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EXHIBIT 10.1
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PARTICIPATION AGREEMENT
AMONG
NOVELLUS SYSTEMS, INC.
AND
LEASE PLAN NORTH AMERICA, INC.
AND
THE PARTICIPANTS NAMED HEREIN
AND
ABN AMRO BANK N.V.,
as Agent for the Participants
June 9, 1997
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TABLE OF CONTENTS
Page
SECTION I. INTERPRETATION 2
1.01. Definitions. 2
1.02. Rules of Construction. 2
SECTION II. LEASE FACILITIES. 2
2.01. Acquisition, Lease, Etc. 2
2.02. Participation Agreement 5
2.03. Advance Requests. 6
2.04. Fees. 7
2.05. Funding of Advances. 8
2.06. Sharing of Payments. 10
2.07. Other Payment Terms. 12
2.08. Commitment Reductions. 14
2.09. Extensions. 14
2.10. Nature of the Transactions 16
2.11. Security 17
2.12. Change of Circumstances. 19
2.13. Taxes on Payments. 22
2.14. Funding Loss Indemnification. 23
2.15. Replacement of Participants. 24
SECTION III. CONDITIONS PRECEDENT. 25
3.01. Initial Acquisition Advance. 25
3.02. Each Acquisition Advance. 25
3.03. Improvement/Expense Advances. 25
3.04. Other Conditions Precedent 25
3.05. Covenant to Deliver. 26
SECTION IV. REPRESENTATIONS AND WARRANTIES 26
4.01. Lessee's Representations and Warranties. 26
4.02. Lessor's Representations and Warranties 32
4.03. Participants' Representations and Warranties. 34
SECTION V. COVENANTS. 35
5.01. Lessee's Affirmative Covenants. 35
5.02. Lessee's Negative Covenants 39
5.03. Lessee's Financial Covenants. 46
5.04. Lessor's Covenants 48
5.05. Participants' Covenants 49
SECTION VI. LESSOR, AGENT AND THEIR RELATIONS WITH PARTICIPANTS. 49
6.01. Appointment of Agent. 49
6.02. Powers and Immunities 49
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6.03. Reliance. 49
6.04. Defaults 50
6.05. Indemnification. 50
6.06. Non-Reliance 51
6.07. Resignation or Removal of Agent. 51
6.08. Authorization 52
6.09. Lessor and Agent in their Individual Capacities. 52
SECTION VII. MISCELLANEOUS 52
7.01. Notices. 52
7.02. Expenses. 53
7.03. Indemnification. 54
7.04. Waivers; Amendments. 54
7.05. Successors and Assigns 55
7.06. Setoff. 59
7.07. No Third Party Rights 60
7.08. Partial Invalidity. 60
7.09. JURY TRIAL 60
7.10. Counterparts 60
7.11. No Joint Venture, Etc 60
7.12. Usury Savings Clause 61
7.13. Confidentiality 61
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SCHEDULES
I Participants (Preamble, 7.01, Schedule 1.01)
II Pricing Grid (Schedule 3.01)
1.01 Definitions
1.02 Rules of Construction
3.01 Initial Conditions Precedent
3.02 Conditions Precedent to each Acquisition Advance
4.01(g) Litigation
4.01(q) Subsidiaries
4.01(t) Individual Property Representations
5.02(a) Existing Indebtedness
5.02(b) Existing Liens
5.02(e) Existing Investments
EXHIBITS
A Land (2.01(a))
B(1) Facility 1 Lease Agreement (2.01(a))
B(2) Facility 2 Lease Agreement (2.01(b))
C(1) Facility 1 Purchase Agreement (2.01(a))
C(2) Facility 2 Purchase Agreement (2.01(b))
D Facility 2 Construction Agency Agreement (2.01(b))
E Acquisition Request (2.03(a))
F Improvement/Expense Advance Request (2.03(b))
G(1) 364-Day Commitment Extension Request (2.09(a))
G(2) Lease Extension Request (2.09(b))
H Assignment of Construction Agreements (2.11(a))
I Cash Collateral Agreement (2.11(a))
J Assignment of Lease (2.11(b))
K Lessor Deed of Trust (2.11(b))
L Lessor Security Agreement (2.11(b))
M Assignment Agreement (7.05(b))
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PARTICIPATION AGREEMENT
THIS PARTICIPATION AGREEMENT (this "Agreement" herein), dated as of
June 9, 1997, is entered into by and among:
(1) NOVELLUS SYSTEMS, INC., a California corporation ("Lessee");
(2) LEASE PLAN NORTH AMERICA, INC., an Illinois corporation
("Lessor");
(3) Each of the financial institutions from time to time listed
in Schedule I hereto, as amended from time to time (such financial
institutions to be referred to collectively as the "Participants");
and
(4) ABN AMRO BANK N.V., acting through its San Francisco
International Branch, as agent for the Participants (in such capacity,
"Agent").
RECITALS
A. Lessee has requested Lessor and the Participants to provide to
Lessee two lease facilities as follows:
(1) Pursuant to the first facility ("Facility 1"), Lessor would
(a) purchase certain land designated by Lessee, (b) lease such land to
Lessee, (c) make advances to finance certain related expenses and (d)
grant to Lessee the right to purchase such property.
(2) Pursuant to the second facility ("Facility 2"), Lessor would
(a) purchase certain land, improvements (including improvements to the
land under Facility 1) and other property designated by Lessee, (b)
lease such property to Lessee, (c) appoint Lessee as Lessor's agent to
make certain improvements to such property and to the land under
Facility 1, (d) make advances to finance such improvements and to pay
certain related expenses and (e) grant to Lessee the right to purchase
such property.
(3) The Participants would participate in such lease facilities
by (a) funding the purchase prices and other advances to be made by
Lessor and (b) acquiring participation interests in the rental and
certain other payments to be made by Lessee.
▇. ▇▇▇▇▇▇ and the 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:
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SECTION I. INTERPRETATION.
1.01. Definitions. Unless otherwise indicated in this Agreement or any
other Operative Document, each term set forth in Schedule 1.01, when used in
this Agreement or any other Operative Document, shall have the respective
meaning given to that term in Schedule 1.01 or in the provision of this
Agreement or other document, instrument or agreement referenced in Schedule
1.01.
1.02. Rules of Construction. Unless otherwise indicated in this
Agreement or any other Operative Document, the rules of construction set forth
in Schedule 1.02 shall apply to this Agreement and the other Operative
Documents.
SECTION II. LEASE FACILITIES.
2.01. Acquisition, Lease, Etc.
(a) Facility 1. Subject to the terms and conditions of this
Agreement (including the limitations set forth in Subparagraph 2.01(c)):
(i) Lessor shall, at the request of Lessee from time to time
during the period beginning on the date of this Agreement and
ending on December 31, 1997, purchase (with funds provided by the
Participants) the Tracts of land described in Exhibit A as the
Tract 2 Land, the Tract 3 Land and the Tract 4 Land and such
other Tracts of Land as are to be included in Facility 1 pursuant
to Subparagraph 2.01(d) (as more fully defined in Schedule 1.01,
the "Facility 1 Land"), together with any Appurtenant Rights
thereto;
(ii) Immediately upon the purchase by Lessor of the initial
Tract of Land under Facility 1, Lessor and Lessee shall execute
(i) a Facility 1 Lease Agreement in the form of Exhibit B(1) (the
"Facility 1 Lease Agreement"), pursuant to which Lessor will
lease to Lessee such land and (ii) a Facility 1 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 land; and
(iii) Immediately upon the purchase by Lessor of each
additional Tract of land under Facility 1, Lessor and Lessee
shall execute amendments to the Facility 1 Lease Agreement and
the Facility 1 Purchase Agreement to the extent necessary to add
such land to the land covered thereby.
(b) Facility 2. Subject to the terms and conditions of this
Agreement (including the limitations set forth in Subparagraph 2.01(c)):
(i) Lessor shall, at the request of Lessee from time to time
during the period beginning on the date of this Agreement and
ending on December 31, 1997, purchase (with funds provided by the
Participants)(A) the Tracts of land described in Exhibit A as
the Tract 1 Land and such other Tracts of Land as are to
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be included in Facility 2 pursuant to Subparagraph 2.01(d) (as
more fully defined in Schedule 1.01, the "Facility 2 Land"),
together with any Appurtenant Rights thereto; (B) all
Improvements to the Facility 1 Land and to the Facility 2 Land;
and (C) other related property;
(ii) Immediately upon the purchase by Lessor of the initial
property under Facility 2, Lessor and Lessee shall execute (i) a
Facility 2 Lease Agreement in the form of Exhibit B(2) (the
"Facility 2 Lease Agreement"), pursuant to which Lessor will
lease to Lessee such property, (ii) a Facility 2 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 and (iii) a Facility 2 Construction
Agency Agreement in the form of Exhibit D (the "Facility 2
Construction Agency Agreement"), pursuant to which Lessee agrees
to construct certain improvements to the Tract 1 Land and the
Tract 2 Land;
(iii) Immediately upon the purchase by Lessor of each
additional Tract of Property under Facility 2, Lessor and Lessee
shall execute amendments to the Facility 2 Lease Agreement, the
Facility 2 Purchase Agreement and the Facility 2 Construction
Agency Agreement to the extent necessary to add such Tract of
land to the land covered thereby; and
(iv) During the period beginning on the Acquisition Date for
each Tract of Property under Facility 2 and ending on the first
Business Day of the first full calendar month immediately
succeeding the earliest of (A) June 9, 1999 (the "Outside
Completion Date"), (B) the Completion Date and (C) the date on
which the Unused Total Commitment is $0 (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 for such Tract under
Facility 2 ("Improvement/Expense Advances").
(c) Advance Limitations. The advances made by Lessor to purchase
property under the Facilities (collectively, the "Acquisition Advances")
and the Improvement/Expense Advances made by Lessor under Facility 2
(the Acquisition Advances and the Improvement/Expense Advances to be
referred to collectively as the "Advances") shall be subject to the
following limitations:
(i) The aggregate amount of all Acquisition Advances made by
Lessor under Facility 1 on account of all Facility 1 Property
shall not exceed the sum of all Facility 1 Expiration Date
Appraisals for such property;
(ii) The aggregate amount of all Advances made by Lessor
under Facility 2 on account of all Facility 2 Property shall not
exceed the sum of all Facility 2 Expiration Date Appraisals for
such property;
(iii) The aggregate amount of all Acquisition Advances made by
Lessor under Facility 1 on account of the Tract 2 Property, the
Tract 3 Property and the Tract 4 Property acquired by Lessor
under Facility 1 shall not exceed $20,500,000;
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(iv) The aggregate amount of all Advances made by Lessor
under Facility 2 on account of the Tract 1 Property and the
Facility 2 Property located on the Tract 2 Land, the Tract 3 Land
and the Tract 4 Land acquired by Lessor under Facility 2 shall
not exceed $77,500,000;
(v) The aggregate amount of all Advances made during the
period commencing on the date of this Agreement and ending on the
date 364 days thereafter (the "364-Day Commitment Termination
Date") shall not exceed One Hundred Twenty-Five Million Dollars
($125,000,000) (the "364-Day Commitment"); and
(vi) The aggregate amount of all Advances made during the
period commencing on the date of this Agreement and ending on the
Commitment Termination Date (such period to be referred to as the
"Commitment Period") shall not exceed One Hundred Twenty-Five
Million Dollars ($125,000,000) (the "Total Commitment").
Of the Total Commitment, Zero Dollars ($0) (the "Two-Year Commitment")
is available at any time during the entire Commitment Period. Each
Advance under Facility 2 shall consist of a Tranche A Portion and a
Tranche B Portion.
(d) Future Allocation Between Facility 1 and Facility 2. The
Tract 5 Property, Tract 6 Property and Tract 7 Property shall be
allocated between Facility 1 and Facility 2 when acquired as agreed by
Lessee, Lessor and Agent.
2.02. Participation Agreement.
(a) Advances. Each Participant severally, unconditionally and
irrevocably agrees with Lessor to participate in each Advance made by
Lessor in an amount equal to such Participant's Proportionate Share of
such Advance; provided, however, that the aggregate amount of each
Participant's Proportionate Share of all Advances shall not exceed such
Participant's Commitment. Each Participant shall fund its Proportionate
Share of each Advance as provided in Subparagraph 2.05(a). Each
Participant's Proportionate Share of each Advance under Facility 2 shall
consist of such Participant's Tranche A Portion and Tranche B 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
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specified in Paragraph 7.01. Agent shall promptly furnish to
Lessor and each Participant copies of each such notice and, in
the case of each request for an Advance, shall notify each
Participant of the amount of such Participant's Proportionate
Share of the Advance requested thereby.
(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 the Lien therein
granted to Agent, for the benefit of the Participants, in the
Lessor Deed of Trust and the Lessor Security Agreement.
2.03. Advance Requests.
(a) Acquisition Requests. Lessee shall request Lessor to make
each purchase of property under this Agreement by delivering to Agent an
irrevocable written request in the form of Exhibit E, appropriately
completed (an "Acquisition Request"), which specifies, among other
things:
(i) The Facility under which such purchase is to be made;
(ii) The Tract of land and Appurtenant Rights thereto to be
purchased, if such purchase is under Facility 1, or the Tract of
land and Appurtenant Rights thereto and/or the Improvements to be
purchased if such purchase is under Facility 2;
(iii) The amount of the requested Acquisition Advance to be
made for such property, including the amount of the Acquisition
Price for such property and the Permitted Transaction Expenses
included in such Acquisition Advance; and
(iv) The Acquisition Date for such property, which shall be a
Business Day.
(b) Improvement/Expense Advance Requests. Lessee shall request
Lessor to make each Improvement/Expense Advance under Facility 2 by
delivering to Lessor:
(i) An irrevocable written request in the form of Exhibit F,
appropriately completed (an "Improvement/Expense Advance
Request"), which specifies, among other things:
(A) The Tract of Property for which such Advance is
to be used;
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(B) The amount of such Advance, which shall be an
integral multiple of $10,000;
(C) The date of such Advance, which shall be the
Closing Date or the first Business Day of a month; and
(D) The Permitted Improvement Costs and Permitted
Transaction Expenses to be paid by such Advance; and
(ii) If the proceeds of such Advance are to be used to
purchase Related Goods:
(A) A Supplement to Exhibit B to the Facility 2
Lease Agreement in the form of Exhibit B(1) to the Lease
Agreement (an "Exhibit B Supplement"), which contains a
detailed description of such Related Goods; and
(B) Bills of sale for all such Related Goods
showing Lessor as the purchaser.
Lessee shall not request more than one (1) Improvement/Expense Advance
for each Tract in any calendar month.
(c) Delivery of Advance Requests. Etc. Lessee shall deliver each
Acquisition Request for each Acquisition Advance (other than the
Acquisition Request for the first Acquisition Advance to be made on the
Closing Date) to Lessor at least fifteenE(15) Business Days before the
requested Acquisition Date. Lessee shall deliver each
Improvement/Expense Advance Request to Lessor at least three (3)
Business Days before the date of such Advance. The Acquisition Requests
and Improvement/Expense Advance Requests (collectively, "Advance
Requests") shall be delivered 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.
(d) Capitalization of Base Rent During Commitment Period. On each
Scheduled Rent Payment Date occurring under Facility 2 during the
Commitment Period, the Base Rent due under the Facility 2 Lease
Agreement on such Scheduled Rent Payment Date and attributable to the
Improvements to Tract 4 shall be capitalized by automatically treating
the amount of such Base Rent as an Improvement/Expense Advance made
under Facility 2 on such Scheduled Rent Payment Date. Agent shall notify
Lessor and each Participant of the amount of the Base Rent due on each
such Scheduled Rent Payment Date and so treated as an
Improvement/Expense Advance. Each such Improvement/Expense Advance shall
be allocated to the Improvements to Tract 4.
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").
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(b) Commitment Fees. Lessee shall pay to Agent, for the ratable
benefit of the Participants as provided in clause (ii) of Subparagraph
2.06(c), commitment fees (the "Commitment Fees") as follows:
(i) Lessee shall pay Commitment Fees of fifteen hundredths
of one percent (0.15%) per annum on the daily average Unused
364-Day Commitment for the period beginning on the earlier of
June 16, 1997 and the Closing Date and ending on the 364-Day
Commitment Termination Date.
(ii) Lessee shall pay Commitment Fees of twenty-five
hundredths of one percent (0.25%) per annum on the daily average
Unused Two-Year Commitment for the period beginning on the
earlier of June 16, 1997 and the Closing Date and ending on the
Commitment Termination Date.
Lessee shall pay the Commitment Fees in arrears on the first Business
Day in each January, April, July and October (commencing July 1, 1997)
and on the Commitment Termination Date (or if the Total Commitment is
cancelled on a date prior to such day, on such prior date).
(c) 364-Day Commitment Extension Fee. If Lessor and the
Participants consent to any extension of the 364-Day Commitment
Termination Date requested by Lessee pursuant to Subparagraph 2.09(a),
Lessee shall pay to Agent, for the ratable benefit of the Participants
as provided in clause (iii) of Subparagraph 2.06(c), an extension fee
(the "364-Day Commitment Extension Fee") equal to ten hundredths of one
percent (0.10%) of the Unused 364-Day Commitment on the date Lessee is
notified by Agent of such consent. Lessee shall pay the 364-Day
Commitment Extension Fee on or prior to the Business Day immediately
preceding the original 364-Day 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 III, Agent will promptly
disburse such funds on behalf of Lessor, in same day or immediately
available funds, as follows:
(i) Agent shall disburse each Acquisition Advance on the
applicable Acquisition Date to an escrow or other account
established for payment of the applicable Acquisition Price and
any related Permitted Transaction Expenses pursuant to the
applicable Acquisition Agreement or otherwise as directed by
Lessee in the Advance Request for such Acquisition Advance to pay
such amounts.
(ii) Agent shall disburse each Improvement/Expense Advance as
directed by Lessee in the Advance Request for such
Improvement/Expense Advance.
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Unless otherwise directed by Lessee, all Advances made prior to the
364-Day Commitment Termination Date shall be allocated first to the
364-Day Commitment and, after the 364-Day Commitment is reduced to zero,
to the Two-Year Commitment. All Advances made after the 364-Day
Commitment Termination Date shall be allocated to the Two-Year
Commitment, whether or not the 364-Day Commitment has been reduced to
zero.
(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, such Participant shall pay to Agent, on
demand, interest which shall accrue on such amount until made available
to Agent at rates equal to (i) the daily Federal Funds Rate during the
period from the date of such Advance through the third Business Day
thereafter and (ii) the Base Rate plus two percent (2.0%) thereafter. A
certificate of Agent submitted to any Participant with respect to any
amounts owing under this Subparagraph 2.05(b) shall be conclusive absent
manifest error. If any Participant's Proportionate Share of any Advance
is not in fact made available to Agent by such Participant within three
(3) Business Days after the date of such Advance, Lessee shall pay to
Agent, on demand, an amount equal to such Proportionate Share together
with interest thereon, for each day from the date such amount was made
available to Lessee until the date such amount is repaid to Agent, at a
per annum rate equal to the Base Rate plus two percent (2.0%).
(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. Payments applied to reduce the
Outstanding Lease Amount under each Facility shall be shared as follows:
(i) Facility 1. Each payment of the Outstanding Lease
Amount under Facility 1 shall be shared by the Participants pro
rata according to their respective Outstanding Participation
Amounts under Facility 1 at the time of such payment.
(ii) Facility 2.
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(A) Each payment of the Outstanding Lease Amount
under Facility 2 derived from the purchase price paid by
Lessee to purchase the Facility 2 Property pursuant to the
Facility 2 Purchase Agreement shall be shared by the
Participants pro rata according to their respective
Outstanding Participation Amounts under Facility 2 at the
time of such payment.
(B) Each payment of the Outstanding Lease Amount
under Facility 2 derived from the Residual Value Guaranty
Amount paid by Lessee pursuant to the Facility 2 Purchase
Agreement shall be shared first by the Tranche A
Participants pro rata according to their respective
Outstanding Tranche A Participation Amounts at the time of
such payment and second, if any amounts remain after all
Outstanding Tranche A Participation Amounts are paid in
full, by the Tranche B Participants pro rata according to
their respective Outstanding Tranche B Participation
Amounts at the time of such payment.
(C) Each payment of the Outstanding Lease Amount
under Facility 2 derived from:
(1) the purchase price paid by a Designated
Purchaser to purchase the Facility 2 Property
pursuant to the Facility 2 Purchase Agreement;
(2) the Indemnity Amount paid by Lessee
pursuant to the Facility 2 Purchase Agreement;
(3) Casualty Proceeds or Condemnation
Proceeds related to any of the Facility 2
Property; or
(4) the purchase price paid by any other
Person to purchase the Facility 2 Property (whether
after the retention of the Facility 2 Property by
Lessor following the Facility 2 Expiration Date,
upon foreclosure or otherwise);
Shall be shared first by the Tranche B Participants pro
rata according to their respective Outstanding Tranche B
Participation Amounts at the time of such payment and
second, if any amounts remain after all Outstanding
Tranche B Participation Amounts are paid in full, by the
Tranche A Participants pro rata according to their
respective Outstanding Tranche A Participation Amounts at
the time of such payment.
(b) Base Rent. Each payment applied to Base Rent under either
Facility shall be shared by the Participants which funded the
Outstanding Lease Amount under such Facility pro rata 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.
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(c) Supplemental Rent. Each payment applied to Supplemental Rent
under either Facility shall be shared by the Lessor Parties as follows:
(i) Each payment applied to Agent's Fees shall be solely
for the account of Agent.
(ii) Each payment applied to Commitment Fees shall be shared
by the Participants pro rata according to (A) their respective
Proportionate Shares and (B) in the case of each Participant
which becomes a Participant hereunder after the date hereof, the
date upon which such Participant so became a Participant.
(iii) Each payment applied to the 364-Day Commitment Extension
Fee shall be shared by the Participants pro rata according to
their respective Proportionate Shares on the date of such
payment.
(iv) 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.
(v) 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.
(vi) All other payments under this Agreement and the other
Operative Documents shall be for the benefit of the Person or
Persons specified.
(d) Disproportionate Payments, Etc. If any Participant shall
obtain any payment (whether voluntary, involuntary, through the exercise
of any right of setoff, or otherwise) on account of amounts owed to it
in excess of its ratable share of payments on account of such amounts
obtained by all Participants entitled to such payments, such Participant
shall forthwith purchase from the other Participants such participations
in the payments to be made under the Operative Documents as shall be
necessary to cause such 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.
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(a) Place and Manner of Payments by Lessee. Lessee shall make all
payments due to any Lessor Party under this Agreement and the other
Operative Documents by payments to Agent, for the account of such
Person, at Agent's office, located at the address specified in Paragraph
7.01, with each payment due to a Participant to be for the account of
such Participant's Applicable Participating Office. Lessee shall make
all payments in lawful money of the United States and in same day or
immediately available funds not later than 11:00 a.m. on the date due.
Agent shall promptly disburse to the appropriate Person each such
payment received by Agent for such Person.
(b) Date. Whenever any payment due under this Agreement or any
other Operative Document shall fall due on a day other than a Business
Day, such payment shall be made on the next succeeding Business Day, and
such extension of time shall be included in the computation of Rent,
interest or fees, as the case may be.
(c) Late Payments. If any amounts required to be paid by Lessee
under this Agreement or any other Operative Document (including Rent,
interest, fees or other amounts) remain unpaid after such amounts are
due, Lessee shall pay interest on the aggregate, outstanding balance of
such amounts from the date due until those amounts are paid in full at a
per annum rate equal to the Base Rate plus two percent (2.0%), such rate
to change from time to time as the Base Rate shall change.
(d) Application of Payments. All payments under this Agreement
and the other Operative Documents on account of either Facility shall be
applied first to unpaid fees, costs and expenses then due and payable
under this Agreement or any other Operative Document on account of such
Facility, second to the accrued Base Rent then due and payable under
this Agreement or any other Operative Document on account of such
Facility and finally 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 either 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.
16
2.08. Commitment Reductions.
(a) Reduction or Cancellation of Commitments. Lessee may, at any
time prior to the 364-Day Commitment Termination Date in the case of the
364-Day Commitment or the Commitment Termination Date in the case of the
Two-Year Commitment, upon five (5) Business Days written notice to
Lessor, permanently reduce the 364-Day Commitment or Two-Year Commitment
by the amount of Five Million Dollars ($5,000,000) or an integral
multiple of One Million Dollars ($1,000,000) in excess thereof or cancel
the 364-Day Commitment or Two-Year Commitment in its entirety. Any
reduction of the 364-Day Commitment or Two-Year Commitment shall result
in a corresponding reduction of the Total Commitment.
(b) Effect of Commitment Reductions. From the effective date of
any reduction of the 364-Day Commitment or Two-Year Commitment, the
Commitment Fees shall be computed on the basis of the 364-Day Commitment
or Two-Year Commitment as so reduced. Once reduced or cancelled, the
364-Day Commitment, the Two-Year 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 364-Day Commitment,
Two-Year Commitment or Total Commitment pursuant to this Paragraph 2.08
shall be applied ratably to reduce each Participant's Commitment pro
rata in accordance with its Proportionate Share.
2.09. Extensions.
(a) 364-Day Commitment Extension. Lessee may request Lessor to
extend the 364-Day Commitment Termination Date for an additional period
of six (6) months by appropriately completing, executing and delivering
to Agent a written request in the form of Exhibit G(1) (a "364-Day
Commitment Extension Request"). Lessee shall deliver the 364-Day
Commitment Extension Request to Agent not more than three (3) months and
not less than two (2) months before the original 364-Day Commitment
Termination Date. Agent shall promptly deliver to Lessor and each
Participant three (3) copies of each 364-Day Commitment Extension
Request received by Agent. If Lessor or a Participant, in its sole and
absolute discretion, consents to the 364-Day Commitment Extension
Request, such Person shall evidence such consent by executing and
returning two (2) copies of the 364-Day 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 364-Day Commitment Termination
Date. Any failure by Lessor or any Participant so to execute and return
a 364-Day Commitment Extension Request shall be deemed a denial thereof.
If Lessee shall deliver a 364-Day 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 364-Day
Commitment Termination Date, Agent shall notify Lessee, Lessor and the
Participants in writing whether (i) Agent has received a copy of the
364-Day Commitment Extension Request executed by Lessor and each
Participant, in which case the definition of "364-Day Commitment
Termination Date" set forth in Subparagraph 2.01(i) of this Agreement
shall be deemed extended to the date which is sixE(6) months after the
original 364-Day Commitment Termination Date (subject to receipt by
Agent of the 364-Day Commitment Extension Fee), or (ii) Agent has not
received a copy of the 364-Day Commitment Extension Request executed by
Lessor and
17
each Participant, in which case such 364-Day 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 364-Day Commitment Termination Date at any time.
(b) Lease Extension. Lessee may request Lessor to extend the
original Scheduled Expiration Date of each Lease Agreement for an
additional period of three (3) years by appropriately completing,
executing and delivering to Agent a written request in the form of
Exhibit G(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 original Scheduled Expiration Date. Agent shall
promptly deliver to Lessor and each Participant three (3) copies of each
Lease Extension Request received by Agent. If Lessor or a Participant,
in its sole and absolute discretion, consents to a Lease Extension
Request, such Person shall evidence such consent by executing and
returning two (2) copies of such Lease Extension Request to Agent not
later than the last Business Day which is not less than seven (7) months
prior to the original Scheduled Expiration Date for the applicable Lease
Agreement. Any failure by Lessor or any Participant so to execute and
return a Lease Extension Request shall be deemed a denial thereof. If
Lessee shall deliver a Lease Extension Request to Lessor pursuant to the
first sentence of this Subparagraph 2.09(b), then not later than the
last Business Day which is not less than six (6) months prior to the
original Scheduled Expiration Date for the applicable Lease Agreement,
Agent shall notify Lessee, Lessor and the Participants in writing
whether (i) Agent has received a copy of the Lease Extension Request
executed by Lessor and each Participant, in which case the definition of
"Scheduled Expiration Date" set forth in Subparagraph 2.02(a) of the
applicable Lease Agreement shall be deemed extended to the date which is
three (3) years after the original Scheduled Expiration Date (subject to
the receipt by Agent of any amounts payable by Lessee in connection with
such extension), or (ii) Agent has not received a copy of the Lease
Extension Request executed by Lessor and each Participant, in which case
such Lease Extension Request shall be deemed denied. Lessee acknowledges
that neither Lessor nor any Participant has promised (either expressly
or implicitly), or has any obligation or commitment, to extend or
consent to the extension of the Scheduled Expiration Date for either
Lease Agreement at any time.
2.10. Nature of the Transactions. Lessee and the Lessor Parties intend
that the transactions evidenced by this Agreement and the other Operative
Documents constitute operating leases for accounting purposes and loans secured
by the Property for all other purposes, including federal, state and local
income tax purposes and commercial, real estate and bankruptcy law purposes. To
the extent that this Agreement and the other Operative Documents reflect the
lease form alone, they do so for convenience only. Lessee and the Lessor Parties
intend that the Operative Documents have the dual form referred to in the first
sentence of this paragraph, notwithstanding the use of the lease form alone.
(a) Tax Treatment. For purposes of all income, franchise and
other taxes imposed upon or measured by income, Lessee and Lessor
Parties intend that the transactions evidenced by the Operative
Documents shall be treated as loans by the Participants (through Lessor)
to Lessee secured by the Property, with Lessee as owner of
18
the Property. Lessee and the Lessor Parties may only take deductions,
credits, allowances and other reporting positions on their respective
returns, reports and statements which are consistent with such
treatment, unless required to do otherwise by an appropriate taxing
authority or after a clearly applicable change in applicable
Governmental Rules; provided, however, that if an appropriate taxing
authority or a clearly applicable change in applicable Governmental
Rules requires any Lessor Party to take such an inconsistent position,
such Lessor Party shall promptly notify Lessee.
(b) Other Legal Treatment. For purposes of commercial law, real
property law, 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 either Facility is treated as a loan by the Participants
(through Lessor) to Lessee secured by the Property for such
Facility, with Lessee as owner of such Property pursuant to
Paragraph 2.10, the Lessee Obligations under such Facility shall
be secured by such Property and the other Real Property
Collateral for such Facility and, in the case of Facility 2,
Personal Property Collateral for such Facility (collectively, the
"Property Collateral") as provided in Subparagraphs 2.07(a) and
2.07(b) of the applicable Lease Agreement and, in the case of
Facility 2, in an Assignment of Construction
19
Agreements in the form of Exhibit H, duly executed by Lessee
(the "Assignment of Construction Agreements").
(ii) In addition to the Property Collateral, the Lessee
Obligations may be secured, at Lessee's election, by a Cash
Collateral Agreement in the form of Exhibit I, duly executed by
Lessee (the "Cash Collateral Agreement"), and Cash Collateral
delivered to Agent or Participants pursuant to the Cash
Collateral Agreement. If Lessee elects to deliver any Cash
Collateral pursuant to the Cash Collateral Agreement to decrease
the Applicable Margin for the LIBOR Rental Rate, Lessee shall
deliver to Agent, five (5) Business Days' prior to the delivery
of such Cash Collateral, notice of such election and an opinion
of its counsel in form and substance reasonably satisfactory to
Lessor regarding the Cash Collateral Agreement and such Cash
Collateral and shall deliver such Cash Collateral only on a
Scheduled Rent Payment Date. Lessee may withdraw any Cash
Collateral held pursuant to the Cash Collateral Agreement only as
provided in the Cash Collateral Agreement.
(iii) Lessee shall deliver to Lessor and Agent such additional
mortgages, deeds of trust, security agreements, pledge
agreements, lessor consents and estoppels (containing appropriate
mortgagee and lender protection language) and other instruments,
agreements, certificates, opinions and documents (including
Uniform Commercial Code financing statements and fixture filings
and landlord waivers) as Lessor or Agent may reasonably request
to (A) grant, perfect, maintain, protect and evidence security
interests in favor of Lessor or Agent in the Property Collateral
and 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 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 Lease Agreement and Purchase
Agreement in the form of Exhibit J, duly executed by
Lessor (the "Assignment of Lease");
(B) A Construction Deed of Trust with Assignment of
Rents, Security Agreement and Fixture Filing in the form
of Exhibit K, duly executed by Lessor (the "Lessor Deed of
Trust"); and
(C) A Security Agreement in the form of Exhibit L,
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
20
appropriate mortgagee and lender protection language) and other
instruments, agreements, certificates, opinions and documents
(including Uniform Commercial Code financing statements and
fixture filings and landlord waivers) as Agent may reasonably
request to (A) grant, perfect, maintain, protect and evidence
security interests in favor of Agent in Lessor's rights in the
Property Collateral and Cash Collateral; and (B) otherwise
establish, maintain, protect and evidence the rights provided to
Agent in the Property Collateral and 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, (i) any Participant shall advise Agent that the
LIBOR Rental Rate for such Rental Period cannot be adequately and
reasonably determined due to the unavailability of funds in or other
circumstances affecting the London interbank market or (ii) any
Participant shall advise Agent that the LIBOR Rental Rate for such
Rental Period does not adequately and fairly reflect the cost to such
Participant of funding its portion of the Outstanding Lease Amount 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 Rental Period shall be the Alternate Rental Rate.
(b) Illegality. If, after the date of this Agreement, the
adoption of any Governmental Rule, any change in any Governmental Rule
or the application or requirements thereof (whether such change occurs
in accordance with the terms of such Governmental Rule as enacted, as a
result of amendment or otherwise), any change in the interpretation or
administration of any Governmental Rule by any Governmental Authority,
or compliance by Lessor or any Participant with any request or directive
(whether or not having the force of law) of any Governmental Authority
(a "Change of Law") shall make it unlawful or impossible for any
Participant to fund or maintain its portion of the Outstanding Lease
Amount under either Facility at the LIBOR Rental Rate, such Participant
shall immediately notify Agent and Agent shall immediately notify
Lessee, Lessor and the other Participants of such Change of Law. After
the giving of any such notice (and until Agent shall otherwise notify
Lessee and Lessor that such Change of Law is no longer in effect), the
LIBOR Rental Rate shall be unavailable and the Rental Rate under both
Facilities for each Rental Period shall be the Alternate Rental Rate.
(c) Increased Costs. If, after the date of this Agreement, any
Change of Law:
21
(i) Shall subject Lessor or any Participant to any tax,
duty or other charge with respect to the Outstanding Lease Amount
under either Facility, or shall change the basis of taxation of
Base Rent payments by Lessee to Lessor or any Participant under
this Agreement or any other Operative Document (except for
changes in the rate of taxation on the overall net income of
Lessor or any Participant imposed by its jurisdiction of
incorporation, the jurisdiction in which its principal executive
office is located or, in the case of any Participant, the
jurisdiction in which its Applicable Participating Office is
located); or
(ii) Shall impose, modify or hold applicable any reserve
(excluding any Reserve Requirement or other reserve to the extent
included in the calculation of the LIBOR Rental Rate), special
deposit or similar requirement against assets held by, deposits
or other liabilities in or for the account of, advances or loans
by, or any other acquisition of funds by Lessor or any
Participant for its portion of the Outstanding Lease Amount under
either Facility; or
(iii) Shall impose on Lessor or any Participant any other
condition related to the Outstanding Lease Amount under either
Facility, Base Rent under either Facility or Lessor's or such
Participant's commitments hereunder;
And the effect of any of the foregoing is to increase the cost to Lessor
or such Participant of funding or maintaining its portion of the
Outstanding Lease Amount under either Facility or commitments or to
reduce any amount receivable by Lessor or such Participant hereunder;
then Lessee shall from time to time within five (5) Business Days after
demand by Lessor or such Participant, pay to Lessor or such Participant
additional amounts sufficient to reimburse Lessor or such Participant
for such increased costs or to compensate Lessor or such Participant for
such reduced amounts. A certificate as to the amount of such increased
costs or reduced amounts, submitted by Lessor or such Participant to
Lessee shall, in the absence of manifest error, be conclusive and
binding on Lessee for all purposes. 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, in
the absence of manifest error, be conclusive and binding on Lessee for
all purposes. The
22
obligations of Lessee under this Subparagraph 2.12(d) shall survive
the payment and performance of the Lessee Obligations and the
termination of this Agreement.
(e) Mitigation. If Lessor or any Participant becomes aware of (i)
any Change of Law which will make it unlawful or impossible for such
Person to fund or maintain its portion of the Outstanding Lease Amount
under either Facility at the LIBOR Rental Rate or (ii) any Change of Law
or other event or condition which will obligate Lessee to pay any amount
pursuant to Subparagraph 2.12(c) or Subparagraph 2.12(d), such Person
shall notify Lessee and Agent 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 Agent thereof as promptly as practical. Each Person affected by any
Change of Law which makes it unlawful or impossible for such Person to
fund or maintain its portion of the Outstanding Lease Amount under
either Facility at the LIBOR Rental Rate or to which Lessee 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 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 or contrary to such
Person's normal banking practices.
2.13. Taxes on Payments.
(a) Payments Free of Taxes. All payments made by Lessee under
this Agreement and the other Operative Documents shall be made free and
clear of, and without deduction or withholding for or on account of, any
present or future Indemnified Taxes, now or hereafter imposed, levied,
collected, withheld or assessed by any Governmental Authority. If any
Indemnified Taxes are required to be withheld from any amounts payable
to any Lessor Party hereunder or under the other Operative Documents,
the amounts so payable to such Lessor Party shall be increased to the
extent necessary to yield to such Lessor Party (after payment of all
Indemnified Taxes) the Base Rent or any such other amounts payable
hereunder at the rates or in the amounts specified in this Agreement and
the other Operative Documents. Whenever any Indemnified Taxes are
payable by Lessee, as promptly as possible thereafter, Lessee shall send
to Agent for its own account or for the account of Lessor or such
Participant, as the case may be, a certified copy of an original
official receipt received by Lessee showing payment thereof. If Lessee
fails to pay any Indemnified Taxes when due to the appropriate taxing
authority or fails to remit to Agent the required receipts or other
required documentary evidence, Lessee shall indemnify the Lessor Parties
for any incremental taxes, interest or penalties that may become payable
by the Lessor Parties as a result of any such failure. The obligations
of Lessee under this Subparagraph 2.13(a) shall survive the payment and
performance of the Lessee Obligations and the termination of this
Agreement.
(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
23
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 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 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
Agent a Form 1001 or 4224 pursuant to the immediately preceding sentence
further undertakes to deliver to Lessee and Agent 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 Agent, and such extensions or renewals
thereof as may reasonably be requested by Lessee or Agent, 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 Agent that it is not
capable of receiving payments without any deduction or withholding of
United States federal income tax.
(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 (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 or contrary to such Person's normal
banking practices.
(d) Tax Returns. Nothing contained in this Paragraph 2.13 shall
require any Lessor Party to make available any of its tax returns (or
any other information relating to its taxes which it deems to be
confidential).
2.14. Funding Loss Indemnification. If Lessee shall (a) pay any portion
of the Outstanding Lease Amount under either Facility on any day other than the
last day of a Rental Period (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), Lessee shall, upon 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
24
Person demanding payment under this Paragraph 2.14 shall deliver to Lessee, with
a copy to Agent, a certificate setting forth the amount of costs and losses for
which demand is made, which certificate shall set forth in reasonable detail the
calculation of the amount demanded. Such a certificate so delivered to Lessee
shall constitute prima facie evidence of such costs and losses. The obligations
of Lessee under this Paragraph 2.14 shall survive the payment and performance of
the Lessee Obligations and the termination of this Agreement.
2.15. Replacement of Participants. If any Participant shall (a) become a
Defaulting Participant more than two (2) times 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 Required Participants, or (d)
demand any payment under Subparagraph 2.12(c), 2.12(d) or 2.13(a) for a reason
which is not applicable to Required Participants, 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 financial institution (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 or should have known of the
occurrence of the event or events giving rise to such right, and no Lessor Party
shall have any obligation to identify or locate a replacement Participant for
Lessee. Upon receipt by any affected Participant of a written notice from Agent
stating that Agent is exercising the replacement right set forth in this
Paragraph 2.15, such affected Participant shall sell and assign all of its
rights and obligations under this Agreement and the other Operative Documents to
the replacement Participant pursuant to an Assignment Agreement and Subparagraph
7.05(b) for a purchase price equal to the sum of its portion of the Outstanding
Lease Amount, the accrued and unpaid portion of the Base Rent relating to such
portion and its ratable share of all fees to which it is entitled.
SECTION III. CONDITIONS PRECEDENT.
3.01. Initial Acquisition Advance. The obligation of Lessor to make the
initial Acquisition Advance (and the obligations of the Participants to fund
their respective Proportionate Shares of the Acquisition Advance) 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. Each Acquisition Advance. The obligation of Lessor to make each
Acquisition Advance (including the initial Acquisition Advance) for each Tract
of Property (and the obligations of the Participants to fund their respective
Proportionate Shares of each such Acquisition Advance) is (are) subject to (a)
satisfaction of the conditions set forth in Paragraph 3.01; and (b) receipt by
Agent, on or prior to the applicable Acquisition Date, of each item listed in
Schedule 3.02 for such Tract, each in form and substance satisfactory to Lessor,
Agent and each Participant, and with sufficient copies for, Lessor, Agent and
each Participant.
25
3.03. Improvement/Expense Advances. The obligation of Lessor to make
each Improvement/Expense Advance for each Tract of Property (and the obligations
of the Participants to fund their respective Proportionate Shares of such
Advance) is (are) subject to (a) satisfaction of the conditions set forth in
Paragraph 3.01; (b) satisfaction of the conditions set forth in Paragraph 3.02
for such Tract; (c) receipt by Agent pursuant to Paragraph 2.03 of the Advance
Request for such Advance, appropriately completed and duly executed by Lessee;
and (d) receipt by Agent of date-down endorsements to Agent's and Lessor's title
insurance policies covering such Tract or binders acceptable to Agent and
Lessor.
3.04. Other Conditions Precedent. The occurrence of each Credit Event
(including the making of each Advance by Lessor and the funding of each Advance
by the Participants) is subject to the further conditions that, on the date such
Credit Event is to occur and after giving effect to such Credit Event, the
following shall be true and correct:
(a) The representations and warranties of Lessee set forth in
Paragraph 4.01 and in the other Operative Documents are true and correct
in all material respects as if made on such date (except for
representations and warranties expressly made as of a specified date,
which shall be true as of such date);
(b) No Default has occurred and is continuing or will result from
such Credit Event; and
(c) All of the Operative Documents are in full force and effect.
The submission by Lessee to Lessor and Agent of each Advance Request, each
Notice of Rental Period Selection and a Notice of Marketing Option Exercise
shall be deemed to be a representation and warranty by Lessee that each of the
statements set forth above in this Paragraph 3.04 is true and correct as of the
date of such request and notice.
3.05. 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 IV. 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 warranties 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
26
jurisdiction where the failure to be so qualified or licensed is
reasonably likely to have a Material Adverse Effect.
(b) Authority. The execution, delivery and performance by Lessee
of each Operative Document executed, or to be executed, by Lessee and
the consummation of the transactions contemplated thereby (i) are within
the power of Lessee and (ii) have been duly authorized by all necessary
actions on the part of Lessee.
(c) Enforceability. Each Operative Document executed, or to be
executed, by Lessee has been, or will be, duly executed and delivered by
Lessee and constitutes, or will constitute, a legal, valid and binding
obligation of Lessee, enforceable against Lessee in accordance with its
terms, except as limited by bankruptcy, insolvency or other laws of
general application relating to or affecting the enforcement of
creditors' rights generally and general principles of equity.
(d) Non-Contravention. The execution and delivery by Lessee of
the Operative Documents executed by Lessee and the performance and
consummation of the transactions contemplated thereby do not (i) violate
any Requirement of Law applicable to Lessee; (ii) violate any provision
of, or result in the breach or the acceleration of, or entitle any other
Person to accelerate (whether after the giving of notice or lapse of
time or both), any Contractual Obligation of Lessee; or (iii) result in
the creation or imposition of any Lien (or the obligation to create or
impose any Lien) upon any property, asset or revenue of Lessee (except
such Liens as may be created in favor of Lessor or Agent pursuant to
this Agreement or the other Operative Documents).
(e) Approvals. No consent, approval, order or authorization of,
or registration, declaration or filing with, any Governmental Authority
or other Person (including, without limitation, the shareholders of any
Person) is required in connection with the execution and delivery of the
Operative Documents executed by Lessee and the performance and
consummation by Lessee of the transactions contemplated thereby, except
such as have been made or obtained and are in full force and effect.
(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 (with estimates of the dollar
amounts involved) in Schedule 4.01(g), no actions (including, without
limitation, derivative actions), suits, proceedings or investigations
are pending or, to the knowledge of Lessee,
27
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. Lessee and its Subsidiaries
own and have good and marketable title, or a valid leasehold interest
in, all their respective properties and assets as reflected in the most
recent Financial Statements delivered to Agent (except those assets and
properties disposed of in the ordinary course of business or otherwise
in compliance with this Agreement since the date of such Financial
Statements) and all respective assets and properties acquired by Lessee
and its Subsidiaries since such date (except those disposed of in the
ordinary course of business or otherwise in compliance with this
Agreement), except in any case where the failure so to own or to have
such title is not reasonably likely to have a Material Adverse Effect.
Such assets and properties are subject to no Lien, except for Permitted
Liens. Each of Lessee and its Subsidiaries has complied with all
material obligations under all material leases to which it is a party
and all such leases are in full force and effect. Each of Lessee and its
Subsidiaries enjoys peaceful and undisturbed possession under such
leases.
(i) Financial Statements. The Financial Statements of Lessee and
its Subsidiaries which have been delivered to Agent, (i) are in
accordance with the books and records of Lessee and its Subsidiaries,
which have been maintained in accordance with good business practice;
(ii) have been prepared in conformity with GAAP; and (iii) fairly
present the financial conditions and results of operations of Lessee and
its Subsidiaries as of the date thereof and for the period covered
thereby. Neither Lessee nor any of its Subsidiaries has any Contingent
Obligations, liability for taxes or other outstanding obligations which
are material in the aggregate, except as disclosed in the audited
Financial Statements dated December 31, 1996, furnished by Lessee to
Agent prior to the date hereof, or in the Financial Statements delivered
to Agent pursuant to clause (i) or (ii) of Subparagraph 5.01(a).
(j) Equity Securities. All outstanding Equity Securities of
Lessee are duly authorized, validly issued, fully paid and
non-assessable. All Equity Securities of Lessee have been offered and
sold in compliance with all federal and state securities laws and all
other Requirements of Law.
(k) No Agreements to Sell Assets; Etc. Neither Lessee nor any of
its Subsidiaries has any legal obligation, absolute or contingent, to
any Person to sell the assets of Lessee or any of its Subsidiaries
(other than sales in the ordinary course of business), or to effect any
merger, consolidation or other reorganization of Lessee or any of its
Subsidiaries or to enter into any agreement with respect thereto, except
for sales permitted by Subparagraph 5.02(c).
(l) Employee Benefit Plans.
(i) Based on the latest valuation of each Employee Benefit
Plan that either Lessee or any ERISA Affiliate maintains or
contributes to, or has any
28
obligation under (which occurred within twelve months of the
date of this representation), the aggregate benefit liabilities
of such plan within the meaning of ss. 4001 of ERISA did not
exceed the aggregate value of the assets of such plan. 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),
other than liability for health plan continuation coverage
described in Part 6 of Title I(B) of ERISA, which liability for
health plan contribution coverage is not reasonably likely to
have a Material Adverse Effect.
(ii) Each Employee Benefit Plan complies, in both form and
operation, in all material respects, with its terms, ERISA and
the IRC, and no condition exists or event has occurred with
respect to any such plan which would result in the incurrence by
either Lessee or any ERISA Affiliate of any material liability,
fine or penalty. Each Employee Benefit Plan, related trust
agreement, arrangement and commitment of Lessee or any ERISA
Affiliate is legally valid and binding and in full force and
effect. No Employee Benefit Plan is being audited or investigated
by any government agency or is subject to any pending or
threatened claim or suit. Neither Lessee nor any ERISA Affiliate
nor any fiduciary of any Employee Benefit Plan has engaged in a
prohibited transaction under section 406 of ERISA or section 4975
of the IRC.
(iii) Neither Lessee nor any ERISA Affiliate contributes to or
has any material contingent obligations to any Multiemployer
Plan. Neither Lessee nor 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. 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.
(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,
29
if any, which are being contested in good faith and as to which adequate
reserves (determined in accordance with GAAP) have been provided or
which are not reasonably likely to have a Material Adverse Effect if
unpaid.
(p) Margin Stock. Lessee owns no Margin Stock which, in the
aggregate, would constitute a substantial part of the assets of Lessee,
and no proceeds of any Loan will be used to purchase or carry, directly
or indirectly, any Margin Stock or to extend credit, directly or
indirectly, to any Person for the purpose of purchasing or carrying any
Margin Stock.
(q) Subsidiaries, etc. Set forth in Schedule 4.01(q) (as
supplemented by Lessee from time to time in a written notice to Agent)
is a complete list of all of Lessee's Subsidiaries, the jurisdiction of
incorporation of each, the classes of Equity Securities of each and the
number of shares and percentages of shares of each such class owned
directly or indirectly by Lessee. Except for such Subsidiaries, Lessee
has no Subsidiaries, is not a partner in any partnership or a joint
venturer in any joint venture.
(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 Tract set forth in Parts 1 - 6 of Schedule 4.01(t) are true and
correct. The following representations and warranties apply to all of
the Property:
(i) All of the Property complies and will comply at all
times (whether before commencement of any construction, during
any construction or after completion of construction of any New
Improvements) with all applicable Governmental Rules (including
Title III of the Americans with Disabilities Act; Environmental
Laws; and zoning, land use, building, planning and fire laws,
rules, regulations and codes) and Insurance Requirements, except
for violations which are not reasonably likely to have a Material
Adverse Effect. None of the Property is or has been a site for
the use, generation, manufacture, storage, treatment, release,
discharge, disposal or transportation of any Hazardous Materials,
and no Hazardous Materials (except as set forth in Schedule 1 to
each Lease Agreement) are located on any of the Property. There
are no claims or actions 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.
30
(ii) None of the Improvements (whether before commencement of
any construction, during any construction or after completion of
construction of any New Improvements) encroach or will at any
time encroach in any manner onto any adjoining land, except as
permitted by express written and recorded encroachment agreements
approved by Agent or as affirmatively insured against by
appropriate title insurance.
(iii) All licenses, approvals, authorizations, consents,
permits, easements and rights-of-way required for the use of any
of the Property have been obtained or, if not yet required, will
be obtained before required.
(iv) After the purchase of each Tract of Property on the
Acquisition Date therefor, Lessor will have good and valid fee
simple title to such Property, subject to no Liens except for
Permitted Property Liens.
(u) Chief Place of Business. Lessee's chief place of business is
located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇.
(v) Accuracy of Information Furnished. None of the Operative
Documents and none of the other certificates, statements or information
furnished to Lessor, Agent or any Participant 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. Lessor is an indirect, wholly-owned
Subsidiary of ABN AMRO.
(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.
31
(c) Enforceability. Each Operative Document executed, or to be
executed, by Lessor has been, or will be, duly executed and delivered by
Lessor and constitutes, or will constitute, a legal, valid and binding
obligation of Lessor, enforceable against Lessor in accordance with its
terms, except as limited by bankruptcy, insolvency or other laws of
general application relating to or affecting the enforcement of
creditors' rights generally and general principles of equity.
(d) Non-Contravention. The execution and delivery by Lessor of
the Operative Documents executed by Lessor and the performance and
consummation of the transactions contemplated thereby do not (i) violate
any Requirement of Law applicable to Lessor; (ii) violate any provision
of, or result in the breach or the acceleration of, or entitle any other
Person to accelerate (whether after the giving of notice or lapse of
time or both), any Contractual Obligation of Lessor; or (iii) result in
the creation or imposition of any Lien (or the obligation to create or
impose any Lien) upon any property, asset or revenue of Lessor (except
such Liens as may be created in favor of Agent pursuant to this
Agreement or the other Operative Documents).
(e) Approvals. No consent, approval, order or authorization of,
or registration, declaration or filing with, any Governmental Authority
or other Person (including, without limitation, the shareholders of any
Person) is required in connection with the execution and delivery of the
Operative Documents executed by Lessor and the performance and
consummation of the transactions contemplated thereby, except such as
have been made or obtained and are in full force and effect.
(f) Litigation. No actions (including, without limitation,
derivative actions), suits, proceedings or investigations are pending
or, to the knowledge of Lessor, threatened against Lessor at law or in
equity in any court or before any other Governmental Authority which (i)
is reasonably likely (alone or in the aggregate) to materially and
adversely affect the ability of Lessor to perform its obligations under
the Operative Documents to which it is a party or (ii) seeks to enjoin,
either directly or indirectly, the execution, delivery or performance by
Lessor of the Operative Documents or the transactions contemplated
thereby.
(g) Other Regulations. Lessor is not subject to regulation under
the Investment Company Act of 1940, the Public Utility Holding Company
Act of 1935, the Federal Power Act, the Interstate Commerce Act, any
state public utilities code or to any other Governmental Rule limiting
its ability to incur indebtedness.
(h) Chief Place of Business. Lessor's chief place of business is
located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇.
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 state of
32
incorporation and (ii) has the power and authority to own, lease and
operate its properties and carry on its business as now conducted.
(b) Authority. The execution, delivery and performance by such
Participant of each Operative Document executed, or to be executed, by
such Participant and the consummation of the transactions contemplated
thereby (i) are within the power of such Participant and (ii) have been
duly authorized by all necessary actions on the part of such
Participant.
(c) Enforceability. Each Operative Document executed, or to be
executed, by such Participant has been, or will be, duly executed and
delivered by such Participant and constitutes, or will constitute, a
legal, valid and binding obligation of such Participant, enforceable
against such Participant in accordance with its terms, except as limited
by 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
33
so only in compliance with the Securities Act of 1933 and the rules and
regulations of the Securities and Exchange Commission thereunder and any
applicable state securities laws.
SECTION V. 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, the
following, each in such form and such detail as Agent, Lessor or the
Required Participants shall reasonably request:
(i) As soon as available and in no event later than fifty
(50) days after the last day of each fiscal quarter of Lessee
(other than the last quarter in any fiscal year), a copy of the
Financial Statements of Lessee and its Subsidiaries (prepared on
a consolidated basis) for such quarter and for the fiscal year to
date, certified by the president or chief financial officer of
Lessee to present fairly the financial condition, results of
operations and other information reflected therein and to have
been prepared in accordance with GAAP (subject to normal year-end
audit adjustments);
(ii) As soon as available and in no event later than one
hundred (100) days after the close of each fiscal year of Lessee,
(A) copies of the audited Financial Statements of Lessee and its
Subsidiaries (prepared on a consolidated basis) for such year,
prepared by Ernst & Young or by other independent certified
public accountants of recognized national standing acceptable to
Agent, (B) copies of the unqualified opinions (or qualified
opinions reasonably acceptable to Required Participants) and
management letters delivered by such accountants in connection
with all such Financial Statements and (C) certificates of such
accountants to Agent stating that in making the examination
necessary for their opinion they have reviewed this Agreement and
have obtained no knowledge of any Default which has occurred and
is continuing, or if, in the opinion of such accountants, a
Default has occurred and is continuing, a statement as to the
nature thereof;
(iii) Contemporaneously with the quarterly and year-end
Financial Statements required by the foregoing clauses (i) and
(ii), a compliance certificate of the president or chief
financial officer of Lessee which (A) states that no Default has
occurred and is continuing, or, if any such Default has occurred
and is continuing, a statement as to the nature thereof and what
action Lessee proposes to take with respect thereto and (B) sets
forth, for the quarter or year covered by such Financial
Statements or as of the last day of such quarter or year (as the
case may be), the calculation of the financial ratios and tests
provided in Paragraph 5.03;
(iv) As soon as available and in no event later than fifty
(50) days after the last day of each fiscal quarter of Lessee, a
certificate of the chief financial officer of
34
Lessee which sets forth the calculation of the Funded
Indebtedness/EBITDA Ratio for the consecutive four-quarter
period ending on such day;
(v) As soon as possible and in no event later than five (5)
Business Days after any Senior Officer of Lessee knows of the
occurrence or existence of (A) any Reportable Event 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 $2,500,000 or more
(alone or in the aggregate); (C) any other event or condition
which is reasonably likely to have a Material Adverse Effect; or
(D) any Default; the statement of the president or chief
financial officer of Lessee setting forth details of such event,
condition or Default and the action which Lessee proposes to take
with respect thereto;
(vi) As soon as available and in no event later than five (5)
Business Days after they are sent, made available or filed,
copies of (A) all registration statements and reports filed by
Lessee or any of its Subsidiaries with any securities exchange or
the Securities and Exchange Commission (including, without
limitation, all 10-Q, 10-K and 8-Q reports); (B) all reports,
proxy statements and financial statements sent or made available
by Lessee or any of its Subsidiaries to its security holders; and
(C) all press releases and other similar public concerning any
material developments in the business of Lessee or any of its
Subsidiaries made available by Lessee or any of its Subsidiaries
to the public generally;
(vii) As soon as available and in no event later than five (5)
Business Days after they are filed, copies of all IRS Form 5500
reports for all Employee Benefit Plans required to file such
form;
(viii) As soon as available and in no event later than ten (10)
days before the first day of each fiscal year of Lessee, the
consolidated plan and forecast of Lessee and its Subsidiaries for
such fiscal year, including quarterly cash flow projections and
quarterly projections of Lessee's compliance with each of the
covenants set forth in Paragraph 5.03;
(ix) As soon as possible and in no event later than (A) ten
(10) days prior to the acquisition by Lessee or any of its
Subsidiaries of any new Subsidiary or all or substantially all of
the assets of any other Person, written notice thereof; and
(x) 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
35
clause (vi) of a copy of the Form 10-K report filed by Lessee with the
Securities and Exchange Commission for any year shall satisfy the
requirements of clause (ii)(A) for such year, provided that such reports
are required to contain the same information as required by clause (i)
and clause (ii)(A), respectively.
(b) Books and Records. Lessee and its Subsidiaries shall at all
times keep proper books of record and account in which full, true and
correct entries will be made of their transactions in accordance with
GAAP.
(c) Inspections. Lessee and its Subsidiaries shall permit any
Person designated by any Participant, upon reasonable notice and during
normal business hours, to visit and inspect any of the properties and
offices of Lessee and its Subsidiaries, to examine the books and records
of Lessee and its Subsidiaries and make copies thereof and to discuss
the affairs, finances and business of Lessee and its Subsidiaries with,
and to be advised as to the same by, their officers, auditors and
accountants, all at such times and intervals as any Participant may
reasonably request.
(d) Insurance. In addition to the insurance requirements set
forth in the Lease Agreement with respect to the property, Lessee and
its Subsidiaries shall:
(i) Carry and maintain insurance of the types and in the
amounts customarily carried from time to time during the term of
this Agreement by others engaged in substantially the same
business as such Person and operating in the same geographic area
as such Person, including, but not limited to, fire, public
liability, property damage and worker's compensation; and
(ii) Carry and maintain each policy for such insurance with
financially sound insurers.
(e) Governmental Charges and Other Indebtedness. Lessee and its
Subsidiaries shall promptly pay and discharge when due (i) all taxes and
other Governmental Charges prior to the date upon which penalties accrue
thereon, (ii) all indebtedness which, if unpaid, could become a Lien
upon the property of Lessee or its Subsidiaries and (iii) subject to any
subordination provisions applicable thereto, all other Indebtedness
which, if unpaid, is reasonably likely to have a Material Adverse
Effect, except such 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 G, 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
36
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 shallEmaintain its chief executive office and principal place of
business in the United States and shall not relocate its chief executive
office or principal place of business outside of California except upon
not less than thirty (30) days prior written notice to Agent.
5.02. Lessee's Negative Covenants. Until the termination of this
Agreement and the satisfaction in full by Lessee of all Lessee Obligations,
Lessee will comply, and will cause compliance, with the following negative
covenants, unless Lessor and Required Participants shall otherwise consent in
writing:
(a) Indebtedness. Neither Lessee nor any of its Subsidiaries
shall create, incur, assume or permit to exist any Indebtedness except
for the following ("Permitted Indebtedness"):
(i) The Lessee Obligations under the Operative Documents;
(ii) The Related Credit Obligations;
(iii) Indebtedness of Lessee and its Subsidiaries listed in
Schedule 5.02(a) and existing on the date of this Agreement;
(iv) Indebtedness of Lessee and its Subsidiaries arising from
the endorsement of instruments for collection in the ordinary
course of Lessee's or a Subsidiary's business;
(v) Indebtedness of Lessee and its Subsidiaries for trade
accounts payable, provided that (A) such accounts arise in the
ordinary course of business and (B) no material part of any such
account is more than ninety (90) days past due (unless subject to
a bona fide dispute and for which adequate reserves as required
by GAAP have been established);
(vi) Indebtedness of Lessee and its Subsidiaries under Rate
Contracts, provided that all such Rate Contracts are entered into
in connection with bona fide hedging operations and not for
speculation;
(vii) Indebtedness of Lessee and its Subsidiaries under
purchase money loans and Capital Leases incurred by Lessee or any
of its Subsidiaries to finance the acquisition by such Person of
real property, fixtures or equipment provided that in each case,
(A) such Indebtedness is incurred by such Person at the time of,
or not later than thirty (30) days after, the acquisition by such
Person of the property so financed, (B) such Indebtedness does
not exceed the purchase price of the property so financed, and
(C) no Default has occurred and is continuing at the
37
time such Indebtedness is incurred or will occur after giving
effect to such Indebtedness;
(viii) Indebtedness of Lessee and its Subsidiaries under
initial or successive refinancings of any Indebtedness permitted
by clause (iii) above, provided that (A) the principal amount of
any such refinancing does not exceed the principal amount of the
Indebtedness being refinanced (except to the extent otherwise
permitted by clause (x) below) and (B) the material terms and
provisions of any such refinancing (including maturity,
redemption, prepayment, default and subordination provisions) are
no less favorable to the Participants than the Indebtedness being
refinanced;
(ix) Indebtedness of Lessee and its Subsidiaries with respect
to surety, appeal, indemnity, performance or other similar bonds
in the ordinary course of business; and
(x) Other Indebtedness of Lessee and its Subsidiaries,
provided that the aggregate principal amount of all such other
Indebtedness does not exceed $25,000,000 at any time.
(b) Liens. Neither Lessee nor any of its Subsidiaries shall
create, incur, assume or permit to exist any Lien on or with respect to
any of its assets or property of any character, whether now owned or
hereafter acquired, except for the following ("Permitted Liens"):
(i) Liens in favor of Lessor, Agent or any Participant
securing the Lessee Obligations;
(ii) Liens in favor of Agent or any Participant securing the
Related Credit Obligations;
(iii) Liens listed in Schedule 5.02(b) and existing on the
date of this Agreement;
(iv) Liens for taxes or other Governmental Charges not at the
time delinquent or thereafter payable without penalty or being
contested in good faith, provided that adequate reserves for the
payment thereof as required by GAAP have been established;
(v) Liens of carriers, warehousemen, mechanics, materialmen,
vendors, and landlords and other similar Liens imposed by law
incurred in the ordinary course of business for sums not overdue
or being contested in good faith, provided that adequate reserves
for the payment thereof as required by GAAP have been
established;
(vi) Deposits under workers' compensation, unemployment
insurance and social security laws or to secure the performance
of bids, tenders, contracts (other than for the repayment of
borrowed money) or leases, or to secure statutory
38
obligations of surety or appeal bonds or to secure indemnity,
performance or other similar bonds in the ordinary course of
business;
(vii) Zoning restrictions, easements, rights-of-way, title
irregularities and other similar encumbrances, which alone or in
the aggregate are not substantial in amount and do not materially
detract from the value of the property subject thereto or
interfere with the ordinary conduct of the business of Lessee or
any of its Subsidiaries;
(viii) Banker's Liens and similar Liens (including set-off
rights) in respect of bank deposits;
(ix) Liens on property or assets of any corporation which
becomes a Subsidiary of Lessee or on any property or assets
acquired by Lessee or any of its Subsidiaries after the date of
this Agreement, provided that (A) such Liens exist at the time
the stock of such corporation or such assets or property is or
are acquired by Lessee and (B) such Liens were not created in
contemplation of such acquisition by Lessee;
(x) Judgement Liens, provided that such Liens do not have a
value in excess of $2,500,000 or such Liens are released, stayed,
vacated or otherwise dismissed within twenty (20) days after
issue or levy and, if so stayed, such stay is not thereafter
removed;
(xi) Rights of vendors or lessors under conditional sale
agreements, Capital Leases or other title retention agreements,
provided that, in each case, (A) such rights secure or otherwise
relate to Permitted Indebtedness, (B) such rights do not extend
to any property other than property acquired with the proceeds of
such Permitted Indebtedness and (C) such rights do not secure any
Indebtedness other than such Permitted Indebtedness;
(xii) Liens in favor of customs and revenue authorities
arising as a matter of law to secure payment of customs duties
and in connection with the importation of goods in the ordinary
course of Lessee's and its Subsidiaries' businesses;
(xiii) Liens securing Indebtedness which constitutes Permitted
Indebtedness under clause (vii) of Subparagraph 5.02(a) provided
that, in each case, such Lien (A) covers only those assets, the
acquisition of which was financed by such Permitted Indebtedness,
and (B) secures only such Permitted Indebtedness;
(xiv) Liens on the property or assets of any Subsidiary of
Lessee in favor of Lessee or any other Subsidiary of Lessee;
(xv) Liens incurred in connection with the extension, renewal
or refinancing of the Indebtedness secured by the Liens described
in clause (iii) above, provided that any extension, renewal or
replacement Lien (A) is limited to the property covered by the
existing Lien and (B) secures Indebtedness which is no greater in
39
amount and has material terms no less favorable to the
Participants than the Indebtedness secured by the existing Lien;
(xvi) Liens on insurance proceeds in favor of insurance
companies with respect to the financing of insurance premiums;
(xvii) Permitted Property Liens in the Property; and
(xviii) Other Liens on the property of Lessee and its
Subsidiaries, provided that the aggregate principal amount of all
Indebtedness secured by such other Liens does not exceed at any
time ten percent (10%) of the consolidated total assets of Lessee
and its Subsidiaries at such time.
(c) Asset Dispositions. Neither Lessee nor any of its
Subsidiaries shall sell, lease, transfer or otherwise dispose of any of
its assets or property, whether now owned or hereafter acquired, except
for the following:
(i) Sales of inventory by Lessee and its Subsidiaries in the
ordinary course of their businesses;
(ii) Sales of surplus, damaged, worn or obsolete equipment or
inventory for not less than fair market value;
(iii) Sales or other dispositions of Investments permitted by
clauses (i) and (iii) of Subparagraph 5.02(e) for not less than
fair market value;
(iv) Sales or assignments of defaulted receivables to a
collection agency in the ordinary course of business;
(v) Licenses by Lessee or its Subsidiaries of its patents,
copyrights, trademarks, trade names and service marks in the
ordinary course of its business provided that, in each case, the
terms of the transaction are terms which then would prevail in
the market for similar transactions between unaffiliated parties
dealing at arm's length;
(vi) Sales or other dispositions of assets and property by
Lessee to any of Lessee's Subsidiaries or by any of Lessee's
Subsidiaries to Lessee or any of its other Subsidiaries, provided
that the terms of any such sales or other dispositions by or to
Lessee are terms which are no less favorable to Lessee then would
prevail in the market for similar transactions between
unaffiliated parties dealing at arm's length;
(vii) Sales of accounts receivable of Lessee and its
Subsidiaries, provided that (A) each such sale is (1) for not
less than fair market value and (2) for cash, and (B) the
aggregate book value of all such accounts receivable so sold in
any consecutive four-quarter period does not exceed ten percent
(10%) of the consolidated total accounts receivable of Lessee and
its Subsidiaries on the last day immediately preceding such
four-quarter period; and
40
(viii) Other sales, leases, transfers and disposals of assets
and property for not less than fair market value, provided that
the aggregate book value of all such assets and property so sold,
leased, transferred or otherwise disposed of in any consecutive
four-quarter period does not exceed five percent (5%) of the
consolidated total assets of Lessee and its Subsidiaries on the
last day immediately preceding such four-quarter period.
(d) Mergers, Acquisitions, Etc. Neither Lessee nor any of its
Subsidiaries shall consolidate with or merge into any other Person or
permit any other Person to merge into it, establish any new Subsidiary,
acquire any Person as a new Subsidiary or acquire all or substantially
all of the assets of any other Person, except for the following:
(i) Any Subsidiary of Lessee may merge or consolidate with
any other Subsidiary of Lessee;
(ii) Any Subsidiary of Lessee may merge or consolidate with
Lessee, provided that Lessee is the surviving corporation; and
(iii) Lessee may merge or consolidate with any other
corporation, establish a new Subsidiary, acquire any Person as a
new Subsidiary or acquire all or substantially all of the assets
of any other Person, provided that:
(A) In the case of any merger or consolidation,
either (1) Lessee is the surviving corporation or (2) the
surviving corporation (y) is a Solvent United States
corporation with a financial condition equal to or better
than the financial condition of Lessee immediately prior
to such merger or consolidation and (z) assumes all of the
Lessee Obligations in a manner reasonably acceptable to
the Required Participants;
(B) No Default has occurred and is continuing at
the time of such merger, consolidation, establishment or
acquisition or will occur after giving effect to such
merger, consolidation or acquisition; and
(C) The aggregate cost of any such merger,
consolidation, establishment or acquisition does not
exceed the amounts permitted under Subparagraph
5.02(e)(iv).
(e) Investments. Neither Lessee nor any of its Subsidiaries shall
make any Investment except for Investments in the following:
(i) Investments of Lessee and its Subsidiaries in Cash
Equivalents;
(ii) Any transaction permitted by Subparagraph 5.02(a);
(iii) Money market mutual funds registered with the Securities
and Exchange Commission, meeting the requirements of Rule 2a-7
promulgated under the Investment Company Act of 1940;
41
(iii) Investments listed in Schedule 5.02(e) existing on the
date of this Agreement; and
(iv) Other Investments, provided that the aggregate amount of
such other Investments plus the aggregate cost of all mergers and
consolidations consummated, Subsidiaries established and
Subsidiaries and assets acquired by Lessee pursuant to
Subparagraph 5.02(d) does not exceed in any fiscal year
(A)$100,000,000 for any amounts paid in cash and
(B)$500,000,000 for any amounts paid with shares of common stock
of Lessee (as determined according to the stock price of such
shares on the date of transfer) and accounted for on a pooling
basis in accordance with GAAP.
(f) Dividends, Redemptions, Etc. Neither Lessee nor any of its
Subsidiaries shallEpay any dividends or make any distributions on its
Equity Securities; purchase, redeem, retire, defease or otherwise
acquire for value any of its Equity Securities; return any capital to
any holder of its Equity Securities as such; make any distribution of
assets, Equity Securities, obligations or securities to any holder of
its Equity Securities as such; or set apart any sum for any such
purpose; except as follows:
(i) Either Lessee or any of its Subsidiaries may pay
dividends on its capital stock payable solely in such Person's
own capital stock;
(ii) Any Subsidiary of Lessee may pay dividends to Lessee;
(iii) Lessee may purchase shares of its capital stock for its
employee stock option plans, provided that (A) the aggregate
amount of such purchases does not exceed $50,000,000 in any
fiscal year and (B) no Default has occurred and is continuing at
the time of such purchase or will occur after giving effect to
such purchase; and
(iv) Lessee may purchase shares of its capital stock with the
proceeds received by it from a substantially concurrent issue of
new shares of its capital stock
(g) Change in Business. Neither Lessee nor any of its
Subsidiaries shall engage, either directly or indirectly through
Affiliates, in any material line of business other than the
semiconductor capital equipment business and other businesses incidental
or reasonably related thereto.
(h) ERISA. Neither Lessee nor any ERISA Affiliate shall (i)adopt
or institute any Employee Benefit Plan that is an employee pension
benefit plan within the meaning of Section 3(2) of ERISA, (ii)take any
action which will result in the partial or complete withdrawal, within
the meanings of sections 4203 and 4205 of ERISA, from a Multiemployer
Plan, (iii)engage or permit any Person to engage in any transaction
prohibited by section 406 of ERISA or section 4975 of the IRC involving
any Employee Benefit Plan or Multiemployer Plan which would subject
either Lessee or any ERISA Affiliate to any tax, penalty or other
liability including a liability to indemnify, (iv)incur or allow to
exist any accumulated funding deficiency (within the meaning of
42
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.
(i) Transactions With Affiliates. Neither Lessee nor any of its
Subsidiaries shall enter into any Contractual Obligation with any
Affiliate or engage in any other transaction with any Affiliate except
upon terms at least as favorable to Lessee or such Subsidiary as an
arms-length transaction with unaffiliated Persons.
(j) Accounting Changes. Neither Lessee nor any of its
Subsidiaries shall change (i) its fiscal year (currently January 1
through December 31) or (ii) its accounting practices except as
permitted by GAAP.
5.03. Lessee's Financial Covenants. Until the termination of this
Agreement and the satisfaction in full by Lessee of all Lessee Obligations,
Lessee will comply, and will cause compliance, with the following financial
covenants, unless Lessor and Required Participants shall otherwise consent in
writing:
(a) Funded Indebtedness/Capital Ratio. Lessee shall not permit
its Funded Indebtedness/Capital Ratio on any day set forth below to be
greater than the ratio set forth opposite such day below:
June 30, 1997;
September 30, 1997 0.55 to 1.00;
December 31, 1997;
March 31, 1998;
June 30, 1998 0.50 to 1.00;
September 30, 1998;
December 31, 1998
March 31, 1999
June 30, 1999 0.45 to 1.00;
The last day of each
fiscal quarter thereafter 0.40 to 1.00.
(b) Quick Ratio. Lessee shall not permit its Quick Ratio to be
less than 1.50 to 1.00 on the last day of any fiscal quarter.
(c) Debt Service Coverage Ratio. Lessee shall not permit its Debt
Service Coverage Ratio for any fiscal quarter ending on any day set
forth below to be less than the ratio set forth opposite such day below:
June 30, 1997;
43
September 30, 1997;
December 31, 1997;
March 31, 1998;
June 30, 1998;
September 30, 1998 2.50 to 1.00;
December 31, 1998;
March 31, 1999 3.50 to 1.00;
The last day of each
fiscal quarter thereafter 4.50 to 1.00.
(d) Tangible Net Worth. 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") which occurs after June 30, 1997 (such
date to be referred to herein as the "base date") to be less than the
sum on such determination date of the following:
(i) Ninety percent (90%) of the Tangible Net Worth of Lessee
and its Subsidiaries on the base date;
plus
(ii) Seventy-five percent (75%) of the sum of Lessee's
consolidated quarterly net income (ignoring any quarterly losses)
for each fiscal quarter after the base date through and including
the fiscal quarter ending on the determination date;
plus
(iii) One hundred percent (100%) of the Net Proceeds of all
Equity Securities issued by Lessee and its Subsidiaries (to
Persons other than Lessee or its Subsidiaries) during the period
commencing on the base date and ending on the determination date;
plus
(iv) One hundred percent (100%) of the principal amount of
all debt securities of Lessee and its Subsidiaries converted into
Equity Securities of Lessee and its Subsidiaries during the
period commencing on the base date and ending on the
determination date;
minus
(v) The lesser of (A) the sum of all non-recurring, non-cash
charges taken by Lessee and its Subsidiaries during the period
commencing on the base date and ending on the earlier of the
determination date and December 31, 1997 and (B) $40,000,000.
44
5.04. Lessor's Covenants. Until the termination of this Agreement and
the satisfaction in full by Lessee 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:
(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 and shall promptly discharge, at its
sole cost and expense, any Lessor Lien on the Property; provided,
however, that Lessor shall not be required so to discharge any such
Lessor Lien if (i) the same is being contested in good faith by
appropriate proceedings diligently prosecuted and (ii) any such contest
is completed and all Lessor Liens are discharged on or prior to the
Expiration Date.
(c) Property Disposition. Lessor shall not sell, lease, transfer
or otherwise dispose of its right, title and interest in the Property
and the Operative Documents except as provided in Subparagraph 2.11(b)
or Subparagraph 7.05(d) or after retaining the Property following the
Expiration Date.
(d) Chief Place of Business. Lessor shall not change its chief
place of business 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 VI. 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
45
Document, for the value, validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Operative Document or for any failure
by Lessee or any of its Subsidiaries to perform their respective obligations
hereunder or thereunder. Lessor and Agent may employ agents and
attorneys-in-fact and shall not be responsible to any Participant for the
negligence or misconduct of any such agents or attorneys-in-fact selected by it
with reasonable care. Neither Lessor nor Agent nor any of their respective
directors, officers, employees, agents or advisors shall be responsible to any
Participant for any action taken or omitted to be taken by it or them hereunder
or under any other Operative Document or in connection herewith or therewith,
except for its or their own gross negligence or willful misconduct. Except as
otherwise provided under this Agreement, Lessor and Agent shall take such action
with respect to the Operative Documents as shall be directed by the Required
Participants.
6.03. Reliance. Lessor or Agent shall be entitled to rely upon any
certificate, notice or other document (including any cable, telegram, facsimile
or telex) believed by it in good faith to be genuine and correct and to have
been signed or sent by or on behalf of the proper Person or Persons, and upon
advice and statements of legal counsel, independent accountants and other
experts selected by Lessor or Agent with reasonable care. As to any other
matters not expressly provided for by this Agreement, neither Lessor nor Agent
shall be required to take any action or exercise any discretion, but shall be
required to act or to refrain from acting upon instructions of the Required
Participants and shall in all cases be fully protected by the Participants in
acting, or in refraining from acting, hereunder or under any other Operative
Document in accordance with the instructions of the Required Participants, and
such instructions of the Required Participants and any action taken or failure
to act pursuant thereto shall be binding on all of the Participants.
6.04. Defaults. Neither Lessor nor Agent shall be deemed to have
knowledge or notice of the occurrence of any Default unless Lessor and Agent
have received a written notice from a Participant or Lessee, referring to this
Agreement, describing such Default and stating that such notice is a "Notice of
Default". If Lessor and Agent receive such a notice of the occurrence of a
Default, Agent shall give prompt notice thereof to the Participants. Lessor and
Agent shall take such action with respect to such Default as shall be reasonably
directed by the Required Participants; provided, however, that until Lessor and
Agent shall have received such directions, Lessor or Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default as it shall deem advisable in the best interest of the
Participants.
6.05. Indemnification. Without limiting the Obligations of Lessee
hereunder, each Participant agrees to indemnify Lessor and Agent, ratably in
accordance with such Participant's Proportionate Share, for any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever which may at
any time be imposed on, incurred by or asserted against Lessor or Agent in any
way relating to or arising out of this Agreement or any documents contemplated
by or referred to herein or therein or the transactions contemplated hereby or
thereby or the enforcement of any of the terms hereof or thereof; provided,
however, that no Participant shall be liable for any of the foregoing to the
extent they arise from Lessor's or Agent's gross negligence or willful
misconduct. Lessor or Agent shall be fully justified in refusing to take or in
continuing to take any action hereunder unless it shall first be indemnified to
its satisfaction by the Participants against any and all liability and expense
which may be incurred by it by reason of taking or continuing to take any such
action. The obligations of each Participant under this Paragraph 6.05 shall
survive the
46
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 Commitment Termination Date 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.
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
47
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 VII. 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.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Chief Financial Officer
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax No: (▇▇▇) ▇▇▇-▇▇▇▇
Lessor:Lease Plan North America, Inc.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax No: (▇▇▇) ▇▇▇-▇▇▇▇
Agent: ABN AMRO Bank N.V.
ABN AMRO Bank North America, Inc.
48
Capital Markets-Syndications Group
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
ABN AMRO Bank N.V.
ABN AMRO Bank North America, Inc.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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 on demand, whether or not any Advance
is made hereunder, (a) all reasonable fees and expenses, including reasonable
attorneys' fees and expenses, incurred by Lessor and Agent in connection with
the preparation, negotiation, execution and delivery of, the consummation of the
transactions contemplated by and the exercise of their duties under, this
Agreement and the other Operative Documents, and the preparation, negotiation,
execution and delivery of amendments and waivers hereunder and thereunder and
(b) all reasonable fees and expenses, including reasonable attorneys' fees and
expenses, incurred by the Lessor Parties in the enforcement or attempted
enforcement of any of the Lessee Obligations or in preserving any of the Lessor
Parties' rights and remedies (including all such fees and expenses incurred in
connection with any "workout" or restructuring affecting the Operative Documents
or the Lessee Obligations or any bankruptcy or similar proceeding involving
Lessee or any of its Subsidiaries). As used herein, the term "reasonable
attorneys' fees and expenses" shall include, without limitation, allocable costs
and expenses of Agent's and Participants' in-house legal counsel and staff. The
obligations of Lessee under this Paragraph 7.02 shall survive the payment and
performance of the Lessee Obligations and the termination of this Agreement.
7.03. Indemnification. To the fullest extent permitted by law, Lessee
agrees to protect, indemnify, defend and hold harmless, on an after-tax basis,
the Lessor Parties and the other Indemnitees from and against any and all
liabilities, losses, damages or expenses of any kind or
49
nature (including Indemnified Taxes) and from any suits, claims or demands
(including in respect of or for reasonable attorney's fees and other expenses)
arising on account of or in connection with any matter or thing or action or
failure to act by Indemnitees, or any of them, arising out of or relating to the
Operative Documents, any transaction contemplated thereby or the Property
(including any use by Lessee of the Property or the Advances), except to the
extent such liability arises from the willful misconduct or gross negligence of
such Indemnitee. 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 promptly shall give Lessee notice of the matter and an
opportunity to defend it, at Lessee's sole cost and expense, with legal counsel
reasonably satisfactory to such Lessor Party. Such Lessor Parties may also
require Lessee to defend the matter. Any failure or delay of any Lessor Party to
notify Lessee of any such suit, claim or demand shall not relieve Lessee of its
obligations under this Paragraph 7.03. The 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
364-Day Commitment, Two-Year Commitment or Total Commitment, (ii)
extends the Scheduled Expiration Date, (iii) reduces the Rental Rate or
any fees or other amounts payable for the account of the Participants
hereunder, (iv) postpones any date scheduled for any payment of Base
Rent or any fees or other amounts payable for the account of the
Participants hereunder or thereunder, (v) amends 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 signed or approved in writing by all Participants;
(b) Any amendment, waiver or consent which increases or decreases
the Proportionate Share of any Participant must be in writing and signed
by such Participant; and
(c) Any amendment, waiver or consent which affects the rights or
obligations of Agent must be in writing and signed by Agent.
No failure or delay by any Lessor Party in exercising any right hereunder shall
operate as a waiver thereof or of any other right nor shall any single or
partial exercise of any such right preclude any other further exercise thereof
or of any other right. Unless otherwise specified in such waiver or consent, a
waiver or consent given hereunder shall be effective only in the specific
instance and for the specific purpose for which given.
7.05. Successors and Assigns.
(a) Binding Effect. This Agreement and the other Operative
Documents shall be binding upon and inure to the benefit of Lessee,
Lessor, the Participants, Agent and their respective permitted
successors and assigns. All references in this Agreement to any Person
shall be deemed to include all successors and assigns of such Person.
50
(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 M (an "Assignment Agreement"), executed by each
Assignee Participant and such assignor Participant (an "Assignor
Participant") and delivered to Agent for its acceptance and
recording in the Register; provided, however, that:
(A) Without the written consent of Lessor, Agent
and, if no Default has occurred and is continuing, Lessee
(which consent of Lessor, Agent and Lessee shall not be
unreasonably withheld), no Participant may make any
Assignment to any Assignee Participant which is not,
immediately prior to such Assignment, a Participant
hereunder or an Affiliate thereof; or
(B) Without the written consent of Lessor, Agent
and, if no Default has occurred and is continuing, Lessee
(which consent of Lessor, Agent and Lessee shall not be
unreasonably withheld), no Participant may make any
Assignment to any Assignee Participant if, after giving
effect to such Assignment, the Commitment of such
Participant or such Assignee Participant would be less
than Ten Million Dollars ($10,000,000) (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 which does not assign and delegate an equal pro
rata interest in (1) such Participant's Outstanding
Participation Amount under each Facility, (2) such
Participant's Commitment, (3) such Participant's other
rights, duties and obligations under this Agreement and
the other Operative Documents and (4) such Participant's
rights, duties and obligations under the Related Credit
Documents.
Upon such execution, delivery, acceptance and recording of each
Assignment Agreement, from and after the Assignment Effective
Date determined pursuant to such Assignment Agreement, (y) each
Assignee Participant thereunder shall be a Participant hereunder
with a Proportionate Share as set forth on Attachment 1 to such
Assignment Agreement (under the caption "Proportionate Share
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 Proportionate Share as
set forth on Attachment 1 to such Assignment Agreement (under the
caption
51
"Proportionate Share After Assignment"), or, if the
Proportionate Share of the Assignor Participant has been reduced
to 0%, the Assignor Participant shall cease to be a Participant
and to have any obligation to fund any portion of any Advance;
provided, however, that any such Assignor Participant which
ceases to be a Participant shall continue to be entitled to the
benefits of any provision of this Agreement which by its terms
survives the termination of this Agreement. Each Assignment
Agreement shall be deemed to amend Schedule I to the extent, and
only to the extent, necessary to reflect the addition of each
Assignee Participant, the deletion of each Assignor Participant
which reduces its Proportionate Share to 0% and the resulting
adjustment of 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
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 Borrower 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 Proportionate
Share of each Participant from time to time. The entries in the
Register shall be conclusive in the absence of manifest error,
and Lessee, Agent and the Participants may treat each Person
whose name is recorded in the Register as the owner of the
interests recorded therein for all purposes of this Agreement.
The Register shall be available for inspection by Lessee or any
Participant at any reasonable time and from time to time upon
reasonable prior notice.
(iii) Upon its receipt of an Assignment Agreement executed by
an Assignor Participant and an Assignee Participant (and, to the
extent required by clause (i) of this Subparagraph 7.05(b), by
Lessor, Agent and Lessee), together with payment to Agent by
Assignor Participant of a registration and processing fee of
$2,500, 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
52
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 ScheduleEI
reflecting the names, addresses and respective Proportionate
Shares of all Participants then parties hereto.
(iv) Subject to Subparagraph 7.13(g), the Lessor Parties may
disclose the Operative Documents and any financial or other
information relating to Lessee or any Subsidiary to each other or
to any potential Assignee Participant.
(c) Participant Subparticipations. Any Participant may at any
time sell to one or more banks or other financial institutions
("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 is a multi-asset Person having substantial
assets beyond its interest in the Property and the Operative
Documents 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 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
53
(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 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 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 pursuant to clause (i) above, Lessor
shall pay any real property transfer taxes payable as a result of such
sale and assignment.
7.06. Setoff. In addition to any rights and remedies of the Participants
provided by law, each Participant shall have the right, with the prior written
consent of Agent, but without prior notice to or consent of Lessee, any such
notice and consent being expressly waived by Lessee to the extent permitted by
applicable law, upon the occurrence and during the continuance of an Event of
Default, to set-off and apply against the Lessee Obligations, whether matured or
unmatured, any amount owing from such Participant to Lessee, at or at any time
after, the occurrence of such Event of Default. The aforesaid right of set-off
may be exercised by such Participant against Lessee or against any trustee in
bankruptcy, debtor in possession, assignee for the benefit of creditors,
receiver or execution, judgment or attachment creditor of Lessee or against
anyone else claiming through or against Lessee or such trustee in bankruptcy,
debtor in possession, assignee for the benefit of creditors, receiver, or
execution, judgment or attachment creditor, notwithstanding the fact that such
right of set-off shall not have been exercised by such Participant prior to the
occurrence of an Event of Default. Each Participant agrees promptly to notify
Lessee after any such set-off and application made by such Participant, provided
that the failure to give such notice shall not affect the validity of such
set-off and application.
7.07. No Third Party Rights. Nothing expressed in or to be implied from
this Agreement is intended to give, or shall be construed to give, any Person,
other than the parties hereto and their permitted successors and assigns
hereunder, any benefit or legal or equitable right, remedy or claim under or by
virtue of this Agreement or under or by virtue of any provision herein.
7.08. Partial Invalidity. If at any time any provision of this Agreement
or any other Operative Document is or becomes illegal, invalid or unenforceable
in any respect under the law or any jurisdiction, neither the legality, validity
or enforceability of the remaining provisions of this Agreement or the other
Operative Documents nor the legality, validity or enforceability of such
provision under the law of any other jurisdiction shall in any way be affected
or impaired thereby.
54
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 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 or in connection with any litigation; (f) to comply with any
Requirement of Law applicable to such Lessor Party; (g) 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 (h) otherwise with the prior consent of Lessee; provided,
however, that any disclosure made in violation of this Agreement shall not
affect the obligations of Lessee and its Subsidiaries under this Agreement and
the other Operative Documents.
[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: LEASE PLAN NORTH AMERICA, INC.
By:___________________________
Name:______________________
Title:_____________________
AGENT: ABN AMRO BANK N.V.
By:___________________________
Name:______________________
Title:_____________________
By:___________________________
Name:______________________
Title:_____________________
PARTICIPANTS: ABN AMRO BANK N.V.
By:___________________________
Name:______________________
Title:_____________________
By:___________________________
Name:______________________
Title:_____________________