EXHIBIT 10.2
PARTICIPATION AGREEMENT
THIS PARTICIPATION AGREEMENT (this "Agreement" herein), dated as
of December 5, 1997, is entered into by and among:
(1) ETEC SYSTEMS, INC., a Nevada 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 a lease facility pursuant to which:
(1) Lessor would (a) lease from Lessee the land described
in Exhibit A (as more fully defined in Schedule 1.01, the "Land"),
(b) sublease to Lessee the Land and lease to Lessee certain
improvements to be constructed on the Land, (c) appoint Lessee as
Lessor's agent to make such improvements (which improvements will
be owned by Lessor), (d) make advances to finance such
improvements and to pay certain related expenses and (e) grant to
Lessee the right to purchase such improvements; and
(2) The Participants would participate in such lease
facility by (a) funding the advances to be made by Lessor and (b)
acquiring participation interests in the rental and certain other
payments to be made by Lessee.
▇. ▇▇▇▇▇▇ and the Participants are willing to provide such
lease facility upon the terms and subject to the conditions set forth
herein.
AGREEMENT
NOW, THEREFORE, in consideration of the above Recitals and the
mutual covenants herein contained, the parties hereto hereby agree as
follows:
SECTION 1. INTERPRETATION.
1.01. Definitions. Unless otherwise indicated in this Agreement
or any other Operative Document, each term set forth in Schedule 1.01,
when used in this Agreement or any other Operative Document, shall have
the respective meaning given to that term in Schedule 1.01 or in the
provision of this Agreement or other document, instrument or agreement
referenced in Schedule 1.01.
1.02. Rules of Construction. Unless otherwise indicated in this
Agreement or any other Operative Document, the rules of construction set
forth in Schedule 1.02 shall apply to this Agreement and the other
Operative Documents.
SECTION 2. LEASE FACILITY.
2.01. Acquisition, Lease, Amount Limitations, Etc.
(a) Acquisition, Lease, Etc. Subject to the terms and
conditions of this Agreement (including the limitations set forth
in Subparagraph 2.01(b)):
(i) On a date specified by Lessee pursuant to
Subparagraph 2.03(a) for the acquisition by Lessor of its
leasehold interest in the Land (the "Closing Date"):
(A) Lessor and Lessee shall execute a ground
lease in the form of Exhibit N (the "Ground Lease"),
pursuant to which Lessee leases to Lessor the Land;
and
(B) Immediately upon the execution by Lessor
and Lessee of the Ground Lease, Lessor and Lessee
shall execute (1) a Lease Agreement in the form of
Exhibit B (the "Lease Agreement"), pursuant to which
Lessor leases to Lessee Lessor's leasehold interest in
the Land and Lessor's rights in the improvements to
the Land; (2) a Purchase Agreement in the form of
Exhibit C (the "Purchase Agreement"), pursuant to
which Lessor grants to Lessee the right to purchase
such improvements to the Land and (3) a Construction
Agency Agreement in the form of Exhibit D (the
"Construction Agency Agreement"), pursuant to which
Lessee agrees to construct the improvements to such
property; and
(ii) During the period (the "Commitment Period")
beginning on the date of this Agreement and ending on
December 1, 1999 (the "Outside Completion Date") or, if
earlier, the first Business Day of the first full calendar
month immediately succeeding the earlier of (A) the
Completion Date and (B) the date on which the Unused Total
Commitment is $0 (the earlier of the Outside Completion Date
and such first Business Day to be referred to as the
"Commitment Termination Date"), Lessor shall, at the request
of Lessee, make advances to Lessee (with funds provided by
the Participants) to pay Permitted Improvement Costs and
Permitted Transaction Expenses ("Improvement/Expense
Advances").
(b) Amount Limitations. The advance made by Lessor to
acquire its leasehold interest in the Land pursuant to the Ground
Lease and to acquire any other initial property on the Closing
Date (the "Acquisition Advance") and the Improvement/Expense
Advances made by Lessor (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 the Acquisition Advance
made by Lessor on the Closing Date shall not exceed the
Closing Date Appraisal for the Property;
(ii) Until February 27, 1998, the aggregate amount of
all Advances made by Lessor (including the Acquisition
Advance and all Improvement/Expense Advances) shall not
exceed $3,000,000;
(iii) After February 27, 1998, the aggregate amount of
all Advances made by Lessor (including the Acquisition
Advance and all Improvement/Expense Advances) shall not
exceed the lesser of (A) Sixty Million Dollars ($60,000,000)
(the "Total Commitment") and (B) the Expiration Date
Appraisal for the Property; and
(iv) The aggregate amount of all Advances made by
Lessor (including the Acquisition Advance and all
Improvement/Expense Advances) during the period (the "364-
Day Commitment Period") beginning on the date of this
Agreement and ending on December 4, 1998 (the "364-Day
Commitment Termination Date") shall not exceed Thirty
Million Dollars ($30,000,000) (the "364-Day Commitment").
Of the Total Commitment, Thirty Million Dollars ($30,000,000) (the
"Two-Year Commitment") is available at any time during the entire
Commitment Period. Unless otherwise directed by Lessee, all
Advances made by Lessor on or 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 by Lessor 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.
(c) Expiration Date Appraisal. Not later than February
27, 1998, Lessee shall deliver to Lessor an Expiration Date
Appraisal for the Property, dated as of a recent date and in form
and substance satisfactory to Lessor and Agent.
(d) Tranches. Each Advance shall consist of a Tranche A
Portion, a Tranche B Portion and a Tranche C Portion. For
accounting purposes, the Tranche A Portion and Tranche B Portion
of each Advance shall constitute debt and the Tranche C Portion
shall constitute equity.
2.02. Participation Agreement.
(a) Advances. Each Participant severally, unconditionally
and irrevocably agrees with Lessor to participate in each Advance
made by Lessor in an amount equal to such Participant's
Proportionate Share of such Advance; provided, however, that the
aggregate amount of each Participant's Proportionate Share of all
Advances shall not exceed such Participant's Commitment. Each
Participant shall fund its Proportionate Share of each Advance as
provided in Subparagraph 2.05(a). Each Participant's
Proportionate Share of each Advance shall consist of such
Participant's Tranche A Portion, Tranche B Portion and Tranche C
Portion of such Advance.
(b) Payments. In consideration of each Participant's
participation in each Advance made by Lessor, such Participant
shall participate in the payments made by Lessee under this
Agreement and the other Operative Documents as provided in
Paragraph 2.06.
(c) Other Rights of Participants and Agent.
(i) Until all amounts payable to Agent and
Participants under this Agreement and the other Operative
Documents are paid in full, Lessee shall deliver all notices
for Lessor under this Agreement and the other Operative
Documents to Agent at the office or facsimile number and
during the hours specified in Paragraph 7.01. Agent shall
promptly furnish to Lessor and each Participant 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, the Assignment of
Lease and the Lessor Security Agreement.
2.03. Advance Requests.
(a) Acquisition Request. Lessee shall request Lessor to
enter into the Ground Lease and make the Acquisition Advance by
delivering to Agent an irrevocable written request in the form of
Exhibit E, appropriately completed (the "Acquisition Request"),
which specifies, among other things:
(i) The date selected by Lessor as the Acquisition
Date for the Land, which shall be a date that is a Business
Day on or prior to December 31, 1997; and
(ii) The amount of the Acquisition Advance, including
the amount of the Acquisition Price and the Permitted
Transaction Expenses included in such Acquisition Advance.
(b) Improvement/Expense Advance Requests. Lessee shall
request Lessor to make each Improvement/Expense Advance 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 amount of such Advance, which shall be
in the amount of $500,000 or an integral multiple of
$100,000 in excess thereof;
(B) The date of such Advance, which shall be
the first Business Day of a month; and
(C) The Permitted Improvement Costs and
Permitted Transaction Expenses to be paid by such
Advance; and
(ii) If the proceeds of such Advance are to be used
to purchase Related Goods:
(A) A Supplement to Exhibit B to the Lease
Agreement in the form of Exhibit B(1) to the Lease
Agreement (an "Exhibit B Supplement"), which contains
a detailed description of such Related Goods; and
(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 in any calendar month.
(c) Delivery of Advance Requests. Etc. Lessee shall
deliver the Acquisition Request to Lessor at least three (3)
Business Days before the Closing 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
Request 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 the Lease
Agreement during the Commitment Period, the Base Rent due on such
Scheduled Rent Payment Date shall be capitalized by automatically
treating the amount of such Base Rent as an Improvement/Expense
Advance made 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.
2.04. Fees.
(a) Agent's Fees. Lessee shall pay to Agent, for its own
account, agent's fees in the amounts and at the times set forth in
the Agent's Fee Letter (the "Agent's Fees").
(b) Commitment Fees. Lessee shall pay to Agent, for the
ratable benefit of the Participants as provided in clause (ii) of
Subparagraph 2.06(c), commitment fees (the "Commitment Fees") as
follows:
(i) Lessee shall pay Commitment Fees of one hundred
seventy-five thousandths of one percent (0.175%) per annum
on the daily average Unused 364-Day Commitment for the 364-
Day Commitment Period.
(ii) Lessee shall pay Commitment Fees of two hundred
seventy-five thousandths of one percent (0.275%) per annum
on the daily average Unused Two-Year Commitment for the
entire Commitment Period.
Lessee shall pay the Commitment Fees in arrears on the last
Business Day in each February, May, August and November
(commencing February 27, 1998) 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
Lessor and the Participants as provided in clause (iii) of
Subparagraph 2.06(c), an extension fee (the "364-Day Commitment
Extension Fee") equal to one tenth of one percent (0.10%) of the
Unused 364-Day Commitment on the original 364-Day Commitment
Termination Date. Lessee shall pay the 364-Day Commitment
Extension Fee on or prior to 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
directed by Lessee in the Advance Request for such Advance.
(b) Participant Failure to Fund. Unless Agent shall have
received notice from a Participant prior to the date of any
Advance that such Participant will not make available to Agent
such Participant's Proportionate Share of such Advance, Agent may
assume that such Participant has made such portion available to
Agent on the date of such Advance in accordance with Subparagraph
2.05(a), and Agent may, in reliance upon such assumption, disburse
the full amount of such Advance on such date; provided, however,
that neither Agent nor Lessor shall have any obligation to make an
Advance requested hereunder in an amount which exceeds the
aggregate amount of funds actually received by Agent from the
Participants on account of their respective Proportionate Shares
of such Advance. If any Participant does not make the amount of
its Proportionate Share of any Advance available to Agent on or
prior to the date such Advance is made, Agent promptly shall
notify such Participant of such failure and such Participant shall
pay to Agent, on demand, interest which shall accrue on such
amount until made available to Agent at rates equal to (i) the
daily Federal Funds Rate during the period from the date of such
Advance through the third Business Day thereafter and (ii) the
Base Rate plus two percent (2.0%) thereafter. A certificate of
Agent submitted to any Participant with respect to any amounts
owing under this Subparagraph 2.05(b) shall be conclusive absent
manifest error. If any Participant's Proportionate Share of any
Advance is not in fact made available to Agent by such Participant
within three (3) Business Days after the date of such Advance,
Lessee shall pay to Agent, on demand, an amount equal to such
Proportionate Share together with interest thereon, for each day
from the date such amount was made available to Lessee until the
date such amount is repaid to Agent, at a per annum rate equal to
the Base Rate.
(c) Participants' Obligations Several. The failure of any
Participant to fund its Proportionate Share of any Advance shall
not relieve any other Participant of its obligation hereunder to
fund its Proportionate Share of such Advance, and no Participant
shall be responsible for the failure of any other Participant to
fund its Proportionate Share of any Advance on the date of such
Advance.
2.06. Sharing of Payments.
(a) Outstanding Lease Amount. Lessor shall share payments
applied to reduce the Outstanding Lease Amount as follows:
(i) Each payment of the Outstanding Lease Amount
derived from the purchase price paid by Lessee (or an
Assignee Purchaser) to purchase the Property pursuant to the
Purchase Agreement shall be shared by the Participants pro
rata according to their respective Outstanding Participation
Amounts at the time of such payment.
(ii) Each payment of the Outstanding Lease Amount
derived from the Residual Value Guaranty Amount paid by
Lessee pursuant to the 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; second, if any amounts remain
after all Outstanding Tranche A Participation Amounts are
paid in full, by the Tranche B Participants pro rata
according to their respective Outstanding Tranche B
Participation Amounts at the time of such payment; and
third, if any amounts remain after all Outstanding Tranche A
Participation Amounts and all Outstanding Tranche B
Participation Amounts are paid in full, by the Tranche C
Participants pro rata according to their respective
Outstanding Tranche C Participation Amounts at the time of
such payment.
(iii) Each payment of the Outstanding Lease Amount
derived from:
(A) the purchase price paid by a Designated
Purchaser to purchase the Property pursuant to the
Purchase Agreement;
(B) the Indemnity Amount paid by Lessee
pursuant to the Purchase Agreement; or
(C) Casualty Proceeds or Condemnation Proceeds
related to any of the Property;
Shall be shared first by the Tranche B Participants pro rata
according to their respective Outstanding Tranche B
Participation Amounts at the time of such payment; second,
if any amounts remain after all Outstanding Tranche B
Participation Amounts are paid in full, by the Tranche A
Participants pro rata according to their respective
Outstanding Tranche A Participation Amounts at the time of
such payment; and third, if any amounts remain after all
Outstanding Tranche B Participation Amounts and all
Outstanding Tranche A Participation Amounts are paid in
full, by the Tranche C Participants pro rata according to
their respective Outstanding Tranche C Participation Amounts
at the time of such payment.
(iv) Each payment of the Outstanding Lease Amount
derived from the purchase price paid by any other Person to
purchase the Property (whether after the retention of such
Property by Lessor following the Expiration Date of the
Lease Agreement, upon foreclosure or otherwise) shall be
shared first by the Tranche B Participants pro rata
according to their respective Outstanding Tranche B
Participation Amounts at the time of such payment; second,
if any amounts remain after all Outstanding Tranche B
Participation Amounts are paid in full, by the Tranche A
Participants pro rata according to their respective
Outstanding Tranche A Participation Amounts at the time of
such payment; and third, if any amounts remain after all
Outstanding Tranche B Participation Amounts and all
Outstanding Tranche A Participation Amounts are paid in
full, by the Tranche C Participants pro rata according to
their respective Outstanding Tranche C Participation Amounts
at the time of such payment.
(v) Each payment of the Outstanding Lease Amount
derived from Cash Collateral shall be shared (i) by the
Tranche A Participants alone pro rata according to their
respective Outstanding Tranche A Participation Amounts at
the time of such payment if such payment is made after the
purchase of the Property by a Designated Purchaser pursuant
to the Marketing Option in the Purchase Agreement or (ii) by
all Participants pro rata according to their respective
Outstanding Participation Amounts at the time of such
payment if such payment is made in any other circumstance.
(b) Base Rent. Lessor shall share each payment applied to
Base Rent among the Participants which funded the Outstanding
Lease Amount 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.
(c) Supplemental Rent. Lessor shall share each payment
applied to Supplemental Rent among the Lessor Parties as follows:
(i) Each payment applied to Agent's Fees shall be
solely for the account of Agent.
(ii) Each payment applied to Commitment Fees shall be
shared by the Participants pro rata according to (A) their
respective Proportionate Shares and (B) in the case of each
Participant which becomes a Participant hereunder after the
date hereof, the date upon which such Participant so became
a Participant.
(iii) Each payment applied to 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.
(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 12:00 noon 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.
Whenever this Agreement or any other Operative Document requires a
payment to be made by Lessee but fails to specify a time for such
payment to be made, such payment shall be due and payable thirty
(30) days after demand for such payment is made upon Lessee by the
applicable party.
(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 a late payment charge
on the aggregate, outstanding balance of such amounts from the
date due until those amounts are paid in full at a per annum rate
equal to the Base Rate plus two percent (2.0%), such rate to
change from time to time as the Base Rate shall change.
(d) Application of Payments. All payments under this
Agreement and the other Operative Documents shall be applied first
to unpaid fees, costs and expenses then due and payable under this
Agreement or any other Operative Document, second to the accrued
Base Rent then due and payable under this Agreement or any other
Operative Document and finally to reduce the Outstanding Lease
Amount.
(e) Failure to Pay Agent. Unless Agent shall have
received notice from Lessee at least one (1) Business Day prior to
the date on which any payment is due to Lessor or the Participants
under this Agreement or the other Operative Documents that Lessee
will not make such payment in full, Agent may assume that Lessee
has made such payment in full to Agent on such date and Agent may,
in reliance upon such assumption, cause to be distributed to the
appropriate Persons on such due date an amount equal to the amount
then due such Persons. If and to the extent Lessee shall not have
so made such payment in full to Agent, each such Person shall
repay to Agent forthwith on demand such amount distributed to such
Person together with interest thereon, for each day from the date
such amount is distributed to such Person until the date such
Person repays such amount to Agent, at (i) the Federal Funds Rate
for the first three (3) days and (ii) the Base Rate plus two
percent (2.0%) thereafter, such rate to change from time to time
as the Base Rate shall change. A certificate of Agent submitted
to any Person with respect to any amounts owing by such Person
under this Subparagraph 2.07(e) shall be conclusive absent
manifest error.
2.08. Commitment Reductions.
(a) Reduction or Cancellation of Commitments. Lessee may,
at any time prior to the 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-Day Commitment, upon five (5)
Business Days written notice to Lessor, permanently reduce the
364-Day Commitment or the Two-Year Commitment by the amount of One
Million Dollars ($1,000,000) or an integral multiple of One
Hundred Thousand Dollars ($100,000) in excess thereof or cancel
the 364-Day Commitment or the Two-Year Commitment in its entirety.
Any reduction of the 364-Day Commitment or the 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 the Two-Year
Commitment, the Commitment Fees shall be computed on the basis of
the 364-Day Commitment or the 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, the Two-
Year Commitment or the Total Commitment pursuant to this Paragraph
2.08 shall be applied ratably to reduce each Participant's
Commitment pro rata in accordance with its Proportionate Share.
2.09. Extensions.
(a) 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
fifteen (15) 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(a) shall be deemed extended to the date which is six (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 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, as provided herein but
not more than three (3) times, request Lessor to extend the
Scheduled Expiration Date of the Lease Agreement for an additional
period of one (1) year by appropriately completing, executing and
delivering to Agent a written request in the form of Exhibit 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 nine (9) months and not less than
six (6) months before the then current Scheduled Expiration Date.
Agent shall promptly deliver to Lessor and each Participant three
(3) copies of each Lease Extension Request received by Agent. If
Lessor or a Participant, in its sole and absolute discretion,
consents to a Lease Extension Request, such Person shall evidence
such consent by executing and returning two (2) copies of such
Lease Extension Request to Agent not later than the last Business
Day which is not less than five (5) months prior to the then
current Scheduled Expiration Date. 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 four (4) months prior to the then current
Scheduled Expiration Date, 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 Lease Agreement
shall be deemed extended to the date which is one (1) year after
the then current Scheduled Expiration Date (subject to the receipt
by Agent of any amounts payable by Lessee in connection with such
extension), or (ii) Agent has not received a copy of the Lease
Extension Request executed by Lessor and each Participant, in
which case such Lease Extension Request shall be deemed denied.
Lessee acknowledges that neither Lessor nor any Participant has
promised (either expressly or implicitly), or has any obligation
or commitment, to extend or consent to the extension of the
Scheduled Expiration Date at any time.
2.10. Nature of the Transactions. Lessee and the Lessor Parties
intend that the transactions evidenced by this Agreement and the other
Operative Documents constitute operating leases pursuant to FASB 13 for
accounting purposes and loans secured by the Property for other
purposes, including federal, state and local income tax purposes and
commercial, real estate and bankruptcy law purposes. To the extent that
this Agreement and the other Operative Documents reflect the lease form
alone, they do so for convenience only. Lessee and the Lessor Parties
intend that the Operative Documents have the dual form referred to in
the first sentence of this paragraph, notwithstanding the use of the
lease form alone.
(a) Tax Treatment. For purposes of all income, franchise
and other taxes imposed upon or measured by income, Lessee and
Lessor Parties intend that the transactions evidenced by the
Operative Documents shall be treated as loans by the Participants
(through Lessor) to Lessee secured by the Property, with Lessee as
owner of the Property. Lessee and the Lessor Parties may only
take deductions, credits, allowances and other reporting positions
on their respective returns, reports and statements which are
consistent with such treatment, unless required to do otherwise by
an appropriate taxing authority or after a clearly applicable
change in applicable Governmental Rules; provided, however, that
if an appropriate taxing authority or a clearly applicable change
in applicable Governmental Rules requires any Lessor Party to take
such an inconsistent position, such Lessor Party shall promptly
notify Lessee.
(b) Other Legal Treatment. For purposes of commercial
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 Expiration Date only the Residual Value Guaranty
Amount, the Indemnity Amount and the other amounts required by
Subparagraph 4.06(b) of the Purchase Agreement (or Subparagraph
4.06(c) if Lessor is retaining the Property) if Lessee exercises
the Marketing Option in accordance with the Purchase Agreement;
and (v) Lessee be required to pay on the Expiration Date the
Outstanding Lease Amount and all other amounts outstanding under
this Agreement and the other Operative Documents (including
amounts required by Subparagraph 4.06(a) of the Purchase
Agreement) if the Lease Agreement is terminated prior to its
Scheduled Expiration Date after an Event of Default occurs under
the Lease Agreement or if Lessee fails to or is otherwise not
entitled to exercise the Marketing Option in accordance with the
Purchase Agreement.
(c) No Reliance by Lessee. Lessee acknowledges and agrees
that no Lessor 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.
(d) Modification of Operative Documents. Lessee and the
Lessor Parties shall amend or modify this Agreement and the other
Operative Documents to the extent necessary for the transaction
evidenced by this Agreement and the other Operative Documents to
qualify as an operating lease pursuant to FASB 13 for accounting
purposes if, and only if, such amendments and modifications do not
adversely affect either Lessee or any Lessor Party.
2.11. Security.
(a) Lessee Obligations.
(i) To the extent that the transaction evidenced by
the Lease Agreement, Purchase Agreement and other Operative
Documents is treated as a loan by the Participants (through
Lessor) to Lessee secured by the Property, with Lessee as
owner of the Property pursuant to Paragraph 2.10, the Lessee
Obligations shall be secured by the Real Property Collateral
and the Personal Property Collateral (collectively, the
"Property Collateral") as provided in Subparagraphs 2.07(a)
and 2.07(b) of the Lease Agreement and in an Assignment of
Construction Agreements in the form of Exhibit H, duly
executed by Lessee (the "Assignment of Construction
Agreements").
(ii) In addition to the Property Collateral, the
Lessee Obligations shall be secured by a Cash Collateral
Agreement in the form of Exhibit I, duly executed by Lessee
(the "Cash Collateral Agreement") and Cash Collateral
delivered to Agent or Participants pursuant to the Cash
Collateral Agreement as provided below:
(A) To the extent such Cash Collateral is not
then held by Agent or Participants pursuant to the
Cash Collateral Agreement, Lessee shall deliver to
Agent or Participants pursuant to the Cash Collateral
Agreement:
(1) Cash Collateral in an amount not
less than 100% of the total Tranche A
Proportionate Share of the Outstanding Lease
Amount at any time Lessee elects, pursuant to
Subparagraph 3.02(l) of the Purchase Agreement,
to exercise the Marketing Option after Lessor
notifies Lessee that Lessor is terminating the
Lease Agreement on a Termination Date that is
prior to the Scheduled Expiration Date and the
only basis for such early termination is the
occurrence of a Non-Marketing Option Event of
Default; and
(2) Cash Collateral in an amount not
less than 100% of the total Outstanding Lease
Amount on or prior to August 31, 2002.
(B) Lessee may, at Lessee's election at any
other time, deliver to Agent or Participants pursuant
to the Cash Collateral Agreement Cash Collateral to
decrease the Applicable Margin for the LIBOR Rental
Rate under the Lease 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
shall deliver such Cash Collateral only on a Scheduled
Rent Payment Date under the Lease Agreement.
At the time Lessee delivers any Cash Collateral to Agent or
Participants pursuant to this clause (ii), Lessee also shall
deliver to Lessor a favorable written opinion of its
counsel, in form and substance reasonably satisfactory to
Lessor and Agent but subject to customary qualifications and
assumptions, to the effect that the Cash Collateral
Agreement is a legal, valid and binding agreement of Lessee,
enforceable in accordance with its terms, and that Lessor
has a perfected security interest in the Cash Collateral.
Lessee may not withdraw any Cash Collateral required to be
delivered pursuant to clause (A) above until the Expiration
Date of the Lease Agreement and the satisfaction in full of
all Lessee Obligations. Lessee may withdraw Cash Collateral
delivered and held pursuant to clause (B) above 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
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) Majority Participants shall advise Agent that the
LIBOR Rental Rate for such Rental Period does not adequately and
fairly reflect the cost to such Participants of funding their
shares of the Outstanding Lease Amount, Agent shall immediately
give notice of such condition to Lessee, Lessor and the other
Participants. After the giving of any such notice (and until
Agent shall otherwise notify Lessee and Lessor that the
circumstances giving rise to such condition no longer exist), the
LIBOR Rental Rate shall be unavailable and the Rental Rate for
each new Rental Period shall be the Alternate Rental Rate.
(b) Illegality. If, after the date of this Agreement, the
adoption of any Governmental Rule, any change in any Governmental
Rule or the application or requirements thereof (whether such
change occurs in accordance with the terms of such Governmental
Rule as enacted, as a result of amendment or otherwise), any
change in the interpretation or administration of any Governmental
Rule by any Governmental Authority, or compliance by Lessor or any
Participant with any request or directive (whether or not having
the force of law) of any Governmental Authority (a "Change of
Law") shall make it unlawful or impossible for any Participant to
fund or maintain its portion of the Outstanding Lease Amount at
the LIBOR Rental Rate, such Participant shall immediately notify
Agent and Agent shall immediately notify Lessee, Lessor and the
other Participants of such Change of Law. After the giving of any
such notice (and until Agent shall otherwise notify Lessee and
Lessor that such Change of Law is no longer in effect), the LIBOR
Rental Rate shall be unavailable and the Rental Rate for each
Rental Period shall be the Alternate Rental Rate.
(c) Increased Costs. If, after the date of this
Agreement, any Change of Law:
(i) Shall subject Lessor or any Participant to any
tax, duty or other charge with respect to the Outstanding
Lease Amount, or shall change the basis of taxation of Base
Rent payments by Lessee to Lessor or any Participant under
this Agreement or any other Operative Document (except for
changes in the rate of taxation on the overall net income of
Lessor or any Participant imposed by its jurisdiction of
incorporation or any jurisdiction in which it maintains an
office); or
(ii) Shall impose, modify or hold applicable any
reserve (excluding any Reserve Requirement or other reserve
to the extent included in the calculation of the LIBOR
Rental Rate), special deposit or similar requirement against
assets held by, deposits or other liabilities in or for the
account of, advances or loans by, or any other acquisition
of funds by Lessor or any Participant for its portion of the
Outstanding Lease Amount; or
(iii) Shall impose on Lessor or any Participant any
other condition related to the Outstanding Lease Amount,
Base Rent or Lessor's or such Participant's commitments
hereunder;
And the effect of any of the foregoing is to increase the cost to
Lessor or such Participant of funding or maintaining its portion
of the Outstanding Lease Amount or commitments or to reduce any
amount receivable by Lessor or such Participant hereunder; then
Lessee shall from time to time within thirty (30) 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; provided, however,
that Lessee shall have no obligation to make any payment to any
demanding party under this Subparagraph 2.12(c) on account of any
such increased costs or reduced amounts relating to any Rental
Period that ended more than six (6) months prior to such demanding
party's first demand for payment (or, if any increased costs or
reduced amounts do not relate to a particular Rental Period, on
account of any such increased costs or reduced amounts realized by
the demanding party more than six (6) months prior to its first
demand for payment). A certificate setting forth in reasonable
detail the amount of such increased costs or reduced amounts,
submitted by Lessor or such Participant to Lessee shall constitute
prima facie evidence of such costs or amounts. The obligations of
Lessee under this Subparagraph 2.12(c) shall survive the payment
and performance of the Lessee Obligations and the termination of
this Agreement.
(d) Capital Requirements. If, after the date of this
Agreement, Lessor or any Participant determines that (i) any
Change of Law affects the amount of capital required 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 thirty (30)
Business Days after demand of such Person, such amounts as such
Person or such other Person reasonably 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; provided, however, that Lessee shall have no
obligation to make any payment to any demanding party under this
Subparagraph 2.12(d) on account of any such increased costs
relating to any Rental Period that ended more than six (6) months
prior to such demanding party's first demand for payment (or, if
any increased costs or reduced amounts do not relate to a
particular Rental Period, on account of any such increased costs
or reduced amounts realized by the demanding party more than six
(6) months prior to its first demand for payment). A certificate
of Lessor or any Participant setting forth in reasonable detail
the computation of any such increased costs, delivered by such
Person to Lessee shall constitute prima facie evidence of such
costs. The obligations of Lessee under this Subparagraph 2.12(d)
shall survive the payment and performance of the Lessee
Obligations and the termination of this Agreement.
(e) Mitigation. If Lessor or any Participant becomes
aware of (i) any Change of Law which will make it unlawful or
impossible for such Person to fund or maintain its portion of the
Outstanding Lease Amount 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 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.
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 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.
(d) Tax Returns. Nothing contained in this Paragraph 2.13
shall require any Lessor Party to make available any of its tax
returns (or any other information relating to its taxes which it
deems to be confidential).
2.14. Funding Loss Indemnification. If Lessee shall (a) pay all
or any portion of the Outstanding Lease Amount on any day other than the
last day of a Rental Period therefor (whether an optional payment, a
mandatory payment or otherwise) or (b) cancel or otherwise fail to
consummate any Advance Request which has been delivered to Agent
(whether as a result of the failure to satisfy any applicable conditions
or otherwise), 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. Each
Person demanding payment under this Paragraph 2.14 shall deliver to
Lessee, with a copy to Agent, a certificate setting forth the amount of
costs and losses for which demand is made, which certificate shall set
forth in reasonable detail the calculation of the amount demanded. Such
a certificate so delivered to Lessee shall constitute prima facie
evidence of such costs and losses. The obligations of Lessee under this
Paragraph 2.14 shall survive the payment and performance of the Lessee
Obligations and the termination of this Agreement.
2.15. Replacement of Participants. If any Participant shall (a)
become a Defaulting Participant more than once, (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 Majority 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 Majority 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 receives notice of the event,
condition or demand giving rise to such right, and no Lessor Party shall
have any obligation to identify or locate a replacement Participant for
Lessee. Upon receipt by any affected Participant of a written notice
from Agent stating that Agent is exercising the replacement right set
forth in this Paragraph 2.15, such affected Participant shall sell and
assign all of its rights and obligations under this Agreement and the
other Operative Documents to the replacement Participant pursuant to an
Assignment Agreement and Subparagraph 7.05(b) for a purchase price equal
to the sum of its portion of the Outstanding Lease Amount, the accrued
and unpaid portion of the Base Rent relating to such portion and its
ratable share of all fees to which it is entitled.
SECTION 3. CONDITIONS PRECEDENT.
3.01. Acquisition Advance. The obligation of Lessor to enter into
the Ground Lease and to make the 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. Improvement/Expense Advances. The obligation of Lessor to
make each Improvement/Expense Advance (and the obligations of the
Participants to fund their respective Proportionate Shares of such
Advance) is (are) subject to (i) satisfaction of the conditions set
forth in Paragraph 3.01, (ii) receipt by Agent pursuant to Paragraph
2.03 of the Advance Request for such Advance, appropriately completed
and duly executed by Lessee, and (iii) receipt by Agent of date-down
endorsements to Agent's and Lessor's title insurance policies or binders
acceptable to Agent and Lessor.
3.03. Other Conditions Precedent. The occurrence of each Credit
Event (including the making of each Advance by Lessor and the funding of
each Advance by the Participants) is subject to the further conditions
that, on the date such Credit Event is to occur and after giving effect
to such Credit Event, the following shall be true and correct:
(a) The representations and warranties of Lessee set forth
in Paragraph 4.01 and in the other Operative Documents are true
and correct in all material respects as if made on such date
(except for representations and warranties expressly made as of a
specified date, which shall be true as of such date);
(b) No Default has occurred and is continuing or will
result from such Credit Event; and
(c) All of the Operative Documents are in full force and
effect.
The submission by Lessee to Lessor and Agent of each Advance Request,
each Notice of Rental Period Selection and a Notice of Marketing Option
Exercise shall be deemed to be a representation and warranty by Lessee
that each of the statements set forth above in this Paragraph 3.03 is
true and correct as of the date of such request and notice.
3.04. Covenant to Deliver. Lessee agrees (not as a condition but
as a covenant) to deliver to Lessor and Agent each item required to be
delivered to Lessor and Agent as a condition to each Advance if such
Advance is made. Lessee expressly agrees that the making of any Advance
prior to the receipt by Lessor and Agent of any such item shall not
constitute a waiver by Lessor, Agent or any Participant of Lessee's
obligation to deliver such item, unless expressly waived in writing.
SECTION 4. REPRESENTATIONS AND WARRANTIES.
4.01. Lessee's Representations and Warranties. In order to induce
the Lessor Parties to enter into this Agreement and the other Operative
Documents to which they are parties, Lessee hereby represents and
warrants to the Lessor Parties as follows:
(a) Due Incorporation, Qualification, etc. Each of Lessee
and Lessee's Subsidiaries (i) is a corporation duly organized,
validly existing and in good standing under the laws of its state
of incorporation; (ii) has the power and authority to own, lease
and operate its properties and carry on its business as now
conducted; and (iii) is duly qualified, licensed to do business
and in good standing as a foreign corporation in each jurisdiction
where the failure to be so qualified or licensed is reasonably
likely to have a Material Adverse Effect.
(b) Authority. The execution, delivery and performance by
Lessee of each Operative Document executed, or to be executed, by
Lessee and the consummation of the transactions contemplated
thereby (i) are within the power of Lessee and (ii) have been duly
authorized by all necessary actions on the part of Lessee.
(c) Enforceability. Each Operative Document executed, or
to be executed, by Lessee has been, or will be, duly executed and
delivered by Lessee and constitutes, or will constitute, a legal,
valid and binding obligation of Lessee, enforceable against Lessee
in accordance with its terms, except as limited by bankruptcy,
insolvency or other laws of general application relating to or
affecting the enforcement of creditors' rights generally and
general principles of equity.
(d) Non-Contravention. The execution and delivery by
Lessee of the Operative Documents executed by Lessee and the
performance and consummation of the transactions contemplated
thereby do not (i) violate any Requirement of Law applicable to
Lessee; (ii) violate any provision of, or result in the breach or
the acceleration of, or entitle any other Person to accelerate
(whether after the giving of notice or lapse of time or both), any
Contractual Obligation of Lessee; or (iii) result in the creation
or imposition of any Lien (or the obligation to create or impose
any Lien) upon any property, asset or revenue of Lessee (except
such Liens as may be created in favor of the Lessor Parties
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. No actions (including, without
limitation, derivative actions), suits, proceedings or
investigations are pending or, to the knowledge of Lessee,
threatened against Lessee or any of its Subsidiaries at law or in
equity in any court or before any other Governmental Authority
which (i) is reasonably likely (alone or in the aggregate) to have
a Material Adverse Effect or (ii) seeks to enjoin, either directly
or indirectly, the execution, delivery or performance by Lessee of
the Operative Documents or the transactions contemplated thereby.
(h) Title; Possession Under Leases. 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). 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 July 31, 1997, 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.
(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. Except as
otherwise permitted by Subparagraph 5.02(c) or Subparagraph
5.02(d), 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.
(l) Employee Benefit Plans.
(i) Based upon the latest valuation of each Employee
Benefit Plan that either Lessee or any ERISA Affiliate
maintains or contributes to, or has any obligation under
(which occurred within twelve months of the date of this
representation), the aggregate benefit liabilities of such
plan within the meaning of 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 liability, fine or penalty that is
reasonably likely to have a Material Adverse Effect. 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 that is reasonably likely to have a Material
Adverse Effect. 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 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 that is reasonably
likely to have a Material Adverse Effect. 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 or license 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 and Other Indebtedness. Lessee
and its Subsidiaries have filed or caused to be filed all tax
returns which are required to be filed by them. Lessee and its
Subsidiaries have paid, or made provision for the payment of, all
taxes and other Governmental Charges which have or may have become
due pursuant to said returns or otherwise and all other
indebtedness, except such Governmental Charges or indebtedness, if
any, which are being contested in good faith and as to which
adequate reserves (determined in accordance with GAAP) have been
provided or which are not reasonably likely to have a Material
Adverse Effect if unpaid.
(p) Margin Stock. Lessee owns no Margin Stock which, in
the aggregate, would constitute a substantial part of the assets
of Lessee, and no proceeds of any Loan will be used to purchase or
carry, directly or indirectly, any Margin Stock or to extend
credit, directly or indirectly, to any Person for the purpose of
purchasing or carrying any Margin Stock.
(q) Subsidiaries, etc. Set forth in Schedule 4.01(q) (as
supplemented by Lessee from time to time in a written notice to
Agent) is a complete list of all of Lessee's Subsidiaries, the
jurisdiction of incorporation of each, the classes of Equity
Securities of each and the number of shares and percentages of
shares of each such class owned directly or indirectly by Lessee.
(r) Catastrophic Events. Neither Lessee nor any of its
Subsidiaries and none of their properties is or has been affected
by any fire, explosion, accident, strike, lockout or other labor
dispute, drought, storm, hail, earthquake, embargo, act of God or
other casualty that is reasonably likely to have a Material
Adverse Effect. There are no disputes presently subject to
grievance procedure, arbitration or litigation under any of the
collective bargaining agreements, employment contracts or employee
welfare or incentive plans to which Lessee or any of its
Subsidiaries is a party, and there are no strikes, lockouts, work
stoppages or slowdowns, or, to the best knowledge of Lessee,
jurisdictional disputes or organizing activities occurring or
threatened which alone or in the aggregate are reasonably likely
to have a Material Adverse Effect.
(s) Burdensome Contractual Obligations, Etc. Neither
Lessee nor any of its Subsidiaries and none of their properties is
subject to any Contractual Obligation or Requirement of Law which
is reasonably likely to have a Material Adverse Effect.
(t) No Material Adverse Effect. No event has occurred and
no condition exists which is reasonably likely to have a Material
Adverse Effect.
(u) The Property.
(i) The Land consists of 15.12 acres located in the
City of Hillsboro, Washington County, Oregon, more
particularly described in Exhibit A.
(ii) On the date of this Agreement, there are no
Improvements on the Land. Upon the completion of the New
Improvements on the Land, the Improvements on the Land will
consist of a facility for the manufacture of advance laser
beam generation equipment and associated processes
containing approximately 15.12 acres (including parking,
landscaping, recreational and related facilities, amenities
and improvements).
(iii) No property, other than the leasehold interest
in the Land will be acquired for the Acquisition Price
therefor.
(iv) Access to the Land for pedestrians and motor
vehicles from publicly dedicated streets and public highways
is available.
(v) No portion of the Property is located in an area
identified as a special flood hazard area by the Federal
Emergency Management Agency or other applicable Governmental
Authority, or if any portion of the Property is located in
such an area, flood insurance has been obtained for the
Property or such portion thereof in accordance with
Paragraph 3.03 of the Lease Agreement and the National Flood
Insurance Act of 1968.
(vi) 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. No Hazardous Materials have been used, generated,
manufactured, stored, treated, disposed of, transported or
present on or released or discharged from the Property in
any manner that is reasonably likely to have a Material
Adverse Effect. There are no claims or actions which are
reasonably likely to have a Material Adverse Effect pending
or, to Lessee's knowledge, threatened against any of the
Property by any Governmental Authority or any other Person
relating to Hazardous Materials or pursuant to any
Environmental Laws.
(vii) 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.
(viii) 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.
(ix) After the execution by Lessor and Lessee of the
Ground Lease on the Closing Date, Lessor will have good and
valid leasehold interest in the Property, subject to no
Liens except for Permitted Property Liens.
(v) Chief Executive Office. Lessee's chief executive
office is located at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇., ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇.
(w) Accuracy of Information Furnished. None of the
Operative Documents and none of the other certificates, statements
or information furnished to any Lessor Party by or on behalf of
Lessee or any of its Subsidiaries in connection with the Operative
Documents or the transactions contemplated thereby contains or
will contain any untrue statement of a material fact or omits or
will omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they
were made, not misleading.
Lessee shall be deemed to have reaffirmed, for the benefit of the Lessor
Parties, each representation and warranty contained in this Paragraph
4.01 on and as of the date of each Credit Event (except for
representations and warranties expressly made as of a specified date,
which shall be true as of such date).
4.02. Lessor's Representations and Warranties. In order to induce
Lessee, Agent and the Participants to enter into this Agreement and the
other Operative Documents to which they are parties, Lessor hereby
represents and warranties to Lessee, Agent and the Participants as
follows:
(a) Due Incorporation, Qualification, etc. Lessor (i) is
a corporation duly organized, validly existing and in good
standing under the laws of Illinois and (ii) has the power and
authority to own, lease and operate its properties and carry on
its business as now conducted.
(b) Authority. The execution, delivery and performance by
Lessor of each Operative Document executed, or to be executed, by
Lessor and the consummation of the transactions contemplated
thereby (i) are within the power of Lessor and (ii) have been duly
authorized by all necessary actions on the part of Lessor.
(c) Enforceability. Each Operative Document executed, or
to be executed, by Lessor has been, or will be, duly executed and
delivered by Lessor and constitutes, or will constitute, a legal,
valid and binding obligation of Lessor, enforceable against Lessor
in accordance with its terms, except as limited by bankruptcy,
insolvency or other laws of general application relating to or
affecting the enforcement of creditors' rights generally and
general principles of equity.
(d) Non-Contravention. The execution and delivery by
Lessor of the Operative Documents executed by Lessor and the
performance and consummation of the transactions contemplated
thereby do not (i) violate any Requirement of Law applicable to
Lessor; (ii) violate any provision of, or result in the breach or
the acceleration of, or entitle any other Person to accelerate
(whether after the giving of notice or lapse of time or both), any
Contractual Obligation of Lessor; or (iii) result in the creation
or imposition of any Lien (or the obligation to create or impose
any Lien) upon any property, asset or revenue of Lessor (except
such Liens as may be created in favor of Agent pursuant to this
Agreement or the other Operative Documents).
(e) Approvals. No consent, approval, order or
authorization of, or registration, declaration or filing with, any
Governmental Authority or other Person (including, without
limitation, the shareholders of any Person) is required in
connection with the execution and delivery of the Operative
Documents executed by Lessor and the performance and consummation
of the transactions contemplated thereby, except such as have been
made or obtained and are in full force and effect.
(f) Litigation. No actions (including, without
limitation, derivative actions), suits, proceedings or
investigations are pending or, to the knowledge of Lessor,
threatened against Lessor at law or in equity in any court or
before any other Governmental Authority which (i) is reasonably
likely (alone or in the aggregate) to materially and adversely
affect the ability of Lessor to perform its obligations under the
Operative Documents to which it is a party or (ii) seeks to
enjoin, either directly or indirectly, the execution, delivery or
performance by Lessor of the Operative Documents or the
transactions contemplated thereby.
(g) Other Regulations. Lessor is not subject to
regulation under the Investment Company Act of 1940, the Public
Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act, any state public utilities code or to any
other Governmental Rule limiting its ability to incur
indebtedness.
(h) Chief Executive Office. Lessor's chief executive
office is located at ▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇.
4.03. Participants' Representations and Warranties. In order to
induce Lessee, Lessor and Agent to enter into this Agreement and the
other Operative Documents to which they are parties, each Participant
hereby represents and warranties to Lessee, Lessor and Agent as follows:
(a) Due Incorporation, Qualification, etc. Such
Participant (i) is a corporation duly organized, validly existing
and in good standing under the laws of its jurisdiction of
organization and (ii) has the power and authority to own, lease
and operate its properties and carry on its business as now
conducted.
(b) Authority. The execution, delivery and performance by
such Participant of each Operative Document executed, or to be
executed, by such Participant and the consummation of the
transactions contemplated thereby (i) are within the power of such
Participant and (ii) have been duly authorized by all necessary
actions on the part of such Participant.
(c) Enforceability. Each Operative Document executed, or
to be executed, by such Participant has been, or will be, duly
executed and delivered by such Participant and constitutes, or
will constitute, a legal, valid and binding obligation of such
Participant, enforceable against such Participant in accordance
with its terms, except as limited by bankruptcy, insolvency or
other laws of general application relating to or affecting the
enforcement of creditors' rights generally and general principles
of equity.
(d) Non-Contravention. The execution and delivery by such
Participant of the Operative Documents executed by such
Participant and the performance and consummation of the
transactions contemplated thereby do not (i) violate any
Requirement of Law applicable to such Participant; (ii) violate
any provision of, or result in the breach or the acceleration of,
or entitle any other Person to accelerate (whether after the
giving of notice or lapse of time or both), any Contractual
Obligation of such Participant; or (iii) result in the creation or
imposition of any Lien (or the obligation to create or impose any
Lien) upon any property, asset or revenue of such Participant
(except such Liens as may be created in favor of Lessor or Agent
pursuant to this Agreement or the other Operative Documents).
(e) Approvals. No consent, approval, order or
authorization of, or registration, declaration or filing with, any
Governmental Authority or other Person (including, without
limitation, the shareholders of any Person) is required in
connection with the execution and delivery of the Operative
Documents executed by such Participant and the performance and
consummation of the transactions contemplated thereby, except such
as have been made or obtained and are in full force and effect.
(f) Litigation. No actions (including, without
limitation, derivative actions), suits, proceedings or
investigations are pending or, to the knowledge of such
Participant, threatened against such Participant at law or in
equity in any court or before any other Governmental Authority
which (i) is reasonably likely (alone or in the aggregate) to
materially and adversely affect the ability of such Participant to
perform its obligations under the Operative Documents to which it
is a party or (ii) seeks to enjoin, either directly or indirectly,
the execution, delivery or performance by such Participant of the
Operative Documents or the transactions contemplated thereby.
(g) Own Account. Such Participant is acquiring its
participation interest hereunder for its own account for
investment and not with a view to any distribution (as such term
is used in Section 2(11) of the Securities Act of 1933) thereof,
and, if in the future it should decide to dispose of its
participation interest, it understands that it may do so only in
compliance with the Securities Act of 1933 and the rules and
regulations of the Securities and Exchange Commission thereunder
and any applicable state securities laws.
SECTION 5. COVENANTS.
5.01. Lessee's Affirmative Covenants. Until the termination of
this Agreement and the satisfaction in full by Lessee of all Lessee
Obligations, Lessee will comply, and will cause compliance, with the
following affirmative covenants, unless Lessor and Required Participants
shall otherwise consent in writing:
(a) Financial Statements, Reports, etc. Lessee shall
furnish to Agent, with sufficient copies for Lessor and each
Participant, 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
sixty (60) days after the last day of each fiscal quarter of
Lessee (other than the last quarter of each 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, twenty (120) 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, audited by independent
certified public accountants of recognized national standing
acceptable to Agent and Required Participants, (B) copies of
the unqualified opinions (or qualified opinions reasonably
acceptable to Agent and Required Participants) 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 Paragraph 5.03 and have obtained
no knowledge of any violation by Lessee and its Subsidiaries
of the covenants set forth therein, or if, in the opinion of
such accountants, any such violation has occurred, 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 (a "Compliance
Certificate") 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 possible and in no event later than
five (5) Business Days after any 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 $10,000,000 or more (alone or in the
aggregate); (C) any other event or condition which is
reasonably likely to have a Material Adverse Effect; or
(D) any Default; the statement of the president or chief
financial officer of Lessee setting forth details of such
event, condition or Default and the action which Lessee
proposes to take with respect thereto;
(v) As soon as available and in no event later than
five (5) Business Days after they are sent, made available
or filed, copies of (A) all registration statements and
reports filed by Lessee or any of its Subsidiaries with any
securities exchange or the Securities and Exchange
Commission (including, without limitation, all 10-Q, 10-K
and 8-Q reports); (B) all reports, proxy statements and
financial statements sent or made available by Lessee or any
of its Subsidiaries to its security holders; and (C) all
press releases and other similar public concerning any
material developments in the business of Lessee or any of
its Subsidiaries made available by Lessee or any of its
Subsidiaries to the public generally;
(vi) As soon as available and in no event later than
thirty (30) days after 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
(vii) 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 Agent may from time to time
reasonably request.
(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;
provided, however, that, if no Default has occurred and is
continuing, Lessee shall not be required to permit more than four
(4) such visits for inspection and examination in any fiscal year.
(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;
(ii) Carry and maintain each policy for such
insurance with (A) a company which is rated A or better by
A.M. Best and Company at the time such policy is placed and
at the time of each annual renewal thereof or (B) any other
insurer which is reasonably satisfactory to Agent; and
(iii) Deliver to Agent from time to time, as Agent may
request, schedules setting forth all insurance then in
effect.
(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) 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 are maintained to the
reasonable satisfaction of Agent.
(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 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. Lessee shall maintain its chief executive office
and principal place of business in the United States and shall not
relocate its chief executive office or principal place of business
outside of California except upon not less than ninety (90) 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 or any Guaranty Obligations except for the following
("Permitted Indebtedness"):
(i) The Lessee Obligations under the Operative
Documents;
(ii) Indebtedness of Lessee and its Subsidiaries
listed in Schedule 5.02(a) and existing on the date of this
Agreement;
(iii) 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;
(iv) 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 such account is more than ninety (90) days past due
(unless subject to a bona fide dispute and for which
adequate reserves have been established);
(v) Indebtedness of Lessee and its Subsidiaries
under Rate Contracts, provided that all such arrangements
are entered into in connection with bona fide hedging
operations and not for speculation;
(vi) 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
ninety (90) days after, the first functional use by such
Person of the property so financed and (B) such Indebtedness
does not exceed the purchase price of the property so
financed;
(vii) Subordinated Indebtedness of Lessee and its
Subsidiaries;
(viii) Indebtedness of Lessee and its
Subsidiaries under initial or successive refinancings of any
Indebtedness permitted by clause (ii) above or under
replacements of lines of credit or other credit commitments
permitted by clause (ii) above, provided that (A) the
principal amount of any such refinancing or replacement does
not exceed the principal amount of the Indebtedness being
refinanced or commitment being replaced and (B) the material
terms and provisions of any such refinancing or replacement
(including redemption, prepayment, default and subordination
provisions) are not substantially less favorable than the
comparable terms of the Indebtedness being refinanced or
commitment being replaced, except that the maturity of the
new Indebtedness or commitment may be longer;
(ix) Indebtedness of Lessee and its Subsidiaries with
respect to Surety Instruments incurred in the ordinary
course of business (including surety bonds issued to secure
obligations of Lessee and its Subsidiaries in respect of
equipment ordered from Lessee and its Subsidiaries);
(x) Guaranty Obligations of Lessee in respect of
Permitted Indebtedness of its Subsidiaries;
(xi) Indebtedness of Lessee to any of its
Subsidiaries, Indebtedness of any of Lessee's Subsidiaries
to Lessee or Indebtedness of any of Lessee's Subsidiaries to
any of Lessee's other Subsidiaries, provided that (A) any
Indebtedness of Lessee to any of its Subsidiaries and any
Indebtedness of any of Lessee's Subsidiaries to Lessee shall
be subject to Subparagraph 5.02(j) and (B) any Indebtedness
of Lessee to any of its Subsidiaries is Subordinated
Indebtedness;
(xii) Indebtedness of Lessee's Japanese Subsidiary
with respect to the sale, transfer or assignment of accounts
receivable of such Subsidiary and certain rights and
property related to the collection of or constituting
proceeds of such accounts receivable, provided that:
(A) Such sale, assignment or transfer is (1)
in the ordinary course of business, (2) for cash, (3)
with recourse to such Subsidiary in an amount not to
exceed the aggregate face amount of the accounts
receivable sold and certain additional interest
charges with respect to such Indebtedness and (4)
otherwise permitted under Subparagraph 5.02(c)(vii);
and
(B) Both immediately before and after giving
effect to such sale, assignment or transfer, no
Default shall have occurred and be continuing; and
(xiii) Other Indebtedness of Lessee and its
Subsidiaries, provided that the aggregate amount of such
other Indebtedness outstanding at any time does not exceed
ten percent (10%) of Lessee's Tangible Net Worth on the last
day of the immediately preceding fiscal year.
(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 any Lessor Party securing the
Lessee Obligations;
(ii) Liens listed in Schedule 5.02(b) and existing on
the date of this Agreement;
(iii) 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 have been
established in accordance with GAAP;
(iv) 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 have
been established in accordance with GAAP;
(v) Deposits under workers' compensation,
unemployment insurance and social security laws or to secure
the performance of bids, tenders, contracts (other than for
the repayment of borrowed money) or leases, or to secure
statutory obligations of surety or appeal bonds or to secure
indemnity, performance or other similar bonds in the
ordinary course of business;
(vi) 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;
(vii) Banker's Liens and similar Liens (including set-
off rights) in respect of bank deposits;
(viii) Liens on any property or assets acquired,
or on the property or assets of any Persons acquired, by
Lessee or any of its Subsidiaries after the date of this
Agreement pursuant to Subparagraph 5.02(d), provided that
(A) such Liens exist at the time such property or assets or
such Persons are so acquired and (B) such Liens were not
created in contemplation of such acquisitions;
(ix) Judgement Liens, provided that such Liens do not
have a value in excess of $10,000,000 or such Liens are
released, stayed, vacated or otherwise dismissed within
thirty (30) days after issue or levy and, if so stayed, such
stay is not thereafter removed;
(x) Rights of (A) vendors or lessors under
conditional sale agreements, Capital Leases or other title
retention agreements, provided that, in each case, (1) such
rights secure or otherwise relate to Permitted Indebtedness,
(2) such rights do not extend to any property other than
property acquired with the proceeds of such Permitted
Indebtedness and (3) such rights do not secure any
Indebtedness other than such Permitted Indebtedness and (B)
lessors under operating leases;
(xi) Liens in favor of customs and revenue
authorities arising as a matter of law to secure payment of
customs duties and in connection with the importation of
goods in the ordinary course of Lessee's and its
Subsidiaries' businesses;
(xii) Liens securing Indebtedness which constitutes
Permitted Indebtedness under clause (vi) 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;
(xiii) Liens securing Indebtedness which
constitutes Permitted Indebtedness under clause (xii) of
Subparagraph 5.02(a) provided that, in each case, such Lien
(A) secures only such Permitted Indebtedness, and (B) such
Liens do not extend to any assets or property other than the
assets or property sold (other than cash pledged under
certain circumstances to secure such Permitted Indebtedness
in an amount not to exceed $15,000,000 in the aggregate
during the term of this Agreement, provided that both
immediately before and after giving effect to any such cash
collateralization, Lessee shall be in compliance with the
financial covenants set forth in Paragraph 5.03 and no other
Default or Event of Default shall have occurred and be
continuing);
(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 (ii) or (xii) above, provided that
any extension, renewal or replacement Lien (A) is limited to
the property covered by the existing Lien and (B) secures
Indebtedness which is no greater in amount and has material
terms no less favorable to the Participants than the
Indebtedness secured by the existing Lien;
(xvi) Liens on insurance proceeds in favor of
insurance companies with respect to the financing of
insurance premiums;
(xvii) Liens in inventory of Lessee and its
Subsidiaries in favor of (A) customers of Lessee and its
Subsidiaries to secure the obligations of Lessee and its
Subsidiaries in respect of equipment ordered from Lessee and
its Subsidiaries by such customers or (B) sureties that have
issued surety bonds to such customers to secure such
obligations, provided that each such Lien (1) covers only
(y) the equipment ordered by a customer pursuant to a
purchase order which has been delivered to Lessee or one of
its Subsidiaries and (z) the parts and other inventory of
Lessee and its Subsidiaries which will be used to build such
equipment, (2) secures only the obligations of Lessee and
its Subsidiaries in respect of such equipment and (3)
terminates upon the delivery of such equipment to such
customer or the ultimate purchaser thereof or the return to
such customer of such deposit;
(xviii) Permitted Property Liens in the Property;
and
(xix) Other Liens, provided that the aggregate amount
of the Indebtedness outstanding at any time and secured by
such other Liens does not exceed five percent (5%) of
Lessee's Tangible Net Worth on the last day of the
immediately preceding fiscal year;
Provided, however, that the foregoing exceptions shall not be
construed to permit any Liens, except for Permitted Property
Liens, in any of the Property
(c) Asset Dispositions. Neither Lessee nor any of its
Subsidiaries shall sell, lease, transfer or otherwise dispose of
all or any part 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 or other dispositions of surplus, damaged,
worn or obsolete equipment or inventory;
(iii) Sales or other dispositions of Investments
permitted by clause (i) 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, for cash, in the ordinary course of
business of accounts receivable of Lessee's Japanese
Subsidiary and certain rights and property of such
Subsidiary related to the collection of or constituting
proceeds of such accounts receivable, with or without
recourse, at a discount rate not to exceed ten percent
(10%);
(viii) Sales, for cash, in the ordinary course of
business of accounts receivable of Lessee and certain rights
and property of Lessee related to the collection of or
constituting proceeds of such accounts receivable, with or
without recourse, at a discount rate not to exceed ten
percent (10%), provided that the aggregate amount of
accounts receivable so sold by Lessee in any fiscal quarter
does not exceed twelve million Dollars $12,000,000);
(ix) The sale by Lessee to the ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ of the
improvements that have been made by Lessee to the property
located at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ and
that will be leased back to Lessee pursuant to the Hayward
Lease, provided that (A) the book value of such improvements
at the time of such sale does not exceed $11,000,000 and (B)
the purchase price paid by the ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ for such
improvements is not less than $12,000,000; and
(x) Other sales, leases, transfers and disposals of
assets and property, provided that the aggregate value of
all such assets and property (based upon the greater of the
fair market or book value of such assets and property) so
sold, leased, transferred or otherwise disposed of in any
fiscal year does not exceed five percent (5%) of Lessee's
Tangible Net Worth on the last day of the immediately
preceding fiscal year;
Provided, however, that the foregoing exceptions shall not be
construed to permit any sales, leases, transfers or other
disposals of any of the Property, except as expressly permitted by
the Lease Agreement.
(d) Mergers, Acquisitions, Etc. Neither Lessee nor any of
its Subsidiaries shall acquire any other Person (whether through
merger with such Person, acquisition of such Person as a
Subsidiary or otherwise) or all or substantially all of the assets
of any other Person, except that Lessee and its Subsidiaries may
make any such acquisitions if (i) the aggregate consideration paid
by Lessee and its Subsidiaries in cash for all such acquisitions
after the date of this Agreement does not exceed $25,000,000; (ii)
the aggregate consideration paid by Lessee and its Subsidiaries in
stock for all such acquisitions after the date of this Agreement
does not exceed $50,000,000 (such stock to be valued at the market
value thereof at the time paid as consideration); (iii) in any
merger involving Lessee, Lessee is the surviving corporation; and
(iv) both immediately before and after giving effect to any such
acquisition, no Default shall have occurred and be continuing.
(e) Investments. Neither Lessee nor any of its
Subsidiaries shall make any Investment except for Investments in
the following:
(i) Investments in Cash Equivalents;
(ii) Investments permitted by the investment policy
of Lessee set forth in Schedule 5.02(e) or, if any changes
to the investment policy of Lessee are hereafter duly
approved by the Board of Directors of Lessee, in any
subsequent investment policy which is the most recent
investment policy delivered by Lessee to Agent with a
certificate of Lessee's chief financial officer to the
effect that such investment policy has been duly approved by
Lessee's Board of Directors and is then in effect;
(iii) Loans and other extensions of credit by Lessee
and its Subsidiaries to each other to the extent permitted
by clause (xi) of Subparagraph 5.02(a) and other types of
Investments by Lessee and its Subsidiaries to each other;
(iv) Investments consisting of loans to employees,
officers and directors, provided that the aggregate
principal amount of such loans does not exceed $5,000,000 at
any time;
(v) Investments of Lessee and its Subsidiaries in
Rate Contracts, provided that all such arrangements are
entered into in connection with bona fide hedging operations
and not for speculation;
(vi) Investments permitted by Subparagraph 5.02(d);
and
(vii) Other Investments, provided that the amount of
any such Investment, when added to the aggregate amount of
all other Investments made pursuant to this clause (vii)
since the date of this Agreement (net of any returns
previously received on account of such Investments), does
not exceed ten percent (10%) of Lessee's Tangible Net Worth
on the last day of the immediately preceding fiscal year.
(f) Dividends, Redemptions, Etc. Neither Lessee nor any
of its Subsidiaries shall pay any dividends or make any
distributions on its Equity Securities; purchase, redeem, retire,
defease or otherwise acquire for value any of its Equity
Securities; return any capital to any holder of its Equity
Securities as such; make any distribution of assets, Equity
Securities, obligations or securities to any holder of its Equity
Securities as such; or set apart any sum for any such purpose;
except as follows:
(i) Either Lessee or any of its Subsidiaries may pay
dividends on its capital stock payable solely in such
Person's own capital stock;
(ii) Any Subsidiary of Lessee may pay dividends to
Lessee; and
(iii) Lessee may repurchase its Equity Securities,
provided that the cost of any such repurchase, when added to
the aggregate cost of all other repurchases made pursuant to
this clause (iii) since the date of this Agreement, does not
exceed ten percent (10%) of Lessee's Tangible Net Worth on
the last day of the immediately preceding fiscal year.
(g) Change in Business. Neither Lessee nor any of its
Subsidiaries shall engage, either directly or indirectly through
Affiliates, in any business that is substantially different from
the semi-conductor market (including semi-conductor capital
equipment, test and inspection equipment, flat panel displays and
laser direct imaging equipment), the pattern generation market and
any strategic component parts in relation thereto.
(h) Indebtedness Payments, Etc. Neither Lessee nor any of
its Subsidiaries shall (i) prepay, redeem, purchase, defease or
otherwise satisfy in any manner prior to the scheduled payment
thereof any Subordinated Indebtedness or (ii) amend, modify or
otherwise change any of the subordination or other provisions of
any document, instrument or agreement evidencing Subordinated
Indebtedness in a manner which adversely affects the material
rights of the Lessor Parties.
(i) ERISA. Neither Lessee nor any ERISA Affiliate shall
(i) adopt or institute any Employee Benefit Plan that is an
employee pension benefit plan within the meaning of Section 3(2)
of ERISA, (ii) take any action which will result in the partial or
complete withdrawal, within the meanings of sections 4203 and 4205
of ERISA, from a Multiemployer Plan, (iii) engage or permit any
Person to engage in any transaction prohibited by section 406 of
ERISA or section 4975 of the IRC involving any Employee Benefit
Plan or Multiemployer Plan which would subject either Lessee or
any ERISA Affiliate to any tax, penalty or other liability
including a liability to indemnify, (iv) incur or allow to exist
any accumulated funding deficiency (within the meaning of
section 412 of the IRC or section 302 of ERISA), (v) fail to make
full payment when due of all amounts due as contributions to any
Employee Benefit Plan or Multiemployer Plan, (vi) fail to comply
with the requirements of section 4980B of the IRC or Part 6 of
Title I(B) of ERISA, or (vii) adopt any amendment to any Employee
Benefit Plan which would require the posting of security pursuant
to section 401(a)(29) of the IRC, where singly or cumulatively,
the above would have a Material Adverse Effect.
(j) 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.
(k) Accounting Changes. Neither Lessee nor any of its
Subsidiaries shall (i) change its fiscal year (currently August 1
through July 31) or (ii) except as required by GAAP, change its
accounting practices in any manner which would affect Lessee's
compliance with Paragraph 5.03.
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) Leverage Ratio. Lessee shall not permit the Leverage
Ratio of Lessee on the last day of any fiscal quarter set forth
below to be greater than the ratio set forth opposite such quarter
below:
Quarters ending on January 31, 1998
April 30, 1998 and July 31, 1998 0.250
to 1.000;
Quarters ending on, October 31, 1998,
January 31, 1999, April 30, 1999
and July 31, 1999 0.275 to
1.000;
Each quarter thereafter 0.250 to
1.000.
(b) Quick Ratio. Lessee shall not permit the Quick Ratio
of Lessee on the last day of any fiscal quarter set forth below to
be less than the ratio set forth opposite such quarter below:
Quarter ending on January 31, 1998 1.00
to 1.00;
Each quarter thereafter 1.10 to
1.00.
(c) Net Worth. Lessee shall not permit the net worth of
Lessee and its Subsidiaries on the last day of any fiscal quarter
(such day to be referred to herein as a "determination date")
which commences after April 30, 1996 (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) $50,000,000;
(ii) Seventy-five percent (75%) of the sum of the
consolidated quarterly Adjusted Net Income (ignoring any
quarterly losses) of Lessee and its Subsidiaries for each
quarter after the base date through and including the
quarter ending on the determination date; and
(iii) Fifty percent (50%) of the Net Proceeds realized
by Lessee and its Subsidiaries from the issuance of Equity
Securities during the period commencing on the base date and
ending on the determination date.
(d) Cash Balances. Lessee shall not permit the Cash
Balances of Lessee and its Subsidiaries to be less than
$25,000,000 on the last day of any fiscal quarter.
(e) Debt Service Coverage Ratio. Lessee shall not permit
the Debt Service Coverage Ratio of Lessee and its Subsidiaries for
any consecutive four-quarter period to be less than the ratio set
forth opposite such quarter below:
Quarters ending on January 31, 1998
and April 30, 1998 5.00
to 1.00;
Quarters ending on, July 31, 1998
and October 31, 1998 3.00
to 1.00;
Quarters ending on, January 31, 1999
and April 30, 1999 4.00
to 1.00;
Each quarter thereafter 5.00 to 1.00
(f) Profitability. Lessee shall not permit:
(i) The Adjusted Net Income of Lessee and its
Subsidiaries to be a loss in more than two quarters in any
consecutive four-quarter period or the aggregate amount of
any such two quarterly losses to exceed $10,000,000 in total
for the two quarters combined;
(ii) The Operating Income of Lessee and its
Subsidiaries to be a loss in more than two quarters in any
consecutive four-quarter period or the aggregate amount of
any such two quarterly losses to exceed $10,000,000 in total
for the two quarters combined; or
(iii) The cumulative Adjusted Net Income of Lessee and
its Subsidiaries for any consecutive four-quarter period to
be less than $1.00.
5.04. Lessor's Covenants. Until the termination of this Agreement
and the satisfaction in full by Lessor of all Lessor Obligations, Lessor
will comply, and will cause compliance, with the following covenants,
unless Lessee and Required Participants shall otherwise consent in
writing:
(a) Use of Proceeds. Lessor shall use the proceeds of all
amounts delivered to Lessor by Participants pursuant to
Subparagraph 2.05(a) solely to fund Advances.
(b) Lessor Liens. Lessor shall not create, incur, assume
or permit to exist any Lessor Lien (other than any Lien granted to
Agent or any Participant pursuant to the Operative Documents to
secure the Lessor Obligations) and shall promptly discharge, at
its sole cost and expense, any Lessor Lien on the Property (other
than any Liens granted to Agent or any Participant pursuant to the
Operative Documents to secure the Lessor Obligations); provided,
however, that Lessor shall not be required so to discharge any
such Lessor Lien if the same is being (or promptly will be)
contested in good faith by appropriate proceedings diligently
prosecuted, provided that any such contest is completed and all
Lessor Liens are discharged on or prior to the Expiration Date.
(c) Property Disposition. Lessor shall not sell, lease,
transfer or otherwise dispose of its right, title and interest in
the Property and the Operative Documents except as provided in
Subparagraph 2.11(b) or Subparagraph 7.05(d) hereof or in the
Purchase Agreement or after retaining the Property following the
Expiration Date.
(d) Chief Executive Office. Lessor shall not change its
chief executive office without giving Agent prompt written notice.
5.05. Participants' Covenants. Each Participant covenants that it
will not fund its portion of any Advance with the assets of any
"employee benefit plan" (as defined in Section 3(3) of ERISA) which is
subject to Title I of ERISA or any "plan" (as defined in Section
4975(e)(1) of the IRC.
SECTION 6. LESSOR, AGENT AND THEIR RELATIONS WITH PARTICIPANTS.
6.01. Appointment of Agent. Each Participant hereby appoints and
authorizes Agent to act as its agent hereunder and under the other
Operative Documents with such powers as are expressly delegated to Agent
by the terms of this Agreement and the other Operative Documents,
together with such other powers as are reasonably incidental thereto.
Lessor is not an agent for the Participants or Agent, and neither this
Agreement nor any other Operative Document shall be construed to
constitute or evidence a partnership among the Lessor Parties or
otherwise to impose upon Lessor or Agent any fiduciary duty.
6.02. Powers and Immunities. Neither Lessor nor Agent shall have
any duties or responsibilities except those expressly set forth in this
Agreement or in any other Operative Document, be a trustee for any
Participant or have any fiduciary duty to any Participant.
Notwithstanding anything to the contrary contained herein, neither
Lessor nor Agent shall be required to take any action which is contrary
to this Agreement or any other Operative Document or any applicable
Governmental Rule. Neither Lessor nor Agent nor any Participant shall
be responsible to any Participant for any recitals, statements,
representations or warranties made by Lessee or any of its Subsidiaries
contained in this Agreement or in any other Operative 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 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. 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 each
Participant agrees to be bound by all of the agreements of Agent
contained in the Operative Documents.
6.09. Lessor and Agent in their Individual Capacities. Lessor,
Agent and their respective affiliates may make loans to, accept deposits
from and generally engage in any kind of banking or other business with
Lessee and its Subsidiaries and affiliates as though Lessor were not
Lessor hereunder and Agent were not Agent hereunder. With respect to
Advances, if any, made by Agent in its capacity as a Participant, Agent
in its capacity as a Participant shall have the same rights and powers
under this Agreement and the other Operative Documents as any other
Participant and may exercise the same as though it were not Agent, and
the terms "Participant" or "Participants" shall include Agent in its
capacity as a Participant.
SECTION 7. MISCELLANEOUS
7.01. Notices. Except as otherwise provided herein, all notices,
requests, demands, consents, instructions or other communications to or
upon Lessor, Lessee, any Participant or Agent under this Agreement or
the other Operative Documents shall be in writing and faxed, mailed or
delivered, if to Lessor, Lessee or Agent, at its respective facsimile
number or address set forth below or, if to any Participant, at the
address or facsimile number specified beneath the heading "Address for
Notices" under the name of such Participant in Part B of Schedule I (or
to such other facsimile number or address for any party as indicated in
any notice given by that party to the other parties). All such notices
and communications shall be effective (a) when sent by Federal Express
or other overnight service of recognized standing, on the Business Day
following the deposit with such service; (b) when mailed, first class
postage prepaid and addressed as aforesaid through the United States
Postal Service, upon receipt; (c) when delivered by hand, upon delivery;
and (d) when faxed, upon confirmation of receipt; provided, however,
that any Advance Request, Notice of Rental Period Selection, Extension
Request, Notice of Term Purchase Option Exercise, Notice of Marketing
Option Exercise or Notice of Expiration Date Purchase Option Exercise
delivered to Lessor or Agent shall not be effective until received by
Lessor or Agent.
Lessee: Etec Systems, Inc.
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Attn: Treasurer
Tel. No: (▇▇▇) ▇▇▇-▇▇▇▇
Fax. No: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇▇
Tel. No: (▇▇▇) ▇▇▇-▇▇▇▇
Fax. No: (▇▇▇) ▇▇▇-▇▇▇▇
Lessor: Lease Plan North America, Inc.
c/o ABN AMRO Bank N.V.
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Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Tel. No: (▇▇▇) ▇▇▇-▇▇▇▇
Fax. No: (▇▇▇) ▇▇▇-▇▇▇▇
Agent: ABN AMRO Bank N.V.
Capital Markets-Syndications Group
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Attn: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Tel. No: (▇▇▇) ▇▇▇-▇▇▇▇
Fax. No: (▇▇▇) ▇▇▇-▇▇▇▇
With a copy to:
ABN AMRO Bank N.V.
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Attn: ▇▇▇▇▇ ▇▇▇
Tel. No: (▇▇▇) ▇▇▇-▇▇▇▇
Fax. No: (▇▇▇) ▇▇▇-▇▇▇▇
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 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 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 but shall reduce such obligations to the extent of any increase in
those obligations caused solely by any such failure or delay that is
unreasonable. 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 Paragraph 2.06 or this Paragraph 7.04, (vi) amends the
definition of Required Participants or (vii) releases Lessor's
interest in any substantial part of the Property, must be in
writing and 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.
(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 Five Million
Dollars ($5,000,000) (except that a Participant may
make an Assignment which reduces its Commitment to
zero without the written consent of Lessor, Agent or
Lessee); or
(C) Without the written consent of Lessor,
Agent and, if no Default has occurred and is
continuing, Lessee (which consent of Lessor, Agent and
Lessee shall not be unreasonably withheld), no
Participant may make any Assignment of its Outstanding
Tranche A Participation Amount or its Outstanding
Tranche B Participation Amount which does not assign
and delegate an equal pro rata interest in (1) such
Participant's Outstanding Tranche A Participation
Amount and its Outstanding Tranche B Participation
Amount, (2) such Participant's Tranche A Percentage
and its Tranche B Percentage, and (3) such
Participant's other rights, duties and obligations
relating to the Tranche A Portion and the Tranche B
Portion under this Agreement and the other Operative
Documents.
(D) Without the written consent of Lessor,
Agent and, if no Default has occurred and is
continuing, Lessee (which consent of Lessor, Agent and
Lessee shall not be unreasonably withheld), no Tranche
C Participant may make any Assignment of its
Outstanding Tranche C Participation Amount which does
not assign and delegate an equal pro rata interest in
(1) such Participant's Outstanding Tranche C
Participation Amount, (2) such Participant's Tranche C
Percentage, and (3) such Participant's other rights,
duties and obligations relating to the Tranche C
Portion under this Agreement and the other Operative
Documents.
Upon such execution, delivery, acceptance and recording of
each Assignment Agreement, from and after the Assignment
Effective Date determined pursuant to such Assignment
Agreement, (y) each Assignee Participant thereunder shall be
a Participant hereunder with a Tranche A Percentage, Tranche
B Percentage, Tranche C Percentage and Proportionate Share
as set forth on Attachment 1 to such Assignment Agreement
(under the caption "Tranche Percentages and Proportionate
Shares After Assignment") and shall have the rights, duties
and obligations of such a Participant under this Agreement
and the other Operative Documents, and (z) the Assignor
Participant thereunder shall be a Participant with a Tranche
A Percentage, Tranche B Percentage, Tranche C Percentage and
Proportionate Share as set forth on Attachment 1 to such
Assignment Agreement (under the caption "Tranche Percentages
and Proportionate Shares After Assignment") , or, if the
Proportionate Share of the Assignor Participant has been
reduced to 0%, the Assignor Participant shall cease to be a
Participant and to have any obligation to fund any portion
of any Advance; provided, however, that any such Assignor
Participant which ceases to be a Participant shall continue
to be entitled to the benefits of any provision of this
Agreement which by its terms survives the termination of
this Agreement. Each Assignment Agreement shall be deemed
to amend Schedule I to the extent, and only to the extent,
necessary to reflect the addition of each Assignee
Participant, the deletion of each Assignor Participant which
reduces its Proportionate Share to 0% and the resulting
adjustment of Tranche A Percentages, Tranche B Percentages,
Tranche C Percentages and Proportionate Shares arising from
the purchase by each Assignee Participant of all or a
portion of the rights and obligations of an Assignor
Participant under this Agreement and the other Operative
Documents. Each Assignee Participant which was not
previously a Participant hereunder and which is not
incorporated under the laws of the United States of America
or a state thereof shall, within three (3) Business Days of
becoming a Participant, deliver to 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.
(ii) Agent shall maintain at its address referred to
in Paragraph 7.01 a copy of each Assignment Agreement
delivered to it and a register (the "Register") for the
recordation of the names and addresses of the Participants
and the Tranche A Percentage, Tranche B Percentage, Tranche
C Percentage and Proportionate Share of each Participant
from time to time. The entries in the Register shall be
conclusive in the absence of manifest error, and Lessee,
Agent and the Participants may treat each Person whose name
is recorded in the Register as the owner of the interests
recorded therein for all purposes of this Agreement. The
Register shall be available for inspection by Lessee or any
Participant at any reasonable time and from time to time
upon reasonable prior notice.
(iii) Upon its receipt of an Assignment Agreement
executed by an Assignor Participant and an Assignee
Participant (and, to the extent required by clause (i) of
this Subparagraph 7.05(b), by Lessor, Agent and Lessee),
together with payment to Agent by Assignor Participant of a
registration and processing fee of $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 and recordation to Lessor, the
Participants and Lessee. Agent may, from time to time at
its election, prepare and deliver to Lessor, the
Participants and Lessee a revised Schedule I reflecting the
names, addresses and respective Proportionate Shares of all
Participants then parties hereto.
(iv) Subject to Subparagraph 7.13(g), the Lessor
Parties may disclose the Operative Documents and any
financial or other information relating to Lessee or any
Subsidiary to each other or to any potential Assignee
Participant.
(c) Participant Subparticipations. Any Participant may at
any time sell to one or more 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 will not cause the transaction evidenced by this
Agreement and the other Operative Documents to lose its
treatment as an operating lease under FASB 13 or (2) a
Person approved as provided in clause (ii) below; or
(ii) If such sale and assignment is effected in any
other circumstance, the successor Lessor shall be a Person
that is (A) a financial institution or a Person controlled
by a financial institution and (B) approved in writing by
Agent, Required Participants and, if no Default has occurred
and is continuing, Lessee (which consents of Agent, Required
Participants and Lessee shall not be unreasonably withheld);
and
(iii) The successor Lessor executes such documents,
instruments and agreements as may reasonably be necessary to
evidence its agreement to assume all of the obligations and
duties of the Lessor under this Agreement and the other
Operative Documents.
Upon the consummation of any such sale and assignment, (A) the
successor Lessor shall become the "Lessor" and shall succeed to
and become vested with all the rights, powers, privileges, duties
and obligations of the Lessor under this Agreement and the other
Operative Documents and (B) the retiring Lessor shall be
discharged from the duties and obligations of the Lessor
thereafter arising under this Agreement and the other Operative
Documents. After any retiring Lessor's discharge as the Lessor,
the provisions of Section 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.
7.06. Setoff. In addition to any rights and remedies of the
Participants provided by law, each Participant shall have the right,
with the prior written consent of Agent, but without prior notice to or
consent of Lessee, any such notice and consent being expressly waived by
Lessee to the extent permitted by applicable law, upon the occurrence
and during the continuance of an Event of Default, to set-off and apply
against the Lessee Obligations, whether matured or unmatured, any amount
owing from such Participant to Lessee, at or at any time after, the
occurrence of such Event of Default. The aforesaid right of set-off may
be exercised by such Participant against Lessee or against any trustee
in bankruptcy, debtor in possession, assignee for the benefit of
creditors, receiver or execution, judgment or attachment creditor of
Lessee or against anyone else claiming through or against Lessee or such
trustee in bankruptcy, debtor in possession, assignee for the benefit of
creditors, receiver, or execution, judgment or attachment creditor,
notwithstanding the fact that such right of set-off shall not have been
exercised by such Participant prior to the occurrence of an Event of
Default. Each Participant agrees promptly to notify Lessee after any
such set-off and application made by such Participant, provided that the
failure to give such notice shall not affect the validity of such set-
off and application.
7.07. No Third Party Rights. Nothing expressed in or to be
implied from this Agreement is intended to give, or shall be construed
to give, any Person, other than the parties hereto and their permitted
successors and assigns hereunder, any benefit or legal or equitable
right, remedy or claim under or by virtue of this Agreement or under or
by virtue of any provision herein.
7.08. Partial Invalidity. If at any time any provision of this
Agreement or any other Operative Document is or becomes illegal, invalid
or unenforceable in any respect under the law or any jurisdiction,
neither the legality, validity or enforceability of the remaining
provisions of this Agreement or the other Operative Documents nor the
legality, validity or enforceability of such provision under the law of
any other jurisdiction shall in any way be affected or impaired thereby.
7.09. JURY TRIAL. EACH OF LESSEE AND THE LESSOR PARTIES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY IRREVOCABLY WAIVES
ALL RIGHT TO TRIAL BY JURY AS TO ANY ISSUE RELATING TO THE OPERATIVE
DOCUMENTS IN ANY ACTION, PROCEEDING, OR COUNTERCLAIM ARISING OUT OF OR
RELATING TO ANY OPERATIVE DOCUMENT.
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 to the extent
reasonably determined by such Lessor Party to be necessary for the
administration or enforcement of the Operative Documents; (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 in response to any
summons or subpoena; (f) in connection with any litigation among the
parties relating to the Operative Documents or the transactions
contemplated thereby; (g) to comply with any Requirement of Law
applicable to such Lessor Party; (h) to any Assignee Participant or
Subparticipant or any prospective Assignee Participant or
Subparticipant, provided that such Assignee Participant or
Subparticipant or prospective Assignee Participant or Subparticipant
agrees to be bound by this Paragraph 7.13; or (i) otherwise with the
prior consent of Lessee; provided, however, that (i) any Lessor Party
served with any summons or subpoena demanding the disclosure of any such
information shall use reasonable efforts to notify Lessee promptly of
such summons or subpoena and, if requested by Lessee and not materially
disadvantageous to such Lessor Party, to cooperate with Lessee in
obtaining a protective order restricting such disclosure, and (ii) any
disclosure made in violation of this Agreement shall not affect the
obligations of Lessee and its Subsidiaries under this Agreement and the
other Operative Documents.
7.14. Governing Law. This Agreement and the other Operative
Documents were accepted by the Lessor Parties in the state of
California, which state the parties agree has a substantial relationship
to the parties and to the underlying transaction embodied hereby.
Accordingly, in all respects, including, without limiting the generality
of the foregoing, matters of construction, validity, enforceability and
performance, this Agreement and the other Operative Documents and the
obligations arising hereunder and thereunder shall be governed by, and
construed in accordance with, the laws of the state of California
applicable to contracts made and performed in such state and any
applicable law of the United States of America, except that at all times
the provisions for enforcement of Lessor's STATUTORY POWER OF SALE
granted under the Lease Agreement and the creation, perfection and
enforcement of the security interests created pursuant thereto and
pursuant to the other Operative Documents shall be governed by and
construed according to the law of the state where the Property is
located. Except as provided in the immediately preceding sentence,
Lessee hereby unconditionally and irrevocably waives, to the fullest
extent permitted by law, any claim to assert that the law of any
jurisdiction other than California governs this Agreement and the other
Operative Documents.
7.15. Consent to Jurisdiction. Lessee irrevocably submits to the
jurisdiction of: (a) any state or federal court sitting in the state of
California over any suit, action, or proceeding, brought by Lessee
against Lessor Parties, arising out of or relating to this Agreement or
the other Operative Documents; (b) any state or federal court sitting in
the state where the Property is located or the state in which Lessee's
principal place of business is located over any suit, action or
proceeding, brought by Lessor Parties against Lessee, arising out of or
relating to this Agreement or the other Operative Documents; and (c) any
state court sitting in the county of the state where the Property is
located over any suit, action, or proceeding, brought by Lessor Parties
to exercise their STATUTORY POWER OF SALE under this Agreement or any
action brought by Lessor Parties to enforce their rights with respect to
the Collateral. Lessee irrevocably waives, to the fullest extent
permitted by law, any objection that Lessee may now or hereafter have to
the laying of venue of any such suit, action, or proceeding brought in
any such court and any claim that any such suit, action, or proceeding
brought in any such court has been brought in an inconvenient forum.
[The first signature page follows.]
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: ETEC 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:__________________________________
SCHEDULE I
PARTICIPANTS
PART A(1)
TRANCHE PERCENTAGES AND PROPORTIONATE SHARES
PRIOR TO COMMITMENT TERMINATION DATE
Tranche A Tranche B Tranche C Proportionate
Participant Percentage Percentage Percentage
Share___
ABN AMRO
Bank N.V. 89.90000000% 7.00000000% 0.00000000%
96.90000000%
Lease Plan
North America 0.00000000% 0.00000000% 3.10000000%
3.10000000%
TOTAL 89.90000000% 7.00000000% 3.10000000%
100.00000000%
PART A(2)
TRANCHE PERCENTAGES AND PROPORTIONATE SHARES
ON AND AFTER COMMITMENT TERMINATION DATE
Tranche A Tranche B Tranche C Proportionate
Participant Percentage Percentage Percentage
Share___
ABN AMRO
Bank N.V. 83.00000000% 13.90000000% 0.00000000%
96.90000000%
Lease Plan
North America 0.00000000% 0.00000000% 3.10000000%
3.10000000%
TOTAL 83.00000000% 13.90000000% 3.10000000%
100.00000000%
PART B - ADDRESSES, ETC.
ABN AMRO BANK N.V.
Applicable Participating Office:
ABN AMRO Bank N.V.
San Francisco International Branch
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Address for Notices:
ABN AMRO Bank N.V.
San Francisco International Branch
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Attention: ▇▇▇▇▇ ▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
ABN AMRO North America, Inc.
Capital Markets-Syndications Group
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Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Wiring Instructions:
ABN AMRO Bank N.V.
New York, New York
RT/ABA No.: ▇▇▇▇▇▇▇▇▇
Account Name: ABN AMRO San Francisco
Account No.: 6510010545-41
Reference: Etec Systems, Inc. Synthetic Lease
SCHEDULE 1.01
DEFINITIONS
"364-Day Commitment" shall have the meaning given to that term in
Subparagraph 2.03(b) of the Participation Agreement.
"364-Day Commitment Extension Fee" shall have the meaning given to
that term in Subparagraph 2.04(c) of the Participation Agreement.
"364-Day Commitment Period" shall have the meaning given to that
term in Subparagraph 2.03(b) of the Participation Agreement.
"364-Day Commitment Termination Date" shall have the meaning given
to that term in Subparagraph 2.03(b) of the Participation Agreement.
"ABN AMRO" shall mean ABN AMRO Bank N.V.
"Acquisition Advance" shall have the meaning given to that term in
Subparagraph 2.01(b) of the Participation Agreement.
"Acquisition Date" shall mean the date on which Lessor acquires a
leasehold interest in the Land by entering into the Ground Lease with
Lessee.
"Acquisition Price" shall mean the total price payable by Lessor
to acquire its leasehold interest in the Land and to acquire the other
initial Property, if any, on the Closing Date.
"Acquisition Request" shall have the meaning given to that term in
Subparagraph 2.03(a) of the Participation Agreement.
"Adjusted Net Income" shall mean, with respect to Lessee and its
Subsidiaries for any period, the sum, determined on a consolidated basis
in accordance with GAAP where applicable, of:
(a) The net income or net loss of Lessee and its
Subsidiaries for such period after provision for income taxes;
plus
(b) To the extent deducted in calculating such net income
or net loss for such period, all non-recurring charges incurred by
Lessee and its Subsidiaries during such period for the acquisition
of in-process technology; provided, however, that the sum of all
such charges so added to net income or net loss in calculating the
Adjusted Net Income of Lessee and its Subsidiaries during the
period from the date of this Agreement through the Scheduled
Expiration Date shall not exceed $15,000,000.
"Advances" shall have the meaning given to that term in
Subparagraph 2.01(b) of the Participation Agreement.
"Advance Requests" shall have the meaning given to that term in
Subparagraph 2.03(c) of the Participation Agreement.
"Affiliate" shall mean, with respect to any Person, (a) each
Person that, directly or indirectly, owns or controls, whether
beneficially or as a trustee, guardian or other fiduciary, twenty (20%)
or more of any class of Equity Securities of such Person, (b) each
Person that controls, is controlled by or is under common control with
such Person or any Affiliate of such Person or (c) each of such Person's
officers, directors, joint venturers and partners; provided, however,
that in no case shall any Lessor Party be deemed to be an Affiliate of
Lessee or any of its Subsidiaries for purposes of the Operative
Documents. For the purpose of this definition, "control" of a Person
shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of its management or policies, whether
through the ownership of voting securities, by contract or otherwise.
"Agent" shall mean ABN AMRO, acting in its capacity as Agent for
the Participants under the Operative Documents.
"Agent's Fee Letter" shall mean the letter agreement dated as of
November 26, 1997 between Lessee and Agent regarding certain fees
payable by Lessee to Agent.
"Agent's Syndication Letter" shall mean the letter agreement dated
as of November 26, 1997 between Lessee and Agent regarding post-closing
syndication.
"Agent's Fees" shall have the meaning given to that term in
Subparagraph 2.04(a) of the Participation Agreement.
"Alternate Rental Rate" shall mean, for any Rental Period (or
portion thereof), the per annum rate equal to the Base Rate in effect
from time to time during such period plus the Applicable Margin, such
rate to change from time during such period as the Base Rate or
Applicable Margin shall change.
"Applicable Margin" shall mean:
(a) Tranche A and Tranche B. With respect to the
Outstanding Tranche A Amount and Outstanding Tranche B Amount:
(i) No Cash Collateral. During any period when
Agent does not have, in accordance with the Cash Collateral
Agreement, a first priority perfected security interest in
any Cash Collateral securing the Lessee Obligations:
(A) Ninety-five hundredths of one percent
(0.95%) per annum with respect to the LIBOR Rental
Rate; or
(B) Zero percent (0%) per annum with respect
to the Alternate Rental Rate;
(ii) Full Cash Collateral. During any period when
Agent has, in accordance with the Cash Collateral Agreement,
a first priority perfected security interest in Cash
Collateral that secures the Lessee Obligations and has a
value equal to or greater than the full Outstanding Lease
Amount:
(A) Twenty-five hundredths of one percent
(0.25%) per annum with respect to the LIBOR Rental
Rate; or
(B) Zero percent (0%) per annum with respect
to the Alternate Rental Rate; or
(iii) Partial Cash Collateral. During any period when
Agent has, in accordance with the Cash Collateral Agreement,
a first priority perfected security interest in Cash
Collateral that secures the Lessee Obligations but has a
value less than the full Outstanding Lease Amount:
(A) The per annum margin equal to the sum of
the following with respect to the LIBOR Rental Rate:
(1) The product of (y) ninety-five
hundredths of one percent (0.95%) per annum
times (z) a fraction, the numerator of which is
the remainder of the Outstanding Lease Amount
minus the value of the Cash Collateral and the
denominator of which is the Outstanding Lease
Amount; plus
(2) The product of (y) twenty-five
hundredths of one percent (0.25%) per annum
above times (z) a fraction, the numerator of
which is the value of the Cash Collateral and
the denominator of which is the Outstanding
Lease Amount; or
(B) Zero percent (0%) per annum with respect
to the Alternate Rental Rate; and
(b) Tranche C. With respect to the Outstanding Tranche C
Amount:
(i) Two percent (2.0%) per annum with respect to the
LIBOR Rental Rate; or
(ii) Two percent (2.0%) per annum with respect to the
Alternate Rental Rate;
provided, however, that each Applicable Margin set forth in
subparagraphs (a) and (b) of this definition shall be increased by two
percent (2.0%) per annum on the date an Event of Default occurs and
shall continue at such increased rate unless and until such Event of
Default is waived in accordance with the Operative Documents.
"Applicable Participating Office" shall mean, with respect to any
Participant, (a) initially, its office designated as such in Part B of
Schedule I (or, in the case of any Participant which becomes a
Participant by an assignment pursuant to Subparagraph 7.05(b) of the
Participation Agreement, its office designated as such in the applicable
Assignment Agreement) and (b) subsequently, such other office or offices
as such Participant may designate to Agent as the office at which such
Participant's interest in the Lease Agreement will thereafter be
maintained and for the account of which all payments of Rent and other
amounts payable to such Participant under the Operative Documents will
thereafter be made.
"Appraisal" shall mean an appraisal of the Property or a portion
thereof in a form satisfactory to Lessee, Lessor, Agent and the Required
Participants, prepared by an independent MAI appraiser that (a) complies
with the Financial Institutions Reform, Recovery and Enforcement Act of
1989 and all other applicable Governmental Rules and (b) is approved by
Lessor, Agent and the Required Participants (at the time such appraiser
is selected).
"Appurtenant Rights" shall mean all easements and rights-of-way,
strips and gores of land, streets, ways, alleys, passages, sewer rights,
water, water courses, water rights and powers, air rights and
development rights, liberties, tenements, hereditaments and
appurtenances of any nature whatsoever, in any way belonging, relating
or pertaining to any Land or the Improvements thereto and the
reversions, remainders, and all the estates, rights, titles, interests,
property, possession, claim and demand whatsoever, both in law and in
equity, of, in and to such Land and Improvements and every part and
parcel thereof, with the appurtenances thereto.
"Assignee Participant" shall have the meaning given to that term
in Subparagraph 7.05(b) of the Participation Agreement.
"Assignee Purchaser" shall have the meaning given to that term in
Subparagraph 5.03(b)of the Purchase Agreement.
"Assignment" shall have the meaning given to that term in
Subparagraph 7.05(b) of the Participation Agreement.
"Assignment Agreement" shall have the meaning given to that term
in Subparagraph 7.05(b) of the Participation Agreement.
"Assignment Effective Date" shall have, with respect to each
Assignment Agreement, the meaning set forth therein.
"Assignment of Construction Agreements" shall have the meaning
given to that term in Subparagraph 2.11(a) of the Participation
Agreement.
"Assignment of Lease" shall have the meaning given to that term in
Subparagraph 2.11(b).
"Assignor Participant" shall have the meaning given to that term
in Subparagraph 7.05(b) of the Participation Agreement.
"Assumed Appraisal" shall have the meaning given to that term in
Subparagraph 3.02(h) of the Purchase Agreement.
"Base Rate" shall mean, on any day, the greater of (a) the Prime
Rate in effect on such date and (b) the Federal Funds Rate for such day
plus one-half percent (0.50%).
"Base Rent" shall have the meaning given to that term in
Subparagraph 2.03(a) of the Lease Agreement.
"Business Day" shall mean any day on which (a) commercial banks
are not authorized or required to close in San Francisco, California or
New York, New York and (b) if such Business Day is related to a LIBOR
Rental Rate, dealings in Dollar deposits are carried out in the London
interbank market.
"Capital Adequacy Requirement" shall have the meaning given to
that term in Subparagraph 2.12(d) of the Participation Agreement.
"Capital Asset" shall mean, with respect to any Person, any
tangible fixed or capital asset owned or leased (in the case of a
Capital Lease) by such Person, or any expense incurred by such Person
that is required by GAAP to be reported as a non-current asset on such
Person's balance sheet.
"Capital Expenditures" shall mean, with respect to Lessee and its
Subsidiaries for any period, the sum, determined on a consolidated basis
in accordance with GAAP, of all amounts expended and indebtedness
incurred or assumed by Lessee and its Subsidiaries during such period
for the acquisition of Capital Assets (including all amounts expended
and indebtedness incurred or assumed in connection with Capital Leases),
other than amounts expended by Lessee and its Subsidiaries to repurchase
used Lessee systems previously sold to customers by Lessee and its
Subsidiaries. (For clarification and without limiting the generality of
this definition, amounts paid by Lessee under the Hayward Lease shall
not constitute "Capital Expenditures" if the Hayward Lease is an
operating lease under GAAP.)
"Capital Leases" shall mean any and all lease obligations that, in
accordance with GAAP, are required to be capitalized on the books of a
lessee.
"Cash Balances" shall mean, with respect to Lessee and its
Subsidiaries at any time, the remainder, determined on a consolidated
basis in accordance with GAAP, of:
(a) The sum of (i) the cash of Lessee and its Subsidiaries
at such time and (ii) the market value of the Cash Equivalents of
Lessee and its Subsidiaries at such time;
minus
(b) If the Outstanding Revolver Credit at such time
exceeds $5,000,000, the amount of such excess.
"Cash Collateral" shall mean United States Treasury Securities and
deposit accounts held or maintained by Agent and Participants to the
extent such securities and accounts are held and maintained in
accordance with the Cash Collateral Agreement and Lessor has a first
priority perfected security interest therein securing the Lessee
Obligations.
"Cash Collateral Agreement" shall have the meaning given to that
term in Subparagraph 2.11(a) of the Participation Agreement.
"Cash Equivalents" shall mean, on any date:
(a) Any debt investments that mature within one year from
such date if such investments are permitted by the investment
policy of Lessee set forth in Schedule 5.02(e) to the
Participation Agreement; or
(b) If the investment policy of Lessee is changed after
the date of the Participation Agreement, any debt investments that
mature within one year from such date if (i) such investments are
permitted by the most recent investment policy of Lessee and (ii)
such investment policy has been approved by Lessee's Board of
Directors and by Lessor and Required Participants.
"Casualty" shall mean any damage to, destruction of or decrease in
the value of all or any portion of any of the Property as a result of
fire, flood, earthquake or other natural cause; the actions or inactions
of any Person or Persons (whether willful or unintentional and whether
or not constituting negligence); or any other cause.
"Casualty and Condemnation Proceeds" shall mean all awards,
damages, compensation, reimbursement and other payments made or to be
made to Lessee, Lessor or Agent from any insurer, Governmental Authority
or other Person (other than Lessee or any Lessor Party) on account of
any Casualty or Condemnation.
"Change of Control" shall mean (a) with respect to Lessee, the
occurrence of any of the following events: (i) any person or group of
persons (within the meaning of Section 13 or 14 of the Securities
Exchange Act of 1934, as amended) shall (A) acquire beneficial ownership
(within the meaning of Rule 13d-3 promulgated by the Securities and
Exchange Commission under the Securities Exchange Act of 1934, as
amended) of twenty-five percent (25%) or more of the outstanding Equity
Securities of Lessee entitled to vote for members of the board of
directors, or (B) acquire all or substantially all of the assets of
Lessee and its Subsidiaries taken as a whole, or (ii) during any period
of twelve (12) consecutive calendar months, individuals who are
directors of Lessee on the first day of such period ("Initial
Directors") and any directors of Lessee who are specifically approved by
two-thirds of the Initial Directors and previously-approved Directors
("Approved Directors") shall cease to constitute a majority of the Board
of Directors of Lessee before the end of such period; and (b) with
respect to Lessee's Japanese Subsidiary, Lessee shall cease to own at
least fifty-one percent (51%) of the Equity Securities of such
Subsidiary except for nominal amounts of director stock necessary to do
business in Japan.
"Change of Law" shall have the meaning given to that term in
Subparagraph 2.12(b) of the Participation Agreement.
"Closing Date" shall have the meaning given to that term in
Subparagraph 2.01(a) of the Participation Agreement.
"Closing Date Appraisal" shall mean, with respect to the Property
on or as of a recent date prior to the Closing Date, an Appraisal that
assesses at such time the Fair Market Value of Lessor's leasehold
interest in the Property on such date.
"Collateral" shall mean the Property Collateral, the Cash
Collateral and all other property in which any Lessor Party has a Lien
to secure any of the Lessee Obligations.
"Commencement Date" shall have the meaning given to that term in
Subparagraph 2.02(a) of the Lease Agreement.
"Commitment" shall mean, with respect to any Participant at any
time, such Participant's Proportionate Share of the Total Commitment at
such time.
"Commitment Fees" shall have the meaning given to that term in
Subparagraph 2.04(b) of the Participation Agreement.
"Commitment Period" shall have the meaning given to that term in
Subparagraph 2.01(a) of the Participation Agreement.
"Commitment Termination Date" shall have the meaning given to that
term in Subparagraph 2.01(a) of the Participation Agreement.
"Completion" shall have the meaning given to that term in
Subparagraph 3.05(c) of the Construction Agency Agreement. "Complete",
"Completed" and "Completion" shall have comparable meanings.
"Completion Date" shall mean the first date on which all of the
conditions set forth in Subparagraph 3.05(c) of the Construction Agency
Agreement are satisfied.
"Compliance Certificate" shall have the meaning given to that term
in Subparagraph 5.01(a) of the Participation Agreement.
"Condemnation" shall mean any condemnation, requisition,
confiscation, seizure or other taking or sale of the use, access,
occupancy or other right in or to all or any portion of any of the
Property (whether wholly or partially, temporarily or permanently), by
or on account of any actual or threatened eminent domain proceeding or
other taking of action by any Governmental Authority or other Person
having the power of eminent domain, including an action by any such
Governmental Authority or Person to change the grade of, or widen the
streets adjacent to, such Property or alter the pedestrian or vehicular
traffic flow to such Property so as to result in change in access to
such Property, or by or on account of an eviction by paramount title or
any transfer made in lieu of any such proceeding or action. A
"Condemnation" shall be deemed to have occurred on the earliest of the
dates that use, access, occupancy or other right is taken.
"Conforming Bid" shall have the meaning given to that term in
Subparagraph 3.02(c) of the Purchase Agreement.
"Construction Agency Agreement" shall have the meaning given to
that term in Subparagraph 2.01(a) of the Participation Agreement.
"Construction Agreements" shall have the meaning given to that
term in Paragraph 3.02 of the Construction Agency Agreement.
"Contingent Obligation" shall mean, with respect to any Person,
(a) any Guaranty Obligation of that Person; and (b) any direct or
indirect obligation or liability, contingent or otherwise, of that
Person (i) in respect of any Surety Instrument issued for the account of
that Person or as to which that Person is otherwise liable for
reimbursement of drawings or payments, (ii) as a partner or joint
venturer in any partnership or joint venture, (iii) to purchase any
materials, supplies or other property from, or to obtain the services
of, another Person if the relevant contract or other related document or
obligation requires that payment for such materials, supplies or other
property, or for such services, shall be made regardless of whether
delivery of such materials, supplies or other property is ever made or
tendered, or such services are ever performed or tendered, or (iv) in
respect to any Rate Contract that is not entered into in connection with
a bona fide hedging operation that provides offsetting benefits to such
Person. The amount of any Contingent Obligation shall (subject, in the
case of Guaranty Obligations, to the last sentence of the definition of
"Guaranty Obligation") be deemed equal to the maximum reasonably
anticipated liability in respect thereof, and shall, with respect to
item (b)(iv) of this definition be marked to market on a current basis.
"Contractual Obligation" of any Person shall mean, any indenture,
note, lease, loan agreement, security, deed of trust, mortgage, security
agreement, guaranty, instrument; contract, agreement or other form of
contractual obligation or undertaking to which such Person is a party or
by which such Person or any of its property is bound.
"Credit Event" shall mean the making of each Advance, the
selection of a new Rental Period or the exercise of the Marketing Option
under the Purchase Agreement.
"Current Appraisal" shall have the meaning given to that term in
Subparagraph 3.02(h) of the Purchase Agreement.
"Debt Service Coverage Ratio" shall mean, with respect to Lessee
and its Subsidiaries for any period, the ratio, determined on a
consolidated basis in accordance with GAAP where applicable, of;
(a) The remainder of (i) EBITDA of Lessee and its
Subsidiaries for such period minus (ii) all Capital Expenditures
of Lessee and its Subsidiaries for such period;
to
(b) The sum of (i) all Interest Expenses of Lessee and its
Subsidiaries for such period and (ii) all principal payments on
long-term Indebtedness for borrowed money of Lessee and its
Subsidiaries scheduled for payment during the immediately
succeeding comparable period (excluding any payments of the
Outstanding Lease Amount payable on the Expiration Date of the
Lease Agreement).
"Default" shall mean any Event of Default under the Lease
Agreement or any event or circumstance not yet constituting an Event of
Default under the Lease Agreement which, with the giving of any notice
or the lapse of any period of time or both, would become an Event of
Default under the Lease Agreement.
"Defaulting Participant" shall mean a Participant which has failed
to fund its portion of any Advance which it is required to fund under
the Participation Agreement and has continued in such failure for three
(3) Business Days after written notice from Agent.
"Deposit Accounts" shall have the meaning given to that term in
Subparagraph 2.01(a) of the Cash Collateral Agreement.
"Depositary Bank" shall have the meaning given to that term in
Paragraph 2.02 of the Cash Collateral Agreement.
"Designated Purchaser" shall have the meaning given to that term
in Subparagraph 3.02(e) of the Purchase Agreement.
"Dollars" and "$" shall mean the lawful currency of the United
States of America and, in relation to any payment under the Operative
Documents, same day or immediately available funds.
"EBITDA" shall mean, with respect to Lessee and its Subsidiaries
for any period, the sum of the following, determined on a consolidated
basis in accordance with GAAP:
(a) The Adjusted Net Income of Lessee and its Subsidiaries
for such period;
plus
(b) The sum (to the extent deducted in calculating such
Adjusted Net Income) of (i) all Interest Expenses of Lessee and
its Subsidiaries accrued during such period, (ii) all income taxes
of Lessee and its Subsidiaries accrued during such period and (ii)
all depreciation and amortization expenses of Lessee and its
Subsidiaries accrued during such period.
"Eligible Assignee" shall mean (a) a commercial bank organized
under the laws of the United States, or any state thereof, and having a
combined capital and surplus of at least $100,000,000; (b) a commercial
bank organized under the laws of any other country which is a member of
the Organization for Economic Cooperation and Development (the "OECD"),
or a political subdivision of any such country, and having a combined
capital and surplus of at least $100,000,000, provided that such bank is
acting through a branch or agency located in the United States; or (c) a
Person that is (i) a Subsidiary of a Participant, (ii) a Subsidiary of a
Person of which a Participant is a Subsidiary, or (iii) a Person of
which a Participant is a Subsidiary.
"Employee Benefit Plan" shall mean any employee benefit plan
within the meaning of section 3(3) of ERISA maintained or contributed to
by Lessee or any ERISA Affiliate, other than a Multiemployer Plan.
"Environmental Laws" shall mean the Clean Air Act, 42 U.S.C.
Section 7401 et seq.; the Federal Water Pollution Control Act, 33 U.S.C.
Section 1251 et seq.; the Resource Conservation and Recovery Act of
1976, 42 U.S.C. Section 6901 et seq.; the Comprehensive Environment
Response, Compensation and Liability Act of 1980 (including the
Superfund Amendments and Reauthorization Act of 1986, "CERCLA"), 42
U.S.C. Section 9601 et seq.; the Toxic Substances Control Act, 15 U.S.C.
Section 2601 et seq.; the Occupational Safety and Health Act, 29 U.S.C.
Section 651; the Emergency Planning and Community Right-to-Know Act of
1986, 42 U.S.C. Section 11001 et seq.; the Mine Safety and Health Act of
1977, 30 U.S.C. Section 801 et seq.; the Safe Drinking Water Act, 42
U.S.C. Section 300f et seq.; and all other Governmental Rules relating
to the protection of human health and the environment, including all
Governmental Rules pertaining to reporting, licensing, permitting,
transportation, storage, disposal, investigation, and remediation of
emissions, discharges, releases, or threatened releases of Hazardous
Materials into the air, surface water, groundwater, or land, or relating
to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport, or handling of Hazardous Materials.
"Equity Securities" of any Person shall mean (a) all common stock,
preferred stock, participations, shares, partnership interests or other
equity interests in and of such Person (regardless of how designated and
whether or not voting or non-voting) and (b) all warrants, options and
other rights to acquire any of the foregoing.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as the same may from time to time be amended or supplemented,
including any rules or regulations issued in connection therewith.
"ERISA Affiliate" shall mean any Person which is treated as a
single employer with Lessee under Section 414 of the IRC.
"Event of Default" shall have the meaning given to that term in
Paragraph 5.01 of the Lease Agreement.
"Exhibit B Supplement" shall have the meaning given to that term
in Subparagraph 2.03(b) of the Participation Agreement.
"Existing Improvements" shall mean, with respect to the Land, all
Improvements existing on the Land on the Closing Date.
"Expiration Date" shall mean the earlier of (a) the Scheduled
Expiration Date under the Lease Agreement, as such date may be extended
pursuant to this Agreement, and (b) the Termination Date for the Lease
Agreement, if the Lease Agreement is terminated prior to its Scheduled
Expiration Date in accordance with its terms.
"Expiration Date Appraisal" shall mean, with respect to the
Property at any time, an Appraisal that assesses at such time the Fair
Market Value of Lessor's leasehold and other interests in the Property
on the Scheduled Expiration Date and as improved in accordance with the
Plans and Specifications for the New Improvements.
"Expiration Date Purchase Option" shall have the meaning given to
that term in Subparagraph 3.01(b) of the Purchase Agreement.
"Fair Market Value" shall mean, with respect to any of the
Property or any portion thereof, the maximum reasonable amount (not less
than zero) that would be paid in cash in an arm's-length transaction
between an informed and willing purchaser and an informed and willing
seller, neither of whom is under any compulsion to purchase or sell, for
the ownership of the Property or such portion.
"FASB 13" shall mean Financial Accounting Standards Board
Statement No. 13.
"Federal Funds Rate" shall mean, for any day, the rate per annum
set forth in the weekly statistical release designated as H.15(519), or
any successor publication, published by the Federal Reserve Board
(including any such successor publication, "H.15 (519)") for such day
opposite the caption "Federal Funds (Effective)". If on any relevant
day, such rate is not yet published in H.15 (519), the rate for such day
shall be the rate set forth in the daily statistical release designated
as the Composite 3:30 p.m. Quotations for U.S. Government Securities, or
any successor publication, published by the Federal Reserve Bank of New
York (including any such successor publication, the "Composite 3:30 p.m.
Quotations") for such day under the caption "Federal Funds Effective
Rate". If on any relevant day, such rate is not yet published in either
H.15 (519) or the Composite 3:30 p.m. Quotations, the rate for such day
shall be the arithmetic means, as determined by Agent, of the rates
quoted to Agent for such day by three (3) Federal funds brokers of
recognized standing selected by Agent.
"Federal Reserve Board" shall mean the Board of Governors of the
Federal Reserve System.
"Financial Statements" shall mean, with respect to any accounting
period for any Person, statements of income, shareholders' equity and
cash flows of such Person for such period, and a balance sheet of such
Person as of the end of such period, setting forth in each case in
comparative form figures for the corresponding period in the preceding
fiscal year if such period is less than a full fiscal year or, if such
period is a full fiscal year, corresponding figures from the preceding
annual audit, all prepared in reasonable detail and in accordance with
GAAP.
"Force Majeure Events" shall mean any Acts of God, riots, civil
commotions, insurrections, wars, strikes, lockouts or other events
beyond the control of Lessee, except for (a) any such events that are
known to or should be known to Lessee on the Closing Date; (b) any such
events that are caused by the financial condition of Lessee or the
failure of Lessee to make any payments under any Construction
Agreements, any Operative Documents or any related agreements or (c) any
events that could be remedied through the payment of money or the
exercise of other commercially reasonable efforts.
"GAAP" shall mean generally accepted accounting principles and
practices as in effect in the United States of America from time to
time, consistently applied.
"Governmental Authority" shall mean any domestic or foreign
national, state or local government, any political subdivision thereof,
any department, agency, authority or bureau of any of the foregoing, or
any other entity exercising executive, legislative, judicial, regulatory
or administrative functions of or pertaining to government, including,
without limitation, the Federal Deposit Insurance Corporation, the
Federal Reserve Board, the Comptroller of the Currency, any central bank
or any comparable authority.
"Governmental Charges" shall mean taxes, levies, assessments,
fees, imposts, duties, licenses, recording charges, claims or other
charges imposed by any Governmental Authority.
"Governmental Rule" shall mean any law, rule, regulation,
ordinance, order, code, interpretation, judgment, decree, directive,
guidelines, policy or similar form of decision of any Governmental
Authority.
"Ground Lease" shall have the meaning given to that term in
Subparagraph 2.01(a) of the Participation Agreement.
"Ground Lease Commencement Date" shall have the meaning given to
that term in Paragraph 2.02 of the Ground Lease
"Ground Lease Event of Default" shall have the meaning given to
that term in Paragraph 5.01 of the Ground Lease.
"Ground Lease Expiration Date" shall have the meaning given to
that term in Paragraph 4.02
"Ground Lease Option Price" shall have the meaning given to that
term in Paragraph 6.02 of the Ground Lease.
"Ground Lease Property" shall have the meaning given to that term
in Paragraph 2.01 of the Ground Lease.
"Ground Lease Purchase Option" shall have the meaning given to
that term in Paragraph 6.01 of the Ground Lease.
"Ground Lease Purchase Option Date" shall have the meaning given
to that term in Paragraph 6.01 of the Ground Lease.
"Ground Lease Scheduled Expiration Date" shall have the meaning
given to that term in Paragraph 2.02 of the Ground Lease.
"Ground Lessee" shall have the meaning given to that term in the
introductory paragraph of the Ground Lease.
"Ground Lessor" shall have the meaning given to that term in the
introductory paragraph of the Ground Lease.
"Guaranty Obligation" shall mean, with respect to any Person, any
direct or indirect liability of that Person with respect to any
indebtedness, lease, dividend, letter of credit or other obligation (the
"primary obligations") of another Person (the "primary obligor"),
including any obligation of that Person, whether or not contingent,
(a) to purchase, repurchase or otherwise acquire such primary
obligations or any property constituting direct or indirect security
therefor, or (b) to advance or provide funds (i) for the payment or
discharge of any such primary obligation, or (ii) to maintain working
capital or equity capital of the primary obligor or otherwise to
maintain the net worth or solvency or any balance sheet item, level of
income or financial condition of the primary obligor, or (c) to purchase
property, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary
obligor to make payment of such primary obligation, or (d) otherwise to
assure or hold harmless the holder of any such primary obligation
against loss in respect thereof. The amount of any Guaranty Obligation
shall be deemed equal to the stated or determinable amount of the
primary obligation in respect of which such Guaranty Obligation is made
or, if not stated or if indeterminable, the maximum reasonably
anticipated liability in respect thereof.
"Hayward Lease" shall mean the Second Amended and Restated Lease
Agreement to be entered into between the ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, as landlord,
and Lessee, as tenant.
"Hayward Lease Property" shall mean the property leased by Lessee
from the ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ pursuant to the Hayward Lease.
"▇▇▇▇▇▇▇ ▇▇▇▇▇▇" shall mean ESI (CA) QRS 12-6, Inc., a California
corporation.
"Hazardous Materials" shall mean all materials, substances and
wastes which are classified or regulated as "hazardous," "toxic" or
similar descriptions under any Environmental Law.
"Improvement/Expense Advance Request" shall have the meaning given
to that term in Subparagraph 2.03(b) of the Participation Agreement.
"Improvement/Expense Advances" shall have the meaning given to
that term in Subparagraph 2.01(a) of the Participation Agreement.
"Improvements" shall mean all buildings, structures, facilities,
fixtures and other improvements of every kind and description now or
hereafter located on any of the Land, including (a) all parking areas,
roads, driveways, walks, fences, walls, drainage facilities and other
site improvements; (b) all water, sanitary and storm sewer, drainage,
electricity, steam, gas, telephone and other utility equipment and
facilities, all plumbing, lighting, heating, ventilating, air-
conditioning, refrigerating, incinerating, compacting, fire protection
and sprinkler, surveillance and security, public address and
communications equipment and systems, partitions, elevators, escalators,
motors, machinery, pipes, fittings and other items of equipment of every
kind and description now or hereafter located on such Land or attached
to the Improvements thereto which by the nature of their location
thereon or attachment thereto are real property under applicable law;
and (c) all Modifications to such Land or its Improvements, except for
any Modifications removed by Lessee from the Property pursuant to
Subparagraph 3.10 of the applicable Lease Agreement.
"Indebtedness" of any Person shall mean, without duplication:
(a) All obligations of such Person evidenced by notes,
bonds, debentures or other similar instruments and all other
obligations of such Person for borrowed money (including recourse
obligations of such Person in connection with receivables and
other assets sold by such Person);
(b) All obligations of such Person for the deferred
purchase price of property or services (including obligations
under letters of credit and other credit facilities which secure
or finance such purchase price and obligations under "synthetic"
leases but excluding trade payables incurred in the ordinary
course of business on ordinary terms which are not overdue);
(c) All obligations of such Person under conditional sale
or other title retention agreements with respect to property
acquired by such Person (to the extent of the value of such
property if the rights and remedies of the seller or lender under
such agreement in the event of default are limited solely to
repossession or sale of such property);
(d) All obligations of such Person as lessee under or with
respect to Capital Leases;
(e) All net obligations of such Person, contingent or
otherwise, under or with respect to Rate Contracts;
(f) All Guaranty Obligations of such Person with respect
to the obligations of other Persons of the types described in
clauses (a) - (e) above; and
(h) All obligations of other Persons of the types
described in clauses (a) - (e) above to the extent secured by (or
for which any holder of such obligations has an existing right,
contingent or otherwise, to be secured by) any Lien in any
property (including accounts and contract rights) of such Person,
even though such Person has not assumed or become liable for the
payment of such obligations.
(For clarification and without limiting the generality of this
definition, the obligations of Lessee under the Hayward Lease shall not
constitute "Indebtedness" if the Hayward Lease is an operating lease
under GAAP.)
"Indemnified Taxes" shall mean all income taxes, stamp taxes,
sales taxes, use taxes, rental taxes, gross receipts taxes, property
(tangible and intangible) taxes, franchise taxes, excise taxes, value
added taxes, turnover taxes, withholding taxes and other taxes and
Governmental Charges, together with any and all assessments, penalties,
fines, additions and interest thereon, except:
(a) Net income taxes and franchise taxes in lieu of net
income taxes imposed on any Lessor Party by its jurisdiction of
incorporation or a jurisdiction in which it maintains an office
(provided, however, that this definition shall not be construed to
prevent a payment from being made on an after-tax basis);
(b) Any tax or other Governmental Charge that has not
become a Lien on any of the Property and that Lessee is contesting
pursuant to Paragraph 3.12 of the Lease Agreement (but only while
Lessee is so contesting such tax or Governmental Charge); or
(c) Any tax or other Governmental Charge that is imposed
upon an Indemnitee primarily as a result of the gross negligence
or willful misconduct of such Indemnitee itself (as opposed to
gross negligence or willful misconduct imputed to such
Indemnitee), but not taxes or other Governmental Charges imposed
as a result of ordinary negligence of such Indemnitee.
"Indemnitees" shall mean the Lessor Parties and their Affiliates
and their respective directors, officers, employees, agents, attorneys
and advisors.
"Indemnity Amount" shall have the meaning given to that term in
Subparagraph 3.02(g) of the Purchase Agreement.
"Initial Bid" shall have the meaning given to that term in
Subparagraph 3.02(b) of the Purchase Agreement.
"Initial Marketing Period" shall have the meaning given to that
term in Subparagraph 3.02(b) of the Purchase Agreement.
"Insurance Requirements" shall mean all terms, conditions and
requirements imposed by the policies of insurance which Lessee is
required to maintain by the Operative Documents.
"Interest Expenses" shall mean, with respect to Lessee and its
Subsidiaries for any period, the sum, determined on a consolidated basis
in accordance with GAAP, of (a) all interest accrued on the Indebtedness
of Lessee and its Subsidiaries during such period (including interest
attributable to Capital Leases) and (b) all letter of credit fees
payable by Lessee and its Subsidiaries accrued during such period.
"Investment" of any Person shall mean any loan or advance of funds
by such Person to any other Person (other than advances to employees of
such Person for moving and travel expenses, drawing accounts and similar
expenditures in the ordinary course of business), any purchase or other
acquisition of any Equity Securities or Indebtedness of any other
Person, any capital contribution by such Person to or any other
investment by such Person in any other Person (including any Guaranty
Obligations of such Person and any indebtedness of such Person of the
type described in clause (h) of the definition of "Indebtedness" on
behalf of any other Person); provided, however, that Investments shall
not include (a) accounts receivable or other indebtedness owed by
customers of such Person which are current assets and arose from sales
of inventory in the ordinary course of such Person's business or (b)
prepaid expenses of such Person incurred and prepaid in the ordinary
course of business.
"IRC" shall mean the Internal Revenue Code of 1986.
"Issues and Profits" shall mean all present and future rents,
royalties, issues, profits, receipts, revenues, income, earnings and
other benefits accruing from any of the Land, Improvements or
Appurtenant Rights (whether in the form of accounts, chattel paper,
instruments, documents, investment property, general intangibles or
otherwise) including all rents and other amounts payable pursuant to any
Subleases.
"Land" shall mean all lots, pieces, tracts or parcels of land
described in Exhibit A to the Lease Agreement and leased by Lessee
pursuant to the Lease Agreement.
"Lease Agreement" shall have the meaning given to that term in
Subparagraph 2.01(a) of the Participation Agreement.
"Lease Extension Request" shall have the meaning given to that
term in Subparagraph 2.09(b) of the Participation Agreement.
"Lease Reduction Payments" shall mean each of the following to the
extent applied to reduce the Outstanding Lease Amount pursuant to the
Operative Documents:
(a) Casualty and Condemnation Proceeds;
(b) The purchase price paid for the Property (or any
portion thereof) by Lessee, an Assignee Purchaser or a Designated
Purchaser pursuant to the Purchase Agreement;
(c) The Residual Value Guaranty and Indemnity Amount paid
by Lessee pursuant to the Purchase Agreement;
(d) Any proceeds received by Lessee from any sale of the
Property after the Expiration Date if such Property is retained by
Lessor after such Expiration Date pursuant to the applicable
Purchase Agreement; and
(e) Any proceeds received by any Lessor Party from the
exercise of any of its remedies under the Operative Documents
after the occurrence of an Event of Default under the Lease
Agreement.
"Leasehold Mortgagee" shall have the meaning given to that term in
Paragraph 3.07 of the Ground Lease.
"Leasehold Mortgages" shall have the meaning given to that term in
Paragraph 3.07 of the Ground Lease.
"Lessee" shall mean Etec Systems, Inc., acting in its capacity as
Lessee under the Operative Documents.
"Lessee Obligations" shall mean and include all liabilities and
obligations owed by Lessee to any Lessor Party under any of the
Operative Documents of every kind and description and however arising
(whether direct or indirect, absolute or contingent, due or to become
due, now existing or hereafter arising), including the obligation of
Lessee to pay Rent, to pay the Residual Value Guaranty Amount, Indemnity
Amount and/or Outstanding Lease Amount and to pay all interest, fees,
charges, expenses, attorneys' fees and accountants' fees chargeable to
Lessee or payable by Lessee under the Operative Documents.
"Lessee Security Documents" shall mean and include the Lease
Agreement, the Cash Collateral Agreement, the Assignment of Construction
Agreements, the Ground Lease and all other instruments, agreements,
certificates, opinions and documents (including Uniform Commercial Code
financing statements and fixture filings and landlord waivers) delivered
to any Lessor Party in connection with any Collateral or to secure the
Lessee Obligations.
"Lessor" shall mean Lease Plan North America, Inc. , acting in its
capacity as Lessor under the Operative Documents.
"Lessor Deed of Trust" shall have the meaning given to that term
in Subparagraph 2.11(b) of the Participation Agreement.
"Lessor Liens" shall mean any Liens or other interests in any of
the Property of any Person other than Lessee or a Lessor Party arising
as a result of (a) any transfer or assignment by Lessor to such Person
of any of Lessor's interests in such Property in violation of any of the
Operative Documents or (b) any claim against Lessor by any such Person
unrelated to any of the Operative Documents or the transactions
contemplated thereby. (Lessor Liens shall include Liens granted by
Lessor to Agent or any Participant to secure the Lessor Obligations.)
"Lessor Obligations" shall mean and include all liabilities and
obligations owed by Lessor to Agent or any Participant under any of the
Operative Documents of every kind and description and however arising
(whether direct or indirect, absolute or contingent, due or to become
due, now existing or hereafter arising), including the obligation of
Lessor to share payments made by Lessee to Lessor under the Operative
Documents as provided in Paragraph 2.06 of the Participation Agreement.
"Lessor Parties" shall mean Lessor, the Participants and Agent.
"Lessor Security Agreement" shall have the meaning given to that
term in Subparagraph 2.11(b) of the Participation Agreement.
"Leverage Ratio" shall mean, with respect to Lessee and its
Subsidiaries at any time, the ratio, determined on a consolidated basis
in accordance with GAAP, of (a) the Senior Indebtedness of Lessee and
its Subsidiaries at such time to (b) the Total Capital of Lessee and its
Subsidiaries at such time.
"LIBO Rate" shall mean, with respect to any Rental Period, a rate
per annum equal to the quotient (rounded upward if necessary to the
nearest 1/100 of one percent) of (a) the arithmetic mean (rounded upward
if necessary to the nearest 1/16 of one percent) of the rates per annum
appearing on the Telerate Page 3750 (or any successor publication) on
the second Business Day prior to the first day of such Rental Period at
or about 11:00 A.M. (London time) (for delivery on the first day of such
Rental Period) for a term comparable to such Rental Period (or for a
term of one (1) month for any Rental Period that is less than one (1)
month but is at least seven (7) days), divided by (b) one minus the
Reserve Requirement in effect from time to time. If for any reason
rates are not available as provided in clause (a) of the preceding
sentence, the rate to be used in clause (a) shall be, the rate per annum
at which Dollar deposits are offered to ABN AMRO by prime banks in the
London interbank market on the second Business Day prior to the first
day of such Rental Period at or about 11:00 A.M. (London time) (for
delivery on the first day of such Rental Period) in an amount
substantially equal to ABN AMRO's Proportionate Share of the Outstanding
Lease Amount and for a term comparable to such Rental Period (or for a
term of one (1) month for any Rental Period that is less than one (1)
month but is at least seven (7) days). The LIBO Rate shall be adjusted
automatically as of the effective date of any change in the Reserve
Requirement.
"LIBOR Rental Rate" shall mean, for any Rental Period, the per
annum rate equal to the LIBO Rate for such Rental Period, plus the
Applicable Margin, such rate to change from time to time during such
period as the Applicable Margin shall change.
"Lien" shall mean, with respect to any property, any security
interest, mortgage, pledge, lien, charge or other encumbrance in, of, or
on such property or the income therefrom, including the interest of a
vendor or lessor under a conditional sale agreement, Capital Lease,
"synthetic" lease or other title retention agreement, or any agreement
to provide any of the foregoing, and the filing of any financing
statement or similar instrument under the Uniform Commercial Code or
comparable law of any jurisdiction.
"Major Casualty" shall mean, with respect to the Property, any
Casualty affecting such Property where (a) the damage to such Property
is treated by any insurer of such Property as a total loss; (b) such
Property cannot reasonably be repaired and restored to the condition in
which it existed immediately prior to such Casualty; or (c) the
reasonably anticipated cost to repair and restore such Property to the
condition in which it existed immediately prior to such Casualty would
exceed twenty-five percent (25%) of the Outstanding Lease Amount.
"Major Condemnation" shall mean, with respect to the Property, any
Condemnation affecting such Property where (a) all or substantially all
of such Property is taken by such Condemnation; (b) such Property cannot
reasonably be repaired and restored to the condition in which it existed
immediately prior to such Condemnation; or (c) the reasonably
anticipated cost to repair and restore such Property to the condition in
which it existed immediately prior to such Condemnation would exceed
twenty-five percent (25%) of the Outstanding Lease Amount.
"Majority Participants" shall mean (a) at any time the aggregate
Outstanding Lease Amount is greater than $0, Participants whose
aggregate Outstanding Participation Amounts equal or exceed fifty
percent (50%) of the aggregate Outstanding Lease Amount at such time and
(b) at any time the aggregate Outstanding Lease Amount is $0,
Participants whose Proportionate Shares equal or exceed fifty percent
(50%).
"Margin Stock" shall have the meaning given to that term in
Regulation U issued by the Federal Reserve Board, as amended from time
to time, and any successor regulation thereto.
"Marketing Option" shall have the meaning given to that term in
Subparagraph 3.01(a) of the Purchase Agreement.
"Marketing Option Event of Default" shall mean any Event of
Default other than a Non-Marketing Option Event of Default.
"Material Adverse Effect" shall mean a material adverse effect on
(a) the business, assets, operations or financial or other condition of
Lessee and its Subsidiaries, taken as a whole; (b) the ability of Lessee
to pay or perform the Lessee Obligations when due in accordance with the
terms of the Operative Documents; (c) the rights and remedies of any
Lessor Party under the Operative Documents or any related document,
instrument or agreement; or (d) the value of the Property and the
Collateral, any Lessor Party's security interests, Liens or other rights
in the Property and the Collateral or the perfection or priority of such
security interests, Liens or rights.
"Material Casualty" shall mean any Casualty to the Property that
alone, or in combination with any prior Casualties to the Property for
which repairs to restore the Property to its prior condition have not
been completed, will require repairs costing $1,000,000 or more to
restore the Property to its prior condition.
"maturity" shall mean, with respect to any Rent, interest, fee or
other amount payable by Lessee under the Operative Documents, the date
such Rent, interest, fee or other amount becomes due, whether upon the
stated maturity or due date, upon acceleration or otherwise.
"Modifications" shall have the meaning given to that term in
Subparagraph 3.01(c) of the Lease Agreement.
"Multiemployer Plan" shall mean any multiemployer plan within the
meaning of section 3(37) of ERISA maintained or contributed to by Lessee
or any ERISA Affiliate.
"Net Proceeds" shall mean, with respect to any issuance of Equity
Securities by Lessee or any of its Subsidiaries, the aggregate
consideration received by Lessee or such Subsidiary from such issuance
less the sum of the actual amount of the reasonable fees and commissions
payable to Persons other than Lessee or any Affiliate of Lessee and the
other reasonable costs and expenses (including reasonable legal
expenses) directly related to such issuance that are to be paid by
Lessee or any of its Subsidiaries.
"New Improvements" shall mean, with respect to the Land, all new
Improvements to the Land contemplated by the Plans and Specifications.
"Non-Marketing Option Event of Default" shall mean:
(a) An Event of Default under Subparagraph 5.01(m) of the
Lease Agreement; or
(b) An Event of Default under Subparagraph 5.01(c) of the
Lease Agreement resulting from Lessee's failure to start and
complete the construction of the New Improvements in accordance
with the Construction Agency Agreement where such failure is
caused solely by a Force Majeure Event.
"Notice of Expiration Date Purchase Option Exercise" shall have
the meaning given to that term in Paragraph 3.01 of the Purchase
Agreement.
"Notice of Ground Lease Purchase Option Exercise" shall have the
meaning given to that term in Paragraph 6.01 of the Ground Lease.
"Notice of Ground Lease Rent Increase" shall have the meaning
given to that term in Paragraph 2.03 of the Ground Lease.
"Notice of Marketing Option Exercise" shall have the meaning given
to that term in Paragraph 3.01 of the Purchase Agreement.
"Notice of Rental Period Selection" shall have the meaning given
to that term in Subparagraph 2.03(a) of the Lease Agreement.
"Notice of Term Purchase Option Exercise" shall have the meaning
given to that term in Subparagraph 2.01(a) of the Purchase Agreement.
"Operating Income" shall mean, with respect to Lessee and its
Subsidiaries for any period, the sum of the following, determined on a
consolidated basis in accordance with GAAP where applicable:
(a) The Adjusted Net Income of Lessee and its Subsidiaries
for such period;
plus
(b) The remainder of (i) to the extent deducted in
calculating such Adjusted Net Income, all Interest Expenses of
Lessee and its Subsidiaries accrued during such period minus (ii)
to the extent included in calculating such Adjusted Net Income,
all interest income of Lessee and its Subsidiaries accrued during
such period;
plus
(c) The remainder of (i) to the extent deducted in
calculating such Adjusted Net Income, all extraordinary losses of
Lessee and its Subsidiaries accrued during such period minus (ii)
to the extent included in calculating such Adjusted Net Income,
all extraordinary gains of Lessee and its Subsidiaries accrued
during such period;
plus
(d) To the extent deducted in calculating such Adjusted
Net Income, all depreciation and amortization expenses of Lessee
and its Subsidiaries accrued during such period.
"Operative Documents" shall mean and include the Participation
Agreement, the Lease Agreement, the Construction Agency Agreement, the
Purchase Agreement, the Lessee Security Documents, the Lessor Deed of
Trust, the Lessor Security Agreement, the Assignment of Lease, the
Agent's Fee Letter and the Agent's Syndication Letter; all other
notices, requests, certificates, documents, instruments and agreements
delivered to any Lessor Party pursuant to Paragraph 3.01 or 3.02 of the
Participation Agreement; and all notices, requests, certificates,
documents, instruments and agreements delivered to any Lessor Party in
connection with any of the foregoing on or after the date of the
Participation Agreement. (Without limiting the generality of the
preceding definition, the term "Operative Documents" shall include all
written waivers, amendments and modifications to any of the notices,
requests, certificates, documents, instruments and agreements referred
to therein.)
"Option Exercise Notification Date" shall have the meaning given
to that term in Paragraph 6.01 of the Ground Lease.
"Outside Completion Date" shall have the meaning given to that
term in Subparagraph 2.01(a) of the Participation Agreement.
"Outstanding Lease Amount" shall mean, on any date, the remainder
of (a) the sum of all Advances made by Lessor on or prior to such date,
minus (b) the sum of all Lease Reduction Payments applied by Lessor on
or prior to such date.
"Outstanding Participation Amount" shall mean, with respect to any
Participant on any date, the remainder of (a) the sum of the portions of
all Advances funded by such Participant on or prior to such date, minus
(b) the sum of such Participant's share of all Lease Reduction Payments
applied to the Outstanding Lease Amount on or prior to such date.
"Outstanding Revolver Credit" shall mean, with respect to Lessee
and its Subsidiaries at any time, the sum of the aggregate principal
amount of all loans of Lessee and its Subsidiaries outstanding at such
time under revolving lines of credit.
"Outstanding Tranche A Participation Amount" shall mean, with
respect to any Tranche A Participant on any date, the remainder of (a)
such Participant's Tranche A Portion of all Advances made by Lessor on
or prior to such date, minus (b) such Participant's share of all Lease
Reduction Payments applied to the Tranche A Portion of the Advances on
or prior to such date.
"Outstanding Tranche B Participation Amount" shall mean, with
respect to any Tranche B Participant on any date, the remainder of (a)
such Participant's Tranche B Portion of all Advances made by Lessor on
or prior to such date, minus (b) such Participant's share of all Lease
Reduction Payments applied to the Tranche B Portion of the Advances on
or prior to such date.
"Outstanding Tranche C Participation Amount" shall mean, with
respect to any Tranche C Participant on any date, the remainder of (a)
such Participant's Tranche C Portion of all Advances made by Lessor on
or prior to such date, minus (b) such Participant's share of all Lease
Reduction Payments applied to the Tranche C Portion of the Advances on
or prior to such date.
"Participants" shall mean the financial institutions from time to
time listed in Schedule I to the Participation Agreement (as amended
from time to time pursuant to Subparagraph 7.05(b) of the Participation
Agreement or otherwise), acting in their capacities as Participants
under the Operative Documents.
"Participation Agreement" shall mean the Participation Agreement,
dated as of December 5,1997 among Lessee and the Lessor Parties.
"PBGC" shall mean the Pension Benefit Guaranty Corporation, or any
successor thereto.
"Permitted Improvement Costs" shall mean all reasonable costs and
expenses necessary for the construction of the New Improvements to the
Land (not including the costs of the Land, the Existing Improvements and
the other Property to be acquired for the Acquisition Price paid by
Lessor for the Land and the other initial Property on the Closing Date),
including:
(a) All reasonable costs and expenses of building supplies
and materials necessary for the construction of the New
Improvements;
(b) All reasonable costs and expenses of architects,
engineers, contractors and other Persons providing labor and
services necessary for the construction of the New Improvements;
(c) All reasonable costs and expenses of performance and
other bonds and other insurance necessary for the construction of
the New Improvements; and
(d) All Base Rent accruing during the Commitment Period.
"Permitted Indebtedness" shall have the meaning given to that term
in Subparagraph 5.02(a) of the Participation Agreement.
"Permitted Liens" shall have the meaning given to that term in
Subparagraph 5.02(b) of the Participation Agreement.
"Permitted Property Liens" shall have the meaning given to that
term in Subparagraph 3.07(a) of the Lease Agreement.
"Permitted Transaction Expenses" shall mean the following costs
and expenses to the extent payable by Lessee in connection with and
directly related to the preparation, execution and delivery of the
Operative Documents and the transactions contemplated thereby:
(a) The reasonable fees and expenses of counsel for Lessee
incurred in connection with the preparation, negotiation,
execution and delivery of the Operative Documents;
(b) The reasonable fees and expenses of counsel for each
of Lessor and Agent incurred in connection with the preparation,
negotiation, execution and delivery of the Operative Documents;
(c) The reasonable fees and expenses incurred in
recording, registering or filing any of the Operative Documents;
(d) The title fees, premiums and escrow costs and other
expenses relating to title insurance and the closing of the
transactions contemplated by the Operative Documents;
(e) The reasonable fees and expenses of required
environmental audits and appraisals;
(f) The reasonable fees and expenses of consultants and
accountants for Lessee;
(g) The reasonable fees and expenses for surveys; and
(h) Other related reasonable fees and expenses.
"Person" shall mean and include an individual, a partnership, a
corporation (including a business trust), a joint stock company, an
unincorporated association, a limited liability company, a joint
venture, a trust or other entity or a Governmental Authority.
"Personal Property Collateral" shall have the meaning given to
that term in Subparagraph 2.07(b) of the Lease Agreement.
"Plans and Specifications" shall mean the architectural,
engineering and construction plans, specifications and drawings for the
new Improvements to be constructed on the Land delivered to Lessor on or
prior to the Closing Date pursuant to Subparagraph 3.01 and Schedule
3.01 of the Participation Agreement, as such plans, specifications and
drawings may thereafter be revised, amended, supplemented or modified
pursuant to Paragraph 3.01 of the Construction Agency Agreement.
"Prime Rate" shall mean the per annum rate publicly announced by
ABN AMRO from time to time at its Chicago Office. The Prime Rate is
determined by ABN AMRO from time to time as a means of pricing credit
extensions to some customers and is neither directly tied to any
external rate of interest or index nor necessarily the lowest rate of
interest charged by ABN AMRO at any given time for any particular class
of customers or credit extensions. Any change in the Base Rate
resulting from a change in the Prime Rate shall become effective on the
Business Day on which each change in the Prime Rate occurs.
"Property" shall have the meaning given to that term in Paragraph
2.01 of the Lease Agreement.
"Property Collateral" shall have the meaning given to that term in
Subparagraph 2.11(a) of the Participation Agreement.
"Proportionate Share" shall mean, with respect to each
Participant, the percentage set forth under the caption "Proportionate
Share" opposite such Participant's name on Part A of Schedule I, or, if
changed, such percentage as may be set forth for such Participant in the
Register. The Proportionate Share of each Participant shall equal the
sum of such Participant's Tranche A Proportionate Share, Tranche B
Proportionate Share and Tranche C Proportionate Share.
"Purchase Agreement" shall have the meaning given to that term in
Subparagraph 2.01(a) of the Participation Agreement.
"Purchase Documents" shall have the meaning given to that term in
Subparagraph 4.01(a) of the Purchase Agreement.
"Purchaser" shall have the meaning given to that term in
Subparagraph 4.01(a) of the Purchase Agreement.
"Quick Ratio" shall mean, with respect to Lessee and its
Subsidiaries at any time, the ratio, determined on a consolidated basis
in accordance with GAAP, of:
(a) The sum at such time of (i) all cash of Lessee and its
Subsidiaries; (ii) the market value of all Cash Equivalents of
Lessee and its Subsidiaries; and (iii) all accounts receivable of
Lessee and its Subsidiaries, less all reserves therefor; provided,
however, that in computing the foregoing sum, there shall be
excluded therefrom any cash, Cash Equivalent or accounts
receivable subject to a security interest in favor of any Person
other than any Participant;
to
(b) The sum at such time of (i) the current liabilities of
Lessee and its Subsidiaries; and (ii) to the extent not included
in such current liabilities, the Outstanding Revolver Credit at
such time.
"Rate Contracts" shall mean swap agreements (as that term is
defined in Section 101 of the Federal Bankruptcy Reform Act of 1978, as
amended) and any other agreements or arrangements designed to provide
protection against fluctuations in interest or currency exchange rates.
"Real Property Collateral" shall have the meaning given to that
term in Subparagraph 2.07(a) of the Lease Agreement.
"Register" shall have the meaning given to that term in
Subparagraph 7.05(b) of the Participation Agreement.
"Related Agreements" shall mean all chattel paper, accounts,
instruments, documents, investment property and general intangibles
relating to any of the Land, Improvements or Appurtenant Rights or to
the present or future development, construction, operation or use of any
of the Land, Improvements or Appurtenant Rights, including (a) all
plans, specifications, construction agreements, maps, surveys, studies,
books of account, records, files, insurance policies, guarantees and
warranties relating to such Land or Improvements or to the present or
future development, construction, operation or use of such Land,
Improvements or Appurtenant Rights (including the Construction
Agreements and the Plans and Specifications); (b) all architectural,
engineering, construction and management contracts, all supply and
service contracts for water, sanitary and storm sewer, drainage,
electricity, steam, gas, telephone and other utilities relating to such
Land, Improvements or Appurtenant Rights or to the present or future
development, construction, operation or use of such Land, Improvements
or Appurtenant Rights; and (c) all computer software and intellectual
property, guaranties and warranties, letters of credit, and documents
relating to such Land, Improvements or Appurtenant Rights or to the
present or future development, construction, operation or use of such
Land, Improvements or Appurtenant Rights.
"Related Goods" shall mean:
(a) All machinery, furniture, equipment, fixtures and
other goods and tangible personal property (including construction
materials and supplies) financed by any Advance, including all
such property described in Exhibit B to the Lease Agreement and in
each Exhibit B Supplement delivered by Lessee; and
(b) All machinery, equipment, fixtures and other goods and
tangible personal property (including construction materials and
supplies) now or hereafter intended for the construction,
reconstruction, repair, replacement, alteration, addition or
improvement of or to any of the Improvements or any other Related
Goods.
"Related Permits" shall mean all licenses, authorizations,
certificates, variances, consents, approvals and other permits, now or
hereafter pertaining to any of the Land, Improvements or Appurtenant
Rights and all tradenames or business names relating to any of the Land,
Improvements or Appurtenant Rights or the present or future development,
construction, operation or use of any of the Land, Improvements or
Appurtenant Rights.
"Rent" shall mean collectively Base Rent and Supplemental Rent.
"Rent Increase Notification Date" shall have the meaning given to
that term in Paragraph 2.03 of the Ground Lease.
"Rental Period" shall have the meaning given to that term in
Subparagraph 2.03(a ) of the Lease Agreement.
"Rental Rate" shall have the meaning given to that term in
Subparagraph 2.03(a) of each Lease Agreement.
"Repair and Restoration Account" shall have the meaning given to
that term in Subparagraph 3.04(c) of the Lease Agreement.
"Reportable Event" shall have the meaning given to that term in
ERISA and applicable regulations thereunder.
"Required Participants" shall mean (a) at any time the aggregate
Outstanding Lease Amount is greater than $0, Participants whose
aggregate Outstanding Participation Amounts equal or exceed sixty-six
and two-thirds percent (66-2/3%) or more of the aggregate Outstanding
Lease Amount at such time and (b) at any time the aggregate Outstanding
Lease Amount is $0, Participants whose Proportionate Shares equal or
exceed sixty-six and two-thirds percent (66-2/3%).
"Requirement of Law" applicable to any Person shall mean (a) the
Articles or Certificate of Incorporation and By-laws, Partnership
Agreement or other organizational or governing documents of such Person,
(b) any Governmental Rule applicable to such Person, (c) any license,
permit, approval or other authorization granted by any Governmental
Authority to or for the benefit of such Person or (d) any judgment,
decision or determination of any Governmental Authority or arbitrator,
in each case applicable to or binding upon such Person or any of its
property or to which such Person or any of its property is subject.
"Reserve Requirement" shall mean, with respect to any day in any
Rental Period, the aggregate of the reserve requirement rates (expressed
as a decimal) in effect on such day for eurocurrency funding (currently
referred to as "Eurocurrency liabilities" in Regulation D of the Federal
Reserve Board) maintained by a member bank of the Federal Reserve
System. As used herein, the term "reserve requirement" shall include,
without limitation, any basic, supplemental or emergency reserve
requirements imposed on any Participant by any Governmental Authority.
"Residual Value Guaranty Amount" shall have the meaning given to
that term in Subparagraph 3.02(g) of the Purchase Agreement.
"Scheduled Expiration Date" shall have the meaning given to that
term in Subparagraph 2.02(a) of the Lease Agreement.
"Scheduled Rent Payment Date" shall have the meaning given to that
term in Subparagraph 2.03(a) of the Lease Agreement.
"Secondary Marketing Period" shall have the meaning given to that
term in Subparagraph 3.02(b) of the Purchase Agreement.
"Senior Indebtedness" shall mean, with respect to Lessee and its
Subsidiaries at any time, the remainder, determined on a consolidated
basis in accordance with GAAP, of (a) the total Indebtedness of Lessee
and its Subsidiaries at such time minus (b) the total Subordinated
Indebtedness of Lessee and its Subsidiaries at such time.
"Solvent" shall mean, with respect to any Person on any date, that
on such date (a) the fair value of the property of such Person is
greater than the fair value of the liabilities (including, without
limitation, contingent liabilities) of such Person, (b) the present fair
saleable value of the assets of such Person is not less than the amount
that will be required to pay the probable liability of such Person on
its debts as they become absolute and matured, (c) such Person does not
intend to, and does not believe that it will, incur debts or liabilities
beyond such Person's ability to pay as such debts and liabilities mature
and (d) such Person is not engaged in business or a transaction, and is
not about to engage in business or a transaction, for which such
Person's property would constitute an unreasonably small capital.
"Subleases" shall mean all leases and subleases of any of the
Land, Improvements and/or Appurtenant Rights by Lessee as lessor or
sublessor, now or hereafter in effect, whether or not of record,
including all guaranties and security therefor and the right to bring
actions and proceedings thereunder or for the enforcement thereof and to
do anything which Lessee is or may become entitled to do thereunder.
"Subordinated Indebtedness" shall mean Indebtedness which is
unsecured and subordinated to the Lessee Obligations on terms acceptable
to Lessor and the Required Participants.
"Subparticipants" shall have the meaning given to that term in
Subparagraph 7.05(c) of the Participation Agreement.
"Subsidiary" of any Person shall mean (a) any corporation of which
more than 50% of the issued and outstanding Equity Securities having
ordinary voting power to elect a majority of the Board of Directors of
such corporation (irrespective of whether at the time capital stock of
any other class or classes of such corporation shall or might have
voting power upon the occurrence of any contingency) is at the time
directly or indirectly owned or controlled by such Person, by such
Person and one or more of its other Subsidiaries or by one or more of
such Person's other Subsidiaries, (b) any partnership, joint venture, or
other Person of which more than 50% of the equity interest having the
power to vote, direct or control the management of such partnership,
joint venture, business trust or other Person is at the time owned and
controlled by such Person, by such Person and one or more of the other
Subsidiaries or by one or more of such Person's other Subsidiaries or
(c) any other Person included in the Financial Statements of such Person
on a consolidated basis.
"Supplemental Rent" shall have the meaning given to such term in
Subparagraph 2.03(b) of the Lease Agreement.
"Surety Instruments" shall mean all letters of credit (including
standby and commercial), banker's acceptances, bank guaranties, shipside
bonds, surety bonds and similar instruments.
"Tangible Net Worth" shall mean, with respect to Lessee and its
Subsidiaries at any time, the remainder at such time, determined on a
consolidated basis in accordance with GAAP, of (a) the total assets of
Lessee and its Subsidiaries minus (b) the sum (without limitation and
without duplication of deductions) of (i) the total liabilities of
Lessee and its Subsidiaries, (ii) all reserves established by Lessee and
its Subsidiaries for anticipated losses and expenses (to the extent not
deducted in calculating total assets in clause (a) above), and (iii) all
intangible assets of Lessee and its Subsidiaries (to the extent included
in calculating total assets in clause (a) above), including, without
limitation, goodwill (including any amounts, however designated on the
balance sheet, representing the cost of acquisition of businesses and
investments in excess of underlying tangible assets), trademarks,
trademark rights, trade name rights, copyrights, patents, patent rights,
licenses, unamortized debt discount, marketing expenses, organizational
expenses, non-compete agreements and deferred research and development.
"Term" shall mean the period beginning on the Commencement Date of
the Lease Agreement and ending on the Expiration Date of the Lease
Agreement.
"Termination Date" shall mean (a) the date set forth in a Notice
of Term Purchase Option as the Scheduled Rent Payment Date on which the
Lease Agreement will be terminated by Lessee pursuant to Paragraph 4.01
of the Lease Agreement and the Property will be purchased by Lessee
pursuant to Section II of the Purchase Agreement or (b) the date set
forth in a written notice delivered by Lessor to Lessee pursuant to
Subparagraph 5.03(a) or 5.04(a) of the Lease Agreement after the
occurrence of an Event of Default thereunder as the date on which the
Lease Agreement will be terminated.
"Term Purchase Option" shall have the meaning given to that term
in Paragraph 2.01 of the Purchase Agreement.
"Total Capital" shall mean, with respect to Lessee and its
Subsidiaries at any time, the sum, determined on a consolidated basis in
accordance with GAAP, of (a) the total Indebtedness of Lessee and its
Subsidiaries at such time plus (b) the net worth of Lessee and its
Subsidiaries at such time.
"Total Commitment" shall mean the amount set forth as such in
Subparagraph 2.01(b) of the Participation Agreement or, if such amount
is reduced pursuant to Subparagraph 2.08(a) of the Participation
Agreement, the amount to which so reduced.
"Tranche A Participant" shall mean, at any time, any Participant
having an Outstanding Tranche A Participation Amount at such time.
"Tranche A Percentage" shall mean (a) with respect to each
Participant at any time prior to the Commitment Termination Date, the
percentage set forth under the caption "Tranche A Percentage" opposite
such Participant's name in Part A(1) of Schedule I and (b) with respect
to each Participant at any time on or after the Commitment Termination
Date, the percentage set forth under the caption "Tranche A Percentage"
opposite such Participant's name in Part A(2) of Schedule I; or in the
case of either such percentage, if changed, such percentage as may be
set forth for such Participant in the Register.
"Tranche A Portion" shall mean, (a) with respect to any Advance
without reference to any Participant, the portion of such Advance equal
to the Tranche A Proportionate Share of such Advance and (b) with
respect to any Advance with reference to any Participant, the portion of
such Advance equal to such Participant's Tranche A Percentage of such
Advance.
"Tranche A Proportionate Share" shall mean (a) at any time prior
to the Commitment Termination Date, eighty-nine and nine-tenths percent
(89.9%) and (b) at any time on or after the Commitment Termination Date,
eighty-three percent (83.0%).
"Tranche B Participant" shall mean, at any time, any Participant
having an Outstanding Tranche B Participation Amount at such time.
"Tranche B Percentage" shall mean (a) with respect to each
Participant at any time prior to the Commitment Termination Date, the
percentage set forth under the caption "Tranche B Percentage" opposite
such Participant's name in Part A(1) of Schedule I and (b) with respect
to each Participant at any time on or after the Commitment Termination
Date, the percentage set forth under the caption "Tranche B Percentage"
opposite such Participant's name in Part A(2) of Schedule I; or in the
case of either such percentage, if changed, such percentage as may be
set forth for such Participant in the Register..
"Tranche B Portion" shall mean, (a) with respect to any Advance
without reference to any Participant, the portion of such Advance equal
to the Tranche B Proportionate Share of such Advance and (b) with
respect to any Advance with reference to any Participant, the portion of
such Advance equal to such Participant's Tranche B Percentage of such
Advance.
"Tranche B Proportionate Share" shall mean (a) at any time prior
to the Commitment Termination Date, seven percent (7.0%) and (b) at any
time on or after the Commitment Termination Date, thirteen and nine-
tenths percent (13.9%).
"Tranche C Participant" shall mean, at any time, any Participant
having an Outstanding Tranche C Participation Amount at such time.
"Tranche C Percentage" shall mean (a) with respect to each
Participant at any time prior to the Commitment Termination Date, the
percentage set forth under the caption "Tranche C Percentage" opposite
such Participant's name in Part A(1) of Schedule I and (b) with respect
to each Participant at any time on or after the Commitment Termination
Date, the percentage set forth under the caption "Tranche C Percentage"
opposite such Participant's name in Part A(2) of Schedule I; or in the
case of either such percentage, if changed, such percentage as may be
set forth for such Participant in the Register.
"Tranche C Portion" shall mean, (a) with respect to any Advance
without reference to any Participant, the portion of such Advance equal
to the Tranche C Proportionate Share of such Advance and (b) with
respect to any Advance with reference to any Participant, the portion of
such Advance equal to such Participant's Tranche C Percentage of such
Advance.
"Tranche C Proportionate Share" shall mean, at all times (whether
before, on or after the Commitment Termination Date), three and one-
tenth percent (3.1%).
"Trustee" shall have the meaning given to that term in the
introductory paragraph of the Lease Agreement.
"Two-Year Commitment" shall have the meaning given to that term in
Subparagraph 2.01(b) of the Participation Agreement.
"Unused" shall mean (a) with respect to the 364-Day Commitment at
any time, the remainder of (i) the 364-Day Commitment at such time minus
(ii) the aggregate amount of all Advances made prior to such time and
allocated to the 364-Day Commitment; (b) with respect to the Two-Year
Commitment at any time, the remainder of (i) the Two-Year Commitment at
such time minus (ii) the aggregate amount of all Advances made prior to
such time and allocated to the Two-Year Commitment; and (b) with respect
to the Total Commitment at any time, the remainder of (i) the Total
Commitment at such time minus (b) the aggregate amount of all Advances
made prior to such time.
SCHEDULE 1.02
RULES OF CONSTRUCTION
(a) GAAP. Unless otherwise indicated in any Operative Document,
all accounting terms used in the Operative Documents shall be construed,
and all accounting and financial computations thereunder shall be
computed, in accordance with GAAP. If GAAP changes after the date of
the Participation Agreement such that any covenants contained in the
Operative Documents would then be calculated in a different manner or
with different components, Lessee and the Lessor Parties agree to
negotiate in good faith to amend the applicable Operative Documents in
such respects as are necessary to conform those covenants as criteria
for evaluating Lessee's financial condition to substantially the same
criteria as were effective prior to such change in GAAP; provided,
however, that, until Lessee and the Lessor Parities so amend the
Operative Documents, all such covenants shall be calculated in
accordance with GAAP as in effect immediately prior to such change.
(b) Headings. Headings in each of the Operative Documents are
for convenience of reference only and are not part of the substance
thereof.
(c) Plural Terms. All terms defined in any Operative Document
in the singular form shall have comparable meanings when used in the
plural form and vice versa.
(d) Time. All references in each of the Operative Documents to
a time of day shall mean San Francisco, California time, unless
otherwise indicated. All references in each of the Operative Documents
to a date (the "action date") which is one month prior to or after
another date (the "reference date") shall mean the date in the
immediately preceding or succeeding calendar month (as the case may be)
which numerically corresponds to the reference date; provided, however,
that (i) if such corresponding date in the immediately preceding or
succeeding calendar month (as the case may be) is not a Business Day,
the action date shall be the next succeeding Business Day after such
corresponding date (unless, in the case of a Rental Period, such next
Business Day falls in another calendar month, in which case the action
date shall be the immediately preceding Business Day) and (ii) if the
reference date is the last Business Day of a calendar month (or a day
for which there is no numerically corresponding day in the immediately
preceding calendar month) the action date shall be the last Business Day
of the immediately preceding or succeeding calendar month (as the case
may be). All references in each of the Operative Documents to an
earlier date which is two or more months prior to a reference date or to
a later date which is two or more months after a reference date shall be
determined in a comparable manner.
(e) Construction. The Operative Documents are the result of
negotiations among, and have been reviewed by Lessee and each Lessor
Party and their respective counsel. Accordingly, the Operative
Documents shall be deemed to be the product of all parties hereto, and
no ambiguity shall be construed in favor of or against Lessee or any
Lessor Party.
(f) Entire Agreement. The Operative Documents, taken together,
constitute and contain the entire agreement of Lessee and the Lessor
Parties and supersede any and all prior agreements, negotiations,
correspondence, understandings and communications among the parties,
whether written or oral, respecting the subject matter thereof
(including the commitment letter dated as of November 26, 1997] between
Lessee and Agent.)
(g) Calculation of Base Rent, Interest and Fees. All
calculations of Base Rent, interest and fees under the Operative
Documents for any period (i) shall include the first day of such period
and exclude the last day of such period and (ii) shall be calculated on
the basis of a year of 360 days for actual days elapsed, except that
during any period that Base Rent or any interest is to be calculated
based upon the Base Rate, such Base Rent or interest shall be calculated
on the basis of a year of 365 or 366 days, as appropriate, for actual
days elapsed.
(h) References.
(i) References in any Operative Document to "Recitals,"
"Sections," "Paragraphs," "Subparagraphs," "Articles," "Exhibits"
and "Schedules" are to recitals, sections, paragraphs,
subparagraphs, articles, exhibits and schedules therein and
thereto unless otherwise indicated.
(ii) References in any Operative Document to any document,
instrument or agreement (A) shall include all exhibits, schedules
and other attachments thereto, (B) shall include all documents,
instruments or agreements issued or executed in replacement
thereof, and (C) shall mean such document, instrument or
agreement, or replacement or predecessor thereto, as amended,
modified and supplemented from time to time and in effect at any
given time.
(iii) References in any Operative Document to any
Governmental Rule (A) shall include any successor Governmental
Rule, (B) shall include all rules and regulations promulgated
under such Governmental Rule (or any successor Governmental Rule),
and (C) shall mean such Governmental Rule (or successor
Governmental Rule) and such rules and regulations, as amended,
modified, codified or reenacted from time to time and in effect at
any given time.
(iv) References in any Operative Document to any Person in
a particular capacity (A) shall include any permitted successors
to and assigns of such Person in that capacity and (B) shall
exclude such Person individually or in any other capacity.
(i) Other Interpretive Provisions. The words "hereof," "herein"
and "hereunder" and words of similar import when used in any Operative
Document shall refer to such Operative Document as a whole and not to
any particular provision of such Operative Document. The words
"include" and "including" and words of similar import when used in any
Operative Document shall not be construed to be limiting or exclusive.
In the event of any inconsistency between the terms of the Participation
Agreement and the terms of any other Operative Document, the terms of
the Participation Agreement shall govern.
SCHEDULE 3.01
CONDITIONS PRECEDENT TO ACQUISITION ADVANCE
A. Principal Operative Documents.
(1) The Participation Agreement, duly executed by Lessee,
Lessor, each Participant and Agent;
(2) The Lease Agreement, duly executed by Lessee and
Lessor and appropriately notarized for recording;
(3) The Purchase Agreement, duly executed by Lessee and
Lessor;
(4) The Construction Agency Agreement, duly executed by
Lessee and Lessor;
(5) The Assignment of Construction Agreements, duly
executed by Lessee;
(6) The Cash Collateral Agreement, duly executed by
Lessee;
(7) The Assignment of Lease, duly executed by Lessor and
appropriately notarized for recording;
(8) The Lessor Deed of Trust, duly executed by Lessor and
appropriately notarized for recording; and
(9) The Lessor Security Agreement, duly executed by
Lessor.
B. Lessee Corporate Documents.
(1) The Certificate or Articles of Incorporation of
Lessee, certified as of a recent date prior to the Closing Date by
the Secretary of State (or comparable official) of its
jurisdiction of incorporation;
(2) A Certificate of Good Standing (or comparable
certificate) for Lessee, certified as of a recent date prior to
the Closing Date by the Secretary of State (or comparable
official) of its jurisdiction of incorporation;
(3) A certificate of the Secretary or an Assistant
Secretary of Lessee, dated the Closing Date, certifying (a) that
attached thereto is a true and correct copy of the Bylaws of
Lessee as in effect on the Closing Date; (b) that attached thereto
are true and correct copies of resolutions duly adopted by the
Board of Directors of Lessee and continuing in effect, which
authorize the execution, delivery and performance by Lessee of the
Operative Documents executed or to be executed by Lessee and the
consummation of the transactions contemplated thereby; and
(c) that there are no proceedings for the dissolution or
liquidation of Lessee;
(4) A certificate of the Secretary or an Assistant
Secretary of Lessee, dated the Closing Date, certifying the
incumbency, signatures and authority of the officers of Lessee
authorized to execute, deliver and perform the Operative Documents
and all other documents, instruments or agreements related thereto
executed or to be executed by Lessee; and
(5) A Certificates of Good Standing (or comparable
certificates) for Lessee, certified as of a recent date prior to
the Closing Date by the Secretary of State of California and
Oregon.
C. Financial Statements, Financial Condition, Etc.
(1) A copy of the 10-K report filed by Lessee with the
Securities and Exchange Commission for the fiscal year ended July
31, 1997;
(2) The consolidated plan and forecast of Lessee and its
Subsidiaries for the fiscal year to end July 31, 1998, including
quarterly cash flow projections; and
(3) Such other financial, business and other information
regarding Lessee, or any of its Subsidiaries as Agent or any
Participant may reasonably request, including information as to
possible contingent liabilities, tax matters, environmental
matters and obligations for employee benefits and compensation.
D. Collateral Documents.
(1) The Ground Lease, duly executed by Lessor and Lessee;
(2) A Memorandum of Ground Lease, appropriately completed
and duly executed by Lessor and Lessee and appropriately notarized
for recording;
(3) A Memorandum of Purchase Agreement, appropriately
completed and duly executed by Lessee and Lessor and appropriately
notarized for recording;
(4) Evidence that the Lease Agreement, the Assignment of
Lease, the Lessor Deed of Trust, the Memorandum of Ground Lease
and the Memorandum of Purchase Agreement delivered pursuant to
items A(2), A(7), A(8), D(2) and D(3) have been properly recorded
in the Official Records of the County of Washington County,
Oregon;
(5) An extended coverage owner's policy or binder of title
insurance (or a commitment therefor) for the Property insuring
Lessor's leasehold estate to the Property (subject to such
exceptions as Agent may approve), in such amounts and with such
endorsements as Agent may reasonably require, issued by a title
insurer acceptable to Agent, together with such policies of co-
insurance or re-insurance (or commitments therefor) as Agent may
require;
(6) An extended coverage lender's policy of title
insurance (or a commitment therefor) for the Property insuring the
validity and priority of the Lease Agreement (subject to such
exceptions as Agent may approve), in such amounts and with such
endorsements as Agent may reasonably require, issued by a title
insurer acceptable to Agent, together with such policies of co-
insurance or re-insurance (or commitments therefor) as Agent may
require;
(7) An extended coverage lender's policy of title
insurance (or a commitment therefor) for the Property insuring the
validity and priority of the Lessor Deed of Trust (subject to such
exceptions as Agent may approve), in such amounts and with such
endorsements as Agent may reasonably require, issued by a title
insurer acceptable to Agent, together with such policies of co-
insurance or re-insurance (or commitments therefor) as Agent may
require;
(8) Copies of all leases for the Property and all other
documents, instruments and agreements recorded against or
otherwise affecting the Property, including all amendments,
extensions and other modifications thereof;
(9) Subordination, non-disturbance and attornment
agreements from the lessee under each of the leases for the
Property;
(10) Such consents and estoppels, with appropriate
mortgagee protection language, as are requested by Agent, each
duly executed by the appropriate Person;
(11) Such Uniform Commercial Code financing statements and
fixture filings (appropriately completed and executed) for filing
in such jurisdictions as Agent may request to perfect the Liens
granted to Lessor and Agent in the Lessee Security Documents, the
Lessor Security Agreement and the other Operative Documents;
(12) Such Uniform Commercial Code termination statements
(appropriately completed and executed) for filing in such
jurisdictions as Agent may request to terminate any financing
statement evidencing Liens of other Persons in the Collateral
which are prior to the Liens granted to Lessor and Agent in the
Lessee Security Documents, the Lessor Security Agreement and the
other Operative Documents, except for any such prior Liens which
are expressly permitted by the Operative Documents to be prior;
(13) Uniform Commercial Code search certificates from the
jurisdictions in which Uniform Commercial Code financing
statements are to be filed pursuant to item B(10) above reflecting
no other financing statements or filings which evidence Liens of
other Persons in the Collateral which are prior to the Liens
granted to Lessor and Agent in the Lessee Security Documents, the
Lessor Security Agreement and the other Operative Documents,
except for any such prior Liens (a) which are expressly permitted
by the Operative Documents to be prior or (b) for which Agent has
received a termination statement pursuant to item B(12) above;
(14) Such other documents, instruments and agreements as
Agents may reasonably request to establish and perfect the Liens
granted to any Lessor Party in the Lessee Security Documents, the
Lessor Deed of Trust, the Lessor Security Agreement and the other
Operative Documents;
(15) Such other evidence as Agent may request to establish
that the Liens granted to Agent or any Participant in the Lessee
Security Documents, the Lessor Deed of Trust, the Lessor Security
Agreement and the other Operative Documents are perfected and
prior to the Liens of other Persons in the Collateral, except for
any such Liens which are expressly permitted by the Operative
Documents to be prior; and
(16) Oregon Statutory Notice Letter.
E. Opinions.
(1) A favorable written opinion of Pillsbury, Madison &
Sutro, counsel to Lessee, dated the Closing Date, addressed to
Lessor and Agent, for the benefit of Lessor, Agent and the
Participants, and covering such legal matters as Agent may
reasonably request and otherwise in form and substance
satisfactory to Agent.
F. Other Items.
(1) A duly completed and timely delivered Acquisition
Request, duly executed by Lessee;
(2) A Closing Date Appraisal for the Property, dated as of
a recent date prior to the Closing Date;
(3) Bills of sale for all Related Goods to be acquired
with the Acquisition Advances to be made on the Closing Date, each
reflecting Lessor as the purchaser of such Related Goods;
(4) An as-built survey of the Property (a) prepared and
dated not more than two (2) months prior to the Closing Date by a
registered surveyor reasonably satisfactory to Agent,
(b) certified as correct and as (i) having been made in accordance
with the most recent standards for "Minimum Standard Detail
Requirements for ALTA/ACSM Land Title Surveys," jointly
established and adopted by ALTA and ACSM, and (ii) meeting the
accuracy requirements of a Class A survey (as defined therein) and
including items 1-5, 7-13 and 15 of Table 3 thereof, and
(c) disclosing, among other things, (i) the location of the
perimeter of the Property by courses and distances, (ii) all
easements and rights-of-way, whether above or underground, (iii)
the lines of the street abutting the Property and the width
thereof, (iv) encroachments, if any, and the extent thereof in
feet and inches upon the Property, and (v) all boundary and lot
lines, and all other matters that would be disclosed by inspection
of the Property and the public records;
(5) If requested by Lessor, Agent or any Participant, a
list of and copies of all Construction Agreements;
(6) Environmental reports and assessments satisfactory to
Agent issued by environmental consultants acceptable to Agent with
respect to the Property;
(7) Certificates of insurance evidencing the insurance
Lessee is required to maintain pursuant to Paragraph 3.03 of the
Lease Agreements;
(8) A certificate of the Chief Financial Officer of
Lessee, addressed to Lessor and Agent and dated the Closing Date,
certifying that:
(a) The representations and warranties set forth in
Paragraph 4.01 of the Participation Agreement and in the
other Operative Documents are true and correct in all
material respects as of such date (except for such
representations and warranties made as of a specified date,
which shall be true as of such date);
(b) No Default has occurred and is continuing as of
such date;
(c) All of the Operative Documents are in full force
and effect on such date.
(9) All fees and expenses payable to the Lessor Parties on
or prior to the Closing Date (including all Agent's Fees);
(10) All fees and expenses of Lessor's and Agent's counsels
through the Closing Date; and
(11) Such other evidence as Agent may reasonably request to
establish the accuracy and completeness of the representations and
warranties and the compliance with the terms and conditions
contained in the Operative Documents.