.63 feet; thence South 00 degrees
24' 41" West 406.45 feet to a point on the north right-of-way line (being 30.00
feet from centerline) of S.W. Leveton Drive; thence following the north
right-of-way line of S.W. Leveton Drive North 89 degrees 41' 51" West 48.66 feet
to an angle point in the north right-ofway line of said S.W. Leveton Drive;
thence North 89 degrees 35' 19" West 1325.84 feet to a found 3/4" brass washer
marked "PLS 2351" per survey #23,991 marking the Southeast corner of that said
Parcel of land shown as Parcel 2 on Washington County Survey #23,036; thence
following the East line of said Parcel 2 as shown on Washington County Survey
#23,036 North 00 degrees 06' 18" East 845.79 feet to the "TRUE POINT OF
BEGINNING".
Subject to: All easements, restrictions and rights-of-way of record and those
common and apparent on the land.
A-1