EXHIBIT 10.1
PARTICIPATION AGREEMENT
THIS PARTICIPATION AGREEMENT (this "Agreement" herein), dated as of
September 21, 2001, is entered into by and among:
(1) NOVELLUS SYSTEMS, INC., a California corporation ("Lessee");
(2) ABN AMRO LEASING, INC., an Illinois corporation ("Lessor");
(3) NOVELLUS INVESTMENT I, LLC, a California limited liability
company and/or with any other Affiliate of Novellus that is at any time
a "Participant" hereunder ("Novellus Participant"), and each of the
other 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, Lessor, certain affiliates of Lessor as "Lessors" (the
"Existing Affiliate Lessors" and, collectively with Lessor, the "Existing
Lessors"), certain financial institutions as "Participants" (the "Existing
Participants") and ABN AMRO Bank N.V., as agent for the Existing Participants,
are parties to a Participation Agreement dated as of August 31, 1998 (as
amended, the "Novellus I Participation Agreement"), a Participation Agreement
dated as of October 15, 1997 (as amended, the "Novellus II Participation
Agreement"), a Participation Agreement dated as of August 7, 1998 (as amended,
the "Novellus III Participation Agreement"), and a Participation Agreement dated
as of April 13, 2001 (as amended, the "Novellus IV Participation Agreement").
Pursuant to the Novellus I Participation Agreement, Novellus II Participation
Agreement, Novellus III Participation Agreement and Novellus IV Participation
Agreement (collectively, the "Existing Novellus Participation Agreements"), the
Existing Lessors and Existing Participants provided to Lessee certain lease
facilities (the "Existing Facilities") under which the Existing Lessors leased
to Lessee the Existing Lessors' interests in the land described in Exhibit A (as
more fully defined in Schedule 1.01, the "Land") and the improvements thereto
(collectively with the Land, as more fully defined in Schedule 1.01, the
"Property").
B. Lessee now wishes to restructure the Existing Facilities. In
connection with such restructure:
(1) Lessee would pay to the Existing Participants the
"Outstanding Lease Amounts" under the Existing Facilities and all other
amounts payable to the Existing Participants under the Existing
Facilities;
(2) Lessee would terminate the lease agreements, purchase
agreements, construction agency agreements and certain other agreements
executed in connection with the Existing Facilities;
(3) The Existing Affiliate Lessors would transfer their
respective interests in the Property to Lessor; and
(4) Lessee, Lessor, Participants and Agent would enter into this
Agreement and related agreements to create three new lease facilities as
follows:
(1) Pursuant to the first new facility ("Facility 1"),
Lessor would (a) lease to Lessee certain of the Land (as more
fully defined in Schedule 1.01, the "Facility 1 Land") and
certain related property and (b) grant to Lessee the right to
purchase such property.
(2) Pursuant to the second new facility ("Facility 2"),
Lessor would (a) lease to Lessee certain of the Land (as more
fully defined in Schedule 1.01, the "Facility 2 Land"), the
improvements to the Facility 1 Land and the Facility 2 Land and
certain related property and (b) grant to Lessee the right to
purchase such property.
(3) Pursuant to the third new facility ("Facility 3"),
Lessor would (a) lease to Lessee the remaining Property, (b)
appoint Lessee as Lessor's agent to make certain improvements to
such property, (c) make advances to finance such improvements and
to pay certain related expenses and (d) grant to Lessee the right
to purchase such property.
(4) Participants would participate in Facility 1, Facility
2 and Facility 3 (collectively, the "Facilities") by (a) funding
the advances to be made by Lessor and (b) acquiring participation
interests in the rental and certain other payments to be made by
Lessee.
C. Lessor and Participants are willing to provide such lease facilities
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:
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
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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 FACILITIES.
2.01. Acquisition, Lease, Amount Limitations, Etc.
(a) 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 Advances hereunder (the
"Closing Date"):
(A) Lessor and Lessee shall execute (1) a Lease
Agreement in the form of Exhibit B(1) (the "Facility 1
Lease Agreement"), pursuant to which Lessor leases to
Lessee Lessor's interests in the Parcels of land
described in Parts 1, 2, 4 and 8 of Exhibit A (as more
fully defined in Schedule 1.01, the "Facility 1 Land"),
together with any Appurtenant Rights thereto; and (2) a
Purchase Agreement in the form of Exhibit C(1) (the
"Facility 1 Purchase Agreement"), pursuant to which
Lessor grants to Lessee the right to purchase such
property;
(B) Lessor and Lessee shall execute (1) a Lease
Agreement in the form of Exhibit B(2) (the "Facility 2
Lease Agreement"), pursuant to which Lessor leases to
Lessee Lessor's interests in the Parcels of land
described in Parts 3, 5, 6 and 7 of Exhibit A (as more
fully defined in Schedule 1.01, the "Facility 2 Land")
and the improvements to the Facility 1 Land and the
Facility 2 Land, together with any Appurtenant Rights
thereto and any other related property; and (2) a
Purchase Agreement in the form of Exhibit C(2) (the
"Facility 2 Purchase Agreement"), pursuant to which
Lessor grants to Lessee the right to purchase such
property;
(C) Lessor and Lessee shall execute (1) a Lease
Agreement in the form of Exhibit B(3) (the "Facility 3
Lease Agreement"), pursuant to which Lessor leases to
Lessee Lessor's interest in the Parcel of land described
in Part 9 of Exhibit A (as more fully defined in
Schedule 1.01, the "Facility 3 Land") and all
improvements thereto, together with all Appurtenant
Rights thereto and any other related property; and (2) a
Purchase Agreement in the form of Exhibit C(3) (the
"Facility 3 Purchase Agreement"), pursuant to which
Lessor grants to Lessee the right to purchase such
property; and (3) a Construction Agency Agreement in the
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form of Exhibit D (the "Facility 3 Construction Agency
Agreement"), pursuant to which Lessee agrees to
construct certain improvements to the Facility 3 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 Facility 3 Commitment is $0 (the earlier of the
Outside Completion Date and such first Business Day to be
referred to as the "Commitment Termination Date"), Lessor shall,
at the request of Lessee, make additional advances (with funds
provided by the Participants) to pay Permitted Improvement Costs
and Permitted Transaction Expenses under Facility 3.
(b) Amount Limitations. The advances made by Lessor hereunder
(the "Advances") shall be subject to the following limitations:
(i) Facility 1. The aggregate amount of the Advances
made by Lessor on account of each Parcel of Property under
Facility 1 shall not exceed the following respective amounts:
Parcel Amount
----------------------------- ---------------------
1 (3930, 3960 and 3970 $12,348,012
North First Street)
2 (4145 North First Street $ 8,172,036
and 55 Vista Montana)
4 (81 Vista Montana) $ 4,658,913
8 (3940 and 3950 North $ 8,493,993
First Street)
----------------------------- ---------------------
Total $33,672,954
The aggregate amount of all Advances made by Lessor under
Facility 1 shall not exceed the total set forth above (the
"Total Facility 1 Commitment").
(ii) Facility 2. The aggregate amount of the Advances
made by Lessor on account of each Parcel of Property under
Facility 2 shall not exceed the following respective amounts:
Parcel Amount
----------------------------- ---------------------
1 (3930, 3960 and 3970 $11,609,404
North First Street)
2 (4145 North First Street $ 7,547,060
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and 55 Vista Montana)
3 (4000 North First Street) $ 73,387,343
4 (81 Vista Montana) $ 12,859,356
5 (4041 North First Street) $ 24,809,657
6 (3011 North First Street) $ 52,460,114
7 (3175 Hanover) $ 38,824,272
8 (3940 and 3950 North $ 23,796,438
First Street)
----------------------------- ---------------------
Total $245,293,644
The aggregate amount of all Advances made by Lessor under
Facility 2 shall not exceed the total set forth above (the
"Total Facility 2 Commitment").
(iii) Facility 3. The aggregate amount of all Advances
made by Lessor under Facility 3 shall not exceed $15,624,402
(the "Total Facility 3 Commitment").
(iv) All Facilities. The aggregate amount of all
Advances made by Lessor under all three Facilities shall not
exceed $294,591,000 (the "Total Commitment").
(e) Tranches. Each Advance shall consist of a Tranche A Portion,
a Tranche B Portion and a Tranche C Portion. For accounting purposes,
the Tranche A Portion and the Tranche B Portion of each Advance shall
constitute debt and the Tranche C Portion shall constitute equity.
2.02. Participation Agreement.
(a) Advances. Each Participant severally, unconditionally and
irrevocably agrees with Lessor to participate in each Advance made by
Lessor in an amount equal to such Participant's Proportionate Share of
such Advance; provided, however, that:
(i) The aggregate amount of each Participant's
Proportionate Share of all Advances made under Facility 1 shall
not exceed such Participant's Facility 1 Commitment;
(ii) The aggregate amount of each Participant's
Proportionate Share of all Advances made under Facility 2 shall
not exceed such Participant's Facility 2 Commitment;
(iii) The aggregate amount of each Participant's
Proportionate Share of all Advances made under Facility 3 shall
not exceed such Participant's Facility 3 Commitment; and
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(iv) 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 Participant) copies of each
such notice and, in the case of each request for an Advance,
shall notify each Participant of the amount of such
Participant's Proportionate Share of the Advance requested
thereby. (Lessee shall not be liable for, and no Event of
Default shall occur upon, Agent's failure to provide copies of
notices delivered to Agent by Lessee to Lessor and/or the
Participants.)
(ii) Lessor is not an agent for Participants or Agent
and may exercise or refrain from exercising its rights under
this Agreement and the other Operative Documents in its
discretion; provided, however that, until all amounts payable to
Agent and Participants under this Agreement and the other
Operative Documents are paid in full, (A) Lessor shall, subject
to the limitations set forth in Section VI, be required to act
or to refrain from acting upon instructions of the Required
Participants as provided in Paragraph 6.03 and (B) Agent may
exercise any or all of the rights and remedies of Lessor, and
shall be entitled to the other benefits afforded Lessor, under
this Agreement and the other Operative Documents.
(iii) Neither Agent nor any Participant shall have any
right, title or interest in the Property except for (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
Participant as a Participant).
(d) Participation by Novellus Participant. On the Closing Date,
Novellus Participant shall become a Tranche A Participant under Facility
1 and Facility 2. On the Completion Date, Novellus shall become a
Tranche A Participant under Facility 3 by
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purchasing from ABN AMRO pursuant to Subparagraph 7.05(b) ABN AMRO's
Outstanding Tranche A Participation Amount under Facility 3 (and all of
ABN AMRO's other rights and obligations under this Agreement and the
other Operative Documents relating thereto), and assuming its Tranche A
Percentage and Tranche A Portion. Except as otherwise expressly provided
in this Agreement or the other Operative Documents, Novellus Participant
shall be a Participant with the rights, duties and obligations thereof
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 Facility under which such Advance is to
be made;
(B) The amount of such Advance, which shall be
in the minimum amount of $10,000 or an integral multiple
of $10,000 in excess thereof, and, if such Advance is to
be made under Facility 1 or Facility 2, the portions of
such Advance attributable to the respective Parcels of
Property under such Facility;
(C) The date of such Advance, which shall be (1)
a Business Day on or prior to October 30, 2001 in the
case of the Initial Advances (which day shall also be
the same for all three of the Initial Advances) and (2)
the first Business Day of a calendar month in the case
of all other Advances; and
(D) The Permitted Improvement Costs and
Permitted Transaction Expenses under Facility 3 to be
paid by such Advance; and
(ii) If the proceeds of such Advance are to be used to
purchase Related Goods under Facility 3:
(A) A Supplement to Exhibit B to the Facility 3
Lease Agreement in the form of Exhibit B(1) to the
Facility 3 Lease Agreement (an "Exhibit B Supplement"),
which contains a detailed description of such Related
Goods; and
(B) Bills of sale for all such Related Goods
showing Lessor as the purchaser.
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Lessee shall not request more than one (1) Advance under each Facility
in any calendar month.
(b) Delivery of Advance Requests. Etc. Except for the Advance
Request for the initial Advance which may be delivered one (1) Business
Day before the date of such Advance, 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 Under Facility 3.
(i) Lessee shall not be required to pay during the
Construction Period the following amounts that would otherwise
be payable by Lessee under Facility 3 pursuant to the terms of
the Operative Documents:
(A) Any Base Rent payable by Lessee during the
Construction Period under the Facility 3 Lease
Agreement; provided, however, that Lessee may pay any
such Base Rent due on a Scheduled Rent Payment Date (and
such Base Rent shall not be capitalized as provided
below) if, not later than three (3) Business Days prior
to such Scheduled Rent Payment Date, Lessee notifies
Lessor in writing that Lessee will pay such Base Rent;
(B) Any fees payable by Lessee pursuant to
Paragraph 2.04 during the Construction Period and
attributable to the Facility 3 Lease Agreement; and
(C) Any increased costs or reduced amounts that
would be payable by Lessee during the Construction
Period on account of Facility 3 pursuant to Subparagraph
2.12(c) but for the proviso to such subparagraph.
Lessor shall capitalize all such amounts by automatically
treating each such amount as an Advance made on the date such
amount would be payable by Lessee but for this clause (i). All
such amounts so capitalized shall be added to the Outstanding
Lease Amount under Facility 3 and shall be included in the
Outstanding Lease Amount under Facility 3 for all purposes,
including the calculation of the Base Rent payable by Lessee
under the Facility 3 Lease Agreement after the Construction
Period and the calculation of the Residual Value Guaranty Amount
under the Facility 3 Purchase Agreement.
(ii) Lessee also shall not be required to pay the
following amounts unless Lessee purchases the Facility 3
Property:
(A) Any liabilities, losses, damages or expenses
not constituting Project Costs and not covered by
insurance that would be payable by
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Lessee during the Construction Period on account of
Facility 3 pursuant to Paragraph 7.03 but for the
proviso to such paragraph;
(B) Any losses or liabilities not constituting
Project Costs and not covered by insurance that would be
payable by Lessee during the Construction Period on
account of Facility 3 pursuant to Paragraph 3.02 of the
Facility 3 Lease Agreement but for the proviso to such
paragraph;
(C) Any Cost Overrun not constituting Project
Costs and not covered by insurance that Lessor and
Participants fund under Facility 3, except any Cost
Overrun that is caused by or arises from any failure by
Lessee to comply with any of its obligations under the
Operative Documents (including its insurance
obligations), any representation by Lessee in any of the
Operative Documents not being true, any negligence or
willful misconduct of Lessee, or any claim by any
third-party against Lessee (or against any Lessor Party)
based upon any alleged action or inaction by Lessee; or
(D) Any portion of Base Rent that is
attributable to the inclusion in the Facility 3
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 under Facility 3 on
the date such amount would be payable by Lessee but for this
clause (ii). All such amounts so capitalized shall be added to
the Outstanding Lease Amount under Facility 3 and shall be
included in the Outstanding Lease Amount under Facility 3;
provided, however, that, if Lessee exercises the Marketing
Option in accordance with the Facility 3 Purchase Agreement and
the other Operative Documents, Lessee shall have no obligation
to pay any such amounts and Lessor Parties may recover such
amounts only to the extent provided in Subparagraph 3.02(j) of
the Facility 3 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 under Facility 3, all
Lessee payments and other amounts applied to the Outstanding
Lease Amount under Facility 3 shall be applied first to all
other amounts included in the Outstanding Lease Amount under
Facility 3 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).
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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) Facility 3 Commitment Fees. Lessee shall pay to Agent, for
the ratable benefit of the Facility 3 Participants as provided in clause
(ii) of Subparagraph 2.06(c), commitment fees (the "Commitment Fees")
equal to the Commitment Fee Percentage of the daily average Unused Total
Facility 3 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 October 1, 2001) and on the
Commitment Termination Date (or if the Total Facility 3 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 Facility 3 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
Facility 3 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
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Agent at rates equal to (i) the daily Federal Funds Rate during the
period from the date of such Advance through the third Business Day
thereafter and (ii) the Base Rate plus two percent (2.0%) thereafter. A
certificate of Agent submitted to any Participant with respect to any
amounts owing under this Subparagraph 2.05(b) shall be conclusive absent
manifest error. If any Participant's Proportionate Share of any Advance
is not in fact made available to Agent by such Participant within three
(3) Business Days after the date of such Advance, Lessee shall pay to
Agent, on demand, an amount equal to such Proportionate Share together
with interest thereon, for each day from the date such amount was made
available to Lessee until the date such amount is repaid to Agent, at a
per annum rate equal to the Base Rate.
(c) Participants' Obligations Several. The failure of any
Participant to fund its Proportionate Share of any Advance shall not
relieve any other Participant of its obligation hereunder to fund its
Proportionate Share of such Advance, and no Participant shall be
responsible for the failure of any other Participant to fund its
Proportionate Share of any Advance on the date of such Advance.
2.06. Sharing of Payments.
(a) Outstanding Lease Amount. Subject to clause (ii) of
Subparagraph 2.03(c) in the event any amount is capitalized pursuant to
such clause, Lessor shall share payments applied to reduce the
Outstanding Lease Amount of a Facility as follows:
(i) Each payment of the Outstanding Lease Amount under a
Facility derived from the purchase price paid by Lessee (or an
Assignee Purchaser) to purchase the Property under such Facility
pursuant to the Purchase Agreement for such Facility shall be
shared by the Participants pro rata according to their
respective Outstanding Participation Amounts under such Facility
at the time of such payment.
(ii) Each payment of the Outstanding Lease Amount under
a Facility derived from:
(A) The Residual Value Guaranty Amount paid by
Lessee pursuant to the Purchase Agreement for such
Facility; or
(B) The Principal Component of Base Rent under
such Facility;
Shall be shared first by the Tranche A Participants pro rata
according to their respective applicable Outstanding Tranche A
Participation Amounts at the time of such payment; second, if
any amounts remain after all such Outstanding Tranche A
Participation Amounts are paid in full, by the Tranche B
Participants pro rata according to their respective applicable
Outstanding Tranche B Participation Amounts at the time of such
payment; and third, if any amounts remain after all such
Outstanding Tranche A Participation Amounts and all such
Outstanding Tranche B Participation Amounts are paid in full, by
the Tranche C Participants
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pro rata according to their respective applicable Outstanding
Tranche C Participation Amounts at the time of such payment.
(iii) Each payment of the Outstanding Lease Amount under
a Facility derived from:
(A) the purchase price paid by a Designated
Purchaser to purchase the Property under such Facility
pursuant to the Purchase Agreement for such Facility;
(B) the Indemnity Amount paid by Lessee pursuant
to the Purchase Agreement for such Facility;
(C) Casualty Proceeds or Condemnation Proceeds
related to any of the Property under such Facility; or
(D) the purchase price paid by any other Person
(except as otherwise provided in clause (i) above) to
purchase the Property under such Facility, whether after
the retention of such Property by Lessor following the
Expiration Date of the Lease Agreement for such
Facility, upon foreclosure or otherwise;
Shall be shared first by the Tranche B Participants pro rata
according to their respective applicable Outstanding Tranche B
Participation Amounts at the time of such payment; second, if
any amounts remain after all such Outstanding Tranche B
Participation Amounts are paid in full, by the Tranche A
Participants (other than Novellus Participant in the case of any
proceeds of casualty insurance) pro rata according to their
respective applicable Outstanding Tranche A Participation
Amounts at the time of such payment; and third, if any amounts
remain after all such Outstanding Tranche B Participation
Amounts and all such Outstanding Tranche A Participation Amounts
are paid in full, by the Tranche C Participants pro rata
according to their respective applicable Outstanding Tranche C
Participation Amounts at the time of such payment.
(iv) Notwithstanding anything to the contrary set forth
in this Paragraph 2.06, the proceeds from the foreclosure,
application, setoff, withdrawal or other collection or
disposition of any Cash Collateral shall be shared in accordance
with the other provisions of this Paragraph 2.06 based upon the
Lessee Obligations to which such proceeds of Cash Collateral are
applied; provided, however, that if the Property is sold to a
Designated Purchaser pursuant to the Marketing Option in the
Purchase Agreement:
(A) Any proceeds of Cash Collateral 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
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(B) 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, except that any portion of such proceeds which
are applied to the Residual Value Guaranty Amount and
are attributable to Facility 1 or Facility 2 or, after
the Completion Date, to Facility 3, shall be shared only
among the Tranche A Participants under such Facilities,
if any, other than Novellus Participant, 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.
Notwithstanding anything to the contrary in the Operative Documents, if
through any foreclosure, application, setoff, withdrawal, collection,
disposition or other exercise of remedies against the Cash Collateral,
the Outstanding Lease Balance in respect of any Facility (other than any
Tranche A Portion thereof held by Novellus Participant) shall be paid,
Lessor shall convey the Property related to that Facility to Lessee or
its designee as if Lessee had exercised and fully performed its
obligations with respect to the Expiration Date Purchase Option.
(b) Interest Component of Base Rent. Lessor shall share each
payment applied to the Interest Component of Base Rent under a Facility
among the Participants which funded the Outstanding Lease Amount under
such Facility pro rata within the Tranche A Portion, Tranche B Portion
and the Tranche C Portion, respectively, according to (i) the respective
Outstanding Participation Amounts so funded by such Participants and
(ii) the dates on which such Participants so funded such amounts.
(c) Supplemental Rent. Lessor shall share each payment applied
to Supplemental Rent under a Facility among the Lessor
Parties as follows:
(i) Each payment applied to Agent's Fees shall be solely
for the account of Agent.
(ii) Each payment applied to Commitment Fees under
Facility 3 shall be shared by the Facility 3 Participants pro
rata according to (A) their respective Proportionate Shares
under Facility 3 and (B) in the case of each Facility 3
Participant which becomes a Facility 3 Participant hereunder
after the date hereof, the date upon which such Facility 3
Participant so became a Facility 1 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.
13
(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 Facility 3 Participants pro rata
according to the Unused amounts of their Facility 3 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.
(All amounts payable by Lessee under the Operative Documents shall be
attributable to Facility 1, Facility 2 or Facility 3. If any amounts are
not clearly on account of a Facility, Lessor may attribute such amounts
to any Facility using reasonable methods of allocation; provided,
however, that Lessee may direct Lessor to attribute such amounts to the
Facility designated by Lessee if no Default has occurred and is
continuing.)
(d) Disproportionate Payments, Etc. If any Participant shall
obtain any payment (whether voluntary, involuntary, through the exercise
of any right of setoff, or otherwise) on account of amounts owed to it
in excess of its ratable share of payments on account of such amounts
obtained by all Participants entitled to such payments, such Participant
shall forthwith purchase from the other Participants such participations
in the payments to be made under the Operative Documents as shall be
necessary to cause such purchasing Participant to share the excess
payment ratably with each of them; provided, however, that if all or any
portion of such excess payment is thereafter recovered from such
purchasing Participant, such purchase shall be rescinded and each other
Participant shall repay to the purchasing Participant the purchase price
to the extent of such recovery together with an amount equal to such
other Participant's ratable share (according to the proportion of (i)
the amount of such other Participant's required repayment to (ii) the
total amount so recovered from the purchasing Participant) of any
interest or other amount paid or payable by the purchasing Participant
in respect of the total amount so recovered. Lessee agrees that any
Participant so purchasing a participation from another Participant
pursuant to this Subparagraph 2.06(d) may, to the fullest extent
permitted by law, exercise all its rights of payment (including the
right of setoff) with respect to such participation as fully as if such
Participant were the direct creditor of Lessee in the amount of such
participation.
2.07. Other Payment Terms.
(a) Place and Manner of Payments by Lessee. Lessee shall make
all payments due to any Lessor Party under this Agreement and the other
Operative Documents by payments to Agent, for the account of such
Person, at Agent's office, located at the address specified in Paragraph
7.01, with each payment due to a Participant to be for the account of
such Participant's Applicable Participating Office. Lessee shall make
all payments in lawful money of the United States and in same day or
immediately available
14
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 on account of a Facility shall be
applied first to unpaid fees, costs and expenses and other Supplemental
Rent then due and payable under this Agreement or any other Operative
Document on account of such Facility, second to the accrued Interest
Component of Base Rent then due and payable under this Agreement or any
other Operative Document on account of such Facility and finally to the
Principal Component of Base Rent or otherwise to reduce the Outstanding
Lease Amount under such Facility. If any payments are not clearly on
account of either Facility, Lessor may apply such payments to any
Facility in its discretion; provided, however, that Lessee may direct
Lessor to apply such payments to the Facility designated by Lessee if no
Default has occurred and is continuing.
(e) Failure to Pay Agent. Unless Agent shall have received
notice from Lessee at least one (1) Business Day prior to the date on
which any payment is due to Lessor or the Participants under this
Agreement or the other Operative Documents that Lessee will not make
such payment in full, Agent may assume that Lessee has made such payment
in full to Agent on such date and Agent may, in reliance upon such
assumption, cause to be distributed to the appropriate Persons on such
due date an amount equal to the amount then due such Persons. If and to
the extent Lessee shall not have so made such payment in full to Agent,
each such Person shall repay to Agent forthwith on demand such amount
distributed to such Person together with interest thereon, for each day
from the date such amount is distributed to such Person until the date
such Person repays such amount to Agent, at (i) the Federal Funds Rate
for the first three (3) days and (ii) the Base Rate plus two percent
(2.0%) thereafter, such rate to change from time to time as the Base
Rate shall change. A certificate of Agent submitted to any Person with
respect to any amounts owing by such Person under this Subparagraph
2.07(e) shall be conclusive absent manifest error.
2.08. Commitment Reductions.
15
(a) Reduction or Cancellation of Commitments. Lessee may, at any
time prior to the Commitment Termination Date, upon five (5) Business
Days written notice to Lessor, permanently reduce the Total Facility 3
Commitment by an amount as so designated in writing by Lessee to Agent
or cancel the Total Facility 3 Commitment in its entirety.
(b) Effect of Commitment Reductions. From the effective date of
any reduction of the Total Facility 3 Commitment, the Commitment Fees
shall be computed on the basis of the Total Facility 3 Commitment as
reduced. The Total Commitment shall be automatically reduced by the
amount of each reduction in the Total Facility 3 Commitment. Once
reduced or cancelled, the Total Facility 3 Commitment and the Total
Commitment may not be increased or reinstated without the prior written
consent of Lessor and all Participants. Any reduction of the Total
Facility 3 Commitment pursuant to this Paragraph 2.08 shall be applied
ratably to reduce each Participant's Facility 3 Commitment pro rata in
accordance with its respective Proportionate Share.
2.09. Extensions.
(a) Commitment Extension. Lessee may request Lessor to extend the
Outside Completion Date for an additional period of one (1), two (2),
three (3), four (4), five (5) or six (6) months by appropriately
completing, executing and delivering to Agent a written request in the
form of Exhibit F(1) (a "Commitment Extension Request"). Lessee shall
deliver the Commitment Extension Request to Agent not more than three
(3) months and not less than two (2) months before the original Outside
Completion Date. Agent shall promptly deliver to Lessor and each
Participant three (3) copies of each Commitment Extension Request
received by Agent. If Lessor or a Participant, in its sole and absolute
discretion, consents to the Commitment Extension Request, such Person
shall evidence such consent by executing and returning two (2) copies of
the Commitment Extension Request to Agent not later than the last
Business Day which is not less than twelve (12) Business Days prior to
the original Outside Completion Date. Any failure by Lessor or any
Participant so to execute and return a Commitment Extension Request
shall be deemed a denial thereof. If Lessee shall deliver a Commitment
Extension Request to Lessor pursuant to the first sentence of this
Subparagraph 2.09(a), then not later than ten (10) Business Days prior
to the original 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.
16
(b) Lease Extensions. Lessee may, as provided herein but not
more than three (3) times, request Lessor to extend the Scheduled
Expiration Date of each Lease Agreement for an additional period of one
(1) year by appropriately completing, executing and delivering to Agent
a written request in the form of Exhibit F(2), together with an
attachment thereto setting forth the terms upon which Lessee would
propose for the requested extension (a "Lease Extension Request").
Lessee shall deliver each Lease Extension Request to Agent not more than
twelve (12) months and not less than nine (9) months before the then
current Scheduled Expiration Date. Agent shall promptly deliver to
Lessor and each Participant (other than Novellus Participant) three (3)
copies of each Lease Extension Request received by Agent. If Lessor or a
Participant (other than Novellus Participant), in its sole and absolute
discretion, consents to a Lease Extension Request, such Person shall
evidence such consent by executing and returning two (2) copies of such
Lease Extension Request to Agent not later than the last Business Day
which is not less than seven (7) months prior to the then current
Scheduled Expiration Date for the Lease Agreements. Any failure by
Lessor or any Participant (other than Novellus Participant) so to
execute and return a Lease Extension Request shall be deemed a denial
thereof. If Lessee shall deliver a Lease Extension Request to Lessor
pursuant to the first sentence of this Subparagraph 2.09(b), then not
later than the last Business Day which is not less than six (6) months
prior to the then current Scheduled Expiration Date for the Lease
Agreements, Agent shall notify Lessee, Lessor and the Participants
(other than Novellus Participant) in writing whether (i) Agent has
received a copy of the Lease Extension Request executed by Lessor and
each Participant (other than Novellus Participant), in which case the
definition of "Scheduled Expiration Date" set forth in Subparagraph
2.02(a) of the Lease Agreements 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 Participant), in which case such Lease Extension
Request shall be deemed denied. Lessee acknowledges that neither Lessor
nor any Participant has promised (either expressly or implicitly), or
has any obligation or commitment, to extend or consent to the extension
of the Scheduled Expiration Date for the Lease Agreements at any time.
2.10. Nature of the Transactions. Lessee and the Lessor Parties intend
that the transactions evidenced by this Agreement and the other Operative
Documents constitute operating leases pursuant to FASB 13 for accounting
purposes and loans secured by the Property 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 federal, state and local
taxes, Lessee and Lessor Parties intend that the transactions evidenced
by the Operative Documents shall be treated as loans by the Participants
(through Lessor) to Lessee secured by the Property, with Lessee as owner
of the Property. Lessee and the Lessor Parties may only
17
take deductions, credits, allowances and other reporting positions on
their respective returns, reports and statements which are consistent
with such treatment, unless required to do otherwise by an appropriate
taxing authority or after a clearly applicable change in applicable
Governmental Rules; provided, however, that if an appropriate taxing
authority or a clearly applicable change in applicable Governmental
Rules requires any Lessor Party to take such an inconsistent position,
such Lessor Party shall promptly notify Lessee.
(b) Other Legal Treatment. For purposes of commercial, real
estate and bankruptcy law and other applicable laws, Lessee and Lessor
Parties also intend that the transactions evidenced by the Operative
Documents shall be treated as loans by the Participants (through Lessor)
to Lessee secured by the Property, with Lessee as owner of the Property.
Consistent with such treatment, Lessee and the Lessor Parties intend
that, among other things for such purposes, (i) the Advances be treated
as loans to Lessee by the Participants (through Lessor); (ii) the
Advances be secured by the Property and the Lessor Parties have the
rights and remedies of secured lenders; (iii) Base Rent be treated as
interest on the Advances; (iv) Lessee be required to pay on the
applicable Expiration Date only the Residual Value Guaranty Amount, the
Indemnity Amount and the other amounts required by Subparagraph 4.06(b)
of the applicable Purchase Agreement (or Subparagraph 4.06(c) if Lessor
is retaining the Property) if Lessee exercises the Marketing Option in
accordance with the applicable Purchase Agreement; and (v) Lessee be
required to pay on the applicable Expiration Date the applicable
Outstanding Lease Amount and all other amounts outstanding under this
Agreement and the other Operative Documents (including amounts required
by Subparagraph 4.06(a) of the applicable Purchase Agreement) if the
applicable Lease Agreement is terminated prior to its Scheduled
Expiration Date after an Event of Default occurs under such Lease
Agreement or if Lessee fails to or is otherwise not entitled to exercise
the Marketing Option in accordance with the applicable Purchase
Agreement.
(c) No Reliance by Lessee. Lessee acknowledges and agrees that
no Lessor Party has made any representations or warranties to Lessee
concerning the tax, accounting or legal characteristics of the Operative
Documents and that Lessee has obtained and relied upon such tax,
accounting and legal advice concerning the Operative Documents as it
deems appropriate.
2.11. Security.
(a) Lessee Obligations.
(i) To the extent that the transaction evidenced by the
Lease Agreement, Purchase Agreement and other Operative
Documents for each Facility is treated as a loan by the
Participants (through Lessor) to Lessee secured by the Property
for such Facility, with Lessee as owner of such Property
pursuant to Paragraph 2.10, the Lessee Obligations under such
Facility shall be secured by such Property and the other Real
Property Collateral and Personal Property Collateral for such
Facility (collectively, the "Property Collateral") as provided
in
18
Subparagraphs 2.07(a) and 2.07(b) of the applicable Lease
Agreement and, in the case of Facility 3, 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) Commencing on the Closing Date and until the
Expiration Date of the Facility 1 Lease Agreement and
Facility 2 Lease Agreement and the satisfaction in full
by Lessee of all Lessee Obligations under Facility 1 and
Facility 2, Lessee shall, as security for the
Outstanding Tranche B Participation Amounts and
Outstanding Tranche C Participation Amounts under
Facility 1 and Facility 2, maintain with Agent or a
third-party custodian acceptable to Lessor and Agent,
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 under Facility 1 and Facility 2
at such time.
(B) Commencing on the Closing Date and until the
purchase by Novellus Participant of ABN AMRO's
Outstanding Tranche A Participation Amount under
Facility 3 pursuant to Subparagraph 2.02(d), Lessee
shall, as security for the Lessee Obligations under
Facility 3, maintain with a third-party custodian
acceptable to Lessor and Agent (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
under Facility 3 at such time.
(C) After the purchase by Novellus Participant
of ABN AMRO's Outstanding Tranche A Participation Amount
pursuant to Subparagraph 2.02(d) and until the
Expiration Date of the Facility 3 Lease Agreement and
the satisfaction in full by Lessee of all Lessee
Obligations under Facility 3, Lessee shall, as security
for the Outstanding Tranche B Participation Amounts and
Outstanding Tranche C Participation Amounts under
Facility 3, maintain with Agent or a third-party
custodian acceptable to Lessor and Agent, 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
under Facility 3 at such time.
19
On or prior to the Closing Date, Lessee 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 agreements, lessor consents and
estoppels (containing appropriate mortgagee and lender
protection language) and other instruments, agreements,
certificates, opinions and documents (including Uniform
Commercial Code financing statements and fixture filings and
landlord waivers) as Lessor or Agent may reasonably request to
(A) grant, perfect, maintain, protect and evidence security
interests in favor of Lessor or Agent in the Property Collateral
and the Cash Collateral prior to the Liens or other interests of
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 Agreement,
Sublease Agreement, Lease Agreements and Purchase
Agreements in the form of Exhibit I, duly executed by
Lessor (the "Assignment of Lease");
(B) A 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");
(C) An Assignment of Construction Agreements,
duly executed by Lessor, in form and substance
satisfactory to Agent; and
(D) 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
20
evidence security interests in favor of Agent in Lessor's rights
in the Property Collateral and the Cash Collateral; and (B)
otherwise establish, maintain, protect and evidence the rights
provided to Agent in the Property Collateral and the Cash
Collateral. Lessor shall fully cooperate with Agent and perform
all additional acts reasonably requested by Agent to effect the
purposes of this Subparagraph 2.11(b).
(iii) Lessee hereby consents to the Assignment of Lease,
the Lessor Deed of Trust and the Lessor Security Agreement; the
Liens granted to Agent therein; and all other Liens granted to
Agent in any of the Operative Documents and the Property to
secure the Lessor Obligations.
2.12. Change of Circumstances.
(a) Inability to Determine Rates. If, on or before the first day
of any Rental Period for any Portion, (i) any Participant shall advise
Agent that the LIBOR Rental Rate for such Rental Period and Portion
cannot be adequately and reasonably determined due to the unavailability
of funds in or other circumstances affecting the London interbank market
or (ii) Majority Participants shall advise Agent that the LIBOR Rental
Rate for such Rental Period and Portion does not adequately and fairly
reflect the cost to such Participants of funding their shares of such
Portions under the applicable Facility, Agent shall immediately give
notice of such condition to Lessee, Lessor and the other Participants.
After the giving of any such notice (and until Agent shall otherwise
notify Lessee and Lessor that the circumstances giving rise to such
condition no longer exist), the LIBOR Rental Rate shall be unavailable
and the Rental Rate for each new Rental Period shall be the Alternate
Rental Rate.
(b) Illegality. If, after the date of this Agreement, the
adoption of any Governmental Rule, any change in any Governmental Rule
or the application or requirements thereof (whether such change occurs
in accordance with the terms of such Governmental Rule as enacted, as a
result of amendment or otherwise), any change in the interpretation or
administration of any Governmental Rule by any Governmental Authority,
or compliance by Lessor or any Participant with any request or directive
(whether or not having the force of law) of any Governmental Authority
(a "Change of Law") shall make it unlawful or impossible for any
Participant to fund or maintain its portion of the Outstanding Lease
Amount under any Facility at the LIBOR Rental Rate, such Participant
shall immediately notify Agent and Agent shall immediately notify
Lessee, Lessor and the other Participants of such Change of Law. After
the giving of any such notice (and until Agent shall otherwise notify
Lessee and Lessor that such Change of Law is no longer in effect), the
LIBOR Rental Rate shall be unavailable and the Rental Rate under all
Facilities for each Rental Period shall be the Alternate Rental Rate.
(c) Increased Costs. If, after the date of this Agreement, any
Change of Law:
(i) Shall subject Lessor or any Participant to any tax,
duty or other charge with respect to the Outstanding Lease
Amount under any Facility, or shall
21
change the basis of taxation of Base Rent payments by Lessee to
Lessor or any Participant under this Agreement or any other
Operative Document (except for changes in the rate of taxation
on the overall net income of Lessor or any Participant imposed
by its jurisdiction of incorporation or, in the case of any
Participant, the jurisdiction in which its Applicable
Participating Office is located); or
(ii) Shall impose, modify or hold applicable any reserve
(excluding any Reserve Requirement or other reserve to the
extent included in the calculation of the LIBOR Rental Rate),
special deposit or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances
or loans by, or any other acquisition of funds by Lessor or any
Participant for its portion of the Outstanding Lease Amount
under any Facility; or
(iii) Shall impose on Lessor or any Participant any
other condition related to the Outstanding Lease Amount under
any Facility, Base Rent under any Facility 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 under any Facility or commitments or to reduce
any amount receivable by Lessor or such Participant hereunder; then
Lessee shall from time to time within five (5) Business Days after
demand by such Person, pay to such Person additional amounts sufficient
to reimburse such Person for any such increased costs of such Person or
to compensate such Person for any such reduced amounts of such Person;
provided, however, that Lessee shall have no obligation to pay any
additional amounts under this Subparagraph 2.12(c) on account of any
increased costs or reduced amounts arising under Facility 3 during the
Construction Period except as follows:
(A) Lessee shall pay any such additional amounts under
this Subparagraph 2.12(c) on account of any increased costs or
reduced amounts arising under Facility 3 during the Construction
Period if caused by or arising from any failure by Lessee to
comply with any of its obligations under the Operative Documents
(including its insurance obligations), any representation by
Lessee in any of the Operative Documents not being true, any
negligence or willful misconduct of Lessee, or any claim by any
third-party against Lessee (or against any Lessor Party) based
upon any alleged action or inaction by Lessee.
(B) If any Lessor Party incurs any such increased costs
or reduced amounts under Facility 3 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).
22
A certificate setting forth in reasonable detail the amount of any
increased costs or reduced amounts submitted by any Lessor Party shall
constitute prima facie evidence of such costs or amounts. The
obligations of Lessee under this Subparagraph 2.12(c) shall survive the
payment and performance of the Lessee Obligations and the termination of
this Agreement.
(d) Capital Requirements. If, after the date of this Agreement,
Lessor or any Participant determines that (i) any Change of Law affects
the amount of capital required or expected to be maintained by such
Person or any other Person controlling such Person (a "Capital Adequacy
Requirement") and (ii) the amount of capital maintained by such Person
or such other Person which is attributable to or based upon the
Advances, the commitments or this Agreement must be increased as a
result of such Capital Adequacy Requirement (taking into account such
Person's or such other Person's policies with respect to capital
adequacy), Lessee shall pay to such Person or such other Person, within
five (5) Business Days after demand of such Person, such amounts as such
Person or such other Person shall determine are necessary to compensate
such Person or such other Person for the increased costs to such Person
or such other Person of such increased capital. A certificate of Lessor
or any Participant setting forth in reasonable detail the computation of
any such increased costs, delivered by such Person to Lessee shall
constitute prima facie evidence of such costs. The obligations of Lessee
under this Subparagraph 2.12(d) shall survive the payment and
performance of the Lessee Obligations and the termination of this
Agreement.
(e) Mitigation. If Lessor or any Participant becomes aware of
(i) any Change of Law which will make it unlawful or impossible for such
Person to fund or maintain its portion of the Outstanding Lease Amount
under any Facility at the LIBOR Rental Rate or (ii) any Change of Law or
other event or condition which will obligate Lessee or Lessor to pay any
amount pursuant to Subparagraph 2.12(c) or Subparagraph 2.12(d), such
Person shall notify Lessee and Lessor thereof as promptly as practical.
If any Person has given notice of any such Change of Law or other event
or condition and thereafter becomes aware that such Change of Law or
other event or condition has ceased to exist, such Person shall notify
Lessee and Lessor thereof as promptly as practical. Each Person affected
by any Change of Law which makes it unlawful or impossible for such
Person to fund or maintain its portion of the Outstanding Lease Amount
under any Facility at the LIBOR Rental Rate or to which Lessee or Lessor
is obligated to pay any amount pursuant to Subparagraph 2.12(c) or
Subparagraph 2.12(d) shall use reasonable commercial efforts (including
changing the jurisdiction of its Applicable Participating Office) to
avoid the effect of such Change of Law or to avoid or materially reduce
any amounts which Lessee or Lessor is obligated to pay pursuant to
Subparagraph 2.12(c) or Subparagraph 2.12(d) if, in the reasonable
opinion of such Person, such efforts would not be disadvantageous to
such Person.
2.13. Taxes on Payments.
(a) Payments Free of Taxes. All payments made by Lessee under
this Agreement and the other Operative Documents shall be made free and
clear of, and
23
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.
(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,
24
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.
(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 under any Facility on any day other than
the last day of a Rental Period therefor (whether an optional payment, a
mandatory payment or otherwise) or (b) cancel or otherwise fail to consummate
any Advance Request which has been delivered to Agent (whether as a result of
the failure to satisfy any applicable conditions or otherwise), then Lessee
shall, within five (5) Business Days after demand by Lessor or any Participant,
reimburse such Person for and hold such Person harmless from all costs and
losses incurred by such Person as a result of such payment, cancellation or
failure. Lessee understands that such costs and losses may include, without
limitation, losses incurred by Lessor or a Participant as a result of funding
and other contracts entered into by such Person to fund its portion of the
Outstanding Lease Amount under the applicable Facility. Each Person demanding
payment under this Paragraph 2.14 shall deliver to Lessee, with a copy to Agent,
a certificate setting forth the amount of costs and losses for which demand is
made, which certificate shall set forth in reasonable detail the calculation of
the amount demanded. Such a certificate so delivered to Lessee shall constitute
prima facie evidence of such costs and losses. The obligations of Lessee under
this Paragraph 2.14 shall survive the payment and performance of the Lessee
Obligations and the termination of this Agreement.
2.15. Replacement of Participants. If any Participant (other than
Novellus Participant) shall (a) become a Defaulting Participant more than once
in a period of twelve (12) consecutive months, (b) continue as a Defaulting
Participant for more than five (5) Business Days at any time, (c) deliver,
pursuant to Subparagraph 2.12(b), a notice of a Change of Law which does not
affect any other Participant, or (d) demand any payment under Subparagraph
2.12(c), 2.12(d) or
25
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 Participant) 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.
SECTION 3.CONDITIONS PRECEDENT.
3.01. Initial Advances. The obligation of Lessor to make the Initial
Advances (and the obligations of the Participants to fund their respective
Proportionate Shares of the Initial Advances) on the Closing Date is (are)
subject to receipt by Agent, on or prior to the Closing Date, of each item
listed in Schedule 3.01, each in form and substance satisfactory to Lessor,
Agent and each Participant, and with sufficient copies for, Lessor, Agent and
each Participant.
3.02. Subsequent Advances. The obligation of Lessor to make each
subsequent Advance (and the obligations of the Participants to fund their
respective Proportionate Shares of such Advance) is (are) subject to (a)
satisfaction of the conditions set forth in Paragraph 3.01; and (b) receipt by
Agent pursuant to Paragraph 2.03 of the Advance Request for such Advance,
appropriately completed and duly executed by Lessee.
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
26
(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.
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
27
or both), any Contractual Obligation of Lessee; or (iii) result in the
creation or imposition of any Lien (or the obligation to create or
impose any Lien) upon any property, asset or revenue of Lessee (except
such Liens as may be created in favor of Lessor or Agent pursuant to
this Agreement or the other Operative Documents).
(e) Approvals. No consent, approval, order or authorization of,
or registration, declaration or filing with, any Governmental Authority
or other Person (including, without limitation, the shareholders of any
Person) is required in connection with the execution and delivery of the
Operative Documents executed by Lessee and the performance and
consummation by Lessee of the transactions contemplated thereby, except
(i) such as have been made or obtained and are in full force and effect
and (ii) those construction-related permits and approvals which will be
obtained as and when necessary in compliance with the Facility 3
Construction Agency Agreement.
(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, 10-K and 8-K reports filed by Lessee with the Securities and
Exchange Commission or in Schedule 4.01(g), no actions (including,
without limitation, derivative actions), suits, proceedings or
investigations are pending or, to the knowledge of Lessee, threatened
against Lessee or any of its Subsidiaries at law or in equity in any
court or before any other Governmental Authority which (i) is reasonably
likely (alone or in the aggregate) to have a Material Adverse Effect or
(ii) seeks to enjoin, either directly or indirectly, the execution,
delivery or performance by Lessee of the Operative Documents or the
transactions contemplated thereby.
(h) Title; Possession Under Leases. Except as set forth in the
most recent Form 10-Q, 10-K and 8-K reports filed by Lessee with the
Securities and Exchange Commission or in Schedule 4.01(h), 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
28
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, 2000, or the 10-Q
reports filed by Lessee with the Securities and Exchange Commission for
the quarters ended March 31, 2001 and June 30, 2001 or the 8-K report
filed by Lessee with the Securities and Exchange Commission on June 1,
2001, 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) [Reserved].
(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,
29
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 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 the most
recent Form 10-Q, 10-K and 8-K reports filed by Lessee with the
Securities and Exchange Commission or 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
30
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 the collective bargaining agreements, employment
contracts or employee welfare or incentive plans to which Lessee or any
of its Subsidiaries is a party, and there are no strikes, lockouts, work
stoppages or slowdowns, or, to the best knowledge of Lessee,
jurisdictional disputes or organizing activities occurring or threatened
which alone or in the aggregate are reasonably likely to have a Material
Adverse Effect.
(s) No Material Adverse Effect. No event has occurred and is
continuing and no condition exists which is reasonably likely to have a
Material Adverse Effect.
(t) The Property. The representations and warranties relating to
each Parcel set forth in Schedule 4.01(t) are true and correct. The
following representations and warranties apply to all of the Property:
(i) Access to the Land for pedestrians and motor
vehicles from publicly dedicated streets and public highways is
available.
(ii) All of the Property complies and will comply at all
times (whether before commencement of any construction, during
any construction or after completion of construction of any New
Improvements) with all applicable Governmental Rules (including
Title III of the Americans with Disabilities Act; Environmental
Laws; and zoning, land use, building, planning and fire laws,
rules, regulations and codes) and Insurance Requirements, except
for violations which could not have a Material Adverse Effect.
No Hazardous Materials have been used, generated, manufactured,
stored, treated, disposed of, transported or are present on or
released or discharged from the Property in any manner that
could have a Material Adverse Effect. All listed Hazardous
Materials were used, stored, and transported in accordance with
Applicable Laws. There are no claims or actions which could have
a Material Adverse Effect pending or, to Lessee's knowledge,
threatened against any of the Property by any Governmental
Authority or any other Person relating to Hazardous Materials or
pursuant to any Environmental Laws.
31
(iii) 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.
(iv) 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.
(u) Chief Executive Office. Lessee's chief executive office is
located at 4000 North First Street, San Jose, California.
(v) Accuracy of Information Furnished. None of the Operative
Documents and none of the other certificates, statements or information
furnished to any Lessor Party by or on behalf of Lessee or any of its
Subsidiaries in connection with the Operative Documents or the
transactions contemplated thereby contains or will contain any untrue
statement of a material fact or omits or will omit to state a material
fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
Lessee shall be deemed to have reaffirmed, for the benefit of the Lessor
Parties, each representation and warranty contained in this Paragraph 4.01 on
and as of the date of each Credit Event (except for representations and
warranties expressly made as of a specified date, which shall be true as of such
date).
4.02. Lessor's Representations and Warranties. In order to induce
Lessee, Agent and the Participants to enter into this Agreement and the other
Operative Documents to which they are parties, Lessor hereby represents and
warranties to Lessee, Agent and the Participants as follows:
(a) Due Incorporation, Qualification, etc. Lessor (i) is a
corporation duly organized, validly existing and in good standing under
the laws of its state of incorporation and (ii) has the power and
authority to own, lease and operate its properties and carry on its
business as now conducted.
(b) Authority. The execution, delivery and performance by Lessor
of each Operative Document executed, or to be executed, by Lessor and
the consummation of the transactions contemplated thereby (i) are within
the power of Lessor and (ii) have been duly authorized by all necessary
actions on the part of Lessor.
(c) Enforceability. Each Operative Document executed, or to be
executed, by Lessor has been, or will be, duly executed and delivered by
Lessor and constitutes, or will constitute, a legal, valid and binding
obligation of Lessor, enforceable against Lessor in accordance with its
terms, except as limited by bankruptcy, insolvency or other laws of
32
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 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.
33
(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.
(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.
34
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 Participant), the following, each in such form and such
detail as Agent, Lessor or the Required Participants shall reasonably
request:
(i) As soon as available and in no event later than
fifty (50) days after the last day of each fiscal quarter of
Lessee (other than the last quarter in any fiscal year), a copy
of the Financial Statements of Lessee and its Subsidiaries
(prepared on a consolidated basis) for such quarter and for the
fiscal year to date, certified by the president or chief
financial officer of Lessee to present fairly the financial
condition, results of operations and other information reflected
therein and to have been prepared in accordance with GAAP
(subject to normal year-end audit adjustments);
(ii) As soon as available and in no event later than one
hundred (100) days after the close of each fiscal year of
Lessee, (A) copies of the audited Financial Statements of Lessee
and its Subsidiaries (prepared on a consolidated basis) for such
year, prepared by Ernst & Young or by other independent
certified public accountants of recognized national standing
acceptable to Agent, (B) copies of the unqualified opinions (or
qualified opinions reasonably acceptable to Required
Participants) and management letters delivered by such
accountants in connection with all such Financial Statements and
(C) certificates of such accountants to Agent stating that in
making the examination necessary for their opinion they have
reviewed this Agreement and have obtained no knowledge of any
Default which has occurred and is continuing, or if, in the
opinion of such accountants, a Default has occurred and is
continuing, a statement as to the nature thereof;
(iii) Contemporaneously with the quarterly and year-end
Financial Statements required by the foregoing clauses (i) and
(ii), a compliance certificate of the president or chief
financial officer of Lessee which (A) states that no Default has
occurred and is continuing, or, if any such Default has occurred
and is continuing, a statement as to the nature thereof and what
action Lessee proposes to take with respect thereto; and (B)
sets forth, for the quarter or year covered by such Financial
Statements or as of the last day of such quarter or year (as the
case may be), the calculation of the financial ratios and tests
provided in Paragraph 5.03;
35
(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, 8-Q and 8-K 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; and
(vi) Such other instruments, agreements, certificates,
opinions, statements, documents and information relating to the
operations or condition (financial or otherwise) of Lessee or
its Subsidiaries, and compliance by Lessee with the terms of
this Agreement and the other Operative Documents as Lessor or
Agent may from time to time reasonably request.
For the purposes of this Subparagraph 5.01(a), (1) the timely delivery
by Lessee to Agent pursuant to clause (vi) of a copy of the Form 10-Q
report filed by Lessee with the Securities and Exchange Commission for
any quarter shall satisfy the requirements of clause (i) for such
quarter and (2) the timely delivery by Lessee to Agent pursuant to
clause (vi) of a copy of the Form 10-K report filed by Lessee with the
Securities and Exchange Commission for any year shall satisfy the
requirements of clause (ii)(A) for such year, provided that such reports
are required to contain the same information as required by clause (i)
and clause (ii)(A), respectively.
(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
36
examine the books and records of Lessee and its Subsidiaries and make
copies thereof and to discuss the affairs, finances and business of
Lessee and its Subsidiaries with, and to be advised as to the same by,
their officers, auditors and accountants, all at such times and
intervals as any Participant may reasonably request.
(d) Insurance. In addition to the insurance requirements set
forth in the Lease Agreements with respect to the Property, Lessee and
its Subsidiaries shall:
(i) Carry and maintain insurance of the types and in the
amounts customarily carried from time to time during the term of
this Agreement by others engaged in substantially the same
business as such Person and operating in the same geographic
area as such Person, including, but not limited to, fire, public
liability, property damage and worker's compensation; and
(ii) Carry and maintain each policy for such insurance
with financially sound insurers.
(e) Governmental Charges and Other Indebtedness. Lessee and its
Subsidiaries shall promptly pay and discharge when due (i) all taxes and
other Governmental Charges prior to the date upon which penalties accrue
thereon, (ii) all indebtedness which, if unpaid, could become a Lien
upon the property of Lessee or its Subsidiaries and (iii) subject to any
subordination provisions applicable thereto, all other indebtedness;
except where (A) the failure to pay any such taxes, other Governmental
Charges or indebtedness, either alone or collectively, is not reasonably
likely to have a Material Adverse Effect and (B) any such taxes, other
Governmental Charges or indebtedness as may in good faith be contested
or disputed, or for which arrangements for deferred payment have been
made, provided that in each such case appropriate reserves as required
by GAAP are maintained.
(f) Use of Proceeds. Lessee shall not use any part of the
proceeds of any Advance, directly or indirectly, for the purpose of
purchasing or carrying any Margin Stock or for the purpose of purchasing
or carrying or trading in any securities under such circumstances as to
involve Lessee or any Lessor Party in a violation of Regulations T, U or
X issued by the Federal Reserve Board.
(g) General Business Operations. Each of Lessee and its
Subsidiaries shall (i) preserve and maintain its corporate existence and
all of its rights, privileges and franchises reasonably necessary to the
conduct of its business, (ii) conduct its business activities in
compliance with all Requirements of Law and Contractual Obligations
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
37
office or principal place of business outside of California except upon
not less than thirty (30) days prior written notice to Agent.
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) Liens. Neither Lessee nor any of its Subsidiaries shall
create, incur, assume or permit to exist any Lien on or with respect to
any of its assets or property of any character, whether now owned or
hereafter acquired, except for the following ("Permitted Liens"):
(i) Liens in favor of Lessor, Agent or any Participant
securing the Lessee Obligations;
(ii) Liens securing Economically Defeased Synthetic
Lease Obligations;
(iii) Liens listed in Schedule 5.02(a) 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;
38
(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) 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;
(xii) Liens securing Indebtedness of Lessee and its
Subsidiaries under purchase money loans, Capital Leases,
conditional sale agreements or other title retention agreements
that (A) is incurred by Lessee or any of its Subsidiaries to
finance the acquisition by such Person of real property,
fixtures or equipment, (B) 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, and (C)
does not exceed the purchase price of the property so financed,
provided that (1) no Default has occurred and is continuing or
will occur at the time each such Lien is granted and (2) in each
case, such Lien (I) covers only those assets, the acquisition of
which was financed by such Indebtedness, and (II) secures only
such Indebtedness;
(xiii) Liens on the property or assets of any Subsidiary
of Lessee in favor of Lessee or any other Subsidiary of Lessee;
(xiv) [Reserved];
(xv) Liens on insurance proceeds in favor of insurance
companies with respect to the financing of insurance premiums;
(xvi) Permitted Property Liens in the Property; and
(xvii) 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 fifteen percent (15%) 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.
39
(b) Mergers, Acquisitions, Etc. Neither Lessee nor any of its
Subsidiaries shall consolidate with or merge into any other Person or
permit any other Person to merge into it, establish any new Subsidiary,
acquire any Person as a new Subsidiary or acquire all or substantially
all of the assets of any other Person, except for the following:
(i) Any Subsidiary of Lessee may merge or consolidate
with any other Subsidiary of Lessee;
(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 (x) is a Solvent United States
corporation, (y) assumes in writing all of the Lessee
Obligations and (x) immediately after giving effect to
such merger or consolidation, is in compliance with the
financial covenants contained in Paragraph 5.03; and
(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.
(c) 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.
(d) 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 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.
40
(e) 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) 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 1.35 to 1.00.
(b) Tangible Net Worth. Commencing on June 30, 2001, 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) $1,300,000,000;
plus
(ii) Fifty percent (50%) of the sum of Lessee's
consolidated quarterly net income (ignoring any quarterly
losses) for each fiscal quarter ending after June 30, 2001
through and including the fiscal quarter ending on the
determination date;
plus
(iii) Seventy-five percent (75%) 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 July 1, 2001 and ending on the determination date;
plus
(iv) Seventy-five percent (75%) 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 July 1, 2001 and ending on the
determination date.
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 the following covenants, unless Lessee
and Required Participants shall otherwise consent in writing:
41
(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) in any 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 Document, for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this
42
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 Participant). 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 Participant).
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
43
such action. The obligations of each Participant under this Paragraph 6.05 shall
survive the payment and performance of the Lessee Obligations, the termination
of this Agreement and any Participant ceasing to be a party to this Agreement
(with respect to events which occurred prior to the time such Participant ceased
to be a Participant hereunder).
6.06. Non-Reliance. Each Participant represents that it has,
independently and without reliance on Lessor, Agent, or any other Participant,
and based on such documents and information as it has deemed appropriate, made
its own appraisal of the business, prospects, management, financial condition
and affairs of Lessee and the Subsidiaries and its own decision to enter into
this Agreement and agrees that it will, independently and without reliance upon
Lessor, Agent or any other Participant, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
appraisals and decisions in taking or not taking action under this Agreement or
any other Operative Document. Neither Lessor nor Agent nor any of their
respective affiliates nor any of their respective directors, officers,
employees, agents or advisors shall (a) be required to keep any Participant
informed as to the performance or observance by Lessee or any of its
Subsidiaries of the obligations under this Agreement or any other document
referred to or provided for herein or to make inquiry of, or to inspect the
properties or books of Lessee or any of its Subsidiaries; (b) have any duty or
responsibility to provide any Participant with any credit or other information
concerning Lessee or any of its Subsidiaries which may come into the possession
of Lessor or Agent, except for notices, reports and other documents and
information expressly required to be furnished to the Participants by Lessor or
Agent hereunder; or (c) be responsible to any Participant for (i) any recital,
statement, representation or warranty made by Lessee or any officer, employee or
agent of Lessee in this Agreement or in any of the other Operative Documents,
(ii) the value, validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any Operative Document, (iii) the value or
sufficiency of the Property or the validity or perfection of any of the liens or
security interests intended to be created by the Operative Documents, or (iv)
any failure by Lessee to perform its obligations under this Agreement or any
other Operative Document.
6.07. Resignation or Removal of Agent. Agent may resign at any time by
giving thirty (30) days prior written notice thereof to Lessee and the
Participants, and Agent may be removed at any time with or without cause by the
Required Participants; provided, however, that Agent shall not resign and may
not be removed without cause prior to the expiration of the Commitment Period
without the consent of Lessee unless a Change of Law makes it unlawful or
unreasonably burdensome for Agent to continue to act in such capacity. Upon any
such resignation or removal, the Required Participants shall have the right to
appoint a successor Agent, which Agent, if not a Participant, shall be
reasonably acceptable to Lessee; provided, however, that Lessee shall have no
right to approve a successor Agent if a Default has occurred and is continuing.
Upon the acceptance of any appointment as Agent hereunder by a successor Agent,
such successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from the duties and obligations thereafter arising
hereunder. After any retiring Agent's resignation or removal hereunder as Agent,
the provisions of this Section VI and any other 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.
44
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: Elizabeth McClellan
45
Telephone: (312) 904-2809
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
46
thereunder (which fees and expenses shall be treated as Permitted Transaction
Expenses if incurred prior to the Commitment Termination Date), and (b) all
reasonable fees and expenses, including reasonable attorneys' fees and expenses,
incurred by the Lessor Parties (other than Novellus Participant) 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
Participant's) 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 Participant's) 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 under Facility 3 during the Construction Period,
except as follows:
(a) Lessee shall indemnify the Lessor Parties as provided in
this Paragraph 7.03 from and against any and all such liabilities,
losses, damages and expenses arising under Facility 3 during the
Construction Period if caused by or arising from any failure by Lessee
to comply with any of its obligations under the Operative Documents
(including its insurance obligations), any representation by Lessee in
any of the Operative Documents not being true, any negligence or willful
misconduct of Lessee, or any claim by any third-party against Lessee (or
against any Lessor Party) based upon any alleged action or inaction by
Lessee.
(b) If any Lessor Party incurs any such liabilities, losses,
damages or expenses arising under Facility 3 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,
47
claim or demand shall not relieve Lessee of its obligations under this Paragraph
7.03. The obligations of Lessee under this Paragraph 7.03 shall survive the
payment and performance of the Lessee Obligations and the termination of this
Agreement.
7.04. Waivers; Amendments. Any term, covenant, agreement or condition of
this Agreement or any other Operative Document may be amended or waived if such
amendment or waiver is in writing and is signed by Lessor, Lessee and the
Required Participants; provided, however that:
(a) Any amendment, waiver or consent which (i) increases the
Total Commitment, (ii) extends the Scheduled Expiration Date under any
Lease Agreement, (iii) reduces the Rental Rate or any fees or other
amounts payable for the account of the Participants hereunder, (iv)
postpones any date scheduled for any payment of Base Rent or any fees or
other amounts payable for the account of the Participants hereunder or
thereunder, (v) amends Paragraph 2.06 or this Paragraph 7.04, (vi)
amends the definition of Required Participants or (vii) releases
Lessor's interest in any substantial part of the Property, must be in
writing and also signed or approved in writing by all Participants;
(b) Any amendment, waiver or consent which increases or
decreases any Proportionate Share of any Participant must be in writing
and also signed by such Participant;
(c) Any amendment, waiver or consent which affects the rights or
obligations of Agent must be in writing and also signed by Agent;
(d) Upon the exercise by Lessee of the Partial Purchase Option
under any 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 Participant) 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
48
their respective permitted successors and assigns. All references in
this Agreement to any Person shall be deemed to include all successors
and assigns of such Person.
(b) Participant Assignments.
(i) Any Participant may, at any time, sell and assign to
any other Participant or any Eligible Assignee (individually, an
"Assignee Participant") all or a portion of its rights and
obligations under this Agreement and the other Operative
Documents (such a sale and assignment to be referred to herein
as an "Assignment") pursuant to an assignment agreement in the
form of Exhibit L (an "Assignment Agreement"), executed by each
Assignee Participant and such assignor Participant (an "Assignor
Participant") and delivered to Agent for its acceptance and
recording in the Register; provided, however, that:
(A) Without the written consent of Lessor, Agent
and, if no Default has occurred and is continuing,
Lessee (which consent of Lessor, Agent and Lessee shall
not be unreasonably withheld), no Participant may make
any Assignment to any Assignee Participant which is not,
immediately prior to such Assignment, a Participant
hereunder or an Affiliate thereof (except that ABN AMRO
may make an Assignment to Novellus Participant pursuant
to Subparagraph 2.02(d)); or
(B) Without the written consent of Lessor, Agent
and, if no Default has occurred and is continuing,
Lessee (which consent of Lessor, Agent and Lessee shall
not be unreasonably withheld), no Participant may make
any Assignment to any Assignee Participant if, after
giving effect to such Assignment, the Commitment of such
Participant or such Assignee Participant would be less
than Two Million Dollars ($2,000,000) (except that a
Participant may make an Assignment which reduces its
Commitment to zero without the written consent of
Lessor, Agent or Lessee); or
(C) Without the written consent of Lessor, Agent
and, if no Default has occurred and is continuing,
Lessee (which consent of Lessor, Agent and Lessee shall
not be unreasonably withheld), no Participant may make
any Assignment of its Outstanding Tranche A
Participation Amount under any Facility which does not
assign and delegate an equal pro rata interest in (1)
such Participant's Outstanding Tranche A Participation
Amount under all Facilities, (2) such Participant's
Tranche A Percentage under all Facilities, and (3) such
Participant's other rights, duties and obligations
relating to the Tranche A Portion of all Facilities
under this Agreement and the other Operative Documents;
or
(D) Without the written consent of Lessor, Agent
and, if no Default has occurred and is continuing,
Lessee (which consent of Lessor, Agent and Lessee shall
not be unreasonably withheld), no Participant may
49
make any Assignment of its Outstanding Tranche B
Participation Amount under any Facility which does not
assign and delegate an equal pro rata interest in (1)
such Participant's Outstanding Tranche B Participation
Amount under all Facilities, (2) such Participant's
Tranche B Percentage under all Facilities, and (3) such
Participant's other rights, duties and obligations
relating to the Tranche B Portion of all Facilities
under this Agreement and the other Operative Documents;
or
(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 Participant may make
any Assignment of its Outstanding Tranche C
Participation Amount under any Facility which does not
assign and delegate an equal pro rata interest in (1)
such Participant's Outstanding Tranche C Participation
Amount under all Facilities, (2) such Participant's
Tranche C Percentage under all Facilities, and (3) such
Participant's other rights, duties and obligations
relating to the Tranche C Portion of all Facilities
under this Agreement and the other Operative Documents;
or
(F) Without the written consent of Lessor and
Agent (which consent of Lessor and Agent shall not be
unreasonably withheld), Novellus Participant 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 any Facility 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
Participant.
Upon such execution, delivery, acceptance and recording of each
Assignment Agreement, from and after the Assignment Effective
Date determined pursuant to such Assignment Agreement, (y) each
Assignee Participant thereunder shall be a Participant hereunder
with a Tranche A Percentage, Tranche B Percentage, Tranche C
Percentage and Proportionate Share under each Facility as set
forth on Attachment 1 to such Assignment Agreement (under the
caption "Tranche Percentages and Proportionate Shares After
Assignment") and shall have the rights, duties and obligations
of such a Participant under this Agreement and the other
Operative Documents, and (z) the Assignor Participant thereunder
shall be a Participant with a Tranche A Percentage, Tranche B
Percentage, Tranche C Percentage and Proportionate Share under
each Facility as set forth on Attachment 1 to such Assignment
Agreement (under the caption "Tranche Percentages and
Proportionate Shares After Assignment"), or, if the
Proportionate Share of the Assignor Participant has been reduced
to 0% under all Facilities, the Assignor Participant shall cease
to be a Participant and to have any obligation to fund any
portion of any Advance; provided, however, that any such
Assignor Participant which ceases to be a Participant shall
continue to be entitled to the benefits of any
50
provision of this Agreement which by its terms survives the
termination of this Agreement. Each Assignment Agreement shall
be deemed to amend Schedule I to the extent, and only to the
extent, necessary to reflect the addition of each Assignee
Participant, the deletion of each Assignor Participant which
reduces its Proportionate Share to 0% under all Facilities and
the resulting adjustment of Tranche A Percentages, Tranche B
Percentages, Tranche C Percentages and Proportionate Shares
arising from the purchase by each Assignee Participant of all or
a portion of the rights and obligations of an Assignor
Participant under this Agreement and the other Operative
Documents. Each Assignee Participant which was not previously a
Participant hereunder and which is not incorporated under the
laws of the United States of America or a state thereof shall,
within three (3) Business Days of becoming a Participant,
deliver to Lessee and Agent two duly completed copies of United
States Internal Revenue Service Form 1001 or 4224 (or successor
applicable form), as the case may be, certifying in each case
that such Participant is entitled to receive payments under this
Agreement without deduction or withholding of any United States
federal income taxes. (Without limiting the generality of any of
the preceding provisions of this clause (i) of Subparagraph
7.05(b), no Participant may, if no Default has occurred and is
continuing and Lessee shall object in writing, make any
Assignment to any Assignee Participant that, at the time of such
Assignment, (1) has a basis for demanding any payment under
Subparagraph 2.12(c) or Subparagraph 2.12(d) in excess of the
pro rata amount that then could be demanded thereunder by the
Participant proposing to make such Assignment or (2) would
require Lessee to make any payment under Subparagraph 2.13(a) on
account of payments to such Assignee Participant in excess of
the pro rata amount that Lessee was then required to make
thereunder on account of payments to the Participant proposing
to make such Assignment.)
(ii) Agent shall maintain at its address referred to in
Paragraph 7.01 a copy of each Assignment Agreement delivered to
it and a register (the "Register") for the recordation of the
names and addresses of the Participants and the Tranche A
Percentage, Tranche B Percentage, Tranche C Percentage and
Proportionate Share of each Participant under each Facility from
time to time. The entries in the Register shall be conclusive in
the absence of manifest error, and Lessee, Agent and the
Participants may treat each Person whose name is recorded in the
Register as the owner of the interests recorded therein for all
purposes of this Agreement. The Register shall be available for
inspection by Lessee or any Participant at any reasonable time
and from time to time upon reasonable prior notice.
(iii) Upon its receipt of an Assignment Agreement
executed by an Assignor Participant and an Assignee Participant
(and, to the extent required by clause (i) of this Subparagraph
7.05(b), by Lessor, Agent and Lessee), together with payment to
Agent by Assignor Participant of a registration and processing
fee of $3,000, Agent shall (A) promptly accept such Assignment
Agreement and (B) on the Assignment Effective Date determined
pursuant thereto record the information contained therein in the
Register and give notice of such acceptance
51
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 Participant except in compliance with clause (i)(F) of
Subparagraph 7.05(b)) may at any time sell to one or more Persons
("Subparticipants") subparticipation interests in the rights and
interests of such Participant under this Agreement and the other
Operative Documents. In the event of any such sale by a Participant of
subparticipation interests, such Participant's obligations under this
Agreement and the other Operative Documents shall remain unchanged, such
Participant shall remain solely responsible for the performance thereof
and Lessee and the other Lessor Parties shall continue to deal solely
and directly with such Participant in connection with such Participant's
rights and obligations under this Agreement. Any agreement pursuant to
which any such sale is effected may require the selling Participant to
obtain the consent of the Subparticipant in order for such Participant
to agree in writing to any amendment, waiver or consent of a type
specified in clause (i), (ii), (iii) or (iv) of Subparagraph 7.04(a) but
may not otherwise require the selling Participant to obtain the consent
of such Subparticipant to any other amendment, waiver or consent
hereunder. Lessee agrees that any Participant which has transferred any
subparticipation interest shall, notwithstanding any such transfer, be
entitled to the full benefits accorded such Participant under Paragraph
2.12, Paragraph 2.13, and Paragraph 2.14, as if such Participant had not
made such transfer.
(d) Lessor Assignments. Lessor may, upon one (1) month's prior
written notice to Lessee and Agent, sell and assign all of its right,
title and interest in the Property and its rights, powers, privileges,
duties and obligations under this Agreement and the other Operative
Documents, provided that:
(i) If such sale and assignment is effected after either
(A) the occurrence of a Change of Law which makes it unlawful or
unreasonably burdensome for Lessor to hold legal or beneficial
title to the Property or to perform its obligations and duties
under this Agreement and the other Operative Documents or (B)
the resignation or removal of the Agent which was the Agent at
the time Lessor became the Lessor, the purchaser/assignee (the
"successor Lessor") shall be either (1) a Participant or an
Eligible Assignee that will not cause the transactions evidenced
by this Agreement and the other Operative Documents to lose
their treatment as operating leases under FASB 13 or (2) a
Person approved as provided in clause (ii) below; or
(ii) If such sale and assignment is effected in any
other circumstance, the successor Lessor shall be a Person that
is (A) a financial institution or a Person
52
controlled by a financial institution and (B) approved in
writing by Agent, Required Participants and, if no Default has
occurred and is continuing, Lessee (which consents of Agent,
Required Participants and Lessee shall not be unreasonably
withheld); provided that Lessee shall have no obligation to
consent to any such sale and assignment prior to the Commitment
Termination Date; and
(iii) The successor Lessor executes such documents,
instruments and agreements as may reasonably be necessary to
evidence its agreement to assume all of the obligations and
duties of the Lessor under this Agreement and the other
Operative Documents.
Upon the consummation of any such sale and assignment, (A) the successor
Lessor shall become the "Lessor" and shall succeed to and become vested
with all the rights, powers, privileges, duties and obligations of the
Lessor under this Agreement and the other Operative Documents and (B)
the retiring Lessor shall be discharged from the duties and 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.
53
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.
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 Participant)
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
54
violation of this Agreement shall not affect the obligations of Lessee and its
Subsidiaries under this Agreement and the other Operative Documents.
7.14. Governing Law. Unless otherwise provided in any Operative
Document, this Agreement and each of the other Operative Documents shall be
governed by and construed in accordance with the laws of the State of California
without reference to conflicts of law rules.
7.15. No Merger. Lessee's leasehold or sub-leasehold estate in the
applicable Property arising under the Lease Agreements shall not be merged with
the fee estate or any other superior interest in any Property as a result of the
same Person acquiring, owning or holding, directly or indirectly, in whole or in
part, (a) the leasehold or sub-leasehold estate in any Property or any interest
in such leasehold estate and (b) the fee estate or other superior interest in
such Property or any interest in such fee estate or other superior interest,
unless Lessee, Lessor, Agent and all other parties with an interest in such
Property that would be adversely affected by such merger specifically agree in
writing that such merger shall occur.
[The first signature page follows.]
55
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:_____________________
56
PARTICIPANTS: ABN AMRO BANK N.V.
By:___________________________
Name:______________________
Title:_____________________
By:___________________________
Name:______________________
Title:_____________________
NOVELLUS INVESTMENTS I, LLC
By:___________________________
Name:______________________
Title:_____________________
ABN AMRO LEASING, INC.
By:___________________________
Name:______________________
Title:_____________________
57
SCHEDULE I
PARTICIPANTS
PART A(1) -- TRANCHE PERCENTAGES AND
PROPORTIONATE SHARES UNDER FACILITY 1
TRANCHE A TRANCHE B TRANCHE C PROPORTIONATE
PARTICIPANT PERCENTAGE PERCENTAGE PERCENTAGE SHARE
- ----------- ------------- ------------ ------------ --------------
ABN AMRO 0.00000000 % 0.00000000 % 0.00000000 % 0.00000000 %
Novellus Participant 96.50000000 % 0.00000000 % 0.00000000 % 96.50000000 %
ABN AMRO Leasing, Inc. 0.00000000 % 0.00000000 % 3.50000000 % 3.50000000 %
- ---------------------- -------------- -------------- -------------- --------------
TOTAL 96.50000000 % 0.00000000 % 3.50000000 % 100.00000000 %
I-1
PART A(2) -- TRANCHE PERCENTAGES AND
PROPORTIONATE SHARES UNDER FACILITY 2
TRANCHE A TRANCHE B TRANCHE C PROPORTIONATE
PARTICIPANT PERCENTAGE PERCENTAGE PERCENTAGE SHARE
- ----------- ------------ ------------- ------------ -------------
ABN AMRO 0.00000000 % 10.00000000 % 0.00000000 % 10.00000000 %
Novellus Participant 86.50000000 % 0.00000000 % 0.00000000 % 86.50000000 %
ABN AMRO Leasing, Inc. 0.00000000 % 0.00000000 % 3.50000000 % 3.50000000 %
- ---------------------- ------------- ------------- ------------- -------------
TOTAL 86.50000000 % 10.00000000 % 3.50000000 % 100.0000000 %
I-2
PART A(3-1) -- TRANCHE PERCENTAGES AND
PROPORTIONATE SHARES UNDER FACILITY 3
PRIOR TO THE COMPLETION DATE
TRANCHE A TRANCHE B TRANCHE C PROPORTIONATE
PARTICIPANT PERCENTAGE PERCENTAGE PERCENTAGE SHARE
- ----------- ------------- ------------ ------------ -------------
ABN AMRO(1) 89.90000000 % 6.60000000 % 0.00000000 % 96.50000000 %
Novellus Participant 0.00000000 % 0.00000000 % 0.00000000 % 0.00000000 %
ABN AMRO Leasing, Inc. 0.00000000.% 0.00000000 % 3.50000000 % 3.50000000 %
- ---------------------- ------------- ------------- ------------- -------------
TOTAL 89.90000000.% 6.60000000 % 3.50000000 % 100.00000000 %
PART A(3-2) -- TRANCHE PERCENTAGES AND
PROPORTIONATE SHARES UNDER FACILITY 2
ON AND AFTER THE COMPLETION DATE
TRANCHE A TRANCHE B TRANCHE C PROPORTIONATE
PARTICIPANT PERCENTAGE PERCENTAGE PERCENTAGE SHARE
- ----------- ------------- ------------ ------------ -------------
ABN AMRO 00.00000000 % 9.50000000 % 0.00000000 % 9.50000000 %
Novellus Participant 87.00000000 % 0.00000000 % 0.00000000 % 87.00000000 %
ABN AMRO Leasing, Inc. 0.00000000.% 0.00000000 % 3.50000000 % 3.50000000 %
- ----------- ------------- ------------ ------------ -------------
TOTAL 87.00000000.% 9.50000000 % 3.50000000 % 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
under Facility 3 to Novellus Participant in accordance with Paragraph
2.02(d) of this Agreement.
I-3
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
Wiring Instructions:
ABN AMRO Bank N.V.
New York, New York
RT/ABA No.: 026009580
Account Name: ABN AMRO Bank N.V. - CPU
Account No.: 650-001-1789-41
I-4
Reference: Novellus Systems, Inc. Synthetic Leases
I-5
NOVELLUS INVESTMENT I, LLC
- --------------------------
Applicable Participating Office:
Novellus Investment I, LLC
c/o Novellus Systems, Inc.
4000 North First Street
San Jose, CA 95134
Address for Notices:
Novellus Investment I, LLC
c/o Novellus Systems, Inc.
4000 North First Street
San Jose, CA 95134
Attn: Treasurer
Telephone: (408) 432-5339
Fax No: (408) 545-3009
Wiring Instructions:
CALIFORNIA BANK & TRUST
465 California Street
San Francisco, CA 94104 Swift
code: CALBUS66 ABA routing #: 121002042
Beneficiary name: Novellus Systems, Inc.
Beneficiary account #: 01900180970
I-6
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: Elizabeth McClellan
Telephone: (312) 904-2809
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 Leases
I-7
SCHEDULE 1.01
DEFINITIONS
"ABN AMRO" shall mean ABN AMRO Bank N.V.
"Advances" shall have the meaning given to that term in Subparagraph
2.01(b) 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 Participant) be deemed to be an Affiliate of Lessee or any of its
Subsidiaries for purposes of the Operative Documents. For the purpose of this
definition, "control" of a Person shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of its management or
policies, whether through the ownership of voting securities, by contract or
otherwise.
"Agent" shall mean ABN AMRO, acting in its capacity as Agent for the
Participants under the Operative Documents.
"Agent's Fee Letter" shall mean the letter agreement dated as of August
24, 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) Facility 1 and Facility 2.
(i) Tranche A. With respect to the Outstanding Tranche A
Participation Amounts, 0% per annum;
(ii) Tranche B. With respect to the Outstanding Tranche
B Participation Amounts, 0.35% per annum;
1.01-1
(iii) Tranche C. With respect to the Outstanding Tranche
C Participation Amounts, (A) 1.80% per annum with respect to the
LIBOR Rental Rate, or (B) 0% per annum with respect to the
Alternate Rental Rate;
(b) Facility 3.
(i) Tranche A. With respect to the Outstanding Tranche A
Participation Amounts:
(A) During all periods on or prior to the
Completion Date, (1) 0.20% per annum with respect to the
LIBOR Rental Rate, or (2) 0% per annum with respect to
the Alternate Rental Rate;
(B) During all periods after the Completion
Date, 0% per annum;
(ii) Tranche B. With respect to the Outstanding Tranche
B Participation Amounts:
(A) During all periods on or prior to the
Completion Date, (1) 0.35% per annum with respect to the
LIBOR Rental Rate, or (2) 0% per annum with respect to
the Alternate Rental Rate;
(B) During all periods after the Completion
Date, 0.35% per annum;
(iii) Tranche C. With respect to the Outstanding Tranche
C Participation Amounts, during all periods, whether prior to,
on or after the Completion Date, (A) 1.80% per annum with
respect to the LIBOR Rental Rate, or (B) 0% per annum with
respect to the Alternate Rental Rate;
provided, however, that each Applicable Margin set forth above in subparagraphs
(a) and (b) of this definition shall be increased by two percent (2.0%) per
annum on the date an Event of Default occurs and shall continue at such
increased rate unless and until such Event of Default is waived in accordance
with the Operative Documents.
"Applicable Participating Office" shall mean, with respect to any
Participant, (a) initially, its office designated as such in Part B of Schedule
I (or, in the case of any Participant which becomes a Participant by an
assignment pursuant to Subparagraph 7.05(b) of the Participation Agreement, its
office designated as such in the applicable Assignment Agreement) and (b)
subsequently, such other office or offices as such Participant may designate to
Agent as the office at which such Participant's interest in the Lease Agreement
will thereafter be maintained and for the account of which all payments of Rent
and other amounts payable to such Participant under the Operative Documents will
thereafter be made.
"Appraisal" shall mean an appraisal of an interest in any Parcel of
Property or a portion thereof in a form satisfactory to Lessor, Agent and the
Required Participants, prepared by an
1.01-2
independent MAI appraiser that (a) complies with the Financial Institutions
Reform, Recovery and Enforcement Act of 1989 and all other applicable
Governmental Rules and (b) is approved by Lessor, Agent and the Required
Participants (at the time such appraiser is selected).
"Appurtenant Rights" shall mean all easements and rights-of-way, strips
and gores of land, streets, ways, alleys, passages, sewer rights, water, water
courses, water rights and powers, air rights and development rights, liberties,
tenements, hereditaments and appurtenances of any nature whatsoever, in any way
belonging, relating or pertaining to any Land or the Improvements thereto and
the reversions, remainders, and all the estates, rights, titles, interests,
property, possession, claim and demand whatsoever, both in law and in equity,
of, in and to such Land and Improvements and every part and parcel thereof, with
the appurtenances thereto.
"Assignee Participant" shall have the meaning given to that term in
Subparagraph 7.05(b) of the Participation Agreement.
"Assignee Purchaser" shall have, with respect to each Purchase
Agreement, the meaning given to that term in Subparagraph 5.03(b) of such
Purchase Agreement.
"Assignment" shall have the meaning given to that term in Subparagraph
7.05(b) of the Participation Agreement.
"Assignment Agreement" shall have the meaning given to that term in
Subparagraph 7.05(b) of the Participation Agreement.
"Assignment Effective Date" shall have, with respect to each Assignment
Agreement, the meaning set forth therein.
"Assignment of Construction Agreements" shall have the meaning given to
that term in Subparagraph 2.11(a) of the Participation Agreement.
"Assignment of Lease" shall have the meaning given to that term in
Subparagraph 2.11(b) of the Participation Agreement.
"Assignor Participant" shall have the meaning given to that term in
Subparagraph 7.05(b) of the Participation Agreement.
"Assumed Appraisal" shall have, with respect to each Purchase Agreement,
the meaning given to that term in Subparagraph 3.02(h) of such Purchase
Agreement.
"Base Rate" shall mean, on any day, the greater of (a) the Prime Rate in
effect on such date and (b) the Federal Funds Rate for such day plus one-half
percent (0.50%).
"Base Rent" shall have, with respect to each Lease Agreement, the
meaning given to that term in Subparagraph 2.03(a) of such Lease Agreement. Such
term, when used without reference to a Lease Agreement, shall mean all Base Rent
under all Lease Agreements.
1.01-3
"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.
"Call Option" shall have, with respect to any Purchase Agreement, the
meaning given to that term in Paragraph 2.03 of such Purchase Agreement.
"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 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 of the Lease Agreements;
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.
"Cash Collateral Agreement" shall have the meaning given to that term in
Subparagraph 2.11(a) of the Participation Agreement.
"Cash Equivalents" shall mean:
1.01-4
(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 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
1.01-5
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 Participant)
has a Lien to secure any of the Lessee Obligations.
"Commencement Date" shall have, with respect to either Lease Agreement,
the meaning given to that term in Subparagraph 2.02(a) of such Lease Agreement.
"Commitment" shall mean, with respect to any Participant at any time,
the sum of such Participant's Facility 1 Commitment, Facility 2 Commitment and
Facility 3 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.
"Completion" shall have the meaning given to that term in Subparagraph
3.05(c) of the Facility 3 Construction Agency Agreement. "Complete", "Completed"
and "Completion" shall have comparable meanings.
1.01-6
"Completion Date" shall mean the first date on which all of the
conditions set forth in Subparagraph 3.05(c) of the Facility 2 Construction
Agency Agreement are satisfied for all Parcels of Property covered by the
Facility 3 Construction Agency Agreement.
"Completion Date Appraisal" shall mean, with respect to the Facility 3
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 Participant) at any time of any notice,
certificate or other writing which indicates that the likely Completion Date
will be later than the Outside Completion Date.
"Compliance Certificate" shall have the meaning given to that term in
Subparagraph 5.01(a) of the Participation Agreement.
"Condemnation" shall mean any condemnation, requisition, confiscation,
seizure or other taking or sale of the use, access, occupancy or other right in
or to all or any portion of any of the Property (whether wholly or partially,
temporarily or permanently), by or on account of any actual or threatened
eminent domain proceeding or other taking of action by any Governmental
Authority or other Person having the power of eminent domain, including an
action by any such Governmental Authority or Person to change the grade of, or
widen the streets adjacent to, such Property or alter the pedestrian or
vehicular traffic flow to such Property so as to result in change in access to
such Property, or by or on account of an eviction by paramount title or any
transfer made in lieu of any such proceeding or action. A "Condemnation" shall
be deemed to have occurred on the earliest of the dates that use, access,
occupancy or other right is taken.
"Conforming Bid" shall have, with respect to any Purchase Agreement, the
meaning given to that term in Subparagraph 3.02(c) of such 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 Facility 3 Construction Agency Agreement.
"Construction Period" shall mean, with respect to any building to be
constructed or improved as part of the New Improvements, the period that begins
on the Closing Date and ends on the earlier of (a) the first date on which
Substantial Completion of such construction or improvement for such building
occurs and (b) the Outside Completion Date.
"Construction Termination Event" shall mean (a) the occurrence or
existence of any Cost Overrun Event or Completion Delay Event, (b) the
incurrence by any Lessor Party of any liabilities, losses, damages or expenses
excluded from Lessee's obligations under Paragraph 7.03 of the Participation
Agreement by the proviso to such paragraph, (c) the incurrence by any Lessor
1.01-7
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
Facility 3 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.
"Cooley Lease" means that certain Lease, dated as of July 1, 1998,
between Lessee, as landlord, and Cooley Godward LLP, as tenant, as amended by
that certain First Amendment to Lease, dated as of November 19, 1998.
"Cost Overrun" shall mean the amount, if any, by which:
(a) The aggregate cost to acquire the Facility 3 Property and
Complete the New Improvements, less that portion of such cost that is
payable or reimbursable by an insurer, contractor or other party (other
than Lessor, Lessee or Participants);
exceeds
(b) The greater of (i) the Total Facility 3 Commitment and (ii)
the fair market value of the Facility 3 Property on the Completion Date.
"Cost Overrun Event" shall mean (a) the delivery by Lessee of an Advance
Request for any Advance that will reduce the Unused Total Facility 3 Commitment
to $0 prior to the Completion Date, (b) the occurrence of any event or the
existence of any condition that causes the likely aggregate remaining cost for
Completion of the New Improvements at any time to exceed the Unused Total
Facility 3 Commitment at such time or (c) the delivery by Lessee to any
1.01-8
Lessor Party at any time of any notice, certificate or other writing which
indicates that the likely aggregate remaining cost for Completion of the New
Improvements at such time will exceed the Unused Total Facility 3 Commitment at
such time.
"Credit Event" shall mean the making of each Advance, the selection of a
new Rental Period or the exercise of the Partial Purchase Option or Marketing
Option under any Purchase Agreement.
"Current Appraisal" shall have, with respect to a Purchase Agreement,
the meaning given to that term in Subparagraph 3.02(h) of such Purchase
Agreement.
"Default" shall mean any Event of Default under any Lease Agreement or
any event or circumstance not yet constituting an Event of Default under any
Lease Agreement which, with the giving of any notice or the lapse of any period
of time or both, would become an Event of Default under any Lease Agreement.
"Defaulting Participant" shall mean a Participant which has failed to
fund its portion of any Advance which it is required to fund under the
Participation Agreement and has continued in such failure for three (3) Business
Days after written notice from Agent.
"Deposit Account Control Agreement" shall have the meaning given to that
term in Subparagraph 2.01(b) of the Cash Collateral Agreement.
"Deposit Accounts" shall have the meaning given to that term in
Subparagraph 2.01(a) of the Cash Collateral Agreement.
"Depositary Bank" shall have the meaning given to that term in Paragraph
2.02 of the Cash Collateral Agreement.
"Designated Purchaser" shall have, with respect to any Purchase
Agreement, the meaning given to that term in Subparagraph 3.02(e) of such
Purchase Agreement.
"Dollars" and "$" shall mean the lawful currency of the United States of
America and, in relation to any payment under the Operative Documents, same day
or immediately available funds.
"Economically Defeased Synthetic Lease Obligations" shall mean Synthetic
Lease Obligations under synthetic leases in which the lessee has secured its
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
1.01-9
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 Participant is an Eligible
Assignee of the Tranche A Percentage, Tranche A Proportionate Share and
Outstanding Tranche A Participation Amount under each Facility.
"Eligible Project Costs" shall mean, with respect to Facility 3 on any
date, the remainder of:
(a) The sum of (i) the Outstanding Lease Amount under such
Facility on such date, plus (ii) all Prepaid Rent on such date;
minus
(b) All amounts included in such sum that do not constitute
Project Costs, except for the amounts of any costs, expenses,
liabilities or losses caused by or arising from any failure by Lessee to
comply with any of its obligations under the Operative Documents
(including its insurance obligations), any representation by Lessee in
any of the Operative Documents not being true, any negligence or willful
misconduct of Lessee, or any claim by any third-party against Lessee (or
against any Lessor Party) based upon any alleged action or inaction by
Lessee.
"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.
1.01-10
"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. Notwithstanding the foregoing, the term "Equity
Securities" shall not include the $880,000,000 in Liquid Yield Option(TM) Notes
issued by Lessee, due 2031 (Zero Coupon -- Subordinated).
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as the same may from time to time be amended or supplemented, including any
rules or regulations issued in connection therewith.
"ERISA Affiliate" shall mean any Person which is treated as a single
employer with Lessee under Section 414 of the IRC.
"Event of Default" shall have, with respect to any Lease Agreement, the
meaning given to that term in Paragraph 5.01 of such Lease Agreement.
"Exhibit B Supplement" shall have the meaning given to that term in
Subparagraph 2.03(a) of the Participation Agreement.
"Existing Affiliate Lessors" shall have the meaning given to that term
in Recital A of the Participation Agreement.
"Existing Facilities" shall have the meaning given to that term in
Recital A of the Participation Agreement.
"Existing Improvements" shall mean (a) with respect to a particular
Parcel of Land, all Improvements existing on such Land on the Closing Date and
(b) with respect to all the Land, all such Improvements. Each reference to
"Existing Improvements" shall refer collectively to Existing Improvements with
respect to all the Land unless such reference specifically indicates that it
applies to a particular Parcel.
"Existing Lessors" shall have the meaning given to that term in Recital
A of the Participation Agreement.
"Existing Novellus Participation Agreements" shall have the meaning
given to that term in Recital A of the Participation Agreement.
"Existing Participants" shall have the meaning given to that term in
Recital A of the Participation Agreement.
"Expiration Date" shall mean, with respect to any Lease Agreement, the
earlier of (a) the Scheduled Expiration Date under such Lease Agreement, as such
date may be extended pursuant to this Agreement, and (b) the Termination Date
for such Lease Agreement, if such Lease Agreement is terminated prior to its
Scheduled Expiration Date in accordance with its terms.
1.01-11
"Expiration Date Appraisal" shall mean (a) with respect to the Facility
1 Property or Facility 2 Property (or any portion thereof) as of any date, an
Appraisal that assesses at such time the Fair Market Value of such Property on
the Scheduled Expiration Date for the applicable Lease Agreement and (b) with
respect to the Facility 3 Property (or any portion thereof) as of any date, an
Appraisal that assesses at such time the Fair Market Value of such Property on
the Scheduled Expiration Date for the Facility 3 Lease Agreement and as improved
in accordance with the Plans and Specifications for the New Improvements.
"Expiration Date Purchase Option" shall have, with respect to any
Purchase Agreement, the meaning given to that term in Subparagraph 3.01(b) of
such Purchase Agreement.
"Facilities" shall have the meaning given to that term in Recital B to
the Participation Agreement.
"Facility 1" shall have the meaning given to that term in Recital B to
the Participation Agreement.
"Facility 1 Commitment" shall mean, with respect to any Participant at
any time, such Participant's Facility 1 Proportionate Share of the Total
Facility 1 Commitment at such time.
"Facility 1 Land" shall mean all lots, pieces, tracts or parcels of land
described in Exhibit A to the Facility 1 Lease Agreement and leased by Lessee
pursuant to the Facility 1 Lease Agreement.
"Facility 1 Lease Agreement" shall have the meaning given to that term
in Subparagraph 2.01(a) of the Participation Agreement.
"Facility 1 Property" shall have the meaning given to that term in
Paragraph 2.01 of the Facility 1 Lease Agreement.
"Facility 1 Purchase Agreement" shall have the meaning given to that
term in Subparagraph 2.01(a) of the Participation Agreement.
"Facility 2" shall have the meaning given to that term in Recital B to
the Participation Agreement.
"Facility 2 Commitment" shall mean, with respect to any Participant at
any time, such Participant's Facility 2 Proportionate Share of the Total
Facility 2 Commitment at such time.
"Facility 2 Land" shall mean all lots, pieces, tracts or parcels of land
described in Exhibit A(2) to the Facility 2 Lease Agreement and leased by Lessee
pursuant to the Facility 2 Lease Agreement.
"Facility 2 Lease Agreement" shall have the meaning given to that term
in Subparagraph 2.01(a) of the Participation Agreement.
1.01-12
"Facility 2 Property" shall have the meaning given to that term in
Paragraph 2.01 of the Facility 2 Lease Agreement.
"Facility 2 Purchase Agreement" shall have the meaning given to that
term in Subparagraph 2.01(a) of the Participation Agreement.
"Facility 3" shall have the meaning given to that term in Recital B to
the Participation Agreement.
"Facility 3 Commitment" shall mean, with respect to any Participant at
any time, such Participant's Facility 3 Proportionate Share of the Total
Facility 3 Commitment at such time.
"Facility 3 Construction Agency Agreement" shall have the meaning given
to that term in Subparagraph 2.01(a) of the Participation Agreement.
"Facility 3 Land" shall mean all lots, pieces, tracts or parcels of land
described in Exhibit A to the Facility 3 Lease Agreement and leased by Lessee
pursuant to the Facility 3 Lease Agreement.
"Facility 3 Lease Agreement" shall have the meaning given to that term
in Subparagraph 2.01(a) of the Participation Agreement.
"Facility 3 Property" shall have the meaning given to that term in
Paragraph 2.01 of the Facility 3 Lease Agreement.
"Facility 3 Purchase Agreement" shall have the meaning given to that
term in Subparagraph 2.01(a) of the Participation Agreement.
"Fair Market Value" shall mean, with respect to any of the Property or
any portion thereof, the maximum reasonable amount (not less than zero) that
would be paid in cash in an arm's-length transaction between an informed and
willing purchaser and an informed and willing seller, neither of whom is under
any compulsion to purchase or sell, for the ownership of the Property or such
portion.
"FASB 13" shall mean Financial Accounting Standards Board Statement No.
13.
"Federal Funds Rate" shall mean, for any day, the rate per annum set
forth in the weekly statistical release designated as H.15(519), or any
successor publication, published by the Federal Reserve Board (including any
such successor publication, "H.15 (519)") for such day opposite the caption
"Federal Funds (Effective)". If on any relevant day, such rate is not yet
published in H.15 (519), the rate for such day shall be the rate set forth in
the daily statistical release 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
1.01-13
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.
"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 Agreement" shall mean the Amended and Restated Ground
Lease Agreement, dated as of September 21, 2001, between Novellus and Lessor,
pursuant to which Novellus leased to Lessor the Parcel 7 Property subject to the
terms and conditions of the Stanford Lease.
"Ground Lease Commencement Date" shall have the meaning given to that
term in Paragraph 2.02 of the Ground Lease Agreement.
1.01-14
"Ground Lease Event of Default" shall have the meaning given to that
term in Paragraph 5.01 of the Ground Lease Agreement.
"Ground Lease Expiration Date" shall have the meaning given to that term
in Paragraph 4.02 of the Ground Lease Agreement.
"Ground Option Price" shall have the meaning given to that term in
Paragraph 6.02 of the Ground Lease Agreement.
"Ground Lease Property" shall have the meaning given to that term in
Paragraph 2.01 of the Ground Lease Agreement.
"Ground Lease Purchase Option" shall have the meaning given to that term
in Paragraph 6.01 of the Ground Lease Agreement.
"Ground Lease Purchase Option Date" shall have the meaning given to that
term in Paragraph 6.01 of the Ground Lease Agreement.
"Ground Lease Scheduled Expiration Date" shall have the meaning given to
that term in Paragraph 2.02 of the Ground Lease Agreement.
"Ground Lessee" shall have the meaning given to that term in the
introductory paragraph of the Ground Lease Agreement.
"Ground Lessor" shall have the meaning given to that term in the
introductory paragraph of the Ground Lease Agreement.
"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,"
1.01-15
"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 kind and
description now or hereafter located on such Land or attached to the
Improvements thereto which by the nature of their location thereon or attachment
thereto are real property under applicable law; and (c) all Modifications to
such Land or its Improvements, except for any Modifications removed by Lessee
from the Property pursuant to Subparagraph 3.10 of the applicable Lease
Agreement.
"Indebtedness" of any Person shall mean, without duplication:
(a) All obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments and all other obligations of
such Person for borrowed money (including obligations to repurchase
receivables and other assets sold with recourse);
(b) All obligations of such Person for the deferred purchase
price of property or services (including obligations under letters of
credit and other credit facilities which secure or finance such purchase
price and obligations under "synthetic" leases);
(c) All obligations of such Person under conditional sale or
other title retention agreements with respect to property acquired by
such Person (to the extent of the value of such property if the rights
and remedies of the seller or lender under such agreement in the event
of default are limited solely to repossession or sale of such property);
(d) All obligations of such Person as lessee under or with
respect to Capital Leases;
(e) All non-contingent payment or reimbursement obligations of
such Person under or with respect to Surety Instruments;
(f) All net obligations of such Person, contingent or otherwise,
under or with respect to Rate Contracts;
(g) All Guaranty Obligations of such Person with respect to the
obligations of other Persons of the types described in clauses (a) - (f)
above and all other Contingent Obligations of such Person; and
1.01-16
(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:
(a) Net income taxes imposed on an Indemnitee by the U.S.
federal government (other than those imposed by means of withholding at
source) or 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, or a jurisdiction in which
such Indemnitee is otherwise subject to tax other than as a result of
transactions contemplated by the Operative Documents (provided, however,
that this definition shall not be construed to prevent a payment from
being made on an after-tax basis);
(b) Taxes and other Governmental Charges imposed on an
Indemnitee by a foreign Governmental Authority, taxing authority or
taxing jurisdiction, unless such Taxes are imposed by reason of (i) the
payment by Lessee or any Affiliate of any amount pursuant to the
Operative Documents from, or the booking by Lessee or any Affiliate of
some or all of the transactions contemplated by the Operative Agreements
in, such foreign jurisdiction, (ii) the location of the Property in such
jurisdiction or (iii) activities of the Lessee or an Affiliate of the
Lessee in such jurisdiction;
(c) 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 any Lease Agreement (but only while Lessee is so
contesting such tax or Governmental Charge); or
(d) Any tax or other Governmental Charge that is imposed upon an
Indemnitee primarily as a result of the gross negligence or willful
misconduct of such Indemnitee itself (as opposed to gross negligence or
willful misconduct imputed to such Indemnitee), but not taxes or other
Governmental Charges imposed as a result of ordinary negligence of such
Indemnitee.
"Indemnitees" shall mean the Lessor Parties and their Affiliates and
their respective directors, officers, employees, agents, attorneys and advisors.
"Ineligible Project Costs" shall have the meaning given to that term in
Subparagraph 2.03(c) of the Participation Agreement.
1.01-17
"Indemnity Amount" shall have, with respect to any Purchase Agreement,
the meaning given to that term in Subparagraph 3.02(g) of such Purchase
Agreement.
"Initial Advance" shall mean, with respect to each Facility, the initial
Advance under such Facility.
"Initial Bid" shall have, with respect to any Lease Agreement, the
meaning given to that term in Subparagraph 3.02(b) of such Purchase Agreement.
"Initial Marketing Period" shall have, with respect to any Purchase
Agreement, the meaning given to that term in Subparagraph 3.02(b) of such
Purchase Agreement.
"Insurance Requirements" shall mean all terms, conditions and
requirements imposed by the policies of insurance which Lessee is required to
maintain by the Operative Documents.
"Interest Component" shall have, with respect to any Lease Agreement,
the meaning given to that term in Subparagraph 2.03(a) of such Lease Agreement.
"IRC" shall mean the Internal Revenue Code of 1986.
"Issues and Profits" shall mean all present and future rents, royalties,
issues, profits, receipts, revenues, income, earnings and other benefits
accruing from any of the Land, Improvements or Appurtenant Rights (whether in
the form of accounts, chattel paper, instruments, documents, investment
property, general intangibles or otherwise) including all rents and other
amounts payable pursuant to any Subleases.
"Land" shall mean collectively the Facility 1 Land, the Facility 2 Land
and the Facility 3 Land.
"Lease Agreements" shall mean collectively the Facility 1 Lease
Agreement, the Facility 2 Lease Agreement and the Facility 3 Lease Agreement.
"Lease Extension Request" shall have the meaning given to that term in
Subparagraph 2.09(b) of the Participation Agreement.
"Leasehold Mortgagee" shall have the meaning given to that term in
Subparagraph 3.07(c) of the Ground Lease Agreement.
"Leasehold Mortgages" shall have the meaning given to that term in
Subparagraph 3.07(a) of the Ground Lease Agreement.
"Lease Reduction Payments" shall mean each of the following to the
extent applied to reduce the Outstanding Lease Amount under any Facility
pursuant to the Operative Documents:
(a) The Principal Component of Base Rent paid under such
Facility;
(b) Casualty and Condemnation Proceeds with respect to such
Facility;
1.01-18
(c) The purchase price paid for the Property (or any portion
thereof) by Lessee, an Assignee Purchaser or a Designated Purchaser
pursuant to the Purchase Agreement for such Facility;
(d) The Residual Value Guaranty and Indemnity Amount paid by
Lessee pursuant to the Purchase Agreement for such Facility;
(e) Any proceeds received by Lessee from any sale of the
Property under such Facility after the Expiration Date for such Facility
if such Property is retained by Lessor after such Expiration Date
pursuant to the applicable Purchase Agreement;
(f) Any proceeds received by any Lessor Party from the exercise
of any of its remedies under the Operative Documents after the
occurrence of an Event of Default under the Lease Agreement for such
Facility; and
(g) Any other amount received by Lessor that Lessee, Lessor and
Agent agree shall be applied to reduce the Outstanding Lease Amount
under a Facility.
"Lessee" shall mean Novellus Systems, Inc., acting in its capacity as
Lessee under the Operative Documents.
"Lessee Obligations" shall mean and include all liabilities and
obligations owed by Lessee to any Lessor Party under any of the Operative
Documents of every kind and description and however arising (whether direct or
indirect, absolute or contingent, due or to become due, now existing or
hereafter arising), including the obligation of Lessee to pay Rent, to pay the
Residual Value Guaranty Amounts, Indemnity Amounts and/or Outstanding Lease
Amounts and to pay all interest, fees, charges, expenses, attorneys' fees and
accountants' fees chargeable to Lessee or payable by Lessee under the Operative
Documents. Such term, when used with reference to any Facility, shall mean all
Lessee Obligations under the Lease Agreement, Purchase Agreement and, in the
case of Facility 3, the Facility 3 Construction Agency Agreement for such
Facility and all other Lessee Obligations related to such Facility or to all
Facilities. Such term, when used without reference to any Facility, shall mean
all Lessee Obligations under all Operative Documents.
"Lessee Security Documents" shall mean and include the Lease Agreements,
the Cash Collateral Agreement, the Assignment of Construction Agreements, the
Ground Lease Agreement, the Stanford 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.
1.01-19
"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.
"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.
1.01-20
"Major Casualty" shall mean, with respect to any Property, any Casualty
affecting such Property where (a) the damage to such Property is treated by any
insurer of such Property as a total loss; (b) such Property cannot reasonably be
repaired and restored prior to the expiration of the Term of the lease
applicable to such Property to the condition in which it existed immediately
prior to such Casualty; or (c) the reasonably anticipated cost to repair and
restore such Property to the condition in which it existed immediately prior to
such Casualty would exceed forty percent (40%) of the Outstanding Lease Amount
applicable to such Property.
"Major Condemnation" shall mean, with respect to any Property, any
Condemnation affecting such Property where (a) all or substantially all of such
Property is taken by such Condemnation; (b) such Property cannot reasonably be
repaired and restored to the condition in which it existed immediately prior to
such Condemnation; or (c) the reasonably anticipated cost to repair and restore
such Property to the condition in which it existed immediately prior to such
Condemnation would exceed forty percent (40%) of the Outstanding Lease Amount
applicable to such Property.
"Majority Participants" shall mean (a) at any time the aggregate
Outstanding Lease Amount is greater than $0, Participants (other than Novellus
Participant) whose aggregate Outstanding Participation Amounts exceed fifty
percent (50%) of the aggregate Outstanding Participation Amounts of all
Participants (other than Novellus Participant) at such time and (b) at any time
the aggregate Outstanding Lease Amount is $0, Participants (other than Novellus
Participant) whose Proportionate Shares exceed fifty percent (50%) of the
aggregate Proportionate Shares of all Participants (other than Novellus
Participant) 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, with respect to any Purchase Agreement,
the meaning given to that term in Subparagraph 3.01(a) of such Purchase
Agreement.
"Marketing Option Event of Default" shall mean, with respect to either
Lease Agreement, any Event of Default thereunder other than a Non-Marketing
Option Event of Default.
"Material Adverse Effect" shall mean a material adverse effect on (a)
the business, assets, operations, prospects or financial or other condition of
Lessee and its Subsidiaries, taken as a whole; (b) the ability of Lessee to pay
or perform the Lessee Obligations in accordance with the terms of the Operative
Documents; (c) the ability of any Lessor Party (other than Novellus Participant)
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 Participant's) security
interests, Liens or other rights in the Property and the Collateral or the
perfection or priority of such security interests, Liens or rights.
"Material Casualty" shall mean any Casualty to any Property that alone,
or in combination with any prior Casualties to such Property for which repairs
to restore such Property to its prior condition have not been completed, will
require repairs costing (a) during the
1.01-21
Construction Period, $500,000 or more to restore such Property to its prior
condition, or (b) after the Construction Period, $2,500,000 or more to restore
such Property to its prior condition.
"Material Subsidiary" shall mean, as of any date, each Subsidiary of
Lessee whose assets on the last day of the immediately preceding fiscal year
equaled or exceeded five percent (5%) of the consolidated total assets of Lessee
and all of its Subsidiaries on such day. As used herein, "assets" shall mean the
net book value of assets calculated in accordance with GAAP.
"maturity" shall mean, with respect to any Rent, interest, fee or other
amount payable by Lessee under the Operative Documents, the date such Rent,
interest, fee or other amount becomes due, whether upon the stated maturity or
due date, upon acceleration or otherwise.
"Modifications" shall have, with respect to any Lease Agreement, the
meaning given to that term in Subparagraph 3.01(c) of such Lease Agreement.
"Multiemployer Plan" shall mean any multiemployer plan within the
meaning of section 3(37) of ERISA maintained or contributed to by Lessee or any
ERISA Affiliate.
"Net Proceeds" shall mean, with respect to any sale or issuance of any
Equity Security or any other security by any Person, the aggregate consideration
(excluding intangibles) received by such Person from such sale or issuance less
the sum of the actual amount of the customary fees and commissions payable to
Persons other than such Person or any Affiliate of such Person, the reasonable
legal expenses and the other customary costs and expenses directly related to
such sale or issuance that are to be paid by such Person.
"New Improvements" shall mean all new Improvements under Facility 3
contemplated by the Plans and Specifications therefor.
"Non-Marketing Option Event of Default" shall mean:
(a) With respect to the Facility 1 Lease Agreement and Facility
2 Lease Agreement, an Event of Default under Subparagraph 5.01(n) of
such Lease Agreement; or
(b) With respect to the Facility 3 Lease Agreement, an Event of
Default under Subparagraph 5.01(l), 5.01(m) or 5.01(n) of such Lease
Agreement;
If, in each case, such Event of Default was not caused by any failure by Lessee
to comply with any of its obligations under the Operative Documents (including
its insurance obligations), any representation by Lessee in any of the Operative
Documents not being true, any negligence or willful misconduct of Lessee, or any
claim by any third-party against Lessee (or against any Lessor Party) based upon
any alleged action or inaction by Lessee.
"Notice of Call Option Exercise" shall have, with respect to any
Purchase Agreement, the meaning given to that term in Paragraph 2.03 of such
Purchase Agreement.
1.01-22
"Notice of Expiration Date Purchase Option Exercise" shall have, with
respect to any Purchase Agreement, the meaning given to that term in Paragraph
3.01 of such 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 Agreement.
"Notice of Ground Lease Rent Increase" shall have the meaning given to
that term in Paragraph 2.03 of the Ground Lease Agreement.
"Notice of Marketing Option Exercise" shall have, with respect to any
Purchase Agreement, the meaning given to that term in Paragraph 3.01 of such
Purchase Agreement.
"Notice of Partial Purchase Option Exercise" shall have, with respect to
any Purchase Agreement, the meaning given to that term in Subparagraph 2.02(a)
of such Purchase Agreement.
"Notice of Rental Period Selection" shall have, with respect to any
Lease Agreement, the meaning given to that term in Subparagraph 2.03(a) of such
Lease Agreement.
"Notice of Term Purchase Option Exercise" shall have, with respect to
any Purchase Agreement, the meaning given to that term in Subparagraph 2.01(a)
of such Purchase Agreement.
"Novellus" shall mean Novellus Systems, Inc.
"Novellus I Participation Agreement" shall have the meaning given to
that term in Recital A of the Participation Agreement.
"Novellus II Participation Agreement" shall have the meaning given to
that term in Recital A of the Participation Agreement.
"Novellus III Participation Agreement" shall have the meaning given to
that term in Recital A of the Participation Agreement.
"Novellus IV Participation Agreement" shall have the meaning given to
that term in Recital A of the Participation Agreement.
"Novellus Participant" shall have the meaning given to that term in the
introductory paragraph of the Participation Agreement.
"Operative Documents" shall mean and include the Participation
Agreement, the Stanford Ground Lease, the Ground Lease Agreement, the Lease
Agreements, the Facility 3 Construction Agency Agreement, the Purchase
Agreements, the Lessee Security Documents, the Lessor Deed of Trust, the Lessor
Security Agreement, the Assignment of Lease and the Agent's Fee Letter; all
other notices, requests, certificates, documents, instruments and agreements
delivered to any Lessor Party pursuant to Paragraph 3.01 of the Participation
Agreement; all notices, requests, certificates, 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
1.01-23
all Rate Contracts provided to Lessee by any Participant (other than Novellus
Participant) to hedge against fluctuations in the LIBOR Rental Rate under either
or both Lease Agreements. (Without limiting the generality of the preceding
definition, the term "Operative Documents" shall include all written waivers,
amendments and modifications to any of the notices, requests, certificates,
documents, instruments and agreements referred to therein.)
"Option Exercise Notification Date" shall have the meaning given to that
term in Paragraph 6.01 of the Ground Lease Agreement.
"Outside Completion Date" shall mean the date seven (7) months after the
Closing Date, or, if such date is extended pursuant to Subparagraph 2.09(a) of
the Participation Agreement or Subparagraph 3.05(d) of the Facility 3
Construction Agency Agreement, that date to which so extended.
"Outstanding Lease Amount" shall mean, with respect to any Facility on
any date, the remainder of (a) the sum of all Advances made by Lessor on or
prior to such date under such Facility, minus (b) the sum of all Lease Reduction
Payments applied by Lessor on or prior to such date under such Facility. Such
term, when used without reference to either Facility, shall mean the aggregate
Outstanding Lease Amount under all Facilities.
"Outstanding Participation Amount" shall mean, with respect to any
Participant and any Facility on any date, the remainder of (a) the sum of the
portions of all Advances under such Facility funded by such Participant on or
prior to such date, minus (b) the sum of such Participant's share of all Lease
Reduction Payments applied to the Outstanding Lease Amount under such Facility
on or prior to such date. Such term, when used without reference to any
Facility, shall mean the aggregate Outstanding Participation Amounts of the
applicable Participant under all Facilities.
"Outstanding Tranche A Participation Amount" shall mean, with respect to
any Tranche A Participant under any Facility on any date, the remainder of (a)
such Participant's Tranche A Portion of all Advances made by Lessor under such
Facility on or prior to such date, minus (b) such Participant's share of all
Lease Reduction Payments applied to the Tranche A Portion of the Advances under
such Facility on or prior to such date.
"Outstanding Tranche B Participation Amount" shall mean, with respect to
any Tranche B Participant under any Facility on any date, the remainder of (a)
such Participant's Tranche B Portion of all Advances made by Lessor under such
Facility 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 under
such Facility on or prior to such date.
"Outstanding Tranche C Participation Amount" shall mean, with respect to
any Tranche C Participant under any Facility on any date, the remainder of (a)
such Participant's Tranche C Portion of all Advances made by Lessor under such
Facility on or prior to such date, minus (b) such Participant's share of all
Lease Reduction Payments applied to the Tranche C Portion of the Advances under
such Facility on or prior to such date.
1.01-24
"Parcel" shall mean:
(a) With respect to any land, a parcel of land (or leasehold
interest therein) described in one Part of Exhibit A to a Lease
Agreement or in one Part of Exhibit A to the Participation Agreement, as
the case may be; and
(b) With respect to any Property, a parcel of land (or leasehold
interest therein), together with all Property related to such parcel of
land.
"Parcel 1 Land", "Parcel 2 Land", "Parcel 3 Land", "Parcel 4 Land",
"Parcel 5 Land", "Parcel 6 Land", "Parcel 7 Land", "Parcel 8 Land" and "Parcel 9
Land" shall mean the parcels of land described Part 1, Part 2, Part 3, Part 4,
Part 5 Part 6, Part 7, Part 8 and Part 9, respectively, in Exhibit A to the
Participation Agreement.
"Partial Purchase Date" shall have, with respect to any Purchase
Agreement, the meaning given to that term in Subparagraph 2.02(a) of such
Purchase Agreement.
"Partial Purchase Option" shall have, with respect to any Purchase
Agreement, the meaning given to that term in Paragraph 2.02 of such Purchase
Agreement.
"Participants" shall mean the Persons from time to time listed in
Schedule I to the Participation Agreement (as amended from time to time pursuant
to Subparagraph 7.05(b) of the Participation Agreement or otherwise), acting in
their capacities as Participants under the Operative Documents.
"Participation Agreement" shall mean the Participation Agreement, dated
as of September 21, 2001 among Lessee and the Lessor Parties.
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or any
successor thereto.
"Pension Plan" shall mean any Employee Benefit Plan subject to Title IV
of ERISA that either Lessee or any ERISA Affiliate maintains or contributes to
or has any obligation under.
"Permitted Improvement Costs" shall mean all reasonable costs and
expenses necessary for the construction of the New Improvements and the
acquisition of the Property under Facility 3, 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.
1.01-25
"Permitted Liens" shall have the meaning given to that term in
Subparagraph 5.02(a) 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, if any, payable under the Ground Lease Agreement
during the Commitment Period;
(c) All Commitment Fees and Agent's fees payable during the
Commitment Period;
(d) All other amounts capitalized pursuant to Subparagraph
2.03(c) of the Participation Agreement;
(e) The reasonable fees and expenses of counsel for each of
Lessor and Agent incurred in connection with the Operative Documents;
(f) The reasonable fees and expenses incurred in recording,
registering or filing any of the Operative Documents;
(g) The title fees, premiums and escrow costs and other expenses
relating to title insurance and the closing of the transactions
contemplated by the Operative Documents;
(h) The reasonable fees and expenses of required environmental
audits and appraisals;
(i) The reasonable fees and expenses for surveys and appraisals;
(j) The incremental cost of insurance required by Paragraph 3.03
of the Lease Agreement during the Construction Period; and
(k) 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, with respect to the Facility
3 Lease Agreement, the meaning given to that term in Subparagraph 2.07(b) of
such Lease Agreement.
1.01-26
"Plans and Specifications" shall mean the architectural, engineering and
construction plans, specifications and drawings for the New Improvements, if
any, to be constructed on the Facility 3 Land, as 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
Facility 2 Construction Agency Agreement.
"Portion" shall mean a portion of the Outstanding Lease Amount under any
Facility. If, at any time, Lessee has not divided the Outstanding Lease Amount
into two or more portions, any reference to a Portion shall mean the total
Outstanding Lease Amount at such time under such Facility.
"Prepaid Rent" shall mean Permitted Improvement Costs and Permitted
Transaction Expenses under Facility 3 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 in
the Base Rate resulting from a change in the Prime Rate shall become effective
on the Business Day on which each change in the Prime Rate occurs.
"Principal Component" shall have, with respect to either Lease
Agreement, the meaning given to that term in Subparagraph 2.03(a) of such Lease
Agreement.
"Project Costs" shall mean properly capitalizable "project costs" as
that term is used under GAAP.
"Property" shall mean collectively the Facility 1 Property, the Facility
2 Property and the Facility 3 Property.
"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 and Facility 1 (including
any Advance thereunder) at any time, the percentage set forth under the
caption "Proportionate Share" opposite such Participant's name in Part
A(1) of Schedule I;
(b) With respect to each Participant and Facility 2 (including
any Advance thereunder) at any time, the percentage set forth under the
caption "Proportionate Share" opposite such Participant's name in Part
A(2) of Schedule I;
1.01-27
(c) With respect to each Participant and Facility 3 (including
any Advance thereunder) at any time prior to the Completion Date, the
percentage set forth under the caption "Proportionate Share" opposite
such Participant's name in Part A(3-1) of Schedule I;
(d) With respect to each Participant and Facility 3 (including
any Advance thereunder) at any time on or after the Completion Date, the
percentage set forth under the caption "Proportionate Share" opposite
such Participant's name in Part A(3-2) of Schedule I; and
(e) With respect to each Participant without reference to any
Facility (or any Advance under any Facility) at any time, a fraction
(expressed as a percentage rounded to the eighth digit to the right of
the decimal point), the numerator of which is such Participant's
Commitment at such time and the denominator of which is the Total
Commitment at such time;
or, in the case of any percentage referred to in clause (a), (b) or (c), if
changed, such percentage as may be set forth for such Participant in the
Register. The Proportionate Share of each Participant under a Facility at any
time shall equal the sum of such Participant's Tranche A Percentage, Tranche B
Percentage and Tranche C Percentage under such Facility at such time.
"Purchase Agreements" shall mean collectively the Facility 1 Purchase
Agreement, the Facility 2 Purchase Agreement and the Facility 3 Purchase
Agreement.
"Purchase Documents" shall have, with respect to any Purchase Agreement,
the meaning given to that term in Subparagraph 4.01(a) of such Purchase
Agreement.
"Purchaser" shall have, with respect to any Purchase Agreement, the
meaning given to that term in Subparagraph 4.01(a) of such Purchase Agreement.
"Quick Ratio" shall mean, with respect to Lessee at any time, the ratio,
determined on a consolidated basis in accordance with GAAP, of:
(a) The remainder of (i) the sum (without duplication) of all
cash, Cash Equivalents, short-term investments and net accounts
receivable of Lessee and its 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 remainder of (i) all current liabilities of Lessee and
its Subsidiaries at such time, minus (ii) all such current liabilities
that are secured by Liens in cash, Cash Equivalents, short-term
investments and net accounts receivable and included in the calculation
of clause (a)(i) of this definition above.
1.01-28
(In calculating the Quick Ratio, Cash Equivalents and short-term investments
shall be marked to market quarterly.)
"Rate Contracts" shall mean swap agreements (as that term is defined in
Section 101 of the Federal Bankruptcy Reform Act of 1978, as amended) and any
other agreements or arrangements designed to provide protection against
fluctuations in interest or currency exchange rates.
"Real Property Collateral" shall have, with respect to any Lease
Agreement, the meaning given to that term in Subparagraph 2.07(a) of such Lease
Agreement. Such term, when used without reference to any Lease Agreement, shall
mean collectively the Real Property Collateral under all Lease Agreements.
"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 Goods" shall mean:
(a) All machinery, furniture, equipment, fixtures and other goods
and tangible personal property (including construction materials and
supplies) financed by any Advance, including all such property described
in Exhibit B to the Facility 2 Lease Agreement and in each Exhibit B
Supplement delivered by Lessee; and
(b) All machinery, equipment, inventory, fixtures and other goods
and tangible personal property (including construction materials and
supplies) (i) now or
1.01-29
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 any Lease
Agreement.
"Related Permits" shall mean all licenses, authorizations, certificates,
variances, consents, approvals and other permits, now or hereafter pertaining to
any of the Land, Improvements or Appurtenant Rights and all tradenames or
business names relating to any of the Land, Improvements or Appurtenant Rights
or the present or future development, construction, operation or use of any of
the Land, Improvements or Appurtenant Rights.
"Rent" shall mean collectively, with respect to any Facility, Base Rent
and Supplemental Rent payable in connection with such Facility. Such term, when
used without reference to any Facility, shall mean all Rent under all
facilities.
"Rental Period" shall mean, with respect to any Facility:
(a) With respect to the entire Outstanding Lease Amount during
the period beginning on the Commencement Date for any Lease Agreement
and ending on the Commitment Termination Date, the time period which
commences on the Commencement Date and each subsequent time period
through and including the time period ending on the Commitment
Termination Date as specified in Subparagraph 2.03(a) of such Lease
Agreement; and
(b) With respect to any Portion of the Outstanding Lease Amount
thereafter, the time period selected by Lessee for such Portion pursuant
to Subparagraph 2.03(a) of such Lease Agreement which commences on the
first day of such Portion and each subsequent time period selected by
Lessee pursuant to Subparagraph 2.03(a) of such Lease Agreement.
Each Rental Period with respect to each Facility shall commence on the last day
of the immediately preceding Rental Period.
"Rental Rate" shall have the meaning given to that term in Subparagraph
2.03(a) of each Lease Agreement.
"Rent Increase Notification Date" shall have the meaning given to that
term in Paragraph 2.03 of the Ground Lease Agreement.
"Repair and Restoration Account" shall have, with respect to any Lease
Agreement, the meaning given to that term in Subparagraph 3.04(c) of such Lease
Agreement.
1.01-30
"Reportable Event" shall have the meaning given to that term in ERISA
and applicable regulations thereunder.
"Required Participants" shall mean (a) at any time the aggregate
Outstanding Lease Amount under all Facilities is greater than $0, Participants
(other than Novellus Participant) whose aggregate Outstanding Participation
Amounts under all Facilities equal or exceed sixty-six and two-thirds percent
(66-2/3%) of the aggregate Outstanding Participation Amounts of all Participants
(other than Novellus Participant) under all Facilities at such time and (b) at
any time the aggregate Outstanding Lease Amount under all Facilities is $0,
Participants (other than Novellus Participant) whose Proportionate Shares under
all Facilities equal or exceed sixty-six and two-thirds percent (66-2/3%) of the
aggregate Proportionate Shares of all Participants (other than Novellus
Participant) under all Facilities 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, with respect to any
Purchase Agreement, the meaning given to that term in Subparagraph 3.02(g) of
such Purchase Agreement.
"Scheduled Expiration Date" shall have, with respect to either Lease
Agreement, the meaning given to that term in Subparagraph 2.02(a) of such Lease
Agreement.
"Scheduled Rent Payment Date" shall have, with respect to any Lease
Agreement, the meaning given to that term in Subparagraph 2.03(a) of such Lease
Agreement.
"Secondary Marketing Period" shall have, with respect to any Purchase
Agreement, 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.
1.01-31
"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.
"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.
"Stanford Lease" shall have the meaning given to that term in Recital A
of the Ground Lease Agreement.
"Subleases" shall mean all leases and subleases of any of the Land,
Improvements and/or Appurtenant Rights by Lessee as lessor or sublessor, now or
hereafter in effect, whether or not of record, including all guaranties and
security therefor and the right to bring actions and proceedings thereunder or
for the enforcement thereof and to do anything which Lessee is or may become
entitled to do thereunder.
"Subparticipants" shall have the meaning given to that term in
Subparagraph 7.05(c) of the Participation Agreement.
"Subsidiary" of any Person shall mean (a) any corporation of which more
than 50% of the issued and outstanding Equity Securities having ordinary voting
power to elect a majority of the Board of Directors of such corporation
(irrespective of whether at the time capital stock of any other class or classes
of such corporation shall or might have voting power upon the occurrence of any
contingency) is at the time directly or indirectly owned or controlled by such
Person, by such Person and one or more of its other Subsidiaries or by one or
more of such Person's other Subsidiaries, (b) any partnership, joint venture, or
other Person of which more than 50% of the equity interest having the power to
vote, direct or control the management of such partnership, joint venture,
business trust or other Person is at the time owned and controlled by such
Person, by such Person and one or more of the other Subsidiaries or by one or
more of such Person's other Subsidiaries or (c) any other Person included in the
Financial Statements of such Person on a consolidated basis.
"Substantial Completion" shall have the meaning given to such term in
Subparagraph 3.05(c) of the Facility 3 Construction Agency Agreement.
1.01-32
"Supplemental Rent" shall have, with respect to any Lease Agreement, the
meaning given to such term in Subparagraph 2.03(b) of such Lease Agreement.
"Surety Instruments" shall mean all letters of credit (including standby
and commercial), banker's acceptances, bank guaranties, shipside bonds, surety
bonds and similar instruments.
"Synthetic Lease Obligations" shall mean the monetary obligations of a
Person under (a) a so-called synthetic, off-balance sheet or tax retention
lease, or (b) an agreement for the use or possession of property creating
obligations that do not appear on the balance sheet of such Person but which,
upon the insolvency or bankruptcy of such Person, would be characterized as the
indebtedness of such Person (without regard to accounting treatment).
"Tangible Net Worth" shall mean, with respect to Lessee at any time, the
remainder at such time, determined on a consolidated basis in accordance with
GAAP, of (a) the total assets of Lessee and its Subsidiaries, minus (b) the sum
(without limitation and without duplication of deductions) of (i) the total
liabilities of Lessee and its Subsidiaries, (ii) all reserves established by
Lessee and its Subsidiaries for anticipated losses and expenses (to the extent
not deducted in calculating total assets in clause (a) above) and (iii) all
intangible assets of Lessee and its Subsidiaries (to the extent included in
calculating total assets in clause (a) above), including, without limitation,
goodwill (including any amounts, however designated on the balance sheet,
representing the cost of acquisition of businesses and investments in excess of
underlying tangible assets), trademarks, trademark rights, trade name rights,
copyrights, patents, patent rights, licenses, unamortized debt discount,
marketing expenses, organizational expenses, non-compete agreements and deferred
research and development.
"Term" shall mean, with respect to any Lease Agreement, the period
beginning on the Commencement Date of such Lease Agreement and ending on the
Expiration Date of such Lease Agreement.
"Termination Date" shall mean, with respect to any Lease Agreement, (a)
the date set forth in a Notice of Term Purchase Option as the date on which such
Lease Agreement will be terminated by Lessee pursuant to Paragraph 4.01 of such
Lease Agreement and the Property will be purchased by Lessee pursuant to Section
2 of the applicable Purchase Agreement; (b) the date set forth in a written
notice delivered by Lessor to Lessee pursuant to Subparagraph 5.03(a) or 5.04(a)
of such Lease Agreement after the occurrence of an Event of Default thereunder
as the date on which such Lease Agreement will be terminated; or (c) the date
determined pursuant to clause (ii) of Subparagraph 3.05(d) of the Facility 3
Construction Agency Agreement if Lessee exercises the Marketing Option pursuant
such clause.
"Term Purchase Option" shall have, with respect to any Purchase
Agreement, the meaning given to that term in Paragraph 2.01 of such Purchase
Agreement.
"Total Commitment" shall mean the amount set forth as such in clause
(iii) of Subparagraph 2.01(a) 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.
1.01-33
"Total Facility 1 Commitment" shall mean the amount set forth as such in
clause (i) of Subparagraph 2.01(b) of the Participation Agreement.
"Total Facility 2 Commitment" shall mean the amount set forth as such in
clause (ii) of Subparagraph 2.01(b) of the Participation Agreement.
"Total Facility 3 Commitment" shall mean the amount set forth as such in
clause (iii) of 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.
"Tranche A Participant" shall mean, with respect to any Facility at any
time, any Participant having an Outstanding Tranche A Participation Amount under
such Facility at such time.
"Tranche A Percentage" shall mean (a) with respect to each Participant
and Facility 1 at any time, the percentage set forth under the caption "Tranche
A Percentage" opposite such Participant's name in Part A(1) of Schedule I; (b)
with respect to each Participant and Facility 2 at any time, the percentage set
forth under the caption "Tranche A Percentage" opposite such Participant's name
in Part A(2) of Schedule I; (c) with respect to each Participant and Facility 3
at any time prior to the Completion Date, the percentage set forth under the
caption "Tranche A Percentage" opposite such Participant's name in Part A(3-1)
of Schedule I; and (d) with respect to each Participant and Facility 3 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(3-2) of
Schedule I; or in the case of any such percentage, if changed, such percentage
as may be set forth for such Participant in the Register.
"Tranche A Portion" shall mean, (a) with respect to any Advance under a
Facility without reference to any Participant, the portion of such Advance equal
to the applicable Tranche A Proportionate Share of such Advance and (b) with
respect to any Advance under a Facility with reference to any Participant, the
portion of such Advance equal to such Participant's applicable Tranche A
Percentage of such Advance.
"Tranche A Proportionate Share" shall mean:
(a) With respect to Facility 1, ninety-six and one-half percent
(96.5%);
(b) With respect to Facility 2, eighty-six and one-half percent
(86.5.0%);
(c) With respect to Facility 3, (i) at any time prior to the
Completion Date, eighty-nine and nine-tenths percent (89.9%) and (b) at
any time on or after the Completion Date, eighty-seven percent (87.0%).
"Tranche B Participant" shall mean, with respect to any Facility at any
time, any Participant having an Outstanding Tranche B Participation Amount under
such Facility at such time.
1.01-34
"Tranche B Percentage" shall mean (a) with respect to each Participant
and Facility 1 at any time, the percentage set forth under the caption "Tranche
B Percentage" opposite such Participant's name in Part A(1) of Schedule I; (b)
with respect to each Participant and Facility 2 at any time, the percentage set
forth under the caption "Tranche B Percentage" opposite such Participant's name
in Part A(2) of Schedule I; (c) with respect to each Participant and Facility 3
at any time prior to the Completion Date, the percentage set forth under the
caption "Tranche B Percentage" opposite such Participant's name in Part A(3-1)
of Schedule I; and (d) with respect to each Participant and Facility 3 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(3-2) of
Schedule I; or in the case of any such percentage, if changed, such percentage
as may be set forth for such Participant in the Register.
"Tranche B Portion" shall mean, (a) with respect to any Advance under a
Facility without reference to any Participant, the portion of such Advance equal
to the applicable Tranche B Proportionate Share of such Advance and (b) with
respect to any Advance under a Facility with reference to any Participant, the
portion of such Advance equal to such Participant's applicable Tranche B
Percentage of such Advance.
"Tranche B Proportionate Share" shall mean:
(a) With respect to Facility 1, zero percent (0%);
(b) With respect to Facility 2, ten percent (10.0%);
(c) With respect to Facility 3, (i) at any time prior to the
Completion Date, six and six-tenths percent (6.60%) and (ii) at any time
on or after the Completion Date, nine and one-half percent (9.50%).
"Tranche C Participant" shall mean, with respect to any Facility at any
time, any Participant having an Outstanding Tranche C Participation Amount under
such Facility at such time.
"Tranche C Percentage" shall mean (a) with respect to each Participant
and Facility 1 at any time, the percentage set forth under the caption "Tranche
C Percentage" opposite such Participant's name in Part A(1) of Schedule I; (b)
with respect to each Participant and Facility 2 at any time, the percentage set
forth under the caption "Tranche C Percentage" opposite such Participant's name
in Part A(2) of Schedule I; (c) with respect to each Participant and Facility 3
at any time prior to the Completion Date, the percentage set forth under the
caption "Tranche C Percentage" opposite such Participant's name in Part A(3-1)
of Schedule I; and (d) with respect to each Participant and Facility 3 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(3-2) of
Schedule I; or in the case of any such percentage, if changed, such percentage
as may be set forth for such Participant in the Register.
"Tranche C Portion" shall mean, (a) with respect to any Advance under a
Facility without reference to any Participant, the portion of such Advance equal
to the applicable Tranche C
1.01-35
Proportionate Share of such Advance and (b) with respect to any Advance under a
Facility with reference to any Participant, the portion of such Advance equal to
such Participant's applicable Tranche C Percentage of such Advance.
"Tranche C Proportionate Share" shall mean:
(a) With respect to Facility 1, three and one-half percent (3.50%);
(b) with respect to Facility 2, three and one-half percent (3.50%); and
(c) with respect to Facility 3, three and one-half percent (3.50%).
"Trustee" shall have the meaning given to that term in the introductory
paragraph of each Lease Agreement.
"UCC" shall mean the California Uniform Commercial Code.
"Unused" shall mean:
(a) With respect to the Total Facility 3 Commitment at any time,
the remainder of (i) the Total Facility 3 Commitment at such time minus
(ii) the aggregate amount of all Advances made under Facility 3 prior to
such time; or
(c) With respect to any Participant's Facility 3 Commitment at
any time, the remainder of (i) such Participant's Facility 3 Commitment
at such time minus (ii) the aggregate amount of all Advances funded by
such Participant under Facility 3 prior to such time.
1.01-36
SCHEDULE 1.02
RULES OF CONSTRUCTION
(a) GAAP. Unless otherwise indicated in any Operative Document, all
accounting terms used in the Operative Documents shall be construed, and all
accounting and financial computations thereunder shall be computed, in
accordance with GAAP. If GAAP changes after the date of the Participation
Agreement such that any covenants contained in the Operative Documents would
then be calculated in a different manner or with different components, Lessee
and the Lessor Parties agree to negotiate in good faith to amend the applicable
Operative Documents in such respects as are necessary to conform those covenants
as criteria for evaluating Lessee's financial condition to substantially the
same criteria as were effective prior to such change in GAAP; provided, however,
that, until Lessee and the Lessor Parties so amend the Operative Documents, all
such covenants shall be calculated in accordance with GAAP as in effect
immediately prior to such change.
(b) Headings. Headings in each of the Operative Documents are for
convenience of reference only and are not part of the substance thereof.
(c) Plural Terms. All terms defined in any Operative Document in the
singular form shall have comparable meanings when used in the plural form and
vice versa.
(d) Time. All references in each of the Operative Documents to a time of
day shall mean San Francisco, California time, unless otherwise indicated. All
references in each of the Operative Documents to a date (the "action date")
which is one month prior to or after another date (the "reference date") shall
mean the date in the immediately preceding or succeeding calendar month (as the
case may be) which numerically corresponds to the reference date; provided,
however, that (i) if such corresponding date in the immediately preceding or
succeeding calendar month (as the case may be) is not a Business Day, the action
date shall be the next succeeding Business Day after such corresponding date
(unless, in the case of a Rental Period, such next Business Day falls in another
calendar month, in which case the action date shall be the immediately preceding
Business Day) and (ii) if the reference date is the last Business Day of a
calendar month (or a day for which there is no numerically corresponding day in
the immediately preceding calendar month) the action date shall be the last
Business Day of the immediately preceding or succeeding calendar month (as the
case may be). All references in each of the Operative Documents to an earlier
date which is two or more months prior to a reference date or to a later date
which is two or more months after a reference date shall be determined in a
comparable manner.
(e) Governing Law. Unless otherwise provided in any Operative Document,
each of the Operative Documents shall be governed by and construed in accordance
with the laws of the State of California without reference to conflicts of law
rules.
(f) Construction. The Operative Documents are the result of negotiations
among, and have been reviewed by Lessee and each Lessor Party and their
respective counsel. Accordingly,
1.02-1
the Operative Documents shall be deemed to be the product of all parties hereto,
and no ambiguity shall be construed in favor of or against Lessee or any Lessor
Party.
(g) Entire Agreement. The Operative Documents, taken together,
constitute and contain the entire agreement of Lessee and the Lessor Parties and
supersede any and all prior agreements, negotiations, correspondence,
understandings and communications among the parties, whether written or oral,
respecting the subject matter thereof (including all parts of the commitment
letter dated as of September 13, 2001 between Lessee and Agent but excluding the
Agent's Fee Letter).
(h) Calculation of Base Rent, Interest and Fees. All calculations of
Base Rent, interest and fees under the Operative Documents for any period (i)
shall include the first day of such period and exclude the last day of such
period and (ii) shall be calculated on the basis of a year of 360 days for
actual days elapsed, except that during any period that Base Rent or any
interest is to be calculated based upon the Base Rate, such Base Rent or
interest shall be calculated on the basis of a year of 365 or 366 days, as
appropriate, for actual days elapsed.
(i) References.
(i) References in any Operative Document to "Recitals,"
"Sections," "Paragraphs," "Subparagraphs," "Articles," "Exhibits" and
"Schedules" are to recitals, sections, paragraphs, subparagraphs,
articles, exhibits and schedules therein and thereto unless otherwise
indicated.
(ii) References in any Operative Document to any document,
instrument or agreement (A) shall include all exhibits, schedules and
other attachments thereto, (B) shall include all documents, instruments
or agreements issued or executed in replacement thereof, and (C) shall
mean such document, instrument or agreement, or replacement or
predecessor thereto, as amended, modified and supplemented from time to
time and in effect at any given time.
(iii) References in any Operative Document to any Governmental
Rule (A) shall include any successor Governmental Rule, (B) shall
include all rules and regulations promulgated under such Governmental
Rule (or any successor Governmental Rule), and (C) shall mean such
Governmental Rule (or successor Governmental Rule) and such rules and
regulations, as amended, modified, codified or reenacted from time to
time and in effect at any given time.
(iv) References in any Operative Document to any Person in a
particular capacity (A) shall include any permitted successors to and
assigns of such Person in that capacity and (B) shall exclude such
Person individually or in any other capacity.
(j) Other Interpretive Provisions. The words "hereof," "herein" and
"hereunder" and words of similar import when used in any Operative Document
shall refer to such Operative Document as a whole and not to any particular
provision of such Operative Document. The words "include" and "including" and
words of similar import when used in any Operative
1.02-2
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.
1.02-3
SCHEDULE 3.01
INITIAL CONDITIONS PRECEDENT
A. PRINCIPAL OPERATIVE DOCUMENTS.
(1) The Participation Agreement, duly executed by Lessee, Lessor,
each Participant and Agent;
(2) The Ground Lease Agreement in the form of Exhibit M, duly
executed by Novellus and Lessor;
(3) The Lease Agreements, each duly executed by Lessee and Lessor
and appropriately notarized;
(4) The Purchase Agreements, each duly executed by Lessee and
Lessor;
(5) The Facility 3 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
3.01-1
copies of resolutions duly adopted by the Board of Directors of Lessee
and continuing in effect, which authorize the execution, delivery and
performance by Lessee of the Operative Documents executed or to be
executed by Lessee and the consummation of the 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) 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 Agreement, appropriately
completed and duly executed by Novellus and Lessor and appropriately
notarized for recording;
(2) Such deeds and other documents, instruments and agreements as
Agent determines are necessary to transfer all right, title and interest
of the Existing Affiliate Lessors in the Property to Lessor, each duly
executed by the appropriate parties and, where appropriate, properly
notarized for recording in the Official Records of the County of Santa
Clara, California;
(3) A Memorandum of Purchase Agreement for each Facility,
appropriately completed and duly executed by Lessee and Lessor and
appropriately notarized for recording;
(4) Evidence that the Lease Agreements, the Assignment of Lease,
the Lessor Deed of Trust, the Memorandum of Ground Lease Agreement, the
deeds and the
3.01-2
Memoranda of Purchase Agreement delivered pursuant to items A(3), A(8),
A(9), D(1), D(2) and D(3) have been properly recorded in the Official
Records of the County of Santa Clara, California;
(4) An ALTA extended coverage owner's policy or binder of title
insurance (or a commitment therefor) for the Property insuring Lessor's
leasehold estate to the Parcel 7 Property and fee title to the remaining
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 Agreements (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 such Property, including all amendments, extensions and other
modifications thereof;
(8) Subordination, non-disturbance and attornment agreements from
the lessee under each of the leases for the 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;
3.01-3
(12) Uniform Commercial Code search certificates from the
jurisdictions in which Uniform Commercial Code financing statements are
to be filed pursuant to item D(10) above reflecting no other financing
statements or filings which evidence Liens of other Persons in the
Collateral which are prior to the Liens granted to Lessor and Agent in
the Lessee Security Documents, the Lessor Security Agreement and the
other Operative Documents, except for any such prior Liens (a) which are
expressly permitted by the Operative Documents to be prior or (b) for
which Agent has received a termination statement pursuant to item D(11)
above;
(13) 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 as Agent may reasonably request (including without limitation
the perfection of the security interest in the Cash Collateral) and
otherwise in form and substance satisfactory to Agent.
F. Other Items.
(1) A duly completed and timely delivered Advance Request for
each of the Initial Advances, each duly executed by Lessee;
(2) Bills of sale for all Related Goods to be acquired with the
Initial Advances, each reflecting Lessor as the purchaser of such
Related Goods;
(3) An Expiration Date Appraisal for Lessor's interest in the
Facility 1 Property, dated as of a recent date prior to the Closing
Date, that appraises the Lessor's interest in the Facility 1 Property at
not less than the Total Facility 1 Commitment;
3.01-4
(4) An Expiration Date Appraisal for Lessor's interest in the
Facility 2 Property, dated as of a recent date prior to the Closing
Date, that appraises the Lessor's interest in the Facility 2 Property at
not less than the Total Facility 2 Commitment;
(5) An Expiration Date Appraisal for Lessor's interest in the
Facility 3 Property, dated as of a recent date prior to the Closing
Date, that appraises the Lessor's interest in the Facility 3 Property at
not less than the Total Facility 3 Commitment;
(6) A Completion Date Appraisal for Lessor's interest in the
Facility 3 Property, dated as of a recent date prior to the Closing
Date, that appraises the Lessor's interest in the Facility 3 Property at
not less than the Total Facility 3 Commitment;
(7) A copy of the Plans and Specifications for the New
Improvements, together with a certificate of the architect for the New
Improvements certifying that such Plans and Specifications are complete;
(8) A copy of the budget for the New Improvements which (a)
includes provisions for all hard and soft costs of constructing the New
Improvements (including, without limitation, all capitalized interest)
and reasonable allowances for contingencies and (b) budgets the
aggregate cost of such construction at $10,617,000 or less; together
with a certificate of the Chief Financial Officer of Lessee certifying
that such budget is a reasonable budget that sets forth the likely
maximum costs of constructing the New Improvements;
(9) As necessary, an amendment to that certain Participation
Agreement, dated as of April 18, 2001 among Novellus (as lessee), ABN
AMRO Leasing, Inc. (as lessor), the "Participants" parties thereto, and
ABN AMRO Bank, N.V. (as agent) and the related "Operative Documents" (as
defined therein), in form and substance satisfactory to the parties
thereto;
(10) If requested by Lessor, Agent or any Participant, a list of
and copies of all Construction Agreements;
(11) Environmental reports and assessments satisfactory to Agent
issued by environmental consultants acceptable to Agent with respect to
each Property;
(12) Certificates of insurance evidencing the insurance Lessee is
required to maintain pursuant to Paragraph 3.03 of each Lease
Agreements;
(13) Copies of such amendments and other documents, instruments
and agreements as Agent determines are necessary to terminate the
Existing Participation Agreements and the lease agreements, purchase
agreements, construction agency agreements and other documents,
instruments and agreements executed in connection therewith (other than
the Stanford Lease, the Ground Lease Agreement or any other prior
document, instrument or agreement transferring a fee or leasehold
interest to any Existing Lessor), each duly executed by the appropriate
parties and, where appropriate, properly notarized for recording in the
Official Records of the County of Santa Clara, California;
3.01-5
(14) Evidence that all amounts due and payable by Lessee under
the Existing Participation Agreements and related agreements have been
paid;
(15) A certificate of the Chief Financial Officer of Lessee,
addressed to Lessor and Agent and dated the Closing Date, certifying
that:
(a) The representations and warranties set forth in
Paragraph 4.01 of the Participation Agreement and in the other
Operative Documents are true and correct in all material respects
as of such date (except for such representations and warranties
made as of a specified date, which shall be true as of such
date);
(b) No Default has occurred and is continuing as of such
date; and
(c) All of the Operative Documents are in full force and
effect on such date;
(16) All fees and expenses payable to the Lessor Parties on or
prior to the Closing Date (including the Structuring Fee and Amendment
Fee payable to ABN AMRO pursuant to the commitment letter dated as of
September 13, 2001, and the term sheet attached thereto);
(17) All fees and expenses of Lessor's and Agent's counsels
through the Closing Date; and
(18) Such other evidence as Agent may reasonably request to
establish the accuracy and completeness of the representations and
warranties and the compliance with the terms and conditions contained in
the Operative Documents.
3.01-6
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
Novellus Systems India, India Common 100%
Ltd.
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 Israel Common 100% (indirectly)
Israel, Ltd.
4.01(q)-2
SCHEDULE 4.01(t)
INDIVIDUAL PROPERTY REPRESENTATIONS
4.01(t)-1
SCHEDULE 4.01(t)
PARCEL 1 LAND AND IMPROVEMENTS
(i) The Parcel 1 Land consists of approximately 10.698 acres located at
3930, 3960, and 3970 North First Street, San Jose, California, more particularly
described in Part 1 to Exhibit A.
(ii) On the date of this Agreement, the Existing Improvements on the
Parcel 1 Land consist of (1) a one story building consisting of approximately
70,848 square feet used for office purposes (3930 North First Street); (2) a one
story building consisting of approximately 33,889 square feet of floor area used
for office purposes (3960 North First Street); and (3) a one story office
building consisting of approximately 41,262 square feet of floor area (3970
North First Street).
(iii) The Existing Improvements to Parcel 1 are in good working
condition and fit for use as described above. All utilities required to
adequately service the Existing Improvements for their intended use are
available and "tapped on" and hooked up pursuant to adequate permits (including
any that may be required under applicable Environmental Laws). Access to the
Existing Improvements for pedestrians and motor vehicles from publicly dedicated
streets and public highways is available.
(iv) No portion of the Parcel 1 Property is located in an area
identified as a special flood hazard area by the Federal Emergency Management
Agency or other applicable Governmental Authority, or if any portion of the
Property is located in such an area, flood insurance has been obtained for the
Property or such portion thereof in accordance with Paragraph 3.03 of the
Facility 2 Lease Agreement and the National Flood Insurance Act of 1968.
(v) Lessor has a good and valid fee simple title to the Parcel 1
Property, subject to no Liens except for Permitted Property Liens.
4.01(t)-2
SCHEDULE 4.01(t)
PARCEL 2 LAND AND IMPROVEMENTS
(i) The Parcel 2 Land consists of approximately 7.068 acres located at
55 Vista Montana and 4145 North First Street, San Jose, California, more
particularly described in Part 2 to Exhibit A.
(ii) On the date of this Agreement, the Existing Improvements on the
Parcel 2 Land consist of (1) a two story building consisting of approximately
80,376 square feet of floor area used for office and research and development
purposes (55 Vista Montana); and (2) a two story building consisting of
approximately 35,600 square feet used for office and research and development
purposes (4145 North First Street), together in each case with parking,
landscaping, recreational and related facilities, amenities and improvements.
(iii) The Existing Improvements to Parcel 2 are in good working
condition and fit for use as described above. All utilities required to
adequately service the Existing Improvements for their intended use are
available and "tapped on" and hooked up pursuant to adequate permits (including
any that may be required under applicable Environmental Laws).
(iv) No portion of the Parcel 2 Property is located in an area
identified as a special flood hazard area by the Federal Emergency Management
Agency or other applicable Governmental Authority, or if any portion of the
Property is located in such an area, flood insurance has been obtained for the
Property or such portion thereof in accordance with Paragraph 3.03 of the
Facility 2 Lease Agreement and the National Flood Insurance Act of 1968.
(v) Lessor has a good and valid fee simple title to the Parcel 2
Property, subject to no Liens except for Permitted Property Liens.
4.01(t)-2
SCHEDULE 4.01(t)
PARCEL 3 LAND AND IMPROVEMENTS
(i) The Parcel 3 Land consists of 4.411 acres located at 4000 North
First Street, San Jose, California, more particularly described in Part 3 to
Exhibit A.
(ii) On the date of this Agreement, the Existing Improvements on the
Parcel 2 Land consist of a two story building consisting of approximately 84,096
square feet of floor area used for research and development and office purposes,
together with parking, landscaping, recreational and related facilities,
amenities and improvements.
(iii) The Existing Improvements to Parcel 3 are in good working
condition and fit for use as described above. All utilities required to
adequately service the Existing Improvements for their intended use are
available and "tapped on" and hooked up pursuant to adequate permits (including
any that may be required under applicable Environmental Laws).
(iv) No portion of the Parcel 3 Property is located in an area
identified as a special flood hazard area by the Federal Emergency Management
Agency or other applicable Governmental Authority, or if any portion of the
Property is located in such an area, flood insurance has been obtained for the
Property or such portion thereof in accordance with Paragraph 3.03 of the
Facility 2 Lease Agreement and the National Flood Insurance Act of 1968.
(v) Lessor has a good and valid fee simple title to the Parcel 3
Property, subject to no Liens except for Permitted Property Liens.
4.01(t)-2
SCHEDULE 4.01(t)
PARCEL 4 LAND AND IMPROVEMENTS
(i) The Parcel 4 Land consists of approximately 4.03 acres located at 81
Vista Montana, San Jose, California, more particularly described in Part 4 to
Exhibit A.
(ii) On the date of this Agreement, the Existing Improvements on the
Parcel 4 Land consist of a one story building consisting of approximately 57,131
square feet of floor area used for research and development purposes, together
with parking, landscaping, recreational and related facilities, amenities and
improvements.
(iii) The Existing Improvements to Parcel 4 are in good working
condition and fit for use as described above. All utilities required to
adequately service the Existing Improvements for their intended use are
available and "tapped on" and hooked up pursuant to adequate permits (including
any that may be required under applicable Environmental Laws).
(iv) No portion of the Parcel 4 Property is located in an area
identified as a special flood hazard area by the Federal Emergency Management
Agency or other applicable Governmental Authority, or if any portion of the
Property is located in such an area, flood insurance has been obtained for the
Property or such portion thereof in accordance with Paragraph 3.03 of the
Facility 2 Lease Agreement and the National Flood Insurance Act of 1968.
(v) Lessor has a good and valid fee simple title to the Parcel 4
Property, subject to no Liens except for Permitted Property Liens.
4.01(t)-2
SCHEDULE 4.01(t)
PARCEL 5 LAND AND IMPROVEMENTS
(i) The Parcel 5 Land consists of approximately 5 acres located at 4041
North First Street, San Jose, California, more particularly described in Part 5
to Exhibit A.
(ii) On the date of this Agreement, the Existing Improvements on the
Parcel 5 Land consist of a two story building consisting of approximately 93,707
square feet of floor area used for research and development purposes, together
with parking, landscaping, recreational and related facilities, amenities and
improvements.
(iii) The Existing Improvements to Parcel 5 are in good working
condition and fit for use as described above. All utilities required to
adequately service the Existing Improvements for their intended use are
available and "tapped on" and hooked up pursuant to adequate permits (including
any that may be required under applicable Environmental Laws).
(iv) No portion of the Parcel 5 Property is located in an area
identified as a special flood hazard area by the Federal Emergency Management
Agency or other applicable Governmental Authority, or if any portion of the
Property is located in such an area, flood insurance has been obtained for the
Property or such portion thereof in accordance with Paragraph 3.03 of the
Facility 2 Lease Agreement and the National Flood Insurance Act of 1968.
(v) Lessor has a good and valid fee simple title to the Parcel 5
Property, subject to no Liens except for Permitted Property Liens.
4.01(t)-2
SCHEDULE 4.01(t)
PARCEL 6 LAND AND IMPROVEMENTS
(i) The Parcel 6 Land consists of 6.28 acres located on Orchid Parkway
adjacent to 3011 North First Street, San Jose, California, more particularly
described in Part 6 to Exhibit A.
(ii) On the date of this Agreement, the Existing Improvements on the
Parcel 6 Land consist of a one story building consisting of approximately
146,000 square feet of floor area used for office, research and development,
manufacturing and warehouse purposes, together with parking, landscaping,
recreational and related facilities, amenities and improvements.
(iii) The Existing Improvements to Parcel 6 are in good working
condition and fit for use as described above. All utilities required to
adequately service the Existing Improvements for their intended use are
available and "tapped on" and hooked up pursuant to adequate permits (including
any that may be required under applicable Environmental Laws).
(iv) No portion of the Parcel 6 Property is located in an area
identified as a special flood hazard area by the Federal Emergency Management
Agency or other applicable Governmental Authority, or if any portion of the
Property is located in such an area, flood insurance has been obtained for the
Property or such portion thereof in accordance with Paragraph 3.03 of the
Facility 2 Lease Agreement and the National Flood Insurance Act of 1968.]
(v) Lessor has a good and valid fee simple title to the Parcel 6
Property, subject to no Liens except for Permitted Property Liens.
4.01(t)-2
SCHEDULE 4.01(t)
PARCEL 7 LAND AND IMPROVEMENTS
(i) The Parcel 7 Land consists of approximately 7.167 acres located at
3175 Hanover Street in the City of Palo Alto, California, more particularly
described in Part 7 of Exhibit A.
(ii) On the date of this Agreement, the Existing Improvements on the
Parcel 7 Land consist of a two story building containing approximately 128,970
square feet of floor area used for office purposes, together with parking,
landscaping, recreational and related facilities, amenities and improvements.
(iii) The Existing Improvements to Parcel 7 are in good working
condition and fit for use as described above. All utilities required to
adequately service the Existing Improvements for their intended use are
available and "tapped on" and hooked up pursuant to adequate permits (including
any that may be required under applicable Environmental Laws).
(iv) No portion of the Parcel 7 Property is located in an area
identified as a special flood hazard area by the Federal Emergency Management
Agency or other applicable Governmental Authority, or if any portion of the
Property is located in such an area, flood insurance has been obtained for the
Property or such portion thereof in accordance with Paragraph 3.03 of the
Facility 2 Lease Agreement and the National Flood Insurance Act of 1968.
(v) Lessor has a good and valid leasehold interest in the Parcel 7
Property, subject to no Liens except for Permitted Property Liens.
4.01(t)-2
SCHEDULE 4.01(t)
PARCEL 8 LAND AND IMPROVEMENTS
(i) The Parcel 8 Land consists of approximately 7.384 acres located at
3940 and 3950 North First Street, San Jose, California, more particularly
described in Part 8 to Exhibit A.
(ii) On the date of this Agreement, the Existing Improvements on the
Parcel 8 Land consist of (1) a one story building consisting of approximately
59,904 square feet of floor area used for office and warehouse purposes (3940
North First Street); and (2) a one story building consisting of approximately
42,624 square feet of floor area used for office, warehouse and manufacturing
purposes (3950 North First Street). There are no improvements on the portion of
the Parcel 8 Land located at 3940 North First Street and 3950 North First
Street.
(iii) The Existing Improvements to the Parcel 8 Land are in good working
condition and fit for use as described above. All utilities required to
adequately service the Existing Improvements for their intended use are
available and "tapped on" and hooked up pursuant to adequate permits (including
any that may be required under applicable Environmental Laws). Access to the
Existing Improvements for pedestrians and motor vehicles from publicly dedicated
streets and public highways is available.
(iv) No portion of the Parcel 8 Property is located in an area
identified as a special flood hazard area by the Federal Emergency Management
Agency or other applicable Governmental Authority, or if any portion of the
Property is located in such an area, flood insurance has been obtained for the
Property or such portion thereof in accordance with Paragraph 3.03 of the
Facility 2 Lease Agreement and the National Flood Insurance Act of 1968.
(v) Lessor has a good and valid fee simple title to the Parcel 8
Property, subject to no Liens except for Permitted Property Liens.
4.01(t)-2
SCHEDULE 4.01(t)
PARCEL 9 LAND AND IMPROVEMENTS
(i) The Parcel 9 Land consists of approximately 4.497 acres located at
90 Headquarters Drive, San Jose, California, more particularly described in Part
9 to Exhibit A.
(ii) On the date of this Agreement, the Existing Improvements on the
Parcel 9 Land consist of a two story building consisting of approximately 82,944
square feet of floor area used for office purposes. Upon the Completion of the
New Improvements to the Parcel 9 Land, the Improvements thereto will consist of
a two story building consisting of approximately 82,944 square feet of floor
area of which the second floor is used for office purposes and the ground floor
is partially used for office purposes and an unimproved shell for future
improvements, together with parking, landscaping, recreational and related
facilities, amenities and improvements.
(iii) To Lessee's knowledge, the Existing Improvements to the Parcel 9
Land are in good working condition and fit for use as described above. To
Lessee's knowledge, all utilities required to adequately service the Existing
Improvements for their intended use are available and "tapped on" and hooked up
pursuant to adequate permits (including any that may be required under
applicable Environmental Laws). Access to the Existing Improvements for
pedestrians and motor vehicles from publicly dedicated streets and public
highways is available.
(iv) No portion of the Parcel 9 Property is located in an area
identified as a special flood hazard area by the Federal Emergency Management
Agency or other applicable Governmental Authority, or if any portion of the
Property is located in such an area, flood insurance has been obtained for the
Property or such portion thereof in accordance with Paragraph 3.03 of the
Facility 3 Lease Agreement and the National Flood Insurance Act of 1968.
(v) Lessor has good and valid fee simple title to the Parcel 9 Property,
subject to no Liens except for Permitted Property Liens.
4.01(t)-2
SCHEDULE 5.02(a)
EXISTING LIENS
The Lien encumbering certain proceeds from the issuance by Lessee of
$880,000,000 in Liquid Yield Option(TM) Notes ("LYONS") due 2031 (Zero Coupon --
Subordinated) which have been pledged to secure Lessee's obligations under the
LYONS until July 26, 2002, including Lessee's performance with respect to a
holder's option to require Lessee to purchase some or all of their LYONS on July
26, 2002 for cash, pursuant to a Pledge Agreement, dated as of July, 2001,
between Lessee and Union Bank of California, N.A., together with any permitted
investments thereof under such Pledge Agreement and the proceeds thereof.
5.02(b)-1
EXHIBIT A
LAND
A-1
EXHIBIT A
PART 1
PARCEL 1 LAND
LEGAL DESCRIPTION
(3930, 3960 AND 3970 NORTH FIRST STREET)
REAL PROPERTY in the City of San Jose, County of Santa Clara, State of
California, described as follows:
PARCEL ONE:
PCL. 1 as shown on that certain Parcel Map filed in the office of the Recorder
of the County of Santa Clara, State of California on August 18, 1983 in Book 516
of Maps, page(s) 34 and 35, Santa Clara County Records.
And, excepting therefrom, the following area:
Beginning at the Northeasterly corner of said Parcel 1; thence North 52(Degrees)
27' 12" West, 409.24 feet along the common line of Parcel 1 and Parcel 2 as
shown on said Parcel Map to a common corner thereof; thence leaving said common
line, along the Southerly prolongation of a common line of said Parcels, South
19(Degrees) 40' 54" West, 32.25 feet; thence South 52(Degrees) 22' 44" East,
399.34 feet, to a point on the Southeasterly line of said Parcel 1; thence North
37(Degrees) 32' 59" East, 31.22 feet along said Southeasterly line to the Point
of Beginning;
PARCEL ONE-A:
A non-exclusive easement for ingress and egress over PCL.2, as said parcel is
shown on the Parcel Map recorded in Book 516 of Maps, at pages 34 and 35, Santa
Clara County Records, as granted in an instrument recorded May 23, 1985 in Book
J353, page 1565 and being more particularly described as follows:
Strip 1
A strip of land 26.00 feet wide extending entirely across said PCL. 2 and lying
13.00 feet on each side of a line described as follows:
Beginning at the most Easterly corner of said PCL. 2, said corner being on the
Southwesterly line of Rose Orchard Way; thence along said Southwesterly line N.
59(Degrees) 57' 13" W., 38.00 feet to the true point of beginning of said strip
of land; thence S. 30(Degrees) 02' 47" W., 28.14 feet; thence S. 37(Degrees) 32'
59" W., 423.45 feet to the Southwesterly line of said PCL. 2.
A-2
Strip 2
A strip of land 26.00 feet wide extending entirely across said PCL. 2 and lying
13.00 feet on each side of a line described as follows:
Beginning at the most Northerly corner of said PCL. 2, said corner being on the
Southwesterly line of Rose Orchard Way; thence along said Southwesterly line S.
59(Degree) 57' 13" E., 388.93 feet to the true point of beginning of said strip
of land; thence S. 30(Degree) 02' 47" W., 33.86 feet; thence S. 37(Degree) 32'
48" W., 335.99 feet to the Southwesterly line of said PCL. 2.
Strip 3
A strip of land 26.00 feet wide extending Southwesterly from the Southwesterly
line of said Rose Orchard Way to the Northwesterly line of the above described
and designated Strip 2 and lying 13.00 feet on each side of a line described as
follows:
Beginning at the most Northerly corner of said PCL. 2, said corner being on the
Southwesterly line of Rose Orchard Way; thence along said Southwesterly line S.
59(Degree) 57' 13" E., 30.78 feet to the true point of beginning of said strip
of land; thence S. 30(Degree) 02' 47" W., 26.86 feet; thence S. 37(Degree) 32'
48" W., 262.18 feet; thence S. 52(Degree) 27' 12" E. 343.00 feet to the
Northwesterly line of the above described and designated Strip 2.
PARCEL ONE-B:
A non-exclusive easement for Landscaping, Lighting and Irrigation Facilities
over PCL. 2, as said parcel is shown on the Parcel Map recorded in Book 516 of
Maps, at pages 34 and 35, Santa Clara County Records, as granted in an
instrument recorded May 23, 1985 in Book J353, page 1565 and being more
particularly described as follows:
A strip of land 10.00 feet wide extending Southeasterly from the Northwesterly
line of said PCL. 1 and PCL. 2 and lying 5.00 feet on each side of a line that
begins at the most Northerly corner of said PCL. 1 and runs thence along the
Northeasterly line of said PCL. 1, S. 52(Degree) 27' 12" E. 375.00 feet.
Excepting Therefrom that portion lying within the bounds of Parcel One mentioned
hereinabove.
APN: 097-79-009 & x010
ARB: 97-3-4.01 & 14.01
A-3
EXHIBIT A
PART 2
PARCEL 2 LAND
LEGAL DESCRIPTION
(4145 NORTH FIRST STREET AND 55 VISTA MONTANA)
REAL PROPERTY in the City of San Jose, County of Santa Clara, State of
California, described as follows:
All of Lot 43, as shown on that certain Map entitled Tract No. 7526, which Map
was filed for record in the office of the Recorder of the County of Santa Clara,
State of California on October 27, 1983, in Book 520 of Maps page(s) 28, 29 and
30.
APN: 097-52-013
A-4
EXHIBIT A
PART 3
PARCEL 3 LAND
LEGAL DESCRIPTION
(4000 NORTH FIRST STREET)
REAL PROPERTY in the City of San Jose, County of Santa Clara, State of
California, described as follows:
All of Parcel 4, as shown upon that Parcel Map which was filed for record in the
Office of the Recorder of the County of Santa Clara, State of California on July
13, 1984 in Book 531 of Maps, at pages 41 and 42.
APN: 097-03-049, 056
ARB: 097-03-005.03 & 015.01
A-5
EXHIBIT A
PART 4
PARCEL 4 LAND
LEGAL DESCRIPTION
(81 VISTA MONTANA)
REAL PROPERTY in the City of San Jose, County of Santa Clara, State of
California, described as follows:
PARCEL ONE:
Lot 65, as shown on that certain Map entitled Tract No. 7649, which Map was
filed for record in the office of the Recorder of the County of Santa Clara,
State of California on August 27, 1984, in Book 533 of Maps page(s) 17 and 18.
PARCEL TWO:
A non-exclusive easement for private storm drainage over that portion of Lot 64
as shown on said Tract No. 7649 designated as "8' P.S.D.E.".
APN: 097-52-028
A-6
EXHIBIT A
PART 5
PARCEL 5 LAND
LEGAL DESCRIPTION
(4041 NORTH FIRST STREET)
REAL PROPERTY in the City of San Jose, County of Santa Clara, State of
California, described as follows:
PARCEL ONE:
Parcel 1, as shown on that certain Parcel Map filed for record in the office of
the Recorder of the County of Santa Clara, State of California on July 13, 1983,
in Book 514 of Maps page(s) 47 and 48.
PARCEL TWO:
An easement for the purpose of ingress and egress, said easement being more
particularly described as follows:
Beginning at the Westerly corner common to Parcels 1 and 2, as said parcels are
shown on that certain Parcel Map recorded in Book 514 of Maps, at pages 47 and
48 of Official Records, Santa Clara County, said point of beginning also being
on the Southeasterly right-of-way of Vista Montana (30 feet in half street) as
said Vista Montana is shown on said Tract Map and the most Northerly corner of
Parcel A as said Parcel is shown on the Grant Deed recorded January 12, 1996 in
Book P163 of Official Records, at pages 1259 through 1266; thence from said
point of beginning Southeasterly along the line common to said Parcel 1 and
Parcels A and B, as shown on said Grant Deed South 52(Degree) 27' 12" East
136.38 feet to its intersection with a non-tangent curve concave to the
Northwest having a radius of 50 feet and a radial bearing of South 52(Degree)
27' 12" East at said intersection; thence Southerly and Westerly along said
curve, through a central angle of 147(Degree) 49' 56" an arc length of 129.01
feet; thence along a line parallel with and lying 26.62 feet (perpendicular
distant) Southwesterly of said line common to Parcel 1 and Parcels A and B,
North 52(Degree) 27' 12" West 44.05 feet to said Southeasterly right-of-way line
of Vista Montana; thence along said right-of-way line North 37(Degree) 32' 48"
East 26.62 feet to the point of beginning.
APN: 097-53-015
ARB: 34 506/24
A-7
EXHIBIT A
PART 6
PARCEL 6 LAND
LEGAL DESCRIPTION
(3011 NORTH FIRST STREET)
REAL PROPERTY in the City of San Jose, County of Santa Clara, State of
California, described as follows:
PARCEL ONE:
Lot D, as shown on that certain Map entitled "Parcel Map being a portion of The
Rancho Rincon De Los Esteros", which Map was filed for record in the office of
the Recorder of the County of Santa Clara, State of California on February 27,
1979, in Book 436 of Maps page(s) 9 and 10.
PARCEL TWO:
A non-exclusive for emergency ingress and egress and access as granted in the
Easement Agreement recorded June 22, 1998 as Instrument No. 14246271, Official
Records, being more particularly described as follows:
A strip of land situate in Lot "E", as said lot is shown on that certain Parcel
Map filed for record in Book 436 of Maps at pages 9 and 10, and lying within the
City of San Jose, County of Santa Clara, State of California, described as
follows:
Beginning at a point on the Northeasterly line of said Lot "E", distant South
30(Degree) 04' 00" East 58.06 feet from the most Northerly corner of said Lot
"E";
Thence continuing South 30 degrees 04' 00" East along said Northeasterly line
24.46 feet;
Thence Southerly along a non-tangent curve to the left with a radius of 30.00
feet, from which a radial line bears North 45(Degree) 02' 16" West, through a
central angle of 75(Degree) 01' 44" for an arc length of 39.28 feet to a point
22.25 feet Southwesterly, measured at right angles, from said Northeasterly
line;
Thence South 30(Degree) 04' 00" East 445.12 feet along a line parallel with and
distant 22.25 feet Southwesterly, measured at right angles, from said
Northeasterly line;
A-8
Thence Southeasterly along a tangent curve to the left with a radius of 30.00
feet through a central angle of 75(Degree) 01' 44" for an arc length of 39.28
feet to a point on said Northeasterly line;
Thence South 30(Degree) 04' 00" East along said Northeasterly line 24.46 feet;
Thence Westerly along a non-tangent curve to the right with a radius of 54.00
feet, from which a radial line bears South 21(Degree) 48' 55" East, through a
central angle of 81(Degree) 44' 55" for an arc length of 77.05 feet to a point
46.25 feet Southwesterly, measured at right angles, from said Northeasterly
line;
Thence North 30(Degree) 04' 00" West 445.12 feet along a line parallel with and
distant 46.25 feet Southwesterly, measured at right angles, from said
Northeasterly line;
Thence Northerly along a tangent curve to the right with a radius of 54.00 feet,
through a central angle of 81(Degree) 44' 55" for an arc length of 77.05 feet to
said point of beginning.
APN: 097-56-003
ARB: 097-12-036.04
A-9
EXHIBIT A
PART 7
PARCEL 7 LAND
LEGAL DESCRIPTION
(3175 HANOVER)
A leasehold estate created by that certain Amendment and Restatement of Ground
Lease made effective as of July 1, 1998 by and between The Board of Trustees of
the Leland Stanford Junior University and Novellus Systems, Inc. ("Novellus"), a
memorandum of which was recorded December 1, 1998 as Document No. 14528602 in
the Official Records of Santa Clara County, California, and as subleased by
Novellus to ABN AMRO Leasing, Inc., pursuant to that certain Ground Lease dated
as of September 21, 2001, with respect to the following property:
REAL PROPERTY in the City of Palo Alto, County of Santa Clara, State of
California, described as follows:
PARCEL ONE: (Varian Unit No. 9A)
Commencing at a concrete highway monument set on the Southwesterly line of El
Camino Real (State Highway) opposite Engineer's Station 144+27.00, surveyed by
the California Division of Highways, as established by Decree of Condemnation, a
certified copy of which was recorded July 7, 1930 in Book 520, page 571,
Official Records (said monument also marks the point of intersection of said
Southwesterly line with the Southeasterly line of the 1,289-acre tract of land
described in the Deed from Evelyn C. Crosby, et al, to Leland Stanford, recorded
September 8, 1885 in Book 80 of Deeds, page 382, Santa Clara County Records;
thence along said Southeasterly line, South 33(Degree) 14' 40" West 2,834.07
feet to the TRUE POINT OF BEGINNING; thence along the Northeasterly line of the
22.669-acre tract leased by The Board of Trustees of The Leland Stanford Junior
University to Lockheed Aircraft Corporation by lease dated March 14, 1956,
recorded January 17, 1957 in Book 3709, page 453, Official Records, North
57(Degree) 38' 40" West 570.07 feet to a point in the Southeasterly line of
Hanover Street (60.00 feet in width) as described in the grant of easements for
street and roadway purposes by The Board of Trustees of The Leland Stanford
Junior University to the City of Palo Alto recorded November 14, 1956 in Book
3656, page 424, Official Records; thence along said line North 33(Degree) 14'
40" East 54.98 feet; thence continuing along said line on the arc of a curve to
the left, with a radius of 310.00 feet, through a central angle of 57(Degree)
14' 49" an arc distance of 309.74 feet; thence leaving said line of Hanover
Street North 75(Degree) 36' 03" East 390.25 feet to a point in the Westerly line
of the former Southern Pacific Company 80.00-foot "right-of-way", described in
the lease executed by The Board of Trustees of The Leland Stanford Junior
University, to Peninsula Railroad Company, dated February 23, 1906, recorded
June 30, 1909 in Book N of Leases, page 232, Santa Clara County Records, and in
Quitclaim Deed by Southern Pacific Company to said Board of Trustees recorded
October 20, 1966 in Book 7541,
A-10
page 111, Official Records; thence along said line on the arc of a curve to the
left, with a radius of 2904.84 feet (a radial line at the point of beginning of
said curve bears North 77(Degree) 44' 32" East) through a central angle of
4(Degree) 25' 52" an arc distance of 224.66 feet to a point of compound curve;
thence along a curve to the left, with a radius of 3314.08 feet, through a
central angle of 0(Degree) 31' 30" an arc distance of 30.37 feet to a point of
compound curve; thence along a curve to the left, with a radius of 3859.74 feet,
through a central angle of 0(Degree) 27' 00" an arc distance of 30.31 feet to a
point of compound curve; thence along a curve to the left, with a radius of
4623.69 feet, through a central angle of 0(Degree) 22' 30" an arc distance of
30.26 feet to a point of compound curve; thence along a curve to the left, with
a radius of 5769.61 feet, through a central angle of 0(Degree) 18' 00" an arc
distance of 30.21 feet to a point of compound curve; thence along a curve to the
left, with a radius of 7679.45 feet, through a central angle of 0(Degree) 13'
30" an arc distance of 30.16 feet to a point of compound curve; thence along a
curve to the left, with a radius of 11,499.17 feet, through a central angle of
0(Degree) 09' 00" an arc distance of 30.10 feet to a point of compound curve;
thence along a curve to the left, with a radius of 22,958.32 feet, through a
central angle of 0(Degree) 04' 30" an arc distance of 30.05 feet; thence
continuing along said "right-of-way" line South 18(Degree) 47' 20" East 149.93
feet to a point in the Southeasterly line of said 1,289-acre tract; thence along
said line South 33(Degree) 14' 40" West 219.63 feet to the true point of
beginning.
PARCEL TWO: (Varian Unit No. 11B)
A PORTION of that certain "right-of-way" eighty feet (80') in width designated
"1. Northern Part." in the said lease to Peninsula Railroad Company and in
Quitclaim Deed by Southern Pacific Company to said Board of Trustees recorded
October 20, 1966 in Book 7541, page 111, Official Records, more particularly
described as follows:
Beginning at the Southeasterly corner of land designated as "Varian Unit No. 6,"
on the Westerly line of the said 80-foot wide "right-of-way"; thence North
75(Degree) 36' 03" East 80.06 feet to a point on the Easterly line thereof;
thence along said line on the arc of a curve to the left, having a radius of
2824.84 feet (a radial line at the point of beginning of said curve bears North
77(Degree) 48' 11" East) through a central angle of 4(Degree) 29' 31" an arc
length of 221.47 feet to a point of compound curve; thence along a curve to the
left, having a radius of 3234.08 feet, through a central angle of 0(Degree) 31'
30" an arc length of 29.63 feet to a point of compound curve; thence along a
curve to the left, having a radius of 3779.74 feet, through a central angle of
0(Degree) 27' 00" an arc length of 29.69 feet to a point of compound curve;
thence along a curve to the left, having a radius of 4543.69 feet, through a
central angle of 0(Degree) 22' 30" an arc length of 29.74 feet to a point of
compound curve; thence on a curve to the left, having a radius of 5689.61 feet,
through a central angle of 0(Degree) 18' 00" an arc length of 29.79 feet to a
point of compound curve; thence along a curve to the left, having a radius of
7599.45 feet, through a central angle of 0(Degree) 13' 30" an arc length of
29.84 feet to a point of compound curve; thence along a curve to the left,
having a radius of 11,419.17 feet, through a central angle of 0(Degree) 09' 00"
an arc length of 29.90 feet to a point of compound curve; thence along a curve
to the left, having a radius of 22,878.32 feet, through a central angle of
0(Degree) 04' 30" an arc length of 29.95 feet; thence on tangent South
18(Degree) 47' 20" East 87.49 feet to a point in the Southeasterly line of said
1,289-acre tract of land, at the most Southerly corner of land designated
A-11
as "Varian Unit No. 5,"; thence along said Southeasterly line South 33(Degree)
14' 40" West 101.48 feet to its intersection with the Westerly line of said
80-foot wide "right-of-way"; thence along said Westerly line North 18(Degree)
47' 20" West 149.93 feet; thence along a tangent curve to the right, having a
radius of 22,958.32 feet, through a central angle of 0(Degree) 04' 30" an arc
length of 30.05 feet to a point of compound curvature; thence along a curve to
the right having a radius of 11,499.17 feet; through a central angle of
0(Degree) 09' 00" an arc length of 30.10 feet to a point of compound curvature;
thence along a curve to the right having a radius of 7,679.45 feet, through a
central angle of 0(Degree) 13' 30" an arc length of 30.16 feet to a point of
compound curvature; thence along a curve to the right, having a radius of
5,769.61 feet, through a central angle of 0(Degree) 18' 00" an arc length of
30.21 feet to a point of compound curvature; thence along a curve to the right,
having a radius of 4,623.69 feet, through a central angle of 0(Degree) 22' 30"
an arc length of 30.26 feet to a point of compound curvature; thence along a
curve to the right, having a radius of 3,859.74 feet, through a central angle of
0(Degree) 27' 00" an arc length of 30.31 feet to a point of compound curvature;
thence along a curve to the right, having a radius of 3,314.08 feet, through a
central angle of 0(Degree) 31' 30" an arc length of 30.37 feet to a point of
compound curvature; thence along a curve to the right, having a radius of
2,904.84 feet, through a central angle of 4(Degree) 25' 52" an arc length of
224.66 feet to the point of beginning.
APN: 142-20-042, PTN061
ARB: 142-20-42, X61
A-12
EXHIBIT A
PART 8
PARCEL 8 LAND
LEGAL DESCRIPTION
(3940 AND 3950 NORTH FIRST STREET)
REAL PROPERTY in the City of San Jose, County of Santa Clara, State of
California, described as follows:
PARCEL ONE:
Parcel 2 as shown on that certain Parcel Map filed in the office of the Recorder
of the County of Santa Clara, State of California on August 18, 1983 in Book 516
of Maps, page(s) 34 and 35, Santa Clara County Records.
And, in addition thereto, the following area:
Beginning at the Southeasterly corner of said Parcel 2, thence North 52(Degree)
27' 12" West, 409.24 feet along the common line of Parcel 1 and Parcel 2 as
shown on said Parcel Map to a common corner thereof; thence leaving said common
line, along the Southerly prolongation of a common line of said Parcels, South
19(Degree) 40' 54" West, 32.25 feet; thence South 52(Degree) 22' 44" East,
399.34 feet to a point on the Southeasterly line of said Parcel 1; thence North
37(Degree) 32' 59" East, 31.22 feet along said Southeasterly line to the Point
of Beginning.
PARCEL ONE-A:
A non-exclusive easement for ingress and egress over PCL. 1, as said parcel is
shown on the Parcel Map recorded in Book 516 of Maps, at pages 34 and 35, Santa
Clara County Records, as granted in an instrument recorded May 23, 1985 in Book
J353, page 1565 and being more particularly described as follows:
Strip 1
A strip of land 26.00 feet wide extending entirely across said PCL. 1 and lying
13.00 feet on each side of a line as follows:
Beginning at the Southerly corner of said PCL. 1, said corner being on the
Northeasterly line of North First Street; thence along said Northeasterly line
N. 52(Degree) 27' 12" W., 34.00 feet to the true
A-13
point of beginning of said strip of land; thence N. 37(Degree) 32' 59" E.,
540.00 feet to the Northeasterly line of said PCL. 1.
Strip 2
A strip of land 40.00 feet wide extending entirely across said PCL. 1 and lying
contiguous to and Southeasterly of a line described as follows:
Beginning at the most Southerly corner of said PCL. 1, said corner being on the
Northeasterly line of North First Street; thence along said Northeasterly line
N. 52(Degree) 27' 12" W., 429.25 feet to the true point of beginning of said
strip of land; thence N. 37(Degree) 32' 48" E., 600.00 feet to the Northeasterly
line of said PCL. 1; the Northerly terminus of said 40 foot wide strip of land
being the Northeasterly line of said PCL. 1.
Strip 3
A strip of land 26.00 feet wide, extending Northeasterly from the Southwesterly
line of said PCL. 1 to the Northwesterly line of the above described and
designated Strip 2 and lying 13.00 feet on each side of a line described as
follows:
Beginning at the Westerly corner of said PCL. 1, said corner being on the
Northeasterly line of North First Street; thence along said Northeasterly line
S. 52(Degree) 27' 12" E., 34.00 feet to the true point of beginning of said
strip of land; thence N. 37(Degree) 32' 48" E. 566.00 feet; thence S. 52(Degree)
27' 12" E., 355.25 feet to said Northwesterly line of said Strip 2.
Strip 4
A strip of land 13.00 feet wide lying contiguous to and Northwesterly of the
Northwesterly line of the above described and designated Strip 2 and extending
Southwesterly from the Northeasterly line of said PCL. 1 approximately 21.00
feet to the Northeasterly line of the above described and designated Strip 3.
PARCEL ONE-B:
The right from time to time to construct, install, maintain, replace, remove,
and use storm drain sewers, together with a right of way therefor, over a
portion of PCL. 1 as said parcel is shown on the Parcel Map recorded in Book 516
of Maps, at pages 34 and 35, Santa Clara County Records, as granted in an
instrument recorded May 23, 1985 in Book J353, page 1565 and being more
particularly described as follows:
Strip 1
A strip of land 10.00 feet wide extending entirely across said PCL. 1 and lying
5.00 feet on each side of a line described as follows:
A-14
Beginning at the most Westerly corner of said PCL. 1 said corner being on the
Northeasterly line of North First Street; thence along said Northeasterly line
S. 52(Degree) 27' 12" E., 402.75 feet to the true point of beginning of said
strip of land; thence along the centerline of a existing storm drain line the
following courses: thence N. 37(Degree) 32' 48" E., 28.00 feet to a point herein
designated Point A; thence N. 52(Degree) 27' 12" W., 278.00 feet; thence N.
00(Degree) 51' 00" E., 198.30 feet; thence N. 37(Degree) 32' 33" E., 279.75
feet; thence S. 51(Degree) 19' 51" E., 89.02 feet; thence N. 50(Degree) 06' 47"
E., 133.18 feet; thence N. 37(Degree) 32' 48" E., 5.00 feet to the Northeasterly
line of said PCL 1.
Strip 2
A strip of land 10 feet wide extending Northeasterly from the Northeasterly line
of the above described and designated Strip 1 and lying 5.00 feet on each side
of a line which begins at said Point A; thence along the centerline of an
existing storm drain line the following courses: thence N. 26(Degree) 55' 37"
E., 154.65 feet; thence N. 32(Degree) 55' 53" E., 96.31 feet; thence N.
43(Degree) 21' 28" E., 113.58 feet; thence N. 54(Degree) 44' 21" E., 105.72 feet
to a point herein designated as Point B; thence S. 41(Degree) 57' 14" E., 65.85
feet; thence N. 37(Degree) 32' 48" E., 62.00 feet to the Northeasterly line of
said PCL 2.
Strip 3
A strip of land 5.00 feet wide lying contiguous to and Southwesterly of the
Northeasterly line of said PCL. 1 and extending Southeasterly from the
Southeasterly line of the above described and designated Strip 2 approximately
225 feet.
Strip 4
A strip of land 10.00 feet wide extending Northeasterly from the Northeasterly
line of the above described and designated Strip 2 to the Northeasterly line of
said PCL. 1 and lying 5.00 feet on each side of a line that begins at said Point
B; thence along the centerline of an existing storm drain line N. 37(Degree) 32'
48" E., 50.00 feet to the Northeasterly line of said PCL. 1.
PARCEL ONE-C:
The right from time to time to construct, install, inspect, maintain, replace,
remove and use any and all Public Service Facilities necessary or useful,
together with a right of way therefor, over a portion of PCL. 1 as said parcel
is shown on the Parcel Map recorded in Book 516 of Maps, at pages 34 and 35,
Santa Clara County Records, as granted in an instrument recorded May 23, 1985 in
Book J353, page 1565 and being more particularly described as follows:
Strip 5
A strip of land 15.00 feet wide extending entirely across said PCL. 1 and lying
7.50 feet on each side of a line described as follows:
A-15
Beginning at the most Southerly corner of said PCL. 1, said corner being on the
Northeasterly line of North First Street; thence along said Northeasterly line
N. 52(Degree) 27' 12" W., 60.50 feet to the true point of beginning of said
strip of land; thence N. 37(Degree) 32' 59" E., 394.80 feet to a point herein
designated Point C; thence N. 37(Degree) 32' 59" E., 105.20 feet; thence N.
7(Degree) 27' 01" W., 56.57 feet to the Northeasterly line of said PCL. 1.
Strip 6
A strip of land 15.00 feet wide extending Northerly from the Northerly line of
the above described and designated Strip 5 to the Northeasterly line of said
PCL. 1 and lying 7.5 feet on each side of a line that begins at said Point C;
thence N. 30(Degree) 01' 00" E., 59.5 feet; thence N. 8(Degree) 41' 00" E.,
98.44 feet to the Northeasterly line of said PCL. 1.
Strip 7
A strip of land 15.00 feet wide extending entirely across said PCL. 1 and lying
7.5 feet and each side of a line described as follows:
Beginning at the most Westerly corner of said PCL. 1 said corner being on the
Northeasterly line of North First Street; thence along said Northeasterly line
S. 52(Degree) 27' 12" E., 30.00 feet to the true point of beginning of said
strip of land; thence N. 37(Degree) 32' 33" E., 600.00 feet to the Northeasterly
line of said PCL 1.
Strip 8
That area located within those portions of PCL.1, of the Parcel Map mentioned
hereinabove, lying within the easements designated as "P.S.E.", as shown on said
Parcel Map.
PARCEL ONE-D:
A non-exclusive easement for Landscaping, Lighting and Irrigation Facilities
over PCL. 1, as said parcel is shown on the Parcel Map recorded in Book 516 of
Maps, at pages 34 and 35, Santa Clara County Records, as granted in an
instrument recorded May 23, 1985 in Book J353, page 1565 and being more
particularly described as follows:
A strip of land 10.00 feet wide extending Southeasterly from the Northwesterly
line of said PCL. 1 and PCL. 2 and lying 5.00 feet on each side of a line that
begins at the most Northerly corner of said PCL. 1 and runs thence along the
Northeasterly line of said PCL. 1, S. 52(Degree) 27' 12" E. 375.00 feet.
Excepting therefrom that portion lying within the bounds of Parcel 2 mentioned
hereinabove.
APN: 097-79-004, x010
ARB: 97-3-x4, x4.01
A-16
EXHIBIT A
PART 9
PARCEL 9 LAND
LEGAL DESCRIPTION
(90 HEADQUARTERS DRIVE)
REAL PROPERTY in the City of San Jose, County of Santa Clara, State of
California, described as follows:
Parcel 3, as shown on Parcel Map filed July 13, 1984 in Book 531 of Maps at
pages 41 and 42, Santa Clara County Records.
APN: 097-79-003
ARB: 097-03-005.02
A-17
EXHIBIT B(1)
FACILITY 1 LEASE AGREEMENT
B(1)-1
EXHIBIT B(2)
FACILITY 2 LEASE AGREEMENT
B(2)-1
EXHIBIT B(3)
FACILITY 3 LEASE AGREEMENT
B(3)-1
EXHIBIT C(1)
FACILITY 1 PURCHASE AGREEMENT
C(1)-1
EXHIBIT C(2)
FACILITY 2 PURCHASE AGREEMENT
C(2)-1
EXHIBIT C(3)
FACILITY 3 PURCHASE AGREEMENT
C(3)-1
EXHIBIT D
FACILITY 3 CONSTRUCTION AGENCY AGREEMENT
D-1
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 September 21, 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"). Unless
otherwise indicated, all terms defined in the Participation Agreement have the
same respective meanings when used herein.
2. Pursuant to Subparagraph 2.03(a) of the Participation Agreement,
Lessee hereby irrevocably requests Lessor to make an Advance under Facility [_]
as follows:
(a) Such Advance shall be in the aggregate amount of
$________[include and complete following if proposed Advance under
Facility 1 or Facility 2][, of which amount:
(i) $__________ is for the Parcel [_] Property;
(ii) $__________ is for the Parcel [_] Property;
(iii) $__________ is for the Parcel [_] Property;
(iv) $__________ is for the Parcel [_] Property;
(v) $__________ is for the Parcel [_] Property;
(vi) $__________ is for the Parcel [_] Property; and
(vii) $__________ is for the Parcel [_] Property]; and
(b) The date of such Advance shall be ____________, ____ (the
"Advance Date").
[Add the following language for each of the Initial Advances: This Advance
Request is for the Initial Advance under Facility [_], and the Advance Date
shall be the Closing Date.]
E-1
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 Facility [ ] 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:
(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 under Facility 3:]
[Lessee further certifies to the Lessor Parties that (i) construction of the New
Improvements is proceeding in accordance with the Plans and Specifications, the
Budget, the Facility 3 Construction Agency Agreement, the other Operative
Documents, all applicable Governmental Rules and all applicable Insurance
Requirements and (ii) no Cost Overrun Event or Completion Delay Event has
occurred.]
[Lessee further certifies to the Lessor Parties that the New Improvements have
been Completed in accordance with the Plans and Specifications, the Budget, the
Facility 3 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
E-2
IN WITNESS WHEREOF, Lessee has executed this Advance Request on the date
set forth above.
NOVELLUS SYSTEMS, INC.
By:________________________________
Name ________________________
Title: ______________________
E-3
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 September 21, 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"). 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 Facility 3 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
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
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 September 21, 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"). 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 Agreements for an additional
one (1) year by extending the current Scheduled Expiration Date for each Lease
Agreement 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
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
EXHIBIT G
ASSIGNMENT OF CONSTRUCTION AGREEMENTS
G-1
EXHIBIT H
CASH COLLATERAL AGREEMENT
H-1
EXHIBIT I
ASSIGNMENT OF LEASE
I-1
EXHIBIT J
LESSOR DEED OF TRUST
J-1
EXHIBIT K
LESSOR SECURITY AGREEMENT
K-1
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 September 21, 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 under each Facility set forth under the captions
"Tranche Percentages and Proportionate Shares Assigned" opposite such Assignee
Participant's name on Part A of Attachment I hereto. Such sale, assignment and
delegation shall become effective on the date designated in Part C of Attachment
I hereto (the "Assignment Effective Date"), which
L-1
date shall be, unless Agent shall otherwise consent, at least five (5) Business
Days after the date following the date counterparts of this Assignment Agreement
are delivered to Agent in accordance with Paragraph 3 hereof.
3. Assignment Effective Notice. Upon (a) receipt by Agent of five (5)
counterparts of this Assignment Agreement (to each of which is attached a fully
completed Attachment 1), each of which has been executed by Assignor Participant
and each Assignee Participant (and, to the extent required by clause (i) of
Subparagraph 7.05(b) of the Participation Agreement, by Lessor, Lessee and
Agent) and (b) payment to Agent of the registration and processing fee specified
in clause (iii) of Subparagraph 7.05(b) of the Participation Agreement, Agent
will transmit to Lessor, Lessee, Assignor Participant and each Assignee
Participant an Assignment Effective Notice substantially in the form of
Attachment 2 hereto, fully completed (an "Assignment Effective Notice").
4. Assignment Effective Date. At or before 12:00 noon (local time of
Assignor Participant) on the Assignment Effective Date, each Assignee
Participant shall pay to Assignor Participant, in immediately available or same
day funds, an amount equal to the purchase price, as agreed between Assignor
Participant and such Assignee Participant (the "Assignment Purchase Price"), for
the respective Tranche A Percentage, Tranche B Percentage, Tranche C Percentage
and Proportionate Share under each Facility purchased by such Assignee
Participant hereunder. Effective upon receipt by Assignor Participant of the
Assignment Purchase Price payable by each Assignee Participant, the sale,
assignment and delegation to such Assignee Participant of such Proportionate
Share as described in Paragraph 2 hereof shall become effective.
5. Payments After the Assignment Effective Date. Assignor Participant
and each Assignee Participant hereby agree that Agent shall, and hereby
authorize and direct Agent to, allocate amounts payable under the Participation
Agreement and the other Operative Documents as follows:
(a) All payments applied to reduce the Outstanding Lease Amount
after the Assignment Effective Date with respect to each Tranche A
Percentage, Tranche B Percentage, Tranche C Percentage and Proportionate
Share assigned to an Assignee Participant pursuant to this Assignment
Agreement shall be payable to such Assignee Participant.
(b) All Base Rent, interest, fees and other amounts accrued after
the Assignment Effective Date with respect to each Tranche A Percentage,
Tranche B Percentage, Tranche C Percentage and Proportionate Share
assigned to an Assignee Participant pursuant to this Assignment
Agreement shall be payable to such Assignee Participant.
Assignor Participant and each Assignee Participant shall make any separate
arrangements between themselves which they deem appropriate with respect to
payments between them of amounts paid under the Operative Documents on account
of the Tranche A Percentage, Tranche B Percentage, Tranche C Percentage and
Proportionate Share assigned to such Assignee
L-2
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
L-3
terms thereof, together with such powers as are reasonably incidental
thereto, all in accordance with Section VI of the Participation
Agreement.
(f) Each Assignee Participant (i) affirms that each of the
representations and warranties set forth in Paragraph 4.03 of the
Participation Agreement is true and correct with respect to such
Participant and (ii) agrees that it will perform in accordance with
their terms all of the obligations which by the terms of the
Participation Agreement and the other Operative Documents are required
to be performed by it as a Participant.
(g) Each Assignee Participant represents and warrants that, as of
the date hereof, it would not have any basis for demanding any payment
under Subparagraph 2.12(c) or Subparagraph 2.12(d) of the Participation
Agreement or, to its knowledge, under Subparagraph 2.13(a) of the
Participation Agreement.
(h) Part B of Attachment 1 hereto sets forth administrative
information with respect to each Assignee Participant.
9. Effect of this Assignment Agreement. On and after the Assignment
Effective Date, (a) each Assignee Participant shall be a Participant with a
Tranche A Percentage, Tranche B Percentage, Tranche C Percentage and
Proportionate Share under each Facility as set forth under the caption "Tranche
Percentages and Proportionate Shares After Assignment" opposite such Assignee
Participant's name in Part A of Attachment 1 hereto and shall have the rights,
duties and obligations of such a Participant under the Participation Agreement
and the other Operative Documents and (b) Assignor Participant shall be a
Participant with a Tranche A Percentage, Tranche B Percentage, Tranche C
Percentage and Proportionate Share under each Facility as set forth under the
caption "Tranche Percentages and Proportionate Shares After Assignment" opposite
Assignor Participant's name in Part A of Attachment 1 hereto and shall have the
rights, duties and obligations of such a Participant under the Participation
Agreement and the other Operative Documents, or, if the Proportionate Share of
Assignor Participant has been reduced to zero, Assignor Participant shall cease
to be a Participant and shall have no further obligation to fund any portion of
any Advance.
10. Miscellaneous. This Assignment Agreement shall be governed by, and
construed in accordance with, the laws of the State of California. Paragraph
headings in this Assignment Agreement are for convenience of reference only and
are not part of the substance hereof.
L-4
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: _______________________
L-5
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: _______________________
L-6
ATTACHMENT 1
TO ASSIGNMENT AGREEMENT
PART A(1) -- TRANCHE PERCENTAGES AND PROPORTIONATE SHARES UNDER FACILITY 1
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
ATTACHMENT 1
TO ASSIGNMENT AGREEMENT
PART A(2) -- TRANCHE PERCENTAGES AND PROPORTIONATE SHARES UNDER FACILITY 2
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)-2
ATTACHMENT 1
TO ASSIGNMENT AGREEMENT
PART A(3-1) -- TRANCHE PERCENTAGES AND PROPORTIONATE SHARES UNDER FACILITY 2
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)-3
ATTACHMENT 1
TO ASSIGNMENT AGREEMENT
PART A(3-2) -- TRANCHE PERCENTAGES AND PROPORTIONATE SHARES UNDER FACILITY 2 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:
- ----------------------
_________ __. _____% __. _____% __. _____% __. _____% __. _____% __. _____% __. ______% __. ______%
_________ __. _____% __. _____% __. _____% __. _____% __. _____% __. _____% __. ______% __. ______%
_________ __. _____% __. _____% __. _____% __. _____% __. _____% __. _____% __. ______% __. ______%
_________ __. _____% __. _____% __. _____% __. _____% __. _____% __. _____% __. ______% __. ______%
L(1)-4
PART B
[Assignee Participant]
Applicable Participating Office:
- -------------------------
- -------------------------
- -------------------------
Address for notices:
- -------------------------
- -------------------------
- -------------------------
Telephone No:
-----------
Telecopier No:
-----------
Wiring Instructions:
- -------------------------
- -------------------------
[Assignee Participant]
Applicable Participating Office:
- -------------------------
- -------------------------
- -------------------------
Address for notices:
- -------------------------
- -------------------------
- -------------------------
Telephone No:
-----------
Telecopier No:
-----------
Wiring Instructions:
- -------------------------
- -------------------------
L(1)-5
PART C
ASSIGNMENT EFFECTIVE DATE ________, ____
L(1)-6
ATTACHMENT 2
TO ASSIGNMENT AGREEMENT
FORM OF
ASSIGNMENT EFFECTIVE NOTICE
Reference is made to the Participation Agreement, dated as of September
21, 2001, among Novellus Systems, Inc. ("Lessee"), ABN AMRO Leasing, Inc.
("Lessor"), the Persons parties thereto as "Participants" (the "Participants")
and ABN AMRO Bank N.V., as agent for the Participants (in such capacity,
"Agent"). Agent hereby acknowledges receipt of five executed counterparts of a
completed Assignment Agreement, a copy of which is attached hereto. [Note:
Attach copy of Assignment Agreement.] Terms defined in such Assignment Agreement
are used herein as therein defined.
1. Pursuant to such Assignment Agreement, you are advised that the
Assignment Effective Date will be __________.
2. Pursuant to such Assignment Agreement, each Assignee Participant is
required to pay its Purchase Price to Assignor Participant at or before 12:00
Noon on the Assignment Effective Date in immediately available funds.
Very truly yours,
ABN AMRO Bank N.V.,
as Agent
By: _____________________________
Name: _______________________
Title: ______________________
L(2)-1
EXHIBIT M
AMENDED AND RESTATED GROUND LEASE AGREEMENT
M(1)-1
==============================================================================
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
September 21, 2001
==============================================================================
SCHEDULES
I Participants (Preamble, 7.01, Schedule 1.01)
1.01 Definitions
1.02 Rules of Construction
3.01 Initial Conditions Precedent
4.01(q) Subsidiaries
4.01(t) Individual Property Representations
5.02(a) Existing Liens
EXHIBITS
A Land (Recital A, 2.01(a))
B(1) Facility 1 Lease Agreement (2.01(a))
B(2) Facility 2 Lease Agreement (2.01(a))
B(3) Facility 3 Lease Agreement (2.01(a))
C(1) Facility 1 Purchase Agreement (2.01(a))
C(2) Facility 2 Purchase Agreement (2.01(a)
C(3) Facility 3 Purchase Agreement (2.01(a)
D Facility 3 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 (Schedule 3.01)
-iii-
TABLE OF CONTENTS
PAGE
----
SECTION 1. INTERPRETATION...............................................................2
1.01. Definitions..................................................................2
1.02. Rules of Construction........................................................3
SECTION 2. LEASE FACILITIES.............................................................3
2.01. Acquisition, Lease, Amount Limitations, Etc..................................3
2.02. Participation Agreement......................................................5
2.03. Advance Requests.............................................................7
2.04. Fees........................................................................10
2.05. Funding of Advances.........................................................10
2.06. Sharing of Payments.........................................................11
2.07. Other Payment Terms.........................................................14
2.08. Commitment Reductions.......................................................15
2.09. Extensions..................................................................16
2.10. Nature of the Transactions..................................................17
2.11. Security....................................................................18
2.12. Change of Circumstances.....................................................21
2.13. Taxes on Payments...........................................................23
2.14. Funding Loss Indemnification................................................25
2.15. Replacement of Participants.................................................25
SECTION 3. CONDITIONS PRECEDENT........................................................26
3.01. Initial Advances............................................................26
3.02. Subsequent Advances.........................................................26
3.03. Other Conditions Precedent..................................................26
3.04. Covenant to Deliver.........................................................27
SECTION 4. REPRESENTATIONS AND WARRANTIES..............................................27
4.01. Lessee's Representations and Warranties.....................................27
4.02. Lessor's Representations and Warranties.....................................32
4.03. Participants' Representations and Warranties................................33
SECTION 5. COVENANTS...................................................................35
5.01. Lessee's Affirmative Covenants..............................................35
5.02. Lessee's Negative Covenants.................................................38
-i-
TABLE OF CONTENTS
(CONTINUED)
PAGE
----
5.03. Lessee's Financial Covenants................................................40
5.04. Lessor's Covenants..........................................................41
5.05. Participants' Covenants.....................................................41
SECTION 6. LESSOR, AGENT AND THEIR RELATIONS WITH PARTICIPANTS.........................42
6.01. Appointment of Agent........................................................42
6.02. Powers and Immunities.......................................................42
6.03. Reliance....................................................................42
6.04. Defaults....................................................................42
6.05. Indemnification.............................................................43
6.06. Non-Reliance................................................................43
6.07. Resignation or Removal of Agent.............................................44
6.08. Authorization...............................................................44
6.09. Lessor and Agent in their Individual Capacities.............................44
SECTION 7. MISCELLANEOUS...............................................................44
7.01. Notices.....................................................................44
7.02. Expenses....................................................................46
7.03. Indemnification.............................................................46
7.04. Waivers; Amendments.........................................................47
7.05. Successors and Assigns......................................................48
7.06. Setoff......................................................................53
7.07. No Third Party Rights.......................................................53
7.08. Partial Invalidity..........................................................53
7.09. JURY TRIAL..................................................................53
7.10. Counterparts................................................................53
7.11. No Joint Venture, Etc.......................................................53
7.12. Usury Savings Clause........................................................54
7.13. Confidentiality.............................................................54
7.14. Governing Law...............................................................54
7.15. No Merger...................................................................54
-ii-
An extra section break has been inserted above this paragraph. Do not delete
this section break if you plan to add text after the Table of
Contents/Authorities. Deleting this break will cause Table of
Contents/Authorities headers and footers to appear on any pages following the
Table of Contents/Authorities.
-iii-
FACILITY 1 LEASE AGREEMENT
DEED OF TRUST WITH ASSIGNMENT OF RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
THIS FACILITY 1 LEASE AGREEMENT, DEED OF TRUST WITH ASSIGNMENT OF RENTS,
SECURITY AGREEMENT AND FIXTURE FILING (this "Agreement" herein), dated as of
September 21, 2001 is entered into by and between:
(1) NOVELLUS SYSTEMS, INC., a California corporation ("Lessee");
and
(2) ABN AMRO LEASING, INC., an Illinois corporation, as lessor
under this Agreement and as trustee under the deed of trust contained
herein ("Lessor").
RECITALS
A. Lessee has requested Lessor and the Persons which are "Participants"
under the Participation Agreement referred to in Recital B below (such Persons
to be referred to collectively as the "Participants") to provide to Lessee a
lease facility pursuant to which:
(1) Lessor would (a) lease certain property designated by Lessee
to Lessee, and (b) grant to Lessee the right to purchase such property;
and
(2) The Participants would participate in such lease facility by
(a) funding the advances to be made by Lessor and (b) acquiring
participation interests in the rental and certain other payments to be
made by Lessee.
B. Pursuant to a Participation Agreement dated of even date herewith
(the "Participation Agreement") among Lessee, 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:
1
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. Lessor agrees to lease to Lessee and Lessee
agrees to lease from Lessor the following property (the "Facility 1 Property")
to the extent of Lessor's estate, right, title and interest therein, thereto or
thereunder:
(a) All lots, pieces, tracts and parcels of land described in
Exhibit A (the "Facility 1 Land"), but excluding the Improvements
thereto;
(b) All Appurtenant Rights belonging, relating or pertaining to
the Facility 1 Land;
(c) All Related Goods (including those described in Exhibit B and
in each Exhibit B Supplement), Related Permits and Related Agreements
related to the Facility 1 Land or any of the foregoing 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
certain of the Facility 1 Land and certain of the other Facility 1 Property is
through the Ground Lease Agreement and is a leasehold interest only.)
2.02. Term.
(a) Original Term. The original term of this Agreement shall
commence on the Closing Date (the "Commencement Date") and shall end on
the date five (5) years after the Closing Date (such date as it may be
extended pursuant to Subparagraph 2.02(b) to be referred to as the
"Scheduled Expiration Date").
(b) Extensions. Lessee may request Lessor to extend the Scheduled
Expiration Date in effect at any time for three (3) additional periods
of one (1) year each, as provided in Subparagraph 2.09(b) of the
Participation Agreement. If Lessor and each Participant (other than
Novellus Participant) consents to any such a request in accordance with
such provision, the then current Scheduled Expiration Date shall be
deemed
2
extended by one (1) year in each instance. Lessee acknowledges that
neither Lessor nor any Participant has any obligation or commitment
(either express or implied) to extend, or consent to the extension of,
the Scheduled Expiration Date at any time.
2.03. Rent.
(a) Base Rent.
(i) Lessee shall pay to Lessor as base rent hereunder
("Base Rent") for each Rental Period for each Portion of the
Outstanding Lease Amount an amount equal to the sum of the
Interest Component and Principal Component for such Rental Period
determined as follows:
(A) "Interest Component" shall mean, with respect
to any Rental Period and Portion, the product of (1) the
Rental Rate for such Rental Period and Portion, times (2)
the amount of such Portion on the first day of such Rental
Period, times (3) a fraction, the numerator of which is
the number of days in such Rental Period and the
denominator of which is 360. If the Rental Rate shall
change during any Rental Period, the Rental Rate for such
Rental Period shall be the weighted average of the Rental
Rates in effect from time to time during such Rental
Period.
(B) "Principal Component" shall mean, with respect
to any Rental Period, zero Dollars ($0.00).
(ii) Prior to the Commitment Termination Date, the
Outstanding Lease Amount shall consist of a single Portion with
the following Rental Periods:
(A) A Rental Period which begins on the
Commencement Date and ends on the first Business Day in
the first calendar month immediately following the month
in which the Commencement Date occurs; and
(B) Each successive Rental Period thereafter which
begins on the last day of the immediately preceding Rental
Period and ends one (1) month thereafter on the first
Business Day of a calendar month through and including the
Commitment Termination Date.
(iii) On and after the Commitment Termination Date, Lessee
may select the number and amounts of the Portions into which the
Outstanding Lease Amount is to be divided and the Rental Period
for each such Portion by delivering to Lessor, at least three (3)
Business Days prior to the Commitment Termination Date and
thereafter the last day of each Rental Period for a Portion, an
irrevocable written notice in the form of Exhibit C,
appropriately completed (a "Notice of Rental Period Selection"),
subject to the following:
(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
3
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
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, if any Rental
Period is less than one (1) month, the Rental Rate for
such Rental Period shall be the Alternate Rental Rate;
provided, however, that with respect to the initial Rental
Period, the Rental Rate may be calculated (at ABN AMRO's
discretion) based upon ABN AMRO's "cost of funds"; or
(C) Except as otherwise provided in clause (A)
above for Outstanding Tranche A Participation Amounts and
Outstanding Tranche B Participation Amounts, if the LIBOR
Rental Rate is unavailable for any Rental Period pursuant
to Subparagraph 2.12(a) or Subparagraph 2.12(b) of the
Participation Agreement, the Rental Rate for such Rental
Period shall be the Alternate Rental Rate
(v) Lessee shall pay Base Rent in arrears (A) for each
Portion, on the last day of each Rental Period therefor and, in
the case of any Rental Period which
4
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 Agreement; and
(ii) All other amounts (other than Base Rent, the purchase
price payable by Lessee for any purchase of the Facility 1
Property by Lessee pursuant to the Facility 1 Purchase Agreement
and the Residual Value Guaranty Amount payable under the Facility
1 Purchase Agreement) payable by Lessee under this Agreement and
the other Operative Documents.
Lessee shall pay all Supplemental Rent amounts on the dates specified in
this Agreement and the other Operative Documents for the payment of such
amounts or, if no date is specified for the payment of any such amount,
within five (5) Business Days after demand of Lessor or any other Person
to whom such amount is payable; 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.
2.04. Use. Lessee may use the Facility 1 Property for office, research
and development, warehouse and manufacturing purposes, and for any other purpose
which is in compliance with applicable zoning laws and ordinances for the
Facility 1 Property.
2.05. As Is Lease. Lessee has conducted, or will conduct from time to
time with regard to Facility 1 Property that may be added hereto after the date
hereof, all due diligence which it deems appropriate regarding the Facility 1
Property and agrees that no Lessor Party has any obligation to conduct any such
due diligence. Lessee is leasing the Facility 1 Property "as is, with all
faults" without any representation, warranty, indemnity or undertaking by any
Lessor Party regarding any aspect of the Facility 1 Property, including (a) the
condition of the Facility 1 Property (including any Improvements to the Facility
1 Property made prior to the Commencement Date or during the Term); (b) title to
the Facility 1 Property (including possession of the Facility 1 Property by any
Person or the existence of any Lien or any other right, title or interest in or
to any of the Facility 1 Property in favor of any Person); (c) the value,
habitability, usability, design, operation or fitness for use of the Facility 1
Property; (d) the availability or adequacy of utilities and other services to
the Facility 1 Property; (e) any latent, hidden or patent defect in the Facility
1 Property; (f) the zoning or status of the Facility 1 Property or any other
restrictions on the use of the Facility 1 Property; (g) the economics of the
Facility 1 Property; (h) any Casualty or Condemnation; or (i) the compliance of
the Facility 1 Property with any applicable Governmental Rule or Insurance
Requirement; provided, however, that Lessor shall be obligated to remove Lessor
Liens to the extent required in Subparagraph 5.04(b) of the Participation
Agreement. Without limiting the generality of the foregoing, Lessee
5
specifically waives any covenant of quiet enjoyment except as otherwise provided
in Subparagraph 5.04(b) of the Participation Agreement.
2.06. Nature of Transaction. As more fully provided in Paragraph 2.10 of
the Participation Agreement, Lessee and the Lessor Parties intend that the
transaction evidenced by this Agreement and the other Operative Documents
constitute an operating lease in accordance with FASB 13 for accounting purposes
and a loan secured by the Facility 3 Property for all other purposes, including
federal, state and local tax purposes and commercial, real estate and bankruptcy
law purposes.
2.07. Security, Etc. In order to secure the Lessee Obligations and
otherwise to assure the Lessor Parties the benefits hereof in the event that the
transaction evidenced by this Agreement and the other Operative Documents is,
pursuant to the intent of Lessee and the Lessor Parties, treated as a loan for
certain purposes, Lessee hereby makes the following grants and agrees as
follows:
(a) Real Property Security. As security for the Lessee
Obligations under Facility 1, Lessee hereby irrevocably and
unconditionally grants, conveys, transfers and assigns to Lessor, as
trustee under this deed of trust, for the benefit of Lessor, as
beneficiary (in trust for the benefit of the Lessor Parties), with power
of sale and right of entry and possession, all estate, right, title and
interest of Lessee in the following property, whether now owned or
leased or hereafter acquired, (collectively, the "Real Property
Collateral"):
(i) The Facility 1 Land (including Lessee's leasehold
interest therein through the Stanford Lease), but excluding the
Improvements thereto;
(ii) All Appurtenant Rights belonging, relating or
pertaining to any of the Facility 1 Land;
(iii) All Subleases and Issues and Profits accruing from
the Facility 1 Land or any of the foregoing Appurtenant Rights to
the extent that such Subleases and Issues and Profits constitute
real property;
(iv) All Related Goods, Related Agreements and Related
Permits related to any of the Facility 1 Land or any of the
foregoing Appurtenant Rights to the extent that such Related
Goods, Related Agreements and Related Permits constitute real
property;
(v) All other Facility 1 Property to the extent that such
property constitutes real property; and
(vi) All proceeds of the foregoing, including Casualty and
Condemnation Proceeds.
(b) Personal Property Security. As security for the Lessee
Obligations under Facility 1, Lessee hereby irrevocably and
unconditionally assigns and grants to Lessor, for the benefit of the
Lessor Parties, a security interest in all estate, right, title and
interest
6
of Lessee in the following property, whether now owned or leased or
hereafter acquired, (collectively, the "Personal Property Collateral"):
(i) All Subleases and Issues and Profits accruing from the
Facility 1 Land or any Appurtenant Rights to the extent that such
Subleases and Issues and Profits constitute personal property;
(ii) All Related Goods, Related Agreements and Related
Permits related to the Facility 1 Land or any of the foregoing
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 Participant) in connection with this
Agreement or any other Operative Document (including any Repair
and Restoration Account);
(iv) All other Facility 1 Property to the extent such
Facility 1 Property constitutes personal property; and
(v) All proceeds of the foregoing, including Casualty and
Condemnation Proceeds.
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
California Commercial Code with respect to the Related Goods which are
or are to become fixtures on the Facility 1 Land or Facility 1
Improvements. The mailing addresses of Lessee and of Lessor from which
information concerning security interests hereunder may be obtained are
as set forth on 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, not an
assignment for security purposes only, and Lessor's right to the
Subleases and Issues and Profits is not contingent upon, and may be
exercised without possession of, the Facility 1 Property.
(i) If no Event of Default has occurred and is continuing,
Lessee shall have a revocable license to collect and retain the
Issues and Profits as they become due. Upon the occurrence and
during the continuance of an Event of Default, such license shall
automatically terminate, and Lessor may collect and apply the
Issues and Profits pursuant to Subparagraph 5.02(d) without
further
7
notice to Lessee or any other Person and without taking
possession of the Facility 1 Property. All Issues and Profits
thereafter collected by Lessee shall be held by Lessee as trustee
in a constructive trust for the benefit of Lessor. Lessee hereby
irrevocably authorizes and directs the sublessees under the
Subleases, without any need on their part to inquire as to
whether an Event of Default has actually occurred or is then
existing, to rely upon and comply with any notice or demand by
Lessor for the payment to Lessor of any rental or other sums
which may become due under the Subleases or for the performance
of any of the sublessees' undertakings under the Subleases.
Collection of any Issues and Profits by Lessor shall not cure or
waive any default or notice of default hereunder or invalidate
any acts done pursuant to such notice.
(ii) The foregoing irrevocable assignment shall not cause
any Lessor Party to be (A) a mortgagee in possession; (B)
responsible or liable for (1) the control, care, management or
repair of the Facility 1 Property or for performing any of
Lessee's obligations or duties under the Subleases, (2) any waste
committed on the Facility 1 Property by the sublessees under any
of the Subleases or by any other Persons, (3) any dangerous or
defective condition of the Facility 1 Property, or (4) any
negligence in the management, upkeep, repair or control of the
Facility 1 Property resulting in loss or injury or death to any
sublessee, licensee, employee, invitee or other Person; or (C)
responsible for or impose upon any Lessor Party any duty to
produce rents or profits. No Lessor Party, in the absence of
gross negligence or willful misconduct on its part, shall be
liable to Lessee as a consequence of (y) the exercise or failure
to exercise any of the rights, remedies or powers granted to
Lessor hereunder or (z) the failure or refusal of Lessor to
perform or discharge any obligation, duty or liability of Lessee
arising under the Subleases.
SECTION 3. OTHER LESSEE AND LESSOR RIGHTS AND OBLIGATIONS.
3.01. Maintenance, Repair, Etc.
(a) General. Lessee shall not permit any waste of the Facility 1
Property, except for ordinary wear and tear, and shall, at its sole cost
and expense, maintain the Facility 1 Property in good working order,
mechanical condition and repair and make all necessary repairs thereto,
of every kind and nature whatsoever, whether interior or exterior,
ordinary or extraordinary, structural or nonstructural or foreseen or
unforeseen, in each case as required by all applicable Governmental
Rules and Insurance Requirements and on a basis consistent with the
operation and maintenance of commercial properties comparable in type
and location to the Facility 1 Property and in compliance with prudent
industry practice.
(b) [Reserved].
(c) Other Modifications. Lessee, at its sole cost and expense,
may from time to time make alterations, renovations, improvements and
additions to the Facility 1
8
Property and substitutions and replacements therefor (collectively,
"Modifications"); provided that:
(i) No Modification impairs the value, utility or useful
life of the Facility 1 Property or any part thereof from that
which existed immediately prior to such Modification;
(ii) All Modifications are made expeditiously and, in no
case, unless Lessee currently is exercising either the Term
Purchase Option or the Expiration Date Purchase Option, shall
Modifications remain uncompleted later than six (6) months prior
to the Scheduled Expiration Date;
(iii) All Modifications are made in a good and workmanlike
manner and in compliance with all applicable Governmental Rules
and Insurance Requirements;
(iv) Subject to Paragraph 3.12 relating to permitted
contests, Lessee pays all costs and expenses and discharges (or
cause to be insured or bonded over) any Liens arising in
connection with any Modification not later than the earlier of
(A) sixty (60) days after the same shall be filed (or otherwise
becomes effective) and (B) unless Lessee currently is exercising
either the Term Purchase Option or the Expiration Date Purchase
Option, six (6) months prior to the Scheduled Expiration Date;
(v) At least one (1) month prior to the commencement of
(A) any Modifications which are anticipated to cost $500,000 or
more in the aggregate, or (B) any Modifications which cause the
total of all Modifications undertaken during the previous twelve
month period to exceed an aggregate cost of $1,000,000, Lessee
shall deliver to Lessor, with sufficient copies for Agent and
each Participant(other than Novellus Participant), a brief
written description of such Modifications; and
(vi) All Modifications otherwise comply with this
Agreement and the other Operative Documents.
(d) Abandonment. Lessee shall not abandon the Facility 1 Property
or any material portion thereof for any period in excess of thirty (30)
consecutive days during the term hereof, except as a part of any
Modifications as permitted herein or in the other Operative Documents.
(e) Maintenance. Lessee shall maintain the Facility 1 Property
and each material portion thereof in a manner consistent with other
similar properties in the same area, except as a part of any
Modifications as permitted herein.
3.02. Risk of Loss. Lessee assumes all risks of loss arising from any
Casualty or Condemnation which arises or occurs prior to the Expiration Date or
while Lessee is in possession of the Facility 1 Property and all liability for
all personal injuries and deaths and damages to property suffered by any Person
or property on or in connection with the Facility 1
9
Property which arises or occurs prior to the Expiration Date or while Lessee is
in possession of the Facility 1 Property, except in each case to the extent any
such loss or liability is primarily caused by the gross negligence or willful
misconduct of a Lessor Party. Lessee hereby waives the provisions of California
Civil Code Sections 1932(1), 1932(2) and 1933(4), and any and all other
applicable existing or future Governmental Rules permitting the termination of
this Agreement as a result of any Casualty or Condemnation, and Lessor shall in
no event be answerable or accountable for any risk of loss of or decrease in the
enjoyment and beneficial use of the Facility 1 Property as a result of any such
event.
3.03. Insurance.
(a) Coverage. Lessee, at its sole cost and expense, shall at all
times carry and maintain insurance coverage not less than set forth in
Schedule 3.03 and such additional insurance of the types (including the
types set forth in Schedule 3.03), in amounts, in a form and with
deductibles customarily carried by a reasonably prudent Person owning or
operating properties similar to the Facility 1 Property in the same
geographic area as the Facility 1 Property.
(b) Carriers. Any insurance carried and maintained by Lessee
pursuant to this Paragraph 3.03 shall be underwritten by an insurance
company which (i) has, at the time such insurance is placed and at the
time of each renewal thereof, a general policyholder rating of "A" and a
financial rating of at least VIII from A.M. Best Company or any
successor thereto (or if there is none, an organization having a similar
national reputation) or (ii) is otherwise approved by Lessor and
Required Participants.
(c) Terms. Each insurance policy maintained by Lessee pursuant to
this Paragraph 3.03 shall provide as follows, whether through
endorsements or otherwise:
(i) Lessor and Agent shall be named as additional
insureds, in the case of each policy of liability insurance, and
additional loss payees, in the case of each policy of property
insurance.
(ii) In respect of the interests of Lessor in the policy,
the insurance shall not be invalidated by any action or by
inaction of Lessee or by any Person having temporary possession
of the Facility 1 Property while under contract with Lessee to
perform maintenance, repair, alteration or similar work on the
Facility 1 Property, and shall insure the interests of Lessor
regardless of any breach or violation of any warranty,
declaration or condition contained in the insurance policy by
Lessee, Lessor or any other additional insured (other than by
such additional insured, as to such additional insured);
provided, however, that the foregoing shall not be deemed to (A)
cause such insurance policies to cover matters otherwise excluded
from coverage by the terms of such policies or (B) require any
insurance to remain in force notwithstanding non-payment of
premiums except as provided in clause (iii) below.
(iii) If the insurance policy is cancelled for any reason
whatsoever, or substantial change is made in the coverage that
affects the interests of Lessor, or if
10
the insurance coverage is allowed to lapse for non-payment of
premium, such cancellation, change or lapse shall not be
effective as to Lessor for thirty (30) days after receipt by
Lessor of written notice from the insurers of such cancellation,
change or lapse.
(iv) No Lessor Party shall have any obligation or
liability for premiums, commissions, assessments, or calls in
connection with the insurance.
(v) The insurer shall waive any rights of set-off or
counterclaim or any other deduction, whether by attachment or
otherwise, that it may have against any Lessor Party.
(vi) The insurance shall be primary without right of
contribution from any other insurance that may be carried by any
Lessor Party with respect to its interest in the Facility 1
Property.
(vii) The insurer shall waive any right of subrogation
against any Lessor Party (other than Novellus Participant).
(viii) All provisions of the insurance, except the limits
of liability, shall operate in the same manner as if there were a
separate policy covering each insured party.
(ix) The insurance shall not be invalidated should Lessee
or any Lessor Party waive, in writing, prior to a loss, any or
all rights of recovery against any Person for losses covered by
such policy, nor shall the insurance in favor of any Lessor Party
or Lessee, as the case may be, or their respective rights under
and interests in said policies be invalidated or reduced by any
act or omission or negligence of any Lessor Party or Lessee, as
the case may be, or any other Person having any interest in the
Facility 1 Property.
(x) All insurance proceeds with a value of less than two
million five hundred thousand Dollars ($2,500,000) payable in
respect of any loss or occurrence with respect to the Facility 1
Property shall be paid to and adjusted solely by Lessee. All
other insurance proceeds shall be paid to Lessor and adjusted
jointly by Lessor and Lessee, except that, from and after the
date on which the insurer receives written notice from Lessor
that an Event of Default has occurred and is continuing (and
unless and until such insurer receives written notice from Lessor
that all Events of Default have been cured), all losses shall be
adjusted solely by, and all insurance proceeds shall be paid
solely to, Lessor.
(xi) Each policy of property insurance shall contain a
standard form mortgagee endorsement in favor of Lessor.
(xii) Each insurance policy shall provide that the
coverage to be provided thereunder shall not be invalidated in
the event Lessee or any Lessor Party fails to maintain other
insurance covering losses of a similar type or types.
11
(xiii) Each insurance policy shall contain a "severability
of interest" provision.
(xiv) Each insurance policy which is written as "excess
insurance" shall contain a provision that it will drop down in
the event that any underlying insurance coverage has been reduced
or exhausted by reason of losses paid thereunder.
(d) Evidence of Insurance. Lessee, at its sole cost and expense,
shall furnish to Lessor (i) not later than the Commencement Date, copies
of all policies of insurance required by this Paragraph 3.03, certified
by the insurers, (ii) upon each renewal of insurance and upon any
material change in the terms thereof, copies of all policies, amendments
and/or endorsements evidencing such renewal or change, certified by the
insurers, and (iii) upon the request of Lessor, such other certificates
or documents as Lessor may reasonably request to evidence Lessee's
compliance with the insurance requirements set forth in this Paragraph
3.03.
(e) Release of Lessor Parties. Lessee hereby waives, releases and
discharges each Lessor Party and its directors, officers, employees,
agents and advisors from all claims whatsoever arising out of any loss,
claim, expense or damage to or destruction covered or coverable by
insurance required under this Paragraph 3.03, notwithstanding that such
loss, claim, expense or damage may have been caused by any such Person,
and, as among Lessee and such Persons, Lessee agrees to look to the
insurance coverage only in the event of such loss.
3.04. Casualty and Condemnation.
(a) Notice. Lessee shall give Lessor prompt written notice of the
occurrence of any Material Casualty affecting, or the institution of any
proceedings for the Condemnation of, the Facility 1 Property or any
portion thereof.
(b) Repair Obligations. If any Material Casualty or Condemnation
affecting the Facility 1 Property or any portion thereof occurs, Lessee
shall, at its election, either (i) repair and restore the Facility 1
Property as required by Subparagraph 3.04(c) or (ii) exercise the Term
Purchase Option and purchase the Facility 1 Property pursuant to the
Purchase Agreement; provided, however, that Lessee may not elect to
repair and restore the Facility 1 Property if such casualty or
condemnation is a Major Casualty or 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, Lessee shall exercise the
Term Purchase Option and purchase the Facility 1 Property pursuant to
the Purchase Agreement as promptly as possible but not later than two
(2) months after the occurrence of such Major Casualty or Major
Condemnation, unless Lessor and the Required Participants shall
otherwise consent in writing. If an Event of Default has occurred and is
continuing, Lessor Parties may exercise the rights provided herein.) Not
later than one (1) month after the occurrence of any Material Casualty
or any Condemnation, Lessee shall deliver to Lessor
12
a written notice indicating whether it elects to repair and restore or
purchase the Facility 1 Property.
(c) Repair and Restoration. If Lessee is required to repair and
restore the Facility 1 Property following any Material Casualty or any
Condemnation, Lessee shall diligently proceed to repair and restore the
Facility 1 Property to the condition in which it existed immediately
prior to such Material Casualty or such Condemnation and shall complete
all such repairs and restoration as soon as reasonably practicable;
provided, however, that Lessee shall in any event complete all such
repairs and restoration not later than the earlier of (y) six (6) months
after the occurrence of the Material Casualty or the Condemnation, and
(z) six (6) months prior to the Scheduled Expiration Date unless Lessee
currently is exercising either the Term Purchase Option or the
Expiration Date Purchase Option. Lessee shall make such repairs 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 Facility 1 Property can, in
Lessor's reasonable judgment, with diligent restoration or
repair, be returned to a condition at least equal to the
condition thereof that existed prior to the Casualty or
partial Condemnation causing the loss or damage within the
earlier to occur of (A) six (6) months after the
occurrence of the Casualty or Condemnation and (B) unless
Lessee currently is exercising either the Term Purchase
Option or the Expiration Date Purchase Option, six (6)
months prior to the Scheduled Expiration Date;
13
(B) Evidence that all necessary governmental
approvals can be timely obtained to allow the rebuilding
and reoccupancy of the Facility 1 Property;
(C) Copies of all plans and specifications for the
work;
(D) Copies of all contracts for the work, signed by
a contractor reasonably acceptable to Lessor;
(E) A cost breakdown for the work;
(F) A payment and performance bond for the work or
other security satisfactory to Lessor;
(G) Evidence that, upon completion of the work, the
size, capacity and total value of the Facility 1 Property
will be at least as great as it was before the Casualty or
Condemnation occurred; and
(H) Evidence of satisfaction of any additional
conditions that Lessor or Required Participants may
reasonably establish to protect their rights under this
Agreement and the other Operative Documents.
All plans and specifications for the work must be reasonably
acceptable to Lessor, except that Lessor's approval shall not be
required if the restoration work is based on the same plans and
specifications as were originally used to construct the Facility
1 Property. To the extent that the funds in a Repair and
Restoration Account include both Casualty and Condemnation
Proceeds and other funds deposited by Lessee, the other funds
deposited by Lessee shall be used first. Lessee acknowledges that
the specific conditions described above are reasonable.
(d) Prosecution of Claims for Casualty and Condemnation Proceeds.
Lessee shall proceed promptly and diligently to prosecute in good faith
the settlement or compromise of any and all claims for Casualty and
Condemnation Proceeds; provided, however, that any settlement or
compromise of any such claim shall, except as otherwise provided in
clause (x) of Subparagraph 3.03(c), be subject to the written consent of
Lessor and Required Participants, which consents shall not be
unreasonably withheld. Lessor may participate in any proceedings
relating to such claims, and, after the occurrence and during the
continuance of any Event of Default, Lessor is hereby authorized, in its
own name or in Lessee's name, to adjust any loss covered by insurance or
any Casualty or Condemnation claim or cause of action, and to settle or
compromise any claim or cause of action in connection therewith, and
Lessee shall from time to time deliver to Lessor any and all further
assignments and other instruments required to permit such participation.
(e) Assignment of Casualty and Condemnation Proceeds. Lessee
hereby absolutely and irrevocably assigns to Lessor all Casualty and
Condemnation Proceeds and all claims relating thereto, subject to the
terms of this Agreement which require Lessor to make such proceeds
available to Lessee for restoration. Except as otherwise
14
provided in clause (x) of Subparagraph 3.03(c), Lessee agrees that all
Casualty and Condemnation Proceeds are to be paid to Lessor and Lessee
hereby authorizes and directs any insurer, Governmental Authority or
other Person responsible for paying any Casualty and Condemnation
Proceeds to make payment thereof directly to Lessor alone, and not to
Lessor and Lessee jointly. If Lessee receives any Casualty and
Condemnation Proceeds payable to Lessor hereunder, Lessee shall promptly
pay over such Casualty and Condemnation Proceeds to Lessor. Lessee
hereby covenants that until such Casualty and Condemnation Proceeds are
so paid over to Lessor, Lessee shall hold such Casualty and Condemnation
Proceeds in trust for the benefit of Lessor and shall not commingle such
Casualty and Condemnation Proceeds with any other funds or assets of
Lessee or any other Person. Except as otherwise provided in clause (x)
of Subparagraph 3.03(c), Lessor may commence, appear in, defend or
prosecute any assigned right, claim or action, and may adjust,
compromise, settle and collect all rights, claims and actions assigned
to Lessor, but shall not be responsible for any failure to collect any
such right, claim or action, regardless of the cause of the failure.
(f) Use of Casualty and Condemnation Proceeds.
(i) If (A) no Event of Default has occurred and is
continuing, (B) Lessee exercises the repair and restoration
option pursuant to Subparagraphs 3.04(b) and 3.04(c) and (C)
Lessee complies with any conditions imposed pursuant to
Subparagraph 3.04(c); then Lessor shall release any Casualty and
Condemnation Proceeds to Lessee for repair or restoration of the
Facility 1 Property, but may condition such release and use of
the Casualty and Condemnation Proceeds upon deposit of the
Casualty and Condemnation Proceeds in a Repair and Restoration
Account. Lessor shall have the option, upon the completion of
such restoration of the Facility 1 Property, to apply any surplus
Casualty and Condemnation Proceeds remaining after the completion
of such restoration to the payment of Rent and/or the reduction
of the Outstanding Lease Amount, notwithstanding that such
amounts are not then due and payable or that such amounts are
otherwise adequately secured.
(ii) If (A) an Event of Default has occurred and is
continuing, (B) Lessee fails to or is unable to comply with any
conditions imposed pursuant to Subparagraph 3.04(c) or (C) Lessee
elects to exercise the Term Purchase Option and purchase the
Facility 1 Property pursuant to the Purchase Agreement; then, at
the absolute discretion of Lessor and the Required Participants,
regardless of any impairment of security or lack of impairment of
security, but subject to applicable Governmental Rules governing
the use of Casualty and Condemnation Proceeds, if any, Lessor may
(1) apply all or any of the Casualty and Condemnation Proceeds it
receives to the expenses of Lessor Parties (other than Novellus
Participant) in obtaining such proceeds; (2) apply the balance to
the payment of Rent and/or the reduction of the Outstanding Lease
Amount, notwithstanding that such amounts are not then due and
payable or that such amounts are otherwise adequately secured
and/or (3) release all or any part of such proceeds to Lessee
upon any conditions Lessor and the Required Participants may
elect.
15
(iii) Lessor shall apply any Casualty and Condemnation
Proceeds which are to be used to reduce the Outstanding Lease
Amount only on the last day of a Rental Period unless an Event of
Default has occurred and is continuing.
(iv) Application of all or any portion of the Casualty and
Condemnation Proceeds, or the release thereof to Lessee, shall
not cure or waive any Default or notice of default or invalidate
any acts done pursuant to such notice.
3.05. Taxes. Subject to Paragraph 3.12 relating to permitted contests,
Lessee shall promptly pay when due all Indemnified Taxes imposed on or payable
by Lessee or any Lessor Party in connection with the Facility 1 Property, this
Agreement or any of the other Operative Documents, or any of the transactions
contemplated hereby or thereby. As promptly as possible after any Indemnified
Taxes are payable by Lessee, Lessee shall send to Lessor for the account of the
applicable Lessor Party a certified copy of an original official receipt
received by Lessee showing payment thereof. If Lessee fails to pay any such
Indemnified Taxes when due to the appropriate taxing authority or fails to remit
to Lessor the required receipts or other required documentary evidence, Lessee
shall indemnify the Lessor Parties for any incremental taxes, interest or
penalties that may become payable by the Lessor Parties as a result of any such
failure. The obligations of Lessee under this Paragraph 3.05 shall survive the
payment and performance of the Lessee Obligations and the termination of this
Agreement.
3.06. Environmental Matters.
(a) Lessee's Covenants. Lessee shall not cause or permit
Hazardous Materials to be used, generated, manufactured, stored,
treated, disposed of, transported or present on or released or
discharged from the Facility 1 Property in any manner that is reasonably
likely to have a Material Adverse Effect. Lessee shall immediately
notify Lessor in writing of (i) any knowledge by Lessee that the
Facility 1 Property does not comply with any Environmental Laws; and
(ii) any claims against Lessee or the Facility 1 Property relating to
Hazardous Materials or pursuant to Environmental Laws. In response to
the presence of any Hazardous Materials on, under or about the Facility
1 Property, Lessee shall immediately take, at Lessee's sole expense, all
remedial action required by any Environmental Laws or any judgment,
consent decree, settlement or compromise in respect to any claim based
thereon.
(b) Inspection By Lessor. Upon reasonable prior notice to Lessee,
Lessor, its employees and agents, may from time to time (whether before
or after the commencement of a nonjudicial or judicial foreclosure
proceeding), enter and inspect the Facility 1 Property for the purpose
of determining the existence, location, nature and magnitude of any past
or present release or threatened release of any Hazardous Materials
into, onto, beneath or from the Facility 1 Property.
(c) Indemnity. Without in any way limiting any other indemnity
contained in this Agreement or any other Operative Document, Lessee
agrees to defend, indemnify and hold harmless the Lessor Parties and the
other Indemnitees from and against any claim, loss, damage, cost,
expense or liability directly or indirectly arising out of (i) the
16
use, generation, manufacture, storage, treatment, release, threatened
release, discharge, disposal, transportation or presence of any
Hazardous Materials which are found in, on, under or about the Facility
1 Property or (ii) the breach of any covenant, representation or
warranty of Lessee relating to Hazardous Materials or Environmental Laws
contained in this Agreement or any Operative Document. This indemnity
shall include (A) the costs, whether foreseeable or unforeseeable, of
any investigation, repair, cleanup or detoxification of the Facility 1
Property which is required by any Governmental Authority or is otherwise
necessary to render the Facility 1 Property in compliance with all
Environmental Laws; (B) all other direct or indirect consequential
damages (including any third party claims, claims by any Governmental
Authority, or any fines or penalties against the Indemnitees; and (C)
all court costs and attorneys' fees (including expert witness fees and
the cost of any consultants) paid or incurred by the Indemnitees. Lessee
shall pay immediately upon Lessor's demand any amounts owing under this
indemnity. Lessee shall use legal counsel reasonably acceptable to
Lessor in any action or proceeding arising under this indemnity. The
obligations of Lessee under this Subparagraph 3.06(c) shall survive the
payment and performance of the Lessee Obligations and the termination of
this Agreement.
(d) Legal Effect of Section. Lessee and Lessor agree that (i)
this Paragraph 3.06 and clause (ii) of Subparagraph 4.01(t) of the
Participation Agreement are intended as Lessor's written request for
information (and Lessee's response) concerning the environmental
condition of the real property security as required by California Code
of Civil Procedure Section 726.5 and (ii) each representation and
warranty and covenant herein and therein (together with any indemnity
applicable to a breach of any such representation and warranty) with
respect to the environmental condition of the Facility 1 Property is
intended by Lessor and Lessee to be an "environmental provision" for
purposes of California Code of Civil Procedure Section 736.
3.07. Liens, Easements, Etc.
(a) Lessee's Covenants. Subject to Paragraph 3.12 relating to
permitted contests, Lessee shall not create, incur, assume or permit to
exist any Lien or easement on or with respect to any of the Facility 1
Property of any character, whether now owned or hereafter acquired,
except for the following ("Permitted Property Liens"):
(i) Liens in favor of a Lessor Party securing the Lessee
Obligations and other Lessor Liens;
(ii) Liens, easements and leases 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, the Stanford Lease and the Cooley Lease;
(iii) Liens for taxes or other Governmental Charges not at
the time delinquent or thereafter payable without penalty;
17
(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 operation or maintenance of the
Facility 1 Property in the ordinary course of business, in each
case as approved by Lessor; and
(vi) Lessor Liens.
Subject to Paragraph 3.12 relating to permitted contests, Lessee shall
promptly (A) pay all Indebtedness of Lessee and other obligations prior
to the time the non-payment thereof would give rise to a Lien on the
Facility 1 Property and (B) discharge, at its sole cost and expense, any
Lien on the Facility 1 Property which is not a Permitted Property Lien.
(b) No Consents. Nothing contained in this Agreement shall be
construed as constituting the consent or request of any Lessor Party,
express or implied, to or for the performance by any contractor,
mechanic, laborer, materialman, supplier or vendor of any labor or
services or for the furnishing of any materials for any construction,
alteration, addition, repair or demolition of or to the Facility 1
Property or any part thereof. NOTICE IS HEREBY GIVEN THAT NO LESSOR
PARTY IS OR SHALL BE LIABLE FOR ANY LABOR, SERVICES OR MATERIALS
FURNISHED OR TO BE FURNISHED TO LESSEE, OR TO ANYONE HOLDING THE
FACILITY 1 PROPERTY OR ANY PART THEREOF THROUGH OR UNDER LESSEE, AND
THAT NO MECHANIC'S OR OTHER LIENS FOR ANY SUCH LABOR, SERVICES OR
MATERIALS SHALL ATTACH TO OR AFFECT THE INTEREST OF ANY LESSOR PARTY IN
AND TO THE FACILITY 1 PROPERTY.
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3.08. Subletting. Lessee may, in the ordinary course of business,
sublease the Facility 1 Property or any portion thereof to any Person, provided,
that (a) Lessee remains directly and primarily liable for performing its
obligations under this Agreement and all other Lessee Obligations; (b) each
sublease is subject to and subordinated to this Agreement; (c) each sublease
expressly provides for the surrender of the Facility 1 Property (or portion
thereof) by the sublessee on the Expiration Date; (d) each sublease has a term
which expires on or prior to the Scheduled Expiration Date (or, if longer,
includes a provision that the sublease terminates on the Expiration Date if such
Expiration Date occurs prior to the Scheduled Expiration Date unless Lessee
purchases the Facility 1 Property on the Expiration Date pursuant to the
Purchase Agreement); (e) each sublease prohibits the sublessee from engaging in
any activities on the Facility 1 Property other than those permitted by
Paragraph 2.04; and (f) no sublease has a Material Adverse Effect. Any sublease
which does not satisfy each of the requirements of the immediately preceding
sentence shall be null and void as to the Lessor Parties and their successor and
assigns. Except for such permitted subleases, Lessee shall not assign any of its
rights or interests under this Agreement to any other Person.
3.09. Utility Charges. Lessee shall pay all charges for electricity,
power, gas, oil, water, telephone, sanitary sewer service and all other
utilities and services to, on or in connection with the Facility 1 Property
during the Term.
3.10. Removal of Facility 1 Property. Lessee shall not remove any
Improvements from the Facility 1 Land or any other Facility 1 Property from the
Facility 1 Land or Improvements, except that, during the Term, Lessee may remove
any Modification or any trade fixture, machinery, equipment, inventory or other
personal property if such Modification or property (a) was not financed by an
Advance, (b) is not required by any applicable Governmental Rule or Insurance
Requirement and (c) is readily removable without impairing the value, utility or
remaining useful life of the Facility 1 Property.
3.11. Compliance with Governmental Rules and Insurance Requirements.
Lessee, at its sole cost and expense, shall (a) comply, and cause its agents,
sublessees, assignees, employees, invitees, licensees, contractors and tenants,
and the Facility 1 Property to comply, with all Governmental Rules and Insurance
Requirements relating to the Facility 1 Property (including the construction,
use, operation, maintenance, repair and restoration thereof, whether or not
compliance therewith shall require structural or extraordinary changes in the
Improvements or interfere with the use and enjoyment of the Facility 1
Property), and (b) procure, maintain and comply with all licenses, permits,
orders, approvals, consents and other authorizations required for the
construction, use, maintenance and operation of the Facility 1 Property and for
the use, operation, maintenance, repair and restoration of the Improvements.
3.12. Permitted Contests. Lessee, at its sole cost and expense, may
contest any alleged Lien or easement on any of the Facility 1 Property or any
alleged Governmental Charge, Indebtedness or other obligation which is payable
by Lessee hereunder to Persons other than the Lessor Parties or which, if
unpaid, would give rise to a Lien on any of the Facility 1 Property, provided
that (a) each such contest is diligently pursued in good faith by appropriate
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
19
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 Participant), 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 Participant); (e) the failure to discharge such Lien or
easement or the failure to pay such Governmental Charge, Indebtedness or
obligation is not otherwise reasonably likely to have a Material Adverse Effect;
and (f) unless Lessee currently is exercising the Term Purchase Option or the
Expiration Date Purchase Option, any such contest is completed and such Lien or
easement is discharged (either pursuant to such proceedings or otherwise) or
such Governmental Charge, Indebtedness or obligation is declared invalid, paid
or otherwise satisfied not later than six (6) months prior to the Scheduled
Expiration Date.
3.13. Lessor Obligations; Right to Perform Lessee Obligations. No Lessor
Party shall have any obligation to (a) maintain, repair or make any improvements
to the Facility 1 Property, (b) maintain any insurance on the Facility 1
Property, (c) perform any other obligation of Lessee under this Agreement or any
other Lessee Obligation, (d) make any expenditure on account of the Facility 1
Property (except to make Advances as required by the Participation Agreement) or
(e) take any other action in connection with the Facility 1 Property, this
Agreement or any other Operative Document, except as expressly provided herein
or in another Operative Document; provided however, that Lessor may, in its sole
discretion and without any obligation to do so, after written notice to Lessee,
perform any Lessee Obligation not performed by Lessee when required. Lessor may
enter the Facility 1 Property or exercise any other right of Lessee under this
Agreement or any other Operative Document to the extent Lessor determines in
good faith that such entry or exercise is reasonably necessary for Lessor to
perform any such Lessee Obligation not performed by Lessee when required. Lessee
shall reimburse Lessor and the other Lessor Parties, within five (5) Business
Days after demand and delivery of written evidence of payment, for all fees,
costs and expenses reasonably incurred by them in performing any such obligation
or curing any Default.
3.14. Inspection Rights. During the Term, Lessee shall permit any Person
designated by Lessor, upon reasonable notice and during normal business hours,
to visit and inspect any of the Facility 1 Property.
20
SECTION 4. EXPIRATION DATE.
4.01. Termination by Lessee Prior to Scheduled Expiration Date. Subject
to the terms and conditions of the Purchase Agreement, Lessee may, on any
Scheduled Rent Payment Date prior to the Scheduled Expiration Date, terminate
this Agreement and purchase the Facility 1 Property pursuant to Section 2 of the
Purchase Agreement. Lessee shall notify Lessor of Lessee's election so to
terminate this Agreement and purchase the Facility 1 Property by delivering to
Agent a Notice of Term Purchase Option Exercise pursuant to and in accordance
with the provisions of Paragraph 2.02 of the Purchase Agreement.
4.02. Surrender of Facility 1 Property. Unless Lessee purchases the
Facility 1 Property on the Expiration Date pursuant to the Purchase Agreement,
Lessee shall vacate and surrender the Facility 1 Property to Lessor on the
Expiration Date in its then-current condition, subject to compliance by Lessee
on or prior to such date of its obligations under this Agreement and the other
Operative Documents (including the completion of all Modifications, the
completion of all permitted contests and the removal of all Liens which are not
Permitted Property Liens of the types described in clauses (i), (ii), (iii) or
(iv) of Subparagraph 3.07(a)).
4.03. Holding Over. If Lessee does not purchase the Facility 1 Property
on the Expiration Date pursuant to the Purchase Agreement but continues in
possession of any portion of the Facility 1 Property after the Expiration Date,
Lessee shall pay rent for each day it so continues in possession, payable upon
demand of Lessor, at a per annum rate equal to the Alternate Rental Rate plus
two percent (2.0%) and shall pay and perform all of its other Lessee Obligations
under this Agreement and the other Operative Documents in the same manner as
though the Term had not ended; provided, however, that this Paragraph 4.03 shall
not be interpreted to permit such holding over or to limit any right or remedy
of Lessor for such holding over.
SECTION 5. DEFAULT.
5.01. Events of Default. The occurrence or existence of any one or more
of the following shall constitute an "Event of Default" hereunder:
(a) Non-Payment. Lessee shall (i) fail to pay on the Expiration
Date any amount payable by Lessee under this Agreement or any other
Operative Document on such date, (ii) fail to pay within five (5)
business days after any Scheduled Rent Payment Date any Base Rent
payable on such Scheduled Rent Payment Date (other than the Base Rent
payable on the Expiration Date) or (iii) fail to pay within five (5)
business days after the same becomes due, any Supplemental Rent or other
amount required under the terms of this Agreement or any other Operative
Document (other than any such amount payable on the Expiration Date or
Base Rent); or
(b) Specific Defaults. Lessee or any of its Subsidiaries shall
fail to observe or perform any covenant, obligation, condition or
agreement set forth in Subparagraph 3.01(d), Paragraph 3.03 or
Subparagraph 3.07(a) hereof, or in Paragraph 5.02 or Paragraph 5.03 of
the Participation Agreement; or
21
(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 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
22
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
(i) Operative Documents. Any Operative Document or any material
term thereof shall cease to be, or be asserted by Lessee or any of its
Subsidiaries not to be, a legal, valid and binding obligation of Lessee
or any of its Subsidiaries enforceable in accordance with its terms; or
(j) ERISA. Any Reportable Event which constitutes grounds for the
termination of any Employee Benefit Plan by the PBGC or for the
appointment of a trustee by the PBGC to administer any Employee Benefit
Plan shall occur, or any Employee Benefit Plan shall be terminated
within the meaning of Title IV of ERISA or a trustee shall be appointed
by the PBGC to administer any Employee Benefit Plan; or
(k) Change of Control. Any Change of Control shall occur; or
(l) Ground Lease Agreement. Lessee shall fail to observe or
perform any agreement, term or condition contained in the Ground Lease
Agreement 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
23
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
(m) Stanford Lease. Any "Event of Default" (as defined in the
Stanford Lease) shall occur or exist under the Stanford Lease; or
(n) Material Adverse Effect. Any other event(s) or condition(s)
which is(are) reasonably likely to have a Material Adverse Effect shall
occur and be continuing or exist.
5.02. General Remedies. In all cases, upon the occurrence or existence
of any Event of Default and at any time thereafter unless such Event of Default
is waived, Lessor may, with the consent of the Required Participants, or shall,
upon instructions from the Required Participants, exercise any one or more of
the following rights and remedies (except that the remedy set forth in the first
sentence of Subparagraph 5.02(a) shall be automatic):
(a) Termination of Commitments. If such Event of Default is an
Event of Default of the type described in Subparagraph 5.01(f) or
Subparagraph 5.01(g) affecting Lessee, immediately and without notice,
the obligation of Lessor to make Advances and the obligations of the
Participants to fund Advances shall automatically terminate. If such
Event of Default is any other Event of Default, Lessor may by written
notice to Lessee, terminate the obligation of Lessor to make Advances
and the obligations of the Participants to fund Advances.
(b) Appointment of a Receiver. Lessor may apply to any court of
competent jurisdiction for, and obtain appointment of, a receiver for
the Facility 1 Property.
(c) Specific Performance. Lessor may bring an action in any court
of competent jurisdiction to obtain specific enforcement of any of the
covenants or agreements of Lessee in this Agreement or any of the other
Operative Documents.
(d) Collection of Issues and Profits. Lessor may collect Issues
and Profits as provided in Subparagraph 2.07(c) and apply the proceeds
to pay Lessee Obligations.
(e) Protection of Facility 1 Property. Lessor may enter, take
possession of, manage and operate all or any part of the Facility 1
Property or take any other actions which it reasonably determines are
necessary to protect the Facility 1 Property and the rights and remedies
of the Lessor Parties (other than Novellus Participant) under this
Agreement and the other Operative Documents, including (i) taking and
possessing all of Lessee's books and records relating to the Facility 1
Property; (ii) entering into, enforcing, modifying, or canceling
subleases on such terms and conditions as Lessor may consider proper;
(iii) obtaining and evicting tenants; (iv) fixing or modifying sublease
rents; (v) collecting and receiving any payment of money owing to
Lessee; (vi) completing any unfinished Improvements; and/or (vii)
contracting for and making repairs and alterations.
(f) Other Rights and Remedies. In addition to the specific rights
and remedies set forth above in this Paragraph 5.02 and in Paragraph
5.03 and Paragraph
24
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 Expiration Date exceeds the amount of such rental loss for the
same period that Lessee proves could reasonably be avoided.
(b) Continuation of Lease. Lessor may exercise the rights and
remedies provided by California Civil Code Section 1951.4, including the
right to continue this Agreement in effect after Lessee's breach and
abandonment and recover Rent as it becomes due. Acts of maintenance or
preservation, efforts to relet the Facility 1 Property, the appointment
of a receiver upon Lessor's initiative to protect its interest under
this Agreement or withholding consent to or terminating a sublease shall
not of themselves constitute a termination of Lessee's right to
possession.
(c) Removal and Storage of Facility 1 Property. Lessor may enter
the Facility 1 Property and remove therefrom all Persons and property,
store such property in a public warehouse or elsewhere at the cost of
and for the account of Lessee and sell such property and apply the
proceeds therefrom pursuant to applicable California law.
25
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 California
Uniform Commercial Code.
(c) Judicial Foreclosure. Lessor may bring an action in any court
of competent jurisdiction to foreclose the security interest in the
Facility 1 Property granted to Lessor by this Agreement or any of the
other Operative Documents.
(d) Power of Sale. Lessor may cause some or all of the Facility 1
Property, including any Personal Property Collateral, to be sold or
otherwise disposed of in any combination and in any manner permitted by
applicable Governmental Rules.
(i) Sales of Personal Property. Lessor may dispose of any
Personal Property Collateral separately from the sale of Real
Property Collateral, in any manner permitted by Division 9 of the
California Uniform Commercial Code, including any public or
private sale, or in any manner permitted by any other applicable
Governmental Rule. Any proceeds of any such disposition shall not
cure any Event of Default or reinstate any Lessee Obligation for
purposes of Section 2924c of the California Civil Code. In
connection with any such sale or other disposition, Lessee agrees
that the following procedures constitute a commercially
reasonable sale:
(A) Lessor shall mail written notice of the sale to
Lessee not later than thirty (30) days prior to such sale.
(B) Once per week during the three (3) weeks
immediately preceding such sale, Lessor will publish
notice of the sale in a local daily newspaper of general
circulation.
(C) Upon receipt of any written request, Lessor
will make the Facility 1 Property available to any bona
fide prospective purchaser for inspection during
reasonable business hours.
26
(D) Notwithstanding, Lessor shall be under no
obligation to consummate a sale if, in its judgment, none
of the offers received by it equals the fair value of the
Facility 1 Property offered for sale.
(E) If Lessor so requests, Lessee shall assemble
all of the Personal Property Collateral and make it
available to Lessor at the site of the Facility 1 Land.
Regardless of any provision of this Agreement or any other
Operative Document, Lessor shall not be considered to have
accepted any property other than cash or immediately
available funds in satisfaction of any Lessee Obligation,
unless Lessor has given express written notice of its
election of that remedy in accordance with California
Uniform Commercial Code Section 9621.
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 Facility 1
Property which consists solely of Real Property Collateral in any
manner then permitted by applicable Governmental Rules, including
without limitation a nonjudicial trustee's sale pursuant to
California Civil Code Section 2924 et seq. In its discretion,
Lessor may also or alternatively choose to dispose of some or all
of the Facility 1 Property, in any combination consisting of both
Real Property Collateral and Personal Property Collateral,
together in one sale to be held in accordance with the law and
procedures applicable to real property, as permitted by Section
9604 of the California Uniform Commercial Code. Lessee agrees
that such a sale of Personal Property Collateral together with
Real Property Collateral constitutes a commercially reasonable
sale of the Personal Property Collateral. (For purposes of this
power of sale, either a sale of Real Property Collateral alone,
or a sale of both Real Property Collateral and Personal Property
Collateral together in accordance with California Uniform
Commercial Code Section 9604, will sometimes be referred to as a
"Lessor's Sale.")
(A) Before any Lessor's Sale, Lessor shall give
such notice of default and election to sell as may then be
required by applicable Governmental Rules.
(B) When all time periods then legally mandated
have expired, and after such notice of sale as may then be
legally required has been given, Lessor shall sell the
property being sold at a public auction to be held at the
time and place specified in the notice of sale.
(C) Neither Lessor nor Agent shall have any
obligation to make demand on Lessee before any Lessor's
Sale.
27
(D) From time to time in accordance with then
applicable law, Lessor may postpone any Lessor's Sale by
public announcement at the time and place noticed for that
sale.
(E) At any Lessor's Sale, Lessor shall sell to the
highest bidder at public auction for cash in lawful money
of the United States.
(F) Lessor shall execute and deliver to the
purchaser(s) a deed or deeds conveying the Facility 1
Property being sold without any covenant or warranty
whatsoever, express or implied. The recitals in any such
deed of any matters or facts, including any facts bearing
upon the regularity or validity of any Lessor's Sale,
shall be conclusive proof of their truthfulness. Any such
deed shall be conclusive against all Persons as to the
facts recited in it.
(e) Foreclosure Sales.
(i) Single or Multiple. If the Facility 1 Property
consists of more than one lot, parcel or item of property, Lessor
may:
(A) Designate the order in which the lots, parcels
and/or items shall be sold or disposed of or offered for
sale or disposition; and
(B) Elect to dispose of the lots, parcels and/or
items through a single consolidated sale or disposition to
be held or made under the power of sale granted in
Subparagraph 5.04(d), or in connection with judicial
proceedings, or by virtue of a judgment and decree of
foreclosure and sale; or through two or more such sales or
dispositions; or in any other manner Lessor may deem to be
in its best interests (any such sale or disposition, a
"Foreclosure Sale;" any two or more, "Foreclosure Sales").
If Lessor chooses to have more than one Foreclosure Sale, Lessor
at its option may cause the Foreclosure Sales to be held
simultaneously or successively, on the same day, or on such
different days and at such different times and in such order as
it may deem to be in its best interests. No Foreclosure Sale
shall terminate or affect the security interests granted to
Lessor in the Facility 1 Property by this Agreement on any part
of the Facility 1 Property which has not been sold, until all of
the Lessee Obligations have been paid in full.
(ii) Third Party Bids and Credit Bids. At any Foreclosure
Sale, any Person, including any Lessor Party, may bid for and
acquire the Facility 1 Property or any part of it to the extent
permitted by then applicable Governmental Rules. Instead of
paying cash for the Facility 1 Property, Lessor (and no other
Lessor Party) may settle for the purchase price by crediting the
sales price of the Facility 1 Property against the Lessee
Obligations in any order and proportions as Lessor in its sole
discretion may choose.
28
5.05. [Reserved] .
5.06. 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.
5.07. 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.
5.08. 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.
5.06 SNDA. Lessor shall be bound by the terms of the Subordination,
Non-Disturbance and Attornment Agreement, dated as of November 19, 1998, entered
into between Cooley Godward LLP and Lessor, and recorded on December 1, 1998 in
the Official Records of Santa Clara County, California as Instrument 14528612,
as if this Lease Agreement were the "Security Instrument" referred to therein.
29
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
Participant) in exercising any right hereunder shall operate as a waiver thereof
or of any other right nor shall any single or partial exercise of any such right
preclude any other further exercise thereof or of any other right. Unless
otherwise specified in any such waiver or consent, a waiver or consent given
hereunder shall be effective only in the specific instance and for the specific
purpose for which given.
6.03. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the Lessor Parties and Lessee and their permitted
successors and assigns; provided, however, that the Lessor Parties and Lessee
shall not sell, assign or delegate their respective rights and obligations
hereunder except as provided in the Participation Agreement.
6.04. No Third Party Rights. Nothing expressed in or to be implied from
this Agreement is intended to give, or shall be construed to give, any Person,
other than the Lessor Parties and Lessee and their permitted successors and
assigns, any benefit or legal or equitable right, remedy or claim under or by
virtue of this Agreement or under or by virtue of any provision herein.
6.05. Partial Invalidity. If at any time any provision of this Agreement
is or becomes illegal, invalid or unenforceable in any respect under the law or
any jurisdiction, neither the legality, validity or enforceability of the
remaining provisions of this Agreement nor the legality, validity or
enforceability of such provision under the law of any other jurisdiction shall
in any way be affected or impaired thereby.
6.06. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of California without reference to
conflicts of law rules.
6.07. Counterparts. This Agreement may be executed in any number of
identical counterparts, any set of which signed by all the parties hereto shall
be deemed to constitute a complete, executed original for all purposes.
6.08. Nature of Lessee's Obligations.
(a) Independent Obligation. The obligation of Lessee to pay the
amounts payable by Lessee under this Agreement and the other Operative
Documents and to perform the other Lessee Obligation are absolute,
unconditional and irrevocable obligations which are separate and
independent of the obligations of the Lessor Parties under this
Agreement and the other Operative Documents and all other events and
circumstances, including the events and circumstances set forth in
Subparagraph 6.08(c).
30
(b) No Termination or Abatement. This Agreement and the other
Operative Documents and Lessee's obligation to pay Rent and to pay and
perform all other Lessee Obligations shall continue in full force and
effect without abatement notwithstanding the occurrence or existence of
any event or circumstance, including any event or circumstance set forth
in Subparagraph 6.08(c).
(c) Full Payment and Performance. Lessee shall make all payments
under this Agreement and the other Operative Documents in the full
amounts and at the times required by the terms of this Agreement and the
other Operative Documents without setoff, deduction or reduction of any
kind and shall perform all other Lessee Obligations as and when
required, without regard to any event or circumstances whatsoever,
including (i) the condition of the Facility 1 Property (including any
Improvements to the Facility 1 Property made prior to the Commencement
Date or during the Term); (ii) title to the Facility 1 Property
(including possession of the Facility 1 Property by any Person or the
existence of any Lien or any other right, title or interest in or to any
of the Facility 1 Property in favor of any Person); (iii) the value,
habitability, usability, design, operation or fitness for use of the
Facility 1 Property; (iv) the availability or adequacy of utilities and
other services to the Facility 1 Property; (v) any latent, hidden or
patent defect in the Facility 1 Property; (vi) the zoning or status of
the Facility 1 Property or any other restrictions on the use of the
Facility 1 Property; (g) the economics of the Facility 1 Property; (vii)
any Casualty or Condemnation; (viii) the compliance of the Facility 1
Property with any applicable Governmental Rule or Insurance Requirement;
(ix) any failure by any Lessor Party to perform any of its obligations
under this Agreement or any other Operative Document; or (x) the
exercise by any Lessor Party of any of its remedies under this Agreement
or any other Operative Document; provided, however, that this Paragraph
6.08 shall not abrogate any right which Lessee may have to recover
damages from any Lessor Party for any material breach by such Lessor
Party of its obligations under this Agreement or any other Operative
Document to the extent permitted hereunder or thereunder.
[The signature page follows.]
31
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
32
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]
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]
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 Term, "all risk" property insurance
covering loss or damage in amounts approved by Lessor, Agent and Required
Participants excluding earthquake and flood coverage. Notwithstanding the
foregoing, the maximum amount of any casualty insurance policy required to be
maintained shall not exceed the Outstanding Lease Amount under Facility 1 less
the Outstanding Tranche A Participation Amount held by Novellus Participant
under Facility 1.
3.03-1
EXHIBIT A
FACILITY 1 LAND
[PARCEL 1 - 3930, 3960 AND 3970 NORTH FIRST STREET]
REAL PROPERTY in the City of San Jose, County of Santa Clara, State of
California, described as follows:
PARCEL ONE:
PCL. 1 as shown on that certain Parcel Map filed in the office of the Recorder
of the County of Santa Clara, State of California on August 18, 1983 in Book 516
of Maps, page(s) 34 and 35, Santa Clara County Records.
And, excepting therefrom, the following area:
Beginning at the Northeasterly corner of said Parcel 1; thence North 52(Degree)
27' 12" West, 409.24 feet along the common line of Parcel 1 and Parcel 2 as
shown on said Parcel Map to a common corner thereof; thence leaving said common
line, along the Southerly prolongation of a common line of said Parcels, South
19(Degree) 40' 54" West, 32.25 feet; thence South 52(Degree) 22' 44" East,
399.34 feet, to a point on the Southeasterly line of said Parcel 1; thence North
37(Degree) 32' 59" East, 31.22 feet along said Southeasterly line to the Point
of Beginning;
EXCEPTING THEREFROM ANY IMPROVEMENTS SITUATED ON THE ABOVE-DESCRIBED PROPERTY,
WHICH IMPROVEMENTS ARE, AND SHALL REMAIN, REAL PROPERTY.
PARCEL ONE-A:
A non-exclusive easement for ingress and egress over PCL.2, as said parcel is
shown on the Parcel Map recorded in Book 516 of Maps, at pages 34 and 35, Santa
Clara County Records, as granted in an instrument recorded May 23, 1985 in Book
J353, page 1565 and being more particularly described as follows:
Strip 1
A strip of land 26.00 feet wide extending entirely across said PCL. 2 and lying
13.00 feet on each side of a line described as follows:
Beginning at the most Easterly corner of said PCL. 2, said corner being on the
Southwesterly line of Rose Orchard Way; thence along said Southwesterly line N.
59(Degree) 57' 13" W., 38.00 feet to the true point of beginning of said strip
of land; thence S. 30(Degree) 02' 47" W., 28.14 feet; thence S. 37(Degree) 32'
59" W., 423.45 feet to the Southwesterly line of said PCL. 2.
Strip 2
A-1
A strip of land 26.00 feet wide extending entirely across said PCL. 2 and lying
13.00 feet on each side of a line described as follows:
Beginning at the most Northerly corner of said PCL. 2, said corner being on the
Southwesterly line of Rose Orchard Way; thence along said Southwesterly line S.
59(Degree) 57' 13" E., 388.93 feet to the true point of beginning of said strip
of land; thence S. 30(Degree) 02' 47" W., 33.86 feet; thence S. 37(Degree) 32'
48" W., 335.99 feet to the Southwesterly line of said PCL. 2.
Strip 3
A strip of land 26.00 feet wide extending Southwesterly from the Southwesterly
line of said Rose Orchard Way to the Northwesterly line of the above described
and designated Strip 2 and lying 13.00 feet on each side of a line described as
follows:
Beginning at the most Northerly corner of said PCL. 2, said corner being on the
Southwesterly line of Rose Orchard Way; thence along said Southwesterly line S.
59(Degree) 57' 13" E., 30.78 feet to the true point of beginning of said strip
of land; thence S. 30(Degree) 02' 47" W., 26.86 feet; thence S. 37(Degree) 32'
48" W., 262.18 feet; thence S. 52(Degree) 27' 12" E. 343.00 feet to the
Northwesterly line of the above described and designated Strip 2.
EXCEPTING THEREFROM ANY IMPROVEMENTS SITUATED ON THE ABOVE-DESCRIBED PROPERTY,
WHICH IMPROVEMENTS ARE, AND SHALL REMAIN, REAL PROPERTY.
PARCEL ONE-B:
A non-exclusive easement for Landscaping, Lighting and Irrigation Facilities
over PCL. 2, as said parcel is shown on the Parcel Map recorded in Book 516 of
Maps, at pages 34 and 35, Santa Clara County Records, as granted in an
instrument recorded May 23, 1985 in Book J353, page 1565 and being more
particularly described as follows:
A strip of land 10.00 feet wide extending Southeasterly from the Northwesterly
line of said PCL. 1 and PCL. 2 and lying 5.00 feet on each side of a line that
begins at the most Northerly corner of said PCL. 1 and runs thence along the
Northeasterly line of said PCL. 1, S. 52(Degree) 27' 12" E. 375.00 feet.
Excepting Therefrom that portion lying within the bounds of Parcel One mentioned
hereinabove.
EXCEPTING THEREFROM ANY IMPROVEMENTS SITUATED ON THE ABOVE-DESCRIBED PROPERTY,
WHICH IMPROVEMENTS ARE, AND SHALL REMAIN, REAL PROPERTY.
A-2
APN: 097-79-009 & x010
ARB: 97-3-4.01 & 14.01
A-3
[PARCEL 2 - 4145 NORTH FIRST STREET AND 55 VISTA MONTANA]
REAL PROPERTY in the City of San Jose, County of Santa Clara, State of
California, described as follows:
All of Lot 43, as shown on that certain Map entitled Tract No. 7526, which Map
was filed for record in the office of the Recorder of the County of Santa Clara,
State of California on October 27, 1983, in Book 520 of Maps page(s) 28, 29 and
30.
EXCEPTING THEREFROM ANY IMPROVEMENTS SITUATED ON THE ABOVE-DESCRIBED PROPERTY,
WHICH IMPROVEMENTS ARE, AND SHALL REMAIN, REAL PROPERTY.
APN: 097-52-013
A-4
[PARCEL 4 - 81 VISTA MONTANA]
REAL PROPERTY in the City of San Jose, County of Santa Clara, State of
California, described as follows:
PARCEL ONE:
Lot 65, as shown on that certain Map entitled Tract No. 7649, which Map was
filed for record in the office of the Recorder of the County of Santa Clara,
State of California on August 27, 1984, in Book 533 of Maps page(s) 17 and 18.
EXCEPTING THEREFROM ANY IMPROVEMENTS SITUATED ON THE ABOVE-DESCRIBED PROPERTY,
WHICH IMPROVEMENTS ARE, AND SHALL REMAIN, REAL PROPERTY.
PARCEL TWO:
A non-exclusive easement for private storm drainage over that portion of Lot 64
as shown on said Tract No. 7649 designated as "8' P.S.D.E.".
EXCEPTING THEREFROM ANY IMPROVEMENTS SITUATED ON THE ABOVE-DESCRIBED PROPERTY,
WHICH IMPROVEMENTS ARE, AND SHALL REMAIN, REAL PROPERTY.
APN: 097-52-028
A-5
[PARCEL 8 - 3940 AND 3950 NORTH FIRST STREET]
REAL PROPERTY in the City of San Jose, County of Santa Clara, State of
California, described as follows:
PARCEL ONE:
Parcel 2 as shown on that certain Parcel Map filed in the office of the Recorder
of the County of Santa Clara, State of California on August 18, 1983 in Book 516
of Maps, page(s) 34 and 35, Santa Clara County Records.
And, in addition thereto, the following area:
Beginning at the Southeasterly corner of said Parcel 2, thence North 52(Degree)
27' 12" West, 409.24 feet along the common line of Parcel 1 and Parcel 2 as
shown on said Parcel Map to a common corner thereof; thence leaving said common
line, along the Southerly prolongation of a common line of said Parcels, South
19(Degree) 40' 54" West, 32.25 feet; thence South 52(Degree) 22' 44" East,
399.34 feet to a point on the Southeasterly line of said Parcel 1; thence North
37(Degree) 32' 59" East, 31.22 feet along said Southeasterly line to the Point
of Beginning.
EXCEPTING THEREFROM ANY IMPROVEMENTS SITUATED ON THE ABOVE-DESCRIBED PROPERTY,
WHICH IMPROVEMENTS ARE, AND SHALL REMAIN, REAL PROPERTY.
PARCEL ONE-A:
A non-exclusive easement for ingress and egress over PCL. 1, as said parcel is
shown on the Parcel Map recorded in Book 516 of Maps, at pages 34 and 35, Santa
Clara County Records, as granted in an instrument recorded May 23, 1985 in Book
J353, page 1565 and being more particularly described as follows:
Strip 1
A strip of land 26.00 feet wide extending entirely across said PCL. 1 and lying
13.00 feet on each side of a line as follows:
Beginning at the Southerly corner of said PCL. 1, said corner being on the
Northeasterly line of North First Street; thence along said Northeasterly line
N. 52(Degree) 27' 12" W., 34.00 feet to the true point of beginning of said
strip of land; thence N. 37(Degree) 32' 59" E., 540.00 feet to the Northeasterly
line of said PCL. 1.
Strip 2
A-6
A strip of land 40.00 feet wide extending entirely across said PCL. 1 and lying
contiguous to and Southeasterly of a line described as follows:
Beginning at the most Southerly corner of said PCL. 1, said corner being on the
Northeasterly line of North First Street; thence along said Northeasterly line
N. 52(Degree) 27' 12" W., 429.25 feet to the true point of beginning of said
strip of land; thence N. 37(Degree) 32' 48" E., 600.00 feet to the Northeasterly
line of said PCL. 1; the Northerly terminus of said 40 foot wide strip of land
being the Northeasterly line of said PCL. 1.
Strip 3
A strip of land 26.00 feet wide, extending Northeasterly from the Southwesterly
line of said PCL. 1 to the Northwesterly line of the above described and
designated Strip 2 and lying 13.00 feet on each side of a line described as
follows:
Beginning at the Westerly corner of said PCL. 1, said corner being on the
Northeasterly line of North First Street; thence along said Northeasterly line
S. 52(Degree) 27' 12" E., 34.00 feet to the true point of beginning of said
strip of land; thence N. 37(Degree) 32' 48" E. 566.00 feet; thence S. 52(Degree)
27' 12" E., 355.25 feet to said Northwesterly line of said Strip 2.
Strip 4
A strip of land 13.00 feet wide lying contiguous to and Northwesterly of the
Northwesterly line of the above described and designated Strip 2 and extending
Southwesterly from the Northeasterly line of said PCL. 1 approximately 21.00
feet to the Northeasterly line of the above described and designated Strip 3.
EXCEPTING THEREFROM ANY IMPROVEMENTS SITUATED ON THE ABOVE-DESCRIBED PROPERTY,
WHICH IMPROVEMENTS ARE, AND SHALL REMAIN, REAL PROPERTY.
PARCEL ONE-B:
The right from time to time to construct, install, maintain, replace, remove,
and use storm drain sewers, together with a right of way therefor, over a
portion of PCL. 1 as said parcel is shown on the Parcel Map recorded in Book 516
of Maps, at pages 34 and 35, Santa Clara County Records, as granted in an
instrument recorded May 23, 1985 in Book J353, page 1565 and being more
particularly described as follows:
Strip 1
A strip of land 10.00 feet wide extending entirely across said PCL. 1 and lying
5.00 feet on each side of a line described as follows:
A-7
Beginning at the most Westerly corner of said PCL. 1 said corner being on the
Northeasterly line of North First Street; thence along said Northeasterly line
S. 52(Degree) 27' 12" E., 402.75 feet to the true point of beginning of said
strip of land; thence along the centerline of a existing storm drain line the
following courses: thence N. 37(Degree) 32' 48" E., 28.00 feet to a point herein
designated Point A; thence N. 52(Degree) 27' 12" W., 278.00 feet; thence N.
00(Degree) 51' 00" E., 198.30 feet; thence N. 37(Degree) 32' 33" E., 279.75
feet; thence S. 51(Degree) 19' 51" E., 89.02 feet; thence N. 50(Degree) 06' 47"
E., 133.18 feet; thence N. 37(Degree) 32' 48" E., 5.00 feet to the Northeasterly
line of said PCL 1.
Strip 2
A strip of land 10 feet wide extending Northeasterly from the Northeasterly line
of the above described and designated Strip 1 and lying 5.00 feet on each side
of a line which begins at said Point A; thence along the centerline of an
existing storm drain line the following courses: thence N. 26(Degree) 55' 37"
E., 154.65 feet; thence N. 32(Degree) 55' 53" E., 96.31 feet; thence N.
43(Degree) 21' 28" E., 113.58 feet; thence N. 54(Degree) 44' 21" E., 105.72 feet
to a point herein designated as Point B; thence S. 41(Degree) 57' 14" E., 65.85
feet; thence N. 37(Degree) 32' 48" E., 62.00 feet to the Northeasterly line of
said PCL 2.
Strip 3
A strip of land 5.00 feet wide lying contiguous to and Southwesterly of the
Northeasterly line of said PCL. 1 and extending Southeasterly from the
Southeasterly line of the above described and designated Strip 2 approximately
225 feet.
Strip 4
A strip of land 10.00 feet wide extending Northeasterly from the Northeasterly
line of the above described and designated Strip 2 to the Northeasterly line of
said PCL. 1 and lying 5.00 feet on each side of a line that begins at said Point
B; thence along the centerline of an existing storm drain line N. 37(Degree) 32'
48" E., 50.00 feet to the Northeasterly line of said PCL. 1.
EXCEPTING THEREFROM ANY IMPROVEMENTS SITUATED ON THE ABOVE-DESCRIBED PROPERTY,
WHICH IMPROVEMENTS ARE, AND SHALL REMAIN, REAL PROPERTY.
PARCEL ONE-C:
The right from time to time to construct, install, inspect, maintain, replace,
remove and use any and all Public Service Facilities necessary or useful,
together with a right of way therefor, over a portion of PCL. 1 as said parcel
is shown on the Parcel Map recorded in Book 516 of Maps, at pages 34 and 35,
Santa Clara County Records, as granted in an instrument recorded May 23, 1985 in
Book J353, page 1565 and being more particularly described as follows:
Strip 5
A-8
A strip of land 15.00 feet wide extending entirely across said PCL. 1 and lying
7.50 feet on each side of a line described as follows:
Beginning at the most Southerly corner of said PCL. 1, said corner being on the
Northeasterly line of North First Street; thence along said Northeasterly line
N. 52(Degree) 27' 12" W., 60.50 feet to the true point of beginning of said
strip of land; thence N. 37(Degree) 32' 59" E., 394.80 feet to a point herein
designated Point C; thence N. 37(Degree) 32' 59" E., 105.20 feet; thence N.
7(Degree) 27' 01" W., 56.57 feet to the Northeasterly line of said PCL. 1.
Strip 6
A strip of land 15.00 feet wide extending Northerly from the Northerly line of
the above described and designated Strip 5 to the Northeasterly line of said
PCL. 1 and lying 7.5 feet on each side of a line that begins at said Point C;
thence N. 30(Degree) 01' 00" E., 59.5 feet; thence N. 8(Degree) 41' 00" E.,
98.44 feet to the Northeasterly line of said PCL. 1.
Strip 7
A strip of land 15.00 feet wide extending entirely across said PCL. 1 and lying
7.5 feet and each side of a line described as follows:
Beginning at the most Westerly corner of said PCL. 1 said corner being on the
Northeasterly line of North First Street; thence along said Northeasterly line
S. 52(Degree) 27' 12" E., 30.00 feet to the true point of beginning of said
strip of land; thence N. 37(Degree) 32' 33" E., 600.00 feet to the Northeasterly
line of said PCL 1.
Strip 8
That area located within those portions of PCL.1, of the Parcel Map mentioned
hereinabove, lying within the easements designated as "P.S.E.", as shown on said
Parcel Map.
EXCEPTING THEREFROM ANY IMPROVEMENTS SITUATED ON THE ABOVE-DESCRIBED PROPERTY,
WHICH IMPROVEMENTS ARE, AND SHALL REMAIN, REAL PROPERTY.
PARCEL ONE-D:
A non-exclusive easement for Landscaping, Lighting and Irrigation Facilities
over PCL. 1, as said parcel is shown on the Parcel Map recorded in Book 516 of
Maps, at pages 34 and 35, Santa Clara County Records, as granted in an
instrument recorded May 23, 1985 in Book J353, page 1565 and being more
particularly described as follows:
A strip of land 10.00 feet wide extending Southeasterly from the Northwesterly
line of said PCL. 1 and PCL. 2 and lying 5.00 feet on each side of a line that
begins at the most Northerly corner of
A-9
said PCL. 1 and runs thence along the Northeasterly line of said PCL. 1, S.
52(Degree) 27' 12" E. 375.00 feet.
Excepting therefrom that portion lying within the bounds of Parcel 2 mentioned
hereinabove.
EXCEPTING THEREFROM ANY IMPROVEMENTS SITUATED ON THE ABOVE-DESCRIBED PROPERTY,
WHICH IMPROVEMENTS ARE, AND SHALL REMAIN, REAL PROPERTY.
APN: 097-79-004, x010
ARB: 97-3-x4, x4.01
A-10
EXHIBIT B
RELATED GOODS
NONE
B-1
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 September 21, 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 September 21, 2001 (the "Facility 1
Lease Agreement") between Lessee and Lessor. Unless otherwise indicated, all
terms defined in the Participation Agreement have the same respective meanings
when used herein.
2. Lessee hereby agrees that the description of "Related Goods" set
forth in Exhibit B to the Lease Agreement shall be supplemented by adding
thereto the Related Goods described in Attachment 1 hereto. Lessee hereby
accepts all such Related Goods and agrees that such Related Goods constitute
part of the Facility 1 Property subject to the Lease Agreement.
IN WITNESS WHEREOF, Lessee has executed this Supplement to Exhibit B on
the date set forth above.
LESSEE: NOVELLUS SYSTEMS, INC.
By: ________________________________________
Name: __________________________________
Title: _________________________________
LESSOR: ABN AMRO LEASING, INC.
By: ________________________________________
Name: __________________________________
Title: _________________________________
B(1)-1
ATTACHMENT 1
TO
SUPPLEMENT TO EXHIBIT B
B (Sch-1)-1
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 September 21, 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 September 21, 2001 (the "Facility 1
Lease Agreement") between Lessee and Lessor. Unless otherwise indicated, all
terms defined in the Participation Agreement have the same respective meanings
when used herein.
2. [Insert one of the following as appropriate]
[Pursuant to Subparagraph 2.03(a) of the Facility 1 Lease
Agreement, Lessee hereby irrevocably selects a new Rental Period for a Portion
of the Outstanding Lease Amount as follows:
(a) The Portion for which a new Rental Period is to be selected
is the Portion in the amount of $__________ with a current Rental Period
which began on ________, ____ and ends on __________, ____; and
(b) The next Rental Period for such Portion shall be __________
month[s].]
[Pursuant to Subparagraph 2.03(a) of the Facility 1 Lease
Agreement, Lessee hereby irrevocably elects to divide a Portion of the
Outstanding Lease Amount into further Portions as follows:
(a) The Portion which is to be divided is the Portion in the
amount of $__________ with a current Rental Period which began on
________, ____ and ends on __________, ____; and
C-1
(b) On the last day of the current Rental Period for such
Portion, such Portion is to be divided into the following Portions with
the following initial Rental Periods:
Portion Rental Period
------------ ----------------
$___________ _______ month[s]
$___________ _______ month[s]
$___________ _______ month[s]
$___________ _______ month[s]]
[Pursuant to Subparagraph 2.03(a) of the Facility 1 Lease
Agreement, Lessee hereby irrevocably elects to combine into a single Portion
certain Portions of the Outstanding Lease Amount as follows:
(a) The Portions which are to be combined are the Portions in the
amounts of $__________, $_________ and $_______, each with a current
Rental Period which ends on __________, ____; and
(b) The initial Rental Period for such newly created Portion
shall be __________ month[s].]
3. Lessee hereby certifies to the Lessor Parties (other than Novellus
Participant) 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
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
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FACILITY 1 LEASE AGREEMENT
DEED OF TRUST WITH ASSIGNMENT OF RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
BETWEEN
NOVELLUS SYSTEMS, INC.
AND
ABN AMRO LEASING, INC.
SEPTEMBER 21, 2001
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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.........................................................................3
2.04. Use..........................................................................5
2.05. As Is Lease..................................................................5
2.06. Nature of Transaction........................................................6
2.07. Security, Etc................................................................6
SECTION 3. OTHER LESSEE AND LESSOR RIGHTS AND OBLIGATIONS..................................8
3.01. Maintenance, Repair, Etc.....................................................8
3.02. Risk of Loss.................................................................9
3.03. Insurance...................................................................10
3.04. Casualty and Condemnation...................................................12
3.05. Taxes.......................................................................16
3.06. Environmental Matters.......................................................16
3.07. Liens, Easements, Etc.......................................................17
3.08. Subletting..................................................................19
3.09. Utility Charges.............................................................19
3.10. Removal of Facility 1 Property..............................................19
3.11. Compliance with Governmental Rules and Insurance Requirements...............19
3.12. Permitted Contests..........................................................19
3.13. Lessor Obligations; Right to Perform Lessee Obligations.....................20
3.14. Inspection Rights...........................................................20
SECTION 4. EXPIRATION DATE................................................................21
4.01. Termination by Lessee Prior to Scheduled Expiration Date....................21
4.02. Surrender of Facility 1 Property............................................21
4.03. Holding Over................................................................21
SECTION 5. DEFAULT........................................................................21
5.01. Events of Default...........................................................21
5.02. General Remedies............................................................24
-i-
TABLE OF CONTENTS
(CONTINUED)
PAGE
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5.03. Lease Remedies..............................................................25
5.04. Loan Remedies...............................................................26
5.05. [Reserved]..................................................................29
5.06. Remedies Cumulative.........................................................29
5.07. No Cure or Waiver...........................................................29
5.08. Exercise of Rights and Remedies.............................................29
5.06 SNDA........................................................................29
SECTION 6. MISCELLANEOUS..................................................................30
6.01. Notices.....................................................................30
6.02. Waivers; Amendments.........................................................30
6.03. Successors and Assigns......................................................30
6.04. No Third Party Rights.......................................................30
6.05. Partial Invalidity..........................................................30
6.06. Governing Law...............................................................30
6.07. Counterparts................................................................30
6.08. Nature of Lessee's Obligations..............................................30
SCHEDULE
3.03 Insurance Requirements
EXHIBITS
A Facility 1 Land (2.01(a))
B Related Goods (2.01(d))
C Notice of Rental Period Selection (2.03(a))
-ii-
An extra section break has been inserted above this paragraph. Do not delete
this section break if you plan to add text after the Table of
Contents/Authorities. Deleting this break will cause Table of
Contents/Authorities headers and footers to appear on any pages following the
Table of Contents/Authorities.
-iii-
FACILITY 2 LEASE AGREEMENT
DEED OF TRUST WITH ASSIGNMENT OF RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
THIS FACILITY 2 LEASE AGREEMENT, DEED OF TRUST WITH ASSIGNMENT OF RENTS,
SECURITY AGREEMENT AND FIXTURE FILING (this "Agreement" herein), dated as of
September 21, 2001 is entered into by and between:
(1) NOVELLUS SYSTEMS, INC., a California corporation ("Lessee");
and
(2) ABN AMRO LEASING, INC., an Illinois corporation, as lessor
under this Agreement and as trustee under the deed of trust contained
herein ("Lessor").
RECITALS
A. Lessee has requested Lessor and the Persons which are
"Participants" under the Participation Agreement referred to in Recital B below
(such Persons to be referred to collectively as the "Participants") to provide
to Lessee a lease facility pursuant to which:
(1) Lessor would (a) lease certain property designated by Lessee
to Lessee, and (b) grant to Lessee the right to purchase such property;
and
(2) The Participants would participate in such lease facility by
(a) funding the advances to be made by Lessor and (b) acquiring
participation interests in the rental and certain other payments to be
made by Lessee.
B. Pursuant to a Participation Agreement dated of even date herewith
(the "Participation Agreement") among Lessee, 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:
1
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. Lessor agrees to lease to Lessee and Lessee
agrees to lease from Lessor the following property (the "Facility 2 Property")
to the extent of Lessor's estate, right, title and interest therein, thereto or
thereunder:
(a) All lots, pieces, tracts and parcels of land described in
Exhibit A(2) (the "Facility 2 Land");
(b) All Improvements now or hereafter located on (i) all lots,
pieces, tracts and parcels of land described in Exhibit A(1) (the
"Facility 1 Land"), but excluding the Facility 1 Land itself, and (ii)
the Facility 2 Land ;
(c) All Appurtenant Rights belonging, relating or pertaining to
the Facility 2 Land or any of the foregoing Improvements;
(d) All Related Goods (including those described in Exhibit B
and in each Exhibit B Supplement), Related Permits and Related
Agreements related to the Facility 2 Land or any of the foregoing
Improvements or Appurtenant Rights; and
(e) All accessions and accretions to and replacements and
substitutions for the foregoing.
(Lessee acknowledges that Lessor's only estate, right, title and interest in
certain of the Facility 2 Land and certain of the other Facility 2 Property is
through the Ground Lease Agreement and is a leasehold interest only.)
2.02. Term.
(a) Original Term. The original term of this Agreement shall
commence on the Closing Date (the "Commencement Date") and shall end on
the date five (5) years after the Closing Date (such date as it may be
extended pursuant to Subparagraph 2.02(b) to be referred to as the
"Scheduled Expiration Date").
2
(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 Participant) consents to any such a request in accordance with
such provision, the then current Scheduled Expiration Date shall be
deemed extended by one (1) year in each instance. Lessee acknowledges
that neither Lessor nor any Participant has any obligation or commitment
(either express or implied) to extend, or consent to the extension of,
the Scheduled Expiration Date at any time.
2.03. Rent.
(a) Base Rent.
(i) Lessee shall pay to Lessor as base rent hereunder
("Base Rent") for each Rental Period for each Portion of the
Outstanding Lease Amount an amount equal to the sum of the
Interest Component and Principal Component for such Rental
Period determined as follows:
(A) "Interest Component" shall mean, with
respect to any Rental Period and Portion, the product of
(1) the Rental Rate for such Rental Period and Portion,
times (2) the amount of such Portion on the first day of
such Rental Period, times (3) a fraction, the numerator
of which is the number of days in such Rental Period and
the denominator of which is 360. If the Rental Rate
shall change during any Rental Period, the Rental Rate
for such Rental Period shall be the weighted average of
the Rental Rates in effect from time to time during such
Rental Period.
(B) "Principal Component" shall mean, with
respect to any Rental Period, zero Dollars ($0.00).
(ii) Prior to the Commitment Termination Date, the
Outstanding Lease Amount shall consist of a single Portion with
the following Rental Periods:
(A) A Rental Period which begins on the
Commencement Date and ends on the first Business Day in
the first calendar month immediately following the month
in which the Commencement Date occurs; and
(B) Each successive Rental Period thereafter
which begins on the last day of the immediately
preceding Rental Period and ends one (1) month
thereafter on the first Business Day of a calendar month
through and including the Commitment Termination Date.
(iii) On and after the Commitment Termination Date,
Lessee may select the number and amounts of the Portions into
which the Outstanding Lease Amount is to be divided and the
Rental Period for each such Portion by delivering to Lessor, at
least three (3) Business Days prior to the Commitment
Termination Date and thereafter the last day of each Rental
Period for a Portion, an irrevocable
3
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
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, if any
Rental Period is less than one (1) month, the Rental
Rate for such Rental Period shall be the Alternate
Rental Rate; provided, however, that with respect to the
initial Rental Period, the Rental Rate may be calculated
(at ABN AMRO's discretion) based upon ABN AMRO's "cost
of funds"; or
(C) Except as otherwise provided in clause (A)
above for Outstanding Tranche A Participation Amounts
and Outstanding Tranche B Participation Amounts, if the
LIBOR Rental Rate is unavailable for any
4
Rental Period pursuant to Subparagraph 2.12(a) or
Subparagraph 2.12(b) of the Participation Agreement, the
Rental Rate for such Rental Period shall be the
Alternate Rental Rate
(v) Lessee shall pay Base Rent in arrears (A) for each
Portion, on the last day of each Rental Period therefor and, in
the case of any Rental Period which exceeds three (3) months,
each day occurring every three (3) months after the first day of
such Rental Period (individually, a "Scheduled Rent Payment
Date") and (B) for all Portions, on the Expiration Date.
(b) Supplemental Rent. Lessee shall pay as supplemental rent
hereunder ("Supplemental Rent") :
(i) All amounts payable by Lessor as rent or otherwise
under the Ground Lease Agreement; and
(ii) All other amounts (other than Base Rent, the
purchase price payable by Lessee for any purchase of the
Facility 2 Property by Lessee pursuant to the Facility 2
Purchase Agreement and the Residual Value Guaranty Amount
payable under the Facility 2 Purchase Agreement) payable by
Lessee under this Agreement and the other Operative Documents.
Lessee shall pay all Supplemental Rent amounts on the dates specified in
this Agreement and the other Operative Documents for the payment of such
amounts or, if no date is specified for the payment of any such amount,
within five (5) Business Days after demand of Lessor or any other Person
to whom such amount is payable; provided, however, that all Supplemental
Rent payable pursuant to clause (i) above during the Commitment Period
shall be capitalized as provided in clause (i) of Subparagraph 2.03(c)
of the Participation Agreement.
2.04. Use. Lessee may use the Facility 2 Property for office, research
and development, warehouse and manufacturing purposes, and for any other purpose
which is in compliance with applicable zoning laws and ordinances for the
Facility 2 Property.
2.05. As Is Lease. Lessee has conducted, or will conduct from time to
time with regard to Facility 2 Property that may be added hereto after the date
hereof, all due diligence which it deems appropriate regarding the Facility 2
Property and agrees that no Lessor Party has any obligation to conduct any such
due diligence. Lessee is leasing the Facility 2 Property "as is, with all
faults" without any representation, warranty, indemnity or undertaking by any
Lessor Party regarding any aspect of the Facility 2 Property, including (a) the
condition of the Facility 2 Property (including any Improvements to the Facility
2 Property made prior to the Commencement Date or during the Term); (b) title to
the Facility 2 Property (including possession of the Facility 2 Property by any
Person or the existence of any Lien or any other right, title or interest in or
to any of the Facility 2 Property in favor of any Person); (c) the value,
habitability, usability, design, operation or fitness for use of the Facility 2
Property; (d) the availability or adequacy of utilities and other services to
the Facility 2 Property; (e) any latent, hidden or patent defect in the Facility
2 Property; (f) the zoning or status of the Facility 2
5
Property or any other restrictions on the use of the Facility 2 Property; (g)
the economics of the Facility 2 Property; (h) any Casualty or Condemnation; or
(i) the compliance of the Facility 2 Property with any applicable Governmental
Rule or Insurance Requirement; provided, however, that Lessor shall be obligated
to remove Lessor Liens to the extent required in Subparagraph 5.04(b) of the
Participation Agreement. Without limiting the generality of the foregoing,
Lessee specifically waives any covenant of quiet enjoyment except as otherwise
provided in Subparagraph 5.04(b) of the Participation Agreement.
2.06. Nature of Transaction. As more fully provided in Paragraph 2.10 of
the Participation Agreement, Lessee and the Lessor Parties intend that the
transaction evidenced by this Agreement and the other Operative Documents
constitute an operating lease in accordance with FASB 13 for accounting purposes
and a loan secured by the Facility 3 Property for all other purposes, including
federal, state and local tax purposes and commercial, real estate and bankruptcy
law purposes.
2.07. Security, Etc. In order to secure the Lessee Obligations and
otherwise to assure the Lessor Parties the benefits hereof in the event that the
transaction evidenced by this Agreement and the other Operative Documents is,
pursuant to the intent of Lessee and the Lessor Parties, treated as a loan for
certain purposes, Lessee hereby makes the following grants and agrees as
follows:
(a) Real Property Security. As security for the Lessee
Obligations under Facility 2, Lessee hereby irrevocably and
unconditionally grants, conveys, transfers and assigns to Lessor, as
trustee under this deed of trust, for the benefit of Lessor, as
beneficiary (in trust for the benefit of the Lessor Parties), with power
of sale and right of entry and possession, all estate, right, title and
interest of Lessee in the following property, whether now owned or
leased or hereafter acquired, (collectively, the "Real Property
Collateral"):
(i) The Facility 2 Land (including Lessee's leasehold
interest therein through the Stanford Lease);
(ii) All Improvements now or hereafter located on the
Facility 1 Land (but excluding the Facility 1 Land itself) or
the Facility 2 Land;
(iii) All Appurtenant Rights belonging, relating or
pertaining to any of the Facility 2 Land or any of the foregoing
Improvements;
(iv) All Subleases and Issues and Profits accruing from
the Facility 2 Land or any of the foregoing Improvements or
Appurtenant Rights to the extent that such Subleases and Issues
and Profits constitute real property;
(v) All Related Goods, Related Agreements and Related
Permits related to any of the Facility 2 Land or any of the
foregoing Improvements or Appurtenant Rights to the extent that
such Related Goods, Related Agreements and Related Permits
constitute real property;
6
(vi) All other Facility 2 Property to the extent that
such property constitutes real property; and
(vii) All proceeds of the foregoing, including Casualty
and Condemnation Proceeds.
(b) Personal Property Security. As security for the Lessee
Obligations under Facility 2, Lessee hereby irrevocably and
unconditionally assigns and grants to Lessor, for the benefit of the
Lessor Parties, a security interest in all estate, right, title and
interest of Lessee in the following property, whether now owned or
leased or hereafter acquired, (collectively, the "Personal Property
Collateral"):
(i) All Subleases and Issues and Profits accruing from
the Facility 2 Land, any Improvements to the Facility 1 Land or
Facility 2 Land or any Appurtenant Rights to the extent that
such Subleases and Issues and Profits constitute personal
property;
(ii) All Related Goods, Related Agreements and Related
Permits related to the Facility 2 Land or any of the 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 Participant) in connection
with this Agreement or any other Operative Document (including
any Repair and Restoration Account);
(iv) All other Facility 2 Property to the extent such
Facility 2 Property constitutes personal property; and
(v) All proceeds of the foregoing, including Casualty
and Condemnation Proceeds.
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
California Commercial Code with respect to the Related Goods which are
or are to become fixtures on the Facility 2 Land or Facility 2
Improvements. The mailing addresses of Lessee and of Lessor from which
information concerning security interests hereunder may be obtained are
as set forth on 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
7
now owned or hereafter acquired. This is a present and absolute
assignment, not an assignment for security purposes only, and Lessor's
right to the Subleases and Issues and Profits is not contingent upon,
and may be exercised without possession of, the Facility 2 Property.
(i) If no Event of Default has occurred and is
continuing, Lessee shall have a revocable license to collect and
retain the Issues and Profits as they become due. Upon the
occurrence and during the continuance of an Event of Default,
such license shall automatically terminate, and Lessor may
collect and apply the Issues and Profits pursuant to
Subparagraph 5.02(d) without further notice to Lessee or any
other Person and without taking possession of the Facility 2
Property. All Issues and Profits thereafter collected by Lessee
shall be held by Lessee as trustee in a constructive trust for
the benefit of Lessor. Lessee hereby irrevocably authorizes and
directs the sublessees under the Subleases, without any need on
their part to inquire as to whether an Event of Default has
actually occurred or is then existing, to rely upon and comply
with any notice or demand by Lessor for the payment to Lessor of
any rental or other sums which may become due under the
Subleases or for the performance of any of the sublessees'
undertakings under the Subleases. Collection of any Issues and
Profits by Lessor shall not cure or waive any default or notice
of default hereunder or invalidate any acts done pursuant to
such notice.
(ii) The foregoing irrevocable assignment shall not
cause any Lessor Party to be (A) a mortgagee in possession; (B)
responsible or liable for (1) the control, care, management or
repair of the Facility 2 Property or for performing any of
Lessee's obligations or duties under the Subleases, (2) any
waste committed on the Facility 2 Property by the sublessees
under any of the Subleases or by any other Persons, (3) any
dangerous or defective condition of the Facility 2 Property, or
(4) any negligence in the management, upkeep, repair or control
of the Facility 2 Property resulting in loss or injury or death
to any sublessee, licensee, employee, invitee or other Person;
or (C) responsible for or impose upon any Lessor Party any duty
to produce rents or profits. No Lessor Party, in the absence of
gross negligence or willful misconduct on its part, shall be
liable to Lessee as a consequence of (y) the exercise or failure
to exercise any of the rights, remedies or powers granted to
Lessor hereunder or (z) the failure or refusal of Lessor to
perform or discharge any obligation, duty or liability of Lessee
arising under the Subleases.
SECTION 3. OTHER LESSEE AND LESSOR RIGHTS AND OBLIGATIONS.
3.01. Maintenance, Repair, Etc.
(a) General. Lessee shall not permit any waste of the Facility 2
Property, except for ordinary wear and tear, and shall, at its sole cost
and expense, maintain the Facility 2 Property in good working order,
mechanical condition and repair and make all necessary repairs thereto,
of every kind and nature whatsoever, whether interior or
8
exterior, ordinary or extraordinary, structural or nonstructural or
foreseen or unforeseen, in each case as required by all applicable
Governmental Rules and Insurance Requirements and on a basis consistent
with the operation and maintenance of commercial properties comparable
in type and location to the Facility 2 Property and in compliance with
prudent industry practice.
(b) [Reserved].
(c) Other Modifications. Lessee, at its sole cost and expense,
may from time to time make alterations, renovations, improvements and
additions to the Facility 2 Property and substitutions and replacements
therefor (collectively, "Modifications"); provided that:
(i) No Modification impairs the value, utility or useful
life of the Facility 2 Property or any part thereof from that
which existed immediately prior to such Modification;
(ii) All Modifications are made expeditiously and, in no
case, unless Lessee currently is exercising either the Term
Purchase Option or the Expiration Date Purchase Option, shall
Modifications remain uncompleted later than six (6) months prior
to the Scheduled Expiration Date;
(iii) All Modifications are made in a good and
workmanlike manner and in compliance with all applicable
Governmental Rules and Insurance Requirements;
(iv) Subject to Paragraph 3.12 relating to permitted
contests, Lessee pays all costs and expenses and discharges (or
cause to be insured or bonded over) any Liens arising in
connection with any Modification not later than the earlier of
(A) sixty (60) days after the same shall be filed (or otherwise
becomes effective) and (B) unless Lessee currently is exercising
either the Term Purchase Option or the Expiration Date Purchase
Option, six (6) months prior to the Scheduled Expiration Date;
(v) At least one (1) month prior to the commencement of
(A) any Modifications which are anticipated to cost $500,000 or
more in the aggregate, or (B) any Modifications which cause the
total of all Modifications undertaken during the previous twelve
month period to exceed an aggregate cost of $1,000,000, Lessee
shall deliver to Lessor, with sufficient copies for Agent and
each Participant(other than Novellus Participant), a brief
written description of such Modifications; and
(vi) All Modifications otherwise comply with this
Agreement and the other Operative Documents.
(d) Abandonment. Lessee shall not abandon the Facility 2
Property or any material portion thereof for any period in excess of
thirty (30) consecutive days during
9
the term hereof, except as a part of any Modifications as permitted
herein or in the other Operative Documents.
(e) Maintenance. Lessee shall maintain the Facility 2 Property
and each material portion thereof in a manner consistent with other
similar properties in the same area, except as a part of any
Modifications as permitted herein.
3.02. Risk of Loss. Lessee assumes all risks of loss arising from any
Casualty or Condemnation which arises or occurs prior to the Expiration Date or
while Lessee is in possession of the Facility 2 Property and all liability for
all personal injuries and deaths and damages to property suffered by any Person
or property on or in connection with the Facility 2 Property which arises or
occurs prior to the Expiration Date or while Lessee is in possession of the
Facility 2 Property, except in each case to the extent any such loss or
liability is primarily caused by the gross negligence or willful misconduct of a
Lessor Party. Lessee hereby waives the provisions of California Civil Code
Sections 1932(1), 1932(2) and 1933(4), and any and all other applicable existing
or future Governmental Rules permitting the termination of this Agreement as a
result of any Casualty or Condemnation, and Lessor shall in no event be
answerable or accountable for any risk of loss of or decrease in the enjoyment
and beneficial use of the Facility 2 Property as a result of any such event.
3.03. Insurance.
(a) Coverage. Lessee, at its sole cost and expense, shall at all
times carry and maintain insurance coverage not less than set forth in
Schedule 3.03 and such additional insurance of the types (including the
types set forth in Schedule 3.03), in amounts, in a form and with
deductibles customarily carried by a reasonably prudent Person owning or
operating properties similar to the Facility 2 Property in the same
geographic area as the Facility 2 Property.
(b) Carriers. Any insurance carried and maintained by Lessee
pursuant to this Paragraph 3.03 shall be underwritten by an insurance
company which (i) has, at the time such insurance is placed and at the
time of each renewal thereof, a general policyholder rating of "A" and a
financial rating of at least VIII from A.M. Best Company or any
successor thereto (or if there is none, an organization having a similar
national reputation) or (ii) is otherwise approved by Lessor and
Required Participants.
(c) Terms. Each insurance policy maintained by Lessee pursuant
to this Paragraph 3.03 shall provide as follows, whether through
endorsements or otherwise:
(i) Lessor and Agent shall be named as additional
insureds, in the case of each policy of liability insurance, and
additional loss payees, in the case of each policy of property
insurance.
(ii) In respect of the interests of Lessor in the
policy, the insurance shall not be invalidated by any action or
by inaction of Lessee or by any Person having temporary
possession of the Facility 2 Property while under contract with
Lessee to perform maintenance, repair, alteration or similar
work on the Facility 2 Property, and shall insure the interests
of Lessor regardless of any breach or
10
violation of any warranty, declaration or condition contained in
the insurance policy by Lessee, Lessor or any other additional
insured (other than by such additional insured, as to such
additional insured); provided, however, that the foregoing shall
not be deemed to (A) cause such insurance policies to cover
matters otherwise excluded from coverage by the terms of such
policies or (B) require any insurance to remain in force
notwithstanding non-payment of premiums except as provided in
clause (iii) below.
(iii) If the insurance policy is cancelled for any
reason whatsoever, or substantial change is made in the coverage
that affects the interests of Lessor, or if the insurance
coverage is allowed to lapse for non-payment of premium, such
cancellation, change or lapse shall not be effective as to
Lessor for thirty (30) days after receipt by Lessor of written
notice from the insurers of such cancellation, change or lapse.
(iv) No Lessor Party shall have any obligation or
liability for premiums, commissions, assessments, or calls in
connection with the insurance.
(v) The insurer shall waive any rights of set-off or
counterclaim or any other deduction, whether by attachment or
otherwise, that it may have against any Lessor Party.
(vi) The insurance shall be primary without right of
contribution from any other insurance that may be carried by any
Lessor Party with respect to its interest in the Facility 2
Property.
(vii) The insurer shall waive any right of subrogation
against any Lessor Party (other than Novellus Participant).
(viii) All provisions of the insurance, except the
limits of liability, shall operate in the same manner as if
there were a separate policy covering each insured party.
(ix) The insurance shall not be invalidated should
Lessee or any Lessor Party waive, in writing, prior to a loss,
any or all rights of recovery against any Person for losses
covered by such policy, nor shall the insurance in favor of any
Lessor Party or Lessee, as the case may be, or their respective
rights under and interests in said policies be invalidated or
reduced by any act or omission or negligence of any Lessor Party
or Lessee, as the case may be, or any other Person having any
interest in the Facility 2 Property.
(x) All insurance proceeds with a value of less than two
million five hundred thousand Dollars ($2,500,000) payable in
respect of any loss or occurrence with respect to the Facility 2
Property shall be paid to and adjusted solely by Lessee. All
other insurance proceeds shall be paid to Lessor and adjusted
jointly by Lessor and Lessee, except that, from and after the
date on which the insurer receives written notice from Lessor
that an Event of Default has occurred and is continuing (and
unless and until such insurer receives written
11
notice from Lessor that all Events of Default have been cured),
all losses shall be adjusted solely by, and all insurance
proceeds shall be paid solely to, Lessor.
(xi) Each policy of property insurance shall contain a
standard form mortgagee endorsement in favor of Lessor.
(xii) Each insurance policy shall provide that the
coverage to be provided thereunder shall not be invalidated in
the event Lessee or any Lessor Party fails to maintain other
insurance covering losses of a similar type or types.
(xiii) Each insurance policy shall contain a
"severability of interest" provision.
(xiv) Each insurance policy which is written as "excess
insurance" shall contain a provision that it will drop down in
the event that any underlying insurance coverage has been
reduced or exhausted by reason of losses paid thereunder.
(d) Evidence of Insurance. Lessee, at its sole cost and expense,
shall furnish to Lessor (i) not later than the Commencement Date, copies
of all policies of insurance required by this Paragraph 3.03, certified
by the insurers, (ii) upon each renewal of insurance and upon any
material change in the terms thereof, copies of all policies, amendments
and/or endorsements evidencing such renewal or change, certified by the
insurers, and (iii) upon the request of Lessor, such other certificates
or documents as Lessor may reasonably request to evidence Lessee's
compliance with the insurance requirements set forth in this Paragraph
3.03.
(e) Release of Lessor Parties. Lessee hereby waives, releases
and discharges each Lessor Party and its directors, officers, employees,
agents and advisors from all claims whatsoever arising out of any loss,
claim, expense or damage to or destruction covered or coverable by
insurance required under this Paragraph 3.03, notwithstanding that such
loss, claim, expense or damage may have been caused by any such Person,
and, as among Lessee and such Persons, Lessee agrees to look to the
insurance coverage only in the event of such loss.
3.04. Casualty and Condemnation.
(a) Notice. Lessee shall give Lessor prompt written notice of
the occurrence of any Material Casualty affecting, or the institution of
any proceedings for the Condemnation of, the Facility 2 Property or any
portion thereof.
(b) Repair Obligations. If any Material Casualty or Condemnation
affecting the Facility 2 Property or any portion thereof occurs, Lessee
shall, at its election, either (i) repair and restore the Facility 2
Property as required by Subparagraph 3.04(c) or (ii) exercise the Term
Purchase Option and purchase the Facility 2 Property pursuant to the
Purchase Agreement; provided, however, that Lessee may not elect to
repair and restore the Facility 2 Property if such casualty or
condemnation is a Major Casualty or Major Condemnation or if an Event of
Default has occurred and is continuing unless Lessor and
12
the Required Participants shall consent in writing. (If such casualty or
condemnation is a Major Casualty or Major Condemnation, Lessee shall
exercise the Term Purchase Option and purchase the Facility 2 Property
pursuant to the Purchase Agreement as promptly as possible but not later
than two (2) months after the occurrence of such Major Casualty or Major
Condemnation, unless Lessor and the Required Participants shall
otherwise consent in writing. If an Event of Default has occurred and is
continuing, Lessor Parties may exercise the rights provided herein.) Not
later than one (1) month after the occurrence of any Material Casualty
or any Condemnation, Lessee shall deliver to Lessor a written notice
indicating whether it elects to repair and restore or purchase the
Facility 2 Property.
(c) Repair and Restoration. If Lessee is required to repair and
restore the Facility 2 Property following any Material Casualty or any
Condemnation, Lessee shall diligently proceed to repair and restore the
Facility 2 Property to the condition in which it existed immediately
prior to such Material Casualty or such Condemnation and shall complete
all such repairs and restoration as soon as reasonably practicable;
provided, however, that Lessee shall in any event complete all such
repairs and restoration not later than the earlier of (y) six (6) months
after the occurrence of the Material Casualty or the Condemnation, and
(z) six (6) months prior to the Scheduled Expiration Date unless Lessee
currently is exercising either the Term Purchase Option or the
Expiration Date Purchase Option. Lessee shall make such repairs 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 Facility 2 Property can,
in Lessor's reasonable judgment, with diligent
restoration or repair, be returned to a
13
condition at least equal to the condition thereof that
existed prior to the Casualty or partial Condemnation
causing the loss or damage within the earlier to occur
of (A) six (6) months after the occurrence of the
Casualty or Condemnation and (B) unless Lessee currently
is exercising either the Term Purchase Option or the
Expiration Date Purchase Option, six (6) months prior to
the Scheduled Expiration Date;
(B) Evidence that all necessary governmental
approvals can be timely obtained to allow the rebuilding
and reoccupancy of the Facility 2 Property;
(C) Copies of all plans and specifications for
the work;
(D) Copies of all contracts for the work, signed
by a contractor reasonably acceptable to Lessor;
(E) A cost breakdown for the work;
(F) A payment and performance bond for the work
or other security satisfactory to Lessor;
(G) Evidence that, upon completion of the work,
the size, capacity and total value of the Facility 2
Property will be at least as great as it was before the
Casualty or Condemnation occurred; and
(H) Evidence of satisfaction of any additional
conditions that Lessor or Required Participants may
reasonably establish to protect their rights under this
Agreement and the other Operative Documents.
All plans and specifications for the work must be reasonably
acceptable to Lessor, except that Lessor's approval shall not be
required if the restoration work is based on the same plans and
specifications as were originally used to construct the Facility
2 Property. To the extent that the funds in a Repair and
Restoration Account include both Casualty and Condemnation
Proceeds and other funds deposited by Lessee, the other funds
deposited by Lessee shall be used first. Lessee acknowledges
that the specific conditions described above are reasonable.
(d) Prosecution of Claims for Casualty and Condemnation
Proceeds. Lessee shall proceed promptly and diligently to prosecute in
good faith the settlement or compromise of any and all claims for
Casualty and Condemnation Proceeds; provided, however, that any
settlement or compromise of any such claim shall, except as otherwise
provided in clause (x) of Subparagraph 3.03(c), be subject to the
written consent of Lessor and Required Participants, which consents
shall not be unreasonably withheld. Lessor may participate in any
proceedings relating to such claims, and, after the occurrence and
during the continuance of any Event of Default, Lessor is hereby
authorized, in its own name or in Lessee's name, to adjust any loss
covered by insurance or any Casualty or Condemnation claim or cause of
action, and to settle or compromise any claim or cause of action in
connection therewith, and Lessee shall from time to time
14
deliver to Lessor any and all further assignments and other instruments
required to permit such participation.
(e) Assignment of Casualty and Condemnation Proceeds. Lessee
hereby absolutely and irrevocably assigns to Lessor all Casualty and
Condemnation Proceeds and all claims relating thereto, subject to the
terms of this Agreement which require Lessor to make such proceeds
available to Lessee for restoration. Except as otherwise provided in
clause (x) of Subparagraph 3.03(c), Lessee agrees that all Casualty and
Condemnation Proceeds are to be paid to Lessor and Lessee hereby
authorizes and directs any insurer, Governmental Authority or other
Person responsible for paying any Casualty and Condemnation Proceeds to
make payment thereof directly to Lessor alone, and not to Lessor and
Lessee jointly. If Lessee receives any Casualty and Condemnation
Proceeds payable to Lessor hereunder, Lessee shall promptly pay over
such Casualty and Condemnation Proceeds to Lessor. Lessee hereby
covenants that until such Casualty and Condemnation Proceeds are so paid
over to Lessor, Lessee shall hold such Casualty and Condemnation
Proceeds in trust for the benefit of Lessor and shall not commingle such
Casualty and Condemnation Proceeds with any other funds or assets of
Lessee or any other Person. Except as otherwise provided in clause (x)
of Subparagraph 3.03(c), Lessor may commence, appear in, defend or
prosecute any assigned right, claim or action, and may adjust,
compromise, settle and collect all rights, claims and actions assigned
to Lessor, but shall not be responsible for any failure to collect any
such right, claim or action, regardless of the cause of the failure.
(f) Use of Casualty and Condemnation Proceeds.
(i) If (A) no Event of Default has occurred and is
continuing, (B) Lessee exercises the repair and restoration
option pursuant to Subparagraphs 3.04(b) and 3.04(c) and (C)
Lessee complies with any conditions imposed pursuant to
Subparagraph 3.04(c); then Lessor shall release any Casualty and
Condemnation Proceeds to Lessee for repair or restoration of the
Facility 2 Property, but may condition such release and use of
the Casualty and Condemnation Proceeds upon deposit of the
Casualty and Condemnation Proceeds in a Repair and Restoration
Account. Lessor shall have the option, upon the completion of
such restoration of the Facility 2 Property, to apply any
surplus Casualty and Condemnation Proceeds remaining after the
completion of such restoration to the payment of Rent and/or the
reduction of the Outstanding Lease Amount, notwithstanding that
such amounts are not then due and payable or that such amounts
are otherwise adequately secured.
(ii) If (A) an Event of Default has occurred and is
continuing, (B) Lessee fails to or is unable to comply with any
conditions imposed pursuant to Subparagraph 3.04(c) or (C)
Lessee elects to exercise the Term Purchase Option and purchase
the Facility 2 Property pursuant to the Purchase Agreement;
then, at the absolute discretion of Lessor and the Required
Participants, regardless of any impairment of security or lack
of impairment of security, but subject to applicable
Governmental Rules governing the use of Casualty and
Condemnation Proceeds, if any, Lessor may (1) apply all or any
of the Casualty and Condemnation
15
Proceeds it receives to the expenses of Lessor Parties (other
than Novellus Participant) in obtaining such proceeds; (2) apply
the balance to the payment of Rent and/or the reduction of the
Outstanding Lease Amount, notwithstanding that such amounts are
not then due and payable or that such amounts are otherwise
adequately secured and/or (3) release all or any part of such
proceeds to Lessee upon any conditions Lessor and the Required
Participants may elect.
(iii) Lessor shall apply any Casualty and Condemnation
Proceeds which are to be used to reduce the Outstanding Lease
Amount only on the last day of a Rental Period unless an Event
of Default has occurred and is continuing.
(iv) Application of all or any portion of the Casualty
and Condemnation Proceeds, or the release thereof to Lessee,
shall not cure or waive any Default or notice of default or
invalidate any acts done pursuant to such notice.
3.05. Taxes. Subject to Paragraph 3.12 relating to permitted contests,
Lessee shall promptly pay when due all Indemnified Taxes imposed on or payable
by Lessee or any Lessor Party in connection with the Facility 2 Property, this
Agreement or any of the other Operative Documents, or any of the transactions
contemplated hereby or thereby. As promptly as possible after any Indemnified
Taxes are payable by Lessee, Lessee shall send to Lessor for the account of the
applicable Lessor Party a certified copy of an original official receipt
received by Lessee showing payment thereof. If Lessee fails to pay any such
Indemnified Taxes when due to the appropriate taxing authority or fails to remit
to Lessor the required receipts or other required documentary evidence, Lessee
shall indemnify the Lessor Parties for any incremental taxes, interest or
penalties that may become payable by the Lessor Parties as a result of any such
failure. The obligations of Lessee under this Paragraph 3.05 shall survive the
payment and performance of the Lessee Obligations and the termination of this
Agreement.
3.06. Environmental Matters.
(a) Lessee's Covenants. Lessee shall not cause or permit
Hazardous Materials to be used, generated, manufactured, stored,
treated, disposed of, transported or present on or released or
discharged from the Facility 2 Property in any manner that is reasonably
likely to have a Material Adverse Effect. Lessee shall immediately
notify Lessor in writing of (i) any knowledge by Lessee that the
Facility 2 Property does not comply with any Environmental Laws; and
(ii) any claims against Lessee or the Facility 2 Property relating to
Hazardous Materials or pursuant to Environmental Laws. In response to
the presence of any Hazardous Materials on, under or about the Facility
2 Property, Lessee shall immediately take, at Lessee's sole expense, all
remedial action required by any Environmental Laws or any judgment,
consent decree, settlement or compromise in respect to any claim based
thereon.
(b) Inspection By Lessor. Upon reasonable prior notice to
Lessee, Lessor, its employees and agents, may from time to time (whether
before or after the commencement of a nonjudicial or judicial
foreclosure proceeding), enter and inspect the Facility 2 Property for
the purpose of determining the existence, location, nature and
16
magnitude of any past or present release or threatened release of any
Hazardous Materials into, onto, beneath or from the Facility 2 Property.
(c) Indemnity. Without in any way limiting any other indemnity
contained in this Agreement or any other Operative Document, Lessee
agrees to defend, indemnify and hold harmless the Lessor Parties and the
other Indemnitees from and against any claim, loss, damage, cost,
expense or liability directly or indirectly arising out of (i) the use,
generation, manufacture, storage, treatment, release, threatened
release, discharge, disposal, transportation or presence of any
Hazardous Materials which are found in, on, under or about the Facility
2 Property or (ii) the breach of any covenant, representation or
warranty of Lessee relating to Hazardous Materials or Environmental Laws
contained in this Agreement or any Operative Document. This indemnity
shall include (A) the costs, whether foreseeable or unforeseeable, of
any investigation, repair, cleanup or detoxification of the Facility 2
Property which is required by any Governmental Authority or is otherwise
necessary to render the Facility 2 Property in compliance with all
Environmental Laws; (B) all other direct or indirect consequential
damages (including 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 (ii) of Subparagraph 4.01(t) of the
Participation Agreement are intended as Lessor's written request for
information (and Lessee's response) concerning the environmental
condition of the real property security as required by California Code
of Civil Procedure Section 726.5 and (ii) each representation and
warranty and covenant herein and therein (together with any indemnity
applicable to a breach of any such representation and warranty) with
respect to the environmental condition of the Facility 2 Property is
intended by Lessor and Lessee to be an "environmental provision" for
purposes of California Code of Civil Procedure Section 736.
3.07. Liens, Easements, Etc.
(a) Lessee's Covenants. Subject to Paragraph 3.12 relating to
permitted contests, Lessee shall not create, incur, assume or permit to
exist any Lien or easement on or with respect to any of the Facility 2
Property of any character, whether now owned or hereafter acquired,
except for the following ("Permitted Property Liens"):
(i) Liens in favor of a Lessor Party securing the Lessee
Obligations and other Lessor Liens;
(ii) Liens, easements and leases in existence on the
Commencement Date to the extent reflected in the title insurance
policies delivered to Agent
17
pursuant to Paragraph 3.01 of and Schedule 3.01 to the Participation
Agreement and approved by Lessor, the Stanford Lease and the Cooley
Lease;
(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 operation or maintenance of the Facility 2
Property in the ordinary course of business, in each case as approved by
Lessor; and
(vi) Lessor Liens.
Subject to Paragraph 3.12 relating to permitted contests, Lessee shall
promptly (A) pay all Indebtedness of Lessee and other obligations prior
to the time the non-payment thereof would give rise to a Lien on the
Facility 2 Property and (B) discharge, at its sole cost and expense, any
Lien on the Facility 2 Property which is not a Permitted Property Lien.
(b) No Consents. Nothing contained in this Agreement shall be
construed as constituting the consent or request of any Lessor Party,
express or implied, to or for the performance by any contractor,
mechanic, laborer, materialman, supplier or vendor of any labor or
services or for the furnishing of any materials for any construction,
alteration, addition, repair or demolition of or to the Facility 2
Property or any part thereof. NOTICE IS HEREBY GIVEN THAT NO LESSOR
PARTY IS OR SHALL BE LIABLE FOR ANY LABOR, SERVICES OR MATERIALS
FURNISHED OR TO BE FURNISHED TO LESSEE, OR TO ANYONE HOLDING THE
FACILITY 2 PROPERTY OR ANY PART THEREOF THROUGH OR UNDER LESSEE, AND
THAT NO MECHANIC'S OR OTHER LIENS FOR ANY SUCH LABOR, SERVICES OR
MATERIALS SHALL ATTACH TO OR AFFECT THE INTEREST OF ANY LESSOR PARTY IN
AND TO THE FACILITY 2 PROPERTY.
3.08. Subletting. Lessee may, in the ordinary course of business,
sublease the Facility 2 Property or any portion thereof to any Person, provided,
that (a) Lessee remains directly and primarily liable for performing its
obligations under this Agreement and all other Lessee Obligations; (b) each
sublease is subject to and subordinated to this Agreement; (c) each sublease
expressly provides for the surrender of the Facility 2 Property (or portion
thereof) by the sublessee on the Expiration Date; (d) each sublease has a term
which expires on or prior to the Scheduled Expiration Date (or, if longer,
includes a provision that the sublease terminates on the Expiration Date if such
Expiration Date occurs prior to the Scheduled Expiration Date unless Lessee
purchases the Facility 2 Property on the Expiration Date pursuant to the
Purchase Agreement); (e) each sublease prohibits the sublessee from engaging in
any activities on the Facility 2 Property other than those permitted by
Paragraph 2.04; and (f) no sublease has a Material Adverse Effect. Any sublease
which does not satisfy each of the requirements of the
18
immediately preceding sentence shall be null and void as to the Lessor Parties
and their successor and assigns. Except for such permitted subleases, Lessee
shall not assign any of its rights or interests under this Agreement to any
other Person.
3.09. Utility Charges. Lessee shall pay all charges for electricity,
power, gas, oil, water, telephone, sanitary sewer service and all other
utilities and services to, on or in connection with the Facility 2 Property
during the Term.
3.10. Removal of Facility 2 Property. Lessee shall not remove any
Improvements from the Facility 2 Land or any other Facility 2 Property from the
Facility 2 Land or Improvements, except that, during the Term, Lessee may remove
any Modification or any trade fixture, machinery, equipment, inventory or other
personal property if such Modification or property (a) was not financed by an
Advance, (b) is not required by any applicable Governmental Rule or Insurance
Requirement and (c) is readily removable without impairing the value, utility or
remaining useful life of the Facility 2 Property.
3.11. Compliance with Governmental Rules and Insurance Requirements.
Lessee, at its sole cost and expense, shall (a) comply, and cause its agents,
sublessees, assignees, employees, invitees, licensees, contractors and tenants,
and the Facility 2 Property to comply, with all Governmental Rules and Insurance
Requirements relating to the Facility 2 Property (including the construction,
use, operation, maintenance, repair and restoration thereof, whether or not
compliance therewith shall require structural or extraordinary changes in the
Improvements or interfere with the use and enjoyment of the Facility 2
Property), and (b) procure, maintain and comply with all licenses, permits,
orders, approvals, consents and other authorizations required for the
construction, use, maintenance and operation of the Facility 2 Property and for
the use, operation, maintenance, repair and restoration of the Improvements.
3.12. Permitted Contests. Lessee, at its sole cost and expense, may
contest any alleged Lien or easement on any of the Facility 2 Property or any
alleged Governmental Charge, Indebtedness or other obligation which is payable
by Lessee hereunder to Persons other than the Lessor Parties or which, if
unpaid, would give rise to a Lien on any of the Facility 2 Property, provided
that (a) each such contest is diligently pursued in good faith by appropriate
proceedings; (b) the commencement and continuation of such proceedings suspends
the enforcement of such Lien or easement or the collection of such Governmental
Charge, Indebtedness or obligation; (c) Lessee has established adequate reserves
for the discharge of such 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 Participant), 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 Participant); (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
19
obligation is declared invalid, paid or otherwise satisfied not later than six
(6) months prior to the Scheduled Expiration Date.
3.13. Lessor Obligations; Right to Perform Lessee Obligations. No Lessor
Party shall have any obligation to (a) maintain, repair or make any improvements
to the Facility 2 Property, (b) maintain any insurance on the Facility 2
Property, (c) perform any other obligation of Lessee under this Agreement or any
other Lessee Obligation, (d) make any expenditure on account of the Facility 2
Property (except to make Advances as required by the Participation Agreement) or
(e) take any other action in connection with the Facility 2 Property, this
Agreement or any other Operative Document, except as expressly provided herein
or in another Operative Document; provided however, that Lessor may, in its sole
discretion and without any obligation to do so, after written notice to Lessee,
perform any Lessee Obligation not performed by Lessee when required. Lessor may
enter the Facility 2 Property or exercise any other right of Lessee under this
Agreement or any other Operative Document to the extent Lessor determines in
good faith that such entry or exercise is reasonably necessary for Lessor to
perform any such Lessee Obligation not performed by Lessee when required. Lessee
shall reimburse Lessor and the other Lessor Parties, within five (5) Business
Days after demand and delivery of written evidence of payment, for all fees,
costs and expenses reasonably incurred by them in performing any such obligation
or curing any Default.
3.14. Inspection Rights. During the Term, Lessee shall permit any Person
designated by Lessor, upon reasonable notice and during normal business hours,
to visit and inspect any of the Facility 2 Property.
SECTION 4. EXPIRATION DATE.
4.01. Termination by Lessee Prior to Scheduled Expiration Date. Subject
to the terms and conditions of the Purchase Agreement, Lessee may, on any
Scheduled Rent Payment Date prior to the Scheduled Expiration Date, terminate
this Agreement and purchase the Facility 2 Property pursuant to Section 2 of the
Purchase Agreement. Lessee shall notify Lessor of Lessee's election so to
terminate this Agreement and purchase the Facility 2 Property by delivering to
Agent a Notice of Term Purchase Option Exercise pursuant to and in accordance
with the provisions of Paragraph 2.02 of the Purchase Agreement.
4.02. Surrender of Facility 2 Property. Unless Lessee purchases the
Facility 2 Property on the Expiration Date pursuant to the Purchase Agreement,
Lessee shall vacate and surrender the Facility 2 Property to Lessor on the
Expiration Date in its then-current condition, subject to compliance by Lessee
on or prior to such date of its obligations under this Agreement and the other
Operative Documents (including the completion of all Modifications, the
completion of all permitted contests and the removal of all Liens which are not
Permitted Property Liens of the types described in clauses (i), (ii), (iii) or
(iv) of Subparagraph 3.07(a)).
4.03. Holding Over. If Lessee does not purchase the Facility 2 Property
on the Expiration Date pursuant to the Purchase Agreement but continues in
possession of any portion of the Facility 2 Property after the Expiration Date,
Lessee shall pay rent for each day it so continues in possession, payable upon
demand of Lessor, at a per annum rate equal to the
20
Alternate Rental Rate plus two percent (2.0%) and shall pay and perform all of
its other Lessee Obligations under this Agreement and the other Operative
Documents in the same manner as though the Term had not ended; provided,
however, that this Paragraph 4.03 shall not be interpreted to permit such
holding over or to limit any right or remedy of Lessor for such holding over.
SECTION 5. DEFAULT.
5.01. Events of Default. The occurrence or existence of any one or more
of the following shall constitute an "Event of Default" hereunder:
(a) Non-Payment. Lessee shall (i) fail to pay on the Expiration
Date any amount payable by Lessee under this Agreement or any other
Operative Document on such date, (ii) fail to pay within five (5)
business days after any Scheduled Rent Payment Date any Base Rent
payable on such Scheduled Rent Payment Date (other than the Base Rent
payable on the Expiration Date) or (iii) fail to pay within five (5)
business days after the same becomes due, any Supplemental Rent or other
amount required under the terms of this Agreement or any other Operative
Document (other than any such amount payable on the Expiration Date or
Base Rent); or
(b) Specific Defaults. Lessee or any of its Subsidiaries shall
fail to observe or perform any covenant, obligation, condition or
agreement set forth in Subparagraph 3.01(d), Paragraph 3.03 or
Subparagraph 3.07(a) hereof, or in Paragraph 5.02 or Paragraph 5.03 of
the Participation Agreement; or
(c) Other Defaults. Lessee or any of its Subsidiaries shall fail
to observe or perform any other covenant, obligation, condition or
agreement contained in this Agreement or any other Operative Document
(except for those covenants described in Paragraph 5.01(d) below) and
such failure shall continue for a period of thirty (30) days after
written notice thereof from Lessor, provided, however, that in the event
that such failure cannot reasonably be cured within such thirty (30) day
period, such failure shall 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,
21
certificate or other statement to be false, incorrect, incomplete or
misleading within thirty (30) days of notice thereof from Lessor; or
(e) Cross-Default. (i) Lessee or any of its Subsidiaries shall
fail to make any payment when due on account of any Indebtedness of such
Person (other than the Lessee Obligations) and such failure shall
continue beyond any period of grace provided with respect thereto, if
the amount of such Indebtedness exceeds $10,000,000 or the effect of
such failure is to cause, or permit the holder or holders thereof to
cause, Indebtedness of Lessee and its Subsidiaries (other than the
Lessee Obligations) in an aggregate amount exceeding $10,000,000 to
become due or (ii) Lessee or any of its Subsidiaries shall otherwise
fail to observe or perform any agreement, term or condition contained in
any agreement or instrument relating to any Indebtedness of such Person
(other than the Lessee Obligations), or any other event shall occur or
condition shall exist, if the effect of such failure, event or condition
is to cause, or permit the holder or holders thereof to cause,
Indebtedness of Lessee and its Subsidiaries (other than the Lessee
Obligations) in an aggregate amount exceeding $10,000,000 to become due
(and/or to be secured by cash collateral); or
(f) Insolvency, Voluntary Proceedings. Lessee or any of its
Material Subsidiaries shall (i) apply for or consent to the appointment
of a receiver, trustee, liquidator or custodian of itself or of all or a
substantial part of its property, (ii) be unable, or admit in writing
its inability, to pay its debts generally as they mature, (iii) make a
general assignment for the benefit of its or any of its creditors, (iv)
be dissolved or liquidated in full or in part, (v) become insolvent (as
such term may be defined or interpreted under any applicable statute),
(vi) commence a voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or its debts under
any bankruptcy, insolvency or other similar law now or hereafter in
effect or consent to any such relief or to the appointment of or taking
possession of its property by any official in an involuntary case or
other proceeding commenced against it, or (vi) take any action for the
purpose of effecting any of the foregoing; or
(g) Involuntary Proceedings. Proceedings for the appointment of
a receiver, trustee, liquidator or custodian of Lessee or any of its
Material Subsidiaries or of all or a substantial part of the property
thereof, or an involuntary case or other proceedings seeking
liquidation, reorganization or other relief with respect to Lessee or
any of its Material Subsidiaries or the debts thereof under any
bankruptcy, insolvency or other 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
22
issue or levy; (ii) any judgment, writ, assessment, warrant of
attachment, tax lien or execution or similar process shall be issued or
levied against a substantial part of the property of Lessee or any of
its Subsidiaries and the same shall not be released, stayed, vacated or
otherwise dismissed within thirty (30) days after issue or levy; or
(iii) any other judgments, orders, decrees, arbitration awards, writs,
assessments, warrants of attachment, tax liens or executions or similar
processes which, alone or in the aggregate, are reasonably likely to
have a Material Adverse Effect are rendered, issued or levied; or
(i) Operative Documents. Any Operative Document or any material
term thereof shall cease to be, or be asserted by Lessee or any of its
Subsidiaries not to be, a legal, valid and binding obligation of Lessee
or any of its Subsidiaries enforceable in accordance with its terms; or
(j) ERISA. Any Reportable Event which constitutes grounds for
the termination of any Employee Benefit Plan by the PBGC or for the
appointment of a trustee by the PBGC to administer any Employee Benefit
Plan shall occur, or any Employee Benefit Plan shall be terminated
within the meaning of Title IV of ERISA or a trustee shall be appointed
by the PBGC to administer any Employee Benefit Plan; or
(k) Change of Control. Any Change of Control shall occur; or
(l) Ground Lease Agreement. Lessee shall fail to observe or
perform any agreement, term or condition contained in the Ground Lease
Agreement 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
(m) Stanford Lease. Any "Event of Default" (as defined in the
Stanford Lease) shall occur or exist under the Stanford Lease; or
(n) Material Adverse Effect. Any other event(s) or condition(s)
which is(are) reasonably likely to have a Material Adverse Effect shall
occur and be continuing or exist.
5.02. General Remedies. In all cases, upon the occurrence or existence
of any Event of Default and at any time thereafter unless such Event of Default
is waived, Lessor may, with the 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
23
Lessee, terminate the obligation of Lessor to make Advances and the
obligations of the Participants to fund Advances.
(b) Appointment of a Receiver. Lessor may apply to any court of
competent jurisdiction for, and obtain appointment of, a receiver for
the Facility 2 Property.
(c) Specific Performance. Lessor may bring an action in any
court of competent jurisdiction to obtain specific enforcement of any of
the covenants or agreements of Lessee in this Agreement or any of the
other Operative Documents.
(d) Collection of Issues and Profits. Lessor may collect Issues
and Profits as provided in Subparagraph 2.07(c) and apply the proceeds
to pay Lessee Obligations.
(e) Protection of Facility 2 Property. Lessor may enter, take
possession of, manage and operate all or any part of the Facility 2
Property or take any other actions which it reasonably determines are
necessary to protect the Facility 2 Property and the rights and remedies
of the Lessor Parties (other than Novellus Participant) under this
Agreement and the other Operative Documents, including (i) taking and
possessing all of Lessee's books and records relating to the Facility 2
Property; (ii) entering into, enforcing, modifying, or canceling
subleases on such terms and conditions as Lessor may consider proper;
(iii) obtaining and evicting tenants; (iv) fixing or modifying sublease
rents; (v) collecting and receiving any payment of money owing to
Lessee; (vi) completing any unfinished Improvements; and/or (vii)
contracting for and making repairs and alterations.
(f) Other Rights and Remedies. In addition to the specific
rights and remedies set forth above in this Paragraph 5.02 and in
Paragraph 5.03 and Paragraph 5.04, Lessor may exercise any other right,
power or remedy permitted to it by any applicable Governmental Rule,
either by suit in equity or by action at law, or both.
5.03. Lease Remedies. If the transaction evidenced by this Agreement and
the other Operative Documents is treated as a lease, upon the occurrence or
existence of any Event of Default and at any time thereafter unless such Event
of Default is waived, Lessor may, with the consent of the Required Participants,
or shall, upon instructions from the Required Participants, exercise any one or
more of the following rights and remedies in addition to those rights and
remedies set forth in Paragraph 5.02, provided that, prior to exercising any
remedies provided by this Paragraph 5.03, Lessor shall give Lessee not less than
three (3) Business Days notice during which time Lessee may exercise the
Purchase Option and, provided the Purchase Option is 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
24
payable on or prior to such date and all other amounts payable by Lessee
on the Expiration Date pursuant to this Agreement and the other
Operative Documents. Lessee also shall pay to Lessor, in addition to all
accrued Base Rent, the worth at the time of such payment of the amount
by which the unpaid Base Rent through the Scheduled Expiration Date
exceeds the amount of such rental loss for the same period that Lessee
proves could reasonably be avoided.
(b) Continuation of Lease. Lessor may exercise the rights and
remedies provided by California Civil Code Section 1951.4, including the
right to continue this Agreement in effect after Lessee's breach and
abandonment and recover Rent as it becomes due. Acts of maintenance or
preservation, efforts to relet the Facility 2 Property, the appointment
of a receiver upon Lessor's initiative to protect its interest under
this Agreement or withholding consent to or terminating a sublease shall
not of themselves constitute a termination of Lessee's right to
possession.
(c) Removal and Storage of Facility 2 Property. Lessor may enter
the Facility 2 Property and remove therefrom all Persons and property,
store such property in a public warehouse or elsewhere at the cost of
and for the account of Lessee and sell such property and apply the
proceeds therefrom pursuant to applicable California law.
5.04. Loan Remedies. If the transaction evidenced by this Agreement and
the other Operative Documents is treated as a loan, upon the occurrence or
existence of any Event of Default and at any time thereafter unless such Event
of Default is waived, Lessor may, with the consent of the Required Participants,
or shall, upon instructions from the Required Participants, exercise any one or
more of the following rights and remedies in addition to those rights and
remedies set forth in Paragraph 5.02:
(a) Acceleration of Lessee Obligations. Lessor may, by written
notice to Lessee, terminate this Agreement on a Termination Date which
is prior to the Scheduled Expiration Date, subject to Subparagraph
3.02(1) of the Purchase Agreement, and declare all unpaid Lessee
Obligations due and payable on such Termination Date. Such Termination
Date shall be the last day of a Rental Period unless Required
Participants shall otherwise direct. On such Termination Date (which
shall then be the Expiration Date), Lessee shall pay all unpaid Base
Rent accrued through such date, all Supplemental Rent due and payable on
or prior to such date and all other amounts payable by Lessee on the
Expiration Date pursuant to this Agreement and the other Operative
Documents.
(b) Uniform Commercial Code Remedies. Lessor may exercise any or
all of the remedies granted to a secured party under the California
Uniform Commercial Code.
(c) Judicial Foreclosure. Lessor may bring an action in any
court of competent jurisdiction to foreclose the security interest in
the Facility 2 Property granted to Lessor by this Agreement or any of
the other Operative Documents.
(d) Power of Sale. Lessor may cause some or all of the Facility
2 Property, including any Personal Property Collateral, to be sold or
otherwise disposed of in any combination and in any manner permitted by
applicable Governmental Rules.
25
(i) Sales of Personal Property. Lessor may dispose of
any Personal Property Collateral separately from the sale of
Real Property Collateral, in any manner permitted by Division 9
of the California Uniform Commercial Code, including any public
or private sale, or in any manner permitted by any other
applicable Governmental Rule. Any proceeds of any such
disposition shall not cure any Event of Default or reinstate any
Lessee Obligation for purposes of Section 2924c of the
California Civil Code. In connection with any such sale or other
disposition, Lessee agrees that the following procedures
constitute a commercially reasonable sale:
(A) Lessor shall mail written notice of the sale
to Lessee not later than thirty (30) days prior to such
sale.
(B) Once per week during the three (3) weeks
immediately preceding such sale, Lessor will publish
notice of the sale in a local daily newspaper of general
circulation.
(C) Upon receipt of any written request, Lessor
will make the Facility 2 Property available to any bona
fide prospective purchaser for inspection during
reasonable business hours.
(D) Notwithstanding, Lessor shall be under no
obligation to consummate a sale if, in its judgment,
none of the offers received by it equals the fair value
of the Facility 2 Property offered for sale.
(E) If Lessor so requests, Lessee shall assemble
all of the Personal Property Collateral and make it
available to Lessor at the site of the Facility 2 Land.
Regardless of any provision of this Agreement or any
other Operative Document, Lessor shall not be considered
to have accepted any property other than cash or
immediately available funds in satisfaction of any
Lessee Obligation, unless Lessor has given express
written notice of its election of that remedy in
accordance with California Uniform Commercial Code
Section 9621.
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
Facility 2 Property which consists solely of Real Property
Collateral in any manner then permitted by applicable
Governmental Rules, including without limitation a nonjudicial
trustee's sale pursuant to California Civil Code Sections 2924
et seq. In its discretion, Lessor may also or alternatively
choose to dispose of some or all of the Facility 2 Property, in
any combination consisting of both Real Property Collateral and
Personal Property Collateral, together in one sale to be held in
accordance with the law and procedures applicable to real
property, as permitted by Section 9604 of the California Uniform
Commercial Code. Lessee agrees that such a sale of Personal
26
Property Collateral together with Real Property Collateral
constitutes a commercially reasonable sale of the Personal
Property Collateral. (For purposes of this power of sale, either
a sale of Real Property Collateral alone, or a sale of both Real
Property Collateral and Personal Property Collateral together in
accordance with California Uniform Commercial Code Section 9604,
will sometimes be referred to as a "Lessor's Sale.")
(A) Before any Lessor's Sale, Lessor shall give
such notice of default and election to sell as may then
be required by applicable Governmental Rules.
(B) When all time periods then legally mandated
have expired, and after such notice of sale as may then
be legally required has been given, Lessor shall sell
the property being sold at a public auction to be held
at the time and place specified in the notice of sale.
(C) Neither Lessor nor Agent shall have any
obligation to make demand on Lessee before any Lessor's
Sale.
(D) From time to time in accordance with then
applicable law, Lessor may postpone any Lessor's Sale by
public announcement at the time and place noticed for
that sale.
(E) At any Lessor's Sale, Lessor shall sell to
the highest bidder at public auction for cash in lawful
money of the United States.
(F) Lessor shall execute and deliver to the
purchaser(s) a deed or deeds conveying the Facility 2
Property being sold without any covenant or warranty
whatsoever, express or implied. The recitals in any such
deed of any matters or facts, including any facts
bearing upon the regularity or validity of any Lessor's
Sale, shall be conclusive proof of their truthfulness.
Any such deed shall be conclusive against all Persons as
to the facts recited in it.
(e) Foreclosure Sales.
(i) Single or Multiple. If the Facility 2 Property
consists of more than one lot, parcel or item of property,
Lessor may:
(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
27
Lessor may deem to be in its best interests (any such
sale or disposition, a "Foreclosure Sale;" any two or
more, "Foreclosure Sales").
If Lessor chooses to have more than one Foreclosure Sale, Lessor
at its option may cause the Foreclosure Sales to be held
simultaneously or successively, on the same day, or on such
different days and at such different times and in such order as
it may deem to be in its best interests. No Foreclosure Sale
shall terminate or affect the security interests granted to
Lessor in the Facility 2 Property by this Agreement on any part
of the Facility 2 Property which has not been sold, until all of
the Lessee Obligations have been paid in full.
(ii) Third Party Bids and Credit Bids. At any
Foreclosure Sale, any Person, including any Lessor Party, may
bid for and acquire the Facility 2 Property or any part of it to
the extent permitted by then applicable Governmental Rules.
Instead of paying cash for the Facility 2 Property, Lessor (and
no other Lessor Party) may settle for the purchase price by
crediting the sales price of the Facility 2 Property against the
Lessee Obligations in any order and proportions as Lessor in its
sole discretion may choose.
5.05. [Reserved] .
5.06. 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.
5.07. 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.
5.08. 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.
5.06 SNDA. Lessor shall be bound by the terms of the Subordination,
Non-Disturbance and Attornment Agreement, dated as of November 19, 1998, entered
into between Cooley Godward LLP and Lessor, and recorded on December 1, 1998 in
the Official Records of Santa Clara County, California as Instrument 14528612,
as if this Lease Agreement were the "Security Instrument" referred to therein.
28
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
Participant) in exercising any right hereunder shall operate as a waiver thereof
or of any other right nor shall any single or partial exercise of any such right
preclude any other further exercise thereof or of any other right. Unless
otherwise specified in any such waiver or consent, a waiver or consent given
hereunder shall be effective only in the specific instance and for the specific
purpose for which given.
6.03. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the Lessor Parties and Lessee and their permitted
successors and assigns; provided, however, that the Lessor Parties and Lessee
shall not sell, assign or delegate their respective rights and obligations
hereunder except as provided in the Participation Agreement.
6.04. No Third Party Rights. Nothing expressed in or to be implied from
this Agreement is intended to give, or shall be construed to give, any Person,
other than the Lessor Parties and Lessee and their permitted successors and
assigns, any benefit or legal or equitable right, remedy or claim under or by
virtue of this Agreement or under or by virtue of any provision herein.
6.05. Partial Invalidity. If at any time any provision of this Agreement
is or becomes illegal, invalid or unenforceable in any respect under the law or
any jurisdiction, neither the legality, validity or enforceability of the
remaining provisions of this Agreement nor the legality, validity or
enforceability of such provision under the law of any other jurisdiction shall
in any way be affected or impaired thereby.
6.06. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of California without reference to
conflicts of law rules.
6.07. Counterparts. This Agreement may be executed in any number of
identical counterparts, any set of which signed by all the parties hereto shall
be deemed to constitute a complete, executed original for all purposes.
6.08. Nature of Lessee's Obligations.
(a) Independent Obligation. The obligation of Lessee to pay the
amounts payable by Lessee under this Agreement and the other Operative
Documents and to perform the other Lessee Obligation are absolute,
unconditional and irrevocable obligations which are separate and
independent of the obligations of the Lessor Parties under this
Agreement and the other Operative Documents and all other events and
circumstances, including the events and circumstances set forth in
Subparagraph 6.08(c).
29
(b) No Termination or Abatement. This Agreement and the other
Operative Documents and Lessee's obligation to pay Rent and to pay and
perform all other Lessee Obligations shall continue in full force and
effect without abatement notwithstanding the occurrence or existence of
any event or circumstance, including any event or circumstance set forth
in Subparagraph 6.08(c).
(c) Full Payment and Performance. Lessee shall make all payments
under this Agreement and the other Operative Documents in the full
amounts and at the times required by the terms of this Agreement and the
other Operative Documents without setoff, deduction or reduction of any
kind and shall perform all other Lessee Obligations as and when
required, without regard to any event or circumstances whatsoever,
including (i) the condition of the Facility 2 Property (including any
Improvements to the Facility 2 Property made prior to the Commencement
Date or during the Term); (ii) title to the Facility 2 Property
(including possession of the Facility 2 Property by any Person or the
existence of any Lien or any other right, title or interest in or to any
of the Facility 2 Property in favor of any Person); (iii) the value,
habitability, usability, design, operation or fitness for use of the
Facility 2 Property; (iv) the availability or adequacy of utilities and
other services to the Facility 2 Property; (v) any latent, hidden or
patent defect in the Facility 2 Property; (vi) the zoning or status of
the Facility 2 Property or any other restrictions on the use of the
Facility 2 Property; (g) the economics of the Facility 2 Property; (vii)
any Casualty or Condemnation; (viii) the compliance of the Facility 2
Property with any applicable Governmental Rule or Insurance Requirement;
(ix) any failure by any Lessor Party to perform any of its obligations
under this Agreement or any other Operative Document; or (x) the
exercise by any Lessor Party of any of its remedies under this Agreement
or any other Operative Document; provided, however, that this Paragraph
6.08 shall not abrogate any right which Lessee may have to recover
damages from any Lessor Party for any material breach by such Lessor
Party of its obligations under this Agreement or any other Operative
Document to the extent permitted hereunder or thereunder.
[The signature page follows.]
30
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
31
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]
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]
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 Term, "all risk" property insurance
covering loss or damage in amounts approved by Lessor, Agent and Required
Participants excluding earthquake and flood coverage. Notwithstanding the
foregoing, the maximum amount of any casualty insurance policy required to be
maintained shall not exceed the Outstanding Lease Amount under Facility 2 less
the Outstanding Tranche A Participation Amount held by Novellus Participant
under Facility 2.
3.03-1
EXHIBIT A(1)
FACILITY 1 LAND
[PARCEL 1 -- 3930, 3960 AND 3970 NORTH FIRST STREET]
REAL PROPERTY in the City of San Jose, County of Santa Clara, State of
California, described as follows:
PARCEL ONE:
PCL. 1 as shown on that certain Parcel Map filed in the office of the Recorder
of the County of Santa Clara, State of California on August 18, 1983 in Book 516
of Maps, page(s) 34 and 35, Santa Clara County Records.
And, excepting therefrom, the following area:
Beginning at the Northeasterly corner of said Parcel 1; thence North 52 degrees
27' 12" West, 409.24 feet along the common line of Parcel 1 and Parcel 2 as
shown on said Parcel Map to a common corner thereof; thence leaving said common
line, along the Southerly prolongation of a common line of said Parcels, South
19 degrees 40' 54" West, 32.25 feet; thence South 52 degrees 22' 44" East,
399.34 feet, to a point on the Southeasterly line of said Parcel 1; thence North
37 degrees 32' 59" East, 31.22 feet along said Southeasterly line to the Point
of Beginning;
PARCEL ONE-A:
A non-exclusive easement for ingress and egress over PCL.2, as said parcel is
shown on the Parcel Map recorded in Book 516 of Maps, at pages 34 and 35, Santa
Clara County Records, as granted in an instrument recorded May 23, 1985 in Book
J353, page 1565 and being more particularly described as follows:
Strip 1
A strip of land 26.00 feet wide extending entirely across said PCL. 2 and lying
13.00 feet on each side of a line described as follows:
Beginning at the most Easterly corner of said PCL. 2, said corner being on the
Southwesterly line of Rose Orchard Way; thence along said Southwesterly line N.
59 degrees 57' 13" W., 38.00 feet to the true point of beginning of said strip
of land; thence S. 30 degrees 02' 47" W., 28.14 feet; thence S. 37 degrees 32'
59" W., 423.45 feet to the Southwesterly line of said PCL. 2.
Strip 2
A strip of land 26.00 feet wide extending entirely across said PCL. 2 and lying
13.00 feet on each side of a line described as follows:
A(1)-1
Beginning at the most Northerly corner of said PCL. 2, said corner being on the
Southwesterly line of Rose Orchard Way; thence along said Southwesterly line S.
59 degrees 57' 13" E., 388.93 feet to the true point of beginning of said strip
of land; thence S. 30 degrees 02' 47" W., 33.86 feet; thence S. 37 degrees 32'
48" W., 335.99 feet to the Southwesterly line of said PCL. 2.
Strip 3
A strip of land 26.00 feet wide extending Southwesterly from the Southwesterly
line of said Rose Orchard Way to the Northwesterly line of the above described
and designated Strip 2 and lying 13.00 feet on each side of a line described as
follows:
Beginning at the most Northerly corner of said PCL. 2, said corner being on the
Southwesterly line of Rose Orchard Way; thence along said Southwesterly line S.
59 degrees 57' 13" E., 30.78 feet to the true point of beginning of said strip
of land; thence S. 30 degrees 02' 47" W., 26.86 feet; thence S. 37 degrees 32'
48" W., 262.18 feet; thence S. 52 degrees 27' 12" E. 343.00 feet to the
Northwesterly line of the above described and designated Strip 2.
PARCEL ONE-B:
A non-exclusive easement for Landscaping, Lighting and Irrigation Facilities
over PCL. 2, as said parcel is shown on the Parcel Map recorded in Book 516 of
Maps, at pages 34 and 35, Santa Clara County Records, as granted in an
instrument recorded May 23, 1985 in Book J353, page 1565 and being more
particularly described as follows:
A strip of land 10.00 feet wide extending Southeasterly from the Northwesterly
line of said PCL. 1 and PCL. 2 and lying 5.00 feet on each side of a line that
begins at the most Northerly corner of said PCL. 1 and runs thence along the
Northeasterly line of said PCL. 1, S. 52 degrees 27' 12" E. 375.00 feet.
Excepting Therefrom that portion lying within the bounds of Parcel One mentioned
hereinabove.
APN: 097-79-009 & x010
ARB: 97-3-4.01 & 14.01
A(1)-2
[PARCEL 2 -- 4145 NORTH FIRST STREET AND 55 VISTA MONTANA]
REAL PROPERTY in the City of San Jose, County of Santa Clara, State of
California, described as follows:
All of Lot 43, as shown on that certain Map entitled Tract No. 7526, which Map
was filed for record in the office of the Recorder of the County of Santa Clara,
State of California on October 27, 1983, in Book 520 of Maps page(s) 28, 29 and
30.
APN: 097-52-013
A(1)-3
[PARCEL 4 -- 81 VISTA MONTANA]
REAL PROPERTY in the City of San Jose, County of Santa Clara, State of
California, described as follows:
PARCEL ONE:
Lot 65, as shown on that certain Map entitled Tract No. 7649, which Map was
filed for record in the office of the Recorder of the County of Santa Clara,
State of California on August 27, 1984, in Book 533 of Maps page(s) 17 and 18.
PARCEL TWO:
A non-exclusive easement for private storm drainage over that portion of Lot 64
as shown on said Tract No. 7649 designated as "8' P.S.D.E.".
APN: 097-52-028
A(1)-4
[PARCEL 8 -- 3940 AND 3950 NORTH FIRST STREET]
REAL PROPERTY in the City of San Jose, County of Santa Clara, State of
California, described as follows:
PARCEL ONE:
Parcel 2 as shown on that certain Parcel Map filed in the office of the Recorder
of the County of Santa Clara, State of California on August 18, 1983 in Book 516
of Maps, page(s) 34 and 35, Santa Clara County Records.
And, in addition thereto, the following area:
Beginning at the Southeasterly corner of said Parcel 2, thence North 52 degrees
27' 12" West, 409.24 feet along the common line of Parcel 1 and Parcel 2 as
shown on said Parcel Map to a common corner thereof; thence leaving said common
line, along the Southerly prolongation of a common line of said Parcels, South
19 degrees 40' 54" West, 32.25 feet; thence South 52 degrees 22' 44" East,
399.34 feet to a point on the Southeasterly line of said Parcel 1; thence North
37 degrees 32' 59" East, 31.22 feet along said Southeasterly line to the Point
of Beginning.
PARCEL ONE-A:
A non-exclusive easement for ingress and egress over PCL. 1, as said parcel is
shown on the Parcel Map recorded in Book 516 of Maps, at pages 34 and 35, Santa
Clara County Records, as granted in an instrument recorded May 23, 1985 in Book
J353, page 1565 and being more particularly described as follows:
Strip 1
A strip of land 26.00 feet wide extending entirely across said PCL. 1 and lying
13.00 feet on each side of a line as follows:
Beginning at the Southerly corner of said PCL. 1, said corner being on the
Northeasterly line of North First Street; thence along said Northeasterly line
N. 52 degrees 27' 12" W., 34.00 feet to the true point of beginning of said
strip of land; thence N. 37 degrees 32' 59" E., 540.00 feet to the Northeasterly
line of said PCL. 1.
Strip 2
A strip of land 40.00 feet wide extending entirely across said PCL. 1 and lying
contiguous to and Southeasterly of a line described as follows:
Beginning at the most Southerly corner of said PCL. 1, said corner being on the
Northeasterly line of North First Street; thence along said Northeasterly line
N. 52 degrees 27' 12" W., 429.25 feet to the true
A(1)-5
point of beginning of said strip of land; thence N. 37 degrees 32' 48" E.,
600.00 feet to the Northeasterly line of said PCL. 1; the Northerly terminus of
said 40 foot wide strip of land being the Northeasterly line of said PCL. 1.
Strip 3
A strip of land 26.00 feet wide, extending Northeasterly from the Southwesterly
line of said PCL. 1 to the Northwesterly line of the above described and
designated Strip 2 and lying 13.00 feet on each side of a line described as
follows:
Beginning at the Westerly corner of said PCL. 1, said corner being on the
Northeasterly line of North First Street; thence along said Northeasterly line
S. 52 degrees 27' 12" E., 34.00 feet to the true point of beginning of said
strip of land; thence N. 37 degrees 32' 48" E. 566.00 feet; thence S. 52 degrees
27' 12" E., 355.25 feet to said Northwesterly line of said Strip 2.
Strip 4
A strip of land 13.00 feet wide lying contiguous to and Northwesterly of the
Northwesterly line of the above described and designated Strip 2 and extending
Southwesterly from the Northeasterly line of said PCL. 1 approximately 21.00
feet to the Northeasterly line of the above described and designated Strip 3.
PARCEL ONE-B:
The right from time to time to construct, install, maintain, replace, remove,
and use storm drain sewers, together with a right of way therefor, over a
portion of PCL. 1 as said parcel is shown on the Parcel Map recorded in Book 516
of Maps, at pages 34 and 35, Santa Clara County Records, as granted in an
instrument recorded May 23, 1985 in Book J353, page 1565 and being more
particularly described as follows:
Strip 1
A strip of land 10.00 feet wide extending entirely across said PCL. 1 and lying
5.00 feet on each side of a line described as follows:
Beginning at the most Westerly corner of said PCL. 1 said corner being on the
Northeasterly line of North First Street; thence along said Northeasterly line
S. 52 degrees 27' 12" E., 402.75 feet to the true point of beginning of said
strip of land; thence along the centerline of a existing storm drain line the
following courses: thence N. 37 degrees 32' 48" E., 28.00 feet to a point herein
designated Point A; thence N. 52 degrees 27' 12" W., 278.00 feet; thence N. 00
degrees 51' 00" E., 198.30 feet; thence N. 37 degrees 32' 33" E., 279.75 feet;
thence S. 51 degrees 19' 51" E., 89.02 feet; thence N. 50 degrees 06' 47" E.,
133.18 feet; thence N. 37 degrees 32' 48" E., 5.00 feet to the Northeasterly
line of said PCL 1.
Strip 2
A strip of land 10 feet wide extending Northeasterly from the Northeasterly line
of the above described and designated Strip 1 and lying 5.00 feet on each side
of a line which begins at said
A(1)-6
Point A; thence along the centerline of an existing storm drain line the
following courses: thence N. 26 degrees 55' 37" E., 154.65 feet; thence N. 32
degrees 55' 53" E., 96.31 feet; thence N. 43 degrees 21' 28" E., 113.58 feet;
thence N. 54 degrees 44' 21" E., 105.72 feet to a point herein designated as
Point B; thence S. 41 degrees 57' 14" E., 65.85 feet; thence N. 37 degrees 32'
48" E., 62.00 feet to the Northeasterly line of said PCL 2.
Strip 3
A strip of land 5.00 feet wide lying contiguous to and Southwesterly of the
Northeasterly line of said PCL. 1 and extending Southeasterly from the
Southeasterly line of the above described and designated Strip 2 approximately
225 feet.
Strip 4
A strip of land 10.00 feet wide extending Northeasterly from the Northeasterly
line of the above described and designated Strip 2 to the Northeasterly line of
said PCL. 1 and lying 5.00 feet on each side of a line that begins at said Point
B; thence along the centerline of an existing storm drain line N. 37 degrees 32'
48" E., 50.00 feet to the Northeasterly line of said PCL. 1.
PARCEL ONE-C:
The right from time to time to construct, install, inspect, maintain, replace,
remove and use any and all Public Service Facilities necessary or useful,
together with a right of way therefor, over a portion of PCL. 1 as said parcel
is shown on the Parcel Map recorded in Book 516 of Maps, at pages 34 and 35,
Santa Clara County Records, as granted in an instrument recorded May 23, 1985 in
Book J353, page 1565 and being more particularly described as follows:
Strip 5
A strip of land 15.00 feet wide extending entirely across said PCL. 1 and lying
7.50 feet on each side of a line described as follows:
Beginning at the most Southerly corner of said PCL. 1, said corner being on the
Northeasterly line of North First Street; thence along said Northeasterly line
N. 52 degrees 27' 12" W., 60.50 feet to the true point of beginning of said
strip of land; thence N. 37 degrees 32' 59" E., 394.80 feet to a point herein
designated Point C; thence N. 37 degrees 32' 59" E., 105.20 feet; thence N. 7
degrees 27' 01" W., 56.57 feet to the Northeasterly line of said PCL. 1.
Strip 6
A strip of land 15.00 feet wide extending Northerly from the Northerly line of
the above described and designated Strip 5 to the Northeasterly line of said
PCL. 1 and lying 7.5 feet on each side of a line that begins at said Point C;
thence N. 30 degrees 01' 00" E., 59.5 feet; thence N. 8 degrees 41' 00" E.,
98.44 feet to the Northeasterly line of said PCL. 1.
A(1)-7
Strip 7
A strip of land 15.00 feet wide extending entirely across said PCL. 1 and lying
7.5 feet and each side of a line described as follows:
Beginning at the most Westerly corner of said PCL. 1 said corner being on the
Northeasterly line of North First Street; thence along said Northeasterly line
S. 52 degrees 27' 12" E., 30.00 feet to the true point of beginning of said
strip of land; thence N. 37 degrees 32' 33" E., 600.00 feet to the Northeasterly
line of said PCL 1.
Strip 8
That area located within those portions of PCL.1, of the Parcel Map mentioned
hereinabove, lying within the easements designated as "P.S.E.", as shown on said
Parcel Map.
PARCEL ONE-D:
A non-exclusive easement for Landscaping, Lighting and Irrigation Facilities
over PCL. 1, as said parcel is shown on the Parcel Map recorded in Book 516 of
Maps, at pages 34 and 35, Santa Clara County Records, as granted in an
instrument recorded May 23, 1985 in Book J353, page 1565 and being more
particularly described as follows:
A strip of land 10.00 feet wide extending Southeasterly from the Northwesterly
line of said PCL. 1 and PCL. 2 and lying 5.00 feet on each side of a line that
begins at the most Northerly corner of said PCL. 1 and runs thence along the
Northeasterly line of said PCL. 1, S. 52 degrees 27' 12" E. 375.00 feet.
Excepting therefrom that portion lying within the bounds of Parcel 2 mentioned
hereinabove.
APN: 097-79-004, x010
ARB: 97-3-x4, x4.01
A(1)-8
EXHIBIT A(2)
FACILITY 2 LAND
[PARCEL 3 -- 4000 NORTH FIRST STREET]
REAL PROPERTY in the City of San Jose, County of Santa Clara, State of
California, described as follows:
All of Parcel 4, as shown upon that Parcel Map which was filed for record in the
Office of the Recorder of the County of Santa Clara, State of California on July
13, 1984 in Book 531 of Maps, at pages 41 and 42.
APN: 097-03-049, 056
ARB: 097-03-005.03 & 015.01
A(2)-1
[PARCEL 5 -- 4041 NORTH FIRST STREET]
REAL PROPERTY in the City of San Jose, County of Santa Clara, State of
California, described as follows:
PARCEL ONE:
Parcel 1, as shown on that certain Parcel Map filed for record in the office of
the Recorder of the County of Santa Clara, State of California on July 13, 1983,
in Book 514 of Maps page(s) 47 and 48.
PARCEL TWO:
An easement for the purpose of ingress and egress, said easement being more
particularly described as follows:
Beginning at the Westerly corner common to Parcels 1 and 2, as said parcels are
shown on that certain Parcel Map recorded in Book 514 of Maps, at pages 47 and
48 of Official Records, Santa Clara County, said point of beginning also being
on the Southeasterly right-of-way of Vista Montana (30 feet in half street) as
said Vista Montana is shown on said Tract Map and the most Northerly corner of
Parcel A as said Parcel is shown on the Grant Deed recorded January 12, 1996 in
Book P163 of Official Records, at pages 1259 through 1266; thence from said
point of beginning Southeasterly along the line common to said Parcel 1 and
Parcels A and B, as shown on said Grant Deed South 52 degrees 27' 12" East
136.38 feet to its intersection with a non-tangent curve concave to the
Northwest having a radius of 50 feet and a radial bearing of South 52 degrees
27' 12" East at said intersection; thence Southerly and Westerly along said
curve, through a central angle of 147 degrees 49' 56" an arc length of 129.01
feet; thence along a line parallel with and lying 26.62 feet (perpendicular
distant) Southwesterly of said line common to Parcel 1 and Parcels A and B,
North 52 degrees 27' 12" West 44.05 feet to said Southeasterly right-of-way line
of Vista Montana; thence along said right-of-way line North 37 degrees 32' 48"
East 26.62 feet to the point of beginning.
APN: 097-53-015
ARB: 34 506/24
A(2)-2
[PARCEL 6 -- 3011 NORTH FIRST STREET]
REAL PROPERTY in the City of San Jose, County of Santa Clara, State of
California, described as follows:
PARCEL ONE:
Lot D, as shown on that certain Map entitled "Parcel Map being a portion of The
Rancho Rincon De Los Esteros", which Map was filed for record in the office of
the Recorder of the County of Santa Clara, State of California on February 27,
1979, in Book 436 of Maps page(s) 9 and 10.
PARCEL TWO:
A non-exclusive for emergency ingress and egress and access as granted in the
Easement Agreement recorded June 22, 1998 as Instrument No. 14246271, Official
Records, being more particularly described as follows:
A strip of land situate in Lot "E", as said lot is shown on that certain Parcel
Map filed for record in Book 436 of Maps at pages 9 and 10, and lying within the
City of San Jose, County of Santa Clara, State of California, described as
follows:
Beginning at a point on the Northeasterly line of said Lot "E", distant South 30
degrees 04' 00" East 58.06 feet from the most Northerly corner of said Lot "E";
Thence continuing South 30 degrees 04' 00" East along said Northeasterly line
24.46 feet;
Thence Southerly along a non-tangent curve to the left with a radius of 30.00
feet, from which a radial line bears North 45 degrees 02' 16" West, through a
central angle of 75 degrees 01' 44" for an arc length of 39.28 feet to a point
22.25 feet Southwesterly, measured at right angles, from said Northeasterly
line;
Thence South 30 degrees 04' 00" East 445.12 feet along a line parallel with and
distant 22.25 feet Southwesterly, measured at right angles, from said
Northeasterly line;
Thence Southeasterly along a tangent curve to the left with a radius of 30.00
feet through a central angle of 75 degrees 01' 44" for an arc length of 39.28
feet to a point on said Northeasterly line;
Thence South 30 degrees 04' 00" East along said Northeasterly line 24.46 feet;
Thence Westerly along a non-tangent curve to the right with a radius of 54.00
feet, from which a radial line bears South 21 degrees 48' 55" East, through a
central angle of 81 degrees 44' 55" for an arc length of 77.05 feet to a point
46.25 feet Southwesterly, measured at right angles, from said Northeasterly
line;
A(2)-3
Thence North 30 degrees 04' 00" West 445.12 feet along a line parallel with and
distant 46.25 feet Southwesterly, measured at right angles, from said
Northeasterly line;
Thence Northerly along a tangent curve to the right with a radius of 54.00 feet,
through a central angle of 81 degrees 44' 55" for an arc length of 77.05 feet to
said point of beginning.
APN: 097-56-003
ARB: 097-12-036.04
A(2)-4
EXHIBIT B
RELATED GOODS
NONE
B-1
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 September 21, 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 September 21, 2001 (the "Facility 2
Lease Agreement") between Lessee and Lessor. Unless otherwise indicated, all
terms defined in the Participation Agreement have the same respective meanings
when used herein.
2. Lessee hereby agrees that the description of "Related Goods" set
forth in Exhibit B to the Lease Agreement shall be supplemented by adding
thereto the Related Goods described in Attachment 1 hereto. Lessee hereby
accepts all such Related Goods and agrees that such Related Goods constitute
part of the Facility 2 Property subject to the Lease Agreement.
IN WITNESS WHEREOF, Lessee has executed this Supplement to Exhibit B on
the date set forth above.
LESSEE: NOVELLUS SYSTEMS, INC.
By: _____________________________________
Name: _______________________________
Title: ______________________________
LESSOR: ABN AMRO LEASING, INC.
By: _____________________________________
Name: _______________________________
Title: ______________________________
B(1)-1
ATTACHMENT 1
TO
SUPPLEMENT TO EXHIBIT B
B(SCH-1)-1
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 September 21, 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 September 21, 2001 (the "Facility 2
Lease Agreement") between Lessee and Lessor. Unless otherwise indicated, all
terms defined in the Participation Agreement have the same respective meanings
when used herein.
2. [Insert one of the following as appropriate]
[Pursuant to Subparagraph 2.03(a) of the Facility 2 Lease Agreement,
Lessee hereby irrevocably selects a new Rental Period for a Portion of the
Outstanding Lease Amount as follows:
(a) The Portion for which a new Rental Period is to be selected
is the Portion in the amount of $__________ with a current Rental Period
which began on ________, ____ and ends on __________, ____; and
(b) The next Rental Period for such Portion shall be __________
month[s].]
[Pursuant to Subparagraph 2.03(a) of the Facility 2 Lease
Agreement, Lessee hereby irrevocably elects to divide a Portion of the
Outstanding Lease Amount into further Portions as follows:
(a) The Portion which is to be divided is the Portion in the
amount of $__________ with a current Rental Period which began on
________, ____ and ends on __________, ____; and
C-1
(b) On the last day of the current Rental Period for such
Portion, such Portion is to be divided into the following Portions with
the following initial Rental Periods:
Portion Rental Period
------------ ----------------
$___________ _______ month[s]
$___________ _______ month[s]
$___________ _______ month[s]
$___________ _______ month[s]]
[Pursuant to Subparagraph 2.03(a) of the Facility 2 Lease Agreement,
Lessee hereby irrevocably elects to combine into a single Portion certain
Portions of the Outstanding Lease Amount as follows:
(a) The Portions which are to be combined are the Portions in
the amounts of $__________, $_________ and $_______, each with a current
Rental Period which ends on __________, ____; and
(b) The initial Rental Period for such newly created Portion
shall be __________ month[s].]
3. Lessee hereby certifies to the Lessor Parties (other than Novellus
Participant) 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
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
================================================================================
FACILITY 2 LEASE AGREEMENT
DEED OF TRUST WITH ASSIGNMENT OF RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
BETWEEN
NOVELLUS SYSTEMS, INC.
AND
ABN AMRO LEASING, INC.
SEPTEMBER 21, 2001
================================================================================
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.........................................................................3
2.04. Use..........................................................................5
2.05. As Is Lease..................................................................5
2.06. Nature of Transaction........................................................6
2.07. Security, Etc................................................................6
SECTION 3. OTHER LESSEE AND LESSOR RIGHTS AND OBLIGATIONS..................................8
3.01. Maintenance, Repair, Etc.....................................................8
3.02. Risk of Loss................................................................10
3.03. Insurance...................................................................10
3.04. Casualty and Condemnation...................................................12
3.05. Taxes.......................................................................16
3.06. Environmental Matters.......................................................16
3.07. Liens, Easements, Etc.......................................................17
3.08. Subletting..................................................................18
3.09. Utility Charges.............................................................19
3.10. Removal of Facility 2 Property..............................................19
3.11. Compliance with Governmental Rules and Insurance Requirements...............19
3.12. Permitted Contests..........................................................19
3.13. Lessor Obligations; Right to Perform Lessee Obligations.....................20
3.14. Inspection Rights...........................................................20
SECTION 4. EXPIRATION DATE................................................................20
4.01. Termination by Lessee Prior to Scheduled Expiration Date....................20
4.02. Surrender of Facility 2 Property............................................20
4.03. Holding Over................................................................20
SECTION 5. DEFAULT........................................................................21
5.01. Events of Default...........................................................21
5.02. General Remedies............................................................23
-i-
TABLE OF CONTENTS
(CONTINUED)
PAGE
----
5.03. Lease Remedies..............................................................24
5.04. Loan Remedies...............................................................25
5.05. [Reserved]..................................................................28
5.06. Remedies Cumulative.........................................................28
5.07. No Cure or Waiver...........................................................28
5.08. Exercise of Rights and Remedies.............................................28
5.06 SNDA........................................................................28
SECTION 6. MISCELLANEOUS..................................................................29
6.01. Notices.....................................................................29
6.02. Waivers; Amendments.........................................................29
6.03. Successors and Assigns......................................................29
6.04. No Third Party Rights.......................................................29
6.05. Partial Invalidity..........................................................29
6.06. Governing Law...............................................................29
6.07. Counterparts................................................................29
6.08. Nature of Lessee's Obligations..............................................29
SCHEDULE
3.03 Insurance Requirements
EXHIBITS
A(1) Facility 1 Land (2.01(a))
A(2) Facility 2 Land (2.01(a))
B Related Goods (2.01(d))
C Notice of Rental Period Selection (2.03(a))
-ii-
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FACILITY 3 LEASE AGREEMENT
CONSTRUCTION DEED OF TRUST WITH ASSIGNMENT OF RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
THIS FACILITY 3 LEASE AGREEMENT, CONSTRUCTION DEED OF TRUST WITH
ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE FILING (this "Agreement"
herein), dated as of September 21, 2001 is entered into by and between:
(1) NOVELLUS SYSTEMS, INC., a California corporation ("Lessee");
and
(2) ABN AMRO LEASING, INC., an Illinois corporation, as lessor
under this Agreement and as trustee under the deed of trust contained
herein ("Lessor").
RECITALS
A. Lessee has requested Lessor and the Persons which are "Participants"
under the Participation Agreement referred to in Recital B below (such Persons
to be referred to collectively as the "Participants") to provide to Lessee a
lease facility pursuant to which:
(1) Lessor would (a) lease certain property designated by Lessee
to Lessee, (B) appoint Lessee as Lessor's agent to make certain
improvements to such property, (c) make advances to finance such
improvements and to pay certain related expenses and (d) grant to Lessee
the right to purchase such property; and
(2) The Participants would participate in such lease facility by
(a) funding the advances to be made by Lessor and (b) acquiring
participation interests in the rental and certain other payments to be
made by Lessee.
B. Pursuant to a Participation Agreement dated of even date herewith
(the "Participation Agreement") among Lessee, 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:
1
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. Lessor agrees to lease to Lessee and Lessee
agrees to lease from Lessor the following property (the "Facility 3 Property")
to the extent of Lessor's estate, right, title and interest therein, thereto or
thereunder:
(a) All lots, pieces, tracts and parcels of land described in
Exhibit A (the "Facility 3 Land");
(b) All Improvements now or hereafter located on the Facility 3
Land;
(c) All Appurtenant Rights belonging, relating or pertaining to
the Facility 3 Land or the Improvements thereto;
(d) All Related Goods (including those described in Exhibit B
and in each Exhibit B Supplement), Related Permits and Related
Agreements related to the Facility 3 Land or any of the foregoing
Improvements or Appurtenant Rights; and
(e) All accessions and accretions to and replacements and
substitutions for the foregoing.
2.02. Term.
(a) Original Term. The original term of this Agreement shall
commence on the Closing Date (the "Commencement Date") and shall end on
the date five (5) years after the Closing Date (such date as it may be
extended pursuant to Subparagraph 2.02(b) to be referred to as the
"Scheduled Expiration Date").
(b) Extensions. Lessee may request Lessor to extend the
Scheduled Expiration Date in effect at any time for three (3) additional
periods of one (1) year each, as provided in Subparagraph 2.09(b) of the
Participation Agreement. If Lessor and each Participant (other than
Novellus Participant) consents to any such a request in accordance with
such provision, the then current Scheduled Expiration Date shall be
deemed extended by one (1) year in each instance. Lessee acknowledges
that neither Lessor nor
2
any Participant has any obligation or commitment (either express or
implied) to extend, or consent to the extension of, the Scheduled
Expiration Date at any time.
2.03. Rent.
(a) Base Rent.
(i) Lessee shall pay to Lessor as base rent hereunder
("Base Rent") for each Rental Period for each Portion of the
Outstanding Lease Amount an amount equal to the sum of the
Interest Component and Principal Component for such Rental
Period determined as follows:
(A) "Interest Component" shall mean, with
respect to any Rental Period and Portion, the product of
(1) the Rental Rate for such Rental Period and Portion,
times (2) the amount of such Portion on the first day of
such Rental Period, times (3) a fraction, the numerator
of which is the number of days in such Rental Period and
the denominator of which is 360. If the Rental Rate
shall change during any Rental Period, the Rental Rate
for such Rental Period shall be the weighted average of
the Rental Rates in effect from time to time during such
Rental Period.
(B) "Principal Component" shall mean, with
respect to any Rental Period, zero Dollars ($0.00).
(ii) Prior to the Commitment Termination Date, the
Outstanding Lease Amount shall consist of a single Portion with
the following Rental Periods:
(A) A Rental Period which begins on the
Commencement Date and ends on the first Business Day in
the first calendar month immediately following the month
in which the Commencement Date occurs; and
(B) Each successive Rental Period thereafter
which begins on the last day of the immediately
preceding Rental Period and ends one (1) month
thereafter on the first Business Day of a calendar month
through and including the Commitment Termination Date.
(iii) On and after the Commitment Termination Date,
Lessee may select the number and amounts of the Portions into
which the Outstanding Lease Amount is to be divided and the
Rental Period for each such Portion by delivering to Lessor, at
least three (3) Business Days prior to the Commitment
Termination Date and thereafter the last day of each Rental
Period for a Portion, an irrevocable written notice in the form
of Exhibit C, appropriately completed (a "Notice of Rental
Period Selection"), subject to the following:
(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
3
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; provided, however,
that with respect to the initial Rental Period, the
Rental Rate may be calculated (at ABN AMRO's discretion)
based upon ABN AMRO's "cost of funds"; 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 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
4
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") all amounts (other than
Base Rent, the purchase price payable by Lessee for any purchase
of the Facility 3 Property by Lessee pursuant to the Facility 3
Purchase Agreement and the Residual Value Guaranty Amount
payable under the Facility 3 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.
2.04. Use. Lessee may use the Facility 3 Property for office, research
and development, warehouse and manufacturing purposes, and for any other purpose
which is in compliance with applicable zoning laws and ordinances for the
Facility 3 Property.
2.05. As Is Lease. Lessee has conducted, or will conduct from time to
time with regard to Facility 3 Property that may be added hereto after the date
hereof, all due diligence which it deems appropriate regarding the Facility 3
Property and agrees that no Lessor Party has any obligation to conduct any such
due diligence. Lessee is leasing the Facility 3 Property "as is, with all
faults" without any representation, warranty, indemnity or undertaking by any
Lessor Party regarding any aspect of the Facility 3 Property, including (a) the
condition of the Facility 3 Property (including any Improvements to the Facility
3 Property made prior to the Commencement Date or during the Term); (b) title to
the Facility 3 Property (including possession of the Facility 3 Property by any
Person or the existence of any Lien or any other right, title or interest in or
to any of the Facility 3 Property in favor of any Person); (c) the value,
habitability, usability, design, operation or fitness for use of the Facility 3
Property; (d) the availability or adequacy of utilities and other services to
the Facility 3 Property; (e) any latent, hidden or patent defect in the Facility
3 Property; (f) the zoning or status of the Facility 3 Property or any other
restrictions on the use of the Facility 3 Property; (g) the economics of the
Facility 3 Property; (h) any Casualty or Condemnation; or (i) the compliance of
the Facility 3 Property with any applicable Governmental Rule or Insurance
Requirement; provided, however, that Lessor shall be obligated to remove Lessor
Liens to the extent required in Subparagraph 5.04(b) of the Participation
Agreement. Without limiting the generality of the foregoing, Lessee specifically
waives any covenant of quiet enjoyment except as otherwise provided in
Subparagraph 5.04(b) of the Participation Agreement.
2.06. Nature of Transaction. As more fully provided in Paragraph 2.10 of
the Participation Agreement, Lessee and the Lessor Parties intend that the
transaction evidenced by this Agreement and the other Operative Documents
constitute an operating lease in accordance with FASB 13 for accounting purposes
and a loan secured by the Facility 3 Property for all other
5
purposes, including federal, state and local tax purposes and commercial, real
estate and bankruptcy law purposes.
2.07. Security, Etc. In order to secure the Lessee Obligations and
otherwise to assure the Lessor Parties the benefits hereof in the event that the
transaction evidenced by this Agreement and the other Operative Documents is,
pursuant to the intent of Lessee and the Lessor Parties, treated as a loan for
certain purposes, Lessee hereby makes the following grants and agrees as
follows:
(a) Real Property Security. As security for the Lessee
Obligations under Facility 3, Lessee hereby irrevocably and
unconditionally grants, conveys, transfers and assigns to Lessor, as
trustee under this deed of trust, for the benefit of Lessor, as
beneficiary (in trust for the benefit of the Lessor Parties), with power
of sale and right of entry and possession, all estate, right, title and
interest of Lessee in the following property, whether now owned or
leased or hereafter acquired, (collectively, the "Real Property
Collateral"):
(i) The Facility 3 Land;
(ii) All Improvements now or hereafter located on the
Facility 3 Land;
(iii) All Appurtenant Rights belonging, relating or
pertaining to any of the Facility 3 Land or Improvements
thereto;
(iv) All Subleases and Issues and Profits accruing from
the Facility 3 Land or any of the foregoing Improvements or
Appurtenant Rights to the extent that such Subleases and Issues
and Profits constitute real property;
(v) All Related Goods, Related Agreements and Related
Permits related to any of the Facility 3 Land or any of the
foregoing Improvements or Appurtenant Rights to the extent that
such Related Goods, Related Agreements and Related Permits
constitute real property;
(vi) All other Facility 3 Property to the extent that
such property constitutes real property; and
(vii) All proceeds of the foregoing, including Casualty
and Condemnation Proceeds.
(b) Personal Property Security. As security for the Lessee
Obligations under Facility 3, Lessee hereby irrevocably and
unconditionally assigns and grants to Lessor, for the benefit of the
Lessor Parties, a security interest in all estate, right, title and
interest of Lessee in the following property, whether now owned or
leased or hereafter acquired, (collectively, the "Personal Property
Collateral"):
(i) All Subleases and Issues and Profits accruing from
the Facility 3 Land or any of the foregoing Improvements or
Appurtenant Rights to the extent that such Subleases and Issues
and Profits constitute personal property;
6
(ii) All Related Goods, Related Agreements and Related
Permits related to the Facility 3 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 Participant) in connection
with this Agreement or any other Operative Document (including
any Repair and Restoration Account);
(iv) All other Facility 3 Property to the extent such
Facility 3 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
California Commercial Code with respect to the Related Goods which are
or are to become fixtures on the Facility 3 Land or Facility 3
Improvements. The mailing addresses of Lessee and of Lessor from which
information concerning security interests hereunder may be obtained are
as set forth on 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, not an
assignment for security purposes only, and Lessor's right to the
Subleases and Issues and Profits is not contingent upon, and may be
exercised without possession of, the Facility 3 Property.
(i) If no Event of Default has occurred and is
continuing, Lessee shall have a revocable license to collect and
retain the Issues and Profits as they become due. Upon the
occurrence and during the continuance of an Event of Default,
such license shall automatically terminate, and Lessor may
collect and apply the Issues and Profits pursuant to
Subparagraph 5.02(d) without further notice to Lessee or any
other Person and without taking possession of the Facility 3
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
7
by Lessor for the payment to Lessor of any rental or other sums
which may become due under the Subleases or for the performance
of any of the sublessees' undertakings under the Subleases.
Collection of any Issues and Profits by Lessor shall not cure or
waive any default or notice of default hereunder or invalidate
any acts done pursuant to such notice.
(ii) The foregoing irrevocable assignment shall not
cause any Lessor Party to be (A) a mortgagee in possession; (B)
responsible or liable for (1) the control, care, management or
repair of the Facility 3 Property or for performing any of
Lessee's obligations or duties under the Subleases, (2) any
waste committed on the Facility 3 Property by the sublessees
under any of the Subleases or by any other Persons, (3) any
dangerous or defective condition of the Facility 3 Property, or
(4) any negligence in the management, upkeep, repair or control
of the Facility 3 Property resulting in loss or injury or death
to any sublessee, licensee, employee, invitee or other Person;
or (C) responsible for or impose upon any Lessor Party any duty
to produce rents or profits. No Lessor Party, in the absence of
gross negligence or willful misconduct on its part, shall be
liable to Lessee as a consequence of (y) the exercise or failure
to exercise any of the rights, remedies or powers granted to
Lessor hereunder or (z) the failure or refusal of Lessor to
perform or discharge any obligation, duty or liability of Lessee
arising under the Subleases.
SECTION 3. OTHER LESSEE AND LESSOR RIGHTS AND OBLIGATIONS.
3.01. Maintenance, Repair, Etc.
(a) General. Lessee shall not permit any waste of the Facility 3
Property, except for ordinary wear and tear, and shall, at its sole cost
and expense, maintain the Facility 3 Property in good working order,
mechanical condition and repair and make all necessary repairs thereto,
of every kind and nature whatsoever, whether interior or exterior,
ordinary or extraordinary, structural or nonstructural or foreseen or
unforeseen, in each case as required by all applicable Governmental
Rules and Insurance Requirements and on a basis consistent with the
operation and maintenance of commercial properties comparable in type
and location to the Facility 3 Property and in compliance with prudent
industry practice.
(b) New Improvements. Lessee shall make or cause to be made all
of the New Improvements authorized and required by the Facility 3
Construction Agency Agreement in accordance with the Facility 3
Construction Agency Agreement.
(c) Other Modifications. After the Completion of the New
Improvements, Lessee, at its sole cost and expense, may from time to
time make alterations, renovations, improvements and additions to the
Facility 3 Property and substitutions and replacements therefor
(collectively, "Modifications") in addition to the New Improvements;
provided that:
8
(i) No Modification impairs the value, utility or useful
life of the Facility 3 Property or any part thereof from that
which existed immediately prior to such Modification;
(ii) All Modifications are made expeditiously and, in no
case, unless Lessee currently is exercising either the Term
Purchase Option or the Expiration Date Purchase Option, shall
Modifications remain uncompleted later than six (6) months prior
to the Scheduled Expiration Date;
(iii) All Modifications are made in a good and
workmanlike manner and in compliance with all applicable
Governmental Rules and Insurance Requirements;
(iv) Subject to Paragraph 3.12 relating to permitted
contests, Lessee pays all costs and expenses and discharges (or
cause to be insured or bonded over) any Liens arising in
connection with any Modification not later than the earlier of
(A) sixty (60) days after the same shall be filed (or otherwise
becomes effective) and (B) unless Lessee currently is exercising
either the Term Purchase Option or the Expiration Date Purchase
Option, six (6) months prior to the Scheduled Expiration Date;
(v) At least one (1) month prior to the commencement of
(A) any Modifications which are anticipated to cost $500,000 or
more in the aggregate, or (B) any Modifications which cause the
total of all Modifications undertaken during the previous twelve
month period to exceed an aggregate cost of $1,000,000, Lessee
shall deliver to Lessor, with sufficient copies for Agent and
each Participant(other than Novellus Participant), a brief
written description of such Modifications; and
(vi) All Modifications otherwise comply with this
Agreement and the other Operative Documents.
(d) Abandonment. Lessee shall not abandon the Facility 3
Property or any material portion thereof for any period in excess of
thirty (30) consecutive days during the term hereof, except as a part of
any New Improvements or Modifications as permitted herein or in the
other Operative Documents.
(e) Maintenance. Lessee shall maintain the Facility 3 Property
and each material portion thereof in a manner consistent with other
similar properties in the same area, except as a part of any New
Improvements or Modifications as permitted herein.
3.02. Risk of Loss. Lessee assumes all risks of loss arising from any
Casualty or Condemnation which arises or occurs prior to the Expiration Date or
while Lessee is in possession of the Facility 3 Property and all liability for
all personal injuries and deaths and damages to property suffered by any Person
or property on or in connection with the Facility 3 Property which arises or
occurs prior to the Expiration Date or while Lessee is in possession of the
Facility 3 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
9
Lessee shall have no obligation under this Paragraph 3.02 on account of any such
loss or liability arising under Facility 3 during the Construction Period except
as follows:
(a) Lessee shall be liable under this Paragraph 3.02 for all
such losses and liabilities arising under Facility 3 during the
Construction Period if caused by or arising from any failure by Lessee
to comply with any of its obligations under the Operative Documents
(including its insurance obligations), any representation by Lessee in
any of the Operative Documents not being true, any negligence or willful
misconduct of Lessee, or any claim by any third-party against Lessee (or
against any Lessor Party) based upon any alleged action or inaction by
Lessee.
(b) If any Lessor Party incurs any such loss or liability
arising under Facility 3 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 Facility 3 Property as a result of any such event.
3.03. Insurance.
(a) Coverage.
(i) During the Construction Period, Lessee shall arrange
for insurance as agent for Lessor and the incremental cost of
such insurance shall be capitalized as a project cost. Such
insurance coverage, during the Construction Period, shall be not
less than set forth in Schedule 3.03 and such additional
insurance of the types (including the types set forth in
Schedule 3.03), in amounts and in a form acceptable to Lessor.
The deductibles for all such insurance shall be limited to
$25,000 for flood coverage, $-0- for earthquake coverage, and
$10,000 for all other coverage.
(ii) After the Construction Period, Lessee, at its sole
cost and expense, shall at all times carry and maintain
insurance coverage. Such insurance coverage, after the
Construction Period, shall be not less than set forth in
Schedule 3.03 and such additional insurance of the types
(including the types set forth in Schedule 3.03), in amounts, in
a form and with deductibles customarily carried by a reasonably
prudent Person owning or operating properties similar to the
Facility 3 Property in the same geographic area as the Facility
3 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
10
successor thereto (or if there is none, an organization having a similar
national reputation) or (ii) is otherwise approved by Lessor and
Required Participants; provided, however, that, any insurance company
underwriting Lessee's earthquake and flood insurance shall be acceptable
as long as each such insurance company has a general policyholder rating
of "A-" and a financial rating of at least VIII from A.M. Best Company
on the date such insurance is placed.
(c) Terms. Each insurance policy maintained by Lessee pursuant
to this Paragraph 3.03 shall provide as follows, whether through
endorsements or otherwise:
(i) Lessor and Agent shall be named as additional
insureds, in the case of each policy of liability insurance, and
additional loss payees, in the case of each policy of property
insurance.
(ii) In respect of the interests of Lessor in the
policy, the insurance shall not be invalidated by any action or
by inaction of Lessee or by any Person having temporary
possession of the Facility 3 Property while under contract with
Lessee to perform maintenance, repair, alteration or similar
work on the Facility 3 Property, and shall insure the interests
of Lessor regardless of any breach or violation of any warranty,
declaration or condition contained in the insurance policy by
Lessee, Lessor or any other additional insured (other than by
such additional insured, as to such additional insured);
provided, however, that the foregoing shall not be deemed to (A)
cause such insurance policies to cover matters otherwise
excluded from coverage by the terms of such policies or (B)
require any insurance to remain in force notwithstanding
non-payment of premiums except as provided in clause (iii)
below.
(iii) If the insurance policy is cancelled for any
reason whatsoever, or substantial change is made in the coverage
that affects the interests of Lessor, or if the insurance
coverage is allowed to lapse for non-payment of premium, such
cancellation, change or lapse shall not be effective as to
Lessor for thirty (30) days after receipt by Lessor of written
notice from the insurers of such cancellation, change or lapse.
(iv) No Lessor Party shall have any obligation or
liability for premiums, commissions, assessments, or calls in
connection with the insurance.
(v) The insurer shall waive any rights of set-off or
counterclaim or any other deduction, whether by attachment or
otherwise, that it may have against any Lessor Party.
(vi) The insurance shall be primary without right of
contribution from any other insurance that may be carried by any
Lessor Party with respect to its interest in the Facility 3
Property.
(vii) The insurer shall waive any right of subrogation
against any Lessor Party (other than Novellus Participant).
11
(viii) All provisions of the insurance, except the
limits of liability, shall operate in the same manner as if
there were a separate policy covering each insured party.
(ix) The insurance shall not be invalidated should
Lessee or any Lessor Party waive, in writing, prior to a loss,
any or all rights of recovery against any Person for losses
covered by such policy, nor shall the insurance in favor of any
Lessor Party or Lessee, as the case may be, or their respective
rights under and interests in said policies be invalidated or
reduced by any act or omission or negligence of any Lessor Party
or Lessee, as the case may be, or any other Person having any
interest in the Facility 3 Property.
(x) All insurance proceeds with a value of less than
five hundred thousand Dollars ($500,000) payable in respect of
any loss or occurrence with respect to the Facility 3 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
Facility 3 Property after the Construction Period shall be paid
to and adjusted solely by Lessee. All other insurance proceeds
shall be paid to Lessor and adjusted jointly by Lessor and
Lessee, except that, from and after the date on which the
insurer receives written notice from Lessor that an Event of
Default has occurred and is continuing (and unless and until
such insurer receives written notice from Lessor that all Events
of Default have been cured), all losses shall be adjusted solely
by, and all insurance proceeds shall be paid solely to, Lessor.
(xi) Each policy of property insurance shall contain a
standard form mortgagee endorsement in favor of Lessor.
(xii) Each insurance policy shall provide that the
coverage to be provided thereunder shall not be invalidated in
the event Lessee or any Lessor Party fails to maintain other
insurance covering losses of a similar type or types.
(xiii) Each insurance policy shall contain a
"severability of interest" provision.
(xiv) Each insurance policy which is written as "excess
insurance" shall contain a provision that it will drop down in
the event that any underlying insurance coverage has been
reduced or exhausted by reason of losses paid thereunder.
(d) Evidence of Insurance. Lessee, at its sole cost and expense,
shall furnish to Lessor (i) not later than the Commencement Date, copies
of all policies of insurance required by this Paragraph 3.03, certified
by the insurers, (ii) upon each renewal of insurance and upon any
material change in the terms thereof, copies of all policies, amendments
and/or endorsements evidencing such renewal or change, certified by the
insurers, and (iii) upon the request of Lessor, such other certificates
or documents as
12
Lessor may reasonably request to evidence Lessee's compliance with the
insurance requirements set forth in this Paragraph 3.03.
(e) Release of Lessor Parties. Lessee hereby waives, releases
and discharges each Lessor Party and its directors, officers, employees,
agents and advisors from all claims whatsoever arising out of any loss,
claim, expense or damage to or destruction covered or coverable by
insurance required under this Paragraph 3.03, notwithstanding that such
loss, claim, expense or damage may have been caused by any such Person,
and, as among Lessee and such Persons, Lessee agrees to look to the
insurance coverage only in the event of such loss.
3.04. Casualty and Condemnation.
(a) Notice. Lessee shall give Lessor prompt written notice of
the occurrence of any Material Casualty affecting, or the institution of
any proceedings for the Condemnation of, the Facility 3 Property or any
portion thereof.
(b) Repair Obligations.
(i) If any Material Casualty or Condemnation affecting
the Facility 3 Property or any portion thereof occurs during the
Construction Period, Lessee shall, if so directed by Lessor and
Required Participants in writing, repair and restore the
Facility 3 Property as required by Subparagraph 3.04(c) to the
extent that Casualty and Condemnation Proceeds and Advances are
available for such work; provided, however, that, if Casualty
and Condemnation Proceeds and Advances are not available for
such work, Lessee shall pay Prepaid Rent if the Material
Casualty or Condemnation was 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.
(ii) If any Material Casualty or Condemnation affecting
the Facility 3 Property or any portion thereof occurs after the
Construction Period, Lessee shall, at its election, either (A)
repair and restore the Facility 3 Property as required by
Subparagraph 3.04(c) or (B) exercise the Term Purchase Option
and purchase the Facility 3 Property pursuant to the Purchase
Agreement; provided, however, that Lessee may not elect to
repair and restore the Facility 3 Property if such casualty or
condemnation is a Major Casualty or Major Condemnation or if an
Event of Default has occurred and is continuing unless Lessor
and the Required Participants shall consent in writing. (If such
casualty or condemnation is a Major Casualty or Major
Condemnation that occurs after the Construction Period, Lessee
shall exercise the Term Purchase Option and purchase the
Facility 3 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
13
consent in writing. If an Event of Default has occurred and is
continuing, Lessor Parties may exercise the rights provided
herein.) Not later than one (1) month after the occurrence of
any Material Casualty or any Condemnation occurring after the
Construction Period, Lessee shall deliver to Lessor a written
notice indicating whether it elects to repair and restore or
purchase the Facility 3 Property.
(c) Repair and Restoration. If Lessee is required to repair and
restore the Facility 3 Property following any Material Casualty or any
Condemnation, Lessee shall diligently proceed to repair and restore the
Facility 3 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;
provided, however, that Lessee shall in any event complete all such
repairs and restoration 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 (I)
Lessee currently is exercising either the Term Purchase Option or the
Expiration Date Purchase Option or (II) the Material Casualty or
Condemnation occurs during the Construction Period and is 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). 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"):
(A) Any Casualty and Condemnation Proceeds which
are available and are released to Lessee pursuant to
Subparagraph 3.04(f) if the Material Casualty or
Condemnation occurs during the Construction Period and
is 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); or
14
(B) 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) in all cases not covered by
the preceding clause (A).
(ii) As soon as reasonably possible and in no event
later than two (2) months after the occurrence of the Material
Casualty or the Condemnation, Lessee shall establish an
arrangement for lien releases and disbursement of funds
acceptable to Lessor and in a manner and upon such terms and
conditions as would be required by a prudent interim
construction lender.
(iii) As soon as reasonably possible and in no event
later than two (2) months after the occurrence of the Material
Casualty or the Condemnation, Lessee shall deliver to Lessor the
following, each in form and substance acceptable to Lessor:
(A) Evidence that the Facility 3 Property can,
in Lessor's reasonable judgment, with diligent
restoration or repair, be returned to a condition at
least equal to the condition thereof that existed prior
to the Casualty or partial Condemnation causing the loss
or damage within the earlier to occur of (A) six (6)
months after the occurrence of the Casualty or
Condemnation and (B) unless Lessee currently is
exercising either the Term Purchase Option or the
Expiration Date Purchase Option, six (6) months prior to
the Scheduled Expiration Date;
(B) Evidence that all necessary governmental
approvals can be timely obtained to allow the rebuilding
and reoccupancy of the Facility 3 Property;
(C) Copies of all plans and specifications for
the work;
(D) Copies of all contracts for the work, signed
by a contractor reasonably acceptable to Lessor;
(E) A cost breakdown for the work;
(F) A payment and performance bond for the work
or other security satisfactory to Lessor;
(G) Evidence that, upon completion of the work,
the size, capacity and total value of the Facility 3
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.
15
All plans and specifications for the work must be reasonably
acceptable to Lessor, except that Lessor's approval shall not be
required if the restoration work is based on the same plans and
specifications as were originally used to construct the Facility
3 Property. To the extent that the funds in a Repair and
Restoration Account include both Casualty and Condemnation
Proceeds and other funds deposited by Lessee, the other funds
deposited by Lessee shall be used first. Lessee acknowledges
that the specific conditions described above are reasonable.
(d) Prosecution of Claims for Casualty and Condemnation
Proceeds. Lessee shall proceed promptly and diligently to prosecute in
good faith the settlement or compromise of any and all claims for
Casualty and Condemnation Proceeds; provided, however, that any
settlement or compromise of any such claim shall, except as otherwise
provided in clause (x) of Subparagraph 3.03(c), be subject to the
written consent of Lessor and Required Participants, which consents
shall not be unreasonably withheld. Lessor may participate in any
proceedings relating to such claims, and, after the occurrence and
during the continuance of any Event of Default, Lessor is hereby
authorized, in its own name or in Lessee's name, to adjust any loss
covered by insurance or any Casualty or Condemnation claim or cause of
action, and to settle or compromise any claim or cause of action in
connection therewith, and Lessee shall from time to time deliver to
Lessor any and all further assignments and other instruments required to
permit such participation.
(e) Assignment of Casualty and Condemnation Proceeds. Lessee
hereby absolutely and irrevocably assigns to Lessor all Casualty and
Condemnation Proceeds and all claims relating thereto, subject to the
terms of this Agreement which require Lessor to make such proceeds
available to Lessee for restoration. Except as otherwise provided in
clause (x) of Subparagraph 3.03(c), Lessee agrees that all Casualty and
Condemnation Proceeds are to be paid to Lessor and Lessee hereby
authorizes and directs any insurer, Governmental Authority or other
Person responsible for paying any Casualty and Condemnation Proceeds to
make payment thereof directly to Lessor alone, and not to Lessor and
Lessee jointly. If Lessee receives any Casualty and Condemnation
Proceeds payable to Lessor hereunder, Lessee shall promptly pay over
such Casualty and Condemnation Proceeds to Lessor. Lessee hereby
covenants that until such Casualty and Condemnation Proceeds are so paid
over to Lessor, Lessee shall hold such Casualty and Condemnation
Proceeds in trust for the benefit of Lessor and shall not commingle such
Casualty and Condemnation Proceeds with any other funds or assets of
Lessee or any other Person. Except as otherwise provided in clause (x)
of Subparagraph 3.03(c), Lessor may commence, appear in, defend or
prosecute any assigned right, claim or action, and may adjust,
compromise, settle and collect all rights, claims and actions assigned
to Lessor, but shall not be responsible for any failure to collect any
such right, claim or action, regardless of the cause of the failure.
(f) Use of Casualty and Condemnation Proceeds.
(i) If (A) no Event of Default has occurred and is
continuing, (B) Lessee exercises the repair and restoration
option pursuant to Subparagraphs 3.04(b) and 3.04(c) and (C)
Lessee complies with any conditions imposed
16
pursuant to Subparagraph 3.04(c); then Lessor shall release any
Casualty and Condemnation Proceeds to Lessee for repair or
restoration of the Facility 3 Property, but may condition such
release and use of the Casualty and Condemnation Proceeds upon
deposit of the Casualty and Condemnation Proceeds in a Repair
and Restoration Account. Lessor shall have the option, upon the
completion of such restoration of the Facility 3 Property, to
apply any surplus Casualty and Condemnation Proceeds remaining
after the completion of such restoration to the payment of Rent
and/or the reduction of the Outstanding Lease Amount,
notwithstanding that such amounts are not then due and payable
or that such amounts are otherwise adequately secured.
(ii) If (A) an Event of Default has occurred and is
continuing, (B) Lessee fails to or is unable to comply with any
conditions imposed pursuant to Subparagraph 3.04(c) or (C)
Lessee elects to exercise the Term Purchase Option and purchase
the Facility 3 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 Participant) in
obtaining such proceeds; (2) apply the balance to the payment of
Rent and/or the reduction of the Outstanding Lease Amount,
notwithstanding that such amounts are not then due and payable
or that such amounts are otherwise adequately secured and/or (3)
release all or any part of such proceeds to Lessee upon any
conditions Lessor and the Required Participants may elect.
(iii) Lessor shall apply any Casualty and Condemnation
Proceeds which are to be used to reduce the Outstanding Lease
Amount only on the last day of a Rental Period unless an Event
of Default has occurred and is continuing.
(iv) Application of all or any portion of the Casualty
and Condemnation Proceeds, or the release thereof to Lessee,
shall not cure or waive any Default or notice of default or
invalidate any acts done pursuant to such notice.
17
3.05. Taxes. Subject to Paragraph 3.12 relating to permitted contests,
Lessee shall promptly pay when due all Indemnified Taxes imposed on or payable
by Lessee or any Lessor Party in connection with the Facility 3 Property, this
Agreement or any of the other Operative Documents, or any of the transactions
contemplated hereby or thereby. As promptly as possible after any Indemnified
Taxes are payable by Lessee, Lessee shall send to Lessor for the account of the
applicable Lessor Party a certified copy of an original official receipt
received by Lessee showing payment thereof. If Lessee fails to pay any such
Indemnified Taxes when due to the appropriate taxing authority or fails to remit
to Lessor the required receipts or other required documentary evidence, Lessee
shall indemnify the Lessor Parties for any incremental taxes, interest or
penalties that may become payable by the Lessor Parties as a result of any such
failure. The obligations of Lessee under this Paragraph 3.05 shall survive the
payment and performance of the Lessee Obligations and the termination of this
Agreement.
3.06. Environmental Matters.
(a) Lessee's Covenants. Lessee shall not cause or permit
Hazardous Materials to be used, generated, manufactured, stored,
treated, disposed of, transported or present on or released or
discharged from the Facility 3 Property in any manner that is reasonably
likely to have a Material Adverse Effect. Lessee shall immediately
notify Lessor in writing of (i) any knowledge by Lessee that the
Facility 3 Property does not comply with any Environmental Laws; and
(ii) any claims against Lessee or the Facility 3 Property relating to
Hazardous Materials or pursuant to Environmental Laws. In response to
the presence of any Hazardous Materials on, under or about the Facility
3 Property, Lessee shall immediately take, at Lessee's sole expense, all
remedial action required by any Environmental Laws or any judgment,
consent decree, settlement or compromise in respect to any claim based
thereon.
(b) Inspection By Lessor. Upon reasonable prior notice to
Lessee, Lessor, its employees and agents, may from time to time (whether
before or after the commencement of a nonjudicial or judicial
foreclosure proceeding), enter and inspect the Facility 3 Property for
the purpose of determining the existence, location, nature and magnitude
of any past or present release or threatened release of any Hazardous
Materials into, onto, beneath or from the Facility 3 Property.
(c) Indemnity. Without in any way limiting any other indemnity
contained in this Agreement or any other Operative Document, Lessee
agrees to defend, indemnify and hold harmless the Lessor Parties and the
other Indemnitees from and against any claim, loss, damage, cost,
expense or liability directly or indirectly arising out of (i) the use,
generation, manufacture, storage, treatment, release, threatened
release, discharge, disposal, transportation or presence of any
Hazardous Materials which are found in, on, under or about the Facility
3 Property or (ii) the breach of any covenant, representation or
warranty of Lessee relating to Hazardous Materials or Environmental Laws
contained in this Agreement or any Operative Document. This indemnity
shall include (A) the costs, whether foreseeable or unforeseeable, of
any investigation, repair, cleanup or detoxification of the Facility 3
Property which is required by any Governmental Authority or is otherwise
necessary to render the Facility 3 Property in compliance with all
Environmental Laws; (B) all other direct or indirect consequential
damages (including
18
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 (ii) of Subparagraph 4.01(t) of the
Participation Agreement are intended as Lessor's written request for
information (and Lessee's response) concerning the environmental
condition of the real property security as required by California Code
of Civil Procedure Section 726.5 and (ii) each representation and
warranty and covenant herein and therein (together with any indemnity
applicable to a breach of any such representation and warranty) with
respect to the environmental condition of the Facility 3 Property is
intended by Lessor and Lessee to be an "environmental provision" for
purposes of California Code of Civil Procedure Section 736.
3.07. Liens, Easements, Etc.
(a) Lessee's Covenants. Subject to Paragraph 3.12 relating to
permitted contests, Lessee shall not create, incur, assume or permit to
exist any Lien or easement on or with respect to any of the Facility 3
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, easements and leases 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, the Stanford Lease and the Cooley Lease;
(iii) Liens for taxes or other Governmental Charges not
at the time delinquent or thereafter payable without penalty;
(iv) Liens of carriers, warehousemen, mechanics,
materialmen and vendors and other similar Liens imposed by law
incurred in the ordinary course of business for sums not
overdue;
(v) Easements granted or created in connection with and
reasonably necessary for the construction of the New
Improvements or for the operation or maintenance of the Facility
3 Property in the ordinary course of business, in each case as
approved by Lessor; and
(vi) Lessor Liens.
19
Subject to Paragraph 3.12 relating to permitted contests, Lessee shall
promptly (A) pay all Indebtedness of Lessee and other obligations prior
to the time the non-payment thereof would give rise to a Lien on the
Facility 3 Property and (B) discharge, at its sole cost and expense, any
Lien on the Facility 3 Property which is not a Permitted Property Lien.
(b) No Consents. Nothing contained in this Agreement shall be
construed as constituting the consent or request of any Lessor Party,
express or implied, to or for the performance by any contractor,
mechanic, laborer, materialman, supplier or vendor of any labor or
services or for the furnishing of any materials for any construction,
alteration, addition, repair or demolition of or to the Facility 3
Property or any part thereof. NOTICE IS HEREBY GIVEN THAT NO LESSOR
PARTY IS OR SHALL BE LIABLE FOR ANY LABOR, SERVICES OR MATERIALS
FURNISHED OR TO BE FURNISHED TO LESSEE, OR TO ANYONE HOLDING THE
FACILITY 3 PROPERTY OR ANY PART THEREOF THROUGH OR UNDER LESSEE, AND
THAT NO MECHANIC'S OR OTHER LIENS FOR ANY SUCH LABOR, SERVICES OR
MATERIALS SHALL ATTACH TO OR AFFECT THE INTEREST OF ANY LESSOR PARTY IN
AND TO THE FACILITY 3 PROPERTY.
20
3.08. Subletting. Lessee may, in the ordinary course of business,
sublease the Facility 3 Property or any portion thereof to any Person, provided,
that (a) Lessee remains directly and primarily liable for performing its
obligations under this Agreement and all other Lessee Obligations; (b) each
sublease is subject to and subordinated to this Agreement; (c) each sublease
expressly provides for the surrender of the Facility 3 Property (or portion
thereof) by the sublessee on the Expiration Date; (d) each sublease has a term
which expires on or prior to the Scheduled Expiration Date (or, if longer,
includes a provision that the sublease terminates on the Expiration Date if such
Expiration Date occurs prior to the Scheduled Expiration Date unless Lessee
purchases the Facility 3 Property on the Expiration Date pursuant to the
Purchase Agreement); (e) each sublease prohibits the sublessee from engaging in
any activities on the Facility 3 Property other than those permitted by
Paragraph 2.04; and (f) no sublease has a Material Adverse Effect. Any sublease
which does not satisfy each of the requirements of the immediately preceding
sentence shall be null and void as to the Lessor Parties and their successor and
assigns. Except for such permitted subleases, Lessee shall not assign any of its
rights or interests under this Agreement to any other Person.
3.09. Utility Charges. Lessee shall pay all charges for electricity,
power, gas, oil, water, telephone, sanitary sewer service and all other
utilities and services to, on or in connection with the Facility 3 Property
during the Term.
3.10. Removal of Facility 3 Property. Lessee shall not remove any
Improvements from the Facility 3 Land or any other Facility 3 Property from the
Facility 3 Land or Improvements, except that, during the Term, Lessee may remove
any Modification or any trade fixture, machinery, equipment, inventory or other
personal property if such Modification or property (a) was not financed by an
Advance, (b) is not required by any applicable Governmental Rule or Insurance
Requirement and (c) is readily removable without impairing the value, utility or
remaining useful life of the Facility 3 Property.
3.11. Compliance with Governmental Rules and Insurance Requirements.
Lessee, at its sole cost and expense, shall (a) comply, and cause its agents,
sublessees, assignees, employees, invitees, licensees, contractors and tenants,
and the Facility 3 Property to comply, with all Governmental Rules and Insurance
Requirements relating to the Facility 3 Property (including the construction,
use, operation, maintenance, repair and restoration thereof, whether or not
compliance therewith shall require structural or extraordinary changes in the
Improvements or interfere with the use and enjoyment of the Facility 3
Property), and (b) procure, maintain and comply with all licenses, permits,
orders, approvals, consents and other authorizations required for the
construction, use, maintenance and operation of the Facility 3 Property and for
the use, operation, maintenance, repair and restoration of the Improvements.
3.12. Permitted Contests. Lessee, at its sole cost and expense, may
contest any alleged Lien or easement on any of the Facility 3 Property or any
alleged Governmental Charge, Indebtedness or other obligation which is payable
by Lessee hereunder to Persons other than the Lessor Parties or which, if
unpaid, would give rise to a Lien on any of the Facility 3 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
21
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 Participant), 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 Participant); (e) the failure to discharge such Lien or
easement or the failure to pay such Governmental Charge, Indebtedness or
obligation is not otherwise reasonably likely to have a Material Adverse Effect;
and (f) unless Lessee currently is exercising the Term Purchase Option or the
Expiration Date Purchase Option, any such contest is completed and such Lien or
easement is discharged (either pursuant to such proceedings or otherwise) or
such Governmental Charge, Indebtedness or obligation is declared invalid, paid
or otherwise satisfied not later than six (6) months prior to the Scheduled
Expiration Date.
3.13. Lessor Obligations; Right to Perform Lessee Obligations. No Lessor
Party shall have any obligation to (a) maintain, repair or make any improvements
to the Facility 3 Property, (b) maintain any insurance on the Facility 3
Property, (c) perform any other obligation of Lessee under this Agreement or any
other Lessee Obligation, (d) make any expenditure on account of the Facility 3
Property (except to make Advances as required by the Participation Agreement) or
(e) take any other action in connection with the Facility 3 Property, this
Agreement or any other Operative Document, except as expressly provided herein
or in another Operative Document; provided however, that Lessor may, in its sole
discretion and without any obligation to do so, after written notice to Lessee,
perform any Lessee Obligation not performed by Lessee when required. Lessor may
enter the Facility 3 Property or exercise any other right of Lessee under this
Agreement or any other Operative Document to the extent Lessor determines in
good faith that such entry or exercise is reasonably necessary for Lessor to
perform any such Lessee Obligation not performed by Lessee when required. Lessee
shall reimburse Lessor and the other Lessor Parties, within five (5) Business
Days after demand and delivery of written evidence of payment, for all fees,
costs and expenses reasonably incurred by them in performing any such obligation
or curing any Default.
3.14. Inspection Rights. During the Term, Lessee shall permit any Person
designated by Lessor, upon reasonable notice and during normal business hours,
to visit and inspect any of the Facility 3 Property.
22
SECTION 4. EXPIRATION DATE.
4.01. Termination by Lessee Prior to Scheduled Expiration Date. Subject
to the terms and conditions of the Purchase Agreement, Lessee may, on any
Scheduled Rent Payment Date prior to the Scheduled Expiration Date, terminate
this Agreement and purchase the Facility 3 Property pursuant to Section 2 of the
Purchase Agreement. Lessee shall notify Lessor of Lessee's election so to
terminate this Agreement and purchase the Facility 3 Property by delivering to
Agent a Notice of Term Purchase Option Exercise pursuant to and in accordance
with the provisions of Paragraph 2.02 of the Purchase Agreement.
4.02. Surrender of Facility 3 Property. Unless Lessee purchases the
Facility 3 Property on the Expiration Date pursuant to the Purchase Agreement,
Lessee shall vacate and surrender the Facility 3 Property to Lessor on the
Expiration Date in its then-current condition, subject to compliance by Lessee
on or prior to such date of its obligations under this Agreement and the other
Operative Documents (including the completion of the New Improvements and all
Modifications, the completion of all permitted contests and the removal of all
Liens which are not Permitted Property Liens of the types described in clauses
(i), (ii), (iii) or (iv) of Subparagraph 3.07(a)).
4.03. Holding Over. If Lessee does not purchase the Facility 3 Property
on the Expiration Date pursuant to the Purchase Agreement but continues in
possession of any portion of the Facility 3 Property after the Expiration Date,
Lessee shall pay rent for each day it so continues in possession, payable upon
demand of Lessor, at a per annum rate equal to the Alternate Rental Rate plus
two percent (2.0%) and shall pay and perform all of its other Lessee Obligations
under this Agreement and the other Operative Documents in the same manner as
though the Term had not ended; provided, however, that this Paragraph 4.03 shall
not be interpreted to permit such holding over or to limit any right or remedy
of Lessor for such holding over.
SECTION 5. DEFAULT.
5.01. Events of Default. The occurrence or existence of any one or more
of the following shall constitute an "Event of Default" hereunder:
(a) Non-Payment. Lessee shall (i) fail to pay on the Expiration
Date any amount payable by Lessee under this Agreement or any other
Operative Document on such date, (ii) fail to pay within five (5)
business days after any Scheduled Rent Payment Date any Base Rent
payable on such Scheduled Rent Payment Date (other than the Base Rent
payable on the Expiration Date) or (iii) fail to pay within five (5)
business days after the same becomes due, any Supplemental Rent or other
amount required under the terms of this Agreement or any other Operative
Document (other than any such amount payable on the Expiration Date or
Base Rent); or
(b) Specific Defaults. Lessee or any of its Subsidiaries shall
fail to observe or perform any covenant, obligation, condition or
agreement set forth in Subparagraph 3.01(d), Paragraph 3.03 or
Subparagraph 3.07(a) hereof, in Paragraph 5.02 or Paragraph
23
5.03 of the Participation Agreement or in Paragraph 3.01 or Paragraph
3.02 of the Facility 3 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 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
24
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
(i) Operative Documents. Any Operative Document or any material
term thereof shall cease to be, or be asserted by Lessee or any of its
Subsidiaries not to be, a legal, valid and binding obligation of Lessee
or any of its Subsidiaries enforceable in accordance with its terms; or
(j) ERISA. Any Reportable Event which constitutes grounds for
the termination of any Employee Benefit Plan by the PBGC or for the
appointment of a trustee by the PBGC to administer any Employee Benefit
Plan shall occur, or any Employee Benefit Plan shall be terminated
within the meaning of Title IV of ERISA or a trustee shall be appointed
by the PBGC to administer any Employee Benefit Plan; or
(k) Change of Control. Any Change of Control shall occur; or
(l) Construction Termination Event. Any Construction Termination
Event shall occur or exist; or
25
(m) Material Casualty or Condemnation. Any Material Casualty or
Material Condemnation affecting the Facility 3 Property and not fully
covered by insurance meeting the requirements set forth herein shall
occur during the Construction Period, unless Required Participants and
Lessor direct Lessee to repair and restore the Facility 3 Property
following such Casualty or Condemnation pursuant to clause (i) of
Subparagraph 3.04(b); or
(n) Material Adverse Effect. Any other event(s) or condition(s)
which is (are) reasonably likely to have a Material Adverse Effect shall
occur and be continuing or exist.
5.02. General Remedies. In all cases, except as otherwise provided in
Paragraph 5.05, upon the occurrence or existence of any Event of Default and at
any time thereafter unless such Event of Default is waived, Lessor may, with the
consent of the Required Participants, or shall, upon instructions from the
Required Participants, exercise any one or more of the following rights and
remedies (except that the remedy set forth in the first sentence of Subparagraph
5.02(a) shall be automatic):
(a) Termination of Commitments. If such Event of Default is an
Event of Default of the type described in Subparagraph 5.01(f) or
Subparagraph 5.01(g) affecting Lessee, immediately and without notice,
the obligation of Lessor to make Advances and the obligations of the
Participants to fund Advances shall automatically terminate. If such
Event of Default is any other Event of Default, Lessor may by written
notice to Lessee, terminate the obligation of Lessor to make Advances
and the obligations of the Participants to fund Advances.
(b) Appointment of a Receiver. Lessor may apply to any court of
competent jurisdiction for, and obtain appointment of, a receiver for
the Facility 3 Property.
(c) Specific Performance. Lessor may bring an action in any
court of competent jurisdiction to obtain specific enforcement of any of
the covenants or agreements of Lessee in this Agreement or any of the
other Operative Documents.
(d) Collection of Issues and Profits. Lessor may collect Issues
and Profits as provided in Subparagraph 2.07(c) and apply the proceeds
to pay Lessee Obligations.
(e) Protection of Facility 3 Property. Lessor may enter, take
possession of, manage and operate all or any part of the Facility 3
Property or take any other actions which it reasonably determines are
necessary to protect the Facility 3 Property and the rights and remedies
of the Lessor Parties (other than Novellus Participant) under this
Agreement and the other Operative Documents, including (i) taking and
possessing all of Lessee's books and records relating to the Facility 3
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.
26
(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, except as otherwise
provided in Paragraph 5.05, 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 Expiration Date exceeds the amount of such rental loss for the
same period that Lessee proves could reasonably be avoided.
(b) Continuation of Lease. Lessor may exercise the rights and
remedies provided by California Civil Code Section 1951.4, including the
right to continue this Agreement in effect after Lessee's breach and
abandonment and recover Rent as it becomes due. Acts of maintenance or
preservation, efforts to relet the Facility 3 Property, the appointment
of a receiver upon Lessor's initiative to protect its interest under
this Agreement or withholding consent to or terminating a sublease shall
not of themselves constitute a termination of Lessee's right to
possession.
(c) Removal and Storage of Facility 3 Property. Lessor may enter
the Facility 3 Property and remove therefrom all Persons and property,
store such property in a public warehouse or elsewhere at the cost of
and for the account of Lessee and sell such property and apply the
proceeds therefrom pursuant to applicable California law.
5.04. Loan Remedies. If the transaction evidenced by this Agreement and
the other Operative Documents is treated as a loan, except as otherwise provided
in Paragraph 5.05, 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
27
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 California
Uniform Commercial Code.
(c) Judicial Foreclosure. Lessor may bring an action in any
court of competent jurisdiction to foreclose the security interest in
the Facility 3 Property granted to Lessor by this Agreement or any of
the other Operative Documents.
(d) Power of Sale. Lessor may cause some or all of the Facility
3 Property, including any Personal Property Collateral, to be sold or
otherwise disposed of in any combination and in any manner permitted by
applicable Governmental Rules.
(i) Sales of Personal Property. Lessor may dispose of
any Personal Property Collateral separately from the sale of
Real Property Collateral, in any manner permitted by Division 9
of the California Uniform Commercial Code, including any public
or private sale, or in any manner permitted by any other
applicable Governmental Rule. Any proceeds of any such
disposition shall not cure any Event of Default or reinstate any
Lessee Obligation for purposes of Section 2924c of the
California Civil Code. In connection with any such sale or other
disposition, Lessee agrees that the following procedures
constitute a commercially reasonable sale:
(A) Lessor shall mail written notice of the sale
to Lessee not later than thirty (30) days prior to such
sale.
(B) Once per week during the three (3) weeks
immediately preceding such sale, Lessor will publish
notice of the sale in a local daily newspaper of general
circulation.
(C) Upon receipt of any written request, Lessor
will make the Facility 3 Property available to any bona
fide prospective purchaser for inspection during
reasonable business hours.
(D) Notwithstanding, Lessor shall be under no
obligation to consummate a sale if, in its judgment,
none of the offers received by it equals the fair value
of the Facility 3 Property offered for sale.
28
(E) If Lessor so requests, Lessee shall assemble
all of the Personal Property Collateral and make it
available to Lessor at the site of the Facility 3 Land.
Regardless of any provision of this Agreement or any
other Operative Document, Lessor shall not be considered
to have accepted any property other than cash or
immediately available funds in satisfaction of any
Lessee Obligation, unless Lessor has given express
written notice of its election of that remedy in
accordance with California Uniform Commercial Code
Section 9621.
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
Facility 3 Property which consists solely of Real Property
Collateral in any manner then permitted by applicable
Governmental Rules, including without limitation a nonjudicial
trustee's sale pursuant to California Civil Code Sections 2924
et seq. In its discretion, Lessor may also or alternatively
choose to dispose of some or all of the Facility 3 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 9604 of the California Uniform
Commercial Code. Lessee agrees that such a sale of Personal
Property Collateral together with Real Property Collateral
constitutes a commercially reasonable sale of the Personal
Property Collateral. (For purposes of this power of sale, either
a sale of Real Property Collateral alone, or a sale of both Real
Property Collateral and Personal Property Collateral together in
accordance with California Uniform Commercial Code Section 9604,
will sometimes be referred to as a "Lessor's Sale.")
(A) Before any Lessor's Sale, Lessor shall give
such notice of default and election to sell as may then
be required by applicable Governmental Rules.
(B) When all time periods then legally mandated
have expired, and after such notice of sale as may then
be legally required has been given, Lessor shall sell
the property being sold at a public auction to be held
at the time and place specified in the notice of sale.
(C) Neither Lessor nor Agent shall have any
obligation to make demand on Lessee before any Lessor's
Sale.
(D) From time to time in accordance with then
applicable law, Lessor may postpone any Lessor's Sale by
public announcement at the time and place noticed for
that sale.
(E) At any Lessor's Sale, Lessor shall sell to
the highest bidder at public auction for cash in lawful
money of the United States.
29
(F) Lessor shall execute and deliver to the
purchaser(s) a deed or deeds conveying the Facility 3
Property being sold without any covenant or warranty
whatsoever, express or implied. The recitals in any such
deed of any matters or facts, including any facts
bearing upon the regularity or validity of any Lessor's
Sale, shall be conclusive proof of their truthfulness.
Any such deed shall be conclusive against all Persons as
to the facts recited in it.
(e) Foreclosure Sales.
(i) Single or Multiple. If the Facility 3 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 Facility 3 Property by this Agreement on any part
of the Facility 3 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 Facility 3 Property or any part of it to
the extent permitted by then applicable Governmental Rules.
Instead of paying cash for the Facility 3 Property, Lessor (and
no other Lessor Party) may settle for the purchase price by
crediting the sales price of the Facility 3 Property against the
Lessee Obligations in any order and proportions as Lessor in its
sole discretion may choose.
5.05. Limitation of Remedies. Notwithstanding any rights and remedies
granted to Lessor in Paragraph 5.02, Paragraph 5.03 or Paragraph 5.04, if Lessor
notifies Lessee pursuant to Subparagraph 5.03(a) or Subparagraph 5.04(a) that
Lessor is terminating this Agreement on a Termination Date which is prior to the
Scheduled Expiration Date and the only basis for such early termination is the
occurrence of a Non-Marketing Option Event of Default under Subparagraph 5.01(l)
or Subparagraph 5.01(m), Lessee shall have no obligation to make any payment
otherwise required under this Agreement or the Facility 3 Purchase Agreement if
30
Lessee, on or prior to such Termination Date, (y) executes and delivers to
Lessor such documents, instruments and agreements as Lessor shall reasonably
request to release, transfer and assign to Lessor all right, title and interest
that Lessee may have in the Facility 3 Property, all property and casualty
insurance policies required by Paragraph 3.03 during the Construction Period,
all proceeds of such insurance and all other Casualty and Condemnation Proceeds,
free and clear of all Liens and other interests of other Persons other than
Lessor Liens or Permitted Property Liens, and (z) vacates and surrenders the
Facility 3 Property to Lessor. Upon satisfaction of the foregoing conditions,
all Cash Collateral shall be released to Lessee.
5.06. 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.
5.07. 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.
5.08. 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.
31
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
Participant) in exercising any right hereunder shall operate as a waiver thereof
or of any other right nor shall any single or partial exercise of any such right
preclude any other further exercise thereof or of any other right. Unless
otherwise specified in any such waiver or consent, a waiver or consent given
hereunder shall be effective only in the specific instance and for the specific
purpose for which given.
6.03. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the Lessor Parties and Lessee and their permitted
successors and assigns; provided, however, that the Lessor Parties and Lessee
shall not sell, assign or delegate their respective rights and obligations
hereunder except as provided in the Participation Agreement.
6.04. No Third Party Rights. Nothing expressed in or to be implied from
this Agreement is intended to give, or shall be construed to give, any Person,
other than the Lessor Parties and Lessee and their permitted successors and
assigns, any benefit or legal or equitable right, remedy or claim under or by
virtue of this Agreement or under or by virtue of any provision herein.
6.05. Partial Invalidity. If at any time any provision of this Agreement
is or becomes illegal, invalid or unenforceable in any respect under the law or
any jurisdiction, neither the legality, validity or enforceability of the
remaining provisions of this Agreement nor the legality, validity or
enforceability of such provision under the law of any other jurisdiction shall
in any way be affected or impaired thereby.
6.06. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of California without reference to
conflicts of law rules.
6.07. Counterparts. This Agreement may be executed in any number of
identical counterparts, any set of which signed by all the parties hereto shall
be deemed to constitute a complete, executed original for all purposes.
6.08. Nature of Lessee's Obligations.
(a) Independent Obligation. The obligation of Lessee to pay the
amounts payable by Lessee under this Agreement and the other Operative
Documents and to perform the other Lessee Obligation are absolute,
unconditional and irrevocable obligations which are separate and
independent of the obligations of the Lessor Parties under this
Agreement and the other Operative Documents and all other events and
circumstances, including the events and circumstances set forth in
Subparagraph 6.08(c).
32
(b) No Termination or Abatement. This Agreement and the other
Operative Documents and Lessee's obligation to pay Rent and to pay and
perform all other Lessee Obligations shall continue in full force and
effect without abatement notwithstanding the occurrence or existence of
any event or circumstance, including any event or circumstance set forth
in Subparagraph 6.08(c).
(c) Full Payment and Performance. Lessee shall make all payments
under this Agreement and the other Operative Documents in the full
amounts and at the times required by the terms of this Agreement and the
other Operative Documents without setoff, deduction or reduction of any
kind and shall perform all other Lessee Obligations as and when
required, without regard to any event or circumstances whatsoever,
including (i) the condition of the Facility 3 Property (including any
Improvements to the Facility 3 Property made prior to the Commencement
Date or during the Term); (ii) title to the Facility 3 Property
(including possession of the Facility 3 Property by any Person or the
existence of any Lien or any other right, title or interest in or to any
of the Facility 3 Property in favor of any Person); (iii) the value,
habitability, usability, design, operation or fitness for use of the
Facility 3 Property; (iv) the availability or adequacy of utilities and
other services to the Facility 3 Property; (v) any latent, hidden or
patent defect in the Facility 3 Property; (vi) the zoning or status of
the Facility 3 Property or any other restrictions on the use of the
Facility 3 Property; (g) the economics of the Facility 3 Property; (vii)
any Casualty or Condemnation; (viii) the compliance of the Facility 3
Property with any applicable Governmental Rule or Insurance Requirement;
(ix) any failure by any Lessor Party to perform any of its obligations
under this Agreement or any other Operative Document; or (x) the
exercise by any Lessor Party of any of its remedies under this Agreement
or any other Operative Document; provided, however, that this Paragraph
6.08 shall not abrogate any right which Lessee may have to recover
damages from any Lessor Party for any material breach by such Lessor
Party of its obligations under this Agreement or any other Operative
Document to the extent permitted hereunder or thereunder.
6.09. Construction License. The lease by Lessor to Lessee of the
Facility 3 Property under this Agreement is granted to Lessee reserving to
Lessor and its agents a temporary construction license to enter upon the
Facility 3 Property for purposes of constructing the New Improvements.
[The signature page follows.]
33
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: Elizabeth McClellan
Telephone: (312) 904-2809
Fax Number: (312) 904-6217
34
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]
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]
SCHEDULE 3.03
INSURANCE REQUIREMENTS
(i) At all times during the Term, commercial general liability
insurance, umbrella insurance and excess liability insurance, each written on an
"occurrence basis", including products and completed operation hazards, covering
claims for bodily injury, personal injury or death sustained by persons or
damage to property, in an amount of not less than $25,000,000 per occurrence and
$25,000,000 annual aggregate;
(ii) At all times during the Term, workers' compensation insurance for
statutory limits and employer's liability insurance covering injury, death or
disease sustained by employees, in an amount not less than $1,000,000 for
disease and $1,000,000 for bodily injury or death by accident;
(iii) At all times during the Construction Period portion of the Term,
"all risk" builders' risk insurance, or equivalent property insurance, covering
course of construction risks (whether on-site or off-site), including risks of
collapse, flood and earthquake, in an amount of not less than the value of the
Facility 3 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 excluding earthquake and flood coverage.
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 under Facility 3 less the Outstanding Tranche A
Participation Amount held by Novellus Participant under Facility 3.
3.03-1
EXHIBIT A
FACILITY 3 LAND
90 HEADQUARTERS DRIVE
REAL PROPERTY in the City of San Jose, County of Santa Clara, State of
California, described as follows:
Parcel 3, as shown on Parcel Map filed July 13, 1984 in Book 531 of Maps at
pages 41 and 42, Santa Clara County Records.
APN: 097-79-003
ARB: 097-03-005.02
A-1
EXHIBIT B
RELATED GOODS
NONE
B-1
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 September 21, 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 September 21, 2001 (the "Facility 3
Lease Agreement") between Lessee and Lessor. Unless otherwise indicated, all
terms defined in the Participation Agreement have the same respective meanings
when used herein.
2. Lessee hereby agrees that the description of "Related Goods" set
forth in Exhibit B to the Lease Agreement shall be supplemented by adding
thereto the Related Goods described in Attachment 1 hereto. Lessee hereby
accepts all such Related Goods and agrees that such Related Goods constitute
part of the Facility 3 Property subject to the Lease Agreement.
IN WITNESS WHEREOF, Lessee has executed this Supplement to Exhibit B on
the date set forth above.
LESSEE: NOVELLUS SYSTEMS, INC.
By:
-------------------------------------
Name:
--------------------------------
Title:
-------------------------------
LESSOR: ABN AMRO LEASING, INC.
By:
-------------------------------------
Name:
--------------------------------
Title:
-------------------------------
B(1)-1
ATTACHMENT 1
TO
SUPPLEMENT TO EXHIBIT B
(B (Sch-1)-1
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 September 21, 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 September 21, 2001 (the "Facility 3
Lease Agreement") between Lessee and Lessor. Unless otherwise indicated, all
terms defined in the Participation Agreement have the same respective meanings
when used herein.
2. [Insert one of the following as appropriate]
[Pursuant to Subparagraph 2.03(a) of the Facility 3 Lease
Agreement, Lessee hereby irrevocably selects a new Rental Period for a Portion
of the Outstanding Lease Amount as follows:
(a) The Portion for which a new Rental Period is to be selected
is the Portion in the amount of $__________ with a current Rental Period
which began on ________, ____ and ends on __________, ____; and
(b) The next Rental Period for such Portion shall be __________
month[s].]
[Pursuant to Subparagraph 2.03(a) of the Facility 3 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
(b) On the last day of the current Rental Period for such
Portion, such Portion is to be divided into the following Portions with
the following initial Rental Periods:
Portion Rental Period
------- -------------
$___________ _______ month[s]
$___________ _______ month[s]
$___________ _______ month[s]
$___________ _______ month[s]]
[Pursuant to Subparagraph 2.03(a) of the Facility 3 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
Participant) 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
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
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FACILITY 3 LEASE AGREEMENT
CONSTRUCTION DEED OF TRUST WITH ASSIGNMENT OF RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
BETWEEN
NOVELLUS SYSTEMS, INC.
AND
ABN AMRO LEASING, INC.
SEPTEMBER 21, 2001
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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.........................................................................3
2.04. Use..........................................................................6
2.05. As Is Lease..................................................................6
2.06. Nature of Transaction........................................................6
2.07. Security, Etc................................................................6
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...................................................13
3.05. Taxes.......................................................................18
3.06. Environmental Matters.......................................................18
3.07. Liens, Easements, Etc.......................................................19
3.08. Subletting..................................................................20
3.09. Utility Charges.............................................................21
3.10. Removal of Facility 3 Property..............................................21
3.11. Compliance with Governmental Rules and Insurance Requirements...............21
3.12. Permitted Contests..........................................................21
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 Facility 3 Property............................................22
4.03. Holding Over................................................................22
SECTION 5. DEFAULT........................................................................23
5.01. Events of Default...........................................................23
5.02. General Remedies............................................................25
-i-
TABLE OF CONTENTS
(CONTINUED)
PAGE
----
5.03. Lease Remedies..............................................................26
5.04. Loan Remedies...............................................................27
5.05. Limitation of Remedies......................................................31
5.06. Remedies Cumulative.........................................................31
5.07. No Cure or Waiver...........................................................31
5.08. Exercise of Rights and Remedies.............................................31
SECTION 6. MISCELLANEOUS..................................................................31
6.01. Notices.....................................................................31
6.02. Waivers; Amendments.........................................................31
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
SCHEDULE
3.03 Insurance Requirements
EXHIBITS
A Facility 3 Land (2.01(a))
B Related Goods (2.01(d))
C Notice of Rental Period Selection (2.03(a))
-ii-
An extra section break has been inserted above this paragraph. Do not delete
this section break if you plan to add text after the Table of
Contents/Authorities. Deleting this break will cause Table of
Contents/Authorities headers and footers to appear on any pages following the
Table of Contents/Authorities.
-iii-
FACILITY 1 PURCHASE AGREEMENT
THIS FACILITY 1 PURCHASE AGREEMENT (this "Agreement" herein), dated as
of September 21, 2001, is entered into by and between:
(1) NOVELLUS SYSTEMS, INC., a California corporation ("Lessee");
and
(2) ABN AMRO LEASING, INC., an Illinois corporation ("Lessor").
RECITALS
A. Lessee has requested Lessor and the Persons which are "Participants"
under the Participation Agreement referred to in Recital B below (such Persons
to be referred to collectively as the "Participants") to provide to Lessee a
lease facility pursuant to which:
(1) Lessor would (a) lease certain property designated by Lessee
to Lessee, and (b) grant to Lessee the right to purchase such property;
and
(2) The Participants would participate in such lease facility by
(a) funding the advances to be made by Lessor and (b) acquiring
participation interests in the rental and certain other payments to be
made by Lessee.
B. Pursuant to a Participation Agreement dated of even date herewith
(the "Participation Agreement") among Lessee, Lessor, the Participants and ABN
AMRO Bank N.V., as agent for the Participants (in such capacity, "Agent"),
Lessor and the Participants have agreed to provide such lease facility upon the
terms and subject to the conditions set forth therein, including without
limitation the execution and delivery of this Agreement setting forth the terms
for the purchase of the property by Lessee.
AGREEMENT
NOW, THEREFORE, in consideration of the above Recitals and the mutual
covenants herein contained, the parties hereto hereby agree as follows:
SECTION 1. INTERPRETATION.
1.01. Definitions. Unless otherwise indicated in this Agreement or any
other Operative Document, each term set forth in Schedule 1.01 to the
Participation Agreement, when used in this Agreement or any other Operative
Document, shall have the respective meaning given to that term in such Schedule
1.01 or in the provision of this Agreement or other document, instrument or
agreement referenced in such Schedule 1.01.
1.02. 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 Business Day prior to the
Scheduled Expiration Date of the Facility 1 Lease Agreement, terminate the
Facility 1 Lease Agreement and purchase all of the Facility 1 Property (the
"Term Purchase Option").
(a) Notice of Term Purchase Option Exercise. Lessee shall notify
Lessor of Lessee's exercise of the Term Purchase Option by delivering to
Lessor an irrevocable written notice in the form of Exhibit A(1),
appropriately completed (the "Notice of Term Purchase Option Exercise"),
which states that Lessee is exercising its right to terminate the
Facility 1 Lease Agreement prior to the Scheduled Expiration Date
thereof pursuant to Paragraph 4.01 of the Facility 1 Lease Agreement and
purchase all of the Facility 1 Property pursuant to this Paragraph 2.01
and specifies the Business Day 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 as soon as possible but in no event later than
ten (10) Business Days prior to the date on which such termination and
purchase are to occur. (Lessee shall also, to the extent reasonably
practicable, provide Lessor with advance notice indicating that it is
considering exercising the Term Purchase Option.) The Notice of Term
Purchase Option Exercise shall be delivered as required by Subparagraph
2.02(c) and Paragraph 7.01 of the Participation Agreement; provided,
however, that Lessee shall promptly deliver the original of any Notice
of Term Purchase Option Exercise initially delivered by facsimile. After
delivering to Lessor the Notice of Term Purchase Option Exercise, Lessee
may, upon not less than ten (10) Business Days prior written notice to
Lessor, extend the date on which the termination of the Facility 1 Lease
Agreement and Lessee's purchase of the Facility 1 Property is to occur
to a Business Day not more than ten (10) Business Days after the date
specified in the Notice of Term Purchase Option Exercise, provided that
Lessee may so extend such date only once.
(b) Term Purchase Option Purchase Price. Lessee or its designee
shall pay to Lessor on the Expiration Date, as the purchase price for
the 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 Business Day
prior to the Scheduled Expiration Date of the Facility 1 Lease Agreement,
without terminating the Facility 1 Lease Agreement, purchase one or more Parcels
(but not less than all of any such Parcel) of the Facility 1 Property (the
"Partial Purchase Option").
2
(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 Parcels of the Facility 1 Property prior to the
Scheduled Expiration Date pursuant to this Paragraph 2.02 and specifies
(i) the Parcel(s) so to be purchased and (ii) the Business Day on which
such purchase is to occur (a "Partial Purchase Date"). Lessee shall give
each Notice of Partial Purchase Option Exercise to Lessor as soon as
possible but in no event later than one (1) month prior to the Partial
Purchase Date on which a purchase is to occur. (Lessee shall also, to
the extent reasonably practicable, provide Lessor with advance notice
indicating that it is considering exercising the Partial Purchase
Option.) 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. After delivering to Lessor the Notice
of Partial Purchase Option Exercise, Lessee may, upon not less than ten
(10) Business Days prior written notice to Lessor, extend the date on
which the termination of the Facility 1 Lease Agreement and Lessee's
purchase of the Facility 1 Property is to occur to a Business Day not
more than ten (10) Business Days after the date specified in the Notice
of Partial Purchase Option Exercise, provided that Lessee may so extend
such date only once.
(b) Partial Purchase Option Purchase Price. Lessee shall pay to
Lessor on each Partial Purchase Date, as the purchase price for each
Parcel of Facility 1 Property to be purchased on such date, an amount
equal to the portion of the Outstanding Lease Amount under Facility 1 on
such date attributable to such Parcel of Facility 1 Property.
(c) Conditions to Exercise of Partial Purchase Option. The
purchase by Lessee on any Partial Purchase Date of any Parcel of
Facility 1 Property pursuant to this Paragraph 2.02 is subject to the
following conditions:
(i) Lessor shall have received the Notice of Partial
Purchase Option Exercise for such purchase pursuant to
Subparagraph 2.02(a);
(ii) Lessor shall have received, on or prior to such
Partial Purchase Date:
(A) New Expiration Date Appraisals for all
Parcels of Facility 1 Property that are to remain
subject to the Facility 1 Lease Agreement after such
Partial Purchase Date, which appraisals (1) each shall
be dated a recent date prior to such Partial Purchase
Date and (2) together shall assess the aggregate Fair
Market Value of all such remaining Parcels of Facility 1
Property at not less than the Outstanding Lease Amount
under Facility 1 that will remain after application of
all amounts to be applied thereto on such Partial
Purchase Date; and
(B) The purchase price payable by Lessee for
such Parcel of
3
Facility 1 Property pursuant to Subparagraph 2.02(b) and
any other amounts payable by Lessee pursuant to
Subparagraph 4.06(b); and
(iii) No Default shall have occurred and be continuing
on such Partial Purchase Date or will occur as a result of such
purchase by Lessee.
2.03. Call Option. Subject to the terms and conditions of this Agreement
and the other Operative Documents (including those set forth below in this
Paragraph 2.03), Lessee may, at its option on any Business Day prior to the
Scheduled Expiration Date of the Facility 1 Lease Agreement, require Lessor and
the Participants to sell to Lessee (or its designee) all of their respective
right, title and interest in, and assume all obligations and liabilities arising
after such sale under, the Operative Documents related to Facility 1 at par,
together with all accrued and unpaid interest, yield and fees thereon to the
date of such sale and, as applicable, any other amounts then due and payable
under any of the Operative Documents related to Facility 1 (including, without
limitation, any unpaid amounts in respect of unpaid claims for indemnification
then due and owing and any breakage and related costs which are payable pursuant
to the Participation Agreement if the amounts due in respect of such interest
were being prepaid, and not purchased, on such date) (the "Call Option").
(a) Notice of Call Option Exercise. Lessee shall notify Lessor
of Lessee's exercise of the Call Option by delivering to Lessor an
irrevocable written notice in the form of Exhibit A(3), appropriately
completed (the "Notice of Call Option Exercise"), which states that
Lessee is exercising its right to purchase from the Lessor and the
Participants their respective right, title and interest in, and assume
all obligations and liabilities arising after such sale under, the
Operative Documents related to Facility 1 pursuant to this Paragraph
2.03 and specifies the date on which such purchases are to occur (which
date, after the delivery of such notice, shall be the Expiration Date).
Lessee shall give the Notice of Call Option Exercise as soon as possible
but in no event later than one (1) month prior to the date on which such
purchase is to occur. (Lessee shall also, to the extent reasonably
practicable, provide Lessor with advance notice indicating that it is
considering exercising the Call Option.) Each Notice of Call 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 Call Option
Exercise initially delivered by facsimile. After delivering to Lessor
the Notice of Call Option Exercise, Lessee may, upon not less than ten
(10) Business Days prior written notice to Lessor, extend the date on
which such purchase of the Operative Documents related to the Facility 1
Property is to occur to a Business Day not more than ten (10) Business
Days after the date specified in the Notice of Call Option Exercise,
provided that Lessee may so extend such date only once.
(b) Conditions Precedent to Call Option Exercise. Prior to the
effectiveness of the Call Option Exercise, (i) Lessee (or its designee)
shall have obtained all necessary authorizations, approvals and consents
for such Call Option Exercise and each such authorization, approval and
consent shall be in full force and effect, (ii) Lessee shall have
reimbursed the Lessor Parties for all costs and expenses incurred by
such Lessor Parties (including the fees and expenses of their respective
counsel) in connection with such Call
4
Option Exercise, (iii) title to the Facility 1 Property shall have been
transferred from Lessor to Lessee in a manner as if Lessee shall have
exercised the Term Purchase Option and (iv) each Lessor Party shall have
received such documents, instruments, agreements and certificates as it
may reasonably request, each in form and substance satisfactory to such
Lessor Party, in order to effectuate such purchase and sale. Upon
satisfaction of the conditions described in this Paragraph 2.03 by
Lessee (or its designee), the Lessor Parties shall convey their
respective right, title and interest in, and Lessee (or its designee)
shall assume all obligations and liabilities arising after such sale
under, the transactions contemplated by the Operative Documents related
to Facility 1, free and clear of any Lessor Lien, whereupon such rights,
interests, obligations and liabilities of the Lessor Parties shall
thereupon be assumed by and inure to the benefit of Lessee (or its
designee) (other than rights arising as a result of claims or
impositions theretofore arising, which shall remain exercisable by such
Lessor Party). Subject to the satisfaction by Lessee of the terms and
conditions set forth herein, the Lessor Parties agree to cooperate in
good faith with Lessee in effectuating any such transaction.
SECTION 3. OBLIGATIONS OF LESSEE ON THE EXPIRATION DATE.
3.01. Alternative. Unless Lessee has exercised the Term Purchase Option,
on the Expiration Date of the Facility 1 Lease Agreement, Lessee shall either:
(a) Marketing Option. Cause another Person to complete the
purchase of the Facility 1 Property pursuant to Paragraph 3.02 (the
"Marketing Option"); or
(b) Expiration Date Purchase Option. Purchase the Facility 1
Property itself pursuant to Paragraph 3.03 (the "Expiration Date
Purchase Option").
Lessee shall elect either the Marketing Option or the Expiration Date Purchase
Option by delivering to Lessor, not more than nine (9) months nor less than six
(6) months prior to the Scheduled Expiration Date for the Facility 1 Lease
Agreement, either (i) a written notice in the form of Exhibit B, appropriately
completed (the "Notice of Marketing Option Exercise"), or (ii) a written notice
in the form of Exhibit C, appropriately completed (the "Notice of Expiration
Date Purchase Option Exercise"); provided, however, that (A) Lessee shall be
deemed to have elected the Expiration Date Purchase Option if it fails to
deliver either notice as required by this sentence; (B) Lessee's election of the
Expiration Date Purchase Option (whether expressly by a notice so delivered or
implicitly by the failure to deliver any notice) shall be irrevocable; and (C)
Lessee may not elect the Marketing Option if (1) the Expiration Date has been
accelerated to an earlier Termination Date following a Marketing Option Event of
Default under the Facility 1 Lease Agreement, or (2) the conditions set forth in
Paragraph 3.03 of the Participation Agreement are not satisfied on the date
Lessee delivers its election notice or on the Expiration Date of the Facility 1
Lease Agreement (unless, in each case, the only event or condition causing such
conditions not to be so satisfied is the occurrence of a Non-Marketing Option
Event of Default under the Facility 1 Lease Agreement). The Notice of Marketing
Option Exercise or the Notice of Expiration Date Purchase Option Exercise shall
be delivered as required by Subparagraph 2.02(c) and Paragraph 7.01 of the
Participation Agreement; provided, however,
5
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 Facility 1 Property on the
Expiration Date for a purchase price which is not less than the lesser
of (A) the difference between the Outstanding Lease Amount and Residual
Value Guaranty Amount under Facility 1 and (B) the Fair Market Value of
the Facility 1 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 Facility 1 Lease Agreement
(the "Initial Marketing Period"), Lessee shall use reasonable
efforts to solicit Conforming Bids from potential purchasers of
the Facility 1 Property. On or prior to the last day of the
Initial Marketing Period, Lessee shall deliver to Lessor any
Conforming Bid selected by Lessee (the "Initial Bid"). If the
purchase price specified in the Initial Bid is equal to or
greater than the difference between the Outstanding Lease Amount
and Residual Value Guaranty Amount under Facility 1, Lessor
shall accept such bid and Lessee shall have no further
obligations to solicit additional bids.
(ii) Secondary Marketing Period. If Lessee does not
submit an Initial Bid or if the purchase price specified in the
Initial Bid is less than the difference between the Outstanding
Lease Amount and Residual Value Guaranty Amount under Facility
1, Lessor may reject such bid and Lessee shall, during the
period which begins on the day following the Initial Marketing
Period and ends on the date two (2) months prior to the
Expiration Date of the Facility 1 Lease Agreement (the
"Secondary Marketing Period"):
(A) Use its best efforts to solicit additional
Conforming Bids, including the engagement of experienced
and knowledgeable brokers;
(B) Furnish to each Lessor Party (other than
Novellus Participant) copies of all bids and otherwise
provide each Lessor Party (other than Novellus
Participant) with such information relating to the
marketing of the Facility 1 Property as such Person may
reasonably request in writing;
6
(C) Agree to provide to all potential purchasers
all customary seller's indemnities (including
environmental indemnities), representations and
warranties regarding the Facility 1 Property (including
the title to, except for Lessor Liens, and condition of
the Facility 1 Property);
(D) Furnish to each Lessor Party (other than
Novellus Participant) copies of environmental reports,
architect's certificates, licenses, permits and other
evidence reasonably requested by such Person to
establish that no Default has occurred and is continuing
under the Facility 1 Lease Agreement;
(E) Permit any Lessor Party or potential
purchaser to inspect the Facility 1 Property and the
maintenance records for the Property upon reasonable
prior written notice and during normal business hours
and provide to each such Person all information
regarding the Facility 1 Property reasonably requested
by such Person in writing;
(F) Take all other commercially reasonable steps
to secure the best price for the Facility 1 Property;
and
(G) If any Conforming Bids were received by
Lessee, submit to Lessor on or prior to the last day of
the Secondary Marketing Period any Conforming Bid
selected by Lessee with a purchase price which is equal
to or greater than the difference between the
Outstanding Lease Amount and Residual Value Guaranty
Amount under Facility 1 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 Participant) shall have the right to submit one or
more bids or solicit bids from other Persons.
(c) Conforming Bids. Each bid must meet each of the following
requirements (each such bid to be referred to herein as a "Conforming
Bid"):
(i) The bid may be submitted by any Person other than
(A) a Person which is an Affiliate of Lessee or (B) a Person
which has an agreement (whether express or implied) with Lessee
or any of its Affiliates to sell, lease or otherwise make
available to Lessee or any of its Affiliates any portion of the
Facility 1 Property;
(ii) The bidder must agree in writing to purchase the
Facility 1 Property on the Expiration Date of the Facility 1
Lease Agreement for a purchase price to be paid in cash which is
not less than the lesser of (A) the difference between the
Outstanding Lease Amount and Residual Value Guaranty Amount
under Facility 1 on such date and (B) the Fair Market Value of
the Facility 1 Property on such date;
7
(iii) The bidder must agree to purchase the Property "as
is" without any representations, warranties or indemnities,
except for (A) any representations, warranties or indemnities
provided by Lessor and Lessee pursuant to Subparagraph 4.01(b)
and (B) any representations, warranties or indemnities provided
by Lessee pursuant to clause (ii)(C) of Subparagraph 3.02(b);
and
(iv) The bidder must agree to be bound by the other
terms and conditions of this Agreement applicable to bidders.
(d) Lessor's Obligation to Accept Bids. If, at any time on or
prior to the last day of the Secondary Marketing Period, Lessee submits
to Lessor a Conforming Bid under this Paragraph 3.02 with a purchase
price which is equal to or greater than the difference between the
Outstanding Lease Amount and Residual Value Guaranty Amount under
Facility 1, Lessor shall accept such bid. If Lessee submits to Lessor a
Conforming Bid under this Paragraph 3.02 with a purchase price which is
less than the difference between the Outstanding Lease Amount and
Residual Value Guaranty Amount under Facility 1, Lessor shall not accept
such bid unless approved by Lessor and Required Participants. If Lessee
fails to submit a bid to Lessor on or prior to the last day of the
Secondary Marketing Period which Lessor is so required to accept, Lessor
shall (unless it elects to accept another bid which it is not required
to accept, in which case Lessee's obligations shall be limited to the
amounts payable pursuant to clause (ii) of Subparagraph 4.06(a)) retain
the Facility 1 Property after the Expiration Date of the Facility 1
Lease Agreement; provided, however, that Lessee's payment obligations on
such Expiration Date shall be limited to the amounts payable pursuant to
clause (iii) of Subparagraph 4.06(a) if (i) Lessor retains the Facility
1 Property after Lessee submits a Conforming Bid on or prior to the last
day of the Secondary Marketing Period in accordance with clause (ii) of
Subparagraph 3.02(b) and (ii) the Marketing Option has not terminated
prior to such Expiration Date pursuant to Subparagraph 3.02(f). If
Lessee fails to obtain a Conforming Bid prior to the last day of the
Secondary Marketing Period which Lessor is required to accept or another
bid which Lessor elects to accept (notwithstanding that it is not
required to do so) despite Lessee's timely and complete compliance with
Lessee's marketing obligations as described in Subparagraph 3.02(a) and
Subparagraph 3.02(b), and such failure is not caused by any negligence
or willful misconduct of Lessee, then Lessee's payment obligations on
the Expiration Date of the Facility 1 Lease Agreement shall be limited
to the amounts payable pursuant to clause (ii) or clause (iii) of
Subparagraph 4.06(a), as applicable. Lessor shall notify Lessee of
Lessor's election to retain the Facility 1 Property by delivering to
Lessee, at least ten (10) days prior to the Expiration Date of the
Facility 1 Lease Agreement, a written notice of such election.
(e) Purchase Price. If Lessor accepts any bid by any Person,
such Person (the "Designated Purchaser") shall pay to Lessor on the
Expiration Date of the Facility 1 Lease Agreement, as the purchase price
for the Property, the amount set forth in such bid as the purchase
price.
(f) Termination of the Marketing Option. Lessee's right to
exercise the Marketing Option shall immediately terminate and Lessee
shall purchase the Facility 1
8
Property on the Expiration Date of the Facility 1 Lease Agreement
pursuant to Paragraph 3.03 if (i) Lessee fails to comply with any of its
obligations under this Paragraph 3.02; (ii) a Marketing Option Event of
Default under the Facility 1 Lease Agreement occurs after Lessee
delivers the Notice of Marketing Option Exercise; (iii) the conditions
precedent set forth in Paragraph 3.03 of the Participation Agreement are
not satisfied on the Expiration Date of the Facility 1 Lease Agreement
(unless the only event or condition causing such conditions not to be so
satisfied is the occurrence of a Non-Marketing Option Event of Default
under the Facility 1 Lease Agreement); or (iv) the Designated Purchaser
fails to consummate the purchase of the Facility 1 Property on the
Expiration Date of the Facility 1 Lease Agreement in accordance with its
accepted bid and this Agreement, without regard to the reason for such
failure (except as otherwise provided in the following proviso);
provided, however, that, if the Designated Purchaser fails to consummate
the purchase of the Property on the Expiration Date solely due to
Lessor's failure to remove Lessor Liens or deliver the required deed and
bill of sale or other documents required to be delivered by Lessor
hereunder, Lessee's right to exercise the Marketing Option shall not
terminate, Lessee shall not be required to purchase the Property on the
Expiration Date and Lessee's payment obligations on the Expiration Date
shall be limited to the amounts set forth in Subparagraph 4.06(b)
(determined as if the purchase by the Designated Purchaser had been
consummated).
(g) Residual Value Guaranty Amount and Indemnity Amount. Unless
Lessee's right to exercise the Marketing Option has terminated and
Lessee is required to purchase the Facility 1 Property on the Expiration
Date of the Facility 1 Lease Agreement pursuant to Paragraph 3.03,
Lessee shall pay to Lessor on such Expiration Date the Residual Value
Guaranty Amount and the Indemnity Amount calculated as follows:
(i) The "Residual Value Guaranty Amount" shall be an
amount equal to the total Outstanding Lease Amount under
Facility 1 on the Expiration Date.
(ii) The "Indemnity Amount" shall be an amount equal to
the decrease, if any, between the Commencement Date and the
Expiration Date of the Facility 1 Lease Agreement in the Fair
Market Value of the Facility 1 Property caused by (A) any
representation or warranty of Lessee or any of its Affiliates
regarding the Facility 1 Property set forth in any of the
Operative Documents proving to be false or inaccurate when made,
(B) the existence of, or the failure of Lessee to pay any
Governmental Charge, Indebtedness or other obligation which
might give rise to, any Liens in the Facility 1 Property (other
than Permitted Property Liens), (C) the failure of Lessee to
complete any Modifications or (D) any other failure of Lessee to
comply with any of its obligations regarding the Facility 1
Property set forth in any of the Operative Documents.
(h) Determination of Fair Market Value and Indemnity Amount. If
the purchase price specified in the Initial Bid is less than the
difference between the Outstanding Lease Amount and Residual Value
Guaranty Amount under Facility 1, 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
9
Guaranty Amount under Facility 1), deliver to Lessee a written notice of
Lessor's determination of the current Fair Market Value of the Facility
1 Property and the Indemnity Amount. To determine such amounts, Lessor
shall obtain Appraisals of the Facility 1 Property which set forth:
(i) A current Appraisal of the Fair Market Value of the
Facility 1 Property in its then existing condition (the "Current
Appraisal"); and
(ii) An Appraisal of the Fair Market Value of the
Facility 1 Property which assumes that (A) all representations
and warranties regarding the Facility 1 Property made by Lessee
or any of its Affiliates in any of the Operative Documents were
true and correct when made; (B) Lessee has maintained the
Facility 1 Property in compliance with all applicable
Governmental Rules, Insurance Requirements and the Operative
Documents; (C) Lessee has completed all Modifications in a good
and workmanlike manner and otherwise as required by the
Operative Documents; (D) Lessee has repaired the Facility 1
Property as required by the Operative Documents following any
Casualty; (E) Lessee has restored the Facility 1 Property as
required by the Operative Documents following any Condemnation;
(F) Lessee has paid all Governmental Charges, Indebtedness and
other obligations which, if unpaid, might give rise to a Lien
(other than a Lessor Lien) on the Facility 1 Property; (G)
Lessee has removed all Liens on the Facility 1 Property except
for Permitted Property Liens and Lessor Liens; and (H) Lessee
has performed all of its other obligations as required by the
Operative Documents (the "Assumed Appraisal").
In the absence of manifest error, (A) the Current Appraisal shall
constitute the current Fair Market Value of the Facility 1 Property and
(B) the difference between the Current Appraisal and the Assumed
Appraisal shall constitute the Indemnity Amount if the Current Appraisal
is less than the Assumed Appraisal.
(i) Lessee not an Agent. Lessee shall not be an agent for any of
the Lessor Parties in arranging for a purchaser of the Facility 1
Property. No Lessor Party (other than Novellus Participant) shall be
bound by any acts of Lessee.
(j) Application of Proceeds. After the exercise by Lessee of the
Marketing Option, Lessor shall apply and distribute all amounts received
by Lessor on the Expiration Date as follows:
(i) First, Lessor shall apply such amounts to the
portion of the Outstanding Lease Amount under Facility 1 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 under Facility 1 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;
10
(iii) Third, to the extent any amounts then remain,
Lessor shall apply such amounts to the portion of all other
amounts, if any, due and payable by Lessee under the Operative
Documents on account of Facility 1 on or prior to such date not
constituting Ineligible Project Costs to the extent necessary to
pay such portion of the unpaid amounts;
(iv) Fourth, to the extent any amounts then remain,
Lessor shall distribute to Lessee (A) such amounts as are
necessary to pay all Prepaid Rent paid by Lessee, except for any
such Prepaid Rent caused by or arising from any failure by
Lessee to comply with any of its obligations under the Operative
Documents (including its insurance obligations), any
representation by Lessee in any of the Operative Documents not
being true, any negligence or willful misconduct of Lessee, or
any claim by any third-party against Lessee (or against any
Lessor Party) based upon any alleged action or inaction by
Lessee, and (B) an amount equal to the Residual Value Guaranty
Amount paid by Lessee hereunder.
(v) Fifth, to the extent any amounts then remain, Lessor
shall apply such amounts to all Ineligible Project Costs paid or
incurred by Lessor Parties.
(vi) Finally, to the extent any amounts then remain,
Lessor shall promptly distribute all such remaining proceeds to
Lessee.
(k) Creditworthiness of Designated Purchaser. Lessee assumes all
responsibility for determining the creditworthiness of any potential
purchaser on any bid submitted by Lessee to Lessor hereunder. If, after
any purchase by a Designated Purchaser hereunder, the purchase price
paid by such Designated Purchaser is recovered from any Lessor Party
(other than Novellus Participant), Lessee shall reimburse such Lessor
Party for such recovery unless such recovery is due solely to a material
misrepresentation or covenant breach by such Lessor Party.
(l) Exercise of Marketing Option After Non-Marketing Option
Event of Default. If Lessor notifies Lessee pursuant to Subparagraph
5.03(a) or Subparagraph 5.04(a) of the Lease Agreement that Lessor is
terminating the Lease Agreement on a Termination Date which is prior to
the Scheduled Expiration Date of the Facility 1 Lease Agreement and the
only basis for such early termination is the occurrence of a
Non-Marketing Option Event of Default under the Facility 1 Lease
Agreement, 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 delivers to
Lessor a Notice of Marketing Option Exercise. Upon the delivery by
Lessee to Lessor of a Notice of Marketing Option Exercise, the
Expiration Date of the Facility 1 Lease Agreement shall, if the
conditions to the exercise of the Marketing Option set forth in
Paragraph 3.01 are satisfied, be extended to the first Business Day of
the first full calendar month that is six (6) months after the date of
receipt by Lessor of such Notice of Marketing Option Exercise. Any
exercise by Lessee of the Marketing Option pursuant to this Subparagraph
3.02(l) shall be subject to the terms and conditions otherwise set forth
in this Agreement.
11
3.03. Expiration Date Purchase Option.
(a) General. If (i) Lessee elects to exercise the Expiration
Date Purchase Option by delivering to Lessor a Notice of Expiration Date
Purchase Option Exercise pursuant to Paragraph 3.01; (ii) Lessee elects
to exercise the Marketing Option by delivering to Lessor a Notice of
Marketing Option Exercise pursuant to Paragraph 3.01 but the Marketing
Option terminates pursuant to Subparagraph 3.02(f); or (iii) Lessee
fails to deliver to Lessor either notice as required by Paragraph 3.01;
Lessee shall purchase the Facility 1 Property on the Expiration Date of
the Facility 1 Lease Agreement and otherwise comply, or cause compliance
with, the requirements of this Paragraph 3.03 and the other applicable
provisions of this Agreement.
(b) Purchase Price. If Lessee is purchasing the Facility 1
Property pursuant to the Expiration Date Purchase Option, Lessee shall
pay to Lessor on the Expiration Date of the Facility 1 Lease Agreement,
as the purchase price for the Facility 1 Property, an amount equal to
the Outstanding Lease Amount under Facility 1 on such date.
SECTION 4. TERMS OF ALL PURCHASES.
4.01. Representations and Warranties of Parties.
(a) Representations and Warranties of Purchaser. The purchaser
of the Facility 1 Property, whether Lessee, an Assignee Purchaser or a
Designated Purchaser ("Purchaser"), shall represent and warrant to
Lessor on the Expiration Date of the Facility 1 Lease Agreement (or, in
the case of a purchase of a portion of the Facility 1 Property pursuant
to the Partial Purchase Option, on the applicable Partial Purchase Date)
as follows:
(i) Such Person is a legal entity duly organized,
validly existing and in good standing under the laws of its
jurisdiction of organization or an individual with legal
capacity to purchase the Facility 1 Property (or, in the case of
a purchase of a portion of the Facility 1 Property pursuant to
the Partial Purchase Option, the portion to be purchased).
(ii) The execution, delivery and performance by such
Person of each document, instrument and agreement executed, or
to be executed, by such Person in connection with its purchase
of the Facility 1 Property (or, in the case of a purchase of a
portion of the Facility 1 Property pursuant to the Partial
Purchase Option, the portion to be purchased) (the "Purchase
Documents") and the consummation of the transactions
contemplated thereby (A) are within the power of such Person and
(B) have been duly authorized by all necessary actions on the
part of such Person.
(iii) Each Purchase Document executed, or to be
executed, by such Person has been, or will be, duly executed and
delivered by such Person and constitutes, or will constitute, a
legal, valid and binding obligation of such Person, enforceable
against such Person in accordance with its terms, except as
limited by
12
bankruptcy, insolvency or other laws of general application
relating to or affecting the enforcement of creditors' rights
generally and general principles of equity.
(iv) Such Person has not (A) made a general assignment
for the benefit of creditors, (B) filed any voluntary petition
in bankruptcy or suffered the filing of any involuntary petition
by such Person's creditors, (C) suffered the appointment of a
receiver to take possession of all, or substantially all, of
such Person's assets, (D) suffered the attachment or other
judicial seizure of all, or substantially all, of such Person's
assets, (E) admitted in writing its inability to pay its debts
as they come due, or (F) made an offer of settlement, extension
or composition to its creditors generally.
(v) Such Person is not a "party in interest" within the
meaning of Section 3(14) of the ERISA, with respect to any
investor in or beneficiary of Lessor.
(b) Representations and Warranties of Lessor and Lessee. Each of
Lessor and Lessee shall represent and warrant to Purchaser (and Lessee
also shall represent and warrant to Lessor if Lessor is to retain the
Facility 1 Property) on the Expiration Date of the Facility 1 Lease
Agreement as follows:
(i) Such Person is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction
of organization.
(ii) The execution, delivery and performance by such
Person of each Purchase Document executed, or to be executed, by
such Person and the consummation of the transactions
contemplated thereby (A) are within the power of such Person and
(B) have been duly authorized by all necessary actions on the
part of such Person.
(iii) Each Purchase Document executed, or to be
executed, by such Person has been, or will be, duly executed and
delivered by such Person and constitutes, or will constitute, a
legal, valid and binding obligation of such Person, enforceable
against such Person in accordance with its terms, except as
limited by bankruptcy, insolvency or other laws of general
application relating to or affecting the enforcement of
creditors' rights generally and general principles of equity.
(iv) Such Person has not (A) made a general assignment
for the benefit of creditors, (B) filed any voluntary petition
in bankruptcy or suffered the filing of any involuntary petition
by such Person's creditors, (C) suffered the appointment of a
receiver to take possession of all, or substantially all, of
such Person's assets, (D) suffered the attachment or other
judicial seizure of all, or substantially all, of such Person's
assets, (E) admitted in writing its inability to pay its debts
as they come due, or (F) made an offer of settlement, extension
or composition to its creditors generally.
In addition to the foregoing, (A) Lessee shall represent and warrant to
the Designated Purchaser (or Lessor if Lessor is to retain the Facility
1 Property) on the Expiration Date
13
of the Facility 1 Lease Agreement that no Liens are attached to the
Facility 1 Property, except for Permitted Property Liens, and (B) Lessor
shall represent and warrant to Purchaser on the Expiration Date of the
Facility 1 Lease Agreement (or, in the case of a purchase of a portion
of the Facility 1 Property pursuant to the Partial Purchase Option, on
the applicable Partial Purchase Date) that no Lessor Liens are attached
to the Facility 1 Property (or, in the case of a purchase of a portion
of the Facility 1 Property pursuant to the Partial Purchase Option, the
portion to be purchased). Except for the foregoing representations and
warranties to be made by Lessor on the Expiration Date of the Facility 1
Lease Agreement (or, in the case of a purchase of a portion of the
Facility 1 Property pursuant to the Partial Purchase Option, on the
applicable Partial Purchase Date), no Lessor Party shall make any
representation or warranty regarding the Facility 1 Property or the sale
of the Facility 1 Property. Lessee shall make such additional
representations and warranties as it may be required to make pursuant to
clause (ii) of Subparagraph 3.02(b).
(c) Survival of Representations and Warranties. The
representations and warranties of Purchaser, Lessor and Lessee shall
survive for a period of twelve (12) months after the Expiration Date of
the Facility 1 Lease Agreement (or, in the case of a purchase of a
portion of the Facility 1 Property pursuant to the Partial Purchase
Option, after the applicable Partial Purchase Date). Any claim which any
such party may have at any time against any other such party for a
breach of any such representation or warranty, whether known or unknown,
which is not asserted by written notice within such twelve (12) month
period shall not be valid or effective, and the party shall have no
liability with respect thereto.
4.02. "As Is" Purchase. All purchases of the Facility 1 Property
hereunder shall be "as is, with all faults" and without any representations,
warranties or indemnities except for any representations, warranties or
indemnities provided by Lessee pursuant to clause (ii)(C) of Subparagraph
3.02(b) or by Lessor or Lessee pursuant to Subparagraph 4.01(b). Each Purchaser
shall specifically acknowledge and agree that Lessor is selling and such
Purchaser is purchasing the Facility 1 Property on an "as is, with all faults"
basis and that such Purchaser is not relying on any representations or
warranties of any kind whatsoever, express or implied, from any Lessor Party,
its agents, or brokers as to any matters concerning the Facility 1 Property
(except for any representations and warranties provided by Lessor pursuant to
Subparagraph 4.01(b)), including (a) the condition of the Facility 1 Property
(including any Improvements to the Facility 1 Property made prior to the
Commencement Date or during the Term of the Facility 1 Lease Agreement); (b)
title to the Facility 1 Property (including possession of the Facility 1
Property by any Person or the existence of any Lien or any other right, title or
interest in or to any of the Facility 1 Property in favor of any Person); (c)
the value, habitability, usability, design, operation or fitness for use of the
Facility 1 Property; (d) the availability or adequacy of utilities and other
services to the Facility 1 Property; (e) any latent, hidden or patent defect in
the Facility 1 Property; (f) the zoning or status of the Facility 1 Property or
any other restrictions on the use of the Facility 1 Property; (g) the economics
of the Facility 1 Property; (h) any Casualty or Condemnation; or (i) the
compliance of the Facility 1 Property with any applicable Governmental Rule or
Insurance Requirement.
14
4.03. Release. Without limiting the foregoing, each Purchaser shall, on
behalf of itself and its successors and assigns, waive its right to recover
from, and forever release and discharge, Lessor and the other Indemnitees from
any and all demands, claims, legal or administrative proceedings, losses,
liabilities, damages, penalties, fines, liens, judgments, costs or expenses
whatsoever (including attorneys' fees and costs), whether direct or indirect,
known or unknown, foreseen or unforeseen, that may arise on account of or in any
way be connected with the physical condition of the Facility 1 Property or any
Governmental Rule applicable thereto, including any Environment Law. Each
Purchaser shall expressly waive the benefits of Section 1542 of the California
Civil Code, which provides that, "a general release does not extend to claims
which the creditor does not know or expect to exist in his favor at the time of
executing the release, which if known to him must have materially affected the
settlement with the debtor."
4.04. Permits, Approvals, Etc. Lessee shall obtain all permits, licenses
and approvals from and make all filings with Governmental Authorities and other
Persons, comply and cause compliance with all applicable Governmental Rules and
take all other actions required for the marketing, purchase and sale of the
Facility 1 Property.
4.05. Costs. Lessee shall pay directly, without deduction from the
purchase price or any other amount payable to Lessor hereunder, all costs and
expenses of Lessee and Lessor associated with the marketing and sale of the
Facility 1 Property, including brokers' fees and commissions; title insurance
premiums; survey charges; utility, tax and other prorations; fees and expenses
of environmental consultants and attorneys; appraisal costs; escrow fees;
recording fees; documentary, transfer and other taxes; and all other fees, costs
and expenses which might otherwise be deducted from the purchase price or any
other amount payable to Lessor hereunder.
4.06. Lessee's Payment Obligations.
(a) Expiration Date. On the Expiration Date of the Facility 1
Lease Agreement, Lessee shall pay to Lessor the following:
(i) Purchase by Lessee. If the Facility 1 Property is to
be purchased by Lessee or an Assignee Purchaser on such date,
(A) the Outstanding Lease Amount, (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 in each case to the
extent attributable to Facility 1;
(ii) Purchase by a Designated Purchaser. If the Facility
1 Property is to be purchased by a Designated Purchaser on such
date, (A) the Residual Value Guaranty 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 in each case to the extent attributable to Facility
1; or
(iii) Retention by Lessor. If the Facility 1 Property is
to be retained by Lessor on such date pursuant to Subparagraph
3.02(d), (A) the Residual Value Guaranty Amount, (B) the
Indemnity Amount, (C) all unpaid Rent accrued
15
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 Parcels of Facility 1
Property to be purchased on such date, (ii) all unpaid Rent attributable
to such Parcels of Facility 1 Property accrued through or due and
payable on or prior to such date and (iii) all other amounts
attributable to such Parcels of Facility 1 Property, if any, due and
payable by Lessee under the Operative Documents on or prior to such
date.
4.07. Lessor Liens. Lessor shall remove all Lessor Liens from the
Facility 1 Property before the Expiration Date of the Facility 1 Lease Agreement
(or, in the case of a purchase of a portion of the Facility 1 Property pursuant
to the Partial Purchase Option, from the portion to be purchased before the
applicable Partial Purchase Date).
4.08. Transfer Documents.
(a) Expiration Date.
(i) Lessor. Subject to receipt by Lessor on the
Expiration Date of the Facility 1 Lease Agreement of the full
amount of the following, without any setoff, deduction or
reduction of any kind:
(A) In the case of a transfer to Lessee or an
Assignee Purchaser, all amounts payable by Lessee
pursuant to clause (i) of Subparagraph 4.06(a); or
(B) In the case of a transfer to a Designated
Purchaser, (1) the purchase price payable by the
Designated Purchaser and (2) all amounts payable by
Lessee pursuant to clause (ii) of Subparagraph 4.06(a);
Lessor shall transfer its interest in the Facility 1 Property to
Purchaser on the Expiration Date of the Facility 1 Lease
Agreement (unless Lessor is to retain the Facility 1 Property)
by executing and delivering to Purchaser a Deed in substantially
the form of Exhibit D(1), an Acknowledgment of Disclaimer of
Representations and Warranties in substantially the form of
Exhibit D(2), a Bill of Sale in substantially the form of
Exhibit E, and shall assign to Purchaser Lessor's option to
purchase its interest in the Facility 1 Property as provided in
the Ground Lease Agreement.
(ii) Lessee. On the Expiration Date of the Facility 1
Lease Agreement, unless Lessee is to purchase the Facility 1
Property, Lessee shall transfer its interest in the Facility 1
Property to the Designated Purchaser or an Assignee Purchaser
(or Lessor if Lessor is to retain the Facility 1 Property) by
executing and delivering to such Person a Deed in substantially
the form of Exhibit F, shall assign to Lessee Lessor's option to
purchase its interest in such Parcels of the Facility 1 Property
as provided in the Ground Lease Agreement a Bill of Sale in
16
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 Parcels of Facility 1
Property to be purchased on such date to Lessee by executing and
delivering to Lessee a Deed in substantially the form of Exhibit D(1), a
Bill of Sale in substantially the form of Exhibit E, and such other
documents, instruments and agreements as Lessee may reasonably request.
4.09. Casualty and Condemnation Proceeds. If, on the Expiration Date of
the Facility 1 Lease Agreement, any Casualty and Condemnation Proceeds are held
by Lessor in a Repair and Restoration Account or otherwise, Lessor shall (a) if
Lessee is to purchase the Facility 1 Property on the Expiration Date of the
Facility 1 Lease Agreement and Lessee shall so direct, apply such proceeds to
the purchase price to be paid by Lessee or (b) in all other cases, release such
proceeds to Lessee; provided, however, that Lessor shall not have any obligation
so to apply or release such proceeds unless Lessee and/or any Designated
Purchaser has complied with all of the terms and conditions of this Agreement.
4.10. Payments. Purchaser, Lessor and Lessee shall make all payments in
lawful money of the United States and in same day or immediately available funds
not later than 12:00 noon on the date due.
4.11. Environmental Reports. Lessee shall obtain and deliver to Lessor,
not later than one (1) month prior to the Expiration Date of the Lease Agreement
(or, in the case of a purchase of a portion of the Facility 1 Property pursuant
to the Partial Purchase Option, prior to the applicable Partial Purchase Date),
environmental reports with respect to the Facility 1 Property (or, in the case
of a purchase of a portion of the Facility 1 Property pursuant to the Partial
Purchase Option, with respect to the applicable portion thereof) prepared by
environmental consultants acceptable to Lessor.
4.12. Simultaneous Exercise of Facility 1, 2 and 3 Options.
(a) Expiration Date Purchase Option or Marketing Option. At any
time Lessee exercises the Expiration Date Purchase Option or Marketing
Option with respect to the Facility 1 Property hereunder, Lessee shall
simultaneously exercise the same option with respect to the Facility 2
Property under the Facility 2 Purchase Agreement and the Facility 3
Property under the Facility 3 Purchase Agreement. If Lessee elects to
exercise the Marketing Option under this Agreement, the Facility 2
Purchase Agreement and the Facility 3 Purchase Agreement, Lessee shall
not submit bids from different Persons under the three Purchase
Agreements unless (i) the bidder for the Facility 1 Property and the
bidder for the Facility 2 Property have agreed upon the terms of a
ground lease pursuant to which the Facility 1 bidder would lease the
Parcel 7 Land to the Facility 2 bidder, (ii) the terms of such ground
lease do not have a material adverse effect on the values of the
Facility 1 Property or Facility 2 Property and (iii) any necessary
approvals required for such ground lease under the Stanford Lease have
been obtained.
17
(b) Partial Purchase Option. At any time Lessee exercises the
Partial Purchase Option with respect to any Parcel of Facility 1
Property hereunder, Lessee shall simultaneously exercise the same option
with respect to the corresponding Parcel of the Facility 2 Property, if
any, under the Facility 2 Purchase Agreement.
4.13. 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
Participant) in exercising any right hereunder shall operate as a waiver thereof
or of any other right nor shall any single or partial exercise of any such right
preclude any other further exercise thereof or of any other right. Unless
otherwise specified in any such waiver or consent, a waiver or consent given
hereunder shall be effective only in the specific instance and for the specific
purpose for which given.
5.03. Successors and Assigns.
(a) General. This Agreement shall be binding upon and inure to
the benefit of the Lessor Parties and Lessee and their permitted
successors and assigns; provided, however, that the Lessor Parties and
Lessee shall not sell, assign or delegate their respective rights and
obligations hereunder except as provided in the Participation Agreement
and in Subparagraph 5.03(b).
(b) Assignment by Lessee of Purchase Rights. Lessee may assign
to a third party (an "Assignee Purchaser") its right to purchase the
Facility 1 Property pursuant to the Term Purchase Option, the Partial
Purchase Option or the Expiration Date Purchase Option; provided,
however, that (i) such an assignment shall not relieve Lessee of its
obligations to consummate or cause the consummation of any such purchase
in accordance with the terms of this Agreement and (ii) Lessee assumes
all responsibility for determining the creditworthiness of any such
Assignee Purchaser. If, after any purchase by an Assignee Purchaser
hereunder, the purchase price paid by such Assignee Purchaser is
recovered from any Lessor Party (other than Novellus Participant),
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.
18
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.
5.07. Counterparts. This Agreement may be executed in any number of
identical counterparts, any set of which signed by all the parties hereto shall
be deemed to constitute a complete, executed original for all purposes.
5.08. Nature of Lessee's Obligations.
(a) Independent Obligation. The obligation of Lessee to pay the
amounts payable by Lessee under this Agreement and the other Operative
Documents and to perform the other Lessee Obligation are absolute,
unconditional and irrevocable obligations which are separate and
independent of the obligations of the Lessor Parties under this
Agreement and the other Operative Documents and all other events and
circumstances, including the events and circumstances set forth in
Subparagraph 5.08(c).
(b) No Termination or Abatement. This Agreement and the other
Operative Documents and Lessee's obligation to pay all amounts hereunder
and to pay and perform all other Lessee Obligations shall continue in
full force and effect without abatement notwithstanding the occurrence
or existence of any event or circumstance, including any event or
circumstance set forth in Subparagraph 5.08(c).
(c) Full Payment and Performance. Lessee shall make all payments
under this Agreement and the other Operative Documents in the full
amounts and at the times required by the terms of this Agreement and the
other Operative Documents without setoff, deduction or reduction of any
kind and shall perform all other Lessee Obligations as and when
required, without regard to any event or circumstances whatsoever,
including (i) the condition of the Facility 1 Property (including any
Improvements to the Facility 1 Property made prior to the Commencement
Date or during the Term of the Facility 1 Lease Agreement); (ii) title
to the Facility 1 Property (including possession of the Facility 1
Property by any Person or the existence of any Lien or any other right,
title or interest in or to any of the Facility 1 Property in favor of
any Person); (iii) the value, habitability, usability, design, operation
or fitness for use of the Facility 1 Property; (iv) the availability or
adequacy of utilities and other services to the Facility 1 Property; (v)
any latent, hidden or patent defect in the Facility 1 Property; (vi) the
zoning or status of
19
the Facility 1 Property or any other restrictions on the use of the
Facility 1 Property; (g) the economics of the Facility 1 Property; (vii)
any Casualty or Condemnation; (viii) the compliance of the Facility 1
Property with any applicable Governmental Rule or Insurance Requirement;
(ix) any failure by any Lessor Party to perform any of its obligations
under this Agreement or any other Operative Document; or (x) the
exercise by any Lessor Party of any of its remedies under this Agreement
or any other Operative Document; provided, however, that this Paragraph
5.08 shall not abrogate any right which Lessee may have to recover
damages from any Lessor Party for any material breach by such Lessor
Party of its obligations under this Agreement or any other Operative
Document to the extent permitted hereunder or thereunder.
[The signature page follows.]
20
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:
-------------------------------
21
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 September 21, 2001
(the "Participation Agreement"), among Novellus Systems, Inc.
("Lessee"), ABN AMRO Leasing, Inc. ("Lessor"), the Persons listed in
Schedule I to the Participation Agreement (the "Participants") and ABN
AMRO Bank N.V., as agent for the Participants (in such capacity,
"Agent"); and
(b) The Facility 1 Lease Agreement, dated as of September 21,
2001 (the "Lease Agreement"), between Lessee and Lessor; and
(c) The Facility 1 Purchase Agreement, dated as of September 21,
2001 (the "Purchase Agreement"), between Lessee and Lessor.
Unless otherwise indicated, all terms defined in the Participation Agreement
have the same respective meanings when used herein.
2. Pursuant to Paragraph 4.01 of the Facility 1 Lease Agreement and
Paragraph 2.01 of the Facility 1 Purchase Agreement, Lessee hereby irrevocably
notifies Lessor that Lessee is exercising its right to terminate the Facility 1
Lease Agreement prior to the Scheduled Expiration Date of the Facility 1 Lease
Agreement and purchase the Facility 1 Property on [_________, ____] (which date,
after the delivery of this notice, shall be the Expiration Date of the Facility
1 Lease Agreement).
IN WITNESS WHEREOF, Lessee has executed this Notice of Term Purchase
Option Exercise on the date set forth above.
NOVELLUS SYSTEMS, INC.
By:
-------------------------------------
Name:
--------------------------------
Title:
-------------------------------
A(1)-1
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 September 21, 2001
(the "Participation Agreement"), among Novellus Systems, Inc.
("Lessee"), ABN AMRO Leasing, Inc. ("Lessor"), the Persons listed in
Schedule I to the Participation Agreement (the "Participants") and ABN
AMRO Bank N.V., as agent for the Participants (in such capacity,
"Agent"); and
(b) The Facility 1 Purchase Agreement, dated as of September 21,
2001 (the "Purchase Agreement"), between Lessee and Lessor.
Unless otherwise indicated, all terms defined in the Participation Agreement
have the same respective meanings when used herein.
2. Pursuant to Paragraph 2.02 of the Facility 1 Purchase Agreement,
Lessee hereby irrevocably notifies Lessor that Lessee is exercising its right to
purchase a portion of the Facility 1 Property as follows:
(a) The Parcel[s] of Facility 1 Property to be purchased is
[are] ________________; and
(b) The date on which such purchase is to occur is [_________,
____].
3. Lessee hereby certifies to Lessor, Agent and the Participants (other
than Novellus Participant) 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
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
EXHIBIT A(3)
NOTICE OF CALL 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 September 21, 2001
(the "Participation Agreement"), among Novellus Systems, Inc.
("Lessee"), ABN AMRO Leasing, Inc. ("Lessor"), the Persons listed in
Schedule I to the Participation Agreement (the "Participants") and ABN
AMRO Bank N.V., as agent for the Participants (in such capacity,
"Agent"); and
(b) The Facility 1 Purchase Agreement, dated as of September 21,
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 2.03 of the Facility 1 Purchase Agreement,
Lessee hereby irrevocably notifies Lessor that Lessee (or its designee) is
exercising its right to purchase all of the Lessor Parties' respective right,
title and interest in, and assume all obligations and liabilities arising after
such purchase under, the Operative Documents related to Facility 1 as follows:
(a) The date on which such purchase is to occur is [_________,
____].
3. Lessee hereby certifies to Lessor, Agent and the Participants (other
than Novellus Participant) 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(3)-1
IN WITNESS WHEREOF, Lessee has executed this Notice of Call Option
Exercise on the date set forth above.
NOVELLUS SYSTEMS, INC.
By:
-------------------------------------
Name:
--------------------------------
Title:
-------------------------------
A(3)-2
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 September 21, 2001
(the "Participation Agreement"), among Novellus Systems, Inc.
("Lessee"), ABN AMRO Leasing, Inc. ("Lessor"), the Persons listed in
Schedule I to the Participation Agreement (the "Participants") and ABN
AMRO Bank N.V., as agent for the Participants (in such capacity,
"Agent"); and
(b) The Facility 1 Purchase Agreement, dated as of September 21,
2001 (the "Purchase Agreement"), between Lessee and Lessor.
Unless otherwise indicated, all terms defined in the Participation Agreement
have the same respective meanings when used herein.
2. Pursuant to Paragraph 3.01 of the Purchase Agreement, Lessee hereby
notifies Lessor that Lessee is electing to exercise the Marketing Option on the
Scheduled Expiration Date of the Facility 1 Lease Agreement of [_____, ____].
3. Lessee hereby certifies to Lessor, Agent and the Participants (other
than Novellus Participant) that, on the date of this notice:
(a) The representations and warranties of Lessee set forth in
Paragraph 4.01 of the Participation Agreement and in the other Operative
Documents are true and correct in all material respects as if made on
such date (except for representations and warranties expressly made as
of a specified date, which shall be true as of such date);
(b) No Default (other than a Non-Marketing Option Event of
Default under the Facility 1 Lease Agreement) has occurred and is
continuing; and
(c) All of the Operative Documents are in full force and effect
on such date.
B-1
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
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 September 21, 2001
(the "Participation Agreement"), among Novellus Systems, Inc.
("Lessee"), ABN AMRO Leasing, Inc. ("Lessor"), the Persons listed in
Schedule I to the Participation Agreement (the "Participants") and ABN
AMRO Bank N.V., as agent for the Participants (in such capacity,
"Agent"); and
(b) The Facility 1 Purchase Agreement, dated as of September 21,
2001 (the "Purchase Agreement"), between Lessee and Lessor.
Unless otherwise indicated, all terms defined in the Participation Agreement
have the same respective meanings when used herein.
2. Pursuant to Paragraph 3.01 of the Purchase Agreement, Lessee hereby
notifies Lessor that Lessee is electing to exercise the Expiration Date Purchase
Option on the Scheduled Expiration Date of the Facility 1 Lease Agreement of
[_____, ____].
IN WITNESS WHEREOF, Lessee has executed this Notice of Expiration Date
Purchase Option Exercise on the date set forth above.
NOVELLUS SYSTEMS, INC.
By:
-------------------------------------
Name:
--------------------------------
Title:
-------------------------------
C-1
EXHIBIT D(1)
RECORDING REQUESTED BY
WHEN RECORDED RETURN TO
AND MAIL TAX STATEMENTS TO:
[Purchaser]
- -------------------------------
- -------------------------------
- -------------------------------
Documentary Transfer Tax is not of public record and is shown on a separate
sheet attached to this deed.
- --------------------------------------------------------------------------------
QUITCLAIM DEED
FOR VALUABLE CONSIDERATION, the receipt of which is hereby acknowledged,
ABN AMRO Leasing, Inc. ("Grantor"), hereby releases, remises and forever
quitclaims to [PURCHASER], a _____________ ("Grantee"), the real property
located in the City of [__________], State of California, described on EXHIBIT A
attached hereto and made a part hereof (the "Property").
[See Next Page]
D(1)-1
Executed as of _____, ____.
ABN AMRO LEASING, INC.,
By:
-------------------------------------
Its:
------------------------------------
D(1)-2
EXHIBIT A
LEGAL DESCRIPTION
Assessor's Parcel No.: _______________
D(1)(A)-1
State of _____________
County of _____________________
On _______________________ before me, ______________________________,
Date Name, Title of Officer
personally appeared ________________________________________________,
Name(s) of signer(s)
(personally known to me -OR- (proved to me on the basis of satisfactory
evidence to be the person(s) whose name(s)
is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed
the same in his/her/their authorized
capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s) or
the entity upon behalf of which the person(s)
acted, executed the instrument.
WITNESS my hand and official seal.
------------------------------------------------
D(1)(A)-2
__________, _____
Santa Clara County Recorder
Re: Request That Statement of Documentary
Transfer Tax Not be Recorded
Dear Sir:
Request is hereby made in accordance with Section 11932 of the Revenue
and Taxation Code that this statement of tax due not be recorded with the
attached deed but be affixed to the deed after recordation and before return as
directed on the deed.
The attached deed names ABN AMRO Leasing, Inc., as grantor, and
[PURCHASER], a _________________, as grantee.
The property being transferred and described in the attached deed is
located in the City of San Jose and County of [__________], State of California.
The amount of Documentary Transfer Tax due on the attached deed is
$__________, computed on full value of the property conveyed.
ABN AMRO LEASING, INC.,
By:
-------------------------------------
Its:
------------------------------------
D(1)(A)-3
EXHIBIT D(2)
ACKNOWLEDGMENT AND DISCLAIMER OF REPRESENTATIONS AND WARRANTIES
THIS ACKNOWLEDGMENT OF DISCLAIMER OF REPRESENTATIONS AND WARRANTIES
(this "Certificate") is made as of ___________, ____ by [PURCHASER], a
_____________ ("Grantee").
Contemporaneously with execution of this Acknowledgement, ABN AMRO
Leasing, Inc., an Illinois corporation ("AALI"), is executing and delivering to
Grantee a Quitclaim Deed and a Bill of Sale (the foregoing documents and any
other documents to be executed and delivered to Grantee in connection therewith
are herein called the "Conveyancing Documents" and any of the properties, rights
or other matters assigned, transferred or conveyed pursuant thereto are herein
collectively called the "Property") pursuant to the terms of a Facility 1
Purchase Agreement dated as of September 21, 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 September 21, 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
The provisions of this Acknowledgement shall be binding on Grantee, its
successors and assigns and any other party claiming through Grantee. Grantee
hereby acknowledges that AALI N.A. is entitled to rely and is relying on this
Certificate.
EXECUTED as of ____________, _______.
[PURCHASER]
By:
-------------------------------------
Name:
--------------------------------
Title:
-------------------------------
D(2)-2
EXHIBIT E
BILL OF SALE
FOR GOOD AND VALUABLE CONSIDERATION, the receipt of which is hereby
acknowledged, ABN AMRO LEASING, INC., an Illinois corporation ("Seller"), does
hereby sell, transfer and convey to [PURCHASER], a _________________________
("Purchaser"), the personal property owned by Seller in connection with that
certain real property commonly known as _______________, San Jose, California,
including, without limitation, the personal property itemized on SCHEDULE 1
attached hereto and incorporated herein by this reference (the "Property").
Seller is selling and Purchaser is purchasing the Property on an "as is,
with all faults" basis and Purchaser is not relying on any representations or
warranties of any kind whatsoever, express or implied, from Seller, its agents,
or brokers as to any matters concerning the Property including (a) the condition
of the Property; (b) title to the Property (including possession of the Property
by any individual or entity or the existence of any lien or any other right,
title or interest in or to any of the Property in favor of any person); (c) the
value, habitability, usability, design, operation or fitness for use of the
Property; or (d) any latent, hidden or patent defect in the Property.
Dated: ________, ____ SELLER:
ABN AMRO LEASING, INC.,
By:
-------------------------------------
Its:
------------------------------------
PURCHASER:
[PURCHASER]
a
---------------------------------------
By:
-------------------------------------
Its:
------------------------------------
E-1
SCHEDULE 1
PROPERTY
E(1)-2
EXHIBIT F
RECORDING REQUESTED BY
WHEN RECORDED RETURN TO
AND MAIL TAX STATEMENTS TO:
- ----------------------------------
- ----------------------------------
Attention:
------------------------
Documentary Transfer Tax is not of public record and is shown on a separate
sheet attached to this deed.
- --------------------------------------------------------------------------------
GRANT DEED
FOR VALUABLE CONSIDERATION, the receipt of which is hereby acknowledged,
NOVELLUS SYSTEMS, INC., a California corporation ("Grantor"), hereby releases,
remises and forever grants to [PURCHASER] ("Grantee"), the real property located
in the City of San Jose, County of Santa Clara, State of California, described
on EXHIBIT A attached hereto and made a part hereof (the "Property").
Executed as of __________, ____.
NOVELLUS SYSTEMS, INC.,
a California corporation
By:
-------------------------------------
Its:
------------------------------------
F-1
EXHIBIT A
LEGAL DESCRIPTION
Assessor's Parcel No.: ____________________
F(A)-1
State of _________________
County of _____________________
On ___________________________ before me, _____________________________________,
Date Name, Title of Officer
personally appeared ___________________________________________________________,
Name(s) of signer(s)
(personally known to me -OR- (proved to me on the basis of satisfactory
evidence to be the person(s) whose name(s)
is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed
the same in his/her/their authorized
capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s) or
the entity upon behalf of which the person(s)
acted, executed the instrument.
WITNESS my hand and official seal.
-----------------------------------------------
F(A)-2
____________, ______
Santa Clara County Recorder
Re: Request That Statement of Documentary
Transfer Tax Not be Recorded
Dear Sir:
Request is hereby made in accordance with Section 11932 of the Revenue
and Taxation Code that this statement of tax due not be recorded with the
attached deed but be affixed to the deed after recordation and before return as
directed on the deed.
The attached deed names NOVELLUS SYSTEMS, INC., a California
corporation, as grantor, and [PURCHASER], as grantee.
The property being transferred and described in the attached deed is
located in the City of San Jose and County of Santa Clara, State of California.
The amount of Documentary Transfer Tax due on the attached deed is
$__________, computed on full value of the property conveyed.
NOVELLUS SYSTEMS, INC.,
a
---------------------------------------
By:
-------------------------------------
Its:
------------------------------------
F(A)-3
EXHIBIT G
BILL OF SALE
For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Novellus Systems, Inc., a California corporation
("Seller"), does hereby sell, transfer, and convey unto [PURCHASER] ("Buyer"),
the personal property owned by Seller in connection with that certain real
property commonly known as _______________, San Jose, California, which Seller
warrants to be free and clear of all liens and encumbrances, including, without
limitation, the personal property itemized on SCHEDULE 1 attached hereto and
incorporated herein by this reference.
Seller does hereby covenant with Buyer that Seller is the lawful owner
of such personal property, and that the undersigned has good right to sell the
same as aforesaid and will warrant and defend the title thereto unto Buyer, its
successors and assigns, against the claims and demands of all persons
whomsoever.
DATED this ____ day of __________, ____.
SELLER: Novellus Systems, Inc.,
a California corporation
By:
-------------------------------------
Its:
------------------------------------
G-1
SCHEDULE 1
PROPERTY
G(1)-1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FACILITY 1 PURCHASE AGREEMENT
BETWEEN
NOVELLUS SYSTEMS, INC.
AND
ABN AMRO LEASING, INC.
SEPTEMBER 21, 2001
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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. Partial Purchase Option......................................................2
2.03. Call Option..................................................................4
SECTION 3. OBLIGATIONS OF LESSEE ON THE EXPIRATION DATE..............................5
3.01. Alternative..................................................................5
3.02. Marketing Option.............................................................6
3.03. Expiration Date Purchase Option.............................................12
SECTION 4. TERMS OF ALL PURCHASES...................................................13
4.01. Representations and Warranties of Parties...................................13
4.02. "As Is" Purchase............................................................15
4.03. Release.....................................................................15
4.04. Permits, Approvals, Etc.....................................................16
4.05. Costs.......................................................................16
4.06. Lessee's Payment Obligations................................................16
4.07. Lessor Liens................................................................17
4.08. Transfer Documents..........................................................17
4.09. Casualty and Condemnation Proceeds..........................................18
4.10. Payments....................................................................18
4.11. Environmental Reports.......................................................18
4.12. Simultaneous Exercise of Facility 1, 2 and 3 Options........................18
4.13. Further Assurances..........................................................18
SECTION 5. MISCELLANEOUS............................................................18
5.01. Notices.....................................................................18
5.02. Waivers, Amendments.........................................................19
5.03. Successors and Assigns......................................................19
5.04. No Third Party Rights.......................................................19
5.05. Partial Invalidity..........................................................19
5.06. Governing Law...............................................................19
5.07. Counterparts................................................................20
5.08. Nature of Lessee's Obligations..............................................20
EXHIBITS
A(1) Notice of Term Purchase Option Exercise (2.01)
A(2) Notice of Partial Purchase Option Exercise (2.02)
A(3) Notice of Call Option Exercise (2.03)
B Notice of Marketing
Option Exercise (3.01)
C Notice of Expiration Date Purchase Option Exercise (3.01)
D(1) Deed (Lessor) (4.08(a))
D(2) Acknowledgement and Disclaimer of Representations and Warranties
(4.08(a))
E Bill of Sale (Lessor) (4.08(a))
F Deed (Lessee) (4.08(b))
TABLE OF CONTENT PAGE
G Bill of Sale (Lessee) (4.08(b))
-i-
FACILITY 2 PURCHASE AGREEMENT
THIS FACILITY 2 PURCHASE AGREEMENT (this "Agreement" herein), dated as
of September 21, 2001, is entered into by and between:
(1) NOVELLUS SYSTEMS, INC., a California corporation ("Lessee"); and
(2) ABN AMRO LEASING, INC., an Illinois corporation ("Lessor").
RECITALS
A. Lessee has requested Lessor and the Persons which are "Participants"
under the Participation Agreement referred to in Recital B below (such Persons
to be referred to collectively as the "Participants") to provide to Lessee a
lease facility pursuant to which:
(1) Lessor would (a) lease certain property designated by Lessee
to Lessee, and (b) grant to Lessee the right to purchase such property;
and
(2) The Participants would participate in such lease facility by
(a) funding the advances to be made by Lessor and (b) acquiring
participation interests in the rental and certain other payments to be
made by Lessee.
B. Pursuant to a Participation Agreement dated of even date herewith
(the "Participation Agreement") among Lessee, Lessor, the Participants and ABN
AMRO Bank N.V., as agent for the Participants (in such capacity, "Agent"),
Lessor and the Participants have agreed to provide such lease facility upon the
terms and subject to the conditions set forth therein, including without
limitation the execution and delivery of this Agreement setting forth the terms
for the purchase of the property by Lessee.
AGREEMENT
NOW, THEREFORE, in consideration of the above Recitals and the mutual
covenants herein contained, the parties hereto hereby agree as follows:
SECTION 1. INTERPRETATION.
1.01. Definitions. Unless otherwise indicated in this Agreement or any
other Operative Document, each term set forth in Schedule 1.01 to the
Participation Agreement, when used in this Agreement or any other Operative
Document, shall have the respective meaning given to that term in such Schedule
1.01 or in the provision of this Agreement or other document, instrument or
agreement referenced in such Schedule 1.01.
1.02. 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 Business Day prior to the
Scheduled Expiration Date of the Facility 2 Lease Agreement, terminate the
Facility 2 Lease Agreement and purchase all of the Facility 2 Property (the
"Term Purchase Option").
(a) Notice of Term Purchase Option Exercise. Lessee shall notify
Lessor of Lessee's exercise of the Term Purchase Option by delivering to
Lessor an irrevocable written notice in the form of Exhibit A(1),
appropriately completed (the "Notice of Term Purchase Option Exercise"),
which states that Lessee is exercising its right to terminate the
Facility 2 Lease Agreement prior to the Scheduled Expiration Date
thereof pursuant to Paragraph 4.01 of the Facility 2 Lease Agreement and
purchase all of the Facility 2 Property pursuant to this Paragraph 2.01
and specifies the Business Day 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 as soon as possible but in no event later than
ten (10) Business Days prior to the date on which such termination and
purchase are to occur. (Lessee shall also, to the extent reasonably
practicable, provide Lessor with advance notice indicating that it is
considering exercising the Term Purchase Option.) The Notice of Term
Purchase Option Exercise shall be delivered as required by Subparagraph
2.02(c) and Paragraph 7.01 of the Participation Agreement; provided,
however, that Lessee shall promptly deliver the original of any Notice
of Term Purchase Option Exercise initially delivered by facsimile. After
delivering to Lessor the Notice of Term Purchase Option Exercise, Lessee
may, upon not less than ten (10) Business Days prior written notice to
Lessor, extend the date on which the termination of the Facility 2 Lease
Agreement and Lessee's purchase of the Facility 2 Property is to occur
to a Business Day not more than ten (10) Business Days after the date
specified in the Notice of Term Purchase Option Exercise, provided that
Lessee may so extend such date only once.
(b) Term Purchase Option Purchase Price. Lessee or its designee
shall pay to Lessor on the Expiration Date, as the purchase price for
the Property, an amount equal to the Outstanding Lease Amount on such
date.
2.02. Partial Purchase Option. Subject to the terms and conditions of
this Agreement and the other Operative Documents (including those set forth
below in this Paragraph 2.02), Lessee may, at its option on any Business Day
prior to the Scheduled Expiration Date of the Facility 2 Lease Agreement,
without terminating the Facility 2 Lease Agreement, purchase one or more Parcels
(but not less than all of any such Parcel) of the Facility 2 Property (the
"Partial Purchase Option").
2
(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 Parcels of the Facility 2 Property prior to the
Scheduled Expiration Date pursuant to this Paragraph 2.02 and specifies
(i) the Parcel(s) so to be purchased and (ii) the Business Day on which
such purchase is to occur (a "Partial Purchase Date"). Lessee shall give
each Notice of Partial Purchase Option Exercise to Lessor as soon as
possible but in no event later than one (1) month prior to the Partial
Purchase Date on which a purchase is to occur. (Lessee shall also, to
the extent reasonably practicable, provide Lessor with advance notice
indicating that it is considering exercising the Partial Purchase
Option.) 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. After delivering to Lessor the Notice
of Partial Purchase Option Exercise, Lessee may, upon not less than ten
(10) Business Days prior written notice to Lessor, extend the date on
which the termination of the Facility 2 Lease Agreement and Lessee's
purchase of the Facility 2 Property is to occur to a Business Day not
more than ten (10) Business Days after the date specified in the Notice
of Partial Purchase Option Exercise, provided that Lessee may so extend
such date only once.
(b) Partial Purchase Option Purchase Price. Lessee shall pay to
Lessor on each Partial Purchase Date, as the purchase price for each
Parcel of Facility 2 Property to be purchased on such date, an amount
equal to the portion of the Outstanding Lease Amount under Facility 2 on
such date attributable to such Parcel of Facility 2 Property.
(c) Conditions to Exercise of Partial Purchase Option. The
purchase by Lessee on any Partial Purchase Date of any Parcel of
Facility 2 Property pursuant to this Paragraph 2.02 is subject to the
following conditions:
(i) Lessor shall have received the Notice of Partial
Purchase Option Exercise for such purchase pursuant to
Subparagraph 2.02(a);
(ii) Lessor shall have received, on or prior to such
Partial Purchase Date:
(A) New Expiration Date Appraisals for all
Parcels of Facility 2 Property that are to remain
subject to the Facility 2 Lease Agreement after such
Partial Purchase Date, which appraisals (1) each shall
be dated a recent date prior to such Partial Purchase
Date and (2) together shall assess the aggregate Fair
Market Value of all such remaining Parcels of Facility 2
Property at not less than the Outstanding Lease Amount
under Facility 2 that will remain after application of
all amounts to be applied thereto on such Partial
Purchase Date; and
(B) The purchase price payable by Lessee for
such Parcel of
3
Facility 2 Property pursuant to Subparagraph 2.02(b) and
any other amounts payable by Lessee pursuant to
Subparagraph 4.06(b); and
(iii) No Default shall have occurred and be continuing on
such Partial Purchase Date or will occur as a result of such
purchase by Lessee.
2.03. Call Option. Subject to the terms and conditions of this Agreement
and the other Operative Documents (including those set forth below in this
Paragraph 2.03), Lessee may, at its option on any Business Day prior to the
Scheduled Expiration Date of the Facility 2 Lease Agreement, require Lessor and
the Participants to sell to Lessee (or its designee) all of their respective
right, title and interest in, and assume all obligations and liabilities arising
after such sale under, the Operative Documents related to Facility 2 at par,
together with all accrued and unpaid interest, yield and fees thereon to the
date of such sale and, as applicable, any other amounts then due and payable
under any of the Operative Documents related to Facility 2 (including, without
limitation, any unpaid amounts in respect of unpaid claims for indemnification
then due and owing and any breakage and related costs which are payable pursuant
to the Participation Agreement if the amounts due in respect of such interest
were being prepaid, and not purchased, on such date) (the "Call Option").
(a) Notice of Call Option Exercise. Lessee shall notify Lessor
of Lessee's exercise of the Call Option by delivering to Lessor an
irrevocable written notice in the form of Exhibit A(3), appropriately
completed (the "Notice of Call Option Exercise"), which states that
Lessee is exercising its right to purchase from the Lessor and the
Participants their respective right, title and interest in, and assume
all obligations and liabilities arising after such sale under, the
Operative Documents related to Facility 2 pursuant to this Paragraph
2.03 and specifies the date on which such purchases are to occur (which
date, after the delivery of such notice, shall be the Expiration Date).
Lessee shall give the Notice of Call Option Exercise as soon as possible
but in no event later than one (1) month prior to the date on which such
purchase is to occur. (Lessee shall also, to the extent reasonably
practicable, provide Lessor with advance notice indicating that it is
considering exercising the Call Option.) Each Notice of Call 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 Call Option
Exercise initially delivered by facsimile. After delivering to Lessor
the Notice of Call Option Exercise, Lessee may, upon not less than ten
(10) Business Days prior written notice to Lessor, extend the date on
which such purchase of the Operative Documents related to the Facility 2
Property is to occur to a Business Day not more than ten (10) Business
Days after the date specified in the Notice of Call Option Exercise,
provided that Lessee may so extend such date only once.
(b) Conditions Precedent to Call Option Exercise. Prior to the
effectiveness of the Call Option Exercise, (i) Lessee (or its designee)
shall have obtained all necessary authorizations, approvals and consents
for such Call Option Exercise and each such authorization, approval and
consent shall be in full force and effect, (ii) Lessee shall have
reimbursed the Lessor Parties for all costs and expenses incurred by
such Lessor Parties (including the fees and expenses of their respective
counsel) in connection with such Call
4
Option Exercise, (iii) title to the Facility 2 Property shall have been
transferred from Lessor to Lessee in a manner as if Lessee shall have
exercised the Term Purchase Option and (iv) each Lessor Party shall have
received such documents, instruments, agreements and certificates as it
may reasonably request, each in form and substance satisfactory to such
Lessor Party, in order to effectuate such purchase and sale. Upon
satisfaction of the conditions described in this Paragraph 2.03 by
Lessee (or its designee), the Lessor Parties shall convey their
respective right, title and interest in, and Lessee (or its designee)
shall assume all obligations and liabilities arising after such sale
under, the transactions contemplated by the Operative Documents related
to Facility 2, free and clear of any Lessor Lien, whereupon such rights,
interests, obligations and liabilities of the Lessor Parties shall
thereupon be assumed by and inure to the benefit of Lessee (or its
designee) (other than rights arising as a result of claims or
impositions theretofore arising, which shall remain exercisable by such
Lessor Party). Subject to the satisfaction by Lessee of the terms and
conditions set forth herein, the Lessor Parties agree to cooperate in
good faith with Lessee in effectuating any such transaction.
SECTION 3. OBLIGATIONS OF LESSEE ON THE EXPIRATION DATE.
3.01. Alternative. Unless Lessee has exercised the Term Purchase Option,
on the Expiration Date of the Facility 2 Lease Agreement, Lessee shall either:
(a) Marketing Option. Cause another Person to complete the
purchase of the Facility 2 Property pursuant to Paragraph 3.02 (the
"Marketing Option"); or
(b) Expiration Date Purchase Option. Purchase the Facility 2
Property itself pursuant to Paragraph 3.03 (the "Expiration Date
Purchase Option").
Lessee shall elect either the Marketing Option or the Expiration Date Purchase
Option by delivering to Lessor, not more than nine (9) months nor less than six
(6) months prior to the Scheduled Expiration Date for the Facility 2 Lease
Agreement, either (i) a written notice in the form of Exhibit B, appropriately
completed (the "Notice of Marketing Option Exercise"), or (ii) a written notice
in the form of Exhibit C, appropriately completed (the "Notice of Expiration
Date Purchase Option Exercise"); provided, however, that (A) Lessee shall be
deemed to have elected the Expiration Date Purchase Option if it fails to
deliver either notice as required by this sentence; (B) Lessee's election of the
Expiration Date Purchase Option (whether expressly by a notice so delivered or
implicitly by the failure to deliver any notice) shall be irrevocable; and (C)
Lessee may not elect the Marketing Option if (1) the Expiration Date has been
accelerated to an earlier Termination Date following a Marketing Option Event of
Default under the Facility 2 Lease Agreement, or (2) the conditions set forth in
Paragraph 3.03 of the Participation Agreement are not satisfied on the date
Lessee delivers its election notice or on the Expiration Date of the Facility 2
Lease Agreement (unless, in each case, the only event or condition causing such
conditions not to be so satisfied is the occurrence of a Non-Marketing Option
Event of Default under the Facility 2 Lease Agreement). The Notice of Marketing
Option Exercise or the Notice of Expiration Date Purchase Option Exercise shall
be delivered as required by Subparagraph 2.02(c) and Paragraph 7.01 of the
Participation Agreement; provided, however,
5
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 Facility 2 Property on the
Expiration Date for a purchase price which is not less than the lesser
of (A) the difference between the Outstanding Lease Amount and Residual
Value Guaranty Amount under Facility 2 and (B) the Fair Market Value of
the Facility 2 Property and (iii) otherwise comply, or cause compliance
with, the requirements of this Paragraph 3.02 and the other applicable
provisions of this Agreement.
(b) Lessee's Marketing Obligations.
(i) Initial Marketing Period. During the period
beginning on the date Lessee delivers the Notice of Marketing
Option Exercise and ending on the date which is four (4) months
prior to the Expiration Date of the Facility 2 Lease Agreement
(the "Initial Marketing Period"), Lessee shall use reasonable
efforts to solicit Conforming Bids from potential purchasers of
the Facility 2 Property. On or prior to the last day of the
Initial Marketing Period, Lessee shall deliver to Lessor any
Conforming Bid selected by Lessee (the "Initial Bid"). If the
purchase price specified in the Initial Bid is equal to or
greater than the difference between the Outstanding Lease Amount
and Residual Value Guaranty Amount under Facility 2, Lessor
shall accept such bid and Lessee shall have no further
obligations to solicit additional bids.
(ii) Secondary Marketing Period. If Lessee does not
submit an Initial Bid or if the purchase price specified in the
Initial Bid is less than the difference between the Outstanding
Lease Amount and Residual Value Guaranty Amount under Facility
2, Lessor may reject such bid and Lessee shall, during the
period which begins on the day following the Initial Marketing
Period and ends on the date two (2) months prior to the
Expiration Date of the Facility 2 Lease Agreement (the
"Secondary Marketing Period"):
(A) Use its best efforts to solicit additional
Conforming Bids, including the engagement of experienced
and knowledgeable brokers;
(B) Furnish to each Lessor Party (other than
Novellus Participant) copies of all bids and otherwise
provide each Lessor Party (other than Novellus
Participant) with such information relating to the
marketing of the Facility 2 Property as such Person may
reasonably request in writing;
6
(C) Agree to provide to all potential purchasers
all customary seller's indemnities (including
environmental indemnities), representations and
warranties regarding the Facility 2 Property (including
the title to, except for Lessor Liens, and condition of
the Facility 2 Property);
(D) Furnish to each Lessor Party (other than
Novellus Participant) copies of environmental reports,
architect's certificates, licenses, permits and other
evidence reasonably requested by such Person to
establish that no Default has occurred and is continuing
under the Facility 2 Lease Agreement;
(E) Permit any Lessor Party or potential
purchaser to inspect the Facility 2 Property and the
maintenance records for the Property upon reasonable
prior written notice and during normal business hours
and provide to each such Person all information
regarding the Facility 2 Property reasonably requested
by such Person in writing;
(F) Take all other commercially reasonable steps
to secure the best price for the Facility 2 Property;
and
(G) If any Conforming Bids were received by
Lessee, submit to Lessor on or prior to the last day of
the Secondary Marketing Period any Conforming Bid
selected by Lessee with a purchase price which is equal
to or greater than the difference between the
Outstanding Lease Amount and Residual Value Guaranty
Amount under Facility 2 or, if no such Conforming Bid
was received by Lessee, the highest Conforming Bid
received by Lessee during the Secondary Marketing
Period.
During the Secondary Marketing Period, any Lessor Party (other
than Novellus Participant) shall have the right to submit one or
more bids or solicit bids from other Persons.
(c) Conforming Bids. Each bid must meet each of the following
requirements (each such bid to be referred to herein as a "Conforming
Bid"):
(i) The bid may be submitted by any Person other than
(A) a Person which is an Affiliate of Lessee or (B) a Person
which has an agreement (whether express or implied) with Lessee
or any of its Affiliates to sell, lease or otherwise make
available to Lessee or any of its Affiliates any portion of the
Facility 2 Property;
(ii) The bidder must agree in writing to purchase the
Facility 2 Property on the Expiration Date of the Facility 2
Lease Agreement for a purchase price to be paid in cash which is
not less than the lesser of (A) the difference between the
Outstanding Lease Amount and Residual Value Guaranty Amount
under Facility 2 on such date and (B) the Fair Market Value of
the Facility 2 Property on such date;
7
(iii) The bidder must agree to purchase the Property "as
is" without any representations, warranties or indemnities,
except for (A) any representations, warranties or indemnities
provided by Lessor and Lessee pursuant to Subparagraph 4.01(b)
and (B) any representations, warranties or indemnities provided
by Lessee pursuant to clause (ii)(C) of Subparagraph 3.02(b);
and
(iv) The bidder must agree to be bound by the other
terms and conditions of this Agreement applicable to bidders.
(d) Lessor's Obligation to Accept Bids. If, at any time on or
prior to the last day of the Secondary Marketing Period, Lessee submits
to Lessor a Conforming Bid under this Paragraph 3.02 with a purchase
price which is equal to or greater than the difference between the
Outstanding Lease Amount and Residual Value Guaranty Amount under
Facility 2, Lessor shall accept such bid. If Lessee submits to Lessor a
Conforming Bid under this Paragraph 3.02 with a purchase price which is
less than the difference between the Outstanding Lease Amount and
Residual Value Guaranty Amount under Facility 2, Lessor shall not accept
such bid unless approved by Lessor and Required Participants. If Lessee
fails to submit a bid to Lessor on or prior to the last day of the
Secondary Marketing Period which Lessor is so required to accept, Lessor
shall (unless it elects to accept another bid which it is not required
to accept, in which case Lessee's obligations shall be limited to the
amounts payable pursuant to clause (ii) of Subparagraph 4.06(a)) retain
the Facility 2 Property after the Expiration Date of the Facility 2
Lease Agreement; provided, however, that Lessee's payment obligations on
such Expiration Date shall be limited to the amounts payable pursuant to
clause (iii) of Subparagraph 4.06(a) if (i) Lessor retains the Facility
2 Property after Lessee submits a Conforming Bid on or prior to the last
day of the Secondary Marketing Period in accordance with clause (ii) of
Subparagraph 3.02(b) and (ii) the Marketing Option has not terminated
prior to such Expiration Date pursuant to Subparagraph 3.02(f). If
Lessee fails to obtain a Conforming Bid prior to the last day of the
Secondary Marketing Period which Lessor is required to accept or another
bid which Lessor elects to accept (notwithstanding that it is not
required to do so) despite Lessee's timely and complete compliance with
Lessee's marketing obligations as described in Subparagraph 3.02(a) and
Subparagraph 3.02(b), and such failure is not caused by any negligence
or willful misconduct of Lessee, then Lessee's payment obligations on
the Expiration Date of the Facility 2 Lease Agreement shall be limited
to the amounts payable pursuant to clause (ii) or clause (iii) of
Subparagraph 4.06(a), as applicable. Lessor shall notify Lessee of
Lessor's election to retain the Facility 2 Property by delivering to
Lessee, at least ten (10) days prior to the Expiration Date of the
Facility 2 Lease Agreement, a written notice of such election.
(e) Purchase Price. If Lessor accepts any bid by any Person,
such Person (the "Designated Purchaser") shall pay to Lessor on the
Expiration Date of the Facility 2 Lease Agreement, as the purchase price
for the Property, the amount set forth in such bid as the purchase
price.
(f) Termination of the Marketing Option. Lessee's right to
exercise the Marketing Option shall immediately terminate and Lessee
shall purchase the Facility 2
8
Property on the Expiration Date of the Facility 2 Lease Agreement
pursuant to Paragraph 3.03 if (i) Lessee fails to comply with any of its
obligations under this Paragraph 3.02; (ii) a Marketing Option Event of
Default under the Facility 2 Lease Agreement occurs after Lessee
delivers the Notice of Marketing Option Exercise; (iii) the conditions
precedent set forth in Paragraph 3.03 of the Participation Agreement are
not satisfied on the Expiration Date of the Facility 2 Lease Agreement
(unless the only event or condition causing such conditions not to be so
satisfied is the occurrence of a Non-Marketing Option Event of Default
under the Facility 2 Lease Agreement); or (iv) the Designated Purchaser
fails to consummate the purchase of the Facility 2 Property on the
Expiration Date of the Facility 2 Lease Agreement in accordance with its
accepted bid and this Agreement, without regard to the reason for such
failure (except as otherwise provided in the following proviso);
provided, however, that, if the Designated Purchaser fails to consummate
the purchase of the Property on the Expiration Date solely due to
Lessor's failure to remove Lessor Liens or deliver the required deed and
bill of sale or other documents required to be delivered by Lessor
hereunder, Lessee's right to exercise the Marketing Option shall not
terminate, Lessee shall not be required to purchase the Property on the
Expiration Date and Lessee's payment obligations on the Expiration Date
shall be limited to the amounts set forth in Subparagraph 4.06(b)
(determined as if the purchase by the Designated Purchaser had been
consummated).
(g) Residual Value Guaranty Amount and Indemnity Amount. Unless
Lessee's right to exercise the Marketing Option has terminated and
Lessee is required to purchase the Facility 2 Property on the Expiration
Date of the Facility 2 Lease Agreement pursuant to Paragraph 3.03,
Lessee shall pay to Lessor on such Expiration Date the Residual Value
Guaranty Amount and the Indemnity Amount calculated as follows:
(i) The "Residual Value Guaranty Amount" shall be an
amount equal to the total Tranche A Proportionate Share of the
Outstanding Lease Amount under Facility 2 on the Expiration
Date.
(ii) The "Indemnity Amount" shall be an amount equal to
the decrease, if any, between the Commencement Date and the
Expiration Date of the Facility 2 Lease Agreement in the Fair
Market Value of the Facility 2 Property caused by (A) any
representation or warranty of Lessee or any of its Affiliates
regarding the Facility 2 Property set forth in any of the
Operative Documents proving to be false or inaccurate when made,
(B) the existence of, or the failure of Lessee to pay any
Governmental Charge, Indebtedness or other obligation which
might give rise to, any Liens in the Facility 2 Property (other
than Permitted Property Liens), (C) the failure of Lessee to
complete any Modifications or (D) any other failure of Lessee to
comply with any of its obligations regarding the Facility 2
Property set forth in any of the Operative Documents.
(h) Determination of Fair Market Value and Indemnity Amount. If
the purchase price specified in the Initial Bid is less than the
difference between the Outstanding Lease Amount and Residual Value
Guaranty Amount under Facility 2, Lessor may, on or prior to the last
day of the Secondary Marketing Period (if Lessee has not previously
delivered to Lessor a Conforming Bid with a purchase price equal to or
9
greater than the difference between the Outstanding Lease Amount and
Residual Value Guaranty Amount under Facility 2), deliver to Lessee a
written notice of Lessor's determination of the current Fair Market
Value of the Facility 2 Property and the Indemnity Amount. To determine
such amounts, Lessor shall obtain Appraisals of the Facility 2 Property
which set forth:
(i) A current Appraisal of the Fair Market Value of the
Facility 2 Property in its then existing condition (the "Current
Appraisal"); and
(ii) An Appraisal of the Fair Market Value of the
Facility 2 Property which assumes that (A) all representations
and warranties regarding the Facility 2 Property made by Lessee
or any of its Affiliates in any of the Operative Documents were
true and correct when made; (B) Lessee has maintained the
Facility 2 Property in compliance with all applicable
Governmental Rules, Insurance Requirements and the Operative
Documents; (C) Lessee has completed all Modifications in a good
and workmanlike manner and otherwise as required by the
Operative Documents; (D) Lessee has repaired the Facility 2
Property as required by the Operative Documents following any
Casualty; (E) Lessee has restored the Facility 2 Property as
required by the Operative Documents following any Condemnation;
(F) Lessee has paid all Governmental Charges, Indebtedness and
other obligations which, if unpaid, might give rise to a Lien
(other than a Lessor Lien) on the Facility 2 Property; (G)
Lessee has removed all Liens on the Facility 2 Property except
for Permitted Property Liens and Lessor Liens; and (H) Lessee
has performed all of its other obligations as required by the
Operative Documents (the "Assumed Appraisal").
In the absence of manifest error, (A) the Current Appraisal shall
constitute the current Fair Market Value of the Facility 2 Property and
(B) the difference between the Current Appraisal and the Assumed
Appraisal shall constitute the Indemnity Amount if the Current Appraisal
is less than the Assumed Appraisal.
(i) Lessee not an Agent. Lessee shall not be an agent for any of
the Lessor Parties in arranging for a purchaser of the Facility 2
Property. No Lessor Party (other than Novellus Participant) shall be
bound by any acts of Lessee.
(j) Application of Proceeds. After the exercise by Lessee of the
Marketing Option, Lessor shall apply and distribute all amounts received
by Lessor on the Expiration Date as follows:
(i) First, Lessor shall apply such amounts to the
portion of the Outstanding Lease Amount under Facility 2 not
constituting Ineligible Project Costs to the extent necessary to
pay such portion of the Outstanding Lease Amount;
(ii) Second, to the extent any amounts then remain,
Lessor shall apply such amounts to the portion of all unpaid
Rent under Facility 2 accrued through or
10
due and payable on or prior to such date not constituting
Ineligible Project Costs to the extent necessary to pay such
portion of the unpaid Rent;
(iii) Third, to the extent any amounts then remain,
Lessor shall apply such amounts to the portion of all other
amounts, if any, due and payable by Lessee under the Operative
Documents on account of Facility 2 on or prior to such date not
constituting Ineligible Project Costs to the extent necessary to
pay such portion of the unpaid amounts;
(iv) Fourth, to the extent any amounts then remain,
Lessor shall distribute to Lessee (A) such amounts as are
necessary to pay all Prepaid Rent paid by Lessee, except for any
such Prepaid Rent caused by or arising from any failure by
Lessee to comply with any of its obligations under the Operative
Documents (including its insurance obligations), any
representation by Lessee in any of the Operative Documents not
being true, any negligence or willful misconduct of Lessee, or
any claim by any third-party against Lessee (or against any
Lessor Party) based upon any alleged action or inaction by
Lessee, and (B) an amount equal to the Residual Value Guaranty
Amount paid by Lessee hereunder.
(v) Fifth, to the extent any amounts then remain, Lessor
shall apply such amounts to all Ineligible Project Costs paid or
incurred by Lessor Parties.
(vi) Finally, to the extent any amounts then remain,
Lessor shall promptly distribute all such remaining proceeds to
Lessee.
(k) Creditworthiness of Designated Purchaser. Lessee assumes all
responsibility for determining the creditworthiness of any potential
purchaser on any bid submitted by Lessee to Lessor hereunder. If, after
any purchase by a Designated Purchaser hereunder, the purchase price
paid by such Designated Purchaser is recovered from any Lessor Party
(other than Novellus Participant), Lessee shall reimburse such Lessor
Party for such recovery unless such recovery is due solely to a material
misrepresentation or covenant breach by such Lessor Party.
(l) Exercise of Marketing Option After Non-Marketing Option
Event of Default. If Lessor notifies Lessee pursuant to Subparagraph
5.03(a) or Subparagraph 5.04(a) of the Lease Agreement that Lessor is
terminating the Lease Agreement on a Termination Date which is prior to
the Scheduled Expiration Date of the Facility 2 Lease Agreement and the
only basis for such early termination is the occurrence of a
Non-Marketing Option Event of Default under the Facility 2 Lease
Agreement, 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 delivers to
Lessor a Notice of Marketing Option Exercise. Upon the delivery by
Lessee to Lessor of a Notice of Marketing Option Exercise, the
Expiration Date of the Facility 2 Lease Agreement shall, if the
conditions to the exercise of the Marketing Option set forth in
Paragraph 3.01 are satisfied, be extended to the first Business Day of
the first full calendar month that is six (6) months after the date of
receipt by Lessor of such Notice of Marketing Option Exercise. Any
exercise by Lessee of the Marketing Option pursuant to
11
this Subparagraph 3.02(l) shall be subject to the terms and conditions
otherwise set forth in this Agreement.
3.03. Expiration Date Purchase Option.
(a) General. If (i) Lessee elects to exercise the Expiration
Date Purchase Option by delivering to Lessor a Notice of Expiration Date
Purchase Option Exercise pursuant to Paragraph 3.01; (ii) Lessee elects
to exercise the Marketing Option by delivering to Lessor a Notice of
Marketing Option Exercise pursuant to Paragraph 3.01 but the Marketing
Option terminates pursuant to Subparagraph 3.02(f); or (iii) Lessee
fails to deliver to Lessor either notice as required by Paragraph 3.01;
Lessee shall purchase the Facility 2 Property on the Expiration Date of
the Facility 2 Lease Agreement and otherwise comply, or cause compliance
with, the requirements of this Paragraph 3.03 and the other applicable
provisions of this Agreement.
(b) Purchase Price. If Lessee is purchasing the Facility 2
Property pursuant to the Expiration Date Purchase Option, Lessee shall
pay to Lessor on the Expiration Date of the Facility 2 Lease Agreement,
as the purchase price for the Facility 2 Property, an amount equal to
the Outstanding Lease Amount under Facility 2 on such date.
SECTION 4. TERMS OF ALL PURCHASES.
4.01. Representations and Warranties of Parties.
(a) Representations and Warranties of Purchaser. The purchaser
of the Facility 2 Property, whether Lessee, an Assignee Purchaser or a
Designated Purchaser ("Purchaser"), shall represent and warrant to
Lessor on the Expiration Date of the Facility 2 Lease Agreement (or, in
the case of a purchase of a portion of the Facility 2 Property pursuant
to the Partial Purchase Option, on the applicable Partial Purchase Date)
as follows:
(i) Such Person is a legal entity duly organized,
validly existing and in good standing under the laws of its
jurisdiction of organization or an individual with legal
capacity to purchase the Facility 2 Property (or, in the case of
a purchase of a portion of the Facility 2 Property pursuant to
the Partial Purchase Option, the portion to be purchased).
(ii) The execution, delivery and performance by such
Person of each document, instrument and agreement executed, or
to be executed, by such Person in connection with its purchase
of the Facility 2 Property (or, in the case of a purchase of a
portion of the Facility 2 Property pursuant to the Partial
Purchase Option, the portion to be purchased) (the "Purchase
Documents") and the consummation of the transactions
contemplated thereby (A) are within the power of such Person and
(B) have been duly authorized by all necessary actions on the
part of such Person.
12
(iii) Each Purchase Document executed, or to be
executed, by such Person has been, or will be, duly executed and
delivered by such Person and constitutes, or will constitute, a
legal, valid and binding obligation of such Person, enforceable
against such Person in accordance with its terms, except as
limited by bankruptcy, insolvency or other laws of general
application relating to or affecting the enforcement of
creditors' rights generally and general principles of equity.
(iv) Such Person has not (A) made a general assignment
for the benefit of creditors, (B) filed any voluntary petition
in bankruptcy or suffered the filing of any involuntary petition
by such Person's creditors, (C) suffered the appointment of a
receiver to take possession of all, or substantially all, of
such Person's assets, (D) suffered the attachment or other
judicial seizure of all, or substantially all, of such Person's
assets, (E) admitted in writing its inability to pay its debts
as they come due, or (F) made an offer of settlement, extension
or composition to its creditors generally.
(v) Such Person is not a "party in interest" within the
meaning of Section 3(14) of the ERISA, with respect to any
investor in or beneficiary of Lessor.
(b) Representations and Warranties of Lessor and Lessee. Each of
Lessor and Lessee shall represent and warrant to Purchaser (and Lessee
also shall represent and warrant to Lessor if Lessor is to retain the
Facility 2 Property) on the Expiration Date of the Facility 2 Lease
Agreement as follows:
(i) Such Person is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction
of organization.
(ii) The execution, delivery and performance by such
Person of each Purchase Document executed, or to be executed, by
such Person and the consummation of the transactions
contemplated thereby (A) are within the power of such Person and
(B) have been duly authorized by all necessary actions on the
part of such Person.
(iii) Each Purchase Document executed, or to be
executed, by such Person has been, or will be, duly executed and
delivered by such Person and 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
13
come due, or (F) made an offer of settlement, extension or
composition to its creditors generally.
In addition to the foregoing, (A) Lessee shall represent and warrant to
the Designated Purchaser (or Lessor if Lessor is to retain the Facility
2 Property) on the Expiration Date of the Facility 2 Lease Agreement
that no Liens are attached to the Facility 2 Property, except for
Permitted Property Liens, and (B) Lessor shall represent and warrant to
Purchaser on the Expiration Date of the Facility 2 Lease Agreement (or,
in the case of a purchase of a portion of the Facility 2 Property
pursuant to the Partial Purchase Option, on the applicable Partial
Purchase Date) that no Lessor Liens are attached to the Facility 2
Property (or, in the case of a purchase of a portion of the Facility 2
Property pursuant to the Partial Purchase Option, the portion to be
purchased). Except for the foregoing representations and warranties to
be made by Lessor on the Expiration Date of the Facility 2 Lease
Agreement (or, in the case of a purchase of a portion of the Facility 2
Property pursuant to the Partial Purchase Option, on the applicable
Partial Purchase Date), no Lessor Party shall make any representation or
warranty regarding the Facility 2 Property or the sale of the Facility 2
Property. Lessee shall make such additional representations and
warranties as it may be required to make pursuant to clause (ii) of
Subparagraph 3.02(b).
(c) Survival of Representations and Warranties. The
representations and warranties of Purchaser, Lessor and Lessee shall
survive for a period of twelve (12) months after the Expiration Date of
the Facility 2 Lease Agreement (or, in the case of a purchase of a
portion of the Facility 2 Property pursuant to the Partial Purchase
Option, after the applicable Partial Purchase Date). Any claim which any
such party may have at any time against any other such party for a
breach of any such representation or warranty, whether known or unknown,
which is not asserted by written notice within such twelve (12) month
period shall not be valid or effective, and the party shall have no
liability with respect thereto.
4.02. "As Is" Purchase. All purchases of the Facility 2 Property
hereunder shall be "as is, with all faults" and without any representations,
warranties or indemnities except for any representations, warranties or
indemnities provided by Lessee pursuant to clause (ii)(C) of Subparagraph
3.02(b) or by Lessor or Lessee pursuant to Subparagraph 4.01(b). Each Purchaser
shall specifically acknowledge and agree that Lessor is selling and such
Purchaser is purchasing the Facility 2 Property on an "as is, with all faults"
basis and that such Purchaser is not relying on any representations or
warranties of any kind whatsoever, express or implied, from any Lessor Party,
its agents, or brokers as to any matters concerning the Facility 2 Property
(except for any representations and warranties provided by Lessor pursuant to
Subparagraph 4.01(b)), including (a) the condition of the Facility 2 Property
(including any Improvements to the Facility 2 Property made prior to the
Commencement Date or during the Term of the Facility 2 Lease Agreement); (b)
title to the Facility 2 Property (including possession of the Facility 2
Property by any Person or the existence of any Lien or any other right, title or
interest in or to any of the Facility 2 Property in favor of any Person); (c)
the value, habitability, usability, design, operation or fitness for use of the
Facility 2 Property; (d) the availability or adequacy of utilities and other
services to the Facility 2 Property; (e) any latent, hidden or patent defect in
the Facility 2 Property; (f) the zoning or status of the Facility 2 Property or
any other restrictions on the use of
14
the Facility 2 Property; (g) the economics of the Facility 2 Property; (h) any
Casualty or Condemnation; or (i) the compliance of the Facility 2 Property with
any applicable Governmental Rule or Insurance Requirement.
4.03. Release. Without limiting the foregoing, each Purchaser shall, on
behalf of itself and its successors and assigns, waive its right to recover
from, and forever release and discharge, Lessor and the other Indemnitees from
any and all demands, claims, legal or administrative proceedings, losses,
liabilities, damages, penalties, fines, liens, judgments, costs or expenses
whatsoever (including attorneys' fees and costs), whether direct or indirect,
known or unknown, foreseen or unforeseen, that may arise on account of or in any
way be connected with the physical condition of the Facility 2 Property or any
Governmental Rule applicable thereto, including any Environment Law. Each
Purchaser shall expressly waive the benefits of Section 1542 of the California
Civil Code, which provides that, "a general release does not extend to claims
which the creditor does not know or expect to exist in his favor at the time of
executing the release, which if known to him must have materially affected the
settlement with the debtor."
4.04. Permits, Approvals, Etc. Lessee shall obtain all permits, licenses
and approvals from and make all filings with Governmental Authorities and other
Persons, comply and cause compliance with all applicable Governmental Rules and
take all other actions required for the marketing, purchase and sale of the
Facility 2 Property.
4.05. Costs. Lessee shall pay directly, without deduction from the
purchase price or any other amount payable to Lessor hereunder, all costs and
expenses of Lessee and Lessor associated with the marketing and sale of the
Facility 2 Property, including brokers' fees and commissions; title insurance
premiums; survey charges; utility, tax and other prorations; fees and expenses
of environmental consultants and attorneys; appraisal costs; escrow fees;
recording fees; documentary, transfer and other taxes; and all other fees, costs
and expenses which might otherwise be deducted from the purchase price or any
other amount payable to Lessor hereunder.
4.06. Lessee's Payment Obligations.
(a) Expiration Date. On the Expiration Date of the Facility 2
Lease Agreement, Lessee shall pay to Lessor the following:
(i) Purchase by Lessee. If the Facility 2 Property is to
be purchased by Lessee or an Assignee Purchaser on such date,
(A) the Outstanding Lease Amount, (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 in each case to the
extent attributable to Facility 2;
(ii) Purchase by a Designated Purchaser. If the Facility
2 Property is to be purchased by a Designated Purchaser on such
date, (A) the Residual Value Guaranty Amount, (B) the Indemnity
Amount, (C) all unpaid Rent accrued through or due and payable
on or prior to such date and (D) all other amounts, if any, due
and payable by Lessee under the Operative Documents on or prior
to such date in each case to the extent attributable to Facility
2; or
15
(iii) Retention by Lessor. If the Facility 2 Property is
to be retained by Lessor on such date pursuant to Subparagraph
3.02(d), (A) the Residual Value Guaranty Amount, (B) the
Indemnity Amount, (C) all unpaid Rent accrued through or due and
payable on or prior to such date and (D) all other amounts, if
any, due and payable by Lessee under the Operative Documents on
or prior to such date.
(b) Partial Purchase Date. On any Partial Purchase Date, Lessee
shall pay to Lessor (i) the purchase price for the Parcels of Facility 2
Property to be purchased on such date, (ii) all unpaid Rent attributable
to such Parcels of Facility 2 Property accrued through or due and
payable on or prior to such date and (iii) all other amounts
attributable to such Parcels of Facility 2 Property, if any, due and
payable by Lessee under the Operative Documents on or prior to such
date.
4.07. Lessor Liens. Lessor shall remove all Lessor Liens from the
Facility 2 Property before the Expiration Date of the Facility 2 Lease Agreement
(or, in the case of a purchase of a portion of the Facility 2 Property pursuant
to the Partial Purchase Option, from the portion to be purchased before the
applicable Partial Purchase Date).
4.08. Transfer Documents.
(a) Expiration Date.
(i) Lessor. Subject to receipt by Lessor on the
Expiration Date of the Facility 2 Lease Agreement of the full
amount of the following, without any setoff, deduction or
reduction of any kind:
(A) In the case of a transfer to Lessee or an
Assignee Purchaser, all amounts payable by Lessee
pursuant to clause (i) of Subparagraph 4.06(a); or
(B) In the case of a transfer to a Designated
Purchaser, (1) the purchase price payable by the
Designated Purchaser and (2) all amounts payable by
Lessee pursuant to clause (ii) of Subparagraph 4.06(a);
Lessor shall transfer its interest in the Facility 2 Property to
Purchaser on the Expiration Date of the Facility 2 Lease Agreement
(unless Lessor is to retain the Facility 2 Property) by executing and
delivering to Purchaser a Deed in substantially the form of Exhibit
D(1), an Acknowledgment of Disclaimer of Representations and Warranties
in substantially the form of Exhibit D(2), a Bill of Sale in
substantially the form of Exhibit E, and shall assign to Purchaser
Lessor's option to purchase its interest in the Facility 2 Property as
provided in the Ground Lease Agreement.
(ii) Lessee. On the Expiration Date of the Facility 2 Lease
Agreement, unless Lessee is to purchase the Facility 2 Property, Lessee
shall transfer its interest in the Facility 2 Property to the Designated
Purchaser or an Assignee Purchaser (or Lessor if Lessor is to retain the
Facility 2 Property) by executing
16
and delivering to such Person a Deed in substantially the form of
Exhibit F, shall assign to Lessee Lessor's option to purchase its
interest in such Parcels of the Facility 2 Property as provided in the
Ground Lease Agreement 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 Parcels of Facility 2
Property to be purchased on such date to Lessee by executing and
delivering to Lessee a Deed in substantially the form of Exhibit D(1), a
Bill of Sale in substantially the form of Exhibit E, and such other
documents, instruments and agreements as Lessee may reasonably request.
4.09. Casualty and Condemnation Proceeds. If, on the Expiration Date of
the Facility 2 Lease Agreement, any Casualty and Condemnation Proceeds are held
by Lessor in a Repair and Restoration Account or otherwise, Lessor shall (a) if
Lessee is to purchase the Facility 2 Property on the Expiration Date of the
Facility 2 Lease Agreement and Lessee shall so direct, apply such proceeds to
the purchase price to be paid by Lessee or (b) in all other cases, release such
proceeds to Lessee; provided, however, that Lessor shall not have any obligation
so to apply or release such proceeds unless Lessee and/or any Designated
Purchaser has complied with all of the terms and conditions of this Agreement.
4.10. Payments. Purchaser, Lessor and Lessee shall make all payments in
lawful money of the United States and in same day or immediately available funds
not later than 12:00 noon on the date due.
4.11. Environmental Reports. Lessee shall obtain and deliver to Lessor,
not later than one (1) month prior to the Expiration Date of the Lease Agreement
(or, in the case of a purchase of a portion of the Facility 2 Property pursuant
to the Partial Purchase Option, prior to the applicable Partial Purchase Date),
environmental reports with respect to the Facility 2 Property (or, in the case
of a purchase of a portion of the Facility 2 Property pursuant to the Partial
Purchase Option, with respect to the applicable portion thereof) prepared by
environmental consultants acceptable to Lessor.
4.12. Simultaneous Exercise of Facility 1, 2 and 3 Options.
(a) Expiration Date Purchase Option or Marketing Option. At any
time Lessee exercises the Expiration Date Purchase Option or Marketing
Option with respect to the Facility 2 Property hereunder, Lessee shall
simultaneously exercise the same option with respect to the Facility 1
Property under the Facility 1 Purchase Agreement and the Facility 3
Property under the Facility 3 Purchase Agreement. If Lessee elects to
exercise the Marketing Option under this Agreement, the Facility 1
Purchase Agreement and the Facility 3 Purchase Agreement, Lessee shall
not submit bids from different Persons under the three Purchase
Agreements unless (i) the bidder for the Facility 1 Property and the
bidder for the Facility 2 Property have agreed upon the terms of a
ground lease pursuant to which the Facility 1 bidder would lease the
Parcel 7 Land to the
17
Facility 2 bidder, (ii) the terms of such ground lease do not have a
material adverse effect on the values of the Facility 1 Property or
Facility 2 Property and (iii) any necessary approvals required for such
ground lease under the Stanford Lease have been obtained.
(b) Partial Purchase Option. At any time Lessee exercises the
Partial Purchase Option with respect to any Parcel of Facility 2
Property hereunder, Lessee shall simultaneously exercise the same option
with respect to the corresponding Parcel of the Facility 1 Property, if
any, under the Facility 1 Purchase Agreement.
4.13. 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
Participant) in exercising any right hereunder shall operate as a waiver thereof
or of any other right nor shall any single or partial exercise of any such right
preclude any other further exercise thereof or of any other right. Unless
otherwise specified in any such waiver or consent, a waiver or consent given
hereunder shall be effective only in the specific instance and for the specific
purpose for which given.
5.03. Successors and Assigns.
(a) General. This Agreement shall be binding upon and inure to
the benefit of the Lessor Parties and Lessee and their permitted
successors and assigns; provided, however, that the Lessor Parties and
Lessee shall not sell, assign or delegate their respective rights and
obligations hereunder except as provided in the Participation Agreement
and in Subparagraph 5.03(b).
(b) Assignment by Lessee of Purchase Rights. Lessee may assign
to a third party (an "Assignee Purchaser") its right to purchase the
Facility 2 Property pursuant to the Term Purchase Option, the Partial
Purchase Option or the Expiration Date Purchase Option; provided,
however, that (i) such an assignment shall not relieve Lessee of its
obligations to consummate or cause the consummation of any such purchase
in accordance with the terms of this Agreement and (ii) Lessee assumes
all responsibility for determining the creditworthiness of any such
Assignee Purchaser. If, after any purchase by an Assignee Purchaser
hereunder, the purchase price paid by such Assignee
18
Purchaser is recovered from any Lessor Party (other than Novellus
Participant), 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.
5.07. Counterparts. This Agreement may be executed in any number of
identical counterparts, any set of which signed by all the parties hereto shall
be deemed to constitute a complete, executed original for all purposes.
5.08. Nature of Lessee's Obligations.
(a) Independent Obligation. The obligation of Lessee to pay the
amounts payable by Lessee under this Agreement and the other Operative
Documents and to perform the other Lessee Obligation are absolute,
unconditional and irrevocable obligations which are separate and
independent of the obligations of the Lessor Parties under this
Agreement and the other Operative Documents and all other events and
circumstances, including the events and circumstances set forth in
Subparagraph 5.08(c).
(b) No Termination or Abatement. This Agreement and the other
Operative Documents and Lessee's obligation to pay all amounts hereunder
and to pay and perform all other Lessee Obligations shall continue in
full force and effect without abatement notwithstanding the occurrence
or existence of any event or circumstance, including any event or
circumstance set forth in Subparagraph 5.08(c).
(c) Full Payment and Performance. Lessee shall make all payments
under this Agreement and the other Operative Documents in the full
amounts and at the times required by the terms of this Agreement and the
other Operative Documents without setoff, deduction or reduction of any
kind and shall perform all other Lessee Obligations as and when
required, without regard to any event or circumstances whatsoever,
including (i) the condition of the Facility 2 Property (including any
Improvements to the Facility 2 Property made prior to the Commencement
Date or during the Term of the Facility 2 Lease Agreement); (ii) title
to the Facility 2 Property (including possession of the Facility 2
Property by any Person or the existence of any Lien or any other right,
title or interest in or to any of the Facility 2 Property in favor of
any Person); (iii) the value,
19
habitability, usability, design, operation or fitness for use of the Facility 2
Property; (iv) the availability or adequacy of utilities and other services to
the Facility 2 Property; (v) any latent, hidden or patent defect in the Facility
2 Property; (vi) the zoning or status of the Facility 2 Property or any other
restrictions on the use of the Facility 2 Property; (g) the economics of the
Facility 2 Property; (vii) any Casualty or Condemnation; (viii) the compliance
of the Facility 2 Property with any applicable Governmental Rule or Insurance
Requirement; (ix) any failure by any Lessor Party to perform any of its
obligations under this Agreement or any other Operative Document; or (x) the
exercise by any Lessor Party of any of its remedies under this Agreement or any
other Operative Document; provided, however, that this Paragraph 5.08 shall not
abrogate any right which Lessee may have to recover damages from any Lessor
Party for any material breach by such Lessor Party of its obligations under this
Agreement or any other Operative Document to the extent permitted hereunder or
thereunder.
[The signature page follows.]
20
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: ______________________________
21
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 September 21, 2001
(the "Participation Agreement"), among Novellus Systems, Inc.
("Lessee"), ABN AMRO Leasing, Inc. ("Lessor"), the Persons listed in
Schedule I to the Participation Agreement (the "Participants") and ABN
AMRO Bank N.V., as agent for the Participants (in such capacity,
"Agent"); and
(b) The Facility 2 Lease Agreement, dated as of September 21,
2001 (the "Lease Agreement"), between Lessee and Lessor; and
(c) The Facility 2 Purchase Agreement, dated as of September 21,
2001 (the "Purchase Agreement"), between Lessee and Lessor.
Unless otherwise indicated, all terms defined in the Participation Agreement
have the same respective meanings when used herein.
2. Pursuant to Paragraph 4.01 of the Facility 2 Lease Agreement and
Paragraph 2.01 of the Facility 2 Purchase Agreement, Lessee hereby irrevocably
notifies Lessor that Lessee is exercising its right to terminate the Facility 2
Lease Agreement prior to the Scheduled Expiration Date of the Facility 2 Lease
Agreement and purchase the Facility 2 Property on [_________, ____] (which date,
after the delivery of this notice, shall be the Expiration Date of the Facility
2 Lease Agreement).
IN WITNESS WHEREOF, Lessee has executed this Notice of Term Purchase
Option Exercise on the date set forth above.
NOVELLUS SYSTEMS, INC.
By: _____________________________________
Name: _______________________________
Title: ______________________________
A(1)-1
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 September 21, 2001
(the "Participation Agreement"), among Novellus Systems, Inc.
("Lessee"), ABN AMRO Leasing, Inc. ("Lessor"), the Persons listed in
Schedule I to the Participation Agreement (the "Participants") and ABN
AMRO Bank N.V., as agent for the Participants (in such capacity,
"Agent"); and
(b) The Facility 2 Purchase Agreement, dated as of September 21,
2001 (the "Purchase Agreement"), between Lessee and Lessor.
Unless otherwise indicated, all terms defined in the Participation Agreement
have the same respective meanings when used herein.
2. Pursuant to Paragraph 2.02 of the Facility 2 Purchase Agreement,
Lessee hereby irrevocably notifies Lessor that Lessee is exercising its right to
purchase a portion of the Facility 2 Property as follows:
(a) The Parcel[s] of Facility 2 Property to be purchased is
[are] ________________; and
(b) The date on which such purchase is to occur is [_________,
____].
3. Lessee hereby certifies to Lessor, Agent and the Participants (other
than Novellus Participant) 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
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
EXHIBIT A(3)
NOTICE OF CALL 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 September 21, 2001
(the "Participation Agreement"), among Novellus Systems, Inc.
("Lessee"), ABN AMRO Leasing, Inc. ("Lessor"), the Persons listed in
Schedule I to the Participation Agreement (the "Participants") and ABN
AMRO Bank N.V., as agent for the Participants (in such capacity,
"Agent"); and
(b) The Facility 2 Purchase Agreement, dated as of September 21,
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 2.03 of the Facility 2 Purchase Agreement,
Lessee hereby irrevocably notifies Lessor that Lessee (or its designee) is
exercising its right to purchase all of the Lessor Parties' respective right,
title and interest in, and assume all obligations and liabilities arising after
such purchase under, the Operative Documents related to Facility 2 as follows:
(a) The date on which such purchase is to occur is [_________,
____].
3. Lessee hereby certifies to Lessor, Agent and the Participants (other
than Novellus Participant) 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(3)-1
IN WITNESS WHEREOF, Lessee has executed this Notice of Call Option
Exercise on the date set forth above.
NOVELLUS SYSTEMS, INC.
By: _____________________________________
Name: _______________________________
Title: ______________________________
A(3)-2
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 September 21, 2001
(the "Participation Agreement"), among Novellus Systems, Inc.
("Lessee"), ABN AMRO Leasing, Inc. ("Lessor"), the Persons listed in
Schedule I to the Participation Agreement (the "Participants") and ABN
AMRO Bank N.V., as agent for the Participants (in such capacity,
"Agent"); and
(b) The Facility 2 Purchase Agreement, dated as of September 21,
2001 (the "Purchase Agreement"), between Lessee and Lessor.
Unless otherwise indicated, all terms defined in the Participation Agreement
have the same respective meanings when used herein.
2. Pursuant to Paragraph 3.01 of the Purchase Agreement, Lessee hereby
notifies Lessor that Lessee is electing to exercise the Marketing Option on the
Scheduled Expiration Date of the Facility 2 Lease Agreement of [_____, ____].
3. Lessee hereby certifies to Lessor, Agent and the Participants (other
than Novellus Participant) that, on the date of this notice:
(a) The representations and warranties of Lessee set forth in
Paragraph 4.01 of the Participation Agreement and in the other Operative
Documents are true and correct in all material respects as if made on
such date (except for representations and warranties expressly made as
of a specified date, which shall be true as of such date);
(b) No Default (other than a Non-Marketing Option Event of
Default under the Facility 2 Lease Agreement) has occurred and is
continuing; and
(c) All of the Operative Documents are in full force and effect
on such date.
B-1
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
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 September 21, 2001
(the "Participation Agreement"), among Novellus Systems, Inc.
("Lessee"), ABN AMRO Leasing, Inc. ("Lessor"), the Persons listed in
Schedule I to the Participation Agreement (the "Participants") and ABN
AMRO Bank N.V., as agent for the Participants (in such capacity,
"Agent"); and
(b) The Facility 2 Purchase Agreement, dated as of September 21,
2001 (the "Purchase Agreement"), between Lessee and Lessor.
Unless otherwise indicated, all terms defined in the Participation Agreement
have the same respective meanings when used herein.
2. Pursuant to Paragraph 3.01 of the Purchase Agreement, Lessee hereby
notifies Lessor that Lessee is electing to exercise the Expiration Date Purchase
Option on the Scheduled Expiration Date of the Facility 2 Lease Agreement of
[_____, ____].
IN WITNESS WHEREOF, Lessee has executed this Notice of Expiration Date
Purchase Option Exercise on the date set forth above.
NOVELLUS SYSTEMS, INC.
By: _____________________________________
Name: _______________________________
Title: ______________________________
C-1
EXHIBIT D(1)
RECORDING REQUESTED BY
WHEN RECORDED RETURN TO
AND MAIL TAX STATEMENTS TO:
[Purchaser]
- ------------------
- ------------------
- ------------------
Documentary Transfer Tax is not of public record and is shown on a separate
sheet attached to this deed.
- --------------------------------------------------------------------------------
QUITCLAIM DEED
FOR VALUABLE CONSIDERATION, the receipt of which is hereby acknowledged,
ABN AMRO Leasing, Inc. ("Grantor"), hereby releases, remises and forever
quitclaims to [PURCHASER], a _____________ ("Grantee"), the real property
located in the City of [__________], State of California, described on EXHIBIT A
attached hereto and made a part hereof (the "Property").
[See Next Page]
D(1)-1
Executed as of _____, ____.
ABN AMRO LEASING, INC.,
By: _________________________
Its: ________________________
D(1)-2
EXHIBIT A
LEGAL DESCRIPTION
Assessor's Parcel No.: _______________
D(1)(A)-1
State of ____________
County of _____________________
On ___________________ before me, _________________________,
Date Name, Title of Officer
personally appeared ________________________________________________,
Name(s) of signer(s)
(personally known to me -OR- (proved to me on the basis of satisfactory evidence
to be the person(s) whose name(s) is/are
subscribed to the within instrument and
acknowledged to me that he/she/they executed
the same in his/her/their authorized
capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s)
or the entity upon behalf of which the
person(s) acted, executed the instrument.
WITNESS my hand and official seal.
--------------------------------------------
D(1)(A)-2
__________ , ____
Santa Clara County Recorder
Re: Request That Statement of Documentary
Transfer Tax Not be Recorded
Dear Sir:
Request is hereby made in accordance with Section 11932 of the Revenue
and Taxation Code that this statement of tax due not be recorded with the
attached deed but be affixed to the deed after recordation and before return as
directed on the deed.
The attached deed names ABN AMRO Leasing, Inc., as grantor, and
[PURCHASER], a _________________, as grantee.
The property being transferred and described in the attached deed is
located in the City of San Jose and County of [__________], State of California.
The amount of Documentary Transfer Tax due on the attached deed is
$__________, computed on full value of the property conveyed.
ABN AMRO LEASING, INC.,
By:___________________________
Its: _________________________
D(1)(A)-3
EXHIBIT D(2)
ACKNOWLEDGMENT AND DISCLAIMER OF REPRESENTATIONS AND WARRANTIES
THIS ACKNOWLEDGMENT OF DISCLAIMER OF REPRESENTATIONS AND WARRANTIES
(this "Certificate") is made as of ___________, ____ by [PURCHASER], a
_____________ ("Grantee").
Contemporaneously with execution of this Acknowledgement, ABN AMRO
Leasing, Inc., an Illinois corporation ("AALI"), is executing and delivering to
Grantee a Quitclaim Deed and a Bill of Sale (the foregoing documents and any
other documents to be executed and delivered to Grantee in connection therewith
are herein called the "Conveyancing Documents" and any of the properties, rights
or other matters assigned, transferred or conveyed pursuant thereto are herein
collectively called the "Property") pursuant to the terms of a Facility 2
Purchase Agreement dated as of September 21, 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 September 21, 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
The provisions of this Acknowledgement shall be binding on Grantee, its
successors and assigns and any other party claiming through Grantee. Grantee
hereby acknowledges that AALI N.A. is entitled to rely and is relying on this
Certificate.
EXECUTED as of ____________, _______.
[PURCHASER]
By: _____________________________________
Name: _______________________________
Title: ______________________________
D(2)-2
EXHIBIT E
BILL OF SALE
FOR GOOD AND VALUABLE CONSIDERATION, the receipt of which is hereby
acknowledged, ABN AMRO LEASING, INC., an Illinois corporation ("Seller"), does
hereby sell, transfer and convey to [PURCHASER], a _________________________
("Purchaser"), the personal property owned by Seller in connection with that
certain real property commonly known as _______________, San Jose, California,
including, without limitation, the personal property itemized on SCHEDULE 1
attached hereto and incorporated herein by this reference (the "Property").
Seller is selling and Purchaser is purchasing the Property on an "as is,
with all faults" basis and Purchaser is not relying on any representations or
warranties of any kind whatsoever, express or implied, from Seller, its agents,
or brokers as to any matters concerning the Property including (a) the condition
of the Property; (b) title to the Property (including possession of the Property
by any individual or entity or the existence of any lien or any other right,
title or interest in or to any of the Property in favor of any person); (c) the
value, habitability, usability, design, operation or fitness for use of the
Property; or (d) any latent, hidden or patent defect in the Property.
Dated: ________, ____ SELLER:
ABN AMRO LEASING, INC.,
By:_________________________
Its: _______________________
PURCHASER:
[PURCHASER]
a __________________________
By:_________________________
Its: _____________________
E-1
SCHEDULE 1
PROPERTY
E(1)-2
EXHIBIT F
RECORDING REQUESTED BY
WHEN RECORDED RETURN TO
AND MAIL TAX STATEMENTS TO:
- ---------------------
- ---------------------
- ---------------------
Attention: _____________
Documentary Transfer Tax is not of public record and is shown on a separate
sheet attached to this deed.
- --------------------------------------------------------------------------------
GRANT DEED
FOR VALUABLE CONSIDERATION, the receipt of which is hereby acknowledged,
NOVELLUS SYSTEMS, INC., a California corporation ("Grantor"), hereby releases,
remises and forever grants to [PURCHASER] ("Grantee"), the real property located
in the City of San Jose, County of Santa Clara, State of California, described
on EXHIBIT A attached hereto and made a part hereof (the "Property").
Executed as of __________, ____.
NOVELLUS SYSTEMS, INC.,
a California corporation
By: ________________________________
Its:________________________________
F-1
EXHIBIT A
LEGAL DESCRIPTION
Assessor's Parcel No.: ____________________
F(A)-1
State of _________________
County of _____________________
On ___________________ before me, _________________________,
Date Name, Title of Officer
personally appeared ________________________________________________,
Name(s) of signer(s)
(personally known to me -OR- ( proved to me on the basis of satisfactory
evidence to be the person(s) whose name(s)
is/are subscribed to the within instrument
and acknowledged to me that he/she/they
executed the same in his/her/their
authorized capacity(ies), and that by
his/her/their signature(s) on the instrument
the person(s) or the entity upon behalf of
which the person(s) acted, executed the
instrument.
WITNESS my hand and official seal.
----------------------------------
F(A)-2
_________, ____
Santa Clara County Recorder
Re: Request That Statement of Documentary
Transfer Tax Not be Recorded
Dear Sir:
Request is hereby made in accordance with Section 11932 of the Revenue
and Taxation Code that this statement of tax due not be recorded with the
attached deed but be affixed to the deed after recordation and before return as
directed on the deed.
The attached deed names NOVELLUS SYSTEMS, INC., a California
corporation, as grantor, and [PURCHASER], as grantee.
The property being transferred and described in the attached deed is
located in the City of San Jose and County of Santa Clara, State of California.
The amount of Documentary Transfer Tax due on the attached deed is
$__________, computed on full value of the property conveyed.
NOVELLUS SYSTEMS, INC.,
a __________________
By:__________________________
Its:_________________________
F(A)-3
EXHIBIT G
BILL OF SALE
For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Novellus Systems, Inc., a California corporation
("Seller"), does hereby sell, transfer, and convey unto [PURCHASER] ("Buyer"),
the personal property owned by Seller in connection with that certain real
property commonly known as _______________, San Jose, California, which Seller
warrants to be free and clear of all liens and encumbrances, including, without
limitation, the personal property itemized on SCHEDULE 1 attached hereto and
incorporated herein by this reference.
Seller does hereby covenant with Buyer that Seller is the lawful owner
of such personal property, and that the undersigned has good right to sell the
same as aforesaid and will warrant and defend the title thereto unto Buyer, its
successors and assigns, against the claims and demands of all persons
whomsoever.
DATED this ____ day of __________, ____.
SELLER: Novellus Systems, Inc.,
a California corporation
By:_____________________________
Its:____________________________
G-1
SCHEDULE 1
PROPERTY
G(1)-1
================================================================================
FACILITY 2 PURCHASE AGREEMENT
BETWEEN
NOVELLUS SYSTEMS, INC.
AND
ABN AMRO LEASING, INC.
SEPTEMBER 21, 2001
================================================================================
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. Partial Purchase Option......................................................2
2.03. Call Option..................................................................4
SECTION 3. OBLIGATIONS OF LESSEE ON THE EXPIRATION DATE..............................5
3.01. Alternative..................................................................5
3.02. Marketing Option.............................................................6
3.03. Expiration Date Purchase Option.............................................12
SECTION 4. TERMS OF ALL PURCHASES...................................................13
4.01. Representations and Warranties of Parties...................................13
4.02. "As Is" Purchase............................................................15
4.03. Release.....................................................................15
4.04. Permits, Approvals, Etc.....................................................16
4.05. Costs.......................................................................16
4.06. Lessee's Payment Obligations................................................16
4.07. Lessor Liens................................................................17
4.08. Transfer Documents..........................................................17
4.09. Casualty and Condemnation Proceeds..........................................18
4.10. Payments....................................................................18
4.11. Environmental Reports.......................................................18
4.12. Simultaneous Exercise of Facility 1, 2 and 3 Options........................18
4.13. Further Assurances..........................................................18
SECTION 5. MISCELLANEOUS............................................................18
5.01. Notices.....................................................................18
5.02. Waivers, Amendments.........................................................19
5.03. Successors and Assigns......................................................19
5.04. No Third Party Rights.......................................................19
5.05. Partial Invalidity..........................................................19
5.06. Governing Law...............................................................19
5.07. Counterparts................................................................20
5.08. Nature of Lessee's Obligations..............................................20
EXHIBITS
A(1) Notice of Term Purchase Option Exercise (2.01)
A(2) Notice of Partial Purchase Option Exercise (2.02)
A(3) Notice of Call Option Exercise (2.03)
B Notice of Marketing Option Exercise (3.01)
C Notice of Expiration Date Purchase Option Exercise (3.01)
D(1) Deed (Lessor) (4.08(a))
D(2) Acknowledgement and Disclaimer of Representations and Warranties
(4.08(a))
E Bill of Sale (Lessor) (4.08(a))
F Deed (Lessee) (4.08(b))
TABLE OF CONTENTS
PAGE
G Bill of Sale (Lessee) (4.08(b))
-i-
FACILITY 3 PURCHASE AGREEMENT
THIS FACILITY 3 PURCHASE AGREEMENT (this "Agreement" herein), dated as
of September 21, 2001, is entered into by and between:
(1) NOVELLUS SYSTEMS, INC., a California corporation ("Lessee");
and
(2) ABN AMRO LEASING, INC., an Illinois corporation ("Lessor").
RECITALS
A. Lessee has requested Lessor and the Persons which are "Participants"
under the Participation Agreement referred to in Recital B below (such Persons
to be referred to collectively as the "Participants") to provide to Lessee a
lease facility pursuant to which:
(1) Lessor would (a) lease certain property designated by Lessee
to Lessee, (B) appoint Lessee as Lessor's agent to make certain
improvements to such property, (c) make advances to finance such
improvements and to pay certain related expenses and (d) grant to Lessee
the right to purchase such property; and
(2) The Participants would participate in such lease facility by
(a) funding the advances to be made by Lessor and (b) acquiring
participation interests in the rental and certain other payments to be
made by Lessee.
B. Pursuant to a Participation Agreement dated of even date herewith
(the "Participation Agreement") among Lessee, Lessor, the Participants and ABN
AMRO Bank N.V., as agent for the Participants (in such capacity, "Agent"),
Lessor and the Participants have agreed to provide such lease facility upon the
terms and subject to the conditions set forth therein, including without
limitation the execution and delivery of this Agreement setting forth the terms
for the purchase of the property by Lessee.
AGREEMENT
NOW, THEREFORE, in consideration of the above Recitals and the mutual
covenants herein contained, the parties hereto hereby agree as follows:
SECTION 1. INTERPRETATION.
1.01. Definitions. Unless otherwise indicated in this Agreement or any
other Operative Document, each term set forth in Schedule 1.01 to the
Participation Agreement, when used in this Agreement or any other Operative
Document, shall have the respective meaning given to that term in such Schedule
1.01 or in the provision of this Agreement or other document, instrument or
agreement referenced in such Schedule 1.01.
1.02. 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 Business Day prior to the
Scheduled Expiration Date of the Facility 3 Lease Agreement, terminate the
Facility 3 Lease Agreement and purchase all of the Facility 3 Property (the
"Term Purchase Option").
(a) Notice of Term Purchase Option Exercise. Lessee shall notify
Lessor of Lessee's exercise of the Term Purchase Option by delivering to
Lessor an irrevocable written notice in the form of Exhibit A(1),
appropriately completed (the "Notice of Term Purchase Option Exercise"),
which states that Lessee is exercising its right to terminate the
Facility 3 Lease Agreement prior to the Scheduled Expiration Date
thereof pursuant to Paragraph 4.01 of the Facility 3 Lease Agreement and
purchase all of the Facility 3 Property pursuant to this Paragraph 2.01
and specifies the Business Day 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 as soon as possible but in no event later than
ten (10) Business Days prior to the date on which such termination and
purchase are to occur. (Lessee shall also, to the extent reasonably
practicable, provide Lessor with advance notice indicating that it is
considering exercising the Term Purchase Option.) The Notice of Term
Purchase Option Exercise shall be delivered as required by Subparagraph
2.02(c) and Paragraph 7.01 of the Participation Agreement; provided,
however, that Lessee shall promptly deliver the original of any Notice
of Term Purchase Option Exercise initially delivered by facsimile. After
delivering to Lessor the Notice of Term Purchase Option Exercise, Lessee
may, upon not less than ten (10) Business Days prior written notice to
Lessor, extend the date on which the termination of the Facility 3 Lease
Agreement and Lessee's purchase of the Facility 3 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 Business Day
prior to the Scheduled Expiration Date of the Facility 3 Lease Agreement,
without terminating the Facility 3 Lease Agreement, purchase one or more Parcels
(but not less than all of any such Parcel) of the Facility 3 Property (the
"Partial Purchase Option"). (Lessee understands that the Facility 3 Property
currently consists of only one Parcel and that, as a result, the Partial
Purchase Option currently is not available.)
2
(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 Parcels of the Facility 3 Property prior to the
Scheduled Expiration Date pursuant to this Paragraph 2.02 and specifies
(i) the Parcel(s) so to be purchased and (ii) the Business Day on which
such purchase is to occur (a "Partial Purchase Date"). Lessee shall give
each Notice of Partial Purchase Option Exercise to Lessor as soon as
possible but in no event later than one (1) month prior to the Partial
Purchase Date on which a purchase is to occur. (Lessee shall also, to
the extent reasonably practicable, provide Lessor with advance notice
indicating that it is considering exercising the Partial Purchase
Option.) 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. After delivering to Lessor the Notice
of Partial Purchase Option Exercise, Lessee may, upon not less than ten
(10) Business Days prior written notice to Lessor, extend the date on
which the termination of the Facility 3 Lease Agreement and Lessee's
purchase of the Facility 3 Property is to occur to a Business Day not
more than ten (10) Business Days after the date specified in the Notice
of Partial Purchase Option Exercise, provided that Lessee may so extend
such date only once.
(b) Partial Purchase Option Purchase Price. Lessee shall pay to
Lessor on each Partial Purchase Date, as the purchase price for each
Parcel of Facility 3 Property to be purchased on such date, an amount
equal to the portion of the Outstanding Lease Amount under Facility 3 on
such date attributable to such Parcel of Facility 3 Property.
(c) Conditions to Exercise of Partial Purchase Option. The
purchase by Lessee on any Partial Purchase Date of any Parcel of
Facility 3 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
Parcels of Facility 3 Property that are to remain
subject to the Facility 3 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 Parcels of Facility 3
Property at not less than the Outstanding Lease Amount
under Facility 3 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 Parcel of
3
Facility 3 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.
2.03. Call Option. Subject to the terms and conditions of this Agreement
and the other Operative Documents (including those set forth below in this
Paragraph 2.03), Lessee may, at its option on any Business Day prior to the
Scheduled Expiration Date of the Facility 3 Lease Agreement, require Lessor and
the Participants to sell to Lessee (or its designee) all of their respective
right, title and interest in, and assume all obligations and liabilities arising
after such sale under, the Operative Documents related to Facility 3 at par,
together with all accrued and unpaid interest, yield and fees thereon to the
date of such sale and, as applicable, any other amounts then due and payable
under any of the Operative Documents related to Facility 3 (including, without
limitation, any unpaid amounts in respect of unpaid claims for indemnification
then due and owing and any breakage and related costs which are payable pursuant
to the Participation Agreement if the amounts due in respect of such interest
were being prepaid, and not purchased, on such date) (the "Call Option").
(a) Notice of Call Option Exercise. Lessee shall notify Lessor of
Lessee's exercise of the Call Option by delivering to Lessor an
irrevocable written notice in the form of Exhibit A(3), appropriately
completed (the "Notice of Call Option Exercise"), which states that
Lessee is exercising its right to purchase from the Lessor and the
Participants their respective right, title and interest in, and assume
all obligations and liabilities arising after such sale under, the
Operative Documents related to Facility 3 pursuant to this Paragraph
2.03 and specifies the date on which such purchases are to occur (which
date, after the delivery of such notice, shall be the Expiration Date).
Lessee shall give the Notice of Call Option Exercise as soon as possible
but in no event later than one (1) month prior to the date on which such
purchase is to occur. (Lessee shall also, to the extent reasonably
practicable, provide Lessor with advance notice indicating that it is
considering exercising the Call Option.) Each Notice of Call 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 Call Option
Exercise initially delivered by facsimile. After delivering to Lessor
the Notice of Call Option Exercise, Lessee may, upon not less than ten
(10) Business Days prior written notice to Lessor, extend the date on
which such purchase of the Operative Documents related to the Facility 3
Property is to occur to a Business Day not more than ten (10) Business
Days after the date specified in the Notice of Call Option Exercise,
provided that Lessee may so extend such date only once.
(b) Conditions Precedent to Call Option Exercise. Prior to the
effectiveness of the Call Option Exercise, (i) Lessee (or its designee)
shall have obtained all necessary authorizations, approvals and consents
for such Call Option Exercise and each such authorization, approval and
consent shall be in full force and effect, (ii) Lessee shall have
reimbursed the Lessor Parties for all costs and expenses incurred by
such Lessor Parties (including the fees and expenses of their respective
counsel) in connection with such Call
4
Option Exercise, (iii) title to the Facility 3 Property shall have been
transferred from Lessor to Lessee in a manner as if Lessee shall have
exercised the Term Purchase Option and (iv) each Lessor Party shall have
received such documents, instruments, agreements and certificates as it
may reasonably request, each in form and substance satisfactory to such
Lessor Party, in order to effectuate such purchase and sale. Upon
satisfaction of the conditions described in this Paragraph 2.03 by
Lessee (or its designee), the Lessor Parties shall convey their
respective right, title and interest in, and Lessee (or its designee)
shall assume all obligations and liabilities arising after such sale
under, the transactions contemplated by the Operative Documents related
to Facility 3, free and clear of any Lessor Lien, whereupon such rights,
interests, obligations and liabilities of the Lessor Parties shall
thereupon be assumed by and inure to the benefit of Lessee (or its
designee) (other than rights arising as a result of claims or
impositions theretofore arising, which shall remain exercisable by such
Lessor Party). Subject to the satisfaction by Lessee of the terms and
conditions set forth herein, the Lessor Parties agree to cooperate in
good faith with Lessee in effectuating any such transaction.
SECTION 3. OBLIGATIONS OF LESSEE ON THE EXPIRATION DATE.
3.01. Alternative. Unless Lessee has exercised the Term Purchase Option
or Lessee has no further payment obligation under this Agreement pursuant to
Paragraph 5.05 of the Facility 3 Lease Agreement, on the Expiration Date of the
Facility 3 Lease Agreement, Lessee shall either:
(a) Marketing Option. Cause another Person to complete the
purchase of the Facility 3 Property pursuant to Paragraph 3.02 (the
"Marketing Option"); or
(b) Expiration Date Purchase Option. Purchase the Facility 3
Property itself pursuant to Paragraph 3.03 (the "Expiration Date
Purchase Option").
Lessee shall elect either the Marketing Option or the Expiration Date Purchase
Option by delivering to Lessor, not more than nine (9) months nor less than six
(6) months prior to the Scheduled Expiration Date for the Facility 3 Lease
Agreement, either (i) a written notice in the form of Exhibit B, appropriately
completed (the "Notice of Marketing Option Exercise"), or (ii) a written notice
in the form of Exhibit C, appropriately completed (the "Notice of Expiration
Date Purchase Option Exercise"); provided, however, that (A) Lessee shall be
deemed to have elected the Expiration Date Purchase Option if it fails to
deliver either notice as required by this sentence; (B) Lessee's election of the
Expiration Date Purchase Option (whether expressly by a notice so delivered or
implicitly by the failure to deliver any notice) shall be irrevocable; and (C)
Lessee may not elect the Marketing Option if (1) the Expiration Date has been
accelerated to an earlier Termination Date following a Marketing Option Event of
Default under the Facility 3 Lease Agreement, (2) the conditions set forth in
Paragraph 3.03 of the Participation Agreement are not satisfied on the date
Lessee delivers its election notice or on the Expiration Date of the Facility 3
Lease Agreement (unless, in each case, the only event or condition causing such
conditions not to be so satisfied is the occurrence of a Non-Marketing Option
Event of Default under the Facility 3 Lease Agreement) or (3) Lessee has no
further payment obligation under this Agreement pursuant to Paragraph 5.05 of
the Facility 3 Lease Agreement. The Notice of
5
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 Facility 3 Property on the Expiration Date for
a purchase price which is not less than the lesser of (A) the difference
between the Outstanding Lease Amount and Residual Value Guaranty Amount
under Facility 3 and (B) the Fair Market Value of the Facility 3
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 Facility 3 Lease Agreement (the
"Initial Marketing Period"), Lessee shall use reasonable efforts
to solicit Conforming Bids from potential purchasers of the
Facility 3 Property. On or prior to the last day of the Initial
Marketing Period, Lessee shall deliver to Lessor any Conforming
Bid selected by Lessee (the "Initial Bid"). If the purchase price
specified in the Initial Bid is equal to or greater than the
difference between the Outstanding Lease Amount and Residual
Value Guaranty Amount under Facility 3, Lessor shall accept such
bid and Lessee shall have no further obligations to solicit
additional bids.
(ii) Secondary Marketing Period. If Lessee does not submit
an Initial Bid or if the purchase price specified in the Initial
Bid is less than the difference between the Outstanding Lease
Amount and Residual Value Guaranty Amount under Facility 3,
Lessor may reject such bid and Lessee shall, during the period
which begins on the day following the Initial Marketing Period
and ends on the date two (2) months prior to the Expiration Date
of the Facility 3 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 Participant) copies of all bids and otherwise
provide each Lessor Party (other than Novellus
Participant) with such information relating to the
6
marketing of the Facility 3 Property as such Person may
reasonably request in writing;
(C) Agree to provide to all potential purchasers
all customary seller's indemnities (including
environmental indemnities), representations and
warranties regarding the Facility 3 Property (including
the title to, except for Lessor Liens, and condition of
the Facility 3 Property);
(D) Furnish to each Lessor Party (other than
Novellus Participant) copies of environmental reports,
architect's certificates, licenses, permits and other
evidence reasonably requested by such Person to
establish that no Default has occurred and is continuing
under the Facility 3 Lease Agreement;
(E) Permit any Lessor Party or potential
purchaser to inspect the Facility 3 Property and the
maintenance records for the Property upon reasonable
prior written notice and during normal business hours
and provide to each such Person all information
regarding the Facility 3 Property reasonably requested
by such Person in writing;
(F) Take all other commercially reasonable steps
to secure the best price for the Facility 3 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 and Residual Value Guaranty
Amount under Facility 3 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 Participant) shall have the right to submit one or
more bids or solicit bids from other Persons.
(c) Conforming Bids. Each bid must meet each of the following
requirements (each such bid to be referred to herein as a "Conforming
Bid"):
(i) The bid may be submitted by any Person other than
(A) a Person which is an Affiliate of Lessee or (B) a Person
which has an agreement (whether express or implied) with Lessee
or any of its Affiliates to sell, lease or otherwise make
available to Lessee or any of its Affiliates any portion of the
Facility 3 Property;
(ii) The bidder must agree in writing to purchase the
Facility 3 Property on the Expiration Date of the Facility 3
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
7
under Facility 3 on such date and (B) the Fair Market Value of
the Facility 3 Property on such date;
(iii) The bidder must agree to purchase the Property "as
is" without any representations, warranties or indemnities,
except for (A) any representations, warranties or indemnities
provided by Lessor and Lessee pursuant to Subparagraph 4.01(b)
and (B) any representations, warranties or indemnities provided
by Lessee pursuant to clause (ii)(C) of Subparagraph 3.02(b);
and
(iv) The bidder must agree to be bound by the other
terms and conditions of this Agreement applicable to bidders.
(d) Lessor's Obligation to Accept Bids. If, at any time on or
prior to the last day of the Secondary Marketing Period, Lessee submits
to Lessor a Conforming Bid under this Paragraph 3.02 with a purchase
price which is equal to or greater than the difference between the
Outstanding Lease Amount and Residual Value Guaranty Amount under
Facility 3, Lessor shall accept such bid. If Lessee submits to Lessor a
Conforming Bid under this Paragraph 3.02 with a purchase price which is
less than the difference between the Outstanding Lease Amount and
Residual Value Guaranty Amount under Facility 3, Lessor shall not accept
such bid unless approved by Lessor and Required Participants. If Lessee
fails to submit a bid to Lessor on or prior to the last day of the
Secondary Marketing Period which Lessor is so required to accept, Lessor
shall (unless it elects to accept another bid which it is not required
to accept, in which case Lessee's obligations shall be limited to the
amounts payable pursuant to clause (ii) of Subparagraph 4.06(a)) retain
the Facility 3 Property after the Expiration Date of the Facility 3
Lease Agreement; provided, however, that Lessee's payment obligations on
such Expiration Date shall be limited to the amounts payable pursuant to
clause (iii) of Subparagraph 4.06(a) if (i) Lessor retains the Facility
3 Property after Lessee submits a Conforming Bid on or prior to the last
day of the Secondary Marketing Period in accordance with clause (ii) of
Subparagraph 3.02(b) and (ii) the Marketing Option has not terminated
prior to such Expiration Date pursuant to Subparagraph 3.02(f). If
Lessee fails to obtain a Conforming Bid prior to the last day of the
Secondary Marketing Period which Lessor is required to accept or another
bid which Lessor elects to accept (notwithstanding that it is not
required to do so) despite Lessee's timely and complete compliance with
Lessee's marketing obligations as described in Subparagraph 3.02(a) and
Subparagraph 3.02(b), and such failure is not caused by any negligence
or willful misconduct of Lessee, then Lessee's payment obligations on
the Expiration Date of the Facility 3 Lease Agreement shall be limited
to the amounts payable pursuant to clause (ii) or clause (iii) of
Subparagraph 4.06(a), as applicable. Lessor shall notify Lessee of
Lessor's election to retain the Facility 3 Property by delivering to
Lessee, at least ten (10) days prior to the Expiration Date of the
Facility 3 Lease Agreement, a written notice of such election.
(e) Purchase Price. If Lessor accepts any bid by any Person, such
Person (the "Designated Purchaser") shall pay to Lessor on the
Expiration Date of the Facility 3 Lease Agreement, as the purchase price
for the Property, the amount set forth in such bid as the purchase
price.
8
(f) Termination of the Marketing Option. Lessee's right to
exercise the Marketing Option shall immediately terminate and Lessee
shall purchase the Facility 3 Property on the Expiration Date of the
Facility 3 Lease Agreement pursuant to Paragraph 3.03 if (i) Lessee
fails to comply with any of its obligations under this Paragraph 3.02;
(ii) a Marketing Option Event of Default under the Facility 3 Lease
Agreement occurs after Lessee delivers the Notice of Marketing Option
Exercise; (iii) the conditions precedent set forth in Paragraph 3.03 of
the Participation Agreement are not satisfied on the Expiration Date of
the Facility 3 Lease Agreement (unless the only event or condition
causing such conditions not to be so satisfied is the occurrence of a
Non-Marketing Option Event of Default under the Facility 3 Lease
Agreement); or (iv) the Designated Purchaser fails to consummate the
purchase of the Facility 3 Property on the Expiration Date of the
Facility 3 Lease Agreement in accordance with its accepted bid and this
Agreement, without regard to the reason for such failure (except as
otherwise provided in the following proviso); provided, however, that,
if the Designated Purchaser fails to consummate the purchase of the
Property on the Expiration Date solely due to Lessor's failure to remove
Lessor Liens or deliver the required deed and bill of sale or other
documents required to be delivered by Lessor hereunder, Lessee's right
to exercise the Marketing Option shall not terminate, Lessee shall not
be required to purchase the Property on the Expiration Date and Lessee's
payment obligations on the Expiration Date shall be limited to the
amounts set forth in Subparagraph 4.06(b) (determined as if the purchase
by the Designated Purchaser had been consummated).
(g) Residual Value Guaranty Amount and Indemnity Amount. Unless
Lessee's right to exercise the Marketing Option has terminated and
Lessee is required to purchase the Facility 3 Property on the Expiration
Date of the Facility 3 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 under Facility 3 on the Expiration
Date; provided, however, that:
(A) If Lessee has paid any Prepaid Rent or if
the Outstanding Lease Amount under Facility 3 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 under Facility 3 on the
Completion Date includes any Ineligible Project Costs,
then the Tranche A Proportionate Share under Facility 3
after the Completion Date shall be recomputed and set at
the maximum percentage such that the (1) Lessee is not
deemed under GAAP to be the owner of the Facility 3
Property prior to the Completion Date, and (2) from the
Lessee's perspective, the Facility 3 Lease Agreement
9
qualifies as an operating lease in accordance with GAAP
in effect on the date of the Participation Agreement.
If, as a result of such recomputation, the Tranche A
Proportionate Share under Facility 3 after the
Completion Date is changed, corresponding changes shall
be made to the Tranche B Proportionate Share, the
Tranche A Percentages and the Tranche B Percentages
under Facility 3 and percentages after the Completion
Date (such that the sum of the Tranche A Proportionate
Shares and the Tranche B Proportionate Shares and
percentages after such recomputation equal the sum of
such Proportionate Shares and percentages prior to such
recomputation).
(ii) The "Indemnity Amount" shall be applicable after
the Completion Date and shall be an amount equal to the
decrease, if any, between the Commencement Date and the
Expiration Date of the Facility 3 Lease Agreement in the Fair
Market Value of the Facility 3 Property caused by (A) any
representation or warranty of Lessee or any of its Affiliates
regarding the Facility 3 Property set forth in any of the
Operative Documents proving to be false or inaccurate when made,
(B) the existence of, or the failure of Lessee to pay any
Governmental Charge, Indebtedness or other obligation which
might give rise to, any Liens in the Facility 3 Property (other
than Permitted Property Liens), (C) the failure of Lessee to
complete any New Improvements or any Modifications or (D) any
other failure of Lessee to comply with any of its obligations
regarding the Facility 3 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 under Facility 3, Lessor may, on or prior to the last
day of the Secondary Marketing Period (if Lessee has not previously
delivered to Lessor a Conforming Bid with a purchase price equal to or
greater than the difference between the Outstanding Lease Amount and
Residual Value Guaranty Amount under Facility 3), deliver to Lessee a
written notice of Lessor's determination of the current Fair Market
Value of the Facility 3 Property and the Indemnity Amount. To determine
such amounts, Lessor shall obtain Appraisals of the Facility 3 Property
which set forth:
(i) A current Appraisal of the Fair Market Value of the
Facility 3 Property in its then existing condition (the "Current
Appraisal"); and
(ii) An Appraisal of the Fair Market Value of the
Facility 3 Property which assumes that (A) all representations
and warranties regarding the Facility 3 Property made by Lessee
or any of its Affiliates in any of the Operative Documents were
true and correct when made; (B) Lessee has maintained the
Facility 3 Property in compliance with all applicable
Governmental Rules, Insurance Requirements and the Operative
Documents; (C) Lessee has completed all Modifications and any
other New Improvements in a good and workmanlike manner and
otherwise as required by the Operative Documents; (D) Lessee has
repaired the Facility 3 Property as required by the Operative
Documents
10
following any Casualty; (E) Lessee has restored the Facility 3
Property as required by the Operative Documents following any
Condemnation; (F) Lessee has paid all Governmental Charges,
Indebtedness and other obligations which, if unpaid, might give
rise to a Lien (other than a Lessor Lien) on the Facility 3
Property; (G) Lessee has removed all Liens on the Facility 3
Property except for Permitted Property Liens and Lessor Liens;
and (H) Lessee has performed all of its other obligations as
required by the Operative Documents (the "Assumed Appraisal").
In the absence of manifest error, (A) the Current Appraisal shall
constitute the current Fair Market Value of the Facility 3 Property and
(B) the difference between the Current Appraisal and the Assumed
Appraisal shall constitute the Indemnity Amount if the Current Appraisal
is less than the Assumed Appraisal.
(i) Lessee not an Agent. Lessee shall not be an agent for any of
the Lessor Parties in arranging for a purchaser of the Facility 3
Property. No Lessor Party (other than Novellus Participant) shall be
bound by any acts of Lessee.
(j) Application of Proceeds. After the exercise by Lessee of the
Marketing Option, Lessor shall apply and distribute all amounts received
by Lessor on the Expiration Date as follows:
(i) First, Lessor shall apply such amounts to the
portion of the Outstanding Lease Amount under Facility 3 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 under Facility 3 accrued through or due and payable on or
prior to such date not constituting Ineligible Project Costs to
the extent necessary to pay such portion of the unpaid Rent;
(iii) Third, to the extent any amounts then remain,
Lessor shall apply such amounts to the portion of all other
amounts, if any, due and payable by Lessee under the Operative
Documents on account of Facility 3 on or prior to such date not
constituting Ineligible Project Costs to the extent necessary to
pay such portion of the unpaid amounts;
(iv) Fourth, to the extent any amounts then remain,
Lessor shall distribute to Lessee (A) such amounts as are
necessary to pay all Prepaid Rent paid by Lessee, except for any
such Prepaid Rent caused by or arising from any failure by
Lessee to comply with any of its obligations under the Operative
Documents (including its insurance obligations), any
representation by Lessee in any of the Operative Documents not
being true, any negligence or willful misconduct of Lessee, or
any claim by any third-party against Lessee (or against any
Lessor Party) based upon any alleged action or inaction by
Lessee, and (B) an amount equal to the Residual Value Guaranty
Amount paid by Lessee hereunder.
11
(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 Participant), Lessee shall reimburse such Lessor
Party for such recovery unless such recovery is due solely to a material
misrepresentation or covenant breach by such Lessor Party.
(l) Exercise of Marketing Option After Non-Marketing Option Event
of Default. If Lessor notifies Lessee pursuant to Subparagraph 5.03(a)
or Subparagraph 5.04(a) of the Lease Agreement that Lessor is
terminating the Lease Agreement on a Termination Date which is prior to
the Scheduled Expiration Date of the Facility 3 Lease Agreement and the
only basis for such early termination is the occurrence of a
Non-Marketing Option Event of Default under the Facility 3 Lease
Agreement, 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 delivers to
Lessor a Notice of Marketing Option Exercise. Upon the delivery by
Lessee to Lessor of a Notice of Marketing Option Exercise, the
Expiration Date of the Facility 3 Lease Agreement shall, if the
conditions to the exercise of the Marketing Option set forth in
Paragraph 3.01 are satisfied, be extended to the first Business Day of
the first full calendar month that is six (6) months after the date of
receipt by Lessor of such Notice of Marketing Option Exercise in all
other cases. Any exercise by Lessee of the Marketing Option pursuant to
this Subparagraph 3.02(l) shall be subject to the terms and conditions
otherwise set forth in this Agreement.
3.03. Expiration Date Purchase Option.
(a) General. If (i) Lessee elects to exercise the Expiration Date
Purchase Option by delivering to Lessor a Notice of Expiration Date
Purchase Option Exercise pursuant to Paragraph 3.01; (ii) Lessee elects
to exercise the Marketing Option by delivering to Lessor a Notice of
Marketing Option Exercise pursuant to Paragraph 3.01 but the Marketing
Option terminates pursuant to Subparagraph 3.02(f); or (iii) Lessee
fails to deliver to Lessor either notice as required by Paragraph 3.01;
Lessee shall purchase the Facility 3 Property on the Expiration Date of
the Facility 3 Lease Agreement and otherwise comply, or cause compliance
with, the requirements of this Paragraph 3.03 and the other applicable
provisions of this Agreement.
(b) Purchase Price. If Lessee is purchasing the Facility 3
Property pursuant to the Expiration Date Purchase Option, Lessee shall
pay to Lessor on the Expiration Date of the Facility 3 Lease Agreement,
as the purchase price for the Facility 3 Property, an amount equal to
the Outstanding Lease Amount under Facility 3 on such date.
12
SECTION 4. TERMS OF ALL PURCHASES.
4.01. Representations and Warranties of Parties.
(a) Representations and Warranties of Purchaser. The purchaser of
the Facility 3 Property, whether Lessee, an Assignee Purchaser or a
Designated Purchaser ("Purchaser"), shall represent and warrant to
Lessor on the Expiration Date of the Facility 3 Lease Agreement (or, in
the case of a purchase of a portion of the Facility 3 Property pursuant
to the Partial Purchase Option, on the applicable Partial Purchase Date)
as follows:
(i) Such Person is a legal entity duly organized,
validly existing and in good standing under the laws of its
jurisdiction of organization or an individual with legal
capacity to purchase the Facility 3 Property (or, in the case of
a purchase of a portion of the Facility 3 Property pursuant to
the Partial Purchase Option, the portion to be purchased).
(ii) The execution, delivery and performance by such
Person of each document, instrument and agreement executed, or
to be executed, by such Person in connection with its purchase
of the Facility 3 Property (or, in the case of a purchase of a
portion of the Facility 3 Property pursuant to the Partial
Purchase Option, the portion to be purchased) (the "Purchase
Documents") and the consummation of the transactions
contemplated thereby (A) are within the power of such Person and
(B) have been duly authorized by all necessary actions on the
part of such Person.
(iii) Each Purchase Document executed, or to be
executed, by such Person has been, or will be, duly executed and
delivered by such Person and constitutes, or will constitute, a
legal, valid and binding obligation of such Person, enforceable
against such Person in accordance with its terms, except as
limited by bankruptcy, insolvency or other laws of general
application relating to or affecting the enforcement of
creditors' rights generally and general principles of equity.
(iv) Such Person has not (A) made a general assignment
for the benefit of creditors, (B) filed any voluntary petition
in bankruptcy or suffered the filing of any involuntary petition
by such Person's creditors, (C) suffered the appointment of a
receiver to take possession of all, or substantially all, of
such Person's assets, (D) suffered the attachment or other
judicial seizure of all, or substantially all, of such Person's
assets, (E) admitted in writing its inability to pay its debts
as they come due, or (F) made an offer of settlement, extension
or composition to its creditors generally.
(v) Such Person is not a "party in interest" within the
meaning of Section 3(14) of the ERISA, with respect to any
investor in or beneficiary of Lessor.
13
(b) Representations and Warranties of Lessor and Lessee. Each of
Lessor and Lessee shall represent and warrant to Purchaser (and Lessee
also shall represent and warrant to Lessor if Lessor is to retain the
Facility 3 Property) on the Expiration Date of the Facility 3 Lease
Agreement as follows:
(i) Such Person is a corporation duly organized, validly
existing and in good standing under the laws of its jurisdiction
of organization.
(ii) The execution, delivery and performance by such
Person of each Purchase Document executed, or to be executed, by
such Person and the consummation of the transactions
contemplated thereby (A) are within the power of such Person and
(B) have been duly authorized by all necessary actions on the
part of such Person.
(iii) Each Purchase Document executed, or to be
executed, by such Person has been, or will be, duly executed and
delivered by such Person and constitutes, or will constitute, a
legal, valid and binding obligation of such Person, enforceable
against such Person in accordance with its terms, except as
limited by bankruptcy, insolvency or other laws of general
application relating to or affecting the enforcement of
creditors' rights generally and general principles of equity.
(iv) Such Person has not (A) made a general assignment
for the benefit of creditors, (B) filed any voluntary petition
in bankruptcy or suffered the filing of any involuntary petition
by such Person's creditors, (C) suffered the appointment of a
receiver to take possession of all, or substantially all, of
such Person's assets, (D) suffered the attachment or other
judicial seizure of all, or substantially all, of such Person's
assets, (E) admitted in writing its inability to pay its debts
as they come due, or (F) made an offer of settlement, extension
or composition to its creditors generally.
In addition to the foregoing, (A) Lessee shall represent and warrant to
the Designated Purchaser (or Lessor if Lessor is to retain the Facility
3 Property) on the Expiration Date of the Facility 3 Lease Agreement
that no Liens are attached to the Facility 3 Property, except for
Permitted Property Liens, and (B) Lessor shall represent and warrant to
Purchaser on the Expiration Date of the Facility 3 Lease Agreement (or,
in the case of a purchase of a portion of the Facility 3 Property
pursuant to the Partial Purchase Option, on the applicable Partial
Purchase Date) that no Lessor Liens are attached to the Facility 3
Property (or, in the case of a purchase of a portion of the Facility 3
Property pursuant to the Partial Purchase Option, the portion to be
purchased). Except for the foregoing representations and warranties to
be made by Lessor on the Expiration Date of the Facility 3 Lease
Agreement (or, in the case of a purchase of a portion of the Facility 3
Property pursuant to the Partial Purchase Option, on the applicable
Partial Purchase Date), no Lessor Party shall make any representation or
warranty regarding the Facility 3 Property or the sale of the Facility 3
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).
14
(c) Survival of Representations and Warranties. The
representations and warranties of Purchaser, Lessor and Lessee shall
survive for a period of twelve (12) months after the Expiration Date of
the Facility 3 Lease Agreement (or, in the case of a purchase of a
portion of the Facility 3 Property pursuant to the Partial Purchase
Option, after the applicable Partial Purchase Date). Any claim which any
such party may have at any time against any other such party for a
breach of any such representation or warranty, whether known or unknown,
which is not asserted by written notice within such twelve (12) month
period shall not be valid or effective, and the party shall have no
liability with respect thereto.
4.02. "As Is" Purchase. All purchases of the Facility 3 Property
hereunder shall be "as is, with all faults" and without any representations,
warranties or indemnities except for any representations, warranties or
indemnities provided by Lessee pursuant to clause (ii)(C) of Subparagraph
3.02(b) or by Lessor or Lessee pursuant to Subparagraph 4.01(b). Each Purchaser
shall specifically acknowledge and agree that Lessor is selling and such
Purchaser is purchasing the Facility 3 Property on an "as is, with all faults"
basis and that such Purchaser is not relying on any representations or
warranties of any kind whatsoever, express or implied, from any Lessor Party,
its agents, or brokers as to any matters concerning the Facility 3 Property
(except for any representations and warranties provided by Lessor pursuant to
Subparagraph 4.01(b)), including (a) the condition of the Facility 3 Property
(including any Improvements to the Facility 3 Property made prior to the
Commencement Date or during the Term of the Facility 3 Lease Agreement); (b)
title to the Facility 3 Property (including possession of the Facility 3
Property by any Person or the existence of any Lien or any other right, title or
interest in or to any of the Facility 3 Property in favor of any Person); (c)
the value, habitability, usability, design, operation or fitness for use of the
Facility 3 Property; (d) the availability or adequacy of utilities and other
services to the Facility 3 Property; (e) any latent, hidden or patent defect in
the Facility 3 Property; (f) the zoning or status of the Facility 3 Property or
any other restrictions on the use of the Facility 3 Property; (g) the economics
of the Facility 3 Property; (h) any Casualty or Condemnation; or (i) the
compliance of the Facility 3 Property with any applicable Governmental Rule or
Insurance Requirement.
4.03. Release. Without limiting the foregoing, each Purchaser shall, on
behalf of itself and its successors and assigns, waive its right to recover
from, and forever release and discharge, Lessor and the other Indemnitees from
any and all demands, claims, legal or administrative proceedings, losses,
liabilities, damages, penalties, fines, liens, judgments, costs or expenses
whatsoever (including attorneys' fees and costs), whether direct or indirect,
known or unknown, foreseen or unforeseen, that may arise on account of or in any
way be connected with the physical condition of the Facility 3 Property or any
Governmental Rule applicable thereto, including any Environment Law. Each
Purchaser shall expressly waive the benefits of Section 1542 of the California
Civil Code, which provides that, "a general release does not extend to claims
which the creditor does not know or expect to exist in his favor at the time of
executing the release, which if known to him must have materially affected the
settlement with the debtor."
4.04. Permits, Approvals, Etc. Lessee shall obtain all permits, licenses
and approvals from and make all filings with Governmental Authorities and other
Persons, comply and cause compliance with all applicable Governmental Rules and
take all other actions required for the marketing, purchase and sale of the
Facility 3 Property.
15
4.05. Costs. Lessee shall pay directly, without deduction from the
purchase price or any other amount payable to Lessor hereunder, all costs and
expenses of Lessee and Lessor associated with the marketing and sale of the
Facility 3 Property, including brokers' fees and commissions; title insurance
premiums; survey charges; utility, tax and other prorations; fees and expenses
of environmental consultants and attorneys; appraisal costs; escrow fees;
recording fees; documentary, transfer and other taxes; and all other fees, costs
and expenses which might otherwise be deducted from the purchase price or any
other amount payable to Lessor hereunder.
4.06. Lessee's Payment Obligations.
(a) Expiration Date. On the Expiration Date of the Facility 3
Lease Agreement, Lessee shall pay to Lessor the following:
(i) Purchase by Lessee. If the Facility 3 Property is to
be purchased by Lessee or an Assignee Purchaser on such date,
(A) the Outstanding Lease Amount, (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 in each case to the
extent attributable to Facility 3;
(ii) Purchase by a Designated Purchaser. If the Facility
3 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 in each case to the extent attributable to Facility
3; or
(iii) Retention by Lessor. If the Facility 3 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 Parcels of Facility 3
Property to be purchased on such date, (ii) all unpaid Rent attributable
to such Parcels of Facility 3 Property accrued through or due and
payable on or prior to such date and (iii) all other amounts
attributable to such Parcels of Facility 3 Property, if any, due and
payable by Lessee under the Operative Documents on or prior to such
date.
4.07. Lessor Liens. Lessor shall remove all Lessor Liens from the
Facility 3 Property before the Expiration Date of the Facility 3 Lease Agreement
(or, in the case of a purchase of a portion of the Facility 3 Property pursuant
to the Partial Purchase Option, from the portion to be purchased before the
applicable Partial Purchase Date).
16
4.08. Transfer Documents.
(a) Expiration Date.
(i) Lessor. Subject to receipt by Lessor on the
Expiration Date of the Facility 3 Lease Agreement of the full
amount of the following, without any setoff, deduction or
reduction of any kind:
(A) In the case of a transfer to Lessee or an
Assignee Purchaser, all amounts payable by Lessee
pursuant to clause (i) of Subparagraph 4.06(a); or
(B) In the case of a transfer to a Designated
Purchaser, (1) the purchase price payable by the
Designated Purchaser and (2) all amounts payable by
Lessee pursuant to clause (ii) of Subparagraph 4.06(a);
Lessor shall transfer its interest in the Facility 3 Property to
Purchaser on the Expiration Date of the Facility 3 Lease
Agreement (unless Lessor is to retain the Facility 3 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.
(ii) Lessee. On the Expiration Date of the Facility 3
Lease Agreement, unless Lessee is to purchase the Facility 3
Property, Lessee shall transfer its interest in the Facility 3
Property to the Designated Purchaser or an Assignee Purchaser
(or Lessor if Lessor is to retain the Facility 3 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 Parcels of Facility 3
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, and such other
documents, instruments and agreements as Lessee may reasonably request.
4.09. Casualty and Condemnation Proceeds. If, on the Expiration Date of
the Facility 3 Lease Agreement, any Casualty and Condemnation Proceeds are held
by Lessor in a Repair and Restoration Account or otherwise, Lessor shall (a) if
Lessee is to purchase the Facility 3 Property on the Expiration Date of the
Facility 3 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.
17
4.10. Payments. Purchaser, Lessor and Lessee shall make all payments in
lawful money of the United States and in same day or immediately available funds
not later than 12:00 noon on the date due.
4.11. Environmental Reports. Lessee shall obtain and deliver to Lessor,
not later than one (1) month prior to the Expiration Date of the Lease Agreement
(or, in the case of a purchase of a portion of the Facility 3 Property pursuant
to the Partial Purchase Option, prior to the applicable Partial Purchase Date),
environmental reports with respect to the Facility 3 Property (or, in the case
of a purchase of a portion of the Facility 3 Property pursuant to the Partial
Purchase Option, with respect to the applicable portion thereof) prepared by
environmental consultants acceptable to Lessor.
4.12. Simultaneous Exercise of Facility 1, 2 and 3 Options. At any time
Lessee exercises the Expiration Date Purchase Option or Marketing Option with
respect to the Facility 3 Property hereunder, Lessee shall simultaneously
exercise the same option with respect to the Facility 1 Property under the
Facility 1 Purchase Agreement and the Facility 2 Property under the Facility 2
Purchase Agreement. If Lessee elects to exercise the Marketing Option under this
Agreement, the Facility 1 Purchase Agreement and the Facility 2 Purchase
Agreement, Lessee shall not submit bids from different Persons under the three
Purchase Agreements unless (a) the bidder for the Facility 1 Property and the
bidder for the Facility 2 Property have agreed upon the terms of a ground lease
pursuant to which the Facility 1 bidder would lease the Parcel 7 Land to the
Facility 2 bidder, (b) the terms of such ground lease do not have a material
adverse effect on the values of the Facility 1 Property or Facility 2 Property
and (c) any necessary approvals required for such ground lease under the
Stanford Lease have been obtained.
4.13. 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
Participant) 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.
18
5.03. Successors and Assigns.
(a) General. This Agreement shall be binding upon and inure to
the benefit of the Lessor Parties and Lessee and their permitted
successors and assigns; provided, however, that the Lessor Parties and
Lessee shall not sell, assign or delegate their respective rights and
obligations hereunder except as provided in the Participation Agreement
and in Subparagraph 5.03(b).
(b) Assignment by Lessee of Purchase Rights. Lessee may assign to
a third party (an "Assignee Purchaser") its right to purchase the
Facility 3 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 Participant),
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.
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).
19
(b) No Termination or Abatement. This Agreement and the other
Operative Documents and Lessee's obligation to pay all amounts hereunder
and to pay and perform all other Lessee Obligations shall continue in
full force and effect without abatement notwithstanding the occurrence
or existence of any event or circumstance, including any event or
circumstance set forth in Subparagraph 5.08(c).
(c) Full Payment and Performance. Lessee shall make all payments
under this Agreement and the other Operative Documents in the full
amounts and at the times required by the terms of this Agreement and the
other Operative Documents without setoff, deduction or reduction of any
kind and shall perform all other Lessee Obligations as and when
required, without regard to any event or circumstances whatsoever,
including (i) the condition of the Facility 3 Property (including any
Improvements to the Facility 3 Property made prior to the Commencement
Date or during the Term of the Facility 3 Lease Agreement); (ii) title
to the Facility 3 Property (including possession of the Facility 3
Property by any Person or the existence of any Lien or any other right,
title or interest in or to any of the Facility 3 Property in favor of
any Person); (iii) the value, habitability, usability, design, operation
or fitness for use of the Facility 3 Property; (iv) the availability or
adequacy of utilities and other services to the Facility 3 Property; (v)
any latent, hidden or patent defect in the Facility 3 Property; (vi) the
zoning or status of the Facility 3 Property or any other restrictions on
the use of the Facility 3 Property; (g) the economics of the Facility 3
Property; (vii) any Casualty or Condemnation; (viii) the compliance of
the Facility 3 Property with any applicable Governmental Rule or
Insurance Requirement; (ix) any failure by any Lessor Party to perform
any of its obligations under this Agreement or any other Operative
Document; or (x) the exercise by any Lessor Party of any of its remedies
under this Agreement or any other Operative Document; provided, however,
that this Paragraph 5.08 shall not abrogate any right which Lessee may
have to recover damages from any Lessor Party for any material breach by
such Lessor Party of its obligations under this Agreement or any other
Operative Document to the extent permitted hereunder or thereunder.
[The signature page follows.]
20
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:_________________________
21
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 September 21, 2001
(the "Participation Agreement"), among Novellus Systems, Inc.
("Lessee"), ABN AMRO Leasing, Inc. ("Lessor"), the Persons listed in
Schedule I to the Participation Agreement (the "Participants") and ABN
AMRO Bank N.V., as agent for the Participants (in such capacity,
"Agent"); and
(b) The Facility 3 Lease Agreement, dated as of September 21,
2001 (the "Lease Agreement"), between Lessee and Lessor; and
(c) The Facility 3 Purchase Agreement, dated as of September 21,
2001 (the "Purchase Agreement"), between Lessee and Lessor.
Unless otherwise indicated, all terms defined in the Participation Agreement
have the same respective meanings when used herein.
2. Pursuant to Paragraph 4.01 of the Facility 3 Lease Agreement and
Paragraph 2.01 of the Facility 3 Purchase Agreement, Lessee hereby irrevocably
notifies Lessor that Lessee is exercising its right to terminate the Facility 3
Lease Agreement prior to the Scheduled Expiration Date of the Facility 3 Lease
Agreement and purchase the Facility 3 Property on [_________, ____] (which date,
after the delivery of this notice, shall be the Expiration Date of the Facility
3 Lease Agreement).
IN WITNESS WHEREOF, Lessee has executed this Notice of Term Purchase
Option Exercise on the date set forth above.
NOVELLUS SYSTEMS, INC.
By:_________________________________
Name:__________________________
Title:_________________________
A(1)-1
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 September 21, 2001
(the "Participation Agreement"), among Novellus Systems, Inc.
("Lessee"), ABN AMRO Leasing, Inc. ("Lessor"), the Persons listed in
Schedule I to the Participation Agreement (the "Participants") and ABN
AMRO Bank N.V., as agent for the Participants (in such capacity,
"Agent"); and
(b) The Facility 3 Purchase Agreement, dated as of September 21,
2001 (the "Purchase Agreement"), between Lessee and Lessor.
Unless otherwise indicated, all terms defined in the Participation Agreement
have the same respective meanings when used herein.
2. Pursuant to Paragraph 2.02 of the Facility 3 Purchase Agreement,
Lessee hereby irrevocably notifies Lessor that Lessee is exercising its right to
purchase a portion of the Facility 3 Property as follows:
(a) The Parcel[s] of Facility 3 Property to be purchased is [are]
________________; and
(b) The date on which such purchase is to occur is [_________,
____].
3. Lessee hereby certifies to Lessor, Agent and the Participants (other
than Novellus Participant) 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
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
EXHIBIT A(3)
NOTICE OF CALL 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 September 21, 2001
(the "Participation Agreement"), among Novellus Systems, Inc.
("Lessee"), ABN AMRO Leasing, Inc. ("Lessor"), the Persons listed in
Schedule I to the Participation Agreement (the "Participants") and ABN
AMRO Bank N.V., as agent for the Participants (in such capacity,
"Agent"); and
(b) The Facility 3 Purchase Agreement, dated as of September 21,
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 2.03 of the Facility 3 Purchase Agreement,
Lessee hereby irrevocably notifies Lessor that Lessee (or its designee) is
exercising its right to purchase all of the Lessor Parties' respective right,
title and interest in, and assume all obligations and liabilities arising after
such purchase under, the Operative Documents related to Facility 3 as follows:
(a) The date on which such purchase is to occur is [_________,
____].
3. Lessee hereby certifies to Lessor, Agent and the Participants (other
than Novellus Participant) 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(3)-1
IN WITNESS WHEREOF, Lessee has executed this Notice of Call Option
Exercise on the date set forth above.
NOVELLUS SYSTEMS, INC.
By:_________________________________
Name:__________________________
Title:_________________________
A(3)-2
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 September 21, 2001
(the "Participation Agreement"), among Novellus Systems, Inc.
("Lessee"), ABN AMRO Leasing, Inc. ("Lessor"), the Persons listed in
Schedule I to the Participation Agreement (the "Participants") and ABN
AMRO Bank N.V., as agent for the Participants (in such capacity,
"Agent"); and
(b) The Facility 3 Purchase Agreement, dated as of September 21,
2001 (the "Purchase Agreement"), between Lessee and Lessor.
Unless otherwise indicated, all terms defined in the Participation Agreement
have the same respective meanings when used herein.
2. Pursuant to Paragraph 3.01 of the Purchase Agreement, Lessee hereby
notifies Lessor that Lessee is electing to exercise the Marketing Option on the
Scheduled Expiration Date of the Facility 3 Lease Agreement of [_____, ____].
3. Lessee hereby certifies to Lessor, Agent and the Participants (other
than Novellus Participant) that, on the date of this notice:
(a) The representations and warranties of Lessee set forth in
Paragraph 4.01 of the Participation Agreement and in the other Operative
Documents are true and correct in all material respects as if made on
such date (except for representations and warranties expressly made as
of a specified date, which shall be true as of such date);
(b) No Default (other than a Non-Marketing Option Event of
Default under the Facility 3 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
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
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 September 21, 2001
(the "Participation Agreement"), among Novellus Systems, Inc.
("Lessee"), ABN AMRO Leasing, Inc. ("Lessor"), the Persons listed in
Schedule I to the Participation Agreement (the "Participants") and ABN
AMRO Bank N.V., as agent for the Participants (in such capacity,
"Agent"); and
(b) The Facility 3 Purchase Agreement, dated as of September 21,
2001 (the "Purchase Agreement"), between Lessee and Lessor.
Unless otherwise indicated, all terms defined in the Participation Agreement
have the same respective meanings when used herein.
2. Pursuant to Paragraph 3.01 of the Purchase Agreement, Lessee hereby
notifies Lessor that Lessee is electing to exercise the Expiration Date Purchase
Option on the Scheduled Expiration Date of the Facility 3 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
EXHIBIT D(1)
RECORDING REQUESTED BY
WHEN RECORDED RETURN TO
AND MAIL TAX STATEMENTS TO:
[Purchaser]
- ------------------
- ------------------
- ------------------
Documentary Transfer Tax is not of public record and is shown on a separate
sheet attached to this deed.
- --------------------------------------------------------------------------------
QUITCLAIM DEED
FOR VALUABLE CONSIDERATION, the receipt of which is hereby
acknowledged, ABN AMRO Leasing, Inc. ("Grantor"), hereby releases, remises and
forever quitclaims to [PURCHASER], a _____________ ("Grantee"), the real
property located in the City of [__________], State of California, described on
EXHIBIT A attached hereto and made a part hereof (the "Property").
[See Next Page]
D(1)-1
Executed as of _____, ____.
ABN AMRO LEASING, INC.,
By: _________________________
Its: _________________________
D(1)-2
EXHIBIT A
LEGAL DESCRIPTION
Assessor's Parcel No.: _______________
D(1)(A)-1
State of _____________
County of _____________________
On ___________________ before me, _________________________,
Date Name, Title of Officer
personally appeared ________________________________________________,
Name(s) of signer(s)
( personally known to me -OR- ( proved to me
on the basis of satisfactory evidence to be
the person(s) whose name(s) is/are
subscribed to the within instrument and
acknowledged to me that he/she/they executed
the same in his/her/their authorized
capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s)
or the entity upon behalf of which the
person(s) acted, executed the instrument.
WITNESS my hand and official seal.
--------------------------------------------
D(1)(A)-2
______,____
Santa Clara County Recorder
Re: Request That Statement of Documentary
Transfer Tax Not be Recorded
Dear Sir:
Request is hereby made in accordance with Section 11932 of the Revenue
and Taxation Code that this statement of tax due not be recorded with the
attached deed but be affixed to the deed after recordation and before return as
directed on the deed.
The attached deed names ABN AMRO Leasing, Inc., as grantor, and
[PURCHASER], a _________________, as grantee.
The property being transferred and described in the attached deed is
located in the City of San Jose and County of [__________], State of California.
The amount of Documentary Transfer Tax due on the attached deed is
$__________, computed on full value of the property conveyed.
ABN AMRO LEASING, INC.,
By:_______________________________
Its: ___________________________
D(1)(A)-3
EXHIBIT D(2)
ACKNOWLEDGMENT AND DISCLAIMER OF REPRESENTATIONS AND WARRANTIES
THIS ACKNOWLEDGMENT OF DISCLAIMER OF REPRESENTATIONS AND WARRANTIES
(this "Certificate") is made as of ___________, ____ by [PURCHASER], a
_____________ ("Grantee").
Contemporaneously with execution of this Acknowledgement, ABN AMRO
Leasing, Inc., an Illinois corporation ("AALI"), is executing and delivering to
Grantee a Quitclaim Deed and a Bill of Sale (the foregoing documents and any
other documents to be executed and delivered to Grantee in connection therewith
are herein called the "Conveyancing Documents" and any of the properties, rights
or other matters assigned, transferred or conveyed pursuant thereto are herein
collectively called the "Property") pursuant to the terms of a Facility 3
Purchase Agreement dated as of September 21, 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 September 21, 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
The provisions of this Acknowledgement shall be binding on Grantee, its
successors and assigns and any other party claiming through Grantee. Grantee
hereby acknowledges that AALI N.A. is entitled to rely and is relying on this
Certificate.
EXECUTED as of ____________, _______.
[PURCHASER]
By: ________________________________
Name: _______________________
Title: ______________________
D(2)-2
EXHIBIT E
BILL OF SALE
FOR GOOD AND VALUABLE CONSIDERATION, the receipt of which is
hereby acknowledged, ABN AMRO LEASING, INC., an Illinois corporation ("Seller"),
does hereby sell, transfer and convey to [PURCHASER], a
_________________________ ("Purchaser"), the personal property owned by Seller
in connection with that certain real property commonly known as _______________,
San Jose, California, including, without limitation, the personal property
itemized on SCHEDULE 1 attached hereto and incorporated herein by this reference
(the "Property").
Seller is selling and Purchaser is purchasing the Property on an
"as is, with all faults" basis and Purchaser is not relying on any
representations or warranties of any kind whatsoever, express or implied, from
Seller, its agents, or brokers as to any matters concerning the Property
including (a) the condition of the Property; (b) title to the Property
(including possession of the Property by any individual or entity or the
existence of any lien or any other right, title or interest in or to any of the
Property in favor of any person); (c) the value, habitability, usability,
design, operation or fitness for use of the Property; or (d) any latent, hidden
or patent defect in the Property.
Dated: ________, ____ SELLER:
ABN AMRO LEASING, INC.,
By:_______________________________
Its: ___________________________
PURCHASER:
[PURCHASER]
a ________________________________
By:_______________________________
Its: ___________________________
E-1
SCHEDULE 1
PROPERTY
E(1)-2
EXHIBIT F
RECORDING REQUESTED BY
WHEN RECORDED RETURN TO
AND MAIL TAX STATEMENTS TO:
- ---------------------
- ---------------------
Attention: _____________
Documentary Transfer Tax is not of public record and is shown on a separate
sheet attached to this deed.
- --------------------------------------------------------------------------------
GRANT DEED
FOR VALUABLE CONSIDERATION, the receipt of which is hereby
acknowledged, NOVELLUS SYSTEMS, INC., a California corporation ("Grantor"),
hereby releases, remises and forever grants to [PURCHASER] ("Grantee"), the real
property located in the City of San Jose, County of Santa Clara, State of
California, described on EXHIBIT A attached hereto and made a part hereof (the
"Property").
Executed as of __________, ____.
NOVELLUS SYSTEMS, INC.,
a California corporation
By: ________________________________
Its:________________________________
F-1
EXHIBIT A
LEGAL DESCRIPTION
Assessor's Parcel No.: ____________________
F(A)-1
State of _________________
County of _____________________
On ___________________ before me, _________________________,
Date Name, Title of Officer
personally appeared ________________________________________________,
Name(s) of signer(s)
(personally known to me -OR- (proved to me on the basis of satisfactory evidence
to be the person(s) whose name(s) is/are
subscribed to the within instrument and
acknowledged to me that he/she/they executed the
same in his/her/their authorized capacity(ies),
and that by his/her/their signature(s) on the
instrument the person(s) or the entity upon behalf
of which the person(s) acted, executed the
instrument.
WITNESS my hand and official seal.
--------------------------------------------
F(A)-2
--------- , ----
Santa Clara County Recorder
Re: Request That Statement of Documentary
Transfer Tax Not be Recorded
Dear Sir:
Request is hereby made in accordance with Section 11932 of the Revenue
and Taxation Code that this statement of tax due not be recorded with the
attached deed but be affixed to the deed after recordation and before return as
directed on the deed.
The attached deed names NOVELLUS SYSTEMS, INC., a California
corporation, as grantor, and [PURCHASER], as grantee.
The property being transferred and described in the attached deed is
located in the City of San Jose and County of Santa Clara, State of California.
The amount of Documentary Transfer Tax due on the attached deed is
$__________, computed on full value of the property conveyed.
NOVELLUS SYSTEMS, INC.,
a ____________________
By:_________________________________
Its: _______________________________
F(A)-3
EXHIBIT G
BILL OF SALE
For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Novellus Systems, Inc., a California corporation
("Seller"), does hereby sell, transfer, and convey unto [PURCHASER] ("Buyer"),
the personal property owned by Seller in connection with that certain real
property commonly known as _______________, San Jose, California, which Seller
warrants to be free and clear of all liens and encumbrances, including, without
limitation, the personal property itemized on SCHEDULE 1 attached hereto and
incorporated herein by this reference.
Seller does hereby covenant with Buyer that Seller is the lawful owner
of such personal property, and that the undersigned has good right to sell the
same as aforesaid and will warrant and defend the title thereto unto Buyer, its
successors and assigns, against the claims and demands of all persons
whomsoever.
DATED this ____ day of __________, ____.
SELLER: Novellus Systems, Inc.,
a California corporation
By:_________________________________
Its: _______________________________
G-1
SCHEDULE 1
PROPERTY
G(1)-1
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
FACILITY 3 PURCHASE AGREEMENT
BETWEEN
NOVELLUS SYSTEMS, INC.
AND
ABN AMRO LEASING, INC.
SEPTEMBER 21, 2001
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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. Partial Purchase Option......................................................2
2.03. Call Option..................................................................4
SECTION 3. OBLIGATIONS OF LESSEE ON THE EXPIRATION DATE..............................5
3.01. Alternative..................................................................5
3.02. Marketing Option.............................................................6
3.03. Expiration Date Purchase Option.............................................12
SECTION 4. TERMS OF ALL PURCHASES...................................................13
4.01. Representations and Warranties of Parties...................................13
4.02. "As Is" Purchase............................................................15
4.03. Release.....................................................................15
4.04. Permits, Approvals, Etc.....................................................16
4.05. Costs.......................................................................16
4.06. Lessee's Payment Obligations................................................16
4.07. Lessor Liens................................................................16
4.08. Transfer Documents..........................................................17
4.09. Casualty and Condemnation Proceeds..........................................17
4.10. Payments....................................................................18
4.11. Environmental Reports.......................................................18
4.12. Simultaneous Exercise of Facility 1, 2 and 3 Options........................18
4.13. Further Assurances..........................................................18
SECTION 5. MISCELLANEOUS............................................................18
5.01. Notices.....................................................................18
5.02. Waivers, Amendments.........................................................18
5.03. Successors and Assigns......................................................19
5.04. No Third Party Rights.......................................................19
5.05. Partial Invalidity..........................................................19
5.06. Governing Law...............................................................19
5.07. Counterparts................................................................19
5.08. Nature of Lessee's Obligations..............................................19
EXHIBITS
A(1) Notice of Term Purchase Option Exercise (2.01)
A(2) Notice of Partial Purchase Option Exercise (2.02)
A(3) Notice of Call Option Exercise (2.03)
B Notice of Marketing Option Exercise (3.01)
C Notice of Expiration Date Purchase Option Exercise (3.01)
D(1) Deed (Lessor) (4.08(a))
D(2) Acknowledgement and Disclaimer of Representations and
Warranties (4.08(a))
E Bill of Sale (Lessor) (4.08(a))
F Deed (Lessee) (4.08(b))
TABLE OF CONTENTS
PAGE
G Bill of Sale (Lessee) (4.08(b))
-i-
CASH COLLATERAL AGREEMENT
THIS CASH COLLATERAL AGREEMENT (this "Agreement" herein), dated as of
September 21, 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 three
lease facilities pursuant to which:
(1) Lessor would (a) lease certain property designated by Lessee
to Lessee, (b) in the case of Facility 3, appoint Lessee as Lessor's
agent to make certain improvements to such property, (c) make advances
to finance the Facility 3 improvements and to pay certain related
expenses and (d) grant to Lessee the right to purchase such property;
and
(2) The Participants would participate in such lease facilities
by (a) funding the advances to be made by Lessor and (b) acquiring
participation interests in the rental and certain other payments to be
made by Lessee.
B. Pursuant to a Participation Agreement dated as of September 21, 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 facilities 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
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 Participant, as provided in
the Participation Agreement) and grants to Lessor (for the ratable benefit of
the Lessor Parties, other than Novellus Participant, 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 and certificates of
deposit 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 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).
2
2.02. Securities Intermediaries; Depositary Banks. Lessee may maintain
Securities Accounts only with ABN AMRO Bank, N.V., Wells Fargo Bank, National
Association, Union Bank of California, N.A. 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 ABN AMRO Bank, N.V.,
Wells Fargo Bank, National Association, Union Bank of California, N.A. and other
banks (as defined in the UCC) that are approved by Lessor and Agent (a
"Depositary Bank").
2.03. Separate Accounts for Each Facility. Lessee shall maintain for
each Facility one or more Securities Accounts and/or Deposit Accounts for that
Facility that are separate from the Securities Accounts and/or Deposit Accounts
maintained by Lessee for the other Facilities. Lessee shall, prior to the
delivery of any Cash Collateral to any Securities Account or Deposit Account,
notify Lessor in writing of the Facility for which such account is to hold Cash
Collateral Lessee shall not commingle in the same Securities Account or Deposit
Account Cash Collateral for more than one Facility.
2.04. 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 under a Facility,
and prior to such Advance, Lessee shall deliver all Cash Collateral
necessary to satisfy the Cash Collateral amount requirement for such
Facility 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 for any Facility 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 and the Facility for which it is 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
3
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 2.05. 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 (i) all Cash Collateral for
Facility 3 shall be in the form of United States Treasury Securities
until the purchase by Lessee of ABN AMRO's Outstanding Tranche A
Participation Amount under Facility 3 pursuant to Subparagraph 2.02(d)
of the Participation Agreement and (ii) all such investments shall be
subject to the term limitations set forth in the definition of Cash
Collateral. If a Default has occurred and is continuing, (A) all new
Cash Collateral shall be maintained in time deposit accounts with terms
not exceeding one (1) week and (B) 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.
2.05. 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 for a Facility 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
such 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 for a Facility 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 such Cash Collateral to the extent of such excess,
free and clear of all liens and security interests hereunder, provided
that:
(i) 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
and the Securities Account or Deposit Account 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
(ii) Lessee may not make more than one (1) withdrawal in
any calendar month.
4
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.
2.06. 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 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.
2.07. Deposit Accounts Maintained With ABN AMRO Bank, N.V.. In the event
Lessee maintains one or more Deposit Accounts with ABN AMRO Bank, N.V. pursuant
to this Agreement, Lessor agrees that the rate of return applicable to Cash
Collateral maintained therein shall be (a) zero percent (0%) per annum with
respect to amounts on deposit attributable to Outstanding Tranche B
Participation Amount and (b) the then applicable market rate with respect to
amounts on deposit attributable to the Outstanding Tranche C Participation
Amount.
SECTION 3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF LESSEE.
3.01. Representations and Warranties. Lessee represents and warrants to
the Lessor Parties (other than Novellus Participant) 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.
5
(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 Participant) 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.
(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
6
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 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 Participant) 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 Participant) 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.
7
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
Agreements, 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 failure or delay by any Lessor Party (other than Novellus
Participant) 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 Participant) and
Lessee and their permitted successors and assigns; provided, however, that the
Lessor Parties (other than Novellus Participant) 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 Participant) 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.
8
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 Participant) 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.
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.]
9
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:____________________________
10
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. Securities Intermediary and Grantor have entered into a custody
agreement (as from time to time amended, modified, supplemented, or restated,
the "Custody 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 Grantor 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 September 21, 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 records of
Securities Intermediary show that Grantor is the sole owner of the Securities
Account, (b) the Custody Agreement, the security
entitlements arising out of the financial assets carried in the Securities
Account and any free credit balances are valid and legally binding obligations
of Securities Intermediary, (c) Securities Intermediary has not been served with
any notice of levy or received any notice of any security interest in or other
claim to the Securities Account, or any portion of the financial assets
maintained therein, other than Secured Party's claim pursuant to this Control
Agreement, and (d) Securities Intermediary is not presently obligated to accept
any entitlement order from any person with respect to the Securities Account or
any portion of the financial assets maintained therein, except for entitlement
orders that Securities Intermediary is obligated to accept from Secured Party
under this Control Agreement and entitlement orders that Securities
Intermediary, subject to the provisions of Section 2 below, is obligated to
accept from Grantor. 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 (a) effect sales, trades, transfers or exchanges of financial assets
in the Securities Account (but not to effect any withdrawals other than ordinary
cash dividends and interest income) and (b) 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 sell financial assets to Grantor on
margin, 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 Custody 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.
2
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.
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. Custody Agreement. This Control Agreement supplements the
Custody Agreement between Grantor and Securities Intermediary. In the event of a
conflict between this Control Agreement and the Custody Agreement, the terms of
this Control Agreement will prevail. Regardless of any provision in the Custody
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
3
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.
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.
4
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:
[______________]
[______________]
[______________]
[______________]
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 September 21, 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 records of Depositary Bank
show that Grantor is the sole owner of the Deposit Account, (b) any balances in
the Deposit Account are valid and legally binding obligations of Depositary
Bank, (c) Depositary Bank has not been served with any notice of levy or
received any notice of any security interest in or other claim to the Deposit
Account, or any portion of the financial assets maintained therein, other than
Secured Party's claim pursuant to this Control Agreement, and (d) Depositary
Bank is not presently obligated to accept any entitlement order from any person
with respect to the Deposit Account or any portion of the
B-1
financial assets on deposit therein , except for entitlement orders that
Depositary Bank is obligated to accept from Secured Party under this Control
Agreement and entitlement orders that Depositary Bank, subject to the provisions
of Section 2 below, is obligated to accept from Grantor.
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 (a) change or modify the terms or interest rate of any
deposit account, certificate of deposit or other time deposit in or constituting
the Deposit Account and (b) 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 Custody 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
B-2
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.
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
B-3
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.
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
[______________]
ABN AMRO LEASING, INC.
By: ________________________________
Name: __________________________
Title: _________________________
Address:
[______________]
[______________]
[______________]
[______________]
[____________________]
By: ________________________________
Name: __________________________
Title: _________________________
Address:
[______________]
[______________]
[______________]
[______________]
B-5
================================================================================
CASH COLLATERAL AGREEMENT
BETWEEN
NOVELLUS SYSTEMS, INC.
AND
ABN AMRO LEASING, INC.
SEPTEMBER 21, 2001
================================================================================
TABLE OF CONTENTS
PAGE
----
SECTION 1. INTERPRETATION............................................................ 1
1.01. Definitions............................................................... 1
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. Securities Intermediaries; Depositary Banks............................... 3
2.03. Separate Accounts for Each Facility....................................... 3
2.04. Delivery and Maintenance of Cash Collateral............................... 3
2.05. Withdrawal of Cash Collateral............................................. 4
2.06. Possession by Lessor...................................................... 5
2.07. Deposit Accounts Maintained With ABN AMRO Bank, N.V....................... 5
SECTION 3. REPRESENTATIONS, WARRANTIES AND COVENANTS OF LESSEE....................... 5
3.01. Representations and Warranties............................................ 5
3.02. Covenants................................................................. 6
SECTION 4. RIGHTS AND REMEDIES OF LESSOR............................................. 6
4.01. Authorized Actions by Lessor.............................................. 6
4.02. Other Rights and Remedies Upon an Event of Default........................ 7
4.03. Application of Cash Collateral............................................ 8
SECTION 5. MISCELLANEOUS............................................................. 8
5.01. Notices................................................................... 8
5.02. Waivers; Amendments....................................................... 8
5.03. Successors and Assigns.................................................... 8
5.04. No Third Party Rights..................................................... 8
5.05. Partial Invalidity........................................................ 8
5.06. Governing Law............................................................. 8
5.07. Counterparts.............................................................. 9
5.08. Cumulative Rights, etc.................................................... 9
5.09. Termination............................................................... 9
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TABLE OF CONTENTS
(continued)
PAGE
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EXHIBITS
A Securities Account Control Agreement (2.01(a))
B Deposit Account Control Agreement (2.01(b))
-ii-
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