<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(MARK ONE)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended APRIL 27, 1997 or
--------------
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______________ to _______________
Commission file number 0-6920
------
APPLIED MATERIALS, INC.
(Exact name of registrant as specified in its charter)
Delaware 94-1655526
- - --------------------------------------------------------------------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
3050 Bowers Avenue, Santa Clara, California 95054-3299
- - --------------------------------------------------------------------------------
Address of principal executive offices (Zip Code)
Registrant's telephone number, including area code (408) 727-5555
--------------
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No .
--- ---
Number of shares outstanding of the issuer's common stock as of April 27,
1997: 181,509,733
<PAGE> 2
PART I. FINANCIAL INFORMATION
APPLIED MATERIALS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
- - --------------------------------------------------------------------------------------------
April 27, April 28, April 27, April 28,
(In thousands, except per share amounts) 1997 1996 1997 1996
- - --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net sales $ 900,862 $1,127,855 $1,736,638 $2,168,435
Cost of products sold 486,845 586,564 950,965 1,130,344
---------- ---------- ---------- ----------
Gross margin 414,017 541,291 785,673 1,038,091
Operating expenses:
Research, development and
engineering 131,973 124,918 248,465 235,270
Marketing and selling 74,965 80,587 141,236 157,869
General and administrative 59,617 54,820 119,225 104,375
Acquired in-process research and
development - - 59,500 -
---------- ---------- ---------- ----------
Income from operations 147,462 280,966 217,247 540,577
Interest expense 4,935 4,917 10,735 10,085
Interest income 14,598 9,829 28,155 19,426
---------- ---------- ---------- ----------
Income from consolidated companies
before taxes 157,125 285,878 234,667 549,918
Provision for income taxes 54,994 100,057 102,959 192,471
---------- ---------- ---------- ----------
Income from consolidated companies 102,131 185,821 131,708 357,447
Equity in net income/(loss) of joint
venture - - - -
---------- ---------- ---------- ----------
Net income $ 102,131 $ 185,821 $ 131,708 $ 357,447
---------- ---------- ---------- ----------
Earnings per share $ .54 $ 1.01 $ .71 $ 1.94
---------- ---------- ---------- ----------
Average common shares and equivalents 187,899 183,699 186,762 183,921
- - -----------------------------------------------------------------------------------------
</TABLE>
See accompanying notes to consolidated condensed financial statements.
2
<PAGE> 3
APPLIED MATERIALS, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS*
<TABLE>
<CAPTION>
- - ----------------------------------------------------------------------------------
April 27, Oct. 27,
(In thousands) 1997 1996
- - ----------------------------------------------------------------------------------
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 202,660 $ 403,888
Short-term investments 872,190 633,744
Accounts receivable, net 807,181 822,384
Inventories 507,632 478,552
Deferred income taxes 278,352 281,586
Other current assets 83,295 72,915
---------- ----------
Total current assets 2,751,310 2,693,069
Property, plant and equipment, net 900,041 919,038
Other assets 240,510 25,880
---------- ----------
Total assets $3,891,861 $3,637,987
---------- ----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable $ 19,892 $ 77,522
Current portion of long-term debt 7,659 22,640
Accounts payable and accrued expenses 875,808 791,897
Income taxes payable 147,713 43,168
---------- ----------
Total current liabilities 1,051,072 935,227
Long-term debt 227,808 275,485
Deferred income taxes and other liabilities 107,601 56,850
---------- ----------
Total liabilities 1,386,481 1,267,562
---------- ----------
Stockholders' equity:
Common stock 1,815 1,802
Additional paid-in capital 781,281 763,376
Retained earnings 1,731,272 1,599,564
Cumulative translation adjustments (8,988) 5,683
---------- ----------
Total stockholders' equity 2,505,380 2,370,425
---------- ----------
Total liabilities and stockholders' equity $3,891,861 $3,637,987
- - ----------------------------------------------------------------------------------
</TABLE>
* Amounts as of April 27, 1997 are unaudited. Amounts as of October 27, 1996
were obtained from the October 27, 1996 audited financial statements.
See accompanying notes to consolidated condensed financial statements.
3
<PAGE> 4
APPLIED MATERIALS, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
- - -----------------------------------------------------------------------------------
Six Months Ended
April 27, April 28,
(In thousands) 1997 1996
- - -----------------------------------------------------------------------------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 131,708 $ 357,447
Adjustments required to reconcile net income
to cash provided by operations:
Acquired in-process research & development 59,500 -
Deferred taxes 4,095 1,404
Depreciation and amortization 105,826 63,143
Equity in net income/(loss) of joint venture - -
Changes in assets and liabilities, net of amounts
acquired:
Accounts receivable 16,303 (228,277)
Inventories (15,243) (136,132)
Other current assets (7,303) 12,963
Other assets (317) (2,047)
Accounts payable and accrued expenses 68,807 139,295
Income taxes payable 106,458 (81,332)
Other liabilities 5,284 10,325
--------- ---------
Cash provided by operations 475,118 136,789
--------- ---------
Cash flows from investing activities:
Capital expenditures, net of dispositions (76,521) (249,206)
Cash paid for acquisitions, net of cash acquired (246,565) -
Proceeds from sales of short-term investments 244,937 328,489
Purchases of short-term investments (483,383) (287,407)
--------- ---------
Cash used for investing (561,532) (208,124)
--------- ---------
Cash flows from financing activities:
Short-term debt activity, net (58,318) (9,568)
Long-term debt activity, net (55,807) 8,506
Common stock transactions, net 771 (12,717)
--------- ---------
Cash used for financing (113,354) (13,779)
--------- ---------
Effect of exchange rate changes on cash (1,460) (738)
--------- ---------
Decrease in cash and cash equivalents (201,228) (85,852)
Cash and cash equivalents - beginning of period 403,888 285,845
--------- ---------
Cash and cash equivalents - end of period $ 202,660 $ 199,993
- - -----------------------------------------------------------------------------------
</TABLE>
For the six months ended April 27, 1997, cash payments for interest were $9,908
and net income tax refunds were $8,190. For the six months ended April 28, 1996,
cash payments for interest and income taxes were $12,053 and $253,118,
respectively.
See accompanying notes to consolidated condensed financial statements.
4
<PAGE> 5
APPLIED MATERIALS, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
SIX MONTHS ENDED APRIL 27, 1997
(IN THOUSANDS)
1) Basis of Presentation
In the opinion of management, the unaudited consolidated condensed financial
statements included herein have been prepared on a consistent basis with the
October 27, 1996 audited consolidated financial statements and include all
material adjustments, consisting of normal recurring adjustments, necessary
to fairly present the information set forth therein. These interim financial
statements should be read in conjunction with the October 27, 1996 audited
consolidated financial statements and notes thereto.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the amounts reported in the financial statements and accompanying
notes. Actual results could differ materially from those amounts.
2) Acquisitions
During the first quarter of fiscal 1997, the Company acquired two companies
(Opal, Inc. and Orbot Instruments, Ltd.) in separate transactions for
approximately $293 million, consisting primarily of cash. Opal, Inc. ("Opal")
is a supplier of CD-SEM (critical dimension scanning electron microscope)
systems for use in semiconductor manufacturing. Orbot Instruments, Ltd.
("Orbot") supplies wafer and reticle inspection systems for use in the
production of semiconductors. The acquisitions were completed by the early
part of January 1997, and have been accounted for using the purchase method
of accounting; accordingly, the Company's consolidated results of operations
for the six months ended April 27, 1997 include the operating results of Opal
and Orbot subsequent to their acquisition dates.
In connection with the acquisitions, the Company incurred a $59.5 million
pre-tax charge, or $0.32 per share after tax, for acquired in-process
research and development. With the exception of this charge, the Company's
results of operations for the six months ended April 27, 1997 were not
materially impacted by the acquisitions. As of April 27, 1997, the Company
had $213 million of net intangible assets (see note 5) and $46 million of
deferred tax liabilities that resulted from the acquisitions. With the
exception of these items, the Company's financial condition as of April 27,
1997 has not been materially impacted by the acquisitions.
The Company's pro-forma net sales, income from operations, net income and
earnings per share for the six months ended April 27, 1997 and April 28,
1996, assuming the acquisitions occurred at the beginning of such periods,
would not have been materially different from the actual amounts reported for
such periods.
5
<PAGE> 6
3) Earnings Per Share
Earnings per share has been computed using the weighted average number of
common shares and equivalents outstanding during the period.
In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standard No. 128 (SFAS 128), "Earnings Per Share,"
which the Company is required to adopt in the first quarter of fiscal 1998.
Under the requirements of SFAS 128, primary earnings per share will be
replaced by basic earnings per share and the dilutive effect of stock options
will be excluded from its calculation. For companies with potentially
dilutive securities such as outstanding stock options, fully diluted earnings
per share will be replaced with diluted earnings per share. Upon adoption of
SFAS 128, the Company's basic earnings per share for the second quarter of
fiscal 1997 and 1996 are expected to be $0.56 and $1.04, respectively, and
diluted earnings per share for the same periods are expected to be $0.54 and
$1.01, respectively.
4) Inventories
Inventories are stated at the lower of cost or market, with cost determined
on a first-in, first- out (FIFO) basis. The components of inventories are as
follows:
<TABLE>
<CAPTION>
April 27, 1997 October 27, 1996
-------------- ----------------
<S> <C> <C>
Customer service spares $181,795 $182,320
Systems raw materials 67,688 70,959
Work-in-process 178,588 140,964
Finished goods 79,561 84,309
-------- --------
$507,632 $478,552
======== ========
</TABLE>
5) Other Assets
The components of other assets are as follows:
<TABLE>
<CAPTION>
April 27, 1997 October 27, 1996
-------------- ----------------
<S> <C> <C>
Purchased technology, net $198,709 $ -
Goodwill, net 14,375 -
Other 27,426 25,880
-------- --------
$240,510 $ 25,880
======== ========
</TABLE>
Purchased technology and goodwill are presented at cost, net of accumulated
amortization, and are being amortized using the straight-line method over
their estimated useful lives of eight years. The Company periodically
analyzes these assets to determine whether an impairment in carrying value
has occurred. The Company does not believe that any impairment has occurred
to date.
6
<PAGE> 7
6) Accounts Payable and Accrued Expenses
The components of accounts payable and accrued expenses are as follows:
<TABLE>
<CAPTION>
April 27, 1997 October 27, 1996
-------------- ----------------
<S> <C> <C>
Accounts payable $258,962 $192,607
Compensation and benefits 158,043 170,881
Installation and warranty 188,258 187,873
Other 270,545 240,536
-------- --------
$875,808 $791,897
======== ========
</TABLE>
7) Early Retirement of Debt
During the first quarter of fiscal 1997, the Company repaid its unsecured
senior notes prior to their scheduled maturities. The noteholders received
approximately $56 million, representing principal, accrued interest and
prepayment charges, on December 19, 1996. The prepayment charge was not
material.
8) Litigation Settlement
On May 5, 1997, the Company announced a settlement of all outstanding
litigation with Novellus Systems, Inc., pursuant to which the Company
received $80 million in damages from Novellus for past patent infringement.
This amount will be reflected in the Company's results of operations for the
third fiscal quarter ending July 27, 1997. Novellus also agreed to pay
ongoing royalties for certain system shipments subsequent to the date of the
settlement.
7
<PAGE> 8
APPLIED MATERIALS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
=============================================================================
ACQUISITIONS
During the first quarter of fiscal 1997, the Company acquired Opal, Inc.
("Opal") and Orbot Instruments, Ltd. ("Orbot") in separate transactions for
approximately $293 million, consisting primarily of cash. Opal is a supplier
of CD-SEM (critical dimension scanning electron microscope) systems for use in
semiconductor manufacturing. Orbot supplies wafer and reticle inspection
systems for use in the production of semiconductors. These acquisitions marked
the Company's entry into the metrology and inspection semiconductor equipment
markets. The acquisitions were completed by the early part of January 1997,
and have been accounted for using the purchase method of accounting;
accordingly, the Company's consolidated results of operations for the six
months ended April 27, 1997 include the operating results of Opal and Orbot
subsequent to their acquisition dates. In connection with the acquisitions,
the Company recorded a one-time, pre-tax charge of $59.5 million, or $0.32 per
share after tax, for acquired in-process research and development. With the
exception of this charge, the acquisitions did not materially impact the
Company's results of operations for the six months ended April 27, 1997.
RESULTS OF OPERATIONS
During the latter half of the Company's fiscal 1996, the semiconductor
industry began a period of transition during which sharply lower memory device
prices and excess production capacity caused the Company's customers to reduce
their purchases of semiconductor manufacturing equipment and push out delivery
of previously ordered systems. The Company's results of operations for the
last four fiscal quarters have reflected this industry slowdown. The Company
believes that the low point of its business cycle occurred in the fourth
quarter of fiscal 1996, during which the Company received $683 million of new
orders. The Company's new orders have increased in each of the last two fiscal
quarters, and net sales increased in the second quarter of fiscal 1997,
compared to net sales in the first quarter of fiscal 1997. New orders and net
sales are expected to increase modestly in each of the next two fiscal
quarters. Although quarterly new orders and net sales are improving, they have
not yet returned to the levels achieved during the first two quarters of
fiscal 1996.
8
<PAGE> 9
New orders of $1,014 million were received during the second quarter of fiscal
1997, versus new orders of $905 million in the first quarter of fiscal 1997.
The increase in new orders is primarily the result of strengthening demand for
the Company's advanced technologies, including 0.25 micron capable production
systems, from logic and microprocessor device manufacturers, and selected
strategic investments by DRAM manufacturers. North America (primarily the
United States) new orders increased to $406 million in the second quarter of
fiscal 1997 from $252 million in the first quarter of fiscal 1997; Europe
increased to $136 million from $94 million; Japan increased to $221 million
from $214 million; Korea decreased to $66 million from $135 million; and
Asia-Pacific (Taiwan, China and Southeast Asia) decreased to $185 million from
$210 million. Backlog at April 27, 1997 was $1,485 million, versus $1,448
million at January 26, 1997 and $1,423 million at October 27, 1996.
The Company's net sales for the three and six months ended April 27, 1997
decreased 20.1 and 19.9 percent, respectively, from the corresponding periods of
fiscal 1996. These decreases occurred in all regions except Asia-Pacific, and
are primarily the result of the industry slowdown discussed earlier. Sales by
region as a percentage of total sales were as follows:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
April 27, April 28, April 27, April 28,
1997 1996 1997 1996
--------------------------------------------------
<S> <C> <C> <C> <C>
North
America 39% 32% 37% 35%
Europe 14% 15% 19% 18%
Japan 15% 23% 15% 22%
Korea 11% 14% 9% 11%
Asia-Pacific 21% 16% 20% 14%
</TABLE>
The Company's gross margin for the three and six months ended April 27, 1997
was 46.0 and 45.2 percent, respectively, compared to 48.0 and 47.9 percent for
the corresponding periods of fiscal 1996. These decreases can be attributed
primarily to reduced business volume and product pricing pressures associated
with reduced demand for semiconductor manufacturing equipment. The Company's
gross margin of 46.0 percent in the second quarter of fiscal 1997 improved
from 44.5 percent in the first quarter of fiscal 1997 due to increased
business volume, manufacturing material cost reductions and improved
manufacturing efficiencies. For these same reasons, management expects the
Company's gross margin to increase slightly in each of the next two fiscal
quarters.
9
<PAGE> 10
Excluding the charge for acquired in-process research and development incurred
in connection with the acquisitions of Opal and Orbot, operating expenses as a
percentage of net sales for the three and six months ended April 27, 1997 were
29.6 and 29.3 percent, respectively, versus 23.1 and 22.9 percent for the
corresponding periods in fiscal 1996. These increases are primarily
attributable to reduced business volume and additional research and
development costs for 300mm wafer technology. Research and development
spending is expected to increase in each of the next two fiscal quarters as
the Company accelerates its 300mm product development programs.
Significant operations of the Company are conducted in foreign currencies,
primarily Japanese yen. Forward exchange contracts and options are purchased
to hedge certain existing firm commitments and foreign currency denominated
transactions expected to occur during the next year. Gains and losses on hedge
contracts are reported in income when the related transactions being hedged
are recognized. Because the impact of movements in currency exchange rates on
foreign exchange contracts generally offsets the related impact on the
underlying items being hedged, these financial instruments are not expected to
subject the Company to risks that would otherwise result from changes in
currency exchange rates. Exchange gains and losses did not have a significant
effect on the Company's results of operations for the three and six months
ended April 27, 1997 or April 28, 1996.
Interest expense for the three and six months ended April 27, 1997 was $4.9
million and $10.7 million, respectively, compared to $4.9 million and $10.1
million, respectively, for the corresponding periods of fiscal 1996. The
Company's debt consists mainly of long-term debt bearing interest at fixed
rates. Therefore, fluctuations in interest expense from period to period were
primarily due to changes in the Company's average short-term debt outstanding
during those periods.
Interest income for the three and six months ended April 27, 1997 was $14.6
million and $28.2 million, respectively, compared to $9.8 million and $19.4
million, respectively, for the corresponding periods of fiscal 1996. These
increases can be attributed primarily to higher average cash and investment
balances.
The Company's effective income tax rate for the second quarter of fiscal 1997
was 35 percent, consistent with the rate for the three and six months ended
April 28, 1996. For the six months ended April 27, 1997, the effective rate
was higher than the expected rate of 35 percent, due to the non-deductible
nature of the $59.5 million acquisition related charge discussed above.
Management anticipates that the Company's effective income tax rate for the
remainder of fiscal 1997 will be 35 percent.
10
<PAGE> 11
The Company's results of operations for the three and six months ended April
27, 1997 are not necessarily indicative of future operating results.
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
The Company's financial condition remained strong as of April 27, 1997, with a
ratio of current assets to current liabilities of 2.6:1, compared to 2.9:1 at
October 27, 1996. The Company had $1.1 billion of cash and short-term
investments as of April 27, 1997, slightly above the amount at the end of
fiscal 1996, despite significant outflows related to the acquisitions of Opal
and Orbot and early retirement of certain debt (discussed in note 7 to the
Consolidated Condensed Financial Statements).
The Company generated $475 million of cash from operations in the first six
months of fiscal 1997. This resulted primarily from net income (plus non-cash
charges for depreciation, amortization and acquired in-process research and
development) of $297 million, an increase in accounts payable and accrued
expenses of $69 million and an increase in income taxes payable of $106
million.
Cash used for investing activities of $562 million was primarily for
acquisitions ($247 million, net of cash acquired), net purchases of short-term
investments ($238 million) and net property, plant and equipment acquisitions
of $77 million.
Cash used for financing activities of $113 million was primarily for net
short-term debt repayments and the early retirement of certain long-term debt.
At April 27 1997, the Company's principal sources of liquidity consisted of
$1,075 million of cash, cash equivalents and short-term investments, $194
million of unissued notes registered under the Company's medium-term note
program and $337 million of available credit facilities. During the second
quarter of fiscal 1997, the Company amended its $240 million line of credit
(included in available credit facilities discussed above) to extend the
expiration to April 2001 from February 2000. The Company's liquidity is
affected by many factors, some of which are based on the normal on-going
operations of the business, and others of which relate to the uncertainties of
the industry and global economies. Although the Company's cash requirements
will fluctuate based on the timing and extent of these factors, management
believes that cash generated from operations, together with existing sources
of liquidity, will be sufficient to satisfy the Company's requirements for the
next twelve months.
11
<PAGE> 12
Capital expenditures are expected to approximate $350 million in fiscal 1997,
up from the Company's prior estimate of $250 million. This increase can be
attributed primarily to additional applications lab and research and
development capabilities for 300mm technology. The Company's estimated capital
expenditures are based on its anticipated needs, which change from time to
time as business conditions change. This amount includes funds for the
continuation and completion of facilities improvements and investments in
demonstration and test equipment, information systems and other capital
equipment.
The Company is authorized to repurchase additional shares of its common stock
in the open market through February 1999 in amounts that are intended to
substantially offset the dilution resulting from its stock-based employee
benefit and incentive plans. The Company repurchased 500,000 shares of its
common stock during the first six months of fiscal 1997, for a total cash
outlay of approximately $25 million.
12
<PAGE> 13
RISKS AND UNCERTAINTIES
When used in this Management's Discussion and Analysis, the words "expect,"
"anticipate," "estimate" and similar expressions are intended to identify
forward-looking statements. These statements are subject to risks and
uncertainties that could cause actual results to differ materially from those
projected. These risks and uncertainties include, but are not limited to,
those discussed below.
The semiconductor industry has historically been cyclical and subject to
unexpected periodic downturns associated with sudden changes in supply and
demand. Although the Company's new orders and net sales are improving, and the
semiconductor industry appears to be recovering from the slowdown experienced
in 1996, the Company's ability to accurately predict the industry's cycles and
their effects on the semiconductor manufacturing equipment industry is
limited. For this reason, the Company's expectations with respect to new
orders and revenues for the next two fiscal quarters of 1997 may not be met.
It is also possible that the length and severity of future industry cycles
could be much different from those of previous cycles.
The Company's backlog as of April 27, 1997 was approximately $1,485 million,
up slightly from $1,448 million as of January 26, 1997 and $1,423 million as
of October 27, 1996. The Company schedules production of its systems based
upon order backlog and customer commitments. The backlog includes only those
orders for which written authorizations have been accepted and shipment dates
within 12 months have been assigned. Due to the potential for the cancellation
of orders and changes in customer delivery schedules, the Company's backlog at
any particular date is not necessarily indicative of actual sales for any
succeeding period.
The Company sells systems to, and provides services for, semiconductor
manufacturers located throughout the world. Each region in the global
semiconductor equipment market exhibits unique characteristics which cause
capital equipment investment patterns to vary from period to period. Although
international markets provide the Company with significant growth
opportunities, periodic economic downturns, trade balance issues, political
instability and fluctuations in interest and foreign currency exchange rates
are all risks which could affect global product and service demand. The
Company actively manages its exposure to changes in foreign currency exchange
rates; however, there can be no assurance that future changes in foreign
currency exchange rates will not have a material effect on its results of
operations or financial condition.
13
<PAGE> 14
The Company operates in a highly competitive industry characterized by
increasingly rapid technological changes. The Company's competitive advantage
is therefore primarily dependent on its ability to timely and successfully
develop new products, technologies, processes and services (including those
for 300mm wafers and 0.25 micron and below devices), as well as its ability to
successfully develop and/or penetrate new and existing markets and to ramp
production to meet customer demands. If the Company is unable, for whatever
reason, to introduce leading-edge products, technologies, processes and
services to the market in a timely manner, its results of operations could be
adversely affected.
The Company has a number of programs in place to reduce the cost of
manufacturing its products and providing its services. These programs focus
primarily on improving manufacturing efficiencies and partnering with the
Company's suppliers to obtain materials at the lowest possible price. If the
Company's programs are not successful or results of the programs are not
achieved when anticipated, the Company's expected improvement in its gross
margin in each of the next two fiscal quarters may not be attained. In
addition, if the Company is not able, for whatever reason, to maintain its
gross margin at the current level, its results of operations could be
adversely affected.
The Company completed its acquisitions of Opal and Orbot during its first
quarter of fiscal 1997. These acquisitions marked the Company's entrance into
the metrology and inspection semiconductor manufacturing equipment market. To
date, the Company's results of operations have not been materially impacted as
a result of the acquisitions, except for a one-time charge for acquired
in-process research and development. However, the Company does expect the
acquired companies to contribute significantly to its results of operations at
some point in the future. If the Company is not able to successfully integrate
the operations of these newly acquired companies or expand their customer
bases, the Company's expectations of its future results of operations may not
be met. Also, to the extent that there is an impairment, for whatever reason,
in the value of intangible assets recorded in connection with the
acquisitions, the Company's results of operations could be adversely affected.
The Company is currently involved in litigation regarding patents and other
intellectual property rights and could become involved in additional
litigation in the future. There can be no assurance about the outcome of
current or future litigation or patent infringement inquiries.
The Company undertakes no obligation to update the information, including the
forward-looking statements, contained in this Form 10-Q.
14
<PAGE> 15
PART II OTHER INFORMATION
Item 1. Legal Proceedings
In the first of two lawsuits filed by the Company, captioned Applied
Materials, Inc. v. Advanced Semiconductor Materials America, Inc.(ASMA),
Epsilon Technology, Inc. (doing business as ASM Epitaxy) and Advanced
Semiconductor Materials International N.V. (collectively "ASM") (case no.
C-91-20061-RMW), Judge William Ingram of the United States District Court for
the Northern District of California ruled on April 26, 1994 that ASM's Epsilon
I epitaxial reactor infringed three of the Company's United States patents and
issued an injunction against ASM's use or sale of the atmospheric versions of
ASM Epsilon I in the United States. On October 28, 1996, the U.S. Court of
Appeals for the Federal Circuit decided ASM's appeal of this decision,
affirming the trial court's judgment that one of the Company's patents is
valid and infringed. A permanent injunction is now effective which prohibits
ASM's use and sale of its epitaxial reactors in the United States.
The trial of the Company's second patent infringement lawsuit against ASM,
captioned Applied Materials, Inc. v. ASM (case no. C-92-20643-RMW), was
concluded before Judge Whyte in May 1995. On November 1, 1995, the Court
issued its judgment holding that two of the Company's United States patents
were valid and infringed by reduced pressure versions of ASM's Epsilon I
epitaxial reactors. ASM appealed this decision. On December 17, 1996, the U.S.
Court of Appeals for the Federal Circuit rejected ASM's appeal, and affirmed
the District Court's ruling. A permanent injunction was entered on March 7,
1996 prohibiting ASM's manufacture, use or sale of reduced pressure versions
of its Epsilon I epitaxial reactors within the United States. Trial in the
District Court has been set for July 28, 1997 to determine ASM's liability,
damages and willfulness, for both case no. C-91-20061-RMW and C-92-20643-RMW.
In a separate lawsuit filed by ASM against the Company involving one patent
relating to the Company's single wafer epitaxial product line, captioned ASM
America, Inc. v. Applied Materials, Inc. (case no. C-93-20853-RMW), the Court
granted three motions for summary judgment in favor of the Company which
eliminate the Company's liability on this patent. ASM has not indicated
whether it intends to appeal this matter. The Company's counterclaims against
ASM for inequitable conduct were denied by the Court on April 11, 1997. A
separate action severed from ASM's case, captioned ASM America, Inc. v.
Applied Materials, Inc. (case no. C-95-20169-RMW), involves one United States
patent which relates to the Company's Precision 5000 product. A previously set
trial date has been vacated; no trial date is currently
15
<PAGE> 16
scheduled. In these cases, ASM seeks injunctive relief, damages and such other
relief as the Court may find appropriate.
Further, the Company has filed a Declaratory Judgment action against ASM,
captioned Applied Materials, Inc. v. ASM (case no. C-95-20003-RMW), requesting
that an ASM United States patent be held invalid and not infringed by the
Company's single wafer epitaxial product line. No trial date has been set. On
April 10, 1996, the Court denied ASM's motion for summary judgment and granted
the Company's motion for summary judgment finding several independent grounds
why the Company's reactors do not literally infringe ASM's patent. With this
ruling, the Company's liability has been substantially eliminated on this
patent. ASM has not indicated whether it intends to appeal this decision. On
July 7, 1996, ASM filed a lawsuit, captioned ASM America, Inc. v. Applied
Materials, Inc. (case no. C95-20586-RMW), concerning alleged infringement of a
United States patent by susceptors in chemical vapor deposition chambers.
Discovery is proceeding, and no trial date has been scheduled.
On January 13, 1997, the Company filed a patent infringement suit against ASM,
captioned Applied Materials, Inc. v. ASMA, et al. (case no.
C-97-20045-RMW(EAI)) in the United States District Court, Northern District of
California, regarding ASM's newly announced Epsilon 2000 reactor. Discovery is
commencing, and no trial date has been scheduled.
In September 1994, General Signal Corporation filed a lawsuit against the
Company, captioned General Signal Corporation v. Applied Materials, Inc. (case
no. 94-461-JJF) in the United States District Court, District of Delaware.
General Signal alleges that the Company infringes five of General Signal's
United States patents by making, using, selling or offering for sale
multi-chamber wafer fabrication equipment, including the Precision 5000 series
machines, for example. General Signal seeks an injunction, multiple damages
and costs, including reasonable attorneys' fees and interest, and such other
relief as the court may deem appropriate. A previously scheduled trial date
has been vacated; no trial date is currently scheduled.
On May 5, 1997, the Company entered into a comprehensive, global settlement
with Novellus Systems, Inc. which included a termination of all outstanding
litigation and cross licenses of patents related to certain aspects of
chemical vapor deposition. Pursuant to the settlement, Novellus paid the
Company $80 million in damages for past patent infringement and will pay a
royalty for all future shipments of TEOS-based systems. The parties have
stipulated to dismiss the three cases pending between them in the United
States District Court for the Northern District of California.
16
<PAGE> 17
As a result of the Company's acquisition of Orbot, the Company is involved in
a lawsuit captioned KLA Instruments Corporation v. Orbot (case no.
C93-20886-JW) in the United States District Court, Northern District of
California, alleging infringement of one patent regarding equipment for the
inspection of masks or reticles, and seeking an injunction, damages and such
other relief as the Court may find appropriate. There has been discovery, but
no trial date has been scheduled.
In the normal course of business, the Company from time to time receives and
makes inquiries regarding possible patent infringement. Management believes
that it has meritorious defenses and intends to pursue these matters
vigorously.
Item 4. Submission of Matters to a Vote of Security-Holders
The Annual Meeting of Stockholders was held on March 19, 1997 in Santa Clara,
California. Eight incumbent directors were re-elected without opposition to
serve another one-year term in office. The results of this election were as
follows:
<TABLE>
<CAPTION>
Name of Director Votes For Votes Withheld
-----------------------------------------------------------
<S> <C> <C>
James C. Morgan 142,829,156 468,407
Dan Maydan 142,790,061 507,502
Michael H. Armacost 142,843,023 454,540
Herbert M. Dwight, Jr. 142,843,748 453,815
Philip V. Gerdine 142,846,578 450,985
Tsuyoshi Kawanishi 142,841,398 456,165
Paul R. Low 142,836,568 460,995
Alfred J. Stein 142,846,313 451,250
</TABLE>
On a proposal to amend the Company's 1995 Equity Incentive Plan to increase
the number of shares issuable thereunder by 6,000,000 shares, there were
89,066,659 votes cast in favor, 51,484,911 votes cast against, 593,099
abstentions and 2,152,894 broker non-votes.
17
<PAGE> 18
Item 5. Other Information
The ratio of earnings to fixed charges for the six months ended April 27, 1997
and April 28, 1996, and for each of the last five fiscal years, was as
follows:
<TABLE>
<CAPTION>
Six Months Ended Fiscal Year
------------------- --------------------------------------------
April 27, April 28,
1997 1996 1996 1995 1994 1993 1992
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
11.73x 24.66x 20.14x 21.25x 13.37x 7.61x 3.63x
====== ====== ====== ====== ====== ===== =====
</TABLE>
The Company's ratio of earnings to fixed charges for the six months ended
April 27, 1997 was computed on a consistent basis with the ratio for 1996, as
detailed in Exhibit 12.1 of the Company's Annual Report on Form 10-K for its
fiscal year ended October 27, 1996.
Item 6. Exhibits and Reports on Form 8=K
a) Exhibits are numbered in accordance with the Exhibit Table of Item 601 of
Regulation S=K:
10.1 Amended and Restated Credit Agreement, dated April 4, 1997 among
Applied Materials, Inc., the Banks party hereto, and Morgan
Guaranty Trust Company of New York
10.2 Amendment No. 1 to Amended and Restated Credit Agreement, dated
May 7, 1997
10.3 Resolution pertaining to the Amendment of the Applied Materials,
Inc. 1995 Equity Incentive Plan, adopted by the Stock Option
and Compensation Committee of the Board of Directors of Applied
Materials, Inc. on December 12, 1996
18
<PAGE> 19
10.4 Participation Agreement dated as of April 30, 1997 among Applied
Materials, Inc. (as Lessee and Construction Agent), Credit Suisse
Leasing 92A, L.P., (as Lessor and Borrower), Greenwich funding
Corporation (as CP Lender), The Persons Named on Schedule I (as
Eurodollar Lenders) and Credit Suisse First Boston (acting
through its New York Branch, as Agent)
10.5 Appendix 1 to Participation Agreement, Master Lease Agreement and
Loan Agreement, dated as of April 30, 1997 (Definitions and
Interpretation) for Applied Materials, Inc.
10.6 Loan Agreement dated as of April 30, 1997 among Credit Suisse
Leasing 92A, L.P. (as Borrower), Greenwich Funding Corporation
(as CP Lender), The Persons Named on Schedule I (as Eurodollar
Lenders) and Credit Suisse First Boston (acting through its New
York Branch as Agent) for Revolving Commercial Paper, Eurodollar
Credit and Base Rate Program
10.7 Real Estate and Equipment Facility Master Lease dated as of April
30, 1997 between Credit Suisse Leasing 92A, L.P. (as Lessor), and
Applied Materials, Inc. (as Lessee)
b) A Report on Form 8-K was filed on May 13, 1997. The report contained a
press release dated May 5, 1997, announcing a litigation settlement with
Novellus Systems, Inc. The report also included the Company's financial
statements for the period ended April 27, 1997, as attached to its earnings
release dated May 13, 1997.
19
<PAGE> 20
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
APPLIED MATERIALS, INC.
June 10, 1997 By: \s\Gerald F. Taylor
--------------------
Gerald F. Taylor
Senior Vice President and
Chief Financial Officer
(Principal Financial
Officer)
By: \s\Michael K. O'Farrell
-------------------------
Michael K. O'Farrell
Vice President and
Corporate Controller
(Principal Accounting
Officer)
20
<PAGE> 21
INDEX TO EXHIBITS
10.1 Amended and Restated Credit Agreement, dated April 4, 1997 among
Applied Materials, Inc., the Banks party hereto, and Morgan
Guaranty Trust Company of New York
10.2 Amendment No. 1 to Amended and Restated Credit Agreement, dated
May 7, 1997
10.3 Resolution pertaining to the Amendment of the Applied Materials,
Inc. 1995 Equity Incentive Plan, adopted by the Stock Option
and Compensation Committee of the Board of Directors of Applied
Materials, Inc. on December 12, 1996
10.4 Participation Agreement dated as of April 30, 1997 among Applied
Materials, Inc. (as Lessee and Construction Agent), Credit Suisse
Leasing 92A, L.P., (as Lessor and Borrower), Greenwich funding
Corporation (as CP Lender), The Persons Named on Schedule I (as
Eurodollar Lenders) and Credit Suisse First Boston (acting
through its New York Branch, as Agent)
10.5 Appendix 1 to Participation Agreement, Master Lease Agreement and
Loan Agreement, dated as of April 30, 1997 (Definitions and
Interpretation) for Applied Materials, Inc.
10.6 Loan Agreement dated as of April 30, 1997 among Credit Suisse
Leasing 92A, L.P. (as Borrower), Greenwich Funding Corporation
(as CP Lender), The Persons Named on Schedule I (as Eurodollar
Lenders) and Credit Suisse First Boston (acting through its New
York Branch as Agent) for Revolving Commercial Paper, Eurodollar
Credit and Base Rate Program
10.7 Real Estate and Equipment Facility Master Lease dated as of April
30, 1997 between Credit Suisse Leasing 92A, L.P. (as Lessor), and
Applied Materials, Inc. (as Lessee)
<PAGE> 1
Exhibit 10.1
EXECUTION COPY
AMENDED AND RESTATED CREDIT AGREEMENT
AMENDED AND RESTATED CREDIT AGREEMENT dated as of April 4, 1997
among APPLIED MATERIALS, INC., the BANKS party hereto, and MORGAN GUARANTY TRUST
COMPANY OF NEW YORK, as Agent.
WHEREAS, the parties hereto are parties to a Credit Agreement dated
as of September 8, 1994 as heretofore amended (the "EXISTING AGREEMENT");
WHEREAS, the parties hereto desire to amend the Existing Agreement
to (i) extend the Termination Date from February 11, 2000 to April 4, 2001, (ii)
reduce the rates of interest and fees payable thereunder, (iii) permit the
Company to replace the Lease Agreements (as defined therein) with a new master
lease with Credit Suisse Leasing, 92A, L.P., (iv) permit the Company to elect a
shorter Interest Period with respect to Money Market Absolute Rate Borrowings,
(v) permit the Company to use the proceeds of loans made thereunder to finance
certain acquisitions and (vi) make certain other changes; and
WHEREAS, in connection with such amendment, the parties hereto
desire to restate the Existing Agreement in its entirety to read as set forth in
the Existing Agreement with the amendments specified below;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Definitions; References. (a) Unless otherwise
specifically defined herein, each term used herein which is defined in the
Existing Agreement has the meaning assigned to such term in the Existing
Agreement. Each reference to "hereof", "hereunder", "herein" and "hereby" and
each other similar reference and each reference to "this Agreement" and each
other similar reference contained in the Existing Agreement shall from and after
the Restatement Effective Date refer to the Existing Agreement as amended and
restated hereby.
(b) Each reference to the Existing Agreement contained in (i)
Exhibits A, B, C, D and H thereto or (ii) any Note issued pursuant thereto
shall, from and after the Restatement Effective Date, refer to the Existing
Agreement as amended and restated hereby (and as further amended from time to
time).
(c) "Amendment and Restatement" means this Amended and Restated
Credit Agreement dated as of April 4, 1997 among the parties hereto, amending
and restating the Existing Agreement.
<PAGE> 2
(d) "Restatement Effective Date" means the date this Amendment and
Restatement becomes effective in accordance with Section 11 hereof.
SECTION 2. Extension of Termination Date. The definition of
"Termination Date" in Section 1.01 of the Existing Agreement is amended by
changing the date specified therein from "February 11, 2000" to "April 4, 2001"
SECTION 3. Amendments to Definitions. Section 1.1 of the Existing
Agreement is amended as follows:
(a) The following new definitions are added in the appropriate
alphabetical order:
"Company's 1996 Form 10-K" means the Company's
annual report on Form 10-K for 1996, as filed with the
Securities and Exchange Commission pursuant to the Securities
Exchange Act of 1934.
"Excess Lease Financed Amount" means the amount (if
any) by which the Lease Financed Amount exceeds (i) $250,000,000
at any time when the Company does not have an Improved Rating or
(ii) $500,000,000 at any time when the Company does have an
Improved Rating.
"Improved Rating" means a rating of senior long-term
unsecured debt securities of the Company without any third-party
credit enhancement as either (i) BBB+ or higher by Standard &
Poor's Ratings Services or (ii) Baa1 or higher by Moody's
Investors Service, Inc.
"Lease Financed Amount" means the sum of the
aggregate outstanding principal amount of the Loans (as defined
in the Lease Agreements) and the outstanding Investment Amounts
(as defined in the Lease Agreements).
"Margin Stock" means "margin stock" as such term is
defined in Regulation U.
"Permitted Lease Collateral" means Cash Collateral
(as defined in the Lease Agreements) or Treasuries (as defined
in the Lease Agreements) pledged pursuant to the Pledge
Agreement (as defined in the Lease Agreements), in each case
securing the obligations of the Company under the Lease
Agreements.
(b) The definition of "Company's 1995 Form 10-K" is deleted.
2
<PAGE> 3
(c) Clause (5) of the definition of "Interest Period" is amended by
changing the words "but not less than 30 days" to read "but not less than 7
days".
(d) The definition of "Lease Agreements" is amended to read as
follows:
"Lease Agreements" means the Master Lease dated as
of April 11, 1997 between the Company and Credit Suisse Leasing,
92A, L.P. and the Operative Documents (as defined therein), as
they may be amended from time to time; provided that, except in
the case of substantially unimproved land, the property and
other assets leased pursuant to the Lease Agreements, while
leased thereunder, are not included in the assets of the Company
and its Consolidated Subsidiaries under GAAP.
(e) The last sentence of the definition of "Debt" is amended to read
as follows:
The Company's obligations under the Lease Agreements
shall be excluded from this definition; provided that (i) no
such exclusion shall be made if and to the extent that GAAP
would require such obligations to be classified as debt for
borrowed money and (ii) in any event the term "Debt" shall
include the Excess Lease Financed Amount (if any).
(f) The last sentence of the definition of "Guarantees" is amended
by deleting the words "until December 31, 1995".
(g) The last sentence of the definition of "Lien" is amended to read
as follows:
The Lease Agreements and the arrangements set forth therein shall be
excluded from this definition; provided that:
(i) if any portion of the Lease Financed Amount is
included in Debt under the last sentence of the definition of
Debt, then, for purposes of Section 5.11(j), the Lease
Agreements and the arrangements set forth therein shall be
deemed to create a Lien securing such Debt; and
(ii) if the Lease Agreements and the arrangements
set forth therein create a lien on any property or assets other
than (x) the property and assets leased pursuant to the
3
<PAGE> 4
Lease Agreements, (y) rights of the Company as sublessor
of any portion of such property and assets and (z)
Permitted Lease Collateral, such lien shall not be
excluded from this definition.
(h) The definition of "Consolidated Quick Assets" is
amended by adding at the end of such definition the words "excluding
Permitted Lease Collateral".
SECTION 4. Limitation on Long-Term Leases. The last sentence of
Section 5.13 is amended to read in full as follows:
For purposes of this Section 5.13 only, Rentals shall not include
any payments required under the Lease Agreements.
SECTION 5. Reduced Pricing. The Pricing Schedule to the Existing
Agreement is deleted and replaced with the Pricing Schedule attached hereto.
Interest (if any) and fees accrued prior to the Restatement Effective Date shall
be payable at the rates specified in the original Pricing Schedule. Interest and
fees accruing on or after the Restatement Effective Date shall be payable at the
rates specified in the Pricing Schedule attached hereto.
SECTION 6. Use of Proceeds. Section 5.08 of the Existing Agreement
is amended to read as follows:
SECTION 5.08. Use of Proceeds. The proceeds of the Loans
made under this Agreement will be used by the Company to backstop
its commercial paper and for other general corporate purposes. None
of such proceeds will be used, directly or indirectly, for the
purpose, whether immediate, incidental or ultimate, of buying or
carrying Margin Stock unless, at all times when any such proceeds
are used to buy or carry Margin Stock, not more than 25% of the
value (as determined by any reasonable method) of the assets subject
to any restriction in Section 5.07 or 5.11 consists of Margin Stock.
SECTION 7. Updated Representations and Warranties. (a) Sections
4.04, 4.05 and 4.07 of the Existing Agreement are amended by changing the
reference to "the Company's 1995 Form 10-K" to "the Company's 1996 Form 10-K,"
wherever it appears therein.
(b) Section 4.04 of the Existing Agreement is amended by changing
the date "October 29, 1995" to "October 27, 1996," wherever it appears therein.
SECTION 8. Additional Representations and Warranties. (a) The
Company represents and warrants that as of the Restatement Effective Date,
4
<PAGE> 5
immediately after giving effect to the amendment and restatement of the Existing
Agreement provided for herein:
(i) no Default shall have occurred and be continuing; and
(ii) each representation and warranty of the Company set forth in
the Existing Agreement (as amended hereby) will be true as though
made on and as of the Restatement Effective Date.
(b) Each of the Banks represents to the Agent and each of the
other Banks that it in good faith is not relying upon any Margin Stock as
collateral in the extension or maintenance of the credit provided for in this
Amendment and Restatement.
SECTION 9. Specification of Certain Dates. The words "the date of
this Agreement" in Section 8.02 of the Existing Agreement and the words "the
date hereof" wherever they appear in Section 8.03 thereof, are changed to "April
4, 1997".
SECTION 10. Counterparts. This Amendment and Restatement may be
signed in any number of counterparts, each of which shall be an original, with
the same effect as if the signatures thereto and hereto were upon the same
instrument.
SECTION 11. Conditions to Effectiveness. This Amendment and
Restatement shall become effective, and the Existing Agreement will be amended
and restated in its entirety to read as set forth in the Existing Agreement with
the amendments specified above, on the date when the Agent shall have received
all of the following:
(a) counterparts of this Amendment and Restatement signed by the
Company and all of the Banks that are parties to the Existing
Agreement (or, in the case of any such Bank from which a signed
counterpart shall not have been received, the Agent shall have
received, in form satisfactory to it, facsimile or other written
confirmation from such Bank that it has signed a counterpart
hereof);
(b) an opinion of counsel for the Company, substantially in the
form of Exhibit A hereto and covering such additional matters
relating to the transactions contemplated hereby as the Required
Banks may reasonably request; and
(c) all documents the Agent may reasonably request relating to the
existence of the Company, the corporate authority for and the
validity of the Existing Agreement as amended and restated hereby,
and any other matters relevant hereto, all in form and substance
satisfactory to the Agent.
5
<PAGE> 6
The Agent shall promptly notify the Company and the Banks of the Restatement
Effective Date, and such notice shall be conclusive and binding on all parties
hereto.
SECTION 12. Governing Law. Submission to Jurisdiction. This
Amendment and Restatement shall be governed by and construed in accordance with
the laws of the State of New York. The Company hereby submits to the
nonexclusive jurisdiction of the United States District Court for the Southern
District of New York and of any New York State court sitting in New York City
for purposes of all legal proceedings arising out of or relating to this
Amendment and Restatement or the transactions contemplated hereby. The Company
irrevocably waives, to the fullest extent permitted by law, any objection which
it may now or hereafter have to the laying of the venue of any such proceeding
brought in such a court and any claim that any such proceeding brought in such a
court has been brought in an inconvenient forum.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment
and Restatement to be duly executed by their respective authorized officers as
of the day and year first above written.
APPLIED MATERIALS, INC.
By /s/ Gerald Taylor
-------------------------------------
Name: Gerald F. Taylor
Title: Senior Vice President and Chief
Financial Officer
By /s/ Nancy Handel
-------------------------------------
Name: Nancy H. Handel
Title: Vice President, Corporate Finance and
Treasurer
MORGAN GUARANTY TRUST
COMPANY OF NEW YORK
By /s/ Kathryn Sayko-Yanes
-------------------------------------
Title:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By /s/ Kevin McMahon
-------------------------------------
Title: Managing Director
6
<PAGE> 7
UNION BANK OF CALIFORNIA, N.A.
By /s/ Wanda Headrick
-------------------------------------
Title: Vice President
ABN AMRO BANK N.V. SAN
FRANCISCO INTERNATIONAL
BRANCH
By /s/ Robin S. Yim
-------------------------------------
Title: Group Vice President
By /s/ Richard DaCosta
-------------------------------------
Title: Assistant Vice President
BANQUE NATIONALE DE PARIS
By /s/ Rafael C. Lumanlan
-------------------------------------
Title: Vice President
By /s/ Charles H. Day
-------------------------------------
Title: Assistant Vice President
CITICORP USA, INC.
By /s/ Steven Victorin
-------------------------------------
Title: Attorney-in-Fact
CREDIT SUISSE FIRST BOSTON
By /s/ Marilou Palenzuela
-------------------------------------
Title: Vice President
By /s/ Thomas F. Clausen
-------------------------------------
Title: Vice President
7
<PAGE> 8
DEUTSCHE BANK AG, NEW YORK
AND/OR CAYMAN ISLANDS
BRANCHES
By /s/ Vishwanie S. Sewsankae
-------------------------------------
Title: Assistant Vice President
By /s/ Robert M. Wood, Jr.
-------------------------------------
Title: Director
MELLON BANK, N.A.
By /s/ Edwin H. Wiest
-------------------------------------
Title: First Vice President
MORGAN GUARANTY TRUST
COMPANY OF NEW YORK, as Agent
By /s/ Kathryn Sayko-Yanes
-------------------------------------
Title:
8
<PAGE> 9
PRICING SCHEDULE
The "EURO-DOLLAR MARGIN", "CD MARGIN" and "FACILITY FEE RATE" for
any day are the respective rates per annum set forth below in the applicable row
in the column corresponding to the Pricing Level that applies on such day:
<TABLE>
<CAPTION>
PRICING LEVEL LEVEL I LEVEL II LEVEL III LEVEL IV LEVEL V
- - ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Euro-Dollar Margin 0.150% 0.185% 0.240% 0.300% 0.400%
- - ------------------------------------------------------------------------------------------------
CD Margin 0.275% 0.310% 0.365% 0.425% 0.525%
- - ------------------------------------------------------------------------------------------------
Facility Fee Rate 0.075% 0.090% 0.110% 0.150% 0.225%
- - ------------------------------------------------------------------------------------------------
</TABLE>
For purposes of this Pricing Schedule, the following terms have the
following meanings:
"LEVEL I PRICING" applies on any day if, on such day, the Company's
long-term debt is rated A-or higher by S&P or A3 or higher by Moody's.
"LEVEL II PRICING" applies on any day if on such day, (i) the
Company's long-term debt is rated BBB+ by S&P or Baal by Moody's and (ii) Level
I Pricing does not apply.
"LEVEL III PRICING" applies on any day if, on such day, (i) the
Company's long-term debt is rated BBB by S&P or Baa2 by Moody's and (ii) neither
Level I Pricing nor Level II Pricing applies.
"LEVEL IV PRICING" applies on any day if, on such day, (i) the
Company's long-term debt is rated BBB- by S&P or Baa3 by Moody's and (ii) none
of Level I Pricing, Level II Pricing or Level III Pricing applies.
"LEVEL V PRICING" applies on any day if, on such day, no other
Pricing Level applies.
"MOODY'S" means Moody's Investors Service, Inc.
"PRICING LEVEL" means any one of the five pricing levels represented
by Level Pricing, Level II Pricing, Level III Pricing, Level IV Pricing and
Level V Pricing.
"S&P" means Standard & Poor's Ratings Services.
The ratings to be utilized for purposes of this Pricing Schedule are
those assigned to the senior unsecured long-term debt securities of the Company
without
9
<PAGE> 10
third-party credit enhancement, and any rating assigned to any other debt
security of the Company shall be disregarded. The rating in effect on any day is
the rating in effect at the close of business on such day.
10
<PAGE> 11
EXHIBIT A
OPINION OF COUNSEL
FOR THE COMPANY
[Amendment Effective Date]
To the Banks and the Agent
Referred to Below
c/o Morgan Guaranty Trust Company
of New York, as Agent
60 Wall Street
New York, New York 10260
Ladies and Gentlemen:
I have acted as counsel to Applied Materials, Inc. (the "COMPANY")
in connection with the execution and delivery of that certain Amended and
Restated Credit Agreement (the "CREDIT AGREEMENT") dated as of April 4, 1997
among the Company, the Banks signatory thereto and Morgan Guaranty Trust Company
of New York, as Agent. Except as otherwise defined herein, all terms used herein
and defined in the Credit Agreement or any agreement delivered thereunder shall
have the meanings assigned to them therein.
In connection with this opinion, I have examined executed copies of
the Credit Agreement and the Notes and such other documents, records, agreements
and certificates as I have deemed appropriate. I have also reviewed such matters
of law as I have considered relevant for the purpose of this opinion.
Based upon the foregoing, I am of the opinion that:
1. The Company is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of Delaware; has the corporate
power and authority to own its assets and to transact the business in which it
is now engaged or proposed to be engaged; and is duly licensed or qualified and
is in good standing as a foreign corporation in the State of California.
2. The execution, delivery and performance by the Company of the
Credit Agreement and the Notes are within the Company's corporate powers, have
been duly authorized by all necessary corporate action, require no action by or
in respect of, or filing with, any governmental body, agency or official and do
not contravene, or constitute a default under, any provision of applicable law
or regulation or of the certificate of incorporation or by-laws of the Company
or, to
<PAGE> 12
the best of my knowledge, of any agreement, judgment, injunction, order, decree
or other instrument binding upon the Company or any of its Subsidiaries or,
result in the creation or imposition of any Lien on any asset of the Company or
any of its Restricted Subsidiaries.
3. To the best of my knowledge, except as set forth under the
heading "Legal Proceedings" in the Company's 1996 Form 10-K, there are no
pending or threatened actions, suits or proceedings against or affecting the
Company or any of its Subsidiaries before any court, governmental agency or
arbitrator in which there is a reasonable possibility of an adverse
determination which would have a Material Adverse Effect, or which in any manner
draws into question the validity of the Credit Agreement or the Notes.
4. The Credit Agreement constitutes a valid and binding obligation
of the Company and each Note constitutes a valid and binding agreement of the
Company, in each case enforceable in accordance with its terms.
Certain Assumptions
With your permission I have assumed the following: (a) the
authenticity of original documents and the genuineness of all signatures; (b)
the conformity to the originals of all documents submitted to me as copies and
the truth, accuracy, and completeness of the information, representations and
warranties contained in the records, documents, instruments and certificates I
have reviewed; and (c) the absence of any evidence extrinsic to the provisions
of the written agreements between the parties that the parties intended a
meaning contrary to that expressed by those provisions.
Certain Limitations and Qualifications
I express no opinion as to laws other than laws of the State of
California, the federal law of the United States of America and the General
Corporation Law of the State of Delaware.
With your permission, I have assumed for the purpose of rendering
this opinion that the laws of the State of California govern the transaction,
notwithstanding that the Credit Agreement and the Notes state that they are to
be governed by New York law.
My opinion that any document is legal, valid, binding, or
enforceable in accordance with its terms is qualified as to:
(a) limitations imposed by bankruptcy, insolvency, reorganization,
arrangement, fraudulent conveyance, moratorium, or other similar laws relating
to or affecting the enforcement of creditors' rights generally;
<PAGE> 13
(b) general principles of equity, including without limitation
concepts of mutuality, reasonableness, good faith and fair dealing, and the
possible unavailability of specific performance or injunctive relief, regardless
of whether such enforceability is considered in a proceeding in equity or at
law;
(c) the possibility that certain covenants and provisions for the
acceleration of the maturity of the Notes may not be enforceable if enforcement
would be unreasonable under the then existing circumstances, but in my opinion
acceleration would be available if an event of default occurred as a result of a
material breach of a material covenant;
(d) the unenforceability under certain circumstances of provisions
imposing penalties, forfeiture, late payment charges or an increase in interest
rate upon delinquency in payment or the occurrence of any event of default;
(e) rights to indemnification and contribution which may be limited
by applicable law and equitable principles; and
(f) the unenforceability under certain circumstances of provisions
expressly or by implication waiving broadly or vaguely stated rights (including,
without limitation, waivers of any objection to venue and forum non conveniens
and the right to a jury trial), the benefits of statutory constitutional
provisions, unknown future rights, and defenses to obligations or rights granted
by law, where such waivers are against public policy or prohibited by law.
The phrase "to the best of my knowledge" is intended to indicate
that, during the ordinary course of the performance of my duties as counsel for
the Company, no information that would give me current actual knowledge of the
inaccuracy of such statement has come to my attention.
Use of Opinion
This opinion is solely for your benefit (and the benefit of any
Assignee which becomes a Bank pursuant to Section 9.06(c) of the Credit
Agreement) in connection with the transaction covered by the first paragraph of
this letter and may not be relied upon, used, circulated, quoted or referred to,
nor may copies hereof be delivered to, any other person without my prior written
approval. I disclaim any obligation to update this opinion for events occurring
or coming to my attention after the date hereof.
Very truly yours,
<PAGE> 1
AMENDMENT NO. 1
TO
AMENDED AND RESTATED CREDIT AGREEMENT
AMENDMENT dated as of May 7, 1997 to the Amended and Restated Credit
Agreement dated as of April 4, 1997 (the "AMENDMENT AND RESTATEMENT") among
Applied Materials, Inc. (the "COMPANY"), the BANKS party thereto (the "BANKS")
and MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Agent (the "AGENT").
W I T N E S S E T H :
WHEREAS, the parties hereto desire to amend the Amendment and
Restatement to change the date of the Master Lease (as defined therein) from
April 11, 1997 to April 30, 1997.
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1. Definitions; References. Unless otherwise specifically
defined herein, each term used herein which is defined in the Amendment and
Restatement has the meaning assigned to such term in the Amendment and
Restatement. Each reference to "hereof", "hereunder", "herein" and "hereby" and
each other similar reference and each reference to "this Agreement" and each
other similar reference contained in the Amendment and Restatement shall, after
this Amendment becomes effective, refer to the Amendment and Restatement as
amended hereby.
SECTION 2. Definition of Lease Agreements. The definition of "Lease
Agreements" in Section 3(d) of the Amendment and Restatement is amended by
changing the date "April 11, 1997" to "April 30, 1997".
SECTION 3. Governing Law. This Amendment shall be governed by and
construed in accordance with the laws of the State of New York.
SECTION 4. Counterparts. This Amendment may be signed in any number
of counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.
SECTION 5. Effectiveness. This Amendment shall become effective on
the date when the Agent shall have received from each of the Borrower and the
Required Banks a counterpart hereof signed by such party or facsimile or other
written confirmation (in form satisfactory to the Agent) that such party has
signed a counterpart hereof.
<PAGE> 2
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed by their respective authorized officers as of the day and year
first above written.
APPLIED MATERIALS, INC.
By /s/ Gerald F. Taylor
--------------------------------------
Name: Gerald F. Taylor
Title: Senior Vice President and Chief
Financial Officer
By /s/ Nancy H. Handel
--------------------------------------
Name: Nancy H. Handel
Title: Vice President, Corporate Finance and
Treasurer
MORGAN GUARANTY TRUST
COMPANY OF NEW YORK
By /s/ Kathryn Sayko-Yanes
--------------------------------------
Title: Vice President
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By /s/ Kevin McMahon
--------------------------------------
Title: Managing Director
UNION BANK OF CALIFORNIA, N.A.
By /s/ Wanda Headrick
--------------------------------------
Title: Vice President
ABN AMRO BANK N.V. SAN
FRANCISCO INTERNATIONAL
BRANCH
By /s/ Robin S. Yim
--------------------------------------
Title: Group Vice President
By /s/ Candace J. Hsu
--------------------------------------
Title: Corporate Banking Officer
2
<PAGE> 3
BANQUE NATIONALE DE PARIS
By /s/ Rafael C. Lumanlan
--------------------------------------
Title: Vice President
By /s/ Charles Day
--------------------------------------
Title: Assistant Vice President
CITICORP USA, INC.
By /s/ David L. Harris
--------------------------------------
Title: Vice President
CREDIT SUISSE FIRST BOSTON
By /s/ David J. Worthington
--------------------------------------
Title: Managing Director
By /s/ Marilou Palenzuela
--------------------------------------
Title: Vice President
DEUTSCHE BANK AG, NEW YORK
AND/OR CAYMAN ISLANDS
BRANCHES
By /s/ Ralf Hoffmann
--------------------------------------
Title: Vice President
By /s/ Andreas Neumeier
--------------------------------------
Title: Vice President
MELLON BANK, N.A.
By /s/ Edwin H. Wiest
--------------------------------------
Title: First Vice President
3
<PAGE> 1
EXHIBIT 10.3
RESOLUTION OF THE
STOCK OPTION AND COMPENSATION COMMITTEE OF THE
BOARD OF DIRECTORS OF
APPLIED MATERIALS, INC.
Adopted on December 12, 1996
AMENDMENT OF 1995 EQUITY INCENTIVE PLAN
WHEREAS, this Company sponsors the 1995 Equity Incentive Plan (the
"1995 Plan"); and
WHEREAS, this Committee has been presented with a form of Amendment No.
1 to the 1995 Plan to amend certain provisions of the 1995 Plan respecting
restrictive stock awards;
NOW, THEREFORE, BE IT RESOLVED, that Amendment 1 to the 1995 Plan in
the form annexed hereto as Exhibit B-1, be, and it is hereby adopted; and
RESOLVED, FURTHER, that the number of shares of Company Common Stock
reserved for issuance under the 1995 Plan be increased by an amount not to
exceed 11,000,000 shares.
RESOLVED, FURTHER, that the officers of this Company be, and they
hereby are, authorized and directed, jointly and severally, to take any and all
steps and do any and all things which they deem necessary or advisable in order
to effectuate the purposes of this resolution.
EXHIBIT B
<PAGE> 2
AMENDMENT NO. 1 TO THE
APPLIED MATERIALS, INC.
1995 EQUITY INCENTIVE PLAN
APPLIED MATERIALS, INC., having adopted the Applied Materials, Inc.
1995 Equity Incentive Plan (the "Plan"), hereby amends the Plan, effective as
of December 12, 1996, as follows:
1. Section 2.35 is amended by adding the following sentence as the
last sentence thereof:
Notwithstanding any contrary provision of the Plan, each Period of
Restriction shall have a duration of not less than three years from the
Grant Date unless otherwise approved by the holders of a majority of the
Shares which are present in person or by proxy and entitled to vote at
any Annual or Special Meeting of Stockholders, or unless approved by the
Committee at its discretion solely by reason of death, Disability,
Retirement or major capital change.
2. Section 7.5 is amended by substituting the following sentence for
the second sentence thereof:
Subject to the minimum Period of Restriction specified in Section 2.35,
the Committee, in its discretion, may accelerate the time at which any
restrictions shall lapse or be removed.
IN WITNESS WHEREOF, Applied Materials, Inc., by its duly authorized
officer, has executed this Amendment No. 1 on the date indicated below.
APPLIED MATERIALS, INC.
Dated: December __, 1996 By ____________________________
Title:
EXHIBIT B-1
<PAGE> 1
EXHIBIT 10.4
- - --------------------------------------------------------------------------------
PARTICIPATION AGREEMENT
dated as of April 30, 1997
among
APPLIED MATERIALS, INC.,
as Lessee and Construction Agent,
CREDIT SUISSE LEASING 92A, L.P.,
as Lessor and Borrower,
GREENWICH FUNDING CORPORATION,
as CP Lender,
THE PERSONS NAMED ON SCHEDULE I HERETO,
as Eurodollar Lenders,
and
CREDIT SUISSE FIRST BOSTON,
acting through its New York Branch,
as Agent
--------------------------------------------------
================================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C> <C> <C> <C>
ARTICLE 1. DEFINITIONS; INTERPRETATION................................................................. 2
ARTICLE 2. INITIAL CLOSING DATE........................................................................ 3
ARTICLE 3. ACQUISITIONS AND FUNDINGS................................................................... 3
SECTION 3.1. Existing Sites...................................................... 3
SECTION 3.2. Sites............................................................... 3
SECTION 3.3. Construction Costs.................................................. 3
SECTION 3.4. Equipment........................................................... 3
SECTION 3.5. Refinancing of Loans................................................ 4
SECTION 3.6. Lessor Participation................................................ 4
SECTION 3.7. CP Lender Participation............................................. 4
SECTION 3.8. Eurodollar Lenders Participation.................................... 5
SECTION 3.9. Notations on Notes.................................................. 6
SECTION 3.10. Advances; Limitations and Limits; CP
Lender Advance Limitations.......................................... 7
SECTION 3.11. Termination of Commitments.......................................... 9
SECTION 3.12. Obligations of Participants Several................................. 9
SECTION 3.13. Procedures for Advances............................................. 9
SECTION 3.14 Subordinated Mortgage; Subordinated
Security Agreement.................................................. 12
SECTION 3.15 Lessee Option to Increase Original
Estimated Construction Cost......................................... 12
SECTION 3.16. Lessee Directions................................................... 12
ARTICLE 4. YIELD; INTEREST; COMMITMENT FEES............................................................ 13
SECTION 4.1. Yield............................................................... 13
SECTION 4.2. Interest on CP Loans................................................ 14
SECTION 4.3. Interest on Eurodollar Loans........................................ 14
SECTION 4.4. Computations........................................................ 14
SECTION 4.5. Highest Lawful Rate................................................. 15
SECTION 4.6. Capitalized Interest and Capitalized
Yield............................................................... 16
SECTION 4.7. Commitment Fees..................................................... 17
SECTION 4.8. Collateralization................................................... 17
ARTICLE 5. CERTAIN INTENTIONS OF THE PARTIES........................................................... 18
SECTION 5.1. Nature of Transaction............................................... 18
SECTION 5.2. Amounts Due......................................................... 19
ARTICLE 6. CONDITIONS PRECEDENT TO ACQUISITIONS AND
ADVANCES.................................................................................... 20
SECTION 6.1. Conditions to Each Advance.......................................... 20
SECTION 6.2. Conditions to Site Advance.......................................... 22
SECTION 6.3. Conditions to each Equipment Advance................................ 27
SECTION 6.4. Conditions to each Construction Cost
Funding............................................................. 29
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C> <C> <C>
ARTICLE 7. COMPLETION DATE CONDITIONS.................................................................. 30
ARTICLE 8. REPRESENTATIONS AND WARRANTIES.............................................................. 32
SECTION 8.1. Representations and Warranties of Lessee............................ 32
SECTION 8.2. Representations and Warranties of CSL............................... 40
SECTION 8.3. Representations and Warranties of Agent............................. 42
ARTICLE 9. COVENANTS OF LESSEE......................................................................... 43
SECTION 9.1. Further Assurances.................................................. 43
SECTION 9.2. Consolidation, Merger, Sale, etc.................................... 44
SECTION 9.3. Corporate Existence................................................. 44
SECTION 9.4. Liens............................................................... 44
SECTION 9.5. Compliance Certificates............................................. 44
SECTION 9.6. Change of Name or Address........................................... 45
SECTION 9.7. Compliance with Law, Environmental
Matters............................................................. 45
SECTION 9.8. Investigation by Governmental
Authorities......................................................... 45
SECTION 9.9. Financial and Other Information..................................... 46
SECTION 9.10. Securities.......................................................... 48
SECTION 9.11. Interest Rates...................................................... 48
SECTION 9.12. Revolving Credit Facility........................................... 48
ARTICLE 10. OTHER COVENANTS AND AGREEMENTS.............................................................. 49
SECTION 10.1. Cooperation with Lessee............................................. 49
SECTION 10.2. Covenants of Lessor................................................. 49
SECTION 10.3. Lessor Transfers.................................................... 51
SECTION 10.4. Restrictions on and Effect of Transfer.............................. 52
SECTION 10.5. Covenants and Agreements of Lenders................................. 54
SECTION 10.6. Future Lenders...................................................... 56
SECTION 10.7. Agent under Participation Agreement and
Mortgages........................................................... 56
ARTICLE 11. INDEMNIFICATION............................................................................. 56
SECTION 11.1. General Indemnification............................................. 56
SECTION 11.2. General Tax Indemnity............................................... 58
SECTION 11.3. Withholding Tax Exemption........................................... 63
SECTION 11.4. Increased Costs and Reduced Return.................................. 64
SECTION 11.5. Eurodollar Rate Illegal, Unavailable or
Impracticable....................................................... 65
SECTION 11.6. Funding Losses...................................................... 66
SECTION 11.7. Limitations on Amounts Due Under Section
11.4................................................................ 67
SECTION 11.8. Gross-Up............................................................ 67
SECTION 11.9. Indemnity for Excessive Use and Sales
Below Fair Market Value............................................. 68
SECTION 11.10. Environmental Indemnity............................................. 68
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C> <C> <C>
ARTICLE 12. AGENT....................................................................................... 70
SECTION 12.1. Appointment of Agent; Powers and
Authorization to Take Certain Actions............................... 70
SECTION 12.2. Reliance............................................................ 71
SECTION 12.3. Action Upon Instructions Generally.................................. 72
SECTION 12.4. Indemnification..................................................... 73
SECTION 12.5. Independent Credit Investigation.................................... 74
SECTION 12.6. Refusal to Act...................................................... 74
SECTION 12.7. Resignation or Removal of Agent;
Appointment of Successor............................................ 74
SECTION 12.8. Separate Agent...................................................... 75
SECTION 12.9. Termination of Agency............................................... 76
SECTION 12.10. Compensation of Agency.............................................. 76
SECTION 12.11. Limitations......................................................... 76
ARTICLE 13. MISCELLANEOUS............................................................................... 77
SECTION 13.1. Survival of Agreements.............................................. 77
SECTION 13.2. No Broker, etc...................................................... 77
SECTION 13.3. Notices............................................................. 78
SECTION 13.4. Counterparts........................................................ 78
SECTION 13.5. Amendments.......................................................... 78
SECTION 13.6. Headings, etc....................................................... 79
SECTION 13.7. Parties in Interest................................................. 79
SECTION 13.8. GOVERNING LAW....................................................... 79
SECTION 13.9. Payment of Transaction Expenses and
Other Costs......................................................... 80
SECTION 13.10. Severability........................................................ 80
SECTION 13.11. Liabilities of Lenders.............................................. 80
SECTION 13.12. Liabilities of Agent................................................ 81
SECTION 13.13. Lessor Obligations Nonrecourse; Payment
from Certain Lease and Guarantee
Obligations and Certain Proceeds of
Leased Property Only................................................ 81
SECTION 13.14. Consideration for Consents to Waivers
and Amendments...................................................... 81
SECTION 13.15. Payment Directions.................................................. 82
SECTION 13.16. Role of Arranger and its Affiliates................................. 82
SECTION 13.17. Notices to Lessor under Loan Agreement.............................. 82
SECTION 13.18. Submission to Jurisdiction; Waivers................................. 82
SECTION 13.19. No Proceedings..................................................... 83
SECTION 13.20. Final Agreement..................................................... 83
SECTION 13.21. Confidentiality..................................................... 83
</TABLE>
SCHEDULES
SCHEDULE I Participants' Commitments
SCHEDULE II Notice Information and Payment Instructions
SCHEDULE III Filings and Recordings
SCHEDULE IV Governmental Actions
iii
<PAGE> 5
<TABLE>
<CAPTION>
APPENDICES
<S> <C>
APPENDIX 1 Definitions and Interpretation
APPENDIX 2 Conditions Precedent to Document Closing Date
EXHIBITS
EXHIBIT A Form of Master Lease
EXHIBIT B Form of Construction Agency Agreement
EXHIBIT C Form of Architect's Certificate
EXHIBIT D Form of Completion Date Certificate
EXHIBIT E Form of Advance Request
EXHIBIT F Form of Note Guarantee
EXHIBIT G Form of Loan Agreement
EXHIBIT H Form of Capital Asset Purchase Agreement
EXHIBIT I Form of Mortgage and Security Agreement
EXHIBIT J Form of Deed of Trust, Security Agreement and
Fixture Filing Statement
EXHIBIT K Form of Hazardous Materials Undertaking and
Unsecured Indemnity
EXHIBIT L Form of Assignment of Lease
EXHIBIT M Form of Consent to Assignment of Lease
EXHIBIT N Form of Assignment of Construction Agency
Agreement
EXHIBIT O Form of Consent to Assignment of Construction
Agency Agreement
EXHIBIT P Form of Security and Pledge Agreement
EXHIBIT Q Form of Custodial Agreement
EXHIBIT R Form of Security Agreement
EXHIBIT S Form of Bill of Sale
EXHIBIT T Form of Deed
EXHIBIT U Form of Ground Lease
EXHIBIT V Forms of Opinions of Counsel to Lessee
EXHIBIT W Form of Opinion of Local Counsel Lessee
EXHIBIT X Forms of Lessor Opinions
EXHIBIT Y [Reserved]
EXHIBIT Z Form of Transfer Letter
EXHIBIT AA Form of Private Placement Certificate
EXHIBIT BB Form of Tax Certificate
EXHIBIT CC Form of Subordinated Mortgage
EXHIBIT DD Form of Subordinated Security Agreement
</TABLE>
iv
<PAGE> 6
PARTICIPATION AGREEMENT
THIS PARTICIPATION AGREEMENT, dated as of April 30, 1997 (this
"Participation Agreement"), is entered into by and among APPLIED MATERIALS,
INC., a Delaware corporation, as Lessee and as Construction Agent; CREDIT SUISSE
LEASING 92A, L.P., as Lessor and as Borrower; GREENWICH FUNDING CORPORATION, a
Delaware corporation, as CP Lender; the Persons listed on Schedule I hereto
(together with their respective permitted successors, assigns and transferees
each a "Eurodollar Lender" and collectively "Eurodollar Lenders") and CREDIT
SUISSE FIRST BOSTON, acting through its New York Branch, not in its individual
capacity except as expressly stated herein, but solely as Agent for Lenders.
PRELIMINARY STATEMENT
In accordance with the terms of this Participation Agreement, the
Lease, the Construction Agency Agreement, the Loan Agreement, the Capital Asset
Purchase Agreement and the other Operative Documents:
A. At the request of Lessee, on the initial Advance
Date, Lessor contemplates acquiring the Existing Sites and, on
subsequent Advance Dates from time to time during the Commitment
Period, (i) interests in Land (either fee simple or ground leasehold
interests), (ii) interests in Facilities and/or (iii) interests in
Equipment.
B. Should Lessor acquire interests in Land or Land and
Facilities that constitute Construction Sites, using Advances funded
by Participants, Construction Agent on behalf of Lessor contemplates
either constructing Facilities on such Land or renovating or
rebuilding Facilities that exist on such Land.
C. Lessor intends to lease to Lessee and Lessee intends
to lease from Lessor pursuant to the Lease (i) the Developed Sites
and the Existing Sites, (ii) the Construction Sites and, upon
completion of construction, the Facilities constructed thereon, and
(iii) the Equipment.
D. As directed by Lessee, Lessor is willing to provide
3% of the funding for Site acquisitions, Facilities construction
and/or for Equipment acquisitions and will obtain the remaining 97%
of the costs of such acquisitions or construction from limited
recourse financing from (i) Eurodollar Lenders pursuant to the Loan
Agreement and (ii) CP Lender, out of the proceeds from the issuance
of
1
<PAGE> 7
commercial paper by CP Lender and the loan of such proceeds to
Lessor, pursuant to the Loan Agreement.
E. The Lenders are willing to provide limited
recourse financing to Lessor for 97% of the acquisition cost
of such Site acquisitions, Facilities construction and
Equipment acquisitions.
F. A Capital Asset Purchase Agreement dated as of the
date hereof is being entered into among CP Lender, Purchasers and
Agent, as liquidity agent and as administrative agent, pursuant to
which Purchasers will extend commitments to purchase ratable shares
of all or a portion, as the case may be, of CP Lender's interest in
the Tranche A CP Notes and the Tranche B CP Notes to enable CP
Lender to make payments in respect of CP Lender's Commercial Paper.
G. To induce Lenders and Agent to make loans under the
Loan Agreement and to enter into this Participation Agreement and
the transactions contemplated hereby, AMAT desires to enter, and it
is a condition to the effectiveness hereof that AMAT enter, into the
Note Guarantee.
H. To secure their respective Investment Amounts and
Loans, Participants will have the benefit of a Lien on the Leased
Property and on substantially all of Lessor's rights against Lessee
under the Lease, and CP Lender will assign to Agent for the benefit
of Purchasers certain of its rights in respect of such Lien.
In consideration of the mutual agreements contained in this
Participation Agreement and other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE 1.
DEFINITIONS; INTERPRETATION
Unless the context shall otherwise require, capitalized terms used
and not defined herein shall have the meanings assigned thereto in Appendix 1
hereto for all purposes hereof; and the rules of interpretation set forth in
Appendix 1 hereto shall apply to this Participation Agreement.
2
<PAGE> 8
ARTICLE 2.
INITIAL CLOSING DATE
The Document Closing Date shall occur on the earliest date (on or
before May 15, 1997) on which all the conditions precedent thereto set forth in
Appendix 2 hereto shall have been satisfied or waived by the applicable parties
as set forth therein.
ARTICLE 3.
ACQUISITIONS AND FUNDINGS
SECTION 3.1. Existing Sites. Subject to the terms and conditions of
this Participation Agreement, on the initial Advance Date (i) Agent shall make
an advance, the proceeds of which shall be used to fund the Existing Sites
Purchase Price and the Transaction Expenses incurred on or prior to such Advance
Date, (ii) Lessor shall acquire the Existing Sites and (iii) Lessor and Lessee
shall enter into a Site Lease Supplement for each such Site pursuant to which
Lessor shall lease to Lessee the Existing Sites.
SECTION 3.2. Sites. Subject to the terms and conditions of this
Participation Agreement, on each Advance Date that constitutes a Site
Acquisition Date, (i) Agent shall make an advance (such advance or an advance
pursuant to Section 3.1, a "Site Advance"), the proceeds of which shall be used
to fund the Site Acquisition Cost of the Developed Sites or Construction Sites
to be acquired on such Acquisition Date and related Transaction Expenses, (ii)
Lessor shall acquire such Sites and (iii) Lessor and Lessee shall enter into a
Site Lease Supplement for each such Site pursuant to which Lessor shall lease
(or with respect to Land leased to Lessor pursuant to a Ground Lease, sublease)
to Lessee such Developed Sites or Construction Sites.
SECTION 3.3. Construction Costs. Subject to the terms and conditions
of this Participation Agreement, on each Advance Date that constitutes a
Construction Cost Funding Date, Agent shall make an advance (a "Construction
Advance"), the proceeds of which shall be used to reimburse Construction Agent
for the payment of Construction Costs, and to fund Capitalized Interest and
Capitalized Yield relating to any interest and Yield accrued during the Interest
Period immediately preceding such Construction Advance on the aggregate
outstanding principal amount of any Construction Advances made prior to such
Advance Date.
SECTION 3.4. Equipment. Subject to the terms and conditions of this
Participation Agreement, on each Advance Date
3
<PAGE> 9
that constitutes an Equipment Acquisition Date, (i) Agent shall make an advance
(an "Equipment Advance"), the proceeds of which shall be used to fund the
Equipment Purchase Price and related Transaction Expenses with respect to the
Units of Equipment in the Equipment Group to be acquired on such Equipment
Acquisition Date, (ii) Lessor shall acquire such Units of Equipment, and (iii)
Lessor and Lessee shall enter into an Equipment Lease Supplement pursuant to
which Lessor shall lease to Lessee each Equipment Group funded by such Advance.
Notwithstanding anything herein to the contrary, to the extent that, in
connection with an acquisition of a Site or the making of a Construction
Advance, Agent is also making an Advance for the acquisition of Equipment or
related Transaction Expenses, the portion of such Advance that relates to the
Equipment Cost of the Equipment so being acquired and the Transaction Expenses
related thereto shall be considered an Equipment Advance separate from the Site
Advance or Construction Advance relating to the Site for the purposes of this
Participation Agreement.
SECTION 3.5. Refinancing of Loans. Subject to the terms and
conditions hereof, on each Advance Date that constitutes a Refinancing Date,
Agent shall make an Advance the proceeds of which will be used to repay all or
portion of outstanding Eurodollar Loans or CP Loans (a "Refinancing Advance").
Notwithstanding anything to the contrary in Section 3.6 below, Lessor shall not
be obligated to Fund any portion of a Refinancing Advance.
SECTION 3.6. Lessor Participation. Subject to the terms and
conditions hereof, Lessor shall Fund (as Lessor's portion of an Advance pursuant
to Sections 3.1 through 3.4 hereof) to Agent for an Advance by Agent to Lessee
or Construction Agent, at the request of either such party from time to time
during the Commitment Period on each Advance Date, an amount (each an
"Investment" or "Investment Amount") in immediately available funds equal to
Lessor's Commitment Percentage of the amount of the Advance being funded on such
Advance Date. Notwithstanding any other provision hereof and in addition to the
limitations set forth in Section 3.10, Lessor shall not be obligated to make
available any Investment if the amount of the proposed Investment exceeds the
Available Lessor Commitment. Subject to the terms and conditions hereof, all or
part of the Investment may be repaid to Lessor and readvanced. Subject to the
terms and conditions hereof, Lessor shall acquire ownership (either fee or
leasehold, as the case may be) of each Site and Unit of Equipment and lease (or
sublease) such Site or Unit of Equipment to Lessee pursuant to the Lease and a
Lease Supplement relating thereto.
SECTION 3.7. CP Lender Participation. (a) Subject to the terms and
conditions hereof and of the Loan Agreement, CP Lender may make CP Loans to
Lessor at the request of Lessee or
4
<PAGE> 10
Construction Agent from time to time during the Commitment Period on each
Advance Date in an amount equal to the Eurodollar Lenders' aggregate Commitment
Percentage of the amount of the Advance being funded on such Advance Date. If CP
Lender elects to make a CP Loan hereunder, the proceeds of each such CP Loan
shall be Funded by CP Lender to Agent as CP Lender's portion of an Advance
pursuant to Sections 3.1 through 3.5 hereof. Notwithstanding any other provision
hereof and in addition to the limitations set forth in Section 3.10 hereof, CP
Lender shall not make available to Agent and Agent shall not make an Advance of
any CP Loan if the amount of the proposed CP Loan exceeds the aggregate
Available Eurodollar Lender Commitments. Subject to the terms and conditions
hereof, CP Loans may be repaid in part or in full to CP Lender pursuant to
Section 3.5 and readvanced.
(b) Each CP Loan for a Site acquisition, whether for Existing Sites,
Developed Sites or Construction Sites, payment or reimbursement of Construction
Costs, or to repay any outstanding Eurodollar Loan previously made for such
purposes, shall be recorded by Agent on the grid relating to the two Site Notes,
each such Site Note issued to Agent, on behalf of CP Lender, on the Document
Closing Date and repayable in accordance with the terms of the Loan Agreement
(the Tranche A CP Site Note, to be substantially in the form of Exhibit A-CS of
the Loan Agreement, and representing the aggregate portion of the CP Loans to
which the AMAT Recourse Amount for the Sites will be applied pursuant to Section
5.4 of the Loan Agreement and the Tranche B CP Site Note, to be substantially in
the form of Exhibit B-CS of the Loan Agreement, and representing the remaining
portion of the CP Loans). Each CP Loan for Equipment acquisitions or used to
repay any outstanding Eurodollar Loan previously made for such purpose shall be
recorded by Agent on the grid relating to the two Equipment Notes, each issued
to Agent, on behalf of CP Lender, on the Document Closing Date and repayable in
accordance with the terms of the Loan Agreement (the Tranche A CP Equipment
Note, to be substantially in the form of Exhibit A-CE of the Loan Agreement, and
representing the aggregate portion of the CP Loans to which the AMAT Recourse
Amount for all outstanding Equipment Groups will be applied pursuant to Section
5.4 of the Loan Agreement and the Tranche B CP Equipment Note, to be
substantially in the form of Exhibit B-CE of the Loan Agreement, and
representing the remaining portion of the CP Loans).
SECTION 3.8. Eurodollar Lenders Participation. (a) Subject to the
terms and conditions hereof and of the Loan Agreement, each Eurodollar Lender
severally shall make Eurodollar Loans to Lessor at the request of Lessee or
Construction Agent from time to time during the Commitment Period on each
Advance Date, in an amount in immediately available funds equal to such Lender's
Commitment Percentage of the amount of the Advance being funded on such Advance
Date. The proceeds of each such
5
<PAGE> 11
Eurodollar Loan shall be Funded by Eurodollar Lenders to Agent as Eurodollar
Lender's portion of an Advance pursuant to Sections 3.1 through 3.5 hereof.
Notwithstanding any other provision hereof and in addition to the limitations
set forth in Section 3.10, no Eurodollar Lender shall be obligated to make any
Eurodollar Loan if the amount of such Eurodollar Lender's Eurodollar Loan
exceeds such Eurodollar Lender's Available Eurodollar Lender Commitment. Subject
to the terms and conditions hereof, Eurodollar Loans may be repaid in part or in
full to Lenders and readvanced.
(b) Each Eurodollar Loan made by a Eurodollar Lender for a Site
acquisition, whether for Existing Sites, Developed Sites or Construction Sites,
or payment or reimbursement of Construction Costs shall be recorded on the grid
relating to the two Site Notes, each issued to Agent, on behalf of the
Eurodollar Lenders, on the Document Closing Date and repayable in accordance
with the terms of the Loan Agreement (the Tranche A Eurodollar Site Note, to be
substantially in the form of Exhibit A-ES of the Loan Agreement, and the Tranche
B Eurodollar Site Note, to be substantially in the form of Exhibit B-ES of the
Loan Agreement). Each Eurodollar Loan made by a Eurodollar Lender for Equipment
acquisitions shall be recorded on the grid relating to the two Equipment Notes,
each issued to Agent, on behalf of the Eurodollar Lenders, on the Document
Closing Date and repayable in accordance with the terms of the Loan Agreement
(the Tranche A Eurodollar Equipment Note, to be substantially in the form of
Exhibit A-EE of the Loan Agreement, and the Tranche B Eurodollar Equipment Note,
to be substantially in the form of Exhibit B-EE of the Loan Agreement).
SECTION 3.9. Notations on Notes. Agent, on behalf of each Lender, is
hereby authorized to record on the grid attached to the Tranche A CP Site Note,
the Tranche B CP Site Note, the Tranche A Eurodollar Site Note, the Tranche B
Eurodollar Site Note, the Tranche A CP Equipment Note, the Tranche B CP
Equipment Note, the Tranche A Eurodollar Equipment Note, or the Tranche B
Eurodollar Equipment Note, as applicable, held by Agent, on behalf of the
Lenders, the date and amount of each Funding, the amount of all Capitalized
Interest, each payment or repayment of principal, the type of interest rate
applicable thereto from time to time, the length of each Interest Period with
respect thereto (including, in the case of a Eurodollar Loan for which the Base
Rate may, from time to time, be applicable, the period for which such Base Rate
applies) and the interest rate for such Interest Period. Any such recordation
shall constitute prima facie evidence of the accuracy of the information so
recorded; provided, that the failure to make any such recording or errors in
such recordation, or to provide the copies or calculations described below,
shall not affect the obligation of Borrower under such instrument or the
corresponding obligation of Lessee
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to pay Rent. Agent shall also determine with respect to each Note and the
Investment Amount the portion thereof attributable to each Site and Equipment
Group in order to establish the Site Balance of, and the AMAT Recourse Amount
relating to, each such Site and the Equipment Group Balance of, and the AMAT
Recourse Amount relating to, each such Equipment Group, which determination
shall be conclusive and binding on Lessee and the Participants absent manifest
error. Lessee may from time to time request from any Agent, but not more
frequently than once each fiscal quarter of Lessee, copies of the grids
maintained by Agent, on behalf of the Lenders, with respect to the Notes, and if
requested by Lessee and not previously furnished to Lessee by Agent, the Agent's
calculation of any recordation on such grid.
SECTION 3.10. Advances; Limitations and Limits; CP Lender Advance
Limitations.
(a) In addition to any other provision hereof, Agent shall
not be obligated to make an Advance to Lessee or Construction Agent, and no
Lender shall be obligated to Fund any Loan, and Lessor shall not be required to
Fund the portion of its Investment on such Advance Date if the amount of such
Advance would exceed the aggregate Available Commitments or, after giving effect
to such Advance, the aggregate outstanding amount of Loans and Investment
Amounts would exceed the Aggregate Commitment Amount.
(b) The aggregate amount funded by each of the Lenders and
Lessor hereunder outstanding at any time shall not exceed the Aggregate
Commitment Amount. The amount of the initial Site Advance shall be used solely
to pay for the Site Acquisition Cost of the Existing Sites and any Transaction
Expenses incurred through the initial Advance Date. Following the initial
Advance Date, each Site Advance requested by Lessee shall be used solely for
payment of the Aggregate Property Costs for such Site. Each Advance for
Equipment acquisitions must apply to at least one or more entire Equipment
Groups and shall be used solely for payment of the Equipment Purchase Price for
such Equipment and any Transaction Expenses incurred by Lessee in connection
with the purchase of such Equipment. Each Site Advance and Equipment Advance
may, without the consent of all Participants, only be used to acquire Sites or
Units of Equipment located in any State of the United States of America.
(c) The initial Advance Date shall occur on or before May
15, 1997. Each Advance Date shall be a Business Day, and there shall be no more
than one Advance during any calendar month (excluding any Advance made solely to
pay Capitalized Interest and Capitalized Yield pursuant to Section 4.6). Each
Advance shall be in a minimum amount equal to $1,000,000, or an integral
multiple of $100,000 in excess thereof except with respect to any
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<PAGE> 13
Equipment Advance, which may be in a minimum amount equal to $500,000, or an
integral multiple of $100,000 in excess thereof; provided, that so long as an
Advance is for the full amount of the aggregate Available Participant Commitment
and exceeds the minimum threshold of $1,000,000 or $500,000, as the case may be,
such Advance need not be in an integral multiple of $100,000. Notwithstanding
anything herein to the contrary, (i) the aggregate amount of Equipment Advances
shall not exceed $10,000,000, (ii) no more than two Equipment Pools shall exist
at any time, and (iii) the period from the Equipment Pool Period Commencement
Date for such Equipment Pool through the Maturity Date shall equal or exceed
three years. All remittances made by Lessor and Lenders for the Funding of any
Advance shall be made in immediately available federal funds by wire transfer to
Agent for deposit not later than 1:00 p.m., New York time, on the applicable
Advance Date to such account as Lessee or Construction Agent, as applicable,
shall have indicated in the Advance Request. The Funding by Lessor and each
Lender to Agent of its respective portion of an Advance shall constitute
authorization and direction by such party to Agent to make an Advance pursuant
to Article 3.
(d) Notwithstanding anything contained herein or in the Loan
Agreement to the contrary, with respect to each CP Loan and each CP Rate Period
specified in the applicable Advance Request or Continuation Notice related
thereto, CP Lender shall not make or continue a CP Loan with such CP Rate Period
on any Advance Date, Refinancing Date or Continuation Date if, on such date, the
interest rate (stated on a per annum basis) payable on the Commercial Paper to
be issued by CP Lender with such CP Rate Period exceeds the interest rate
(stated on a per annum basis) set forth below opposite the relevant CP Rate
Period:
<TABLE>
<CAPTION>
Interest Rate Requested CP Rate Period
------------- ------------------------
<S> <C>
24% Less than or equal to
45 days
21% Less than or equal to
51 days and more than
45 days
18% Less than or equal to
60 days and more than
51 days
15% Less than or equal to
72 days and more than
60 days
12% Less than or equal to
</TABLE>
8
<PAGE> 14
<TABLE>
<S> <C>
90 days and more than
72 days
9% Less than or equal to
120 days and more than
90 days
6% Less than or equal to
180 days and more than
120 days
</TABLE>
SECTION 3.11. Termination of Commitments. Notwithstanding anything
in this Participation Agreement to the contrary, the Commitments shall terminate
and Agent shall not be obligated to make any Advance, and no party hereto shall
be obligated to make any Fundings, and no Advance Date may thereafter occur upon
the occurrence of the earlier of (i) 2:00 p.m. New York time on the first (1st)
Business Day immediately preceding the commencement of (a) in the case of
Equipment Advances, the first Remarketing Period elected pursuant to Article
XXII of the Lease, and (b) in the case of Site Advances, the first Site
Remarketing Period elected pursuant to Section 22.1 of the Lease with respect to
a Site or the first Equipment Remarketing Period elected on or after the fifth
anniversary of the Document Closing Date pursuant to Section 22.2 of the Lease
with respect to an Equipment Pool, except, in the case of a Construction Site,
to the extent of future Construction Advances that do not, when aggregated with
all Construction Advances previously Funded for such Site, exceed the Original
Estimated Construction Costs for such Construction Site, (ii) 2:00 p.m. New York
time on the thirtieth (30th) Business Day immediately preceding the Maturity
Date, or (iii) a termination of the Eurodollar Lenders' Commitments pursuant to
Section 6.2 of the Loan Agreement.
SECTION 3.12. Obligations of Participants Several. The obligations
of the Participants hereunder or elsewhere in the Operative Documents shall be
several and not joint; and no Participant shall be liable or responsible for the
acts or defaults of any other party hereunder or under any other Operative
Document.
SECTION 3.13. Procedures for Advances.
(a) Each Advance Date. With respect to the Funding of each
Advance, Lessee shall give Lessor and Agent irrevocable written notice not later
than 1:00 p.m. New York time five (5) Business Days prior to a Site Advance or
an Equipment Advance and three (3) Business Days prior to any Construction
Advance or Refinancing Advance (which in either case does not also constitute a
Site Advance or an Equipment Advance, but any Advance Request may relate to more
than one type of Advance),
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<PAGE> 15
pursuant to an Advance Request substantially in the form of Exhibit E (an
"Advance Request") specifying for each type of Advance requested on such Advance
Date:
(i) the proposed Advance Date;
(ii) the amount of the Advance requested and whether the
Advance is a Site Advance, a Construction Advance (including a
statement of the amount thereof, if any, that constitutes
Capitalized Interest and Capitalized Yield), an
Equipment Advance or Refinancing Advance;
(iii) whether the Loans to Fund such Advance shall be CP
Loans or Eurodollar Loans and the amount of each, and the amount of
such Advance which shall constitute a Refinancing Advance;
(iv) if the Loans to Fund such Advance are Eurodollar
Loans, whether such Eurodollar Loans during the initial Interest
Period commencing on the date of such Advance shall accrue interest
at the Base Rate or the Eurodollar Rate and if the Loans to fund
such Advance are CP Loans, the Interest Period or Interest Periods
applicable to such CP Loans; provided, however, that in no event
shall Lessee select Loans and Interest Periods such that more than
five Payment Dates occur in any calendar month;
(v) with respect to an Equipment Advance, a description
of the Equipment Group and the Units of Equipment included therein
to be acquired on such Advance Date, the Equipment Cost, the
Equipment Purchase Price and location of each such Unit, the
Transaction Expenses to be Funded on such Advance Date and
information satisfactory to Agent in order for Agent to (a) estimate
the Fair Market Value of each Unit of Equipment as of the Original
Equipment Pool Expiration Date, (b) estimate the useful life of each
Unit of Equipment (which Fair Market Value and useful life shall be
satisfactory to Agent and Lessor) and (c) prepare an amortization
schedule for Fixed Rent to attach to the Equipment Lease Supplement
to be delivered pursuant to Section 6.3(c);
(vi) with respect to a Site Advance, whether such
Advance is for the Existing Sites, any other Developed Site or a
Construction Site, a brief description of each Site (including a
legal description) and the Aggregate Property Cost for each such
Site (including the allocation of such amount among the Site
Acquisition Costs (which, for the Existing Sites, is equal to the
Existing Sites Purchase Price), the Original Estimated Construction
Costs, if any, and the applicable Transaction Expenses);
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<PAGE> 16
(vii) with respect to a Construction Advance, whether
Lessor is to acquire fee simple title to or a ground leasehold
interest in the Land;
(viii) with respect to a Site Acquisition Date for a
Construction Site, the anticipated Construction Completion
Date;
(ix) with respect to a Construction Cost Funding Date,
the Remaining Estimated Construction Cost;
(x) if such Advance is to be used to pay any Person or
to reimburse Lessee for Transaction Expenses, a description of the
type and amount of each such Transaction Expense and the allocation
of such Transaction Expenses between Equipment Advances and Site
Advances;
(xi) that Lessee certifies that such Advance complies
with the limitations and conditions set forth at
Section 3.10; and
(xii) wire transfer instructions for the disbursement
of funds.
Lessor and Agent shall promptly forward a copy of such Advance
Request to CP Lender or each Eurodollar Lender, as applicable. All documents and
instruments required to be delivered on the Document Closing Date and the
initial Advance Date pursuant to this Participation Agreement shall be delivered
at the offices of Mayer, Brown & Platt, 1675 Broadway, New York, New York
10019-5820, or at such other location as Required Participants, Agent and Lessee
may agree. Any documents and instruments required to be delivered on any Advance
Date following the initial Advance Date shall be delivered to Agent at its
address set forth on Schedule II, or at such other location as Agent may direct
pursuant to Section 13.3. Other than documents and instruments to be recorded or
filed with a Governmental Authority and each Participant's copy of the Operative
Documents required to be delivered on such Advance Date, all documents and
instruments may be delivered by facsimile with overnight delivery on the next
day.
(b) Application and Payments.
(i) Lessee shall apply or cause to be applied all
Advances solely for the purposes permitted herein and pursuant to
the description set forth in the Advance Request for such Advance.
(ii) The parties to this Participation Agreement
hereby agree that any payment required to be made to
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<PAGE> 17
Participants by Lessor pursuant to any Operative Document shall be
made directly to Agent by Lessee for the benefit of Participants, in
lieu of the corresponding payment required to be made by Lessee to
Lessor and Lessor to Participants pursuant to any Operative
Document. Such payment by Lessee to Agent shall be deemed to
constitute (A) the required payment from Lessee to Lessor and (B)
the corresponding payment by Lessor to Participants.
SECTION 3.14. Subordinated Mortgage; Subordinated Security
Agreement. (a) On each Site Acquisition Date, Lessor shall deliver to Lessee a
duly executed Subordinated Mortgage dated such Site Acquisition Date and
relating to the Site acquired on such date (including such modifications as are
necessary to comply with the Applicable Laws and Regulations of the State in
which such Site is located).
(b) On the Document Closing Date, Lessor shall deliver to Lessee a
duly executed Subordinated Security Agreement dated such Document Closing Date.
SECTION 3.15. Lessee Option to Increase Original Estimated
Construction Cost. With respect to any Construction Site, after the related
Acquisition Date, Lessee shall have the option at any time during the related
Site Term to effect an increase in the Original Estimated Construction Cost of
such Construction Site by requesting Agent and Participants to obtain a new
appraisal, at Lessee's expense, of such Site, which appraisal must meet the
requirements of Section 6.2(a), based upon different or revised Plans and
Specifications provided by Lessee and by causing the provision of additional
title insurance coverage and effecting amendments to the related Site Lease
Supplement, the Notes issued to Agent, on behalf of CP Lender in the case of CP
Notes and each Eurodollar Lender in the case of Eurodollar Notes, with respect
to a Funding made or to be made for such Site, and Security Documents to the
extent reasonably requested by Agent and Participants to reflect such increased
Original Estimated Construction Cost. Notwithstanding the foregoing, Lessee may
at its option, in lieu of increasing the Original Estimated Construction Cost as
specified above pay the additional construction costs from its own funds as
specified in Section 4.1 of the Construction Agency Agreement.
SECTION 3.16. Lessee Directions. Lenders, Agent, Lessee and Lessor
hereby agree that, so long as no Loan Event of Default exists, Lessee shall
have, subject to the terms and conditions set forth in the Loan Agreement, the
exclusive right to exercise the rights of "Borrower" under Section 2 of the Loan
Agreement (other than under Section 2.1(f) of the Loan Agreement), including,
without limitation:
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<PAGE> 18
(a) the exclusive right to make Extension Requests
pursuant to Section 2.2(e) of the Loan Agreement;
(b) the exclusive right to give a notice pursuant to
Section 2.3 of the Loan Agreement;
(c) the exclusive right to replace a Non-Consenting
Eurodollar Lender and to exercise all other rights of Borrower
pursuant to Section 2.2(e) of the Loan Agreement; and
(d) the exclusive right to give a Continuation Notice
pursuant to Section 2.5 of the Loan Agreement.
ARTICLE 4.
YIELD; INTEREST; COMMITMENT FEES
SECTION 4.1. Yield. (a) The amount of Investment Amounts outstanding
from time to time shall accrue Yield at the per annum rate equal to the Yield
Rate. Yield shall be due and payable by Lessee as Basic Rent on each applicable
Payment Date and on each applicable Site Expiration Date and the Equipment Pool
Expiration Date. If all or any portion of the Investment Amount, any Yield
payable thereon or any other amount payable hereunder shall not be paid when due
(whether at stated maturity, the acceleration or otherwise), such overdue amount
shall bear interest at a rate per annum which is equal to the Overdue Rate and
shall be payable from time to time on demand as Supplemental Rent. Subject to
the order of priority for distribution of funds set forth at Section 5.3 of the
Loan Agreement, Lessee may prepay at any time, without penalty, any Investment
Amount.
(b) Lessor hereby directs Lessee to pay in accordance with the Lease
to Agent, for the account of Lessor, the portion of Basic Rent representing
Yield and the portion of Supplemental Rent representing other amounts owing to
Lessor under the Lease from time to time. There is no scheduled amortization of
the Investment Amounts prior to the Maturity Date. Notwithstanding the
foregoing, Lessor shall be entitled to repayment of the Investment Amounts from
a portion of payments made by Lessee pursuant to Section 20.1 and Article XXII
of the Lease, and any amounts paid by Lessee pursuant to Article XV of the Lease
or otherwise with respect to a termination of any Leased Property as a result of
a Casualty or Condemnation, which amounts shall be payable to Lessor in the
amounts and subject to the priority in Section 5 of the Loan Agreement. Lessor
shall keep records with respect to the date and amount of each Funding, the
Yield, each payment of principal and the length of each Interest Period with
respect thereto. Such records shall constitute prima facie
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<PAGE> 19
evidence of the accuracy of the information so recorded; provided, that the
failure to make any such recording or errors in such recordation or to provide
the copies of such records as provided below shall not affect the obligation of
Lessee to pay Rent. Lessor shall provide to Lessee, not more than once a month
upon Lessee's request, copies of such records which have not previously been
provided to Lessee.
SECTION 4.2. Interest on CP Loans. (a) Each CP Loan shall accrue
interest computed and payable in accordance with the terms of the Loan
Agreement.
(b) Lessor shall pay (and hereby directs Lessee to pay in
accordance with the Lease) to Agent, for the account of CP Lender the Basic Rent
(determined on the basis of interest on the CP Loans) received from Lessee under
the Lease from time to time.
SECTION 4.3. Interest on Eurodollar Loans. (a) Each Eurodollar Loan
shall accrue interest computed and payable in accordance with the terms of the
Loan Agreement.
(b) Lessor shall pay (and hereby directs Lessee to pay in
accordance with the Lease) to Agent, for the account of the Eurodollar Lenders
the Basic Rent (determined on the basis of interest on the Eurodollar Loans)
received from Lessee under the Lease from time to time.
SECTION 4.4. Computations. For all purposes under the Operative
Documents, all computations of interest, Yield and other accrued amounts
pursuant to the Operative Documents (including, without limitation, amounts
based on the Overdue Rate) shall be made by Agent on the basis of the actual
number of days elapsed and, when such interest and Yield is based on the
Eurodollar Rate or interest is based on the CP Rate, a 360-day year basis,
otherwise, including when such interest and Yield is based on the Base Rate, a
365- (or, if applicable, 366-) day year basis. Agent shall notify Lessee of the
applicable Eurodollar Rate or Base Rate promptly upon the determination thereof,
but in any event not later than three (3) Business Days prior to each Payment
Date. Any change in the interest rate or Yield on an Advance or an Investment
Amount or Loan resulting from a change in the Base Rate shall become effective
as of the opening of business on the day on which such change becomes effective.
Agent shall as soon as practicable notify Lessor, Lessee and Participants of the
effective date and the amount of each such change in interest rate. Agent shall,
at the request of any party, deliver to such party a statement showing the
quotations used by Agent in determining any rate used to calculate interest or
Yield. Agent shall deliver an invoice to Lessee at least two (2) Business Days
before any Payment Date, specifying the Basic Rent due on such Payment Date.
Notwithstanding the foregoing,
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<PAGE> 20
any failure by Agent to deliver any notice or invoice described in this Section
4.4 shall not in any way relieve Lessee of its obligation to make the Basic Rent
payment on such Payment Date.
SECTION 4.5. Highest Lawful Rate. It is the intention of the parties
hereto to conform strictly to applicable usury laws and, anything herein to the
contrary notwithstanding, the obligations of (a) Lessee to Lessor under this
Participation Agreement and the Lease, (b) Lessor to the Lenders under the Loan
Agreement, (c) any party under the Capital Asset Purchase Agreement, (d) Lessor
to the Lenders under the Notes and (e) of either Lessee or Lessor or any other
party under any other Operative Document, shall be subject to the limitation
that payments of interest or of other amounts constituting interest under
applicable law shall not be required to the extent that receipt thereof would be
in excess of the Highest Lawful Rate (as defined below), or otherwise contrary
to provisions of law applicable to the recipient limiting rates of interest
which may be charged or collected by the recipient. Accordingly, if the
transactions or the amount paid or otherwise agreed to be paid for the use,
forbearance or detention of money under this Participation Agreement, the Lease,
the Loan Agreement, the Capital Asset Purchase Agreement, the Notes and any
other Operative Document would exceed the Highest Lawful Rate or otherwise be
usurious under applicable law (including without limitation the federal and
state laws of the United States of America, or of any other jurisdiction whose
laws may be mandatorily applicable) with respect to the recipient of any such
amount, then, in that event, notwithstanding anything to the contrary in this
Participation Agreement, the Lease, the Loan Agreement, the Capital Asset
Purchase Agreement, or any other Operative Document, it is agreed as follows as
to the recipient of any such amount:
(a) the provisions of this Section 4.5 shall govern and
control over any other provision in this Participation Agreement,
the Lease, the Loan Agreement, the Capital Asset Purchase Agreement,
the Notes and any other Operative Document and each provision set
forth therein is hereby so limited;
(b) the aggregate of all consideration which constitutes
interest under applicable law that is contracted for, charged or
received under this Participation Agreement, the Lease, the Loan
Agreement, the Capital Asset Purchase Agreement, the Notes or any
other Operative Document shall under no circumstances exceed the
maximum amount of interest allowed by applicable law (such maximum
lawful interest rate, if any, with respect to such recipient herein
called the "Highest Lawful Rate"), and all amounts owed under this
Participation Agreement, the Lease, the Loan Agreement, the
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<PAGE> 21
Capital Asset Purchase Agreement, the Notes and any other Operative
Document shall be held subject to reduction and (i) the amount of
interest which would otherwise be payable to the recipient hereunder
and under the Lease, the Loan Agreement, the Capital Asset Purchase
Agreement, the Notes and any other Operative Document, shall be
automatically reduced to the amount allowed under applicable law and
(ii) any unearned interest paid in excess of the Highest Lawful Rate
shall be credited to the payor by the recipient (or, if such
consideration shall have been paid in full, refunded to the payor);
(c) all sums paid, or agreed to be paid for the use,
forbearance and detention of the money under this Participation
Agreement, the Lease, the Loan Agreement, the Capital Asset Purchase
Agreement, the Notes or any other Operative Document shall, to the
extent permitted by applicable law be amortized, prorated, allocated
and spread throughout the full term of such indebtedness until
payment in full so that the actual rate of interest is uniform
throughout the full term thereof;
(d) if at any time the interest, together with any other
fees, late charges and other sums payable pursuant to or in
connection with this Participation Agreement, the Lease, the Loan
Agreement, the Capital Asset Purchase Agreement, the Notes and any
other Operative Document executed in connection herewith or
therewith, and deemed interest under applicable law exceeds that
amount which would have accrued at the Highest Lawful Rate, the
amount of interest and any such fees, charges and sums to accrue to
the recipient of such interest, fees, charges and sums pursuant to
the Operative Documents shall be limited, notwithstanding anything
to the contrary in the Operative Documents to that amount which
would have accrued at the Highest Lawful Rate for the recipient, but
any subsequent reductions, as applicable, shall not reduce the
interest to accrue pursuant to the Operative Documents below the
recipient's Highest Lawful Rate until the total amount of interest
payable to the recipient (including all consideration which
constitutes interest) equals the amount of interest which would have
been payable to the recipient (including all consideration which
constitutes interest), plus the amount of fees which would have been
received but for the effect of this Section 4.5.
SECTION 4.6. Capitalized Interest and Capitalized Yield. On each
date which is three Business Days prior to any Payment Date (unless (i) with
respect to a Construction Period Site, such Payment Date occurs after the
Outside Completion Date and the Construction Completion Date has not occurred
prior to such
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<PAGE> 22
Outside Completion Date, in which case Construction Agent shall fund the portion
of Site Rent attributed to the amounts described below from its own funds, or
(ii) Construction Agent at least three Business Days prior to such Payment Date
gives written notice to Lessor and Agent that it is not requesting such Funding
and that Construction Agent intends to fund the portion of Site Rent attributed
to the amounts described below from its own funds), Construction Agent shall be
deemed to have requested a Construction Advance in an amount equal to
Capitalized Interest and Capitalized Yield accrued on the outstanding Investment
Amounts and Loans with an Interest Period ending on such Payment Date allocated
to Construction Advances for Construction Period Sites. The Advance Date with
respect to any such Construction Advance for accrued Capitalized Interest and
Capitalized Yield shall be the relevant Payment Date (subject to the terms and
conditions for a Construction Advance set forth in this Participation Agreement)
and the proceeds of such Construction Advance shall be applied to pay such
accrued Capitalized Interest and Capitalized Yield. On each such Advance Date,
the Investment shall be increased by an amount equal to the Capitalized Yield
Funded on such date with respect to each Construction Period Site, the
outstanding principal on the applicable Site Notes shall be increased by an
amount equal to the Capitalized Interest Funded on such date with respect to
each Construction Period Site, and the Construction Costs of each Construction
Period Site shall be increased by an amount equal to the Capitalized Yield and
Capitalized Interest relating to such Construction Period Site.
SECTION 4.7. Commitment Fees. Lessee shall pay to Agent for the
account of each Eurodollar Lender and Lessor a commitment fee (the "Commitment
Fees") for the period from and including the Document Closing Date to the
Maturity Date, computed, in the case of such Participant, at a rate per annum
equal to the Commitment Fee Rate on the average daily amount of the Available
Participant Commitment of each such Participant (and prorated for any such
period which is less than a calendar quarter), payable quarterly in arrears on
each Commitment Fee Payment Date, commencing on the first such date to occur
after the Document Closing Date. If all or a portion of any Commitment Fee shall
not be paid when due, such overdue amount shall bear interest, payable by Lessee
on demand, at a rate per annum equal to the Overdue Rate from the date of such
nonpayment until such amount is paid in full (as well after as before judgment).
SECTION 4.8. Collateralization. Lessee agrees that it will not
collateralize the outstanding principal amounts of the Tranche A Notes or the
Available Eurodollar Lender Commitment relating to Tranche A Loans until such
time as the Custodial Agreement has been duly executed and delivered by all
parties thereto.
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ARTICLE 5.
CERTAIN INTENTIONS OF THE PARTIES
SECTION 5.1. Nature of Transaction. It is the intention of the
parties that:
(a) the Overall Transaction constitutes an "operating
lease" pursuant to SFAS No. 13 from Lessor to Lessee for purposes of Lessee's
financial reporting;
(b) for federal, state and local income or franchise
tax, bankruptcy (including the substantive law upon which bankruptcy proceedings
are based), real estate and Uniform Commercial Code purposes:
(i) the Overall Transaction constitutes a loan by
Participants to Lessee and preserves beneficial ownership in the
Leased Property in Lessee, and the obligations of Lessee to pay Site
Rent and Equipment Variable Rent shall be treated as payments of
interest, and the payment by Lessee of any amounts in respect of the
Equipment Fixed Rent and the Lease Balance shall be treated as
repayments of principal;
(ii) the Lease grants a security interest and a mortgage
lien, as the case may be, in all of the Sites, the Equipment and the
other Collateral in favor of Lessor; and
(ii) the Mortgage and the Security Agreement create
liens and security interests in the Collateral in favor of Agent for
the benefit of all Participants.
Accordingly, and notwithstanding any provision of this Participation Agreement
to the contrary, the parties hereto agree and declare that: (i) the transactions
contemplated by the Lease and the other Operative Documents are intended to have
a dual, rather than single, form, as evidenced by the statements set forth in
Sections 5.1(a) and (b) above and Article XXVI of the Lease, and (ii) all
references in this Participation Agreement to the "lease" of the Leased Property
which fail to reference such dual form do so as a matter of convenience only and
do not reflect the intent of the parties hereto as to the true characterization
of such arrangements. Notwithstanding the intentions of the parties set forth
above, Lessee acknowledges and agrees that none of Agent, any Participant or
their representatives have made any representations or warranties concerning the
tax, accounting or legal characteristics of the Operative Documents and that
Lessee has obtained and relied upon
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<PAGE> 24
such tax, accounting and legal advice from its own experts concerning the
Operative Documents as it deems appropriate.
(c) Specifically, without limiting the generality of the
foregoing, the parties hereto intend and agree that, for purposes of filing
federal, state and local returns, reports and other statements relating to
income or franchise taxes, or any other taxes imposed upon or measured by
income: (i) the transactions contemplated by the Operative Documents shall be
treated as conditional sales and Lessee shall be entitled to take any deduction,
credit, allowance or other reporting position consistent with such treatment,
and (ii) neither Lessor nor any Participant shall take an initial position on
its federal, state and local returns, reports and other statements relating to
income or franchise taxes that is inconsistent with such treatment.
(d) Prior to the Lease Expiration Date, neither Lessor
nor any Participant shall claim any federal or state tax attributes or benefits
(including depreciation) relating to the Leased Property unless required to do
so by an appropriate taxing authority or after a change in Applicable Laws and
Regulations; provided, however, that if an appropriate taxing authority shall
require Lessor or any Participant to claim any such federal or state tax
attributes or benefits or such Person otherwise intends to claim such attributes
or benefits as otherwise permitted hereunder, such Person shall promptly notify
Lessee thereof and shall permit Lessee to contest such requirement in a manner
similar to the contest rights provided in, and subject to any applicable
limitation to a contest contained in, Section 11.2(b) hereof (it being
understood, however, that any such contest of an item on a net income or
franchise tax return of Lessor or any Participant shall be based upon a tax
opinion of, and shall be conducted and controlled in good faith by, tax counsel
selected by Lessor or the applicable Participant and reasonably approved by
Lessee).
SECTION 5.2. Amounts Due. (a) Anything else herein or elsewhere to
the contrary notwithstanding, it is the intention of Lessee, Participants and
Agent that: (i) the amount and timing of installments of Basic Rent due and
payable from time to time from Lessee under the Lease shall be equal to the
aggregate payments due and payable in respect of principal and interest on the
Loans and Yield on each Payment Date (to the extent such interest and Yield are
not funded by additional Loans and Investment Amounts); (ii) if Lessee elects
the Purchase Option or becomes obligated to purchase any of the Leased
Properties under the Lease, the Loans, Investment Amounts, all interest, Yield
and Commitment Fees thereon and all other obligations of Lessee owing to the
Participants and Agent which are attributable to the applicable Site or
Equipment Group to be purchased, as allocated
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pursuant to the Loan Agreement, shall be paid in full by Lessee in accordance
with Article XX of the Lease; (iii) if Lessee properly elects a Remarketing
Option and remarkets the related Leased Property in accordance with Article XXII
of the Lease, as applicable, Lessee shall only be required to pay to Agent the
Gross Proceeds, subject to the limitation set forth at Section 22.1 of the Lease
with respect to 25% Property, of the sale of such Leased Property, the AMAT
Recourse Amount, all in accordance with Article XXII of the Lease and any
amounts due pursuant to Section 11.9 of this Participation Agreement and Section
22.5 of the Lease (which aggregate amounts under Article XXII of the Lease may
be less than the Lease Balance); and (iv) upon a Lease Event of Default
resulting in an acceleration of Lessee's obligation to purchase the Leased
Properties under the Lease, the amounts then due and payable by Lessee under the
Lease shall include all amounts necessary to pay in full the Lease Balance, plus
all other amounts then payable by Lessee to Participants and Agent under the
Operative Documents.
(b) Anything else herein or in any other Operative Document to the
contrary notwithstanding, it is the intention of AMAT, Participants and Agent
that the amount of the total obligations of AMAT under the Operative Documents,
including the Lease and the Note Guarantee, on any date, shall not exceed the
sum of the aggregate outstanding principal amount of all Loans, plus all
interest accrued thereon, plus the aggregate outstanding Investment Amounts,
plus all accrued Yield thereon, plus all other costs, expenses and indemnities
(including, without limitation, any amounts payable by Borrower pursuant to
Section 6.2(i) of the Loan Agreement) for which Lessee is liable under the
Operative Documents; provided, however, that the foregoing limitation shall not
apply to any damages or amounts otherwise payable by Lessee as a result of
Lessee's breach of its obligation to make payments to Agent rather than Lessor
in accordance with the Assignment of Lease and the Consent to Assignment, unless
Lessee is required by a court order of a Governmental Authority having
jurisdiction to make such payments to Lessor.
ARTICLE 6.
CONDITIONS PRECEDENT TO ACQUISITIONS AND ADVANCES
SECTION 6.1. Conditions to Each Advance. The obligation of each
Participant to perform its obligations on any Advance Date shall be subject to
the fulfillment to the satisfaction of (including, with respect to writings,
such writings being in form and substance reasonably satisfactory to Agent), or
the waiver in writing by, Agent of the conditions precedent set forth in this
Section 6.1 and the other applicable conditions precedent set
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forth in this Article 6 on or prior to such Advance Date (except that the
obligation of any party hereto shall not be subject to such party's own
performance or compliance):
(a) Advance Request. Lessee (or Construction Agent)
shall have delivered an Advance Request conforming with the applicable
requirements of Section 3.10 in respect of the proposed Advance Date.
(b) Performance. Each party to any Operative Document
shall have performed and complied with all conditions and agreements contained
in this Article 6 and, in all material respects, with all other agreements and
conditions contained herein and in any other Operative Document to which it is a
party required to be performed or complied with by it on or prior to such
Advance Date.
(c) Representations and Warranties True; Absence of
Defaults. Each representation and warranty of AMAT (including those made by AMAT
as Lessee and Construction Agent) contained herein or in any other Operative
Document shall be true and correct in all material respects as though made on
and as of such Advance Date, except that any such representation or warranty
which is expressly made only as of a specified date need be true only as of such
date. No Lease Default or Lease Event of Default shall have occurred and be
continuing or will occur immediately after giving effect to such Advance. Each
Funding on an Advance Date shall be deemed to be a representation and warranty
of AMAT to each of the other parties hereto that (i) the matters specified in
clause (b) above are true and correct as of such Advance Date, (ii) after giving
effect to such Advance, none of the limitations or conditions set forth in
Section 3.10 will be violated, (iii) to the extent that such Funding relates to
a Site Advance, Equipment Advance, initial Construction Advance or the first
Construction Advance of any fiscal quarter of Lessee, each of the
representations and warranties of Lessee contained in the Operative Documents is
true and correct as of such Advance Date, except that any such representation or
warranty which is expressly made only as of a specified date is true only as of
such date, and (iv) if such Advance relates to a Site, that as of such Advance
Date, no Significant Casualty or Significant Condemnation has occurred with
respect to the related Site.
(d) Transaction Expenses. Lessee shall have paid in full
on or prior to such Advance Date all Transaction Expenses for which Lessee has
received an invoice no later than five (5) Business Days prior to such Advance
Date to the parties to whom such Transaction Expenses are payable; provided,
that the Arrangement Fee shall be paid on the initial Advance Date. All other
Transaction Expenses shall be paid by Lessee within the time period specified in
Section 13.9(a); provided, further, that
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the Transaction Expenses incurred in connection with the initial Advance if
invoiced within two (2) Business Days prior to the Advance Date shall be paid in
full on the initial Advance Date. Such payments shall be made by wire transfer
of immediately available funds (x) if to Agent, pursuant to the wire transfer
information provided from time to time to Lessee by Agent (initially as set
forth in Schedule II) or (y) if to any other Person, if the necessary wire
transfer information for such payment is provided to Lessee at least one
Business Day prior to such Advance Date.
(e) Proceedings Satisfactory, Etc. All proceedings taken
in connection with such Advance Date and all documents relating thereto shall be
reasonably satisfactory to Agent and its counsel.
(f) Taxes. All taxes, charges, fees and costs, if any,
payable in connection with the execution, delivery, recording and filing of the
Operative Documents and the transactions contemplated to be consummated on such
Advance Date shall have been paid by Lessee, or arrangements for such payment
shall have been made by Lessee to the satisfaction of Agent and Lessor.
(g) Insurance. Insurance complying with the provisions
of Article XIV of the Lease shall be in full force and effect as evidenced by
certificates of insurance, broker's reports or insurance binders delivered on or
prior to the Advance Date to Agent and Lessor in form and substance reasonably
satisfactory to Agent and Lessor.
SECTION 6.2. Conditions to Site Advance. The obligation of each
Participant to perform its obligations on an Advance Date which is a Site
Acquisition Date with respect to a Developed Site (including the initial advance
for the Existing Sites) or a Construction Site shall be subject to the
fulfillment to the satisfaction of (including, with respect to writings, such
writings being in form and substance reasonably satisfactory to the addressee or
beneficiary thereof), or the waiver in writing by, such Participant of the
conditions precedent set forth in this Section 6.2 with respect to each such
Site and the other applicable conditions precedent set forth in Section 6.1 on
or prior to the initial Advance Date (except that the obligation of any party
hereto shall not be subject to such party's own performance or compliance):
(a) Real Estate and Appraisal Matters. Not less than
five (5) Business Days prior to each Site Advance Date, Lessee will deliver to
Lessor and Agent (and with respect to Section 6.2(b) below, sufficient copies
for, and addressed to, each Participant):
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(i) with respect to a Site Advance for a Construction
Site, a copy of the Plans and Specifications; and
(ii) an appraisal in form and substance reasonably
satisfactory to Agent and Lessor which shall establish (by the use
of appraisal methods satisfactory to Participants) (A) the Fair
Market Value of the Site as of the Advance Date, (B) with respect to
each Developed Site and Existing Site, the Fair Market Value of the
Site as of the last day of the Term, without regard to any renewals,
(C) with respect to a Construction Site, the "as built" Fair Market
Value of such Site (assuming the Completion of the Facility on or
before the Outside Completion Date) as of the last day of the Term,
without regard to any renewals, (D) that the Fair Market Value of
the Site as determined in accordance with items (A) and (B) of this
Section 6.2(a)(ii) with respect to a Developed Site, and in
accordance with item (C) of this Section 6.2(a)(ii), with respect to
a Construction Site, will be not be less than 75% of the Aggregate
Property Cost with respect to such Site, (E) with respect to each
Developed Site and Existing Site, the percentage of the Fair Market
Value of such Site attributable to the Land and the percentage of
the Fair Market Value of such Site attributable to the Facility
located thereon, and (F) with respect to a Construction Site, the
percentage of the Fair Market Value of such Site on an "as built"
basis attributable to the Land and the percentage of the Fair Market
Value of such Site on an "as built" basis attributable to the
Facility. The portion of the appraisal described in clause (A) above
shall be prepared in accordance with FIRREA, and the entire
appraisal will be performed by an independent appraisal company
chosen by Agent. The portion of such appraisal described in clauses
(C) and (F) above shall assume that all scheduled portions of the
Facility shall have been completed or renovated in a good and
workmanlike manner in compliance with Applicable Laws and
Regulations and otherwise in accordance with the Lease and the
applicable Plans and Specifications for such Site.
(b) Filings and Recordings. All applicable filings or
recordings enumerated and described in Schedule III hereof, as well as all other
filings and recordings necessary or appropriate, including financing statements,
precautionary financing statements and fixture filings, in the opinion of
counsel to Agent, to perfect the rights, titles and respective interests of
Participants and Agent (including those with respect to any future Advances for
the Site) intended to be created by the Operative Documents shall have been
made, or shall have been arranged to be made promptly thereafter, in the
appropriate places or offices, including any recordings and filings necessary
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to create, perfect, preserve and protect (i) Lessor's interest in the Site, (ii)
the first mortgage lien and deed of trust of record on the Site, subject to
Permitted Exceptions and the rights of Lessee under the Lease and (iii) the
first priority perfected security interest in all fixtures appurtenant to the
Site, subject to Permitted Exceptions, granted to Agent. All recording and
filing fees, charges and taxes with respect to any recordings or filings made
pursuant to this Section 6.2(b) shall have been paid in full by Lessee, or
arrangements for such payment shall have been made by Lessee, to the
satisfaction of Agent.
(c) Opinions of Counsel. With respect to a Site Advance
following the initial Advance, Agent and Participants shall have received, (i)
an opinion of Lessee's in-house counsel substantially in the form of Exhibit V
with respect to the Operative Documents executed and delivered by Lessee on such
Site Advance Date (but excluding the opinion described at paragraph 4 of such
Exhibit), and (ii)(A) if the Site or Sites are located in the State of
California, an opinion of counsel substantially in the form of Exhibit W-1 with
respect to the Operative Documents executed and delivered by Lessee on such Site
Advance Date or (B) if the Site or Sites are not located in the State of
California, an opinion of counsel substantially in the form of Exhibit W-2.
(d) Title and Title Insurance Commitment. Agent shall
have received from the Title Insurance Company its commitment to issue an ALTA
owner's policy of title insurance (1970 Form), acceptable in form and substance
to Agent and Lessor, insuring that Lessor has good and marketable title to the
Site (fee and/or leasehold), subject to the Lease, Permitted Exceptions and such
other exceptions to title as are acceptable to Agent and Lessor, in an amount
equal to the Aggregate Property Costs for such Site together with complete,
legible copies of all encumbrances, maps and surveys of record, and together
with such reinsurance (with direct access to the reinsurers thereunder) or
coinsurance agreements as Agent shall require. Agent, for the benefit of
Participants, shall have received from the Title Insurance Company its
commitment to issue an ALTA form of lender's policy of title insurance (1970
Form), acceptable in form and substance to Agent, insuring the creation under
the Mortgage in favor of Agent of a valid first priority Lien against the
Collateral, subject to Permitted Exceptions and such exceptions to title as are
reasonably acceptable to Agent, in an amount equal to the Site Acquisition
Costs, together with complete, legible copies of all encumbrances and plats of
record, and together with such reinsurance (with direct access to the reinsurers
thereunder) or coinsurance agreements as Agent shall require. Such Title
Policies shall be dated as of the initial Advance Date relating to such Site,
and, to the extent permitted under Applicable Laws
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and Regulations, shall (w) contain affirmative endorsements as to mechanics
liens, doing business, usury, zoning, easements and rights-of-way, Form B-1
comprehensive coverage, encroachments, the nonviolation of covenants and
restrictions, rights of access and survey matters, (x) delete the creditors'
rights exclusion, (y) contain endorsements regarding the effect of
recharacterization, and (z) contain such other endorsements reasonably requested
by Agent. Notwithstanding the above, with respect to any Construction Site
Advance, Lessee shall be required to deliver such Title Policies only on the
earlier of the initial Advance or the entering into a Ground Lease in connection
with such Construction Site, provided, that the foregoing limitations shall not
relieve Lessee's obligation to deliver the date-down endorsement required by
Section 7(d)(ii).
(e) Survey. Lessee shall have delivered, or shall have
caused to be delivered, to Lessor and Agent an ALTA/1992 (Urban) survey of the
Site certified to the Participants and the Agent in a form satisfactory to the
Title Insurance Company in order to issue the Title Policies and showing no
state of facts unsatisfactory to any of the Participants or the Agent.
Notwithstanding the above, with respect to any Construction Site Advance, Lessee
shall be required to deliver such Survey only on the initial Advance in
connection with such Construction Site and upon completion pursuant to Section
7(b).
(f) Environmental Review. Not less than five (5)
Business Days prior to the Advance Date, each Participant and Agent shall have
received the Environmental Audit for the Site, which shall have been delivered
to and approved by Participants and Agent in their sole and absolute discretion,
and each Participant and Agent shall have received an acknowledgement (in form
and substance satisfactory to each of them) from the firm that prepared the
Environmental Audit that each Participant and Agent may rely on the
Environmental Audit. Notwithstanding the above, with respect to any Construction
Site Advance, Lessee shall be required to deliver such Environmental Audit only
on earlier of the initial Advance or entering into a Ground Lease in connection
with such Construction Site.
(g) Transfer Documents. Lessor shall have received from
the owner of such Site (x) a Bill of Sale, and (y) a grant deed with respect to
each Site located in the State of California and a general warranty deed for any
Site located outside of the State of California (a "Deed"), in conformity with
Applicable Laws and Regulations and appropriate for recording with the
applicable Governmental Authorities, conveying fee simple title to the Site to
Lessor, subject only to Permitted Exceptions or if the Land with respect to any
Construction Site is owned by Lessee, a Ground Lease.
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(h) Site Lease Supplement. Agent shall receive an
original counterpart of the Site Lease Supplement (with sufficient copies for
each Participant) executed by Lessee and Lessor with respect to the Site (which
Site Lease Supplement for a Construction Site shall specify, among other things,
the Permitted Uses of such Site as designated in the Plans and Specifications
delivered to the Appraiser pursuant to Section 6.2(a)); provided that only Agent
shall retain the copy thereof marked as the sole original counterpart for UCC
purposes.
(i) Mortgage. Lessor shall have delivered to Agent a
Mortgage executed by Lessor with respect to the Site.
(j) Assignment of Lease Supplement. Lessor shall have
delivered to Agent a Supplement to the Assignment of Lease executed by Lessor
with respect to the Site.
(k) Consent of Lessee to Assignment of Lease. Lessee
shall have delivered to Lessor and Agent (with sufficient copies for each
Participant) a consent to the Supplement to the Assignment of Lease executed by
Lessee with respect to the Site.
(l) FIRPTA Affidavit. Lessee shall have caused
the seller of such Developed Site to deliver to Agent and Lessor (i) a FIRPTA
Affidavit in customary form or if such seller is a "foreign person" as defined
in Section 1445 of the Code, evidence that a portion of the sales price to be
paid to such seller has been withheld, if so required, in accordance with the
provisions of the Code and Regulations and (ii) any comparable form and
affidavits required with respect to the purchase and sale of the Site by any
state.
(m) No Significant Casualty or Condemnation. With
respect to a Site Advance or a Construction Advance, no Significant Casualty and
no Significant Condemnation shall have occurred with respect to such Site. No
action shall be pending or, to the knowledge of Lessee, threatened by a
Governmental Authority to initiate a Condemnation of a Site which would
constitute a Significant Condemnation.
(n) Construction Agency Agreement Supplement. With
respect to a Construction Site, Lessee, as Construction Agent, shall have
delivered to Agent (with sufficient copies for each Participant) a Construction
Agency Agreement Supplement executed by Lessee, as Construction Agent, and
Lessor with respect to such Construction Site.
(o) Environmental Indemnity. Lessee shall have delivered
to Agent (with sufficient copies for each Participant) an Unsecured
Environmental Indemnity executed by Lessee.
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(p) Remarketing Option. Lessee shall not have given
written notice to Lessor of Lessee's exercise of any Site Remarketing Option
with respect to a Site pursuant to Section 22.1 of the Lease or, on or after the
fifth anniversary of the Document Closing Date, an Equipment Remarketing Option
with respect to an Equipment Pool pursuant to Section 22.2 of the Lease.
SECTION 6.3. Conditions to each Equipment Advance. The obligation of
each Participant to perform its obligations on each Equipment Acquisition Date
shall be subject to the fulfillment to the satisfaction of (including, with
respect to writings, such writings being in form and substance reasonably
satisfactory to Agent), or the waiver in writing by Agent of the conditions
precedent set forth in this Section 6.3 and the other applicable conditions
precedent set forth in Section 6.1 on or prior to such Equipment Acquisition
Date with respect to each Equipment Group to be Funded on such Advance Date
(except that the obligation of any party hereto shall not be subject to such
party's own performance or compliance):
(a) Filings and Recordings. All applicable filings or
recordings enumerated and described in Schedule III hereof, as well as all other
filings and recordings necessary or advisable, including financing statements,
precautionary financing statements and fixture filings, in the opinion of
counsel to Agent, to perfect the rights, titles and interests of Agent and
Participants intended to be created by the Operative Documents shall have been
made, or shall have been arranged to be made promptly thereafter, in the
appropriate places or offices, including any recordings and filings necessary to
create, perfect, preserve and protect (i) Lessor's interest in the Units of
Equipment in the Equipment Group and (ii) the first priority perfected security
interest of record and Lien granted to Agent in such Units of Equipment, subject
in each case, to Permitted Exceptions and the rights of Lessee under the Lease.
All recording and filing fees and taxes with respect to any recordings or
filings made pursuant to this Section 6.3(a) shall have been paid in full by
Lessee, or arrangements for such payment shall have been made by Lessee, to the
satisfaction of Agent.
(b) Invoices and Bills of Sale. Agent shall have
received (i) the invoices signed by the vendor or manufacturer, as appropriate,
for the Units of Equipment in the Equipment Group and (ii) duly executed Bill(s)
of Sale conveying to Lessor such Units of Equipment, with customary warranties
reasonably acceptable to Lessor and Agent.
(c) Equipment Lease Supplement. Lessee shall have
delivered an original counterpart of the Equipment Lease
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Supplement executed by Lessee and Lessor with respect to the Equipment Group to
Lessor and Agent (with sufficient copies for each Participant) setting forth an
amortization schedule for the Equipment Fixed Rent attributable to such Units of
Equipment proposed by Agent, and approved by Lessor and Lessee; provided that
only Agent shall receive the copy thereof marked as the sole original
counterpart for UCC purposes.
(d) Assignment of Lease Supplement. Lessor shall have
delivered to Agent a Supplement to the Assignment of Lease executed by Lessor
with respect to the related Units of Equipment.
(e) Consent of Lessee to Assignment of Lease. Lessee
shall have delivered to Lessor and Agent a consent to the Supplement to the
Assignment of Lease executed by Lessee with respect to the related Units of
Equipment.
(f) Opinions. On the date of the initial Equipment
Advance, Agent and Participants shall have received an opinion of Lessee's
in-house counsel substantially in the form of Exhibit V with respect to the
Operative Documents being executed and delivered by Lessee on such date (but
excluding the opinion described at paragraph 4 of such Exhibit). For each state
in which a Unit of Equipment is located, if no other Unit of Equipment already
subject to the Lease is located in such state, Agent (with sufficient copies for
and addressed to each of the Participants) shall have received an opinion (in
form and content reasonably satisfactory to Participants) from counsel
reasonably satisfactory to each Participant and Agent and qualified with respect
to the laws of such jurisdiction substantially to the effect that (i) as to the
validity and perfection of Agent's lien in such Units of Equipment, (ii) no
other filings or recordings are required to establish and perfect such Lien in
the Units of Equipment, (iii) the descriptions of the Collateral in such filings
and recordings are adequate for the purpose of establishing and perfecting such
Lien, and (iv) that there are no requirements in such state requiring Agent,
Lessor or any other Participant to qualify to do business or pay any fee or tax
other than normal filing and recording fees payable by Lessee.
(g) Searches. Lessor and Agent shall have received a
report satisfactory to Lessor and Agent, as of a date not more than thirty (30)
days prior to the Advance Date, of judgment liens, tax liens and Uniform
Commercial Code filings with respect to Lessee and the Leased Property filed of
record in each applicable jurisdiction.
(h) Waiver. If such Units of Equipment are to be located
on property leased by Lessee, Agent shall have received a waiver from the owner
of such property and any lien holder which
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has a lien thereon, in form and substance reasonably acceptable to Agent and
Lessor, with respect to such Units of Equipment.
(i) Proposed Fair Market Value, Useful Life and
Amortization Schedules. Agent shall have received Lessee's approval of Agent's
(i) estimate of the Fair Market Value as of the applicable Original Equipment
Pool Expiration Date and useful life of each such Unit of Equipment and (ii)
proposed amortization schedule for each such Unit of Equipment, in each case
determined by Agent from the information provided by Lessee pursuant to Section
3.13(a)(v).
(j) Remarketing Option. Lessee shall not have given
written notice to Lessor of Lessee's exercise of a Remarketing Option pursuant
to Article XXII of the Lease.
SECTION 6.4. Conditions to each Construction Cost Funding. The
obligation of each Participant to perform its obligations on a Construction Cost
Funding Date shall be subject to the fulfillment to the satisfaction of
(including, with respect to writings, such writings being in form and substance
reasonably satisfactory to Agent), or the waiver in writing by Agent of the
conditions precedent set forth in this Section 6.4 and in Section 6.1 on or
prior to such Construction Cost Funding Date with respect to each Construction
Site for which a Construction Advance is being made on such Advance Date (except
that the obligation of any party hereto shall not be subject to such party's own
performance or compliance):
(a) Plans and Specifications and Architect's Agreement;
Assignment. Prior to the first Construction Advance under this Section 6.4 for
the Construction Site, Agent and Lessor shall have received, upon request, (i)
the first page of a copy of the Plans and Specifications signed, and all other
pages thereof initialed, by Lessee, as Construction Agent, and Construction
Agent's general contractor (if any) and, if requested by Agent, a copy of
Construction Agent's agreement with the Architect, if any, (ii) a copy of the
general construction contract (if any) and a copy of each Major Construction
Document entered into by Construction Agent or by Construction Agent's general
contractor, as the case may be, and (iii) an assignment, from Lessee in favor of
Lessor, of Lessee's interest, as Construction Agent, in the Plans and
Specifications, the Architect's agreement and the general construction contract
in the form required by the Construction Agency Agreement, and either (A)
attached thereto is the Architect's and general contractor's written consent to
such assignment, in the form required by the Construction Agency Agreement, or
(B) included in such assignment is a certification of Lessee that the applicable
Architect's Agreement includes a provision in substance identical to such
consent.
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(b) Assurance of Completion. If requested by Agent,
Agent and Lessor shall have received from Lessee, as Construction Agent, a
written certification that the Available Commitments for such Facility together
with the other Facilities being constructed or renovated on all other
Construction Sites for which construction has not been completed is sufficient
to complete the construction of such Facilities in accordance with the
respective Plans and Specifications therefor, and that all of such construction
or renovation is capable of being completed prior to the anticipated
Construction Completion Date for each such Construction Site. In the event that
at any time or from time to time the Available Commitments are not sufficient to
fully pay for the Completion of the Facility on any Construction Site, Lessee,
as Construction Agent, covenants that it shall contribute, on an unsecured basis
and without recourse to the Leased Property, to Agent or the Participants for
repayment its own funds to pay costs of such construction or renovation, prior
to making any further request for any Construction Advance to pay for such
construction or renovation until the remaining Available Commitments are
sufficient to fully pay for the completion of such construction or renovation
without further contributions from Lessee.
(c) Construction Progress Information. With respect to
the construction or renovation of a Facility on the Construction Site, Lessee,
as Construction Agent, shall furnish to Agent and Lessor upon request, such
details concerning the construction or renovation of such Facility as Agent or
Lessor may reasonably require, including a detailed breakdown of the applicable
percentages of completion and projected costs of the various phases of
construction or renovation of such Facility, showing the amounts expended to
date for such construction or renovation and the amounts then due and unpaid and
an itemized estimate of the amount necessary to complete construction or
renovation of such Facility in its entirety.
ARTICLE 7.
COMPLETION DATE CONDITIONS
The occurrence of the Construction Completion Date with respect to
any Construction Site shall be subject to the fulfillment to the satisfaction
of, or waiver by, Required Participants of the following conditions precedent:
(a) Construction Completion. The construction or
renovation of the Facility located on such Construction Site shall have been
completed in all material respects in accordance with (i) the Plans and
Specifications (except as any timing of construction or renovation and
completion specified in such Plans
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and Specifications may be modified pursuant to Section 2.8 of the Construction
Agency Agreement) for such Facility and (ii) Applicable Laws and Regulations.
Such Facility shall also be ready for occupancy and operation. All fixtures,
furniture, furnishings, equipment and other property contemplated under such
Plans and Specifications to be incorporated into or installed in such Facility
shall have been incorporated or installed free and clear of all Liens except for
Permitted Liens and Liens in favor of Lessor or Agent.
(b) Architect's Certificate. Lessee shall have furnished
to Lessor and Agent a certificate of the Architect (substantially in the form of
Exhibit C) dated at or about the Construction Completion Date and stating that
(i) the construction or renovation of the Facility located on such Construction
Site has been completed in all material respects in accordance with its Plans
and Specifications (except as any timing of construction or renovation and
completion specified in such Plans and Specifications may be modified pursuant
to Section 2.8 of the Construction Agency Agreement) and such Facility is ready
for use and occupancy and (ii) such Facility, as so completed, complies in all
material respects with all applicable laws and ordinances, and certifying that
attached thereto are true and complete copies of an "as built" or "record" set
of the Plans and Specifications.
(c) Construction Agent's Certification. Construction
Agent shall have furnished to Agent and Lessor with a certification of Lessee
(substantially in the form of Exhibit D) as follows:
(i) The representations and warranties of Lessee
with respect to such Construction Site and Facility set forth in
Section 8.1(i), (l), (m), (n) and (o) are true and correct in all
material respects as of the Construction Completion Date for such
Facility. All amounts owing to third parties for the construction or
renovation of such Facility have been paid in full (other than
contingent obligations for which Lessee has made adequate reserves
or has made other provision for payment in a manner and in amounts
reasonably acceptable to Lessor and Agent);
(ii) No changes or modifications were made to the
related Plans and Specifications after the related Site Acquisition
Date that have had or may have, individually or in the aggregate, a
Material Adverse Effect on the Facility;
(iii) there are no defects to such Facility
including the plumbing, heating, air conditioning and electrical
systems thereof which have had or may have,
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individually or in the aggregate, a Material Adverse Effect
on the Facility; and
(iv) all water, sewer, electric, gas, telephone and
drainage facilities and all other utilities required to adequately
service such Facility for its intended use are available pursuant to
adequate permits (including any that are required under applicable
Environmental Laws) the unavailability of which have had or may
have, individually or in the aggregate, a Material Adverse Effect on
the Facility.
(d) As Built Survey; Title Insurance Endorsements.
Construction Agent shall have furnished to Agent true, correct and complete
copies, certified by the Construction Agent, of the following (to the extent not
previously delivered to Agent):
(i) an "as built" ALTA survey of the Site, certified
to Agent and Lessor, showing the location of the completed Facility,
the location of all points of access to the Site and the location of
all easements affecting the Site and certifying that there are no
encroachments of the Facility onto any easements affecting the Site
or onto any adjoining property (other than Permitted Liens) and that
all applicable setback requirements and other restrictions have been
complied with;
(ii) a date-down endorsement, dated not earlier than
the date of substantial completion of the Facility on such Site, to
the applicable Title Insurance Policy (or, if not available under
the applicable state law, then such other evidence of the lack of
recorded and unrecorded mechanics' liens affecting (or inchoate
rights thereto which could affect) the Site as Agent may reasonably
request; and
(iii) in the event that the applicable Title
Insurance Policy is required to include a zoning endorsement
pursuant to the provisions of Section 6.2(d), ALTA 3.1 Zoning
Endorsement (with express parking coverage).
ARTICLE 8.
REPRESENTATIONS AND WARRANTIES
SECTION 8.1. Representations and Warranties of Lessee. As of the
date hereof, the Document Closing Date and the dates specified in Section
6.1(c), Lessee makes the representations and warranties set forth in this
Section 8.1 to each of the other parties hereto, except that any such
representation or warranty
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which is expressly made only as of a specified date is true only as of such
date.
(a) Due Organization, etc. Lessee is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and Lessee has all requisite corporate power and authority to conduct
its business as presently and presently proposed to be conducted, to own or hold
under lease its properties, to enter into and perform its obligations under each
of the Operative Documents to which it is or is to be a party and each other
agreement, instrument and document to be executed and delivered by it on or
before the Document Closing Date and each Advance Date in connection with or as
contemplated by each such Operative Document to which it is or is to be a party,
and it is duly qualified as a foreign corporation authorized to do business and
is in good standing in California and in every jurisdiction in which its failure
to be so qualified would have a Material Adverse Effect.
(b) Authorization; No Conflict. The execution and
delivery by Lessee of each of the Operative Documents to which it is a party,
and the performance by Lessee of its obligations under such Operative Documents,
have been duly authorized by all necessary corporate action on its part, and do
not and will not: (i) contravene any Applicable Laws and Regulations currently
in effect applicable to or binding on it or the Leased Property; (ii) violate
any provision of its charter or bylaws; (iii) result in a breach of or
constitute a default under any indenture, loan or credit agreement, or any other
agreement or instrument to which Lessee is a party or by which Lessee or its
properties may be bound or affected; (iv) result in, or require, the creation or
imposition of any Lien of any nature upon or with respect to any of the
properties now owned or hereafter acquired by Lessee (other than the security
interests created pursuant to the Operative Documents); or (v) require any
Governmental Action by any Governmental Authority, except, in the case of this
clause (v), (A) for the filings and recordings listed on Schedule III to perfect
the rights of Lessor, Participants and Agent intended to be created by the
Operative Documents, and (B) for those Governmental Actions required with
respect to Lessee or any of its Affiliates listed on Schedule IV, each of which
have been duly effected; and except in the case of each clause above, where the
contravention, violation or failure to be so effected will not, individually or
in the aggregate, have a Material Adverse Effect; and Lessee is not in default
under or in violation of its certificate of incorporation or bylaws.
(c) Enforceability, etc. Each Operative Document to
which Lessee is a party constitutes the legal, valid and binding obligation of
Lessee, enforceable against Lessee in accordance with the terms thereof, except
as such enforceability may be
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limited by applicable bankruptcy, insolvency and similar laws affecting
creditors' rights generally and by general equitable principles.
(d) Litigation. Except as described under the heading
"Legal Proceedings" in Lessee's Form 10-Q for the period ended January 27, 1997
filed with the SEC, there is no action, proceeding or investigation pending or,
to Lessee's knowledge, threatened which questions the validity of the Operative
Documents to which Lessee is a party or any action taken or to be taken pursuant
to the Operative Documents to which Lessee is a party, and there is no action,
proceeding or investigation pending or, to Lessee's knowledged, threatened
which, if adversely determined, would have a Material Adverse Effect.
(e) Taxes. Lessee has filed or caused to be filed all
United States Federal and all other tax returns that are required to be filed by
Lessee, except where the failure to so file such returns (other than in
connection with federal or state income tax returns) would not have a Material
Adverse Effect, and has paid or caused to be paid all taxes shown to be due and
payable on such returns or on any assessment received by Lessee to the extent
that such taxes have become due and payable except to the extent that taxes due,
but unpaid, are being contested in good faith by Lessee by appropriate action or
proceeding and, to the extent (if any) that such taxes are not due and payable,
has established or caused to be established reserves that are adequate for the
payment thereof in accordance with GAAP.
(f) Rights in Respect of the Leased Property. Lessee is
not a party to any contract or agreement to sell any interest in the Leased
Property or any part thereof other than pursuant to or in accordance with this
Agreement and the Lease.
(g) No Lease Default, Loss, etc. No Lease Default or
Lease Event of Default has occurred and is continuing; there is no action
pending or, to Lessee's knowledge, threatened by a Governmental Authority to
initiate a Significant Condemnation.
(h) Chief Executive Office of Lessee. The principal
place of business and chief executive office, as such terms are used in Section
9-103(3) of the UCC, of Lessee are each located at 3050 Bowers Avenue, Santa
Clara, California.
(i) Compliance With Law. With respect to each Developed
Site and each Construction Site for which the Construction Completion Date has
occurred, (i) Lessee has complied and is in compliance with all Applicable Laws
and Regulations, except for any violations which would not have, individually or
in the aggregate, a Material Adverse Effect on Lessee or any such Site; and (ii)
each such Site and the use
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thereof by Lessee and its agents, assignees, employees, invitees, lessees,
licensees and tenants complies with all Applicable Laws and Regulations
(including all zoning, subdivision and land use laws and regulations and
Environmental Laws) and insurance requirements, except for any noncompliance
which would not have, individually or in the aggregate, a Material Adverse
Effect. With respect to each Construction Site, the related Plans and
Specifications have been or will be prepared in all material respects in
accordance with Applicable Laws and Regulations (including applicable
Environmental Laws and building, planning, zoning, subdivision and fire codes,
laws, rules and regulations) and such Facility and the other improvements to be
constructed on such Site will not, encroach in any manner onto any adjoining
land (except as permitted by express written easements or as insured by
appropriate title insurance). Except as disclosed in the Environmental Audit
with respect to each Site, there are no underground storage tanks at such Site.
(j) Investment Company Act. Lessee is not an "investment
company" or a company "controlled" by an "investment company", within the
meaning of the Investment Company Act of 1940.
(k) Public Utility Holding Company. Lessee is not
subject to regulation as a "holding company," an "affiliate" of a "holding
company", or a "subsidiary company" of a "holding company", within the meaning
of the Public Utility Holding Company Act of 1935.
(l) Licenses, Registrations and Permits. All material
Governmental Actions required for (x) the use, treatment, storage, transport,
disposal or disposition of any Hazardous Substance on, at, under or from each
Construction Site during the construction of the Facility thereon, (y)
construction of each Facility in accordance with the related Plans and
Specifications and the Construction Agency Agreement and (z) the use and
occupancy of the Sites and for the operation thereof (including a certificate or
certificates of occupancy for such Site or other legally equivalent permission
to occupy such Site) have either been obtained from the appropriate Governmental
Authorities having jurisdiction or from private parties, as the case may be, or
will be obtained from the appropriate Governmental Authorities having
jurisdiction or from private parties, as the case may be, prior to commencing
any such construction or use and operation, as applicable, except for any
Governmental Action, the failure to have obtained, would not, individually or in
the aggregate, have a Material Adverse Effect.
(m) Nature, Condition and Use of Sites. Each Site to be
acquired on a Site Acquisition Date consists of either a Developed Site on which
a Facility exists on the Site Acquisition
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Date or a Construction Site on which a Facility will be constructed pursuant to
the Construction Agency Agreement. The present condition and use of each Site
conforms with all conditions or requirements of all existing permits and
approvals issued with respect to such Site, and the present use of each Site and
Lessee's intended use of each Site under the Lease does not and will not,
violate any Applicable Laws and Regulations, except for failures to conform or
violations which would not, individually or in the aggregate, have a Material
Adverse Effect. No notices, complaints or orders of violation or noncompliance
or liability of any nature whatsoever have been issued or, to Lessee's
knowledge, threatened by any Governmental Authority or, in writing by, any other
Person with respect to any of the Sites or any present or intended future use
thereof, except for such violations and instances of noncompliance as would not
reasonably be expected to have, individually or in the aggregate, a Material
Adverse Effect on any such Site, and Lessee is not aware of any circumstances
which could give rise to the issuance of any such notices, complaints or orders.
(n) Utility Services. Each Site has available all
material services of public facilities and other utilities necessary for use and
operation of the Facility thereon for its primary intended purposes including
adequate water, gas and electrical supply, storm and sanitary sewerage
facilities, telephone and means of access between such Facility and public
highways for pedestrians and motor vehicles. All utilities serving each Site, or
proposed to serve such Site in accordance with the related Plans and
Specifications, are located in, and vehicular access to the Facility on such
Property is provided by, either public rights-of-way abutting such Site or by
Appurtenant Rights.
(o) Use and Operation of Sites. All material agreements,
easements and other rights, public or private, which are necessary to permit the
lawful use and operation of each Site as Lessee intends to use each such Site
under the Lease and which are necessary to permit the lawful intended use and
operation of all presently intended utilities, driveways, roads and other means
of egress and ingress to and from the same (including certificates of occupancy)
have been obtained and are in full force and effect (or with respect to
Construction Sites will be obtained and be in full force and effect on or prior
to the Completion of the Facility thereon) and Lessee has no actual knowledge of
any pending modification or cancellation of any of the same.
(p) Securities Act. Neither Lessee nor anyone authorized
to act on its behalf has, directly or indirectly, in violation of Section 5 of
the Securities Act or any state securities laws, offered or sold any interest in
the Notes, the
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Leased Property or the Lease, or in any security or lease the offering of which,
for purposes of the Securities Act or any state securities laws, would be deemed
to be part of the same offering as the offering of the aforementioned securities
or leases, or solicited any offer to acquire any of the aforementioned
securities or leases.
(q) Title. Neither Lessee nor any of its Affiliates has
taken or caused to be taken any action which would have an adverse effect on
Lessor's title to the Sites from that indicated in the Title Policies to be
delivered pursuant to Section 6.2(d). Neither Lessee nor any of its Affiliates
has created, consented to, incurred or suffered to exist any Lien upon the
Leased Property, including any of the Sites, other than Permitted Liens.
(r) Federal Reserve Regulations. Neither Lessee nor
Construction Agent, nor any Affiliate thereof will, directly or indirectly, use
any of the proceeds of the sale of the Notes or the Investment or of the
purchase by Lessor of the Sites or the Equipment for the purpose of purchasing
or carrying any "margin security" or "margin stock" within the meaning of
Regulation G, T, U or X of the Board of Governors of the Federal Reserve System,
respectively, or for the purpose of reducing or retiring any indebtedness which
was originally incurred to purchase or carry a margin security or margin stock
or for any other purpose which might cause any of the transactions contemplated
by this Agreement or any other Operative Document to constitute a "purpose
credit" within the meaning of Regulation G, T, U or X of the Board of Governors
of the Federal Reserve System, or for the purpose of purchasing or carrying any
security, and neither Lessee, nor Construction Agent, nor any Affiliate thereof
has taken or will otherwise take or permit any action by Lessee or Construction
Agent, or any of its Affiliates in connection with any of the transactions
contemplated by any of the Operative Documents which would involve a violation
of Regulation G, T, U, or X, or any other regulation of the Board of Governors
of the Federal Reserve System.
(s) ERISA. (i) Neither Lessee, nor any ERISA Affiliate,
presently maintains, participates in, or contributes to, a Plan (A) that has
incurred any material current liability or any "accumulated funding deficiency"
whether or not waived, as defined in Section 412 of the Code or Section 302 of
ERISA, that remains unpaid as of the applicable Advance Date for which Lessee or
any ERISA Affiliate has not reserved sufficient unencumbered assets to pay in
full such liability or deficiency by the payment due date thereof, (B) that has
incurred any material current liabilities with respect to terminations under
Title IV of ERISA or with respect to which as of the applicable Advance Date, a
"reportable event", as defined in Section 4043 of ERISA, has occurred, (C) which
is subject to Title IV of ERISA, but is not a
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Multiemployer Plan whose assets do not at least equal the present value of its
accrued benefits based on the actuarial methods and assumptions included in the
most recent actuarial valuation reports, (D) which is a Multiemployer Plan for
which Lessee or any ERISA Affiliate has received notice that the plan is in
reorganization or insolvent, (E) for which material actions, lawsuits or claims
have been asserted, or (F) for which penalties or taxes have been imposed under
Sections 502(i) and 502(l) of ERISA or Section 4975 of the Code. Neither Lessee
nor any ERISA Affiliate has in the immediate six year period had a complete or
partial withdrawal from any Multiemployer Plan and the liability to which Lessee
or any ERISA Affiliate would become subject under ERISA were there to be a
complete withdrawal from all Multiemployer Plans to which Lessee and its ERISA
Affiliates contribute is not in excess of $500,000. Neither Lessee, nor any
ERISA Affiliate, maintains any "welfare plan" (as defined in Section 3(1) of
ERISA) that obligates Lessee or any ERISA Affiliate to provide health or life
insurance benefits to retired employees of Lessee or any ERISA Affiliate for
which such liability could have a material effect on Lessee's ability to perform
its obligations under any of the Operative Documents.
(ii) The execution and delivery of this Agreement,
including the issuance and sale of the Notes and the consummation of the
transactions contemplated hereby and thereby under the Operative Documents, will
not involve any prohibited transactions, within the meaning of Section 406 of
ERISA or in connection with which a tax could be imposed pursuant to Section
4975 of the Code.
(t) Financial Information.
(i) The consolidated balance sheet of Lessee and its
Consolidated Subsidiaries as of October 27, 1996 and the related
consolidated statements of operations and cash flows for the fiscal
year then ended, reported on by Price Waterhouse LLP, as set forth
(or incorporated by reference) in Lessee's 1996 Form 10-K, a copy of
which has been delivered to each of Participants, fairly present, in
conformity with GAAP, the consolidated financial position of Lessee
and its Consolidated Subsidiaries as of such date and their
consolidated results of operations and cash flows for such fiscal
year.
(ii) The unaudited consolidated balance sheet of Lessee
and its Consolidated Subsidiaries as of January 26, 1997 and the
related unaudited consolidated statements of operations and cash
flows for the portion of Lessee's fiscal year ended at the end of
such quarter, set forth (or incorporated by reference) in Lessee's
most current 10-Q, a copy of which has been delivered to each of
Participants,
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fairly present, in conformity with GAAP, the consolidated financial
position of Lessee and its Consolidated Subsidiaries as of such date
and their consolidated results of operations and cash flows for such
fiscal quarter, subject to normal year-end auditing adjustments.
(iii) Since January 26, 1997, there has been no Material
Adverse Effect.
(u) No Other Filings. On each Site Acquisition Date and
Equipment Acquisition Date, except for the filings and recordings listed in
Schedule III (which filings or recordings shall have been duly made on the
applicable Advance Date, or shall have been arranged to be made promptly
thereafter (including the payment of any fees or taxes relating to any of the
foregoing) in a manner satisfactory to Agent), no other filings or recordings
are necessary to validly and effectively convey to Lessor and Agent such
interests in the Leased Property and the Collateral as contemplated by the
Operative Documents, in each case free and clear of all Liens, other than
Permitted Liens.
(v) Disclosure. The information disclosed or caused to
be provided in writing by Lessee (or any Person authorized or employed by any
such Person as agent or otherwise) to Participants in connection with the
negotiation of the Operative Documents and the transactions contemplated
thereby, when taken as a whole with all other written disclosures to such
parties, do not contain an untrue statement of a material fact or omit to state
a material fact necessary to make the statements herein or therein, in light of
the circumstances under which they were made, misleading.
(w) Appraisal Data. The information provided by Lessee
and its Affiliates to the Appraisers and forming the basis for the conclusions
set forth in each Appraisal, taken as a whole, was true and correct in all
material respects and did not omit any information known and available to Lessee
necessary to make the information provided not materially misleading.
(x) Subjection to Government Regulation. Lessor will not
become, solely by reason of entering into the Operative Documents or
consummation of the transactions contemplated thereby (other than upon exercise
of remedies under the Lease or upon the expiration thereof), subject to ongoing
regulation of its operations by any Governmental Authority having jurisdiction
solely by reason of Lessee's business activities or the specific use of the
Leased Property; provided, however, that Lessee hereby makes no representation
in respect of any regulation applicable to Lessor relating generally to all
owners and lessors of real property (except as set forth in the succeeding
sentence) or
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equipment in the jurisdictions or of the type provided hereunder, the creation
of security interests or lending and financing (including federal and state bank
regulatory provisions). Except as may be required under federal and state bank
regulatory provisions, Lessor, as a result of its ownership of the Sites, will
not be required to obtain or hold any permits or licenses under Applicable Laws
and Regulations.
(y) Solvency. The consummation by Lessee of the
transactions contemplated by the Operative Documents did not and will not render
Lessee insolvent, nor was it made in contemplation of Lessee's insolvency; the
value of the assets and properties of Lessee at fair valuation and at their then
present fair salable value is and, after such transactions, will be greater than
Lessee's total liabilities, including contingent liabilities, as they become
due; the property remaining in the hands of Lessee was not and will not be an
unreasonably small amount of capital.
SECTION 8.2. Representations and Warranties of CSL. Effective as of
the date of execution hereof and as of the initial Advance Date, Credit Suisse
Leasing 92A, L.P., in its individual capacity (in such capacity, "CSL"), with
respect to representations and warranties as to CSL, or as Lessor, with respect
to representations and warranties as to Lessor, represents and warrants to each
of the other parties hereto as follows:
(a) Chief Executive Office. CSL's chief executive
office and principal place of business and the place where the documents,
accounts and records relating to the Overall Transaction are kept is located at
11 Madison Avenue, 19th Floor, New York, New York.
(b) Due Organization, etc. CSL is a limited
partnership duly organized and validly existing in good standing under the laws
of the State of Delaware and is in good standing as a foreign limited
partnership in the State of California and New York and has all corporate power
and authority to execute, deliver and perform its obligations under this
Agreement, the Subordinated Mortgage, the Subordinated Security Agreement, each
other Operative Document to which it is or will be a party as Lessor, and each
other agreement, instrument and document required to be executed and delivered
by each Operative Document, the Subordinated Mortgage and the Subordinated
Security Agreement. The general partner of CSL is Credit Suisse First Boston.
(c) Due Authorization; Enforceability, etc. This
Agreement, the Subordinated Mortgage, the Subordinated Security Agreement and
each other Operative Document to which Lessor is or
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will be a party have been or will be, duly authorized, executed and delivered by
or on behalf of Lessor and are, or upon execution and delivery will be, legal,
valid and binding obligations of Lessor, enforceable against it in accordance
with their respective terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, or similar laws affecting creditors' rights
generally and by general equitable principles.
(d) Non-Contravention. Neither the execution and
delivery by Lessor of the Subordinated Mortgage, the Subordinated Security
Agreement and the Operative Documents to which it is or will be a party, either
in its individual capacity, as Lessor, or both, nor compliance with the terms
and provisions thereof, conflicts with, results in a breach of, constitutes a
default under (with or without the giving of notice or lapse of time or both),
or violates any of the terms, conditions or provisions of: (i) the certificate
of limited partnership or limited partnership agreement of Lessor; (ii) any
bond, debenture, note, mortgage, indenture, agreement, lease or other instrument
to which Lessor, either in its individual capacity, as Agent, or both, is now a
party or by which it or its property, either in its individual capacity, as
Lessor, or both, is bound or affected, where such conflict, breach, default or
violation would be reasonably likely to materially and adversely affect the
ability of Lessor, either in its individual capacity, as Lessor or both, to
perform its obligations under the Subordinated Mortgage, the Subordinated
Security Agreement or any Operative Document to which it is or will be a party,
either in its individual capacity, as Lessor, or both; or (iii) any of the
terms, conditions or provisions of any Applicable Laws and Regulations
applicable to it in its individual capacity, as Lessor, or both, where such
conflict, breach, default or violation would be reasonably likely to materially
and adversely affect the ability of Lessor, either in its individual capacity,
as Lessor or both, to perform its obligations under the Subordinated Mortgage,
the Subordinated Security Agreement or any Operative Document to which it is or
will be a party.
(e) No Approvals, etc. Neither the execution and
delivery by Lessor of the Subordinated Mortgage, the Subordinated Security
Agreement or any of the Operative Documents to which it is a party requires the
consent or approval of, or the giving of notice to or registration with, or the
taking of any other action in respect of, any Governmental Authority or other
body governing its banking practices.
(f) Litigation. There is no action, proceeding or
investigation pending or threatened against Lessor which questions the validity
of the Subordinated Mortgage, the Subordinated Security Agreement or the
Operative Documents, and
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there is no action, proceeding or investigation pending or threatened which is
likely to result, either in any case or in the aggregate, in any material
adverse change in the ability of Lessor to perform its obligations under the
Subordinated Mortgage, the Subordinated Security Agreement or the Operative
Documents to which it is a party.
(g) Lessor Liens. The Leased Property is free and clear
of all Lessor Liens attributable to CSL.
(h) Assignment. Lessor has not assigned or transferred
any of its right, title or interest in or under the Lease except to Agent and
Participants in accordance with this Agreement and the other Operative
Documents.
(i) Defaults. No Loan Event of Default which does not
also constitute a Lease Event of Default and which is attributable solely to a
breach by Lessor of its obligations under the Subordinated Mortgage, the
Subordinated Security Agreement or the Operative Documents has occurred and is
continuing.
SECTION 8.3. Representations and Warranties of Agent. Credit Suisse
First Boston, in its individual capacity (in such capacity, "Bank") or as Agent,
as the case may be, hereby represents and warrants to the Participants as set
forth in this Section 8.3.
(a) Organization and Governmental Authority. Bank is a
bank duly organized and validly existing in good standing under the laws of
Switzerland, operating through its New York Branch and has the corporate power
and authority to enter into and perform its obligations under the Operative
Documents.
(b) Authorization; Binding Effect. The Operative
Documents to which Agent is or will be a party have been or will be, on the date
required to be delivered hereby, duly authorized, executed and delivered by
Agent, and this Participation Agreement is, and such other Operative Documents
are, or, when so executed and delivered by Agent will be, valid, legal and
binding agreements of Agent, enforceable against Agent in accordance with their
respective terms, except as enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and by general principles of equity.
(c) Non-Contravention. Neither the execution and
delivery by Agent of the Operative Documents to which it is or will be a party,
either in its individual capacity, or as Agent, or both, nor compliance with and
performance of the terms and provisions thereof, conflicts with, results in a
breach of,
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constitutes a default under (with or without the giving of notice or lapse of
time or both), or violates any of the terms, conditions or provisions of: (i)
the articles of incorporation or bylaws of Bank; (ii) any bond, debenture, note,
mortgage, indenture, agreement, lease or other instrument to which Bank, either
in its individual capacity, or as Bank, or both, is now a party or by which it
or its property, either in its individual capacity, or as Agent, or both, is
bound or affected, where such conflict, breach, default or violation would be
reasonably likely to materially and adversely affect the ability of Agent,
either in its individual capacity, or as Agent, or both, to perform its
obligations under any Operative Document to which it is or will be a party,
either in its individual capacity, or as Agent, or both; or (iii) any of the
terms, conditions or provisions of any law, rule, regulation, order, injunction
or decree of any Governmental Authority applicable to it in its individual
capacity, or as Agent, or both, where such conflict, breach, default or
violation would be reasonably likely to materially and adversely affect the
ability of Agent, either in its individual capacity, or as Agent, or both, to
perform its obligations under any Operative Document to which it is or will be a
party.
(d) Absence of Litigation, etc. There is no litigation
(including derivative actions), arbitration or governmental proceedings pending
or, to the best knowledge of Agent, threatened against it which would be
reasonably likely to adversely affect Agent's ability to perform its obligations
under the Operative Documents to which it is party.
(e) Consents, etc. No Governmental Action from any
Governmental Authority is or will be required in connection with the execution
and delivery by Agent of the Operative Documents to which it is party or the
performance by Agent of its obligations under such Operative Documents.
ARTICLE 9.
COVENANTS OF LESSEE
SECTION 9.1. Further Assurances. Lessee, at its own cost and
expense, will cause to be promptly and duly taken, executed, acknowledged and
delivered all such further acts, documents and assurances as any Lender, Lessor
or Agent reasonably may request from time to time in order to carry out more
effectively the intent and purposes of this Agreement and the other Operative
Documents and the Overall Transaction. Lessee, at its sole cost and expense,
will cause all financing statements (including precautionary financing
statements, continuation statements and amendments), fixture filings and other
documents, to be recorded or filed at such places and times in such manner, and
will take
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all such other actions or cause such actions to be taken, as may be necessary or
as may be reasonably requested by any Participant, Lessor or Agent in order to
establish and perfect, and to maintain, preserve, protect at all times (i) the
title of Lessor to the Leased Property and Lessor's rights under this Agreement
and the other Operative Documents other than the Permitted Liens, (ii) the first
and prior Lien of the Mortgages on the Collateral (other than Permitted Liens)
and (iii) the first priority security interest of Agent on all Leased Property
created pursuant to the Operative Documents other than the Permitted Liens.
SECTION 9.2. Consolidation, Merger, Sale, etc.
(a) Lessee shall not consolidate with any Person, merge
with or into any Person or convey, transfer or lease to any Person all or
substantially all of its assets in any single transaction (or series of related
transactions); provided that Lessee may merge with another Person if immediately
after giving effect to such transaction Lessee is the surviving entity and:
(i) no Lease Default or Lease Event of Default
(including as a result of the breach of Section 9.12 hereof) shall
have occurred or would occur as a result thereof and be continuing;
and
(ii) the title of Lessor to the Leased Property and
Lessor's rights under this Agreement and the other Operative
Documents and the first and prior Lien of Agent in the Collateral
shall not be adversely affected.
SECTION 9.3. Corporate Existence. Lessee shall at all times maintain
its existence as a corporation in good standing under the laws of the State of
Delaware and shall use commercially reasonable efforts to preserve and keep in
full force and effect its franchises material to its business.
SECTION 9.4. Liens. Lessee shall not incur or suffer to exist any
Lien on any of the Sites other than Permitted Liens.
SECTION 9.5. Compliance Certificates.
(a) Lease Defaults. Following the Document Closing Date
and until the termination of the Lease, Lessee shall furnish to Agent (with
sufficient copies for each Participant) a certificate of Lessee signed by a
Responsible Officer of Lessee within five days after Lessee obtains knowledge
that there exists a Lease Default or Lease Event of Default, which such
certificate shall describe such Lease Default or Lease Event of Default in
reasonable detail, with a statement of Lessee's action with respect thereto
taken or proposed to be taken.
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(b) Annual Certificates. Within ninety (90) days after
the close of each fiscal year, Lessee shall deliver to Agent (with sufficient
copies for each Participant) a certificate of Lessee signed by a Responsible
Officer of Lessee to the effect that the signer is familiar with or has reviewed
the relevant terms of this Agreement, the Lease and each other Operative
Document to which Lessee is a party and has made, or caused to be made under his
or her supervision, a review of the transactions contemplated hereby and thereby
and the condition of the Leased Property during the preceding fiscal year, and
to the knowledge of such signer during such fiscal year, no conditions or events
have occurred which constituted a Lease Default or Lease Event of Default, nor
does the signer have knowledge, after due inquiry, of the existence as at the
date of such certificate, of any condition or event which constitutes a Lease
Default, Lease Event of Default or Significant Event or, if any such condition
or event existed or exists, specifying the nature and period of existence
thereof and what action Lessee has taken or is taking or proposes to take with
respect thereto. Notwithstanding the foregoing, Lessee shall not be required to
deliver such certificate if Lessee has previously delivered such a certificate
within ninety (90) days prior to the close of such fiscal year.
SECTION 9.6. Change of Name or Address. Lessee shall provide Agent
fifteen (15) Business Days prior written notice of any change in name, identity
or corporate structure (as such term is used in Section 9-402(7) of the New York
UCC) or the address of its chief executive office and principal place of
business or the office where it keeps its records concerning its accounts and
the Leased Property.
SECTION 9.7. Compliance with Law, Environmental Matters. (a) Lessee
shall comply at all times with all Applicable Laws and Regulations affecting the
Leased Property except (i) where the necessity of compliance therewith is
contested in good faith by proceedings constituting a Permitted Contest or (ii)
where the violation of which, individually or in the aggregate, would not
reasonably be expected to (x) result in a Material Adverse Effect or (y) if such
violation is not remedied, result in any Lien other than a Permitted Lien, and
Lessee and shall maintain at any Site only such quantities of Permitted
Hazardous Substances, if any, as are reasonably necessary for Lessee's
operations at any Site; and (b) Lessee shall not cause or permit the
installation of any underground storage tanks at any Site.
SECTION 9.8. Investigation by Governmental Authorities. Lessee shall
deliver to Agent (with sufficient copies for each Participant), promptly upon
Lessee's receipt, a copy of any notice of the intent by any Governmental
Authority to (x) take an action which would constitute a Condemnation which if
completed would reasonably be expected to reduce the Fair Market Value of
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the Site by more than $1,000,000, or which would otherwise constitute a
Significant Event, (y) investigate any Site for a material violation of any
Applicable Laws and Regulations on or at such Site, including any Environmental
Law, under which liability may be imposed upon Agent or any Participant or under
which liability having a Material Adverse Effect may be imposed on Lessee or (z)
investigate any Site (other than routine fire, life-safety and similar
inspections) for any violation of Applicable Laws and Regulations under which
criminal liability may be imposed upon Agent or any Participant or under which
liability having a Material Adverse Effect may be imposed on Lessee.
SECTION 9.9. Financial and Other Information. Lessee shall deliver
to Agent (with sufficient counterpart originals for each Participant), the
following financial and other information (provided that Lessee shall not be
required to deliver additional copies of such documents to Agent for delivery to
any Participant if Lessee has concurrently or previously delivered copies of
such documents to such Participant within the time periods specified below
pursuant to the Credit Agreement):
(a) Audited Statements. As soon as available and in any
event within ninety (90) days after the end of each fiscal year of Lessee, a
consolidated balance sheet of Lessee and its Consolidated Subsidiaries at the
end of such fiscal year and the related consolidated statements of operations,
cash flows and shareholders' equity for such fiscal year, setting forth in each
case in comparative form the figures at the end of, and for, the prior fiscal
year, all reported on in a manner acceptable to the SEC by independent public
accountants of nationally recognized standing (it being agreed that Lessee may
satisfy the requirements of this Section 9.9(a) with the delivery of its Annual
Report on Form 10-K filed with the SEC);
(b) Quarterly Statements. As soon as available and in
any event within forty-five (45) days after the end of each of the first three
quarters of each fiscal year of Lessee, the consolidated balance sheet of Lessee
and its Consolidated Subsidiaries at the end of such quarter and the related
consolidated statement of operations and cash flows of Lessee and its
Consolidated Subsidiaries for such quarter and the portion of Lessee's fiscal
year ended at the end of such quarter, setting forth in each case in comparative
form the figures at the end of, and for, the corresponding quarter and the
corresponding portion of Lessee's prior fiscal year; it being agreed that (i)
delivery of such financial statements shall be deemed to be a representation by
Lessee that such financial statements fairly present, in conformity with GAAP,
the consolidated financial position of Lessee and its Consolidated Subsidiaries
as of the close of such quarterly fiscal period and their consolidated
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results of operations and cash flows for the portion of the fiscal year ending
with such quarterly fiscal period (subject to normal year-end adjustments) and
(ii) Lessee may satisfy the requirements of this Section 9.9(b) with the
delivery of its Quarterly Report on Form 10-Q filed with the SEC;
(c) Shareholder Mailings. Promptly upon the mailing
thereof to the shareholders of Lessee generally, copies of all financial
statements, reports and proxy statements so mailed;
(d) Supplemental Environmental Information. Promptly
upon receipt thereof, copies of all updates to the baseline study of the
environmental condition of any of Sites as set forth in the Environmental Audits
required to be delivered pursuant to Section 6.2(f);
(e) Ratings Change. Within five (5) Business Days of any
change by S&P or Moody's in the rating for the unsecured long-term debt of
Lessee, notice of the new rating established by S&P and/or Moody's.
(f) Other. With reasonable promptness, unless the
disclosure of such data or information is protected by the attorney-client
privilege or attorney work-product privilege pursuant to the laws of the
jurisdiction in which such privilege arises or such disclosure is prohibited by
Applicable Laws and Regulations, and subject to appropriate confidentiality
undertakings with respect thereto, such other data and information (financial or
otherwise) which is either maintained in the ordinary course of Lessee's
business or can be obtained or derived without undue burden to Lessee as to the
business of Lessee or the Leased Property or any portion thereof as from time to
time may be reasonably requested in writing by Agent. Subject to the foregoing
restrictions, Lessee shall permit Agent, Lessor and any other Participant during
normal business hours to visit and inspect under Lessee's guidance and, so long
as no Lease Default or Lease Event of Default shall have occurred and be
continuing, upon not less than three (3) Business Days' prior notice, any of the
properties of Lessee, or its Subsidiaries, to examine (to the extent material to
ascertaining compliance with the terms and provisions hereof or to the extent
reasonably related to the financial condition or material operations of Lessee
or any of its Subsidiaries) all of their books of account, records, reports and
other papers, to make copies and extracts therefrom and (to the extent material
to ascertaining compliance with the terms and provisions hereof or to the extent
reasonably related to the financial condition or material operations of Lessee
or any of its Subsidiaries) to discuss their respective affairs, finances and
accounts with their officers, employees (who are managers or officers), and
independent public accountants (and by this provision Lessee authorizes such
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accountants to discuss with Agent, Lessor or any other Participant the finances
and affairs of Lessee and any of its Subsidiaries, provided, that such Person
shall have given prior written notice to Lessee of its intention to discuss such
finances and affairs with such accountants and have given Lessee the opportunity
to participate in such discussions), all at such reasonable times and as often
as may be reasonably requested.
SECTION 9.10. Securities. Lessee shall not, nor shall it permit
anyone authorized to act on its behalf to, take any action which would subject
the issuance or sale of the Notes, Investment, any portion of the Leased
Property or the Lease, or in any security or lease the offering of which, for
purposes of the Securities Act or any state securities laws, would be deemed to
be part of the same offering as the offering of the aforementioned securities or
leases to the registration requirements of Section 5 of the Securities Act or
any state securities laws.
SECTION 9.11. Interest Rates. With respect to each determination of
an interest rate pursuant to the Loan Agreement and this Participation
Agreement, Lessee agrees to be bound by Sections 2.1 and 2.2 of the Loan
Agreement and Article 4 of this Agreement.
SECTION 9.12. Revolving Credit Facility. Lessee covenants and agrees
that, so long as any portion of the obligations of the Lessee under this
Participation Agreement, the Lease or any other Operative Document shall remain
unpaid or unperformed (other than performance of obligations that survive the
expiration or termination of the Lease and that are inchoate and contingent as
of the expiration or termination of the Lease), Lessee will, and will cause each
of its Subsidiaries to, perform, comply with and be bound by all of its
agreements, covenants and obligations contained in Sections 5.09 through 5.14 of
the Credit Agreement (giving effect to any applicable grace and cure periods),
whether or not any amounts are in fact outstanding under the Credit Agreement,
as such Sections are in effect from time to time prior to the date upon which
the first of the following shall occur (i) the ratings established or deemed
established by either Moody's or S&P for the senior unsecured long-term debt of
AMAT shall fall below Baa3 or BBB-, respectively, or neither Moody's or S&P
shall have in effect a rating of such debt or (ii) the debt and obligations
under the Credit Agreement are no longer outstanding and the Credit Agreement is
no longer in full force and effect (such Sections and all other terms of the
Credit Agreement to which reference is made herein, together with all related
definitions and ancillary provisions, being hereby incorporated into this
Participation Agreement by reference as though specifically set forth in
herein). Upon the occurrence of any of clauses (i) or (ii), such Sections shall
be the Sections
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as of the date immediately preceding the date of such occurrence. In determining
compliance with such Sections for purposes of this Participation Agreement at
any time following the termination of the Credit Agreement, any action that
would require consent or approval thereunder shall require the consent or
approval of Required Participants.
ARTICLE 10.
OTHER COVENANTS AND AGREEMENTS
SECTION 10.1. Cooperation with Lessee. Agent, Lessor and each other
Participant shall, to the extent reasonably requested by Lessee (but without
assuming additional liability on account thereof), at Lessee's expense,
cooperate to allow Lessee to (a) perform its covenants contained in Section 9.1,
including at any time and from time to time, upon the reasonable request of
Lessee, to promptly and duly execute and deliver any and all such further
instruments, documents and financing statements (and continuation statements
related thereto) as Lessee may reasonably request in order to perform such
covenants and (b) further Lessee's requirements as lessee of the Leased
Property, including to file any statement with respect to any tax abatements or
other requirements.
SECTION 10.2. Covenants of Lessor.
(a) Discharge of Liens. Lessor covenants that it will
not create or permit to exist at any time, and will, at its own cost and
expense, promptly take such action as may be necessary duly to discharge, or to
cause to be discharged, all Lessor Liens attributable to it and will cause
restitution to be made to the Leased Property in the amount of any diminution of
the value thereof as a result of its failure to comply with its obligations
under this Section 10.2(a). Notwithstanding the foregoing, Lessor shall not be
required to so discharge any such Lessor Lien while the same is being contested
in good faith by appropriate proceedings diligently prosecuted so long as such
proceedings shall not involve any meaningful danger of the impairment of the
Liens granted by Lessor to Agent including the Liens of the Mortgages or of the
sale, forfeiture or loss of, and shall not interfere with the use or disposition
of, any part of the Lease, the Leased Property or title thereto or any interest
therein or the payment of Rent; provided, however, that Lessor shall discharge
any such Lessor Lien attributable to it, whether or not subject to contest as
provided above, upon the purchase of the Leased Property by Lessee pursuant to
the Lease or the sale of the Leased Property in connection with the Remarketing
Option.
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(b) Change of Principal Place of Business. Lessor shall
give prompt notice to Lessee and Agent if Lessor's principal place of business
or chief executive office, or the office where the records concerning the
accounts or contract rights relating to the Leased Property or the Overall
Transaction are kept, shall cease to be located at 11 Madison Avenue, 19th
Floor, New York, New York or if it shall change its name or identity.
(c) Loan Agreement. As between Lessor and Lessee, Lessor
and each Lender hereby agrees that, so long as the Lease is in effect, Lessor
shall not consent to or permit any amendment of the terms and provisions of the
Loan Agreement, the Mortgages or any Note, whether or not any Lease Event of
Default shall have occurred and be continuing, other than amendments which are
ministerial in nature and that do not have an adverse effect on Lessee, without
the prior written consent of Lessee.
(d) Depreciation. Prior to the Lease Expiration Date, no
Participant shall claim any federal or state tax attributes or benefits
(including depreciation) relating to the Leased Property unless required to do
so by an appropriate taxing authority or after a clearly applicable change in
Applicable Laws and Regulations or as a protective response to a proposed
adjustment by a Governmental Authority; provided, however, that if an
appropriate taxing authority shall require any Participant to claim any such
federal or state tax attributes or benefits, such Participant shall promptly
notify Lessee thereof and shall permit Lessee to contest such requirement in a
manner similar to the contest rights provided in, and subject to any applicable
limitation to a context contained in, Section 11.2(b) hereof.
(e) Organization. Unless otherwise approved by Lessee,
which approval shall not be unreasonably withheld, and provided that no Lease
Default or Lease Event of Default shall have occurred and be continuing, CSL (i)
shall at all times remain a solvent, multi-asset company with assets beyond its
interest in the Leased Property and a limited partnership with Credit Suisse
First Boston as its general partner, provided, however, that CSL may merge,
consolidate or combine with an Affiliate or, as a result of a reorganization,
transfer substantially all of its assets or partnership interests to an
Affiliate if the surviving entity has a comparable net worth to Credit Suisse
First Boston or if Credit Suisse First Boston guarantees such entity's general
obligations except as provided for and subject in all cases to the limitations
on liability set forth at Section 13.13 hereof, and (ii) shall not engage in any
other business substantially different from (A) the business as conducted on the
Document Closing Date (including engaging in the business of leasing personal
and real property as lessor, or acting as agent, broker or advisor in leasing
such property and
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making, acquiring or servicing loans or other investments or extensions of
credit in connection therewith or incidental thereto) or (B) the business as
otherwise permitted in Lessor's certificate of limited partnership or other
organizational documents as in effect on the Document Closing Date.
SECTION 10.3. Lessor Transfers.
(a) Lessor shall not assign, convey or otherwise
transfer all or any portion of its right, title or interest in, to or under the
Leased Property (except pursuant to Article VI of the Lease) or any of the
Operative Documents without the prior written consent of Required Lenders, which
consent may not be unreasonably withheld, except that without the prior written
consent of Required Lenders, Lessor may assign (reserving all rights of Lessor
to indemnification relating to the period prior to such transfer) all (but not
less than all) of its right, title and interest in, to and under the Leased
Property and the Operative Documents to an entity (i) that has a net worth of at
least $150,000,000, (ii) that has Credit Suisse First Boston as its general
partner, or (iii) the obligations of which under the Operative Documents are
guaranteed by Credit Suisse First Boston pursuant to a guaranty reasonably
acceptable in form and substance to Lessee. Any such transfer pursuant to this
Section 10.3 (x) shall be at Lessor's sole cost and expense, (y) shall not
require other changes to the Operative Documents which would alter the
obligations of Lessee under any of the Operative Documents and (z) so long as no
Lease Event of Default shall be continuing, shall be further conditioned upon
Lessor's receipt of Lessee's prior written consent, which consent shall not be
unreasonably withheld. So long as no Lease Event of Default shall be continuing,
Lessor shall provide at least five (5) Business Days' prior written notice of
any such transfer to Lessee.
(b) Upon the occurrence and continuance of a Loan Event
of Default specified in clause (b), (c), (d) or (e) of Section 6.1 of the Loan
Agreement, Agent may (at the direction of the Required Lenders) direct Lessor to
transfer, and Lessor shall promptly transfer, to a Eurodollar Lender or another
entity (provided that in the case of a transfer to another entity each of the
conditions set forth in Section 10.3(a) shall have been satisfied, except that
the notice required by the last sentence of Section 10.3(a) may be given by
Agent to Lessee) (the "Replacement Lessor") that is willing to accept the same,
all of Lessor's right, title, interest, duties and obligations in respect of the
Leased Property, the Investment, the Lease and the other Operative Documents
(without recourse to Lessor and reserving all rights of Lessor to
indemnification relating to the period prior to such transfer) for an amount
payable to Lessor in immediately available funds that is equal to the
outstanding Investment, accrued and unpaid Yield thereon plus all other amounts
then owing to Lessor under the Operative Documents and
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the assumption by such Replacement Lessor of the duties and obligations of
Lessor under the Operative Documents; provided that such Replacement Lessor
assumes the duties and obligations of Lessor under the Operative Documents. As a
condition precedent to the effectiveness of such transfer, Lessor shall have
obtained, at its expense, all necessary approvals from Governmental Authorities
and other Persons for such transfers and shall have effected, at its expense,
all recordings and filings necessary to perfect such transfers. All reasonable
and documented expenses of Agent or Lessee incurred in connection with such
transfer shall be reimbursed by Lessor promptly.
SECTION 10.4. Restrictions on and Effect of Transfer. No Lender
shall assign, convey or otherwise transfer all or any portion of its right,
title or interest in, to or under any Note or any of the other Operative
Documents without the prior written consent of each of Agent (who may condition
its approval upon the satisfaction of any of the conditions of subsections (a)
through (g) below) Lessor, CP Lender and Lessee, except that without the prior
written consent of Agent or Lessee (w) any bank or similar financial or
commercial lending institution may pledge its interest in the ordinary course of
its business (including to any Federal Reserve Bank), provided that no transfer
upon a foreclosure pursuant to such a pledge may occur unless the other
provisions of this Section 10.4 are complied with, (x) any Lender may transfer
all or any portion of its interest to a member of its Consolidated Group upon
compliance with subsections (a), (b) and (g) below, (y) any Lender may transfer
all or any portion of its interest to any other existing Participant upon
compliance with subsections (a), (b), (c), (f) and (g) below, and (z) any Lender
may transfer any or all of such right, title and interest upon compliance with
subsections (a) through (g) below; and provided, further, that the restrictions
set forth in this Section 10.4 shall not apply to a participation, with respect
to which Section 10.5 shall apply:
(a) Required Notice and Effective Date. Any Lender
desiring to effect a transfer of its interest shall give written
notice of each such proposed transfer to Lessee, Agent and each
other Participant at least ten (10) days prior to such proposed
transfer, setting forth the name of such proposed transferee, the
percentage or interest to be retained by such Lender, if any, and
the date on which such transfer is proposed to become effective. All
reasonable out-of-pocket costs incurred by Agent and Lessee in
connection with any such disposition by a Lender under this Section
10.4 shall be borne by such Lender. In the event of a transfer under
this Section 10.4, any expenses incurred by the transferee in
connection with its review of the Operative Documents and its
investigation of the transactions contemplated thereby shall be
borne by such
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transferee or the relevant Lender, as they may determine, but shall
not be considered costs and expenses which Lessee is obligated to
pay or reimburse under Section 11.1 or as Supplemental Rent.
(b) Ratable Transfer; Assumption of Obligations. Each
such transfer shall be to a transferee (or to one or more
transferees in the same Consolidated Group) of a ratable and
constant percentage of such Lender's interests (i) in all its Notes
and (ii) its rights and obligations under the Capital Asset Purchase
Agreement in accordance with Section 7 thereof. Any transferee
pursuant to this Section 10.4 shall have executed and delivered to
Agent a letter in substantially the form of the letter attached
hereto as Exhibit Z, and thereupon the obligations of the
transferring Lender under the Operative Documents shall be
proportionately released and reduced to the extent of such transfer.
Upon any such transfer as above provided, the transferee shall be
deemed to be bound by all obligations (whether or not yet accrued)
under, and to have become a party to, all Operative Documents to
which its transferor was a party, shall be deemed the pertinent
"Lender" for all purposes of the Operative Documents and shall be
deemed to have made that portion of the payments pursuant to this
Participation Agreement previously made or deemed to have been made
by the transferor represented by the interest being conveyed; and
each reference herein and in the other Operative Documents to the
pertinent "Lender" shall thereafter be deemed a reference to the
transferee, to the extent of such transfer, for all purposes. Upon
any such transfer, Agent shall deliver to Lessee amended Schedules I
and II to this Participation Agreement, revised to reflect the
relevant information for such new Lender and the Commitment of such
new Lender (and the revised Commitment of the transferor Lender if
it shall not have transferred its entire interest).
(c) Employee Benefit Plans. No Lender may make any such
assignment, conveyance or transfer to or in connection with any
arrangement or understanding in any way involving any employee
benefit plan (or its related trust), as defined in Section 3(3) of
ERISA, or with the assets of any such plan (or its related trust),
as defined in Section 4975(e)(1) of the Code (other than a
governmental plan, as defined in Section 3(32) of ERISA), with
respect to which Lessee or such Lender or any of their Affiliates is
a party in interest within the meaning of ERISA or a "disqualified
person" within the meaning of the Code.
(d) Financial Condition of Transferee. No transfer by a
Lender shall be effective against the other parties to
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this Participation Agreement unless the transferee (i) (x) has a
credit rating of either BBB- by S&P or Baa3 by Moody's (or such
transferee's Affiliate has such rating) and (y) is (A) a bank or
other financial institution with a combined capital, surplus and
undivided profits of at least $75,000,000, or (B) any subsidiary of
such a bank, financial institution or corporation, provided that
such bank, financial institution or corporation furnishes a guaranty
with respect to the transferee's obligations as a Lender, or (C) any
other entity, provided the transferee's obligations as a Lender are
guaranteed by the transferor Lender, the form of which guaranty
shall be approved by Agent and, provided no Lease Event of Default
has occurred and is continuing, by Lessee, which approval shall not
be unreasonably withheld or (ii) is otherwise approved by Lessee,
such approval not to be unreasonably withheld.
(e) Amounts. Any transfer of Notes shall be in a
principal amount which is equal to or greater than $5,000,000;
provided that the foregoing limitation shall not apply to a Lender's
transfer of the entire principal amount of such Lender's Notes.
(f) Effect. From and after any transfer of its Notes
(other than a pledge) the transferring Lender shall be released, to
the extent assumed by the transferee, from its liability and
obligations hereunder and under the other Operative Documents to
which such transferor is a party in respect of obligations to be
performed on or after the date of such transfer. Upon any transfer
by a Lender as above provided, any such transferee shall be deemed a
"Lender" for all purposes of such documents and each reference
herein to a Lender shall thereafter be deemed a reference to such
transferee for all purposes, except as the context may otherwise
require. Notwithstanding any transfer as provided in this Section
10.4, the transferor shall be entitled to all benefits accrued and
all rights vested prior to such transfer, including, without
limitation, rights to indemnification under this Participation
Agreement or any other Operative Document.
(g) Transfer Fee. In connection with any transfer by a
Lender pursuant to this Section 10.4, such Lender shall pay a fee of
$3,500 to Agent on or prior to the date of such transfer.
SECTION 10.5. Covenants and Agreements of Lenders.
(a) Participations. Notwithstanding anything in Section
10.4 to the contrary, each Lender covenants and agrees that it will not grant
participations in its Notes to any Person
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(a "Transferee") unless such Person (i) is a bank or other financial institution
and (ii) represents and warrants, in writing, to such Lender for the benefit of
the Lenders, Lessor and Lessee that no part of the funds used by it to acquire
an interest in the Notes constitutes assets of any Plan or its related trust.
Any such Person shall require any transferee of its interest in the Notes to
make the representations and warranties set forth in the preceding sentence, in
writing, to such Person for its benefit and the benefit of the Participants and
Lessee. In the event of any such sale by a Lender of a participating interest to
a Transferee, such Lender's obligations under this Participation Agreement and
under the other Operative Documents shall remain unchanged, such Lender shall
remain solely responsible for the performance thereof, such Lender shall remain
the holder of its Note for all purposes under this Participation Agreement and
under the other Operative Documents, and Lessor, Agent and, except as set forth
in Section 10.4(b), Lessee shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this
Participation Agreement and under the other Operative Documents. Any such
participation shall be in a ratable and constant percentage of all of such
Participant's Notes.
(b) Transferee Indemnities. Each Transferee shall be
entitled to the benefits of Article VII with respect to its Notes or
participation in the Loans outstanding from time to time; provided, that no
Transferee shall be entitled to receive any greater amount pursuant to such
Article than the transferor Lender would have been entitled to receive in
respect of the amount of the Notes or participation transferred by such
transferor Lender to such Transferee had no such transfer or participation
occurred.
(c) Purchase Events Under the Capital Asset Purchase
Agreement. Each Eurodollar Lender agrees that it will not make the notification
described in clause (v), (vi) or (vii) of the definition of "Purchase Event" set
forth in the Capital Asset Purchase Agreement unless it has first pursued the
related indemnities from Lessee in accordance with Sections 11.4 and 11.5 and
such indemnities are not being or, in such Eurodollar Lender's reasonable
determination, will not be paid by Lessee.
(d) Amendments of the Capital Asset Purchase Agreement.
As between the Lenders and Lessee, each Lender hereby agrees that, so long as
the Lease is in effect and no Lease Event of Default shall have occurred and be
continuing, such Lender shall not consent to or permit any amendment to the
terms and provisions of the Capital Asset Purchase Agreement that would have a
material adverse effect on Lessee or impose additional fees and costs on a party
that would be indemnifiable or
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reimbursed by Lessee, without the prior written consent of Lessee.
SECTION 10.6. Future Lenders. Each Lender, by its acceptance of its
Note or Notes, shall be deemed to be bound by and, upon compliance with the
requirements of Section 10.4, will be entitled to all of the benefits of the
provisions of this Agreement.
SECTION 10.7. Agent under Participation Agreement and Mortgages. For
purposes of this Agreement and the Mortgages, the parties hereto agree that
Agent shall be the agent of Lessor and the Lenders, with Agent's duties and
obligations hereunder and thereunder being subject to the limitations, and Agent
being entitled to the rights set forth in Article 12 hereof.
ARTICLE 11.
INDEMNIFICATION
SECTION 11.1. General Indemnification. Lessee agrees, whether or not
any of the transactions contemplated hereby shall be consummated, to assume
liability for, and to indemnify, protect, defend, save and keep harmless each
Indemnitee from and against any and all Claims that may be imposed on, incurred
by or asserted against such Indemnitee (whether because of action or omission by
such Indemnitee or otherwise), whether or not such Indemnitee shall also be
indemnified as to any such Claim by any other Person and whether or not such
Claim arises or accrues prior to any Advance Date or after the Lease Expiration
Date, in any way relating to or arising out of (a) any of the Operative
Documents or any of the transactions contemplated thereby or any investigation,
litigation or proceeding in connection therewith, and any amendment,
modification or waiver in respect thereof; or (b) the Leased Property or any
part thereof or interest therein; or (c) the acquisition, mortgaging, design,
construction, preparation, installation, inspection, delivery, nondelivery,
acceptance, rejection, purchase, ownership, possession, rental, lease, sublease,
repossession, maintenance, repair, alteration, modification, addition or
substitution, storage, transfer or title, redelivery, use, financing,
refinancing, operation, condition, sale (including, without limitation, any sale
pursuant to Articles XVI, XVII or XXII of the Lease), return or other
disposition of all or any part of any interest in the Leased Property or the
imposition of any Lien (or incurring of any liability to refund or pay over any
amount as a result of any Lien) thereon, including, without limitation: (i)
Claims or penalties arising from any violation of Applicable Laws and
Regulations (including in tort (strict liability or otherwise)), (ii) latent or
other defects, whether or not discoverable,
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(iii) any Claim of BNP or in respect of any agreement with BNP to purchase the
Existing Sites, including any Claim relating to a breach of any such agreement,
and (iv) any Claim for patent, trademark or copyright infringement; (d) the
offer, issuance, sale or delivery of the Notes or Investment; (e) the breach by
Lessee of any representation or warranty made by it or deemed made by it in any
Operative Document; (f) the transactions contemplated hereby or by any other
Operative Document, in respect of the application of Parts 4 and 5 of Subtitle B
of Title I of ERISA and any prohibited transaction described in Section 4975(c)
of the Code or (g) any other agreement entered into or assumed by Lessee in
connection with the Leased Property (including, in each case, matters based on
or arising from the negligence of any Indemnitee, except any indemnification of
Agent for its own negligence in the handling of funds as specifically excluded
below); provided, however, Lessee shall not be required to indemnify under this
Section 11.1 for (1) as to an Indemnitee, any Claim to the extent resulting from
the willful misconduct or gross negligence of such Indemnitee (it being
understood that no Indemnitee shall be deemed to be negligent, grossly negligent
or to have acted wilfully and the parties acknowledge that this indemnity shall
fully apply in connection with any Claim of BNP if Lessor fails to purchase the
Sites upon the failure of any condition thereto set forth in Article 6 of this
Participation Agreement), (2) any Claims in respect of Taxes (such Claims to be
subject to Section 11.2), other than a payment necessary to make payments under
this Section 11.1 on an after-tax basis; provided that the exclusion provided in
this clause (2) does not apply to any taxes or penalties included in Claims
against which the Indemnitee is provided an indemnification under clause (f) of
this Section 11.1, (3) as to an Indemnitee, any Claim resulting from Lessor
Liens which such Indemnitee is responsible for discharging under the Operative
Documents (4) as to an Indemnitee, any Claim to the extent resulting from any
transfer by such Indemnitee in violation of this Agreement or the Operative
Documents (provided, however, that this clause (4) shall not affect the
indemnification rights under this Section 11.1 of any Participant which becomes
a Participant pursuant to a transfer under Section 10.3 or 10.4), (5) as to an
Indemnitee, any Claim against such Indemnitee by another Indemnitee if such
Claim is not related or connected in any way with any action or inaction of
Lessee or any Claim by or against Lessee or for which Lessee is otherwise liable
under the Operative Documents, (6) as to Lessor, any Claim against Lessor to the
extent arising from any breach of a representation or warranty by Lessor set
forth in Section 8.2 of this Agreement or in any other Operative Document or the
Private Placement Letter or from the failure of Lessor to comply in all material
respects with the terms of this Agreement or the other Operative Documents, (7)
as to an Indemnitee, any Claim against such Indemnitee to the extent arising
from a breach of a representation or warranty by such Indemnitee under this
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Agreement or the other Operative Documents or from the failure of such
Indemnitee to comply in all material respects with the material covenants in
this Agreement and the other Operative Documents applicable to such Indemnitee,
(8) as to Lessor, any Claim to the extent resulting from Lessor Liens, (9) as to
an Indemnitee who purchases a Leased Property pursuant to Sections 22.1 or 22.2
of the Lease, any Claim to the extent attributable to acts or events occurring
after the expiration of the Term or the return or remarketing of such Leased
Property so long as Lessor, Agent and Participants are not exercising remedies
against Lessee in respect of the Operative Documents and no Lease Default or
Lease Event of Default has occurred and is continuing, (10) as to Agent, any
Claim against Agent to the extent resulting from its own negligence in handling
of funds, (11) as to any Indemnitee, any Claim against such Indemnitee to the
extent resulting from the wrongful failure of such Indemnitee to distribute to
any other party to this Agreement, as required by the Operative Documents, any
funds received by such Indemnitee or (12) without limiting any provisions of the
Operative Documents requiring Lessee to reimburse or pay the costs of an
Indemnitee, any out-of-pocket or internal costs or expenses of any Indemnitee in
connection with the day-to-day administration of the transactions under the
Operative Documents and which are not included in the definitions of
"Transaction Expenses" or "Supplemental Rent."
SECTION 11.2. General Tax Indemnity.
(a) Tax Indemnity. Lessee shall pay on an after-tax
basis, and on written demand shall indemnify and hold each Indemnitee harmless
from and against, any and all Taxes, howsoever imposed, on or with respect to
any Indemnitee, the Leased Property or any portion thereof, any Operative
Document or Lessee or any sublessee or user of the Leased Property, by the
United States or by any state or local government or other taxing authority in
the United States, or by any taxing authority outside the United States, in
connection with or in any way relating to (i) the acquisition, mortgaging,
design, construction, preparation, installation, inspection, delivery,
nondelivery, acceptance, rejection, purchase, ownership, possession, rental,
lease, sublease, repossession, maintenance, repair, alteration, modification,
addition or substitution, storage, transfer of title, redelivery, use,
financing, refinancing, operation, condition, purchase, repurchase, sale, return
or other application or disposition of all or any part of the Leased Property or
the imposition of any Lien (or incurrence of any liability to refund or pay over
any amount as a result of any Lien) thereon, (ii) Basic Rent or Supplemental
Rent or the receipts or earnings arising from or received with respect to the
Leased Property or any part thereof, or any interest therein or any applications
or dispositions thereof, (iii) any other amount
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paid or payable pursuant to the Notes, Investment or any other Operative
Documents, (iv) the Leased Property or any part thereof or any interest therein,
(v) all or any of the Operative Documents, any other documents contemplated
thereby and any amendments and supplements thereto, and (vi) otherwise with
respect to or in connection with the transactions contemplated by the Operative
Documents or the enforcement thereof; provided, however, that the
indemnification obligation of this Section 11.2 shall not apply to (i) Taxes
which are based upon or measured by the Indemnitee's net income, or which are
expressly in substitution for, or relieve Indemnitee from, any actual Tax based
upon or measured by Indemnitee's net income (except that Lessee shall pay or
reimburse, and indemnify and hold harmless, any Indemnitee which is not
incorporated under the laws of the United States, or a state thereof, and which
has complied with Section 11.3, from any deduction or withholding of any United
States Federal income tax); (ii) Taxes characterized under local law as
franchise, net worth, or shareholder's capital (excluding, however, any
value-added, sales, use, rental license, property or similar Taxes); (iii) Taxes
based upon (A) the voluntary transfer, assignment or disposition by Agent,
Lessor or any Participant of any interest in the Leased Property (other than a
transfer pursuant to the exercise of remedies under the Operative Documents,
transfers pursuant to the exercise of any Remarketing Option or Purchase Option,
a transfer to Lessee or its designee or otherwise pursuant to the Lease), (B)
any involuntary transfer or other disposition in connection with a bankruptcy or
other proceeding for the relief of creditors in which such Indemnitee is the
debtor or (C) any foreclosure sale of an asset of such Indemnitee; (iv) any
Taxes which constitute withholding taxes to the extent imposed with respect to
payments to an Indemnitee that is a transferee to the extent of the excess of
such Taxes over the amount of such Taxes which would have been imposed had there
not been a sale, assignment, transfer or other disposition (whether voluntary or
involuntary) to such transferee; (v) Taxes imposed in respect of any period
after the expiration or earlier termination of the Lease and the payment by
Lessee of all amounts due under the Operative Documents or, if later during the
exercise of remedies while Lease Event of Default is continuing; provided that
the exceptions set forth in this clause (v) shall not apply to Taxes to the
extent such Taxes relate to events or matters arising prior to or simultaneously
with the time of the earliest occurrence of the events covered in this clause
(v), and until Lessee has satisfied and fulfilled its obligations under the
Lease; (vi) Taxes to the extent that such Taxes would not have been imposed on
or with respect to an Indemnitee but for the willful misconduct, gross
negligence or breach of any representation, warranty or covenant of such
Indemnitee or Affiliate thereof; and (vii) any California taxes withheld
pursuant to Section 26131-3 of Title 18 of the California Code of Regulations
(the "California Regulations") as a result of such
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Indemnitee's failing to qualify for any applicable exemption from the
withholding required by Section 11.3 (for this purpose the term "exemption"
shall include, without limitation, (A) having a "permanent place of business" in
California within the meaning of such section; (B) qualifying as a "bank" or
"banking association" within the meaning of such section; and (C) the character
of such payment failing to constitute income from sources within the State of
California within the meaning of Sections 23040 and 26131-1 of the California
Regulations (it being understood, however, that until such time as it receives
an opinion of independent counsel selected by Lessee and reasonably acceptable
to Lessor to the effect that it is required to do so, Lessee will not withhold
any amounts for payment to the California Franchise Tax Board with respect to
Rent payable pursuant to the Operative Documents)).
(b) Contests. Lessee shall pay on or before the time or
times prescribed by law any Taxes (except any Taxes excluded by the proviso to
Section 11.2(a)); provided, however, that Lessee shall be under no obligation to
pay any such Tax so long as the payment of such Tax is not delinquent or is
being contested by a Permitted Contest. If any claim or claims is or are made
against any Indemnitee solely for any Tax which is subject to indemnification as
provided in Section 11.2(a), Indemnitee shall as soon as practicable, but in no
event more than twenty (20) days after receipt of formal written notice of the
Tax or proposed Tax, notify Lessee and if, in the reasonable opinion of Lessee
and (in the case of any Tax which may reasonably be expected to exceed $250,000
in the aggregate) tax counsel acceptable to the Indemnitee, there exists a
reasonable basis to contest such Tax which satisfies the requirements of ABA
Formal Opinion 85-352 (and if the provisos of the definition of "Permitted
Contest" continue to be satisfied and so long as no Lease Event of Default
exists), Lessee at its expense may, to the extent permitted by Applicable Laws
and Regulations, contest such Tax, and subsequently may appeal any adverse
determination, in the appropriate administrative and legal forums; provided,
that in all other circumstances, upon notice from Lessee to such Indemnitee that
there exists a reasonable basis to contest any such Tax which satisfies the
requirements of ABA Formal Opinion 85-352 (as supported by an opinion of tax
counsel to Lessee reasonably acceptable to the Indemnitee), the Indemnitee, at
Lessee's expense, shall contest any such Tax (so long as the provisos of the
definition of "Permitted Contest" continue to be satisfied and so long as no
Lease Event of Default exists). Lessee shall pay all expenses incurred by the
Indemnitee in contesting any such Tax (including, without limitation, all
reasonable attorneys' and accountants' fees, including the allocated costs of
internal counsel), upon demand by the Indemnitee. Lessee shall have the right to
participate in the conduct of any proceedings controlled by the Indemnitee to
the
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extent that such participation by such Person does not interfere with the
Indemnitee's control of such contest and Lessee shall in all events be kept
informed, to the extent practicable, of material developments relative to such
proceedings. The Indemnitee shall have the right to participate in the conduct
of any proceedings controlled by Lessee and the Indemnitee shall in all events
be kept informed, to the extent practicable, of material developments relative
to such proceedings. The Indemnitees agree that a contested claim for which
Lessee would be required to make a reimbursement payment hereunder will not be
settled or compromised without Lessee's prior written consent (which consent
shall neither be unreasonably delayed nor withheld), unless the provisos of the
definition of "Permitted Contest" would not continue to be satisfied. Indemnitee
shall endeavor to settle or compromise any such contested claim in accordance
with written instructions received from Lessees; provided, that (x) Lessee on or
before the date the Indemnitee executes a settlement or compromise pays the
contested Tax to the extent agreed upon or makes an indemnification payment to
the Indemnitee in an amount reasonably acceptable to the Indemnitee; and (y) the
settlement or compromise does not, in the reasonable opinion of the Indemnitee
materially adversely affect the right of such Lessor to receive Rent or the
Lease Balance or any other payment pursuant to the Operative Documents, or
involve a material risk of sale, forfeiture or loss of the Sites or any interest
therein or any matter described in the provisos to the definition of "Permitted
Contest". The failure of an Indemnitee to timely contest a claim against it for
any Tax which is subject to indemnification under Section 11.2(a) and for which
it has an obligation to Lessee to contest under this Section 11.2(b) in the
manner required by Applicable Laws and Regulations or Regulations where Lessee
has timely requested that such Indemnitee contest such claim shall relieve
Lessee of its obligations to such Indemnitee under Section 11.2(a) with respect
to such claim to the extent such failure results in the loss of an effective
contest. If Applicable Laws and Regulations require the payment of a contested
Tax as a condition to, or regardless of, its being contested, and Lessee chooses
to contest such Tax or to direct the Indemnitee to contest such Tax in
accordance with this Section 11.2(b), then Lessee shall provide the Indemnitee
with the funds to pay such Tax, such provision of funds to be deemed a
non-interest bearing loan by Lessee to the Indemnitee to be repaid by any
recovery of such Tax from such contest and any remaining unpaid amount not
recovered to offset Lessee's obligation to indemnify the Indemnitee for such
Tax. Lessee shall indemnify the Indemnitee on a grossed-up basis in accordance
with Section 11.8 for and against any adverse consequences of any such
interest-free loan. In the event that the Indemnitee receives a refund (or like
adjustment) in respect of any Tax for which the Indemnitee has been reimbursed
by Lessee, the Indemnitee shall within ten (10) days remit the
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amount of such refund (or like adjustment) to Lessee, net of all costs and
expenses incurred by such Indemnitee; provided, however, that the Indemnitee
shall not be required to remit any amount pursuant to this sentence in excess of
the amounts previously paid by Lessee to, or on behalf of, such Indemnitee with
respect to such Tax pursuant to this Article 11.
(c) Payments. Any Tax indemnifiable under Section
11.2(a) shall be paid by Lessee directly when due to the applicable taxing
authority if direct payment is practicable and permitted. If direct payment to
the applicable taxing authority is not permitted or is otherwise not made, any
amount payable to an Indemnitee pursuant to Section 11.2(a) shall be paid within
thirty days after receipt of a written demand therefor from such Indemnitee
accompanied by a written statement describing in reasonable detail the amount so
payable, but not before the date that the relevant Taxes are due. Any payments
made pursuant to Section 11.2(a) directly to the Indemnitee entitled thereto or
Lessee, as the case may be, shall be made in immediately available funds at such
bank or to such account as specified by the payee in written directions to the
payor, or, if no such direction shall have been given, by check of the payor
payable to the order of the payee by certified mail, postage prepaid at its
address as set forth in this Participation Agreement. Upon the request of any
Indemnitee with respect to a Tax that Lessee is required to pay, Lessee shall
furnish to such Indemnitee the original or a certified copy of a receipt for
Lessee's payment of such Tax or such other evidence of payment as is reasonably
acceptable to such Indemnitee.
(d) Reports. If any report, return or statement is
required to be filed with respect to any Taxes that are subject to
indemnification under Section 11.2(a), Lessee shall, if Lessee is permitted by
Applicable Laws and Regulations, timely prepare and file such report, return or
statement; provided, however, that if Lessee is not permitted by Applicable Laws
and Regulations to file any such report, return or statement, Lessee will
promptly so notify the appropriate Indemnitee, in which case the Indemnitee, at
Lessee's expense, will file any such report after preparation thereof by Lessee.
(e) Tax Benefit. If, as a result any Taxes
paid or indemnified against by Lessee under this Section 11.2, the aggregate
Taxes paid by Indemnitee for any taxable year and not subject to indemnification
pursuant to this Section 11.2 are less (whether by reason of a deduction,
credit, allocation or apportionment of income or otherwise) than the amount of
such Taxes that otherwise would have been payable by such Indemnitee (a "Tax
Benefit"), then to the extent such Tax Benefit was not taken into account in
determining the amount of indemnification payable by Lessee under Section
11.2(a) hereof and provided no
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Event of Default shall be continuing, such Indemnitee shall pay to Lessee the
lesser of (A)(x) the amount of such Tax Benefit, plus (y) an amount equal to any
Tax Benefit resulting from the payment under clause (x) above and (B) the amount
of the indemnity paid pursuant to this Section 11.2 giving rise to such Tax
Benefit. If it is subsequently determined that the Indemnitee was not entitled
to such Tax Benefit, the portion of such Tax Benefit that is repaid or
recaptured will be treated as Taxes for which the Lessee must indemnify
Indemnitee pursuant to this Section 11.2 without regard to the exclusions other
than the exclusion in clause (vi) of Section 11.2(a).
(f) Independent Examination. Within 15 days after Lessee
receives any computation from Indemnitee, Lessee may request in writing an
independent public accounting firm selected by Indemnitee and reasonably
acceptable to Lessee review and determine on a confidential basis the amount of
any indemnity payment by Lessee to Indemnitee pursuant to this Section 11.2 or
any payment by Indemnitee to Lessee pursuant to Section 11.2(b) or (e) hereof.
Indemnitee shall cooperate with such accounting firm and supply it with all
documentation and records necessary for the accounting firm to conduct such
review and determination (including relevant data from Indemnitee's income tax
returns but not such returns themselves); provided, that such accounting firm
shall agree in writing in a manner satisfactory to Indemnitee to maintain the
confidentiality of such information. The fees and disbursements of such
accounting firm will be paid by Lessee, provided, that such fees and
disbursements shall be paid by Indemnitee if the verification results in an
adjustment in Lessee's favor of five percent (5%) or more of the indemnity
payment or payments computed by Indemnitee.
SECTION 11.3. Withholding Tax Exemption. (a) At least five (5)
Business Days prior to the first date on which any payment is due under any Note
or Investment Amount for the account of any Participant not incorporated under
the laws of the United States or a state thereof, such Participant agrees that
it will have delivered to each of Lessee, Lessor and Agent two duly completed
copies of United States Internal Revenue Service Forms 1001 or 4224, certifying
in either case that such Participant is entitled to receive payments of interest
and/or yield and a return of the principal amount of the Loans and/or Investment
Amount, including Capitalized Interest and Capitalized Yield, as applicable,
under the Operative Documents without deduction or withholding of any United
States Federal income taxes. Each Participant which so delivers a Form 1001 or
4224 further undertakes to deliver to each of Lessee, Lessor and Agent two
additional copies of such form (or a successor form) on or before the date that
such form expires (currently, three successive calendar years for Form 1001 and
one calendar year for Form 4224) or becomes obsolete or after the occurrence of
any event requiring a change in the most recent
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forms so delivered by it, and such amendments thereto or extensions or renewals
thereof as may be reasonably requested by Lessee, Lessor or Agent, in each case
certifying that such Participant is entitled to receive payments under the
Operative Documents without deduction or withholding of any United States
Federal income taxes, unless an event (including 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 such Participant from duly completing and delivering any such form with
respect to it and such Participant advises Lessee, Lessor and Agent that it is
not capable of receiving payments without any withholding of United States
Federal income tax.
(b) For any period with respect to which a Participant has failed to
provide Lessee with the appropriate form described in Section 11.3(a) (other
than if such failure is due to a change in law subsequent to the date such form
originally was required to be provided or if such form otherwise is not required
under the first sentence of Section 11.3(a), such Participant shall not be
entitled to indemnification under Section 11.2 with respect to Taxes imposed by
the United States because of such failure; provided, however, that should a
Participant become subject to Taxes because of such failure, Lessee shall take
such steps as such Participant shall reasonably request to assist such
Participant to recover such Taxes.
SECTION 11.4. Increased Costs and Reduced Return. (a) If the
adoption of any Applicable Laws and Regulations, or any change in any Applicable
Laws and Regulations, or any change in the interpretation or administration
thereof by any Governmental Authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by any
Participant with any request or directive (whether or not having the force or
law) of any such authority, central bank regulator or other Governmental
Authority or comparable agency shall impose, modify, apply or deem applicable
any reserve (including, without limitation, any such requirement imposed by the
Board of Governors of the Federal Reserve System, special deposit, insurance
assessment or similar requirement against assets of, deposits with or for the
account of, or credit extended by, any Participant or shall impose on any
Participant (or its Eurodollar Office) or on the London interbank market any
other condition affecting its Loans or Investment Amounts, its Notes or its
obligation to make Loans or Investment Amounts and the result of any of the
foregoing is to increase the cost to such Participant making or maintaining any
Loan or Investment Amounts, or to reduce the amount of any sum received or
receivable by such Participant under the Operative Documents or under its Notes
with respect thereto, by any amount deemed by such Participant to be material,
then, within sixty (60) days after demand by such
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Participant (with a copy to Agent), Lessee shall pay, subject to Section 11.7,
to such Participant such additional amount or amounts (with interest or Yield on
such Loans, Investment Amounts and additional amounts) as will compensate such
Participant for such increased cost or reduction.
(b) If any Participant shall have determined that, after the date
hereof, the adoption of any applicable law, rule or regulation regarding capital
adequacy, or any change in any such law, rule or regulation, or any change in
the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on capital of such Participant or its parent could have achieved but for such
adoption, change, request or directive (taking into consideration its policies
with respect to capital adequacy) by an amount deemed by such Participant to be
material, then from time to time, within sixty (60) days after demand by such
Participant (with a copy to Agent), Lessee shall pay, subject to Section 11.7,
to such Participant such additional amount or amounts (with interest or Yield on
such Loans, Investment Amounts and additional amounts) as will compensate such
Participant for such reduction.
(c) Each Participant will promptly notify the Lessee and Agent of
any event of which it has knowledge, occurring after the date hereof, which will
entitle such Participant to compensation pursuant to this Section 11.4 and will
designate a different applicable lending office if such designation will avoid
the need for, or reduce the amount of, such compensation and will not, in the
sole judgment of such Participant, be otherwise disadvantageous to such
Participant. A certificate of any Participant claiming compensation under this
Section 11.4 and setting forth the additional amount or amounts to be paid to it
hereunder shall show in reasonable detail the basis for calculating such amount
or amounts and shall be conclusive in the absence of manifest error. In
determining such amount, such Participant may use any reasonable averaging and
attribution methods.
SECTION 11.5. Eurodollar Rate Illegal, Unavailable or Impracticable.
If, on or after the Document Closing Date, the adoption of any Applicable Laws
and Regulations, or any change in any Applicable Laws and Regulations, or any
change in the interpretation or administration thereof by any Governmental
Authority, central bank or comparable agency charted with the interpretation or
administration thereof, or compliance by any Participant (or its Eurodollar
Lending Office) with any request
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or directive (whether or not having the force of law) of any such authority,
central bank or comparable agency shall make it unlawful or impossible for any
Participant (or its Eurodollar lending office) to make, maintain or fund its
Eurodollar Loans or Investment Amounts and such Participant shall so notify
Agent, Agent shall forthwith give notice thereof to the other Participants and
Lessee, whereupon until such Participant notifies Lessee and Agent that the
circumstances giving rise to such suspension no longer exist, the obligation of
such Participant to make Eurodollar Loans and to Fund Investment Amounts shall
be suspended. Before giving any notice to Agent pursuant to this Section 11.5,
such Participant shall designate a different Eurodollar Lending Office if such
designation will avoid the need for giving such notice and will not, in the sole
judgment of such Participant, be otherwise disadvantageous to such Participant.
If such Participant shall determine that it may not lawfully continue to
maintain and fund any of its outstanding Eurodollar Loans or Investment Amounts
to maturity and shall so specify in such notice, then the obligations of such
Participant to make, continue or maintain any such investment shall, upon such
determination, forthwith be suspended until such Participant shall notify Lessee
that such circumstances no longer exist, and all Basic Rent (or interest and
Yield) allocable to such Participant shall automatically be determined on a Base
Rate basis beginning on the next immediately succeeding Payment Date with
respect thereto or sooner, if required by such law, assertion or determination.
SECTION 11.6. Funding Losses. (a) Lessee shall pay to Agent, as
additional Rent, such amounts as may be necessary to reimburse any Participant
for any loss or expense (including, without limitation, any administration
costs) incurred (including any loss or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by such
Participant to make, continue or maintain any portion of its investment in any
Note or Investment on a Eurodollar Rate basis) as a result of (i) the failure of
any Advance Date to occur on or before the date specified therefor in the
Advance Request therefor or (ii) any payment of all or any portion of the Lease
Balance for any reason on a date other than a Payment Date, including, without
limitation, by reason of acceleration. Any Participant shall promptly notify
Agent in writing of the amount of any claim under this Section 11.6, the reason
or reasons therefor and the additional amount required fully to compensate such
Participant for such loss or expense. Such written notice (which shall include
calculations in reasonable detail) shall, in the absence of manifest error, be
conclusive and binding on Lessee.
(b) If the Lessee (i) makes a payment of Basic Rent or (ii)
purchases any Site or Unit of Equipment, in either case,
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resulting in the payment of CP Notes on a date other than the date on which
Commercial Paper matures, at a time when the CP Rate is applicable to the
calculation of Basic Rent with respect thereto, the Lessee shall, on written
demand by CP Lender (with a copy of such demand to Agent), pay to Agent for the
account of CP Lender an amount equal to any loss or expense suffered by CP
Lender during the period from the date of receipt of such payment or purchase to
(but excluding) the maturity date of such Commercial Paper, if the rate of
interest obtainable by CP Lender upon the redeployment of an amount of funds
equal to the amount of such payment or purchase is less than the rate of
interest applicable to such Commercial Paper. A certificate as to such matters
submitted by CP Lender to Lessee shall be, absent manifest error, conclusive and
binding.
SECTION 11.7. Limitations on Amounts Due Under Section 11.4. If any
Participant fails to give Lessee any prompt notice required by Section 11.4(c),
Lessee shall not be required to indemnify and compensate such Participant or
Agent under Section 11.4 for any amounts attributable to the event or factual
circumstance required to be disclosed in such notice and arising during or with
respect to any period ending more than ninety (90) days before notice thereof
has been delivered to Lessee; provided that this Section 11.7 shall in no way
limit the right of any Participant or Agent to demand or receive compensation to
the extent that such compensation relates to any law, rule, regulation,
interpretation, administration, request or directive (or any change therein)
which by its terms has retroactive application if such notice is given within
ninety (90) days after the date of enactment or effectiveness of such
retroactive law, rule, regulation, interpretation, administration, request or
directive (or change therein).
SECTION 11.8. Gross-Up. If an Indemnitee shall not be entitled to a
corresponding and equal deduction with respect to any payment or Tax which
Lessee is required to pay or reimburse under any other provision of this Article
11 (each such payment or reimbursement under this Article 11, an "original
payment") and which original payment constitutes income to such Indemnitee, then
Lessee shall pay to such Indemnitee on demand the amount of such original
payment on a gross-up basis such that, after subtracting all Taxes imposed on
such Indemnitee with respect to such original payment by Lessee (including any
Taxes otherwise excluded by Section 11.2(b) and assuming for this purpose that
such Indemnitee was subject to taxation at the highest Federal marginal rates
applicable to widely held corporations for the year in which such income is
taxable and at an assumed state and local income tax rate of 18.58%), such
payments shall be equal to the original payment to be received or paid (net of
any credits, deductions or other tax benefits then actually recognized that
arise from the payment by such
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Indemnitee of any amount, including taxes, for which the payment to be received
is made).
SECTION 11.9. Indemnity for Excessive Use and Sales Below Fair
Market Value. If following the application of any amounts payable under Article
XXII of the Lease with respect to the remarketing of any Site or Equipment Pool,
the Property Balance for such Site or any Equipment Pool shall not have been
reduced to zero, then Lessee shall promptly pay over to Agent on the applicable
Site Expiration Date or the applicable Equipment Pool Expiration Date, as the
case may be, the remaining Property Balance for such Site or such Equipment Pool
unless Lessee delivers a report from an appraiser selected by Agent and approved
by Lessee, which approval shall not be unreasonably withheld, in form and
substance satisfactory to Required Participants and using approved methods
satisfactory to Required Participants which establishes that the decline in
value of such Site or any Unit of Equipment from (x) in the case of such Site,
the aggregate amount anticipated for such date in the Appraisal delivered on the
applicable Site Acquisition Date or (y) in the case of any Unit of Equipment,
the Equipment Purchase Price related thereto, was not due to any of the
following events, circumstances or conditions, whether or not permitted under
the Lease: (i) the excessive use of the Equipment, (ii) failure to maintain such
Site or Unit of Equipment or any portion thereof in accordance with the Lease or
the other Operative Documents, (iii) any Modifications, alterations,
restorations, repairs or replacements which reduced the value of such Site or
Unit of Equipment (including any change to a Facility resulting from
modifications to the Plans and Specifications for a Site provided to the
appraiser who prepared the Appraisal delivered on the applicable Site
Acquisition Date), (iv) any defect or exception to title of such Site or Unit of
Equipment which is not a Permitted Exception or any adverse environmental
conditions on, under or adjacent to such Site, whether or not such condition
relates to or constitutes a Permitted Hazardous Substance, or (v) any other
cause or condition within the power of Lessee to control or affect other than
ordinary wear and tear.
SECTION 11.10. Environmental Indemnity. Without limitation of the
other provisions of this Article 11 or under the Unsecured Environmental
Indemnities, Lessee agrees to indemnify, hold harmless and defend each
Indemnitee from and against any and all Claims (including without limitation
third party claims for personal injury or real or personal property damage),
losses, damages, liabilities, fines, penalties, charges, administrative and
judicial proceedings (including informal proceedings) and orders, judgments,
remedial action, requirements, enforcement actions of any kind, and all
reasonable and documented costs and expenses incurred in connection therewith
(including but not limited to reasonable and documented attorneys' and/or
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paralegals' fees and expenses), including, but not limited to, all costs
incurred in connection with any investigation or monitoring of site conditions
or any cleanup, remedial, removal or restoration work by any federal, state or
local government agency, arising in whole or in part, out of
(a) the presence on, under or around any of the Sites or
any portion thereof of any Hazardous Substances, or any releases or
discharges of any Hazardous Substances on, under, from, onto or
around any such Site or any portion thereof,
(b) any activity, including, without limitation,
construction, carried on or undertaken on or off any Site or any
portion thereof, and whether by either Lessee or any of its
Affiliates or any predecessor in title or any employees, agents,
sublessees, contractors or subcontractors of Lessee or any
predecessor in title, or any other Persons (including such
Indemnitee), in connection with the handling, treatment, removal,
storage, decontamination, cleanup, transport or disposal of any
Hazardous Substances that at any time are located or present on,
under or around or that at any time migrate, flow, percolate,
diffuse or in any way move onto or under the Sites or any portion
thereof,
(c) loss of or damage to any property or the environment
arising from or in any way related to any Site or Lessee (including,
without limitation, cleanup costs, response costs, remediation and
removal costs, cost of corrective action, costs of financial
assurance, fines and penalties and natural resource damages), or
death or injury to any Person, and all expenses associated with the
protection of wildlife, aquatic species, vegetation, flora and
fauna, and any mitigative action required by or under Environmental
Laws, in each case arising from or in any way related to any Site,
Lessee or the Overall Transaction,
(d) any claim concerning lack of compliance with
Environmental Laws, or any act or omission causing an environmental
condition that requires remediation or would allow any Governmental
Authority to record a Lien against any Site or any portion thereof,
or
(e) any residual contamination on or under any of the
Sites, or affecting any natural resources, and any contamination of
any property or natural resources arising in connection with the
generation, use, handling, storage, transport or disposal of any
such Hazardous Substances, in each case arising from or in any way
related to any Site, Lessee or the Overall Transaction, and
irrespective of whether any of such activities were or will be
undertaken in
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accordance with applicable laws, regulations, codes and
ordinances;
provided, however, that Lessee shall not be required to indemnify any Indemnitee
under this Section 11.10 for any Claim to the extent resulting from the willful
misconduct or gross negligence of such Indemnitee.
ARTICLE 12.
AGENT
SECTION 12.1. Appointment of Agent; Powers and Authorization to Take
Certain Actions.
(a) Each Participant irrevocably appoints and authorizes
Credit Suisse First Boston to act as its agent hereunder, with such powers as
are specifically delegated to Agent by the terms hereof, together with such
other powers as are reasonably incidental thereto. Each Participant authorizes
and directs Agent to, and Agent agrees for the benefit of the Participant, that,
on the Document Closing Date and each Advance Date it will accept the documents
described in Article 6 of this Participation Agreement. Agent accepts the agency
hereby created applicable to it and agrees to receive all payments and proceeds
pursuant to the Operative Documents and disburse such payments or proceeds in
accordance with the Operative Documents. Agent shall have no duties or
responsibilities except those expressly set forth in the Loan Agreement and this
Participation Agreement. Agent shall not be responsible to any Participant (or
to any other Person) (i) for any recitals, statements, representations or
warranties of any party contained in the Loan Agreement, this Participation
Agreement, or in any certificate or other document referred to or provided for
in, or received by any of them under, the Operative Documents, other than the
representations and warranties made by Agent in Section 8.3, or (ii) for the
value, validity, effectiveness, genuineness, enforceability or sufficiency of
the Collateral or the title thereto (subject to Agent's obligations under
Section 8.3) or of the Loan Agreement or any other document referred to or
provided for therein or (iii) for any failure by any Lessee, Lessor or any other
third party (other than Agent) to perform any of its obligations under any
Operative Document. Agent may employ agents, trustees or attorneys-in-fact, may
vest any of them with any property, title, right or power deemed necessary for
the purposes of such appointment and shall not be responsible for the negligence
or misconduct of any of them selected by it with reasonable care. Neither Agent
nor any of its directors, officers, employees or agents shall be liable or
responsible for any action taken or omitted to be taken by it or them hereunder,
or in connection
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herewith, except for its or their own gross negligence or willful misconduct or
its failure to handle funds hereunder and under the other Operative Documents
with ordinary care or, if stricter, the same care as Agent uses in handling its
own funds.
(b) Agent shall not have any duty or obligation to
manage, control, use, operate, store, lease, sell, dispose of or otherwise deal
with the Leased Property, any Collateral or the Lease, or to otherwise take or
refrain from taking any action under, or in connection with, this Participation
Agreement or any related document to which Agent is a party, except as expressly
provided by the terms hereof, and no implied duties of any kind shall be read
into any Operative Document against Agent. The permissive right of Agent to take
actions enumerated in this Participation Agreement or any other Operative
Document shall never be construed as a duty, unless Agent is instructed or
directed to exercise, perform or enforce one or more rights by the Required
Participants (provided that Agent has received indemnification reasonably
satisfactory to it). Subject to Section 12.1(c) below, no provision of the
Operative Documents shall require Agent to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its
obligations under the Operative Documents, or in the exercise of any of its
rights or powers thereunder. It is understood and agreed that the duties of
Agent are ministerial in nature.
(c) Except as specifically provided herein, Agent is
acting hereunder solely as agent and, except as specifically provided herein, is
not responsible to any party hereto in its individual capacity, except with
respect to any claim arising from Agent's gross negligence or willful misconduct
or any breach of a representation or covenant made in its individual capacity.
(d) Agent may accept deposits from, lend money to and
otherwise deal with Lessee or any of its Affiliates with the same rights as it
would have if it were not the named Agent hereunder.
SECTION 12.2. Reliance. Agent may rely upon, and shall not be bound
or obligated to make any investigation into the facts or matters stated in, any
certificate, notice or other communication (including any communication by
telephone, telecopy, telex, telegram or cable) reasonably believed by it to be
genuine and correct and to have been made, 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 Agent with due care
(including any expert selected by Agent to aid Agent in any calculations
required in connection with its duties under the Operative Documents). Any
provision of this Agreement that requires the approval of Agent to its
satisfaction or sole discretion or otherwise with respect to any matter shall
not require Agent to take any action with respect to such matter
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without the approval or direction of Participants or Required Participants, as
the case may be.
SECTION 12.3. Action Upon Instructions Generally. Subject to
Sections 12.4 and 12.6, upon written instructions of the Required Participants,
Agent shall, on behalf of the Participants, give such notice or direction,
exercise such right, remedy or power hereunder or in respect of the Leased
Property, and give such consent or enter into such amendment to any document to
which it is a party as Agent as may be specified in such instructions. Agent
shall deliver to each Participant a copy of each notice, report and certificate
received by Agent pursuant to the Operative Documents. Agent shall have no
obligation to investigate or determine whether there has been a Lease Event of
Default or a Lease Default. Agent shall not be deemed to have notice or
knowledge of a Lease Event of Default or Lease Default unless a Responsible
Officer of Agent is notified in writing of such Lease Event of Default or Lease
Default; provided that Agent shall be deemed to have been notified in writing of
any failure of Lessee to pay Rent in the amounts and at the times set forth in
Article III of the Lease. If Agent receives notice of a Lease Event of Default,
Agent shall give prompt notice thereof, at Lessee's expense, to each
Participant. Subject to Sections 12.4, 12.6 and 13.5, Agent shall take action or
refrain from taking action with respect to such Lease Event of Default as
directed by the Required Participants or, in the case of a Payment Default, as
directed by any Participant; provided, however, that Agent shall take action or
refrain from taking action with respect to Section 6.1 of the Pledge Agreement
as directed by the Required Lenders; and provided, further, that, unless and
until Agent receives such directions, Agent may refrain from taking any action,
or may act in its discretion, with respect to such Lease Event of Default or
Payment Default. Notwithstanding the foregoing, in exercising the remedies of
Participants and Agent hereunder and the other Operative Documents upon a Lease
Event of Default, Agent shall proceed against the Securities Collateral
concurrently with remedies being conducted with respect to the other Collateral
to the extent that Agent determines, based on advice of counsel, that such
concurrent action does not adversely affect the Participants' rights with
respect to the other Collateral. Prior to the date the Lease Balance shall have
become due and payable by acceleration pursuant to Section 17.2 of the Lease,
the Required Participants may deliver written instructions to Agent to waive,
and Agent shall waive pursuant thereto, any Lease Event of Default and its
consequences; provided that in the absence of written instructions from all
Participants, Agent shall not waive any (i) Payment Default or (ii) covenant or
provision which, under Section 13.5, cannot be modified or amended without the
consent of all Participants. As to any matters not expressly provided for by
this Participation Agreement, Agent shall in all
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cases be fully protected in acting, or in refraining from acting, hereunder in
accordance with instructions signed by the Required Participants and such
instructions of the Required Participants and any action taken or failure to act
pursuant thereto shall be binding on each Participant.
SECTION 12.4. Indemnification. (a) Each Participant shall reimburse
and hold Agent harmless, ratably in accordance with its Commitment at the time
the indemnification is required to be given, (but only to the extent that any
such indemnified amounts have not in fact been paid to Agent by, or on behalf
of, Lessee in accordance with Section 11.1) from any and all claims, losses,
damages, obligations, penalties, liabilities, demands, suits, judgments, or
causes of action, and all legal proceedings, and any reasonable costs or
expenses in connection therewith, including allocated charges, costs and
expenses of internal counsel of Agent and all other reasonable attorneys' fees
and expenses incurred by Agent, in any way relating to or arising in any manner
out of (i) any Operative Document, the enforcement hereof or thereof or the
consummation of the transactions contemplated thereby, or (ii) instructions from
the Required Participants (including, without limitation, the costs and expenses
that Lessee is obligated to and does not pay hereunder, but excluding normal
administrative costs and expenses incident to the performance by Agent of its
agency duties hereunder other than materially increased administrative costs and
expenses incurred as a result of a Lease Event of Default); provided that no
Participant shall be liable for any of the foregoing to the extent they arise
from (a) the gross negligence or willful misconduct of Agent, (b) the inaccuracy
of any representation or warranty or breach of any covenant given by Agent in
Section 8.3 or in the Loan Agreement, (c) in the case of Agent's handling of
funds, the failure to act with the same care as Agent uses in handling its own
funds or (d) any taxes, fees or other charges payable by Agent based on or
measured by any fees, commissions or compensation received by it for acting as
Agent in connection with the transactions contemplated by the Operative
Documents.
(b) Notwithstanding anything to the contrary contained
in this Participation Agreement, CP Lender's obligation (i) to provide indemnity
pursuant to Section 12.4(a) or (ii) to pay any sums due and owing to Lessee
shall be payable by CP Lender solely from excess cash flow from CP Lender's
operations which it is not otherwise required to repay when due under CP Notes
issued by CP Lender. Notwithstanding the foregoing, to the extent a CP Loan is
Funded by CP Lender, CP Administrative Agent shall remain obligated for all
obligations under this Participation Agreement to the Agent, the other
Participants and Lessee. The Agent may continue to deal solely and directly with
CP Administrative Agent.
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SECTION 12.5. Independent Credit Investigation. Each Participant by
entering into this Participation Agreement agrees that it has, independently and
without reliance on Agent or any other Participant and based on such documents
and information as it has deemed appropriate, made its own credit analysis of
Lessee and its own decision to enter into this Participation Agreement and each
of the other Operative Documents to which it is a party and that it will,
independently and without reliance upon 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 analysis and decisions in taking action under this
Participation Agreement and any related documents to which it is a party. Agent
shall not be required to keep itself informed as to the performance or
observance by Lessee of any other document referred to (directly or indirectly)
or provided for herein or to inspect the properties or books of Lessee. Except
for notices or statements which Agent is expressly required to give under this
Participation Agreement and for notices, reports and other documents and
information expressly required to be furnished to Agent alone (and not also to
each Participant, it being understood that Agent shall forward copies of same to
each Participant) hereunder or under any other Operative Document, Agent shall
not have any duty or responsibility to provide any Participant with copies of
notices or with any credit or other information concerning the affairs,
financial condition or business of Lessee (or any of its Affiliates) that may
come into the possession of Agent or any of its Affiliates.
SECTION 12.6. Refusal to Act. Except for notices and actions
expressly required of Agent hereunder and except for the performance of its
covenants in Section 8.3, Agent shall in all cases be fully justified in failing
or refusing to act unless (a) it is indemnified to its reasonable satisfaction
by the Participants, subject to the terms of Section 12.4(b) above, against any
and all liability and reasonable expense which may be incurred by it by reason
of taking or continuing to take any such action (provided that such indemnity
shall not be required to extend to liability or expense arising from any matter
described in clauses (a) through (d) of the proviso of Section 12.4(a), it being
understood that no action taken by Agent in accordance with the instructions of
the Required Participants shall be deemed to constitute any such matter) and (b)
it is reasonably satisfied that such action is not contrary to any Operative
Document or to any Applicable Laws and Regulations.
SECTION 12.7. Resignation or Removal of Agent; Appointment of
Successor. Subject to the appointment and acceptance of a successor Agent as
provided below, Agent may resign at any time by giving notice thereof to each
Lessor and Lessee or may be removed at any time by written notice from Required
Participants. Upon any such resignation or removal, Required Participants at
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the time of the resignation or removal shall have the right to appoint a
successor Agent with, if there exists no Lease Default or Event of Default, the
consent of Lessee, which consent shall not be unreasonably withheld, which shall
be a financial institution having a combined capital, surplus and undivided
profits of not less than $100,000,000. If, within 30 calendar days after the
retiring Agent's giving of notice of resignation or receipt of a written notice
of removal, a successor Agent is not so appointed and does not accept such
appointment, then the retiring or removed Agent may appoint a successor Agent
with, if there exists no Lease Default or Event of Default, the consent of
Lessee, which consent shall not be unreasonably withheld, and transfer to such
successor Agent all rights and obligations of the retiring Agent. Such successor
Agent shall be a financial institution having combined capital, surplus and
undivided profits of not less than $100,000,000. 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 or removed Agent and the retiring or removed Agent
shall be discharged from duties and obligations as Agent thereafter arising
hereunder and under any related document. If the retiring Agent does not appoint
a successor, any Participant shall be entitled to apply to a court of competent
jurisdiction for such appointment, and such court may thereupon appoint a
successor to act until such time, if any, as a successor shall have been
appointed as above provided.
SECTION 12.8. Separate Agent. From time to time, (x) the Required
Participants may, and if they fail to do so at any time when they are so
required, Agent may, for the purpose of meeting any legal requirements of any
jurisdiction in which the Collateral may be located, and (y) the Agent may, in
the case of either clause (x) or (y) appoint one or more individuals or
corporations either to act as co-agent jointly with Agent or to act as separate
agent of all or any part of the Collateral, and vest in such individuals or
corporations, in such capacity, such title to such Collateral, or any part
thereof, and such rights or duties as Agent may consider necessary or desirable.
Agent shall not be required to qualify to do business in any jurisdiction where
it is not now so qualified. Agent shall execute, acknowledge and deliver all
such instruments as may be required by any such co-agent or separate agent more
fully confirming such title, rights or duties to such co-agent or separate
agent. Upon the acceptance in writing of such appointment by any such co-agent
or separate agent, it, she or he shall be vested with such interest in the
Collateral or any part thereof, and with such rights and duties, not
inconsistent with the provisions of the Operative Documents, as shall be
specified in the instrument of appointment, jointly with Agent (except insofar
as local law makes it necessary for any such co-agent or separate agent to act
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alone), subject to all terms of the Operative Documents. Any co-agent or
separate agent, to the fullest extent permitted by legal requirements of the
relevant jurisdiction, at any time, by an instrument in writing, shall
constitute Agent its attorney-in-fact and agent, with full power and authority
to do all acts and things and to exercise all discretion on its behalf and in
its name. If any co-agent or separate agent shall die, become incapable of
acting, resign or be removed, the interest in the Collateral and all rights and
duties of such co-agent or separate agent shall, so far as permitted by law,
vest in and be exercised by Agent, without the appointment of a successor to
such co-agent or separate agent.
SECTION 12.9. Termination of Agency. The agency created hereby shall
terminate upon the final disposition by Agent of all Collateral at any time
subject hereto and the final distribution by Agent of all monies or other
property or proceeds received pursuant to the Lease in accordance with their
terms; provided, that at such time Lessee shall have complied fully with all the
terms hereof.
SECTION 12.10. Compensation of Agency. Lessee shall pay
Agent its reasonable fees, costs and expenses for the performance
of Agent's obligations hereunder.
SECTION 12.11. Limitations. It is expressly understood and agreed by
and among the parties hereto that, except as otherwise provided herein or in the
other Operative Documents: (a) this Participation Agreement and the other
Operative Documents to which Agent is a party are executed by Agent, not in its
individual capacity (except with respect to the representations and covenants of
Agent in Section 8.3), but solely as Agent under the Operative Documents in the
exercise of the power and authority conferred and vested in it as such Agent;
(b) each and all of the undertakings and agreements herein made on the part of
Agent are each and every one of them made and intended not as personal
undertakings and agreements by Agent, or for the purpose or with the intention
of binding Agent personally, but are made and intended for the purpose of
binding only the Collateral unless expressly provided otherwise; (c) actions to
be taken by Agent pursuant to its obligations under the Operative Documents may,
in certain circumstances, be taken by Agent only upon specific authority of the
Participants; (d) nothing contained in the Operative Documents shall be
construed as creating any liability on Agent, individually or personally, or any
incorporator or any past, present or future subscriber to the capital stock of,
or stockholder, officer or director, employee or agent of, Agent to perform any
covenants either express or implied contained herein, all such liability, if
any, being expressly waived by the other parties hereto and by any Person
claiming by, through or under them; and (e) so far as Agent,
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individually or personally, is concerned, the other parties hereto and any
Person claiming by, through or under them shall look solely to the Collateral
and Lessee for the performance of any obligation under any of the instruments
referred to herein; provided, however, that nothing in this Section 12.11 shall
be construed to limit in scope or substance the general corporate liability of
Agent in respect of its gross negligence or willful misconduct or those
representations, warranties and covenants of Agent in its individual capacity
set forth herein or in any of the other agreements contemplated hereby.
ARTICLE 13.
MISCELLANEOUS
SECTION 13.1. Survival of Agreements. The representations,
warranties, covenants, indemnities and agreements of the parties provided for in
the Operative Documents, and the parties' obligations under any and all thereof,
shall survive the execution and delivery and the termination or expiration of
this Agreement and any of the Operative Documents, including the termination of
the Lease with respect to any Leased Property, the transfer or disposition of
any interest in the Leased Property to or by Lessor as provided herein or in any
other Operative Documents (and shall not be merged into the Deeds, Bills of Sale
or any other conveyance or transfer document), the purchase and sale of the
Notes or Lessor's interest as Lessor or its Investment, payment therefor and any
disposition thereof and shall be and continue in effect notwithstanding any
investigation made by any party hereto or to any of the other Operative
Documents and the fact that any such party may waive compliance with any of the
other terms, provisions or conditions of any of the Operative Documents.
SECTION 13.2. No Broker, etc. Except for Lessee's dealing with
Credit Suisse First Boston and any of its Affiliates and The Staubach Company,
each of the parties hereto represents to the others that it has not retained or
employed any broker, finder or financial advisor to act on its behalf in
connection with the Overall Transaction, nor has it authorized any broker,
finder or financial adviser retained or employed by any other Person so to act,
nor has it incurred any fees or commissions to which any party hereto might be
subjected by virtue of its entering into the transactions contemplated by this
Agreement. Credit Suisse First Boston's sole compensation for acting hereunder
other than as Agent and Participant is the receipt of the amounts, including
reimbursement of expenses, provided for in the Operative Documents and the
Arrangement Fee. Any party who is in breach of this representation shall
indemnify and hold the other parties
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harmless from and against any liability arising out of such
breach of this representation.
SECTION 13.3. Notices. Unless otherwise specified herein, all
notices, requests, demands or other communications to or upon the respective
parties hereto shall be made in writing and shall be deemed to have been given
(i) in the case of notice by letter, the earlier of when delivered to the
addressee by hand or courier if delivered on a Business Day and, if not
delivered on a Business Day, the first Business Day thereafter or on the third
Business Day after depositing the same in the mails, registered or certified
mail, postage prepaid, return receipt requested, addressed as provided on
Schedule II hereto, and (ii) in the case of notice by facsimile or bank wire,
when receipt is confirmed if delivered on a Business Day and, if not delivered
on a Business Day, the first Business Day thereafter, addressed as provided on
Schedule II hereto, or to such other address as any of the parties hereto may
designate by written notice. Copies of all notices given by facsimile or bank
wire shall be contempo raneously sent by overnight courier.
SECTION 13.4. Counterparts. This Agreement may be executed by the
parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute but one and the same agreement.
SECTION 13.5. Amendments. Neither this Agreement nor any of the
other Operative Documents nor any of the terms hereof or thereof may be
terminated, amended, supplemented, waived or modified orally, but only by an
instrument in writing signed by the party against which the enforcement of the
termination, amendment, supplement, waiver or modification shall be sought;
provided, however, that no such amendment, supplement, waiver or modification
shall amend, supplement, waive or modify any provision of this Participation
Agreement limiting rights of any Person against CP Lender, the extent of the CP
Lender Availability or CP Lender's right to make a CP Loan without the written
consent of CP Administrative Agent; and no such termination, amendment,
supplement, waiver or modification shall be effective unless a signed copy
thereof shall have been delivered to Lessee and Agent. Lessor and Lessee shall
not be permitted to amend, modify or supplement the Lease without the written
consent of Agent and Required Lenders; provided, that without the prior written
consent of each Lender and Agent, Lessor shall not:
(a) modify any of the provisions of this Section 13.5,
change the definition of "Required Lenders" or "Required
Participants", or modify or waive any provision of any Operative
Document requiring action by any of the foregoing,
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or release any collateral (except as otherwise specifically
provided in any Operative Document);
(b) reduce the amount or change the time of payment of
any amount of principal owing or interest owing or payable on any
Note;
(c) modify, amend, waive or supplement any of the
provisions of Articles XV, XVII, XX and XXII of the Lease;
(d) reduce, modify, amend or waive any indemnities in
favor of any Lender or Agent;
(e) reduce the amount or change the time of payment of
Rent or the Lease Balance;
(f) consent to any assignment of the Lease releasing
Lessee from its obligations to pay Rent or the Lease Balance or
changing the absolute and unconditional character of such
obligations; or
(g) permit the creation of any Lien on the Collateral or
any part thereof except as contemplated by the Operative Documents,
or deprive any Lender of the benefit of the security interest and
lien secured by the Collateral.
SECTION 13.6. Headings, etc. The Table of Contents and headings of
the various Articles and Sections of this Agreement are for convenience of
reference only and shall not modify, define, expand or limit any of the terms or
provisions hereof.
SECTION 13.7. Parties in Interest. Except as expressly provided
herein, none of the provisions of this Agreement is intended for the benefit of
any Person except the parties hereto, their successors and permitted assigns.
SECTION 13.8. GOVERNING LAW. THIS AGREEMENT AND EACH OTHER OPERATIVE
DOCUMENT HAS BEEN DELIVERED IN NEW YORK AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES UNDER THIS AGREEMENT AND EACH OTHER OPERATIVE DOCUMENT SHALL BE GOVERNED
BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF NEW YORK,
INCLUDING SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW BUT EXCLUDING
ALL OTHER CHOICE OF LAWS AND CONFLICTS RULES OF SUCH STATE, EXCEPT THAT THE
PERFECTION AND THE EFFECT OF PERFECTION OR NON-PERFECTION OF THE SECURITY
INTEREST IN EQUIPMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
SECTION 9- 103(1)(B) OF THE NEW YORK UCC AND THAT THE CREATION, PERFECTION AND
ENFORCEMENT OF THE LIEN ON A SITE SHALL BE GOVERNED BY THE LAWS OF THE
JURISDICTION IN WHICH SUCH SITE IS LOCATED.
79
<PAGE> 85
SECTION 13.9. Payment of Transaction Expenses and Other Costs.
(a) Transaction Expenses. Except as provided in
Section 6.1(d), whether or not the transactions contemplated hereby and by the
other Operative Documents are consummated, Lessee shall promptly pay within
thirty (30) days of receiving an invoice therefor the Transaction Expenses
directly or furnish Agent funds sufficient to, and Agent shall make payment of
such portion to the Person or Persons entitled to such payment upon receipt of
such funds from Lessee and presentation to Agent of bills or invoices for the
amount of such payment.
(b) Continuing Expenses. Lessee shall pay the fees
specified in the Fee and Yield Letter to Agent as Supplemental
Rent.
(c) Amendments, Supplements and Appraisal. Without
limitation of the foregoing, Lessee agrees to pay to Agent, Lessor and
Participants all reasonable costs and expenses (including reasonable legal fees
and expenses) incurred by any of them in connection with: (i) the considering,
evaluating, investigating, negotiating and entering into or giving or
withholding of any amendments or supplements or waivers or consents with respect
to any Operative Document; (ii) any Casualty or termination of the Lease or any
other Operative Document; (iii) the negotiation and documentation of any
restructuring or "workout," whether or not consummated, of any Operative
Document; (iv) the enforcement of the rights or remedies under the Operative
Documents; and (v) any transfer by Agent, Lessor or a Participant of any
interest in the Operative Documents during the continuance of an Event of
Default.
SECTION 13.10. Severability. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 13.11. Liabilities of Lenders. No Lender shall have any
obligation to any other Lender or to Lessee or Agent with respect to the
transactions contemplated by the Operative Documents except those obligations of
such Lender expressly set forth in the Operative Documents or except as set
forth in the instruments delivered in connection therewith, and no Lender shall
be liable for performance by any other party hereto of such other party's
obligations under the Operative Documents except as otherwise so set forth.
80
<PAGE> 86
SECTION 13.12. Liabilities of Agent. Agent shall have no duty,
liability or obligation to any party to this Agreement with respect to the
transactions contemplated hereby except those duties, liabilities, or
obligations expressly set forth in this Agreement or the Loan Agreement, and any
such duty, liability or obligation of Agent shall be as expressly limited by
this Agreement, the Loan Agreement, or the other Operative Documents as the case
may be.
SECTION 13.13. Lessor Obligations Nonrecourse; Payment from Certain
Lease and Guarantee Obligations and Certain Proceeds of Leased Property Only.
All payments to be made by Lessor in respect of the Loans, the Notes and the
Loan Agreement shall be made only from certain payments received under the Lease
and the Note Guarantee and certain proceeds of the Leased Property and only to
the extent that Lessor or Agent shall have received sufficient payments from
such sources to make payments in respect of the Loans. Each Lender agrees that
it will look solely to such sources of payments to the extent available for
distribution to such Lender as herein provided and that neither Lessor nor Agent
is or shall be personally liable to any Lender for any amount payable hereunder
or under any Note. Nothing in the Loan Agreement, the Notes or any other
Operative Document shall be construed as creating any liability (other than for
willful misconduct or gross negligence) of Lessor in its individual capacity to
pay any sum or to perform any covenant, either express or implied, in the Loan
Agreement, the Notes or any other Operative Documents (all such liability, if
any, being expressly waived by Lenders and Agent) and that each Lender and
Agent, on behalf of itself and its successors and assigns, agrees in the case of
any liability of Lessor hereunder or thereunder (except for such liability
attributable to its willful misconduct or gross negligence) that it will look
solely to those certain payments received under the Lease and the Note Guarantee
and those certain proceeds of the Leased Property, provided, however, that
Lessor in its individual capacity shall in any event be liable with respect to
(i) the removal of Lessor Liens resulting from claims against or acts or
breaches by Lessor in each case in its individual capacity or involving its
gross negligence or willful misconduct or (ii) failure to turn over payments
(other than Excepted Payments) to Agent as required by the terms of the
Operative Documents; and provided further that the foregoing exculpation of
Lessor shall not be deemed to be exculpations of Lessee or any other Person.
SECTION 13.14. Consideration for Consents to Waivers and Amendments.
Lessee hereby agrees that it will not, and that it will not permit any of its
Affiliates to, offer or give any consideration or benefit of any kind whatsoever
to any Participant in connection with, in exchange for, or as an inducement to,
such Participant's consent to any waiver in
81
<PAGE> 87
respect of, any modification or amendment of, any supplement to, or any other
consent or approval under, any Operative Document unless such consideration or
benefit is offered ratably to all Participants.
SECTION 13.15. Payment Directions. It is understood and agreed that
during the Term, for administrative convenience and notwithstanding the terms
and provisions of the Lease or any Loan Document, Lessee will pay all amounts
due Lessor under the Lease and this Agreement, on behalf of Lessor, to or at the
direction of Agent (which direction may change from time to time, so long as
such direction does not require Lessee to make any payment due on any date to
more than one Person) for application in accordance with the terms of Article V
of the Loan Agreement.
SECTION 13.16. Role of Arranger and its Affiliates. Each party
hereto acknowledges hereby that it is aware of the fact that Credit Suisse First
Boston has acted as an "arranger" with respect to the transactions contemplated
by the Operative Documents in addition to being a Lender and Agent and that, as
of the Document Closing Date, its Affiliate, Credit Suisse Leasing 92A, L.P. is
Lessor. Each party releases Credit Suisse First Boston and its Affiliates from
any liability as a result of their acting simultaneously and in their combined
role as an "arranger", as Agent, as Lessor and as a Lender. The foregoing
release shall not limit the obligations or rights of Agent under the Operative
Documents, which obligations and rights of Agent shall be governed by Article
12.
SECTION 13.17. Notices to Lessor under Loan Agreement.
Notwithstanding anything to the contrary in the Loan Agreement, the Lenders and
Lessee hereby agree that any notice or demand to be delivered to or made on
Lessor pursuant to Section 7.2 of the Loan Agreement shall, so long as no Lease
Event of Default is continuing, be delivered directly to or made on Lessee, with
a copy to Lessor, and Lessee shall be entitled to any rights inuring to Lessor
in respect thereof.
SECTION 13.18. Submission to Jurisdiction; Waivers.
(a) Each party hereto irrevocably and unconditionally:
(i) submits for itself and its property in any legal
action or proceeding relating to this Agreement or any other
Operative Document, or for recognition and enforcement of any
judgment in respect thereof, to the nonexclusive general
jurisdiction of the Courts of the State of New York, the courts of
the United States of America for the Southern District of New York,
and appellate courts from any thereof;
82
<PAGE> 88
(ii) consents that any such action or proceedings may be
brought to such courts, and waives any objection that it may now or
hereafter have to the venue of any such action or proceeding in any
such court or that such action or proceeding was brought in an
inconvenient court and agrees not to plead or claim the same;
(iii) agrees that service of process in any such action
or proceeding may be effected by mailing a copy thereof by
registered or certified mail (or any substantially similar form of
mail), postage prepaid, to such party at its address set forth on
Schedule II or at such other address of which the other parties
hereto shall have been notified pursuant to Section 13.3; and
(iv) agrees that nothing herein shall affect the right
to effect service of process in any other manner permitted by law or
shall limit the right to sue in any other jurisdiction.
(b) EACH PARTY HERETO HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THE OPERATIVE DOCUMENTS AND FOR ANY COUNTERCLAIM THEREIN.
SECTION 13.19. No Proceedings. Each of Lessee, Lessor, the
Eurodollar Lenders and Agent hereby agrees that it shall not institute against,
or join any other Person in instituting against, CP Lender any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceeding or other
proceedings under any Federal or state bankruptcy or similar law, for one year
and a day after the latest maturing CP Note issued by CP Lender is paid. This
Section 13.19 shall survive termination of this Participation Agreement.
SECTION 13.20. Final Agreement. THIS AGREEMENT, TOGETHER WITH THE
LEASE, THE LOAN DOCUMENTS, THE OTHER OPERATIVE DOCUMENTS AND OTHER DOCUMENTS
EXECUTED IN CONNECTION HEREWITH OR THEREWITH REPRESENT THE ENTIRE FINAL
AGREEMENT BETWEEN THE PARTIES HERETO WITH RESPECT TO THE TRANSACTIONS
CONTEMPLATED HEREIN AND CANNOT BE MODIFIED, SUPPLEMENTED, AMENDED, RESCINDED OR
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN
THE PARTIES HERETO.
SECTION 13.21. Confidentiality. Each Participant and Agent agrees
severally but not jointly (on behalf of itself and each of its affiliates,
directors, officers, employees and representatives) to use reasonable
precautions to keep confidential, in accordance with safe and sound banking
practices, any non-public information supplied to it by Lessee
83
<PAGE> 89
pursuant to this Agreement which is identified by Lessee as being confidential
at the time the same is delivered to such Participant or Agent, provided that
nothing herein shall limit the disclosure of any such information (i) to the
extent required by statute, rule, regulation or, upon prompt prior written
notice to Lessee (to the extent permitted by law), by judicial process, (ii) to
counsel for any of Participants or Agent, (iii) to bank examiners, auditors or
accountants, (iv) in connection with any litigation to which any one or more of
Participants is a party, provided that Lessee has been given prompt prior
written notice (to the extent permitted by law) of such proposed disclosure or
(v) to any Participant (or prospective Participant) so long as such Assignee or
Participant (or Prospective Assignee or Participant) agrees in writing to be
bound by the terms of this Section 13.21; and provided further that in no event
shall any Participant or Agent be obligated or required to return any materials
furnished by Lessee.
[SIGNATURE PAGES FOLLOW]
84
<PAGE> 90
IN WITNESS WHEREOF, the parties hereto have caused this
Participation Agreement to be duly executed by their respective officers
thereunto duly authorized as of the day and year first above written.
APPLIED MATERIALS, INC., AS LESSEE AND
CONSTRUCTION AGENT
By:/s/ GERALD F. TAYLOR
--------------------------------
Name: Gerald F. Taylor
Title: Senior Vice President and
Cheif Financial Officer
By:/s/ NANCY H. HANDEL
--------------------------------
Name: Nancy H. Handel
Title: Vice President,
Corporate Finance and Treasurer
S-1 PARTICIPATION AGREEMENT
<PAGE> 91
CREDIT SUISSE LEASING 92A, L.P., AS
LESSOR AND BORROWER
By: CREDIT SUISSE FIRST BOSTON, acting
through its New York Branch, as
General Partner
By:/s/ CARL WEATHERLEY-WHITE
----------------------------------
Name: Carl Weatherley-White
Title: Vice President
By:/s/ MATT MOSER
----------------------------------
Name: Matt Moser
Title: Associate
S-2 PARTICIPATION AGREEMENT
<PAGE> 92
GREENWICH FUNDING CORPORATION,
AS CP LENDER
By: CREDIT SUISSE FIRST BOSTON, acting
through its New York Branch, as
Attorney-in-fact
By:/s/ THOMAS MEIER
----------------------------------
Name: Thomas Meier
Title: Vice President
By:/s/ ALBERTO ZONCA
----------------------------------
Name: Alberto Zonca
Title: Associate
S-3 PARTICIPATION AGREEMENT
<PAGE> 93
CREDIT SUISSE FIRST BOSTON, ACTING
THROUGH ITS NEW YORK BRANCH, AS AGENT
By:/s/ CARL WEATHERLEY-WHITE
-----------------------------------
Name: Carl Weatherley-White
Title: Vice President
By:/s/ MATT MOSER
-----------------------------------
Name: Matt Moser
Title: Associate
S-4 PARTICIPATION AGREEMENT
<PAGE> 94
BANQUE NATIONALE DE PARIS, AS EURODOLLAR
LENDER
By:/s/ RAFAEL C. LUMANLAN CHARLES H. DAY
__________________________________________________
Name: Rafael C. Lumanlan Charles H. Day
Title: Vice President Assistant Vice President
S-5 PARTICIPATION AGREEMENT
<PAGE> 95
CREDIT SUISSE FIRST BOSTON, AS
EURODOLLAR LENDER
By:/s/ CARL WEATHERLEY-WHITE
----------------------------------
Name: Carl Weatherley-White
Title: Vice President
By:/s/ MATT MOSER
----------------------------------
Name: Matt Moser
Title: Associate
S-6 PARTICIPATION AGREEMENT
<PAGE> 96
MELLON BANK, N.A., AS EURODOLLAR LENDER
By:/s/ EDWIN H. WIEST
-----------------------------------
Name: Edwin H. Wiest
Title: First Vice President
S-7 PARTICIPATION AGREEMENT
<PAGE> 97
UNION BANK OF CALIFORNIA, N.A. AS
EURODOLLAR LENDER
By:/s/ WANDA HEADRICK
-----------------------------------
Name: Wanda Headrick
Title: Vice President
S-8 PARTICIPATION AGREEMENT
<PAGE> 98
SCHEDULE I
Participants' Commitments
<TABLE>
<CAPTION>
Commitment
Participant Commitments Percentage
- - ----------- ----------- ----------
Eurodollar Lenders:
<S> <C> <C> <C>
Banque Nationale de Tranche A Loan
Paris Commitment: $14,455,670.10 22.2566%
Tranche B Loan
Commitment: $ 2,644,329.90 4.0713%
Mellon Bank, N.A. Tranche A Loan
Commitment: $12,976,288.66 19.9789%
Tranche B Loan
Commitment: $ 2,373,711.34 3.6547%
Union Bank of Tranche A Loan
California, N.A. Commitment: $12,976,288.66 19.9789%
Tranche B Loan
Commitment: $2,373,711.34 3.6547%
Credit Suisse First Tranche A Loan
Boston Commitment: $12,850,752.58 19.7856%
Tranche B Loan
Commitment: $2,350,747.42 3.6193%
Lessor:
Credit Suisse Leasing Investment
92A, L.P. Amount
Commitment: $1,948,500 3.0%
</TABLE>
S-9 PARTICIPATION AGREEMENT
<PAGE> 99
SCHEDULE II
Notice Information and Funding Offices
AMAT: Applied Materials, Inc.
3050 Bowers Avenue, M/S 2036
Santa Clara, CA 95050
Attention: Craig Garber
Assistant Treasurer and
Director of Treasury Operations
Telephone: (408) 748-5032
Facsimile: (408) 986-7825
with a copy to:
Applied Materials, Inc.
3050 Bowers Avenue, M/S 2036
Santa Clara, CA 95050
Attention: Diane Gale
Senior Treasury Manager
Cash and Global Markets
Telephone: (408) 235-6663
Facsimile: (408) 986-7825
Lessor Credit Suisse Leasing 92A, L.P.
11 Madison Avenue
19th Floor
New York, NY 10010-3629
Attention: Director
Telephone: (212) 325-9138
Facsimile: (212) 325-8094
Agent: Credit Suisse First Boston, acting through its New
York Branch
11 Madison Avenue
19th Floor
New York, NY 10010-3629
Attention: Diane Albanese
Telephone: (212) 325-9935
Facsimile: (212) 325-8304
<PAGE> 100
CP Lender: Greenwich Funding Corporation
11 Madison Avenue
19th Floor
New York, NY 10010-3629
Attention: Thomas Meier
Telephone: (212) 325-9077
Facsimile: (212) 325-6677
Eurodollar
Lenders: Banque Nationale de Paris
180 Montgomery Street
San Francisco, CA 94104
Attention (Credit): Rafael Lumanlan, Vice
President
Telephone: (415) 956-0707
Facsimile: (415) 296-8954
Attention (Operations): Donald A. Hart, Treasurer
Telephone: (415) 956-2511
Facsimile: (415) 989-9041
Funding Office: Banque Nationale de Paris, San
Francisco Branch
180 Montgomery Street
San Francisco, CA 94104
Telephone: (415) 956-0707
Facsimile: (415) 296-8954
Wire Transfer Instructions:
Pay to Federal Reserve Bank of San Francisco
For the Account of Banque Nationale de Paris,
San Francisco Branch
ABA No. 121027234
Reference: Applied Materials Lease
2
<PAGE> 101
Mellon Bank, N.A.
Three Mellon Bank Center
23rd Floor, Loan Administration
Pittsburgh, PA 15259
Attention (Credit Issues): Edwin H. Wiest
435 Tasso Street
Suite 100
Palo Alto, CA 94301
Telephone: (415) 326-3005, Ext. 223
Facsimile: (415) 326-2382
Attention (Administration/Operations):
Mr. Damon Carr
Telephone: (412) 234-1872
Facsimile: (412) 236-2027
Wire Transfer Instructions:
Mellon Bank, N.A.
ABA No. 043000261
Loan Administration
Further credit to Credit Suisse Leasing 92A,
L.P., Account No. 990873800
Union Bank of California, N.A.
400 California Street
17th Floor
San Francisco, CA 94104
Attention (Credit Contact/Documentation):
Wanda Headrick, Vice President
Telephone: (415) 765-3003
Facsimile: (415) 765-2634
Attention (Administrative/Operational):
Stacie Burks-Garcia
Telephone: (415) 765-3641
Facsimile: (415) 765-2634
3
<PAGE> 102
Wire Transfer Instructions:
Union Bank of California, N.A.
San Francisco, CA
ABA No. 1220-0049-6
For credit to Corporate Note Department
Account No. 001-2060232
Reference: Applied Materials, Inc.
Credit Suisse First Boston
11 Madison Avenue
19th Floor
New York, NY 10010-3629
Attention: Diane Albanese
Telephone: (212) 325-9935
Facsimile: (212) 325-8304
Wire Transfer Instructions:
Credit Suisse First Boston
ABA No. 026009179
Reference: Applied Materials, Inc.
4
<PAGE> 103
SCHEDULE III
Filings and Recordings
For each Site, the following filings and recordings are required to
perfect the rights of Lessor, Lenders and Agent intended to be created by the
Operative Documents.
A. For each Site, the following Operative Documents must be
recorded among the land records of the county where the
applicable Site is located:
The Deed
The Site Lease Supplement
The Mortgage
For each Existing Site, the following Operative Documents
must be recorded in the Official Records of Santa Clara County,
California:
The Deed
The Site Lease Supplement (California)
The Mortgage
B. All UCC financing statements must be filed with the Secretary of State of the
State where the applicable Site is located and in any other records required by
the UCC in order to perfect the Lessor's, the Lender's and the Agent's rights
intended to be created by the Operative Documents.
For each Existing Site, all UCC financing statements must be filed
with the California Secretary of State.
<PAGE> 104
SCHEDULE IV
GOVERNMENTAL ACTIONS
No other items except as set forth on Schedule III hereto.
<PAGE> 105
APPENDIX 1
TO PARTICIPATION AGREEMENT
DATED AS OF APRIL 30, 1997
Definitions and Interpretation
<PAGE> 106
APPENDIX 2
TO
PARTICIPATION AGREEMENT
DATED AS OF APRIL 30, 1997
DOCUMENT CLOSING DATE CONDITIONS PRECEDENT
A. The occurrence of the Document Closing Date is subject to the
following conditions precedent:
(a) Operative Documents. Each of the Operative Documents to be
entered into on the Document Closing Date shall have been duly authorized,
executed and delivered by the parties thereto, and shall be in full force and
effect, including (i) this Participation Agreement, (ii) the Lease and each
Lease Supplement, (iii) the Construction Agency Agreement, (iv) the Deeds for
each Site, (v) the Bills of Sale, (vi) the Lease Supplement for each Site, (vii)
the Note Guarantee, (viii) the Loan Agreement, (ix) the Capital Asset Purchase
Agreement, (x) the Notes, (xi) the Mortgages for each Site, (xii) the Security
Agreement, (xiii) the Assignment of Lease, from Lessor to Agent for the benefit
of the Lenders, and consented to by Lessee pursuant to that certain Lessee's
Consent, dated as of the Document Closing Date (the "Consent to Assignment") by
Lessee, as obligor, in favor of Agent for the benefit of the Lenders, in each
case in the respective forms set forth as Exhibit L and Exhibit M hereto; (xiv)
the Consent to Assignment, (xv) the Assignment of Construction Agency Agreement
dated as of the Document Closing Date from Lessor to Agent for the benefit of
the Lenders, and consented to by Lessee pursuant to that certain Consent, dated
as of the Document Closing Date (the "Consent to Construction Agency Agreement
Assignment"), in each case in the respective forms set forth as Exhibit N and
Exhibit O hereto; (xvii) the Fee and Yield Letter; (xviii) the Pledge Agreement;
and (xix) the Consent to Construction Agency Agreement Assignment. Agent and
Participants shall each have received a fully executed original or copy of each
of the Operative Documents (other than the Notes and the Lease of which Agent
shall receive the originals and Lessor shall receive specimens). The Operative
Documents (or memoranda thereof), any supplements thereto and any financing
statements in connection therewith required under the Uniform Commercial Code
shall have been recorded, registered and filed, if necessary, in such manner as
to enable Lessee's counsel to render its opinion referred to in clause (c)
below.
(b) Taxes. All taxes, fees and other charges in connection with the
execution, delivery, recording, filing and registration of the Operative
Documents shall have been paid or provisions for such payment shall have been
made to the satisfaction of Agent and Participants.
<PAGE> 107
(c) Opinions of Counsel. (i) Each of Orrick, Herrington & Sutcliffe
LLP and Hallgrimson McNichols & McCann, special counsel to Lessee, shall have
issued to Agent and Participants its opinion in the form set forth on Exhibit
V-1 and V-2, respectively; and (ii) the Law Department of Lessee shall have
issued to Agent and Participants his/her opinion in the form set forth on
Exhibit V-3.
(d) Responsible Employee's Certificate of Lessee. Agent shall have
received a Responsible Employee's Certificate, dated as of the Document Closing
Date, of Lessee stating that (i) each and every representation and warranty of
Lessee contained in the Operative Documents to which it is a party is true and
correct in all material respects on and as of the Document Closing Date, except
that any such representation or warranty which is expressly made only as of a
specified date need be true only as of such date; (ii) no Lease Default or Lease
Event of Default under the Lease or, to the best of such Responsible Officer's
knowledge, the Loan Agreement has occurred and is continuing; (iii) each
Operative Document to which Lessee is a party is in full force and effect with
respect to it; and (iv) Lessee has duly performed and complied with all
covenants, agreements and conditions contained in this Appendix 2 and, in all
material respects, with all other agreements and conditions contained in the
Participation Agreement and in any other Operative Document to which Lessee is a
party required to be performed or complied with by it on or prior to the
Document Closing Date.
(e) Lessee's Resolutions and Incumbency Certificate, etc. Agent
shall each have received (i) a certificate of the Secretary or an Assistant
Secretary of Lessee attaching and certifying as to (A) the resolutions of the
Board of Directors duly authorizing the execution, delivery and performance by
Lessee of each Operative Document to which it is or will be a party, (B) its
certificate of incorporation and bylaws, and (C) the incumbency and signature of
persons authorized to execute and deliver on its behalf the Operative Documents
to which it is a party, and (ii) a good standing certificate from the
appropriate officer of each state in which Land Interests are proposed to be
acquired on the Document Closing Date.
(f) Document Closing Date. The Document Closing Date shall occur on
or prior to May 15, 1997.
(g) Officer's Certificate of Lessor. Lessee and Agent shall have
received a certificate of an authorized officer of Lessor, dated as of the
Document Closing Date, stating that (i) each and every representation and
warranty of Lessor contained in the Operative Documents to which it is a party
is true and correct in all material respects on and as of the
2
<PAGE> 108
Document Closing Date, except that any such representation or warranty which is
expressly made only as of a specified date need be true only as of such date,
(ii) each Operative Document to which Lessor is a party is in full force and
effect with respect to it, and (iii) Lessor has duly performed and complied with
all covenants, agreements and conditions contained herein or in any Operative
Document required to be performed or complied with by it on or prior to the
Document Closing Date.
(h) Lessor's Resolutions and Incumbency Certificate, etc. Lessee and
Agent shall have received (i) a certificate of Lessor attaching and certifying
as to (A) the resolutions duly authorizing the execution, delivery and
performance by Lessor of each Operative Document to which it is or will be a
party, (B) its limited partnership agreement and certificate of limited
partnership, certified as of a recent date by an appropriate officer of Lessor,
and (C) the incumbency and signature of persons authorized to execute and
deliver on its behalf the Operative Documents to which it is a party.
(i) Opinion of Counsel. Each of the General Counsel of Lessor and
Mayer, Brown & Platt, special New York counsel, shall have issued to Lessee,
Lenders and Agent their opinion to the effect and in the form set forth on
Exhibit X-1 and Exhibit X-2, respectively.
(j) Private Placement Certificate. Credit Suisse First Boston and
Lessor shall have delivered to Lessee a Private Placement Certificate
substantially in the form of Exhibit AA.
All documents and instruments required to be delivered on the Document Closing
Date shall be delivered at the offices of Mayer, Brown & Platt, 1675 Broadway,
New York, New York 10019-5820 or at such other location as may be determined by
Agent, Lessor and Lessee.
3
<PAGE> 1
EXHIBIT 10.5
APPENDIX 1
to
Participation Agreement,
Master Lease Agreement and Loan Agreement,
each dated as of April 30, 1997
(Applied Materials, Inc.)
DEFINITIONS AND INTERPRETATION
A. Interpretation. In each Operative Document, unless a clear
contrary intention appears:
(i) the singular number includes the plural number and vice
versa;
(ii) reference to any Person includes such Person's
successors and assigns but, if applicable, only if such successors and
assigns are permitted by the Operative Documents, and reference to a
Person in a particular capacity excludes such Person in any other
capacity or individually;
(iii) reference to any gender includes each other gender;
(iv) reference to any agreement (including any Operative
Document), document or instrument means such agreement, document or
instrument as amended or modified and in effect from time to time in
accordance with the terms thereof and, if applicable, the terms of the
other Operative Documents and reference to any promissory note
includes any promissory note which is an extension or renewal thereof
or a substitute or replacement therefor;
(v) reference to any Applicable Laws and Regulations means
such Applicable Laws and Regulations as amended, modified, codified,
replaced or reenacted, in whole or in part, and in effect from time to
time, including rules and regulations promulgated thereunder and
reference to any section or other provision of any Applicable Laws and
Regulations means that provision of such Applicable Laws and
Regulations from time to time in effect and constituting the
substantive amendment, modification, codification, replacement or
reenactment of such section or other provision;
<PAGE> 2
(vi) reference in any Operative Document to any Article,
Section, Appendix, Schedule or Exhibit means such Article or Section
thereof or Appendix, Schedule or Exhibit thereto;
(vii) "hereunder", "hereof", "hereto" and words of similar
import shall be deemed references to an Operative Document as a whole
and not to any particular Article, Section or other provision thereof;
(viii) "including" (and with correlative meaning "include")
means including without limiting the generality of any description
preceding such term;
(ix) "or" is not exclusive; and
(x) relative to the determination of any period of time,
"from" means "from and including" and "to" means "to but excluding".
B. Accounting Terms. In each Operative Document, unless
expressly otherwise provided, accounting terms shall be construed and
interpreted, and accounting determinations and computations shall be made, in
accordance with GAAP.
C. Conflict in Operative Documents. If there is any conflict
between any Operative Documents, such Operative Document shall be interpreted
and construed, if possible, so as to avoid or minimize such conflict but, to
the extent (and only to the extent) of such conflict, the Participation
Agreement shall prevail and control.
D. Legal Representation of the Parties. The Operative Documents
were negotiated by the parties with the benefit of legal representation and any
rule of construction or interpretation otherwise requiring the Operative
Document to be construed or interpreted against any party shall not apply to
any construction or interpretation hereof or thereof.
E. Defined Terms. Unless a clear contrary intention appears,
terms defined herein have the respective indicated meanings when used in each
Operative Document.
"Acquisition Date" means a Site Acquisition Date or an Equipment
Acquisition Date, as the case may be.
"Administrative Fees" means the fees described in paragraph 3 of the
Fee and Yield Letter.
"Advance" means an advance of funds by Agent pursuant to Article 3 of
the Participation Agreement.
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<PAGE> 3
"Advance Date" means any Business Day on which Investment Amounts and
Loans are funded pursuant to the Participation Agreement and the Loan
Agreement.
"Advance Request" is defined in Section 3.13(a) of the Participation
Agreement.
"Affiliate" means, when used with respect to any Person, any other
Person directly or indirectly Controlling or Controlled by or under direct or
indirect common control with such Person.
"Agent" means Credit Suisse First Boston, acting through its New York
Branch, as agent for the Participants pursuant to the Loan Agreement, or any
successor or additional agent appointed in accordance with the terms of the
Loan Agreement.
"Aggregate Commitment Amount" means the aggregate of all Commitments;
except with respect to a Refinancing Advance, in which case the "Aggregate
Commitment Amount" means the aggregate Commitments of the Eurodollar Lenders.
"Aggregate Property Cost" means, (a) with respect to each Site, an
amount as of the Site Acquisition Date for such Site equal to (i) the Site
Acquisition Costs and any Transaction Expenses incurred or expected to be
incurred by Lessee in connection with the acquisition or financing of such Site
to be Funded in connection with such Advance, in the case of a Developed Site
or Existing Site, or (ii) the sum of the Site Acquisition Costs and any
Transaction Expenses incurred or expected to be incurred by Lessee in
connection with the acquisition or financing of such Site to be Funded in
connection with such Advance plus the Original Estimated Construction Costs, in
the case of each Construction Site, and (b) with respect to each Equipment
Group, an amount as of the Equipment Acquisition Date for such Equipment Group
equal to (i) the Equipment Purchase Price with respect to such Equipment Group
and (ii) any Transaction Expenses incurred or expected to be incurred by Lessee
in connection with the acquisition of such Equipment Group to be Funded in
connection with such Advance.
"AMAT" means Applied Materials, Inc.
"AMAT Recourse Amount" means, (i)(A) with respect to any Site (other
than a Site that constitutes a 25% Property) or Unit of Equipment, an amount
equal to the portion of the Tranche A Participant Balances, determined as of
the applicable Site Expiration Date or Equipment Pool Expiration Date, relating
to Tranche A Loans for such Site or Unit of Equipment and (B) with respect to
any Site that constitutes a 25% Property, the product of an amount equal to the
portion of the Tranche A Participant Balance, determined as of the applicable
Site Expiration Date,
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<PAGE> 4
relating to the Tranche A Loans for such Site and the Improvements Percentage,
plus (ii) in the case of a Site, the aggregate Withheld Amount, if any,
relating to any sale of a portion of such Site pursuant to Section 20.1(b) of
the Lease.
"Applicable Expiration Date" means a Site Expiration Date or an
Equipment Pool Expiration Date, as applicable.
"Applicable Laws and Regulations" means all existing applicable laws,
rules, regulations (including Environmental Laws) statutes, treaties, codes,
ordinances, permits, certificates, orders and licenses of and written
interpretations by, any Governmental Authorities, and applicable judgments,
decrees, injunctions, writs, orders or like action of any court, arbitrator or
other administrative, judicial or quasi- judicial tribunal or agency of
competent jurisdiction (including those pertaining to health, safety or the
environment (including wetlands) and those pertaining to the construction, use
or occupancy of the Leased Property) and any restrictive covenant or deed
restriction or easement of record affecting the Leased Property.
"Applicable Margin" means, with respect to the Tranche A Loans, the
Tranche A Applicable Margin, and with respect to the Tranche B Loans, the
Tranche B Applicable Margin.
"Appraisal" means, (i) with respect to an appraisal in connection with
an Advance, an appraisal prepared by a reputable appraiser selected by Agent
and approved by Required Lenders, and (ii) with respect to any other appraisal,
an appraisal prepared by a reputable appraiser selected by Agent and approved
by Lessee, not to be unreasonably withheld.
"Appurtenant Rights" means (i) all agreements, easements, rights of
way or use, rights of ingress or egress, privileges, appurtenances, tenements,
hereditaments and other rights and benefits at any time belonging or pertaining
to any Land or the Facilities, including the use of any streets, ways, alleys,
vaults or strips of land adjoining, abutting, adjacent or contiguous to any
Land and (ii) all permits, licenses and rights, whether or not of record,
appurtenant to any Land.
"Architect" means a registered architect for Construction Agent or
Lessee.
"Arrangement Fee" shall mean the fee payable to Credit Suisse First
Boston, acting through its New York Branch, as arranger, as provided for in
paragraph 1 of the Fee and Yield Letter.
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<PAGE> 5
"Assignment of Lease" is defined in Appendix 2 to the Participation
Agreement.
"Available Commitments" means the aggregate of the Available
Eurodollar Lender Commitments and Available Lessor Commitments.
"Available Eurodollar Lender Commitment" means as to any Eurodollar
Lender at any time, an amount equal to the excess, if any, of (a) the amount of
such Eurodollar Lender's Commitment over (b) the sum of (i) the aggregate
principal amount of all Eurodollar Loans made by such Eurodollar Lender then
outstanding and (ii) the amount equal to such Eurodollar Lender's Commitment
Percentage multiplied by the aggregate principal amount of all CP Loans then
outstanding, provided, however, that for purposes of determining the Commitment
Fee and the Commitment Fee Rate on any date, Available Eurodollar Lender
Commitment shall be calculated without reference to this clause (b)(ii).
"Available Lessor Commitment" means an amount equal to the excess, if
any, of (a) Lessor's Commitment over (b) the aggregate amount of all
Investments.
"Available Participant Commitment" means the Available Eurodollar
Lender Commitment or the Available Lessor Commitment, as applicable.
"Bank" is defined in Section 8.3 of the Participation Agreement.
"Base Rate" means, with respect to any applicable Interest Period, the
higher of (i) the base commercial lending rate announced from time to time by
Credit Suisse First Boston, New York Branch, or (ii) the rate quoted to Credit
Suisse First Boston at approximately 11:00 a.m. New York City time, by dealers
in the New York Federal Funds Market for the overnight offering of U.S. dollars
to Credit Suisse First Boston, for deposit, plus one-quarter of one percent
(1/4%).
"Base Rate Period" means, with respect to any Eurodollar Loan or
Investment Amount for which Lessee requests interest or Yield to be calculated
based on the Base Rate, (i)(x) the period commencing on the date such rate
becomes effective and ending on (but excluding) the last Business Day of the
calendar month in which such rate became effective and (y) thereafter, each
period commencing on (and including) the last Business Day of each calendar
month and ending on (but excluding) the last Business Day of the next
succeeding calendar month or (ii) if shorter than the periods described in
clause (i), the period ending on the day preceding the first day of an Interest
Period properly selected by Lessee pursuant to a Continuation Notice or an
Advance Request.
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<PAGE> 6
"Basic Rent" means, the sum of (i) the Equipment Rent, calculated as
of the applicable date on which Basic Rent is due, and (ii) Site Rent,
calculated as of the applicable date on which Basic Rent is due and (iii) on
the Special Prepayment Anniversary Date, the Deemed Yield.
"Beneficiaries" is defined in Section 1 of the Note Guarantee.
"Benefitted Lender" is defined in Section 7.6 of the Loan Agreement.
"Bill of Sale" means a bill of sale substantially in the form of
Exhibit S to the Participation Agreement.
"BNP" means BNP Leasing Corporation, a Delaware corporation.
"Borrower" means Credit Suisse Leasing 92A, L.P., as Borrower under
the Loan Agreement.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banks in New York, New York, or (if interest
or Yield is being determined by reference to the Eurodollar Rate) London,
England, are generally authorized or obligated, by law or executive order, to
close.
"California Regulations" is defined in Section 11.2(a) of the
Participation Agreement.
"Capital Asset Purchase Agreement" means the Capital Asset Purchase
Agreement among CP Lender, Agent and Purchasers, substantially in the form of
Exhibit H to the Participation Agreement.
"Capital Expenditure Moratorium Period" means a temporary period
during which the Treasurer of Lessee has generally restrained Lessee's capital
expenditures.
"Capital Lease" means, as applied to any Person, any lease of any
property (whether real, personal or mixed) by that Person as lessee which, in
conformity with GAAP, is, or is required to be, accounted for as a capital
lease on the balance sheet of that Person.
"Capitalized Interest" means, with respect to each Site Note, all
interest accruing on the principal portion of each such Note attributable to
Construction Advances made during and for any Interest Period ending on or
before the Outside Completion Date. Interest accruing during such Interest
Periods on the principal portion of each Site Note attributable to such
Construction Advances shall be allocated to each Construction
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<PAGE> 7
Site based upon the sum of the outstanding Construction Advances Funded by the
Lenders with respect to such Site through the date of determination and shall
be treated as Capitalized Interest, except to the extent that such amount is
not to be capitalized because either (i) such amount exceeds the Available
Eurodollar Lender Commitment, (ii) Construction Agent shall have elected to pay
such amount from its own funds pursuant to Section 4.6 of the Participation
Agreement or (iii) the Interest Period relating to such Construction Advance
ends after the Outside Completion Date.
"Capitalized Yield" means, with respect to the Investment Amounts, all
Yield accruing on the portion of such Investment Amounts attributable to
Construction Advances for a Construction Site made during and for any Interest
Period ending on or before the Outside Completion Date. Yield accruing during
such Interest Periods on the portion of Investment Amounts attributable to such
Construction Advances shall be allocated to such Construction Site based upon
the sum of the outstanding Construction Advances Funded by Lessor with respect
to such Site through the date of determination and shall be treated as
Capitalized Yield, except to the extent that such amount is not to be
capitalized because either (i) such amount exceeds the Available Lessor
Commitment, (ii) Construction Agent shall have elected to pay such amount from
its own funds pursuant to Section 4.6 of the Participation Agreement or (iii)
the Interest Period relating to such Construction Advance ends after the
Outside Completion Date.
"Casualty" means any damage or destruction of all or any portion of
any Unit of Equipment or Site as a result of a fire or other casualty.
"Central Park Property" means the five building facility comprised of
office space, laboratories and warehouses located at 2801 to 2889 Scott
Boulevard, Santa Clara, California.
"CERCLA" means the Comprehensive Environmental Response, Compensation,
and Liability Act of 1980, 42 U.S.C. Section 9601 et. seq., as amended by the
Superfund Amendments and Reauthorization Act of 1986.
"Certifying Party" is defined in Section 27.1 of the Lease.
"Claims" means any and all obligations, liabilities, losses, actions,
suits, judgments, penalties, fines, claims, demands, settlements, costs and
expenses (including reasonable legal fees and expenses) of any nature
whatsoever.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time, or any successor statute thereto.
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<PAGE> 8
"Collateral" means all of the property now owned or hereafter acquired
upon which a Lien is purported to be created by the Security Documents,
including the "Collateral" as that term is defined in the Security Agreement
and "Trust Property" as that term is defined in each of the Mortgages.
"Combined Tax Rate" means the highest Federal marginal rate applicable
to widely held corporations for the applicable year plus an assumed state and
local income tax rate of 3.5%.
"Commercial Paper" means promissory notes of CP Lender issued in the
commercial paper market pursuant to the Commercial Paper Documents.
"Commercial Paper Documents" means collectively (a) the Commercial
Paper and (b) the Capital Asset Purchase Agreement.
"Commitment" means (i) as to any Eurodollar Lender, the obligation of
such Lender to make Eurodollar Loans to Lessor under the Loan Agreement in an
aggregate principal amount at any one time outstanding not to exceed the amount
set forth opposite such Eurodollar Lender's name on Schedule I to the
Participation Agreement, as such amount may be reduced or increased from time
to time in accordance with the provisions of the Loan Agreement, and (ii) as to
Lessor, the obligation of Lessor to make available the Investment Amounts to
Lessee pursuant to Section 3.6 of the Participation Agreement in an aggregate
principal amount at any one time not to exceed amount set forth opposite
Lessor's name on Schedule I to the Participation Agreement.
"Commitment Fee Payment Date" means each Quarterly Payment Date and
the Maturity Date or such earlier date as the Commitments shall terminate as
provided in the Operative Documents.
"Commitment Fee Rate" means at any time the rate per annum set forth
opposite the then applicable rating category for the senior unsecured long-term
debt of AMAT (such rate changing from time to time on the date of each change
in the rating for the unsecured long-term debt of AMAT):
<TABLE>
<CAPTION>
APPLICABLE
RATING CATEGORY COMMITMENT FEE RATE
--------------- -------------------
<S> <C>
A or higher by S&P
A2 or higher by Moody's 0.115%
A- by S&P
A3 by Moody's 0.125%
BBB+ by S&P
</TABLE>
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<PAGE> 9
<TABLE>
<S> <C>
Baa1 by Moody's 0.150%
BBB by S&P
Baa2 by Moody's 0.175%
BBB- by S&P
Baa3 by Moody's 0.215%
lower than BBB- by S&P
lower than Baa3 by Moody's 0.325%
</TABLE>
If the ratings established or deemed established by Moody's and S&P shall fall
in different categories, the higher rating category and, therefore, the lower
applicable Commitment Fee Rate shall apply. If neither Moody's nor S&P shall
have in effect a rating for such debt, then the highest Commitment Fee Rate
shall apply. Notwithstanding the foregoing, for any day during an Interest
Period, after the full collateralization of the outstanding principal amount of
the Tranche A Eurodollar Notes as set forth in the definition of "Tranche A
Applicable Margin", with respect to that portion of the aggregate Available
Eurodollar Lender Commitment available to Fund Tranche A Eurodollar Loans
which, on such day, is collateralized with Treasury Securities pursuant to the
Pledge Agreement, the applicable Commitment Fee Rate for such day shall be
0.05%. For purposes of the foregoing sentence, the "portion of the aggregate
Available Eurodollar Lender Commitment and the Available Lessor Commitment
which Lessee has collateralized with Treasury Securities" shall be deemed to
equal 95% of such Participant's Commitment Percentage of the Value (as defined
in the Custodial Agreement) of Securities Collateral (as defined in the
Custodial Agreement) pledged by Lessee pursuant to the Pledge Agreement as of
the applicable Commitment Fee Payment Date.
"Commitment Fees" is defined in Section 4.7 of the Participation
Agreement.
"Commitment Percentage" means, (i) as to any Eurodollar Lender at any
time, the percentage which such Eurodollar Lender's Commitment then constitutes
of the Aggregate Commitment Amount and (ii) as to Lessor at any time, the
percentage which Lessor's Commitment then constitutes of the Aggregate
Commitment Amount.
"Commitment Period" means the period from and including the Document
Closing Date to but not including the Maturity Date or such earlier date on
which the Commitments shall terminate as provided in the Operative Documents.
"Completion" means, with respect to a Construction Site, such time as
the conditions set forth in Article 7 of the Participation Agreement are
satisfied.
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<PAGE> 10
"Condemnation" means any condemnation, requisition, confiscation,
seizure or other taking or sale of the use, access, occupancy, easement rights
or title to any Site or Unit of Equipment or any part thereof, 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 Person
having the power of eminent domain, including an action by a Governmental
Authority to change the grade of, or widen the streets adjacent to, any Site or
alter the pedestrian or vehicular traffic flow to any Site so as to result in
change in access to such Site, 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, occupancy or title is taken.
"Consent to Assignment" is defined in Appendix 2 to the Participation
Agreement and is substantially in the form of Exhibit M to the Participation
Agreement.
"Consent to Construction Agency Agreement Assignment" is defined in
Appendix 2 to the Participation Agreement.
"Consolidated Group" means, as to any Participant, all other Persons
(whether now existing or hereafter acquired), the accounts of which, in
accordance with GAAP, shall be consolidated with those of such Participant, in
its consolidated financial statements if such statements were prepared as of
such date.
"Consolidated Subsidiary" means, as of any date, any Subsidiary or
other entity the accounts of which would, in accordance with GAAP, be
consolidated with those of Lessee in its consolidated financial statements if
such statements were prepared as of such date.
"Construction Advance" is defined in Section 3.3 of the Participation
Agreement.
"Construction Agency Agreement" means the Construction Agency
Agreement between Lessor and Construction Agent, substantially in the form of
Exhibit B to the Participation Agreement.
"Construction Agency Agreement Assignment" is defined in Appendix 2 to
the Participation Agreement and is substantially in the form of Exhibit N to
the Participation Agreement.
"Construction Agency Agreement Supplement" means a supplement to the
Construction Agency Agreement executed by the Construction Agent and Lessor on
each Site Acquisition Date.
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<PAGE> 11
"Construction Agency Event of Default" means a "Construction Agency
Event of Default" as defined in Section 5.1 of the Construction Agency
Agreement.
"Construction Agent" means Lessee, as construction agent under the
Construction Agency Agreement.
"Construction Commencement Date" is defined in Section 2.3 of the
Construction Agency Agreement.
"Construction Completion Date" means, with respect to a Construction
Site, the date on which Completion for the Facility on such Site has occurred.
"Construction Cost" means with respect to any Construction Site the
amount Advanced under the Participation Agreement to construct any Facility to
be used on such Site in accordance with the Plans and Specifications therefor
and the Operative Documents, as set forth in each applicable Advance Request
therefor (including Capitalized Interest and Capitalized Yield).
"Construction Cost Funding Date" means any Business Day on which
Investment Amounts and Loans with respect to Construction Advances are funded
pursuant to the Participation Agreement and the Loan Agreement.
"Construction Documents" is defined in Section 2.6 of the Construction
Agency Agreement.
"Construction Period" means, with respect to a Construction Site, the
period commencing on the Construction Commencement Date for such Site and
ending on the earlier of (i) the Completion Date and (ii) the Outside
Completion Date, or the Extended Completion Date, as the case may be, for such
Site.
"Construction Period Site" means, at any date of determination, any
Construction Site as to which a Construction Period has commenced, and not
ended, on or prior to such date.
"Construction Site" means land (which may be purchased by Lessor with
Advances Funded by Participants or acquired by Lessor's receipt of a leasehold
interest from Lessee pursuant to a Ground Lease) as to which a Construction
Advance will be required to construct or renovate a Facility pursuant to the
Construction Agency Agreement.
"Continuation Date" is defined at Section 2.5(c) of the Loan
Agreement.
"Continuation Notice" is defined at Section 2.5(c) of the Loan
Agreement.
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<PAGE> 12
"Control" means (including the correlative meanings of the terms
"controlled by" and "under common control with"), as used with respect to any
Person, the possession directly or indirectly, of the power to direct or cause
the direction of the management policies of such Person, whether through the
ownership of voting securities or by contract or otherwise.
"CP Administrative Agent" means Credit Suisse First Boston, acting
through its New York Branch, as administrative agent for CP Lender.
"CP Lender" means Greenwich Funding Corporation.
"CP Loan" means a Loan made by CP Lender.
"CP Rate" means, with respect to Commercial Paper, the rate equivalent
to the per annum rate (or if more than one rate, the weighted average of the
rates) at which Commercial Paper was sold during the applicable Interest Period
(which rate shall include Administrative Fees and Dealer Fees); provided,
however, that if the rate (or rates) as agreed between any such placement agent
or dealer and CP Lender is a discount rate (or rates), the rate for such
Interest Period shall be the rate (or if more than one rate, the weighted
average of the rates) resulting from CP Lender's converting such discount rate
(or rates) to an interest-bearing equivalent rate per annum.
"CP Rate Period" means, with respect to any CP Loan, subject to the
limitations set forth in Section 3.10(d) of the Participation Agreement, the
period (not to exceed 180 days) specified in the Advance Request or
Continuation Notice; provided that if no period is specified in the Advance
Request or Continuation Notice, the "CP Rate Period" shall be the number of
days set forth at the last paragraph of Section 2.5(c) of the Loan Agreement.
"Credit Agreement" means the $240,000,000 Credit Agreement dated
September 8, 1994, and amended by Amendment No. 1 dated as of February 12,
1996, as further amended and restated as of April 4, 1997, among AMAT, the
Banks party thereto and Morgan Guaranty Trust Company of New York, as Agent, as
such agreement is amended, modified, restated, replaced or refinanced from time
to time, including any similar successor agreement or agreements or arrangement
or arrangements providing for revolving or working capital indebtedness,
whether or not secured; provided that if at any time there shall exist no such
arrangement or agreement, the term "Credit Agreement" shall be deemed to refer
to the last such agreement(s) or arrangement(s) to have been in effect,
exclusive of any modification to the terms of such agreements or arrangements
that were made in contemplation of the termination of such facility.
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<PAGE> 13
"CSL" is defined in Section 8.2 of the Participation Agreement.
"Custodial Agreement" means the Custodial Agreement dated as of April
30, 1997, among Lessee, Custodian and Agent, substantially in the form of
Exhibit Q to the Participation Agreement.
"Custodian" means Mellon Bank, N.A., as custodian under the Custodial
Agreement.
"Dealer Fees" means the fees described in paragraph 6 of the Fee and
Yield Letter.
"Deed" is defined in Section 6.2(g) of the Participation Agreement and
is substantially in the form of Exhibit T to such agreement.
"Deemed Yield" means, for any Interest Period during the Special
Period, an amount equal to (i) the product of the Yield Rate for such Interest
Period and (ii) $10,000.
"Developed Site" means Land and the Facilities thereon and as to which
no Construction Advances will be required under the Operative Documents.
"Document Closing Date" is defined in Article 2 of the Participation
Agreement.
"Dollars" and "$" mean dollars in lawful currency of the United States
of America.
"Environmental Audit" means a Phase One environmental site assessment
(the scope and performance of which meets or exceeds ASTM Standard Practice
E1527-93 Standard Practice for Environmental Site Assessments: Phase One
Environmental Site Assessment Process) of each Site to be acquired by Lessor on
a Site Acquisition Date or of a Site to be remarketed under any Remarketing
Option under the Lease.
"Environmental Law" means, whenever enacted or promulgated, any
Federal, state, county or local law, statute, ordinance, rule, regulation,
license, permit, authorization, approval, covenant, written criteria, written
guideline, administrative or court order, judgment, decree, injunction, code or
written requirement or any agreement of Lessee or Affiliate of Lessee with a
Governmental Authority:
(x) relating to pollution (or the cleanup, removal,
remediation or encapsulation thereof, or any other response thereto),
or the regulation or protection of human health,
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<PAGE> 14
safety or the environment, including air, water, vapor, surface water,
groundwater, drinking water, land (including surface or subsurface),
plant, aquatic and animal life, or
(y) concerning exposure to, or the use, containment,
storage, recycling, treatment, generation, discharge, emission,
Release or threatened Release, transportation, processing, handling,
labeling, containment, production, disposal or remediation of any
Hazardous Substance, Hazardous Condition or Hazardous Activity.
in each case as amended and as now or hereafter in effect, and any common law
or equitable doctrine (including injunctive relief and tort doctrines such as
negligence, nuisance, trespass and strict liability) that may impose liability
or obligations for injuries (whether personal or property) or damages due to or
threatened as a result of the presence of, exposure to, or ingestion of, any
Hazardous Substance, whether such common law or equitable doctrine is now or
hereafter recognized or developed. Applicable Laws and Regulations include,
but are not limited to, CERCLA; the Resource Conservation and Recovery Act of
1976, 42 U.S.C. Section 6901 et seq.; the Federal Water Pollution Control Act,
33 U.S.C. Section 1251 et seq.; the Clean Air Act, 42 U.S.C. Section Section
7401 et seq.; the National Environmental Policy Act, 42 U.S.C. Section 4321;
the Refuse Act, 33 U.S.C. Section Section 401 et seq.; the Hazardous Materials
Transportation Act of 1975, 49 U.S.C. Section Section 1801-1812; the Toxic
Substances Control Act, 15 U.S.C. Section Section 2601 et seq.; the Federal
Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C. Section Section 136 et
seq.; the Safe Drinking Water Act, 42 U.S.C. Section Section 300f et seq.; and
the Occupational Safety and Health Act of 1970, each as amended and as now or
hereafter in effect, and their state and local counterparts or equivalents,
including any regulations promulgated thereunder.
"Environmental Violation" means any activity, occurrence or condition
that violates or results in non-compliance with any Environmental Law.
"Equipment" means equipment, apparatus, furnishings, fittings and
personal property of every kind and nature whatsoever purchased, leased or
otherwise acquired by Lessor using the proceeds of the Loans or Investment
Amounts in connection with an Equipment Advance.
"Equipment Acquisition Date" means each date occurring in an Equipment
Pool Period on which Lessor acquires any Unit of Equipment pursuant to Article
3 of the Participation Agreement.
"Equipment Advance" is defined in Section 3.4 of the Participation
Agreement.
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<PAGE> 15
"Equipment Charges" means freight, installation and applicable
sales or use or similar taxes imposed on any Unit of Equipment.
"Equipment Cost" means, with respect to any Unit of Equipment, the
amount advanced on each Equipment Acquisition Date to acquire a Unit of
Equipment.
"Equipment Fixed Rent" means for any Quarterly Payment Date the sum of
the amounts of Equipment Fixed Rent set forth on Schedule II to the Equipment
Lease Supplements.
"Equipment Group" means Units of Equipment which (i) have an aggregate
Equipment Purchase Price of not less than $500,000; (ii) are comprised of the
type of Equipment described in items (i) or (ii) of the definition of Qualified
Equipment; and (iii) are set forth on Schedule I to an Equipment Lease
Supplement.
"Equipment Group Balance" means with respect to an Equipment Group an
amount equal to the outstanding principal amount of the Loans and Investment
Amounts Funded for the acquisition of the Units of Equipment in such Equipment
Group.
"Equipment Invoice Cost" means with respect to any Unit of Equipment
the aggregate cost of such Unit of Equipment (exclusive of Equipment Charges)
reflected on the invoice therefor delivered to Lessor pursuant to Section 3.4
of the Participation Agreement.
"Equipment Lease Supplement" means an Equipment Lease Supplement
substantially in the form of Exhibit B to the Lease together with all
attachments and schedules thereto, as such Equipment Lease Supplement may be
supplemented, amended or modified from time to time.
"Equipment Notes" means the Tranche A Eurodollar Equipment Note, the
Tranche A CP Equipment Note, the Tranche B Eurodollar Equipment Note, and the
Tranche B CP Equipment Note.
"Equipment Pool" means the Units of Equipment for which Equipment
Advances therefor occur during the same Equipment Pool Period.
"Equipment Pool Expiration Date" is defined in Section 2.5(b) of the
Lease.
"Equipment Pool Period" means the period commencing on an Equipment
Pool Period Commencement Date and ending on the day preceding the second
anniversary of such Equipment Pool Period Commencement Date.
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"Equipment Pool Period Commencement Date" means (i) for any Equipment
Advance prior to the second anniversary of the Document Closing Date, the
Document Closing Date, and (ii) for any Equipment Advance thereafter, the last
biennial anniversary of the Document Closing Date immediately preceding the
date of such Equipment Advance.
"Equipment Pool Remarketing Option" is defined in Section 22.2 of the
Lease.
"Equipment Purchase Price" means for a Unit of Equipment the Equipment
Invoice Cost.
"Equipment Remarketing Period" means, with respect to any Equipment
Pool, the period commencing on the date 180 days prior to the Equipment Pool
Expiration Date relating to such Equipment Pool and ending on such Equipment
Pool Expiration Date.
"Equipment Renewal Effective Date" means, with respect to any
Equipment Pool, the date on which the Equipment Renewal Term for such Equipment
Pool becomes effective pursuant to Section 21.2 of the Lease.
"Equipment Renewal Option" is defined in Section 21.2 of the Lease
Agreement.
"Equipment Renewal Request" is defined in Section 21.2 of the Lease.
"Equipment Renewal Term" means, for any Equipment Pool, the one-year
period which immediately follows the Original Equipment Pool Expiration Date
for such Equipment Pool and with respect to which the conditions for the
Equipment Renewal Option set forth at Section 21.2 of the Lease have been
satisfied.
"Equipment Rent" means the Equipment Fixed Rent and the Equipment
Variable Rent.
"Equipment Term" is defined in Section 2.5(b) of the Lease.
"Equipment Variable Rent" means an amount payable on each Payment Date
during the Term equal to the aggregate amount of interest payable on such
Payment Date on the Equipment Notes and Yield payable on such Payment Date on
Investment Amounts.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" means each entity required to be aggregated with
Lessee pursuant to the requirements of Section 414(b) or (c) of the Code.
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"ERISA Group" means AMAT and all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with AMAT, are treated as a single employer
under Section 414 of the Code.
"Eurocurrency Reserve Requirements" means, for any day as applied to a
Loan, the aggregate (without duplication) of the rates (expressed as a decimal
fraction) of reserve requirements in effect on such day (including basic,
supplemental, marginal and emergency reserves under any regulations of the
Board of Governors of the Federal Reserve System of the United States or other
Governmental Authority having jurisdiction with respect thereto) dealing with
reserve requirements prescribed for eurocurrency funding (currently referred to
as "Eurocurrency Liabilities" in Regulation D of the Board of Governors of the
Federal Reserve System of the United States) maintained by a member bank of the
Federal Reserve System.
"Eurodollar Lender Rate" means the sum of the Eurodollar Rate plus the
Applicable Margin or, if required by Section 11.5 of the Participation
Agreement, the Base Rate.
"Eurodollar Lenders" means the several banks from time to time party
to the Loan Agreement as Eurodollar Lenders.
"Eurodollar Loan" means a Loan made by a Eurodollar Lender which may
accrue interest at either the Eurodollar Rate or the Base Rate.
"Eurodollar Office" shall mean initially, the funding office of Agent
designated as such in Schedule III to the Participation Agreement; and
thereafter, such other office of Agent designated from time to time by notice
from Agent to Lessee and the Participants, whether or not outside the United
States, which shall be making or maintaining loans with reference to Eurodollar
Loans.
"Eurodollar Rate" shall mean, with respect to any applicable Interest
Period, the average (rounded upward, if necessary, to the next higher 1/16 of
1%) of the respective rates per annum at which deposits in dollars are offered
to the Eurodollar Reference Bank in the London interbank market at
approximately 11:00 a.m. (London time) two Business Days before the first day
of such Interest Period in an amount approximately equal to the principal
amount of the Eurodollar Loan of the Eurodollar Reference Bank to which such
Interest Period is to apply and for a period of time comparable to such
Interest Period. Notwithstanding the foregoing, for any day during an Interest
Period, with respect to the portion of the outstanding principal amount of the
Tranche A Eurodollar Notes which, on such day, are collateralized with Cash
Collateral pursuant to the Pledge Agreement (which portion shall
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be deemed to equal the dollar amount of such Cash Collateral on deposit on such
day pursuant to the Pledge Agreement), the Eurodollar Rate for such day shall
be zero with respect to the pro rata portion of each Eurodollar Lender's
Tranche A Eurodollar Notes that have been so collateralized, except to the
extent that any amount which constitutes interest, yield or earnings on such
Cash Collateral is recovered in or through legal proceedings by any Person
claiming by or through Lessee from a Eurodollar Lender or Depository (as
defined in the Pledge Agreement), in which case the foregoing provision
reducing the Eurodollar Rate to zero shall be deemed to have no effect, and the
Eurodollar Rate determined in accordance with the preceding sentence shall be
reinstated, to the extent of the amounts so recovered.
"Eurodollar Reference Bank" shall mean Credit Suisse First Boston.
"Excepted Payments" means:
(a) all indemnity payments (including indemnity and gross
up payments made pursuant to Article 11 of the Participation
Agreement) to which Agent or any Participant or any of their
respective Affiliates, agents, officers, directors or employees is
entitled;
(b) any amounts (other than Basic Rent or amounts payable
by Lessee pursuant to Section 16.2 or Articles XVII, XX or XXII of the
Lease) payable pursuant to the terms of any Operative Document to
reimburse Agent or any Participant or any of their respective
Affiliates (including the reasonable out-of-pocket expenses of Agent
and any Participant incurred in connection with any such payment) for
performing or complying with any of the obligations of Lessee under
and as permitted by any Operative Document;
(c) any amount payable to any Participant by any
transferee permitted under the Operative Documents of the interest of
such Participant as the purchase price of such Participant's interest
in the Notes or Investment Amount (or a portion thereof);
(d) any insurance proceeds (or payments with respect to
risks self-insured or policy deductibles) under liability policies
other than such proceeds or payments payable to Agent;
(e) any insurance proceeds under policies maintained by
any Participant;
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(f) Transaction Expenses or other amounts or expenses
paid or payable to or for the benefit of any Participant; and
(g) any payments in respect of interest to the extent
attributable to payments referred to in clauses (a) through (f) above.
"Excess Gross Proceeds" means, as of any Applicable Expiration Date
and only as to Sites and Equipment Pools for which the Remarketing Option was
exercised and for which sales were completed prior to such Applicable
Expiration Date, the aggregate of the amounts, if any, by which the Gross
Proceeds for each such Site and Equipment Group received by Agent pursuant to
Article XXII of the Lease exceeded the related Site Balance or Equipment Group
Balance, respectively, for each such Site or Equipment Group to the extent such
excess (x) was not previously applied against Prior Shortfalls and (y) was paid
by Agent to Lessee pursuant to Article XXII of the Lease.
"Excess Proceeds" means the excess, if any, of the aggregate of all
awards, compensation or insurance proceeds payable in connection with a
Casualty or Condemnation over the Property Balance paid by Lessee pursuant to
Articles XV and XVI of the Lease with respect to such Casualty or Condemnation.
"Existing Sites" means the sites currently owned by BNP and leased to
Lessee commonly referred to as the Central Park Property and the Garrett Drive
Property.
"Existing Sites Purchase Price" means the sum of (a) the payout amount
payable to BNP on the initial Advance Date to purchase the Existing Sites
(which amount shall be paid by Agent to BNP on the initial Advance Date) plus
(b) the difference between (x) $64,950,000 and (y) the sum of the amount set
forth in clause (a) above plus the Transaction Expenses Funded on the initial
Advance Date. The Transaction Expenses Funded on the initial Advance Date not
directly attributable to a Site together with the amount determined in clause
(b) of the preceding sentence (which amount shall be paid by Agent to Lessee on
the initial Advance Date) will be allocated pro rata between the Central Park
Property and the Garrett Drive Property based on the portion of the payout
amount referred to in clause (a) above attributable to each Existing Site.
"Expiration Date Purchase Obligation" means, with respect to any Site
or Equipment Pool, Lessee's obligation, pursuant to Section 20.2 of the Lease,
to purchase (i) such Site on the related Site Expiration Date and (ii) all (but
not less than all) of the Equipment that constitutes such Equipment Pool on the
related Equipment Pool Expiration Date.
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"Extended Completion Date" means, with respect to a Construction Site
for which construction has been properly delayed pursuant to Section 2.8 of the
Construction Agency Agreement, the earlier of (a) six (6) months after the end
of the Capital Expenditure Moratorium Period and (b) the Site Expiration Date.
"Extension Effective Date" is defined in Section 2.2(e) of the Loan
Agreement.
"Extension Request" is defined in Section 2.2(e) of the Loan
Agreement.
"Extension Response Date" is defined in Section 2.2(e) of the Loan
Agreement.
"Facility" means all buildings, structures, Fixtures, and other
Improvements (but excluding Units of Equipment) of every kind existing at any
time and from time to time (including those purchased or constructed with
amounts advanced by the Participants pursuant to the Participation Agreement)
on the Land relating to a Site, together with any and all appurtenances to such
buildings, structures or Improvements, including sidewalks, utility pipes,
conduits and lines, parking areas and roadways, and including all Modifications
and other additions to or changes in the Improvements at any time.
"Fair Market Value" means, with respect to any Site, Unit of Equipment
or Equipment Group, as applicable, the amount, which in any event shall not be
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, respectively, for
the ownership of such Leased Property. The Fair Market Value of any Leased
Property shall be determined based on the assumption that, except for purposes
of Section 11.9 of the Participation Agreement, such Leased Property is in the
condition and state of repair required under Section 10.1 of the Lease and
Lessee is in compliance with the other requirements of the Operative Documents.
"Federal Funds Effective Rate" means, for any day, an interest rate
per annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers, as published for such day by the Federal Reserve Bank of New
York, or, if such rate is not so published for any day which is a Business Day,
the average of quotations for such day on such transaction received by Agent
from three Federal funds brokers of recognized standing selected by it.
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"Fee and Yield Letter" means that certain letter agreement dated as of
April 30, 1997 from Agent and Borrower to Lessee, as consented and agreed to by
Lessee.
"Fixtures" means all fixtures relating to any Facility or Site,
including all components thereof, located in or on any Facility or Site,
together with all replacements, modifications, alterations and additions
thereto.
"Force Majeure Event" means with respect to any Construction Site any
event (the existence or potentiality of which was not known and could not have
been discovered through the exercise of due diligence by Construction Agent
prior to the related Site Acquisition Date) beyond the control of the
Construction Agent and its Affiliates, other than a Casualty or Condemnation,
including strikes, lockouts, adverse soil conditions, acts of God, adverse
weather conditions, inability to obtain labor or materials, government
activities, civil commotion and enemy action; but excluding any event, cause or
condition that results from the Construction Agent's or its Affiliates'
financial condition or failure to pay or any event, cause or condition which
could have been avoided or which could be remedied through the exercise of
commercially reasonable efforts or the commercially reasonable expenditure of
funds.
"Fund," "Funded" or "Funding" means the funding by Lessor and Lenders
on any Advance Date of Investment Amounts and Loans, in the amounts in order to
fund Lessor's or Lenders' portion of each Advance.
"Funding Office" means the office of each Participant identified on
Schedule II to the Participation Agreement as its Funding Office.
"GAAP" means United States generally accepted accounting principles
consistently applied (including principles of consolidation), in effect from
time to time.
"Garrett Drive Property" means the two-story office building located
at 3535 Garrett Drive, Santa Clara, California.
"Governmental Action" means all permits, authorizations,
registrations, consents, approvals, waivers, exceptions, variances, orders,
judgments, written interpretations, decrees, licenses, exemptions,
publications, filings, notices to and declarations of or with, or required by,
any Governmental Authority, or required by any Applicable Laws and Regulations,
and shall include, without limitation, all environmental and operating permits
and licenses that are required for the use, occupancy, zoning and operation of
any Site or Unit of Equipment.
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"Governmental Authority" means any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Gross Proceeds" means the gross proceeds from the sale of a Site (or
portion thereof) or an Equipment Group pursuant to Article XX of the Lease or a
sale of a Site or an Equipment Pool pursuant to Article XXII of the Lease,
without deduction for any marketing, closing or other costs, prorations or
commissions.
"Ground Lease" means a ground lease between Lessee and Lessor
substantially in the form of Exhibit U to the Participation Agreement.
"Hazardous Activity" means any activity, process, procedure or
undertaking that directly or indirectly (i) produces, generates or creates any
Hazardous Substance; (ii) causes or results in (or threatens to cause or result
in) the Release of any Hazardous Substance into the environment (including air,
water vapor, surface water, groundwater, drinking water, land (including
surface or subsurface), plant, aquatic and animal life); (iii) involves the
containment or storage of any Hazardous Substance; or (iv) would be regulated
as hazardous waste treatment, storage or disposal within the meaning of any
Environmental Law.
"Hazardous Condition" means any condition that violates or threatens
to violate, or that results in or threatens noncompliance with, any
Environmental Law.
"Hazardous Substance" means any of the following: (i) any petroleum
or petroleum product, explosives, radioactive materials, asbestos,
formaldehyde, polychlorinated biphenyls, lead and radon gas; (ii) any
substance, material, product, derivative, compound or mixture, mineral,
chemical, waste, gas, medical waste, or pollutant, in each case whether
naturally occurring, man-made or the by-product of any process, that is toxic,
harmful or hazardous to the environment or human health or safety; or (iii) any
substance, material, product, derivative, compound or mixture, mineral,
chemical, waste, gas, medical waste or pollutant that would support the
assertion of any claim under any Environmental Law, whether or not defined as
hazardous as such under any Environmental Law.
"Highest Lawful Rate" is defined in Section 4.5(b) of the
Participation Agreement.
"Improvements" means all buildings, fixtures and improvements located
on the Land from time to time, including but not limited to mechanical,
electrical, HVAC and other building
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systems attached to any buildings or improvements presently existing or to be
constructed on the Land.
"Improvements Balance" means, with respect to any Site that
constitutes a 25% Property, the product obtained by multiplying the Site
Balance as of any date of determination by the Improvements Percentage.
"Improvements Percentage" means, with respect to any Site that
constitutes a 25% Property, the percentage of the Fair Market Value of such
Site (on an "as built" basis in the case of a Construction Site) attributable
to the Facility related thereto, as specified in the Appraisal delivered on the
related Site Advance Date pursuant to Section 6.2(a)(ii) of the Participation
Agreement.
"Improvements Proceeds" means, with respect to any Site that
constitutes a 25% Property, the product obtained by multiplying the Gross
Proceeds by the Improvements Percentage.
"Indemnitee" means any of Agent, Lessor or Participants and their
respective Affiliates and their respective successors, assigns, directors,
shareholders, partners, officers, employees and agents.
"Insurance Requirements" means all terms and conditions of any
insurance policy either required by the Lease to be maintained by Lessee or
required by the Construction Agency Agreement to be maintained by the
Construction Agent, and all requirements of the issuer of any such policy.
"Interest Component" means, with respect to any Interest Period
applicable to Commercial Paper:
(A) without duplication of the amount set forth in
the immediately following clause (B), the sum of the daily
interest accrued on the Commercial Paper outstanding on each
day during such Interest Period equal, for any such day, to
the product of (x) the outstanding principal amount of such
Commercial Paper on such day, (y) the CP Rate on such day, and
(z) 1/360; plus
(B) if any Commercial Paper has been issued during
such Interest Period to fund the interest component on any
other Commercial Paper maturing on a day other than such day,
the sum of the daily interest accrued on such additional
Commercial Paper outstanding on each day during such Interest
Period equal, for any such day, to the product of (x) the
outstanding principal amount of
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such additional Commercial Paper, (y) the CP Rate on such day,
and (z) 1/360.
"Interest Payment Loan" means any Loan made to fund the payment of
Capitalized Interest with respect to a Construction Period Site.
"Interest Period" means (x) with respect to any Eurodollar Loan and
Investment Amount for which Lessee requests a Base Rate, each Base Rate Period;
(y) with respect to any Eurodollar Loan and Investment Amount for which Lessee
requests a Eurodollar Rate, initially the period commencing on (and including)
the Advance Date on which such amount is Advanced or a Continuation Date and
ending on (but excluding) the next succeeding Quarterly Payment Date, and
thereafter each period commencing on (and including) a Quarterly Payment Date
and ending on (but excluding) the next succeeding Quarterly Payment Date and
(z) with respect to any CP Note and any Investment Amount for which the related
CP Loan accrues interest at the CP Rate, each CP Rate Period.
"Investment" or "Investment Amount" is defined in Section 3.6 of the
Participation Agreement.
"Investment Company Act" means the Investment Company Act of 1940, as
amended, together with the rules and regulations promulgated thereunder.
"Land" means either a fee title to or ground lease interest in the
parcel of real property described on Schedule 1 of any Site Lease Supplement
and all Appurtenant Rights attached thereto.
"Land Balance" means, with respect to any Site that constitutes a 25%
Property, the product obtained by multiplying the Site Balance as of any date
of determination by the Land Percentage.
"Land Percentage" means, with respect to any Site that constitutes a
25% Property, the percentage of the Fair Market Value of such Site (on an "as
built" basis in the case of a Construction Site) attributable to the Land
related thereto, as specified in the Appraisal delivered on the related Site
Advance Date pursuant to Section 6.2(a)(ii) of the Participation Agreement.
"Land Proceeds" means, with respect to any Site that constitutes a 25%
Property, the product obtained by multiplying the Gross Proceeds by the Land
Percentage.
"Lease" or "Lease Agreement" means the Master Lease between Lessor and
Lessee, together with any Lease Supplements thereto,
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as the Lease may be amended or modified from time to time as permitted by the
Operative Documents, substantially in the form of Exhibit A to the
Participation Agreement.
"Lease Balance" means, as of any date of determination, an amount
equal to the aggregate sum of the outstanding principal amount of the Loans and
the outstanding Investment Amounts.
"Lease Default" means any event or condition which, with the lapse of
time or the giving of notice, or both, would constitute a Lease Event of
Default.
"Lease Event of Default" is defined in Section 17.1 of the Lease.
"Lease Expiration Date" means the last Site Expiration Date or
Equipment Pool Expiration Date.
"Lease Supplement" means each Site Lease Supplement and Equipment
Lease Supplement.
"Leased Property" means all Equipment and Sites.
"Lenders" means CP Lender and Eurodollar Lenders.
"Lessee" means Applied Materials, Inc., as lessee under the Lease, and
its successors and assigns expressly permitted under the Operative Documents.
"Lessor" means Credit Suisse Leasing 92A, L.P., as Lessor under the
Lease, and its successors and assigns expressly permitted under the Operative
Documents.
"Lessor Lien" means any Lien, true lease or sublease or disposition of
title arising as a result of (a) any claim against Lessor or the Bank not
resulting from the transactions contemplated by the Operative Documents, (b)
any act or omission of Lessor or the Bank which is not required by the
Operative Documents or is in violation of any of the terms of the Operative
Documents, (c) any claim against Lessor or Bank, with respect to Taxes or
Transaction Expenses against which Lessee is not required to indemnify Lessor
or the Bank, in its individual capacity, pursuant to Article 11 of the
Participation Agreement or (d) any claim against Lessor arising out of any
transfer by Lessor of all or any portion of the interest of Lessor in the
Leased Properties or the Operative Documents other than the transfer of title
to or possession of any Leased Properties by Lessor pursuant to and in
accordance with the Lease, the Loan Agreement or the Participation Agreement or
pursuant to the exercise of the remedies set forth in Article XVII of the
Lease.
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"Lien" means any mortgage, deed of trust, pledge, security interest,
encumbrance, lien, easement, servitude or charge of any kind, including any
irrevocable license, conditional sale or other title retention agreement, any
lease in the nature thereof, or any other right of or arrangement with any
creditor to have its claim satisfied out of any specified property or asset
with the proceeds therefrom prior to the satisfaction of the claims of the
general creditors of the owner thereof, whether or not filed or recorded, or
the filing of, or agreement to execute as "debtor", any financing or
continuation statement under the Uniform Commercial Code of any jurisdiction or
any federal, state or local lien imposed pursuant to any Environmental Law.
"Loan" means a Tranche A Loan or a Tranche B Loan.
"Loan Agreement" means the Loan Agreement among Borrower, Agent and
the Lenders, substantially in the form of Exhibit G to the Participation
Agreement.
"Loan Agreement Default" means any event, act or condition which with
notice or lapse of time, or both, would constitute a Loan Event of Default.
"Loan Event of Default" is defined in Section 6.1 of the Loan
Agreement.
"Loan Documents" means the Loan Agreement, the Notes and the Security
Documents.
"Loan Year" means a period of time from the Document Closing Date or
any anniversary of the Document Closing Date to the immediately succeeding
anniversary of the Document Closing Date.
"Loss Determination Notice" is defined in Section 16.1 of the Lease.
"Loss Notice" is defined in Section 15.1(f) of the Lease.
"Loss Settlement Date" is defined in Section 15.1(f)(i) of the Lease.
"Major Construction Document" is defined in Section 2.6 of the
Construction Agency Agreement.
"Material Adverse Effect" means any change or changes, event or
events, omission or omissions, effect or effects or condition or conditions
that individually or in the aggregate are or are likely to be materially
adverse to (i) the business, properties, financial condition or results of
operation of Lessee and its Consolidated Subsidiaries, taken as a whole that
would materially adversely affect the ability of Lessee to perform its
obligations
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set forth in the Operative Documents, (ii) the transactions contemplated by the
Operative Documents, (iii) Lessor's title to or Lessor's or Agent's Lien on any
Site, Equipment Group or the Collateral (except as expressly permitted by the
Operative Documents), (iv) the ownership, use, operation, disposition, utility
or Fair Market Value of any Site or Equipment Group or (v) the validity or
enforceability of any of the Operative Documents or any rights or remedies
under any thereof.
"Material Plan" means at any time a Plan or Plans having aggregate
Unfunded Liabilities in excess of $100,000,000.
"Maturity Date" means the fifth anniversary of the Document Closing
Date, as such date may be extended from time to time pursuant to Section 2.1(e)
of the Loan Agreement, in the case of CP Loans, and 2.2(e) of the Loan
Agreement, in the case of Eurodollar Loans.
"Modifications" is defined in Section 11.1(a) of the Lease.
"Moody's" means Moody's Investors Service, Inc.
"Mortgage" means, with respect to any Site, a Mortgage and Security
Agreement substantially in the form attached as Exhibit I to the Participation
Agreement or a Deed of Trust and Security Agreement substantially in the form
attached as Exhibit J to the Participation Agreement, in each case made by
Lessor and Lessee (to the extent of its interest, if any, in the Leased
Properties) in favor of Agent for the benefit of the Participants and
satisfactory in form and substance to Agent and the Required Lenders in order
to create a first priority mortgage lien on such Site.
"Multiemployer Plan" means at any time an employee pension benefit
plan within the meaning of Section 4001(a)(3) of ERISA to which any member of
the ERISA Group is then making or accruing an obligation to make contributions
or has within the preceding five plan years made contributions, including for
these purposes any Person which ceased to be a member of the ERISA Group during
such five year period.
"Net Proceeds" means all amounts paid in connection with any Casualty
or Condemnation, and all interest earned thereon, less the expense of claiming
and collecting such amounts, including all costs and expenses in connection
therewith for which Agent or Lessor is entitled to be reimbursed pursuant to
the Lease.
"Non-Consenting Eurodollar Lender" is defined in Section 2.2(e)(C) of
the Loan Agreement.
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"Note Guarantee" means the Note Guarantee dated April 30, 1997 by
Lessee in favor of the Indemnitees, substantially in the form of Exhibit F to
the Participation Agreement.
"Notes" means the collective reference to the Tranche A Notes and the
Tranche B Notes.
"Operative Documents" means the following:
(a) the Participation Agreement;
(b) the Loan Agreement;
(c) the Capital Asset Purchase Agreement;
(d) the Notes;
(e) the Lease (including each Lease Supplement);
(f) each of the Security Documents;
(g) Deeds and Contracts of Sale for each Site;
(h) Ground Leases;
(i) Bills of Sale;
(j) the Construction Agency Agreement and each
Construction Agency Agreement Supplement;
(k) the Note Guarantee;
(l) the Unsecured Environmental Indemnities; and
(m) the Fee and Yield Letter.
"Original Equipment Pool Expiration Date" means, with respect to any
Equipment Pool, the third anniversary of the related Equipment Pool Period
Commencement Date.
"Original Site Expiration Date" is defined in Section 2.5(a) of the
Lease.
"Original Estimated Construction Costs" means, with respect to any
Construction Site as of the related Site Acquisition Date (or as of any date of
a redetermination thereof pursuant to Section 3.15 of the Participation
Agreement), an amount equal to the aggregate amount which the Construction
Agent in good faith expects to be expended in order to achieve Completion of
construction on a Construction Site (including amounts expected to be expended
to pay interest accruing on Loans and Yield accruing on Investment Amounts
Funded with respect to any Construction Advance prior to completion).
"Original Executed Counterpart" is defined in Section 32.8 of the
Lease Agreement.
"Outside Completion Date" means, with respect to a Construction Site,
the earlier of (a)(i) for a building intended for a general office or research
and development or manufacturing facility, the date which is twenty four (24)
months after the Construction Commencement Date, or such later date approved by
Required Participants on or before the Site Acquisition Date, but
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no longer than thirty six (36) months after the Construction Commencement Date;
(ii) for a demonstration and testing facility or laboratory, thirty (30) months
after the Construction Commencement Date, or such later date approved by
Required Participants on or before the Site Acquisition Date; provided, that
each such completion date may be extended by up to an additional three (3)
months due to the occurrence of a Force Majeure Event, (b) the applicable Site
Expiration Date.
"Overall Transaction" means all the transactions and activities
referred to in or contemplated by the Operative Documents.
"Overdue Rate" means the lesser of (a) the highest interest rate
permitted by Applicable Laws and Regulations and (b) an interest rate per annum
equal to, in the case of the Notes, the rate of interest otherwise payable with
respect thereto plus 2%, and, in the case of the Investment, the Yield Rate
plus 2%.
"Ownership Interest" is defined in the Capital Asset Purchase
Agreement.
"Ownership Interest Conversion Date" is defined in Section 2.5(d) of
the Loan Agreement.
"Part" is defined in Section 11.2 of the Lease.
"Participant Balance" means, for any Lender or Lessor as of any date
of determination, an amount equal to the sum of the aggregate outstanding
principal amount of all Loans of such Lender or the aggregate Investment
Amounts of Lessor.
"Participants" means collectively Lenders and Lessor, and
"Participant" means any one of the foregoing.
"Participation Agreement" means the Participation Agreement dated as
of April 30, 1997 among Lessee, Construction Agent, Lessor, Agent and the
Lenders.
"Payment Date" means (i) with respect to each payment of Equipment
Fixed Rent, each Quarterly Payment Date, and (ii) with respect to each payment
of Equipment Variable Rent or Site Rent, either the last day of any Interest
Period (including each Refinancing Date) or if prepaid, the date of such
prepayment.
"Payment Default" shall mean a Lease Event of Default described in
Sections 17.1(a) or 17.1(b) of the Lease.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
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"Permitted Contest" shall mean actions taken by a Person to contest in
good faith, by appropriate proceedings initiated timely and diligently
prosecuted, the legality, validity or applicability to the Leased Property or
any interest therein of any Person of: (a) any law, regulation, rule,
judgment, order, or other legal provision or judicial or administrative
requirements; (b) any term or condition of, or any revocation or amendment of,
or other proceeding relating to, any authorization or other consent, approval
or other action by any Governmental Authority; or (c) any Lien or Tax; provided
that the initiation and prosecution of such contest would not: (i) result in,
or materially increase the risk of, the imposition of any criminal liability on
any Indemnitee, such determination to be made in the sole and reasonable
judgment of such Indemnitee; (ii) materially and adversely affect the security
interests created by the Operative Documents or the right, title or interest of
Agent or Lessor in or to the Leased Property or the right of Lessor, Agent or
any Participant to receive payment of the principal of or interest on any Note,
Investment Amount of or Yield, Rent, the Lease Balance or any interest therein;
or (iii) materially and adversely affect the fair market value, utility or
remaining useful life of the Leased Property or any interest therein or the
continued economic operation thereof; and provided further that in any event
adequate reserves in accordance with GAAP are maintained against any adverse
determination of such contest.
"Permitted Exceptions" means, with respect to a Site, all
encumbrances, exceptions, restrictions, easements, rights of way, servitudes,
encroachments and irregularities in title, other than Liens approved of by
Agent prior to the applicable Site Advance Date and which are set forth in the
Title Policy or commitment for such Site to be delivered pursuant to and
conforming with the requirements of Section 6.2(d) of the Participation
Agreement.
"Permitted Hazardous Substances" means with respect to a Site, only
such quantities of Hazardous Substances, if any, that are: (i) reasonably
necessary for the conduct of any Permitted Use at such Site and (ii)
groundwater contaminants originating from a source and which have concentration
levels not to exceed those described in the Environmental Audit for the Site
described in Section 6.2(f) of the Participation Agreement (except for periodic
and temporary increases in such concentration levels that do not, in any event,
result in an Environmental Violation with respect to Lessee, Lessor or the
Site); provided, however, that with respect to both clauses (i) and (ii) of
this definition, the existence, holding and use of all such Hazardous
Substances shall (x) in all events be and remain in compliance with all
Applicable Laws and Regulations and (y) not constitute or become a Significant
Event or constitute or result in a Material Adverse Effect; provided further,
that upon transfer of a Site pursuant to Article XXII of the Lease, Permitted
Hazardous
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<PAGE> 31
Substances shall include only those described in clause (ii) above.
"Permitted Liens" means:
(i) the respective rights and interests of the parties to
the Operative Documents as provided in the Operative Documents;
(ii) the rights of any sublessee or assignee under a
sublease or an assignment expressly permitted by the terms of the
Lease;
(iii) Liens for Taxes that either are not yet due or are
being contested in accordance with the provisions of Section 13.1 of
the Lease or Section 11.2(b) of the Participation Agreement, as
applicable;
(iv) Liens arising by operation of law, materialmen's,
mechanics', workers', repairmen's, employees', carriers',
warehousemen's and other like Liens relating to the construction of
the Improvements or in connection with any Modifications or arising in
the ordinary course of business for amounts that either are not more
than 60 days past due or are being diligently contested in good faith
by appropriate proceedings, so long as such proceedings satisfy the
conditions for the continuation of proceedings to contest Taxes set
forth in Section 13.1 of the Lease;
(v) Liens of any of the types referred to in clause (iv)
above that have been bonded for not less than the full amount in
dispute (or as to which other security arrangements satisfactory to
Lessor have been made), which bonding (or arrangements) shall comply
with Applicable Laws and Regulations, and has effectively stayed any
execution or enforcement of such Liens;
(vi) Liens arising out of judgments or awards with respect to
which appeals or other proceedings for review are being prosecuted in
good faith and for the payment of which adequate reserves have been
provided as required by GAAP or other appropriate provisions have been
made, so long as such proceedings have the effect of staying the
execution of such judgments or awards and satisfy the conditions for
the continuation of proceedings to contest set forth in Section 13.1
of the Lease;
(vii) Permitted Exceptions;
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(viii) easements, rights of way and other encumbrances on
title to real property pursuant to Section 12.2 of the Lease; and
(ix) Lessor Liens.
"Permitted Use" means with respect to any Site, (i) general office,
(ii) distribution facility for storage and shipping of equipment and parts for
the semiconductor and electronics industry, (iii) assembly (using parts
manufactured elsewhere), repair, and testing of machinery and equipment for the
semiconductor and electronics industry, or (iv) demonstration and testing
facility or laboratory for machinery and equipment assembled by Lessee (using
parts manufactured by Lessee at other locations) for the semiconductor and
electronics industry.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization, governmental authority or any other entity.
"Plan" means at any time an employee pension benefit plan (other than
a Multiemployer Plan) which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Code and either (i) is
maintained, or contributed to, by any member of the ERISA Group for employees
of any member of the ERISA Group or (ii) has at any time within the preceding
five years been maintained, or contributed to, by any Person which was at such
time a member of the ERISA Group for employees of any Person which was at such
time a member of the ERISA Group.
"Plans and Specifications" means, with respect to a Construction Site,
the plans and specifications for the Facility to be constructed thereon and
which are provided to the Appraiser to prepare the Appraisal required in
Section 6.2(a)(ii) of the Participation Agreement.
"Pledge Agreement" means the Security and Pledge Agreement, dated as
of April 30, 1997, between Lessee and Agent, substantially in the form of
Exhibit P to the Participation Agreement.
"Pledge Collateral" is defined in Section 2.1 of the Pledge Agreement.
"Prior Shortfalls" means, as of any Applicable Expiration Date and
only as to Sites and Equipment Pools for which the Remarketing Option was
exercised and for which sales were completed prior to such Applicable
Expiration Date, the aggregate of the amounts, if any, by which the Site
Balance or Equipment Group Balance, respectively, for each such Site and
Equipment
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<PAGE> 33
Pool exceeded the sum of Gross Proceeds and AMAT Recourse Amount required to be
paid by Lessee to Agent in connection with each such respective sale pursuant
to Article XXII of the Lease less Gross Proceeds and Excess Gross Proceeds
applied to reduce such Prior Shortfalls pursuant to Article XXII of the Lease.
"Property Balance" means either a Site Balance or an Equipment Group
Balance, as applicable.
"Property Costs" means (i) the Site Acquisition Cost, in the case of a
Developed Site, (ii) the Site Acquisition Cost and the Original Estimated
Property Cost, as revised from time to time, in the case of a Construction Site
and (iii) the Equipment Purchase Price, in the case of any Unit of Equipment.
"Purchase Commitments" is defined in paragraph 3 of the Preliminary
Statements to the Capital Asset Purchase Agreement.
"Purchaser" and "Purchasers" means each of the Banks which are
Eurodollar Lenders in their role as "Purchasers" under the Capital Asset
Purchase Agreement.
"Purchase Notice" is defined in Section 20.1 of the Lease.
"Purchase Option" is defined in Section 20.1 of the Lease.
"Purchase Option Price" is defined in Section 20.1 of the Lease.
"Qualified Equipment" means Equipment to be purchased pursuant to a
Advance Request and which is either office equipment, computers, network
equipment, memory storage devices or peripherals (such as printers, scanners,
mice, copy equipment, microphones, video phones and video cameras) together
with any software incorporated in any of the foregoing or upgrades, additions
and modifications to Equipment previously Funded.
"Quarterly Payment Date" means the last Business Day of each January,
April, July and October of each year.
"Refinancing Advance" is defined in Section 3.5 of the Participation
Agreement.
"Refinancing Date" means the last day of any Interest Period that is
not the Maturity Date.
"Release" means any release, pumping, pouring, emptying, injecting,
escaping, leaching, dumping, seepage, spill, leak, flow, discharge, disposal or
emission of a Hazardous Substance.
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<PAGE> 34
"Remaining Estimated Construction Costs" means, with respect to any
Construction Site, the amount estimated by Lessee to complete the Facilities in
accordance with the Plans and Specifications.
"Remarketing Notice" is defined in Section 22.3(a) of the Lease.
"Remarketing Option" means an Equipment Pool Remarketing Option or a
Site Remarketing Option, as applicable.
"Remarketing Period" means the Equipment Remarketing Period or the
Site Remarketing Period, as applicable.
"Removable Part" is defined in Section 11.2 of the Lease Agreement.
"Renewal Term" means the Equipment Renewal Term or the Site Renewal
Term, as the case may be.
"Rent" means, collectively, the Basic Rent and the Supplemental Rent,
in each case payable under the Lease.
"Replaced Part" is defined in Section 15.1(h) of the Lease.
"Replaced Unit" is defined in Section 15.1(j) of the Lease.
"Replacement Lender" is defined in Section 2.2(e)(ii) of the Loan
Agreement.
"Replacement Lessor" is defined in Section 10.3(b) of the
Participation Agreement.
"Replacement Part" is defined in Section 15.1(h) of the Lease.
"Replacement Unit" is defined in Section 15.1(j) of the Lease.
"Requesting Party" is defined in Section 27.1 of the Lease.
"Required Equipment Alteration" is defined in Section 11.2 of the
Lease Agreement.
"Required Lenders" means, at any time, Eurodollar Lenders having
Commitment Percentages which aggregate at least 51% of the Aggregate
Commitments of all Eurodollar Lenders.
"Required Modification" is defined in Section 11.1(a) of the Lease.
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<PAGE> 35
"Required Participants" means, at any time, Lessor and/or such
Eurodollar Lenders having Commitment Percentages which aggregate at least 51%
of the Aggregate Commitments.
"Required Percentage Amount" means (a) an amount equal to the lesser
of (i) 25% of the sum of (A) the greatest aggregate principal amount of Loans
relating to the Sites outstanding at any time on or after the Document Closing
Date, plus (B) the greatest aggregate Investment Amounts relating to the Sites
outstanding at any time on or after the Document Closing Date or (ii)
$25,000,000, and (b) in the case of a purchase of an Equipment Group pursuant
to Section 20.1(a) of the Lease, an amount equal to 75% of the greatest
aggregate Equipment Group Balances of the Equipment Groups constituting the
related Equipment Pool outstanding at any time on or after the Document Closing
Date.
"Responsible Employee" means any employee of AMAT involved in, or
responsible for, the administration of the construction of the Lease Properties
and the other transactions contemplated by the Operative Documents.
"Responsible Employee's Certificate" means a certificate signed by any
Responsible Employee, which certificate shall certify as true and correct the
subject matter being certified to in such certificate.
"Responsible Officer" of any Person shall mean the Chairman or Vice
Chairman of the Board of Directors, the Chairman or Vice Chairman of the
Executive Committee of the Board of Directors, the President, any Senior Vice
President or Executive Vice President, any Vice President, the Secretary, any
Assistant Secretary, the Treasurer, any Assistant Secretary, any Assistant
Treasurer or comptroller.
"S&P" means Standard & Poor's Ratings Group, a division of
McGraw-Hill, Inc.
"SEC" means Securities and Exchange Commission.
"Secured Obligations" is defined in Section 2.2 of the Security
Agreement.
"Securities Act" means the Securities Act of 1933, together with the
rules and regulations promulgated thereunder.
"Security Agreement" means the Security Agreement, dated as of April
30, 1997, among Lessee, Lessor and Agent substantially in the form of Exhibit R
to the Participation Agreement.
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<PAGE> 36
"Security Documents" means the collective reference to the Security
Agreement, the Pledge Agreement, the Custodial Agreement, the Mortgages, the
Assignment of Lease and the Construction Agency Agreement Assignment and all
other security documents hereafter delivered to Agent granting a Lien on any
asset or assets of any Person to secure the obligations and liabilities of
Lessor under the Loan Agreement and/or under any of the other Loan Documents
and each of the consents executed by Lessee in connection herewith.
"SFAS No.13" means Statement of Financial Accounting Standards No. 13
issued by Financial Accounting Standards Board, as amended from time to time.
"Significant Casualty" means a Casualty that in the reasonable, good
faith judgment of Lessee (as evidenced by a Responsible Employee's Certificate
delivered to Lessor pursuant to Section 16.1 of the Lease) either (a) renders a
Site or entire Equipment Group unsuitable for continued use as commercial
property or equipment of the type of such Site or Equipment Group immediately
prior to such casualty or (b) is so substantial in nature that restoration of
such a Site or entire Equipment Group to substantially its condition as existed
immediately prior to such Casualty would be impracticable or impossible.
"Significant Condemnation" means (i) a Condemnation that involves a
taking of Lessor's entire title to the Land relating to a Site, or (ii) a
Condemnation that in the reasonable, good faith judgment of Lessee (as
evidenced by an Responsible Employee's Certificate delivered to Lessor pursuant
to Section 16.1 of the Lease) either (a) renders the related Site unsuitable
for continued use as commercial property of the type of such Site immediately
prior to such Condemnation or (b) is such that restoration of such Site to
substantially its condition as existed immediately prior to such Condemnation
would be impracticable or impossible.
"Significant Event" means (i) a Significant Casualty, (ii) a
Significant Condemnation, (iii) an Environmental Violation with respect to a
Site which in the reasonable, good faith judgment of the Construction Agent or
Lessee, as the case may be, (and with respect to Lessee as evidenced by a
Responsible Employee's Certificate delivered to Lessor within the time period
specified in Section 15.2 of the Lease) will cost in excess of $5,000,000 to
remediate, (iv) if Lessee fails to provide a Loss Determination Notice in
accordance with the Lease, the occurrence of any event, the effect of which
with respect to any Site, Lessor or the Required Lenders, in their respective
reasonable good faith judgment, believes will cost in excess of $5,000,000 to
remediate or would otherwise constitute a Significant Casualty or Significant
Condemnation, (v) a Condemnation, Casualty or
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<PAGE> 37
Force Majeure Event with respect to a Construction Site which in the
reasonable, good faith judgment of the Construction Agent (as evidenced by a
Responsible Employee's Certificate delivered to Lessor within fifteen (15)
Business Days of such event pursuant to Section 16.1 of the Lease) is so
substantial in nature that achieving Completion of the Facility on such
Construction Site on or prior to the applicable Outside Completion Date would
be impracticable or impossible, (vi) an event where the restoration of any Site
subject to a Casualty or Condemnation shall not be completed prior to the
earlier of (x) the 180th day prior to the Lease Expiration Date or (y) (A)
eighteen (18) months following the occurrence of such Casualty or Condemnation
or (B) if such Casualty or Condemnation occurs during the Construction Period,
the Outside Completion Date, or (vii) a Total Loss.
"Site" means any of the Existing Sites, Construction Sites and
Developed Sites.
"Site Acquisition Cost" means, with respect to any Site, the amount
advanced on each Site Acquisition Date to acquire a Site as set forth in the
Advance Request.
"Site Acquisition Date" means each date on which Lessor acquires a
Site pursuant to Section 3.1 or 3.2 of the Participation Agreement.
"Site Advance" is defined in Section 3.2 of the Participation
Agreement.
"Site Balance" means with respect to a Site an amount equal to the
outstanding principal amount of the Loans and Investment Amounts related to
such Site.
"Site Expiration Date" is defined in Section 2.5(a) of the Lease.
"Site Lease Supplement" means any of the Site Lease Supplements
(California) and the Site Lease Supplements (Other States) and "Site Lease
Supplements" means collectively both such supplements.
"Site Lease Supplement (California)" means a Site Lease Supplement
substantially in the form of Exhibit A-1 to the Lease together with all
attachments and schedules thereto, as such Site Lease Supplement may be
supplemented, amended or modified from time to time.
"Site Lease Supplement (Other States)" means a Site Lease Supplement
substantially in the form of Exhibit A-2 to the Lease together with all
attachments and schedules thereto, as such Site
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<PAGE> 38
Lease Supplement may be supplemented, amended or modified from time to time.
"Site Notes" means the Tranche A Eurodollar Site Note, the Tranche A
CP Site Note, the Tranche B Eurodollar Site Note and the Tranche B CP Site
Note.
"Site Remarketing Option" with respect to a Site is defined in Section
22.1 of the Lease.
"Site Remarketing Period" means, with respect to a Site, the period
commencing on the date 180 days prior to the Site Expiration Date for such Site
and ending on such Site Expiration Date.
"Site Renewal Effective Date" means, with respect to a Site, the date
on which the Site Renewal Term becomes effective pursuant to Section 21.1 of
the Lease.
"Site Renewal Option" with respect to a Site is defined in Section
21.1 of the Lease Agreement.
"Site Renewal Request" with respect to a Site is defined in Section
21.1 of the Lease.
"Site Renewal Term" means, with respect to any Site, the 5-year period
which immediately follows the fifth anniversary of the Site Acquisition Date
for such Site with respect to which the conditions for the Site Renewal Option
set forth at Section 21.1 of the Lease have been satisfied.
"Site Rent" means an amount payable on each Payment Date during the
Term equal to the aggregate amount of interest payable on such Payment Date on
the Site Notes and Yield payable on such Payment Date on the Investment Amounts
which have been funded for Site Advances.
"Site Term" with respect to a Site is defined in Section 2.5(a) of the
Lease.
"Special Period" means the period commencing on (and including) the
Special Prepayment Date (on which date Borrower prepays $10,000 of the
outstanding Tranche B CP Loans pursuant to clause second of Section 5.2 of the
Loan Agreement) and ending on (but excluding) the first day on or after the
first anniversary of the Special Prepayment Date on which CP Lender may issue
Commercial Paper so that it may make the Tranche B CP Loan in accordance with
Section 2.1(f) of the Loan Agreement.
"Special Prepayment Anniversary Date" means the last day of the
Special Period.
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<PAGE> 39
"Special Prepayment Date" means the first day after the third
anniversary of the Document Closing Date on which Commercial Paper shall
mature.
"Subject Property" is defined in Section 22.3 of the Lease.
"Subordinated Mortgage" means, with respect to each Site, a
subordinated mortgage, substantially in the form of Exhibit CC to the
Participation Agreement (modified as required by the Applicable Laws and
Regulations of the State in which such Site is located), together with all
attachments and schedules thereto, as such Subordinated Mortgage may be
supplemented, amended or modified from time to time.
"Subordinated Security Agreement" means, with respect to the
Equipment, a subordinated security agreement substantially in the form of
Exhibit DD to the Participation Agreement, together with all attachments and
schedules thereto, as such Subordinated Security Agreement may be supplemented,
amended or modified from time to time.
"Subsidiary" of any Person means any corporation, partnership, joint
venture, trust or estate of which (or in which) more than 50% of:
(a) the outstanding capital stock having 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 having Voting Power upon
the occurrence of any contingency),
(b) the interest in the capital or profits of such
partnership or joint venture, or
(c) the beneficial interest of such trust or estate,
is at the time directly or indirectly owned by such Person, by such Person and
one or more of its Subsidiaries or by one or more of such Person's
Subsidiaries.
"Supplement to the Assignment of Lease" means each Supplement to the
Assignment of Lease to be delivered on a Land Interest Acquisition Date
substantially in the form of Exhibit L to the Participation Agreement.
"Supplemental Rent" means all amounts, liabilities, obligations, costs
and expenses (other than Basic Rent, interest or principal under the Notes,
Yield or Investment) which Lessee assumes or agrees to pay to Lessor or any
other Person under the Lease, or under any of the other Operative Documents,
including
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payments of Ground Rent, payments of AMAT Recourse Amount and payments pursuant
to Section 16.2 of the Lease and Articles XX and XXII of the Lease, or, subject
to the limitations set forth in clause (v) of Section 5.2(b) of the
Participation Agreement, which Borrower is obligated to pay or is liable for
under any of the Loan Documents (other than payments which Borrower is
obligated to make or for which it is liable on the Special Prepayment Date or
the Special Prepayment Anniversary Date).
"Tax Benefit" is defined in Section 11.2(e) of the Participation
Agreement.
"Taxes" and "Tax" shall mean any and all fees (including, without
limitation, documentation, recording, license and registration fees), taxes
(including, without limitation, income (whether net, gross or adjusted gross),
gross receipts, sales, rental, use, turnover, value-added, property, excise and
stamp taxes, levies, imposts, duties, charges, assessments or withholdings of
any nature whatsoever, together with any penalties, fines or interest thereon
or additions thereto.
"Term" is defined in Section 2.5(c) of the Lease.
"Termination Date" is defined in Section 15.1(d), 16.2(a) and 17.2(e)
of the Lease.
"Title Insurance Company" means First American Title for title
insurance and Santa Clara Land Title for escrow purposes, and their respective
successors and assigns.
"Title Policies" shall mean the title policies described in Section
6.2(d) of the Participation Agreement.
"Total Loss" means any Significant Event which results in the Lease
Balance to decline below the Required Percentage Amount.
"Tranche A Applicable Margin" means, at any time of determination of
the Eurodollar Rate, the rate per annum set forth opposite the then applicable
rating category for the senior unsecured long-term debt of AMAT (such rate
changing from time to time on the date of each change in the rating for the
unsecured long-term debt of AMAT):
<TABLE>
<CAPTION>
RATING CATEGORY Applicable Margin
--------------- -----------------
<S> <C>
A or higher by S&P
A2 or higher by Moody's 0.225%
A- by S&P
A3 by Moody's 0.250%
</TABLE>
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<PAGE> 41
<TABLE>
<S> <C>
BBB+ by S&P
Baa1 by Moody's 0.300%
BBB by S&P
Baa2 by Moody's 0.375%
BBB- by S&P
Baa3 by Moody's 0.450%
lower than BBB- by S&P
lower than Baa3 by Moody's 0.750%
</TABLE>
If the ratings established or deemed established by Moody's and S&P shall fall
in different categories, the higher rating category and, therefore, the lower
Tranche A Applicable Margin shall apply. If neither Moody's nor S&P shall have
in effect a rating for such debt, then the highest Tranche A Applicable Margin
shall apply. Notwithstanding the foregoing, for any day during an Interest
Period, with respect to the portion of the outstanding principal amounts of the
Tranche A Eurodollar Notes which, on such day, are collateralized pursuant to
the Pledge Agreement or the Custodial Agreement with Treasury Securities or
Cash Collateral, the Tranche A Applicable Margin for such day shall be 0.150%.
For purposes of the foregoing sentence, the "portion of the outstanding
principal amount of the Tranche A Eurodollar Notes which Lessee has
collateralized with Treasury Securities" for each Eurodollar Lender shall be
deemed to equal 95% of such Eurodollar Lender's Commitment Percentage of the
Value (as defined in the Custodial Agreement) of Securities Collateral (as
defined in the Custodial Agreement) pledged by Lessee pursuant to the Pledge
Agreement as of the applicable Payment Date.
"Tranche A CP Equipment Note" is defined in Section 2.1(c) of the Loan
Agreement.
"Tranche A CP Loan" is defined in Section 2.1(b) of the Loan
Agreement.
"Tranche A CP Notes" means the Tranche A CP Equipment Note and the
Tranche A CP Site Note held by Agent on behalf of CP Lender.
"Tranche A CP Site Note" is defined in Section 2.1(c) of the Loan
Agreement.
"Tranche A Equipment Percentage" means eighty-six percent (86%).
"Tranche A Eurodollar Equipment Note" is defined in Section 2.2(c) of
the Loan Agreement.
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<PAGE> 42
"Tranche A Eurodollar Loan" is defined in Section 2.2(b) of the Loan
Agreement.
"Tranche A Eurodollar Notes" means the Tranche A Eurodollar Equipment
Note and the Tranche A Eurodollar Site Note held by Agent on behalf of each
Eurodollar Lender.
"Tranche A Eurodollar Site Note" is defined in Section 2.2(c) of the
Loan Agreement.
"Tranche A Lender" means CP Lender (to the extent it makes Tranche A
Loans) and each Eurodollar Lender identified as such on Schedule I to the
Participation Agreement.
"Tranche A Loan" means a Tranche A CP Loan or a Tranche A Eurodollar
Loan, as applicable.
"Tranche A Notes" means the Tranche A Eurodollar Notes and the Tranche
A CP Notes.
"Tranche A Participant Balance" means for each Tranche A Lender as of
any date of determination an amount equal to the sum of such Lender's
outstanding Tranche A Loans.
"Tranche A Percentage" means the Tranche A Equipment Percentage or the
Tranche A Site Percentage, as applicable.
"Tranche A Site Percentage" means eighty-two percent (82%).
"Tranche B Applicable Margin" means, at any time of determination of
the Eurodollar Rate, the rate per annum set forth opposite the then applicable
rating category for the senior unsecured long-term debt of AMAT (such rate
changing from time to time on the date of each change in the rating for the
unsecured long-term debt of AMAT):
<TABLE>
<CAPTION>
RATING CATEGORY APPLICABLE MARGIN
--------------- -----------------
<S> <C>
A or higher by S&P
A2 or higher by Moody's 0.325%
A- by S&P
A3 by Moody's 0.350%
BBB+ by S&P
Baa1 by Moody's 0.400%
BBB by S&P
Baa2 by Moody's 0.475%
BBB- by S&P
</TABLE>
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<PAGE> 43
<TABLE>
<S> <C>
Baa3 by Moody's 0.550%
lower than BBB- by S&P
lower than Baa3 by Moody's 1.000%
</TABLE>
If the ratings established or deemed established by Moody's and S&P shall fall
in different categories, the higher rating category and, therefore, the lower
Tranche B Applicable Margin shall apply. If neither Moody's nor S&P shall have
in effect a rating for such debt, then the highest Tranche B Applicable Margin
shall apply.
"Tranche B CP Equipment Note" is defined in Section 2.1(c) of the Loan
Agreement.
"Tranche B CP Loan" is defined in Section 2.1(b) of the Loan
Agreement.
"Tranche B CP Notes" means the Tranche B CP Equipment Note and the
Tranche B CP Site Note held by Agent on behalf of CP Lender.
"Tranche B CP Site Note" is defined in Section 2.1(c) of the Loan
Agreement.
"Tranche B Equipment Percentage" means eleven percent (11%).
"Tranche B Eurodollar Equipment Note" is defined in Section 2.2(c) of
the Loan Agreement.
"Tranche B Eurodollar Loan" is defined in Section 2.2(b) of the Loan
Agreement.
"Tranche B Eurodollar Notes" means the Tranche B Eurodollar Equipment
Note and the Tranche B Eurodollar Site Note held by Agent on behalf of each
Eurodollar Lender.
"Tranche B Eurodollar Site Note" is defined in Section 2.2(c) of the
Loan Agreement.
"Tranche B Lender" means CP Lender (to the extent it makes Tranche B
Loans) and each Eurodollar Lender identified as such on Schedule I to the
Participation Agreement.
"Tranche B Loan" means a Tranche B CP Loan or a Tranche B Eurodollar
Loan, as applicable.
"Tranche B Notes" means the Tranche B Eurodollar Notes and the Tranche
B CP Notes.
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<PAGE> 44
"Tranche B Participant Balance" means for each Tranche B Lender as of
any date of determination an amount equal to the sum of such Lender's
outstanding Tranche B Loans on such date.
"Tranche B Percentage" means the Tranche B Equipment Percentage or the
Tranche B Site Percentage, as applicable.
"Tranche B Site Percentage" means fifteen percent (15%).
"Transaction Expenses" shall mean transaction costs and expenses
incurred by Agent and Participants in connection with the consummation of the
transactions contemplated by the Operative Documents, and the preparation,
negotiation, execution and delivery of the Operative Documents, including (1)
the reasonable fees, expenses and disbursements of Mayer, Brown & Platt,
special documentation counsel; (2) the reasonable fees and expenses of Kaye,
Scholer, Fierman, Hays & Handler, LLP, special counsel to CP Lender; (3) the
reasonable fees and expenses of local counsel to Lessor, Agent and
Participants; (4) all appraisal fees and reasonable expenses; (5) all recording
and filing fees incurred in connection with the filing of the Site Lease
Supplements, the Mortgages, all financing statements and any other documents,
including fees and expenses of the Title Insurance Company; (6) all costs and
expenses of each company engaged to survey the Land or to conduct environmental
studies; (7) all fees, costs and expenses of Agent, other than Administrative
Fees and Dealer Fees; and (8) the Arrangement Fee.
"Transferee" is defined in Section 10.5(a) of the Participation
Agreement.
"25% Property" means a Site as to which the Fair Market Value of the
Land equals or exceeds twenty-five percent (25%) of the Property Costs as
determined by the appraisal for such Site delivered pursuant to Section
6.2(a)(ii) of the Participation Agreement (it being understood that each
Existing Site shall, based on such Existing Site's appraisal, constitute 25%
Property).
"Unfunded Liabilities" means, with respect to any Plan at any time,
the amount (if any) by which (i) the present value of all benefits under such
Plan exceeds (ii) the fair market value of all Plan assets allocable to such
benefits (excluding any accrued but unpaid contributions), all determined as of
the then most recent valuation date for such Plan, but only to the extent that
such excess represents a potential liability of a member of the ERISA Group to
the PBGC or any other Person under Title IV of ERISA.
"Uniform Commercial Code" and "UCC" means the Uniform Commercial Code
as in effect in any applicable jurisdiction.
-44-
<PAGE> 45
"Unit of Equipment" means an item of Equipment listed on Schedule I to
an Equipment Lease Supplement.
"Unsecured Environmental Indemnity" means each Hazardous Materials
Undertaking and Unsecured Indemnity executed by Lessee in favor of Agent and
Participants, substantially in the form of Exhibit K to the Participation
Agreement.
"Voting Power" means, with respect to securities issued by any Person,
the combined voting power of all securities of such person which are issued and
outstanding at the time of determination and which are entitled to vote in the
election of directors of such Person, other than securities having such power
only by reason of the happening of a contingency.
"Withheld Amount" means, with respect to the portion of any Site sold
pursuant to Section 20.1(b) of the Lease, the product of (i) the gain (as
determined by Lessee, subject to Agent's reasonable review and approval)
realized by Lessee upon the sale of such portion and (ii) the Combined Tax
Rate.
"Yield" shall mean, during the Term with respect to each Interest
Period, (a) the Yield Rate for such Interest Period multiplied by (b) the
aggregate Investment Amounts outstanding.
"Yield Margin" means the margin agreed upon by Credit Suisse Leasing
92A, L.P. and AMAT as stated in the Fee and Yield Letter.
"Yield Rate" shall mean, with respect to any applicable Interest
Period, the rate at which Yield shall accrue during such Interest Period on the
Investment Amounts, which rate shall be (a) for such period of time as interest
on the related Loans is determined on a Eurodollar Rate basis or a CP Rate
basis, the sum of the Eurodollar Rate (calculated for the applicable Interest
Period) plus the Yield Margin, and (b) for such period of time as interest on
the related Loans is determined on a Base Rate basis, the sum of the Base Rate
plus the Yield Margin.
-45-
<PAGE> 1
EXHIBIT 10.6
==============================================================================
LOAN AGREEMENT
dated as of April 30, 1997
among
CREDIT SUISSE LEASING 92A, L.P.,
as Borrower,
GREENWICH FUNDING CORPORATION,
as CP Lender,
THE PERSONS NAMED ON SCHEDULE I HERETO,
as Eurodollar Lenders
and
CREDIT SUISSE FIRST BOSTON,
acting through its New York Branch,
as Agent
______________________________________________________________________________
Revolving Commercial Paper,
Eurodollar Credit and Base Rate Program
==============================================================================
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C> <C>
SECTION 1. DEFINITIONS; INTERPRETATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 2. AMOUNT AND TERMS OF LENDERS' COMMITMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 2.1 CP Loan Facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 2.2 Eurodollar Loans and Eurodollar Lender Commitments . . . . . . . . . . . . . . . . . . . 4
SECTION 2.3 Interest Payment Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
SECTION 2.4 Notations on Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECTION 2.5 Procedure for Borrowing, Continuation or Ownership Interest Conversion . . . . . . . . . 10
SECTION 2.6 Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 2.7 Computation of Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 2.8 Pro Rata Treatment and Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
SECTION 3. CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 4. COVENANTS AND LIMITATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 4.1 Borrower Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
SECTION 4.2 Non-Recourse Obligations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 5. DISTRIBUTIONS OF PAYMENTS AND COLLATERAL PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 5.1 [RESERVED]. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 5.2 Basic Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
SECTION 5.3 Purchase Payments by Lessee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
SECTION 5.4 AMAT Recourse Amounts Payment by Lessee . . . . . . . . . . . . . . . . . . . . . . . . . 19
SECTION 5.5 Sales Proceeds and Other Payments from Remarketing of Leased Properties . . . . . . . . . 19
SECTION 5.6 Other Prepayment Amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 5.7 Supplemental Rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 5.8 Excepted Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
SECTION 5.9 Distribution of Payments after Loan Event of Default . . . . . . . . . . . . . . . . . . 21
SECTION 5.10 Other Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 5.11. Casualty and Condemnation Amounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
SECTION 5.12 Order of Application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 5.13 Distribution of Advance for Prepayment of Outstanding Loans . . . . . . . . . . . . . . . 23
SECTION 5.14 Proceeds of Pledge Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 6. LOAN EVENT OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 6.1 Loan Event of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
SECTION 6.2 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
SECTION 7. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 7.1 Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 7.2 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
</TABLE>
-i-
<PAGE> 3
<TABLE>
<S> <C>
SECTION 7.3 No Waiver; Cumulative Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 7.4 Survival of Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 7.5 Successors and Assigns; Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
SECTION 7.6 Adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 7.7 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 7.8 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 7.9 Intention . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
SECTION 7.10 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 7.11 Prohibited Proceeding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
SECTION 7.12 Source of Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Schedule I - Eurodollar Lenders
Exhibit A-CE - Form of Tranche A CP Equipment Note
Exhibit A-CS - Form of Tranche A CP Site Note
Exhibit A-EE - Form of Tranche A Eurodollar Equipment Note
Exhibit A-ES - Form of Tranche A Eurodollar Site Note
Exhibit B-CE - Form of Tranche B CP Equipment Note
Exhibit B-CS - Form of Tranche B CP Site Note
Exhibit B-EE - Form of Tranche B Eurodollar Equipment Note
Exhibit B-ES - Form of Tranche B Eurodollar Site Note
</TABLE>
-ii-
<PAGE> 4
LOAN AGREEMENT
THIS LOAN AGREEMENT, dated as of April 30, 1997, is entered into by
and among CREDIT SUISSE LEASING 92A, L.P., as Borrower (the "Borrower"),
GREENWICH FUNDING CORPORATION, as CP Lender (the "CP Lender"), the Persons
named on Schedule I to this Loan Agreement, as Eurodollar Lenders (the
"Eurodollar Lenders"), and CREDIT SUISSE FIRST BOSTON, acting through its New
York Branch, as Agent (the "Agent").
The parties hereto hereby agree as follows:
SECTION 1.
DEFINITIONS; INTERPRETATION
Unless the context shall otherwise require, capitalized terms used and
not defined herein shall have the meanings assigned thereto in Appendix 1 to
the Participation Agreement, dated as of April 30, 1997, among Applied
Materials, Inc., as Lessee and Construction Agent (the "Lessee"), Borrower, CP
Lender, Eurodollar Lenders and Agent (the "Participation Agreement"), for all
purposes hereof; and the rules of interpretation set forth in such Appendix 1
shall apply to this Loan Agreement.
SECTION 2.
AMOUNT AND TERMS OF LENDERS' COMMITMENTS
SECTION 2.1 CP Loan Facility.
(a) CP Loan Availability. Subject to the terms and
conditions hereof and of the Participation Agreement, CP Lender may, in its
sole discretion, issue Commercial Paper and, from the proceeds thereof, make CP
Loans to Borrower from time to time on a revolving basis during the Commitment
Period for the purpose of enabling Borrower to Fund Site Advances, Construction
Advances (including Interest Payment Loans), Equipment Advances or Refinancing
Advances, as contemplated in the Participation Agreement. Each such CP Loan
shall be equal to the lesser of (i) the aggregate amount of borrowing requested
by Borrower to be made on such date as a CP Loan and (ii) the net proceeds of
the issuance of Commercial Paper received by CP Lender on such date; provided,
however, that notwithstanding any other provision hereof or of the
Participation Agreement or the Capital Asset Purchase Agreement and in addition
to the limitations set forth in Section 3.10 of the Participation Agreement, CP
Lender shall
<PAGE> 5
not make available to Borrower and neither Borrower nor Agent shall request any
CP Loan if the amount of the proposed CP Loan exceeds the aggregate Available
Eurodollar Lender Commitments; provided further that advancing funds to
refinance an outstanding Eurodollar Loan, to the extent used for such purpose,
shall not be counted against such Available Eurodollar Lender Commitments.
During the Commitment Period, Borrower may borrow from CP Lender, prepay the CP
Loans in whole or in part, and reborrow, all in accordance with the terms and
conditions hereof and of the Participation Agreement and the Capital Asset
Purchase Agreement.
(b) CP Loan Tranches. Each CP Loan funded by CP Lender
on an Advance Date shall be deemed to consist of a "Tranche A CP Loan" in an
original principal amount equal to the Tranche A Percentage times the principal
amount of such CP Loan and a "Tranche B CP Loan" in an original principal
amount equal to the Tranche B Percentage times the principal amount of such CP
Loan.
(c) Issuance of Notes to CP Lender. On the Document
Closing Date, Borrower shall issue to Agent, on behalf of CP Lender, two Site
Notes (a "Tranche A CP Site Note" substantially in the form of Exhibit A-CS and
a "Tranche B CP Site Note" substantially in the form of Exhibit B-CS). Each
such CP Site Note shall be in a maximum principal amount equal to the Tranche A
Site Percentage, in the case of the Tranche A CP Site Note, and the Tranche B
Site Percentage, in the case of the Tranche B CP Site Note, of the aggregate
Participants' Commitments. On the Document Closing Date, Borrower shall issue
to Agent, on behalf of CP Lender, two Equipment Notes (a "Tranche A CP
Equipment Note" in substantially the form of Exhibit A-CE and a "Tranche B CP
Equipment Note" in substantially the form of Exhibit B-CE). Each such CP
Equipment Note shall be in a maximum principal amount equal to the Tranche A
Equipment Percentage, in the case of the Tranche A CP Equipment Note, and the
Tranche B Equipment Percentage, in the case of the Tranche B CP Equipment Note,
of $10,000,000. Each Note issued to Agent, on behalf of CP Lender, shall (i)
be dated as of the Document Closing Date, (ii) be stated to mature on the
Maturity Date, (iii) provide for the payment of interest in accordance with
Section 2.1(d) and (iv) shall include a grid for purposes of recording the
information specified in Section 2.4. The CP Site Notes shall provide that no
principal amortization shall be required prior to the Maturity Date, except as
provided for at Section 2.6(c). Each CP Equipment Note shall provide for
ratable payments of principal on each Quarterly Payment Date in the amount
equal to the product of (A) the aggregate Equipment Fixed Rent payable by
Lessee on such date under the Equipment Lease Supplements and (B) the Tranche A
Percentage, in the case of the Tranche A CP Equipment Note, and the Tranche B
Percentage, in the case of the Tranche B CP Equipment Note.
2
<PAGE> 6
(d) Interest Rate and Payment Dates. (i) Each
outstanding CP Loan shall bear interest for each day during each Interest
Period at the applicable CP Rate.
(ii) If all or a portion of the principal amount
of any CP Loan, any interest payable thereon or any other amount payable
hereunder shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), such overdue amount shall bear interest at a rate
per annum which is equal to the sum of (x) the rate necessary for CP Lender to
pay when due the Interest Component on the outstanding Commercial Paper plus
(y) the Overdue Rate.
(iii) Interest accruing on each CP Loan shall be
payable in arrears on each applicable Payment Date, Refinancing Date,
Continuation Date or any other date of prepayment or conversion (on the amount
prepaid or converted), and at maturity (whether by acceleration, demand or
otherwise), in an amount necessary to repay the Interest Component of all
Commercial Paper maturing on such date. Notwithstanding the foregoing,
interest accruing pursuant to clause (ii) of this Section 2.1(d) shall be
payable from time to time on demand and each prepayment of a CP Loan shall be
accompanied by accrued interest to the date of such prepayment on the amount
prepaid.
(e) Extension of Maturity Date. The Maturity Date with
respect to the CP Loans shall be deemed to be automatically extended for the
same term as any extension of the term of the Purchase Commitments pursuant to
the Capital Asset Purchase Agreement and the extension of the Maturity Date
with respect to the CP Loans shall become effective as of the date on which the
extension of the Purchase Commitments is effective.
(f) Special Prepayment Anniversary Funding. On the
Special Prepayment Anniversary Date, CP Lender may, in its sole discretion (i)
issue sufficient face amounts of Commercial Paper (taking into account
Commercial Paper maturing on such date) so that it will have sufficient funds
to loan to Borrower $10,000 and (ii) loan to Borrower $10,000 as an additional
Funding on the outstanding Tranche B CP Loan; provided that CP Lender shall
fund such Tranche B CP Loan only to the extent that it shall have received net
proceeds of the issuance of Commercial Paper on such date (after repaying
maturing Commercial Paper on such date). In any event, the principal amount of
such Tranche B CP Loan, together with the outstanding principal amount of all
Tranche A CP Loans and Eurodollar Loans, may not exceed the aggregate
Eurodollar Lenders' Commitments.
3
<PAGE> 7
SECTION 2.2 Eurodollar Loans and Eurodollar Lender Commitments.
(a) Eurodollar Loan Commitments. (i) Subject to the
terms and conditions hereof and of the Participation Agreement and the
limitations set forth in clause (v) below and Section 3.10 of the Participation
Agreement, each Eurodollar Lender severally agrees to make Eurodollar Loans to
Borrower from time to time on a revolving basis during the Commitment Period
for the purpose of enabling Borrower to Fund Site Advances, Construction
Advances (including Interest Payment Loans), Equipment Advances and Refinancing
Advances, as contemplated in the Participation Agreement.
(ii) Subject to the terms and conditions hereof and of the
Participation Agreement and the limitations set forth in clause (v) below and
in Section 3.10 of the Participation Agreement, each Eurodollar Lender
severally agrees, on each Advance Date (including any Refinancing Date) that CP
Lender does not make a requested CP Loan to Borrower pursuant to Section 2.1,
to make a Eurodollar Loan to Borrower pursuant to Section 2.5(b) in an amount
equal to the aggregate amount of borrowing requested by Borrower to be made on
such date.
(iii) Subject to the terms and conditions hereof and of the
Participation Agreement and the limitations set forth in clause (v) below and
in Section 3.10 of the Participation Agreement, each Eurodollar Lender
severally agrees, on each Advance Date (including any Refinancing Date) for
which CP Loans are requested by Borrower pursuant to Section 2.1 and the
proceeds from the issuance by CP Lender of Commercial Paper does not equal the
borrowing requested by Borrower, to make a Eurodollar Loan to Borrower pursuant
to Section 2.5(b) in an amount equal to the difference between the aggregate
amount of borrowing requested by Borrower to be made on such date and the
proceeds from the issuance by CP Lender of such Commercial Paper.
(iv) Subject to the terms and conditions hereof and of the
Participation Agreement and the limitations set forth in clause (v) below and
in Section 3.10 of the Participation Agreement, each Eurodollar Lender
severally agrees, that on each Ownership Interest Conversion Date, the
Ownership Interest of such Eurodollar Lender shall automatically and without
further act be deemed to have been converted to, and shall become, a Eurodollar
Loan as provided in Section 2.5(d).
(v) Notwithstanding any other provision hereof and of the
Participation Agreement and the Capital Asset Purchase Agreement, each
Eurodollar Lender's obligations to Fund Eurodollar Loans is subject to the
limitations set forth at Sections 3.8(a) and 3.10 of the Participation
Agreement. During
4
<PAGE> 8
the Commitment Period Borrower may use the Commitments of Eurodollar Lenders by
borrowing, prepaying the Eurodollar Loans in whole or in part, and reborrowing,
all in accordance with the terms and conditions hereof and of the Participation
Agreement. Eurodollar Loans shall be made by each Eurodollar Lender at its
Eurodollar Office.
(b) Eurodollar Loan Tranches. Each Eurodollar Loan
funded by a Eurodollar Lender on an Advance Date shall be deemed to consist of
a "Tranche A Eurodollar Loan" in an original principal amount equal to the
Tranche A Percentage times the principal amount of such Eurodollar Loan and a
"Tranche B Eurodollar Loan" in an original principal amount equal to the
Tranche B Percentage times the principal amount of such Eurodollar Loan.
(c) Issuance of Notes to Eurodollar Lenders. On the
Document Closing Date, Borrower shall issue to Agent, on behalf of the
Eurodollar Lenders, two Site Notes (a "Tranche A Eurodollar Site Note"
substantially in the form of Exhibit A-ES and a "Tranche B Eurodollar Site
Note" substantially in the form of Exhibit B-ES). Each such Eurodollar Site
Note shall be in a maximum principal amount equal to the Tranche A Site
Percentage, in the case of the Tranche A Eurodollar Site Note, and the Tranche
B Site Percentage, in the case of the Tranche B Eurodollar Site Note, of
aggregate Participants' Commitments. On the Document Closing Date, Borrower
shall issue to Agent, on behalf of the Eurodollar Lenders, two Equipment Notes
(a "Tranche A Eurodollar Equipment Note" in substantially the form of Exhibit
A-EE and a "Tranche B Eurodollar Equipment Note" in substantially the form of
Exhibit B-EE). Each such Eurodollar Equipment Note shall be in a maximum
principal amount equal to the Tranche A Equipment Percentage, in the case of
the Tranche A Eurodollar Equipment Note, and the Tranche B Equipment
Percentage, in the case of the Tranche B Eurodollar Equipment Note of
$10,000,000. Each Note issued to Agent, on behalf of the Eurodollar Lenders,
shall (i) be dated as of the Document Closing Date, (ii) be stated to mature on
the Maturity Date, (iii) provide for the payment of interest in accordance with
Section 2.2(d) and (iv) shall include a grid for purposes of recording the
information specified in Section 2.4. The Eurodollar Site Notes shall provide
that no principal amortization shall be required prior to the Maturity Date,
except as provided for at Section 2.6(c). Each Eurodollar Equipment Note shall
provide for payments of principal on each Quarterly Payment Date in the amount
equal to the product of the aggregate Equipment Fixed Rent payable by Lessee on
such date under the Equipment Lease Supplements multiplied by the Tranche A
Percentage, in the case of the Tranche A Eurodollar Equipment Note, and the
Tranche B Percentage, in the case of the Tranche B Eurodollar Equipment Note.
5
<PAGE> 9
(d) Interest Rates and Payment Dates. (i) Each
outstanding Eurodollar Loan shall bear interest for each day during each
Interest Period at a rate per annum equal to either the Eurodollar Lender Rate
or the Base Rate, as applicable, determined for such Interest Period.
(ii) If all or a portion of the principal amount
of any Eurodollar Loan, any interest payable thereon or any other amount
payable hereunder shall not be paid when due (whether at the stated maturity,
by acceleration or otherwise), such overdue amount shall bear interest at a
rate per annum which is equal to the Overdue Rate.
(iii) Interest accruing on each Eurodollar Loan shall
be payable in arrears on each applicable Payment Date, Refinancing Date,
Continuation Date or any other date of prepayment or conversion (on the amount
prepaid or converted), and at maturity (whether by acceleration, demand or
otherwise). Notwithstanding the foregoing, interest accruing pursuant to
paragraph (ii) of this Section 2.2(d)(iii) shall be payable from time to time
on demand and each prepayment of Eurodollar Loans shall be accompanied by
accrued interest to the date of such prepayment on the amount prepaid.
(e) Extension of Eurodollar Lenders' Commitments. (i)
Lessee on behalf of Borrower may, by written request to Agent and each
Eurodollar Lender given not earlier than 180 days and not later than 90 days
prior to each anniversary of the Document Closing Date, beginning with the
first anniversary, and in no event more than once during each Loan Year,
request (an "Extension Request") that the Maturity Date be extended to the date
that is five years after such anniversary of the Document Closing Date. No
later than the date (the "Extension Response Date") which is 45 days after such
request has been delivered to Agent and each Eurodollar Lender, each Eurodollar
Lender will notify Borrower in writing (with a copy to Agent) whether or not it
consents to such Extension Request (which consent may be granted or denied by
each Eurodollar Lender in its sole and absolute discretion and may be
conditioned on receipt of such financial information or other documentation as
may be specified by each Eurodollar Lender), provided that any Eurodollar
Lender that fails to so advise Borrower on or prior to the Extension Response
Date shall be deemed to have denied such Extension Request. The extension of
the Maturity Date contemplated by any Extension Request shall become effective
as of the first date (the "Extension Effective Date" with respect to such
extension) on or after the Extension Response Date on which all of the
following conditions have been satisfied:
(A) on both the date of the Extension Request and the
Extension Effective Date, (w) each of the representations
6
<PAGE> 10
and warranties made by Borrower in or pursuant to the Loan Documents
and the Participation Agreement and by Lessee in or pursuant to the
Participation Agreement shall be true and correct in all material
respects as if made on and as of each such date, except that any such
representation or warranty which was expressly made only as of a
specified date was true only as of such date, (x) no Loan Default or
Loan Event of Default shall have occurred and be continuing, (y) on
each of such dates Lessee shall be deemed to have represented and
warranted as to the matters set forth in clauses (w) and (x), and (z)
on each of such dates Agent shall have received a certificate of
Borrower as to the matters relating to Borrower set forth in clauses
(w) and (x);
(B) Eurodollar Lenders holding at least 51% of the aggregate
Eurodollar Loans outstanding at such time (or, if no Eurodollar Loans
are outstanding at such time, Eurodollar Lenders having at least 51%
of the aggregate Commitments of all Eurodollar Lenders at such time)
shall have consented to such Extension Request in each such Eurodollar
Lender's sole and absolute discretion;
(C) provided Lessee has obtained the consent described in
subparagraph (B), all Eurodollar Lenders who do not consent to or deny
such Extension Request (each a "Non-Consenting Eurodollar Lender") (1)
shall have been replaced by Replacement Lenders in accordance with
subsection (ii) of this Section 2.2(e) or (2) shall have had their
outstanding Eurodollar Loans prepaid and, whether or not they have any
Eurodollar Loans outstanding, have their Purchase Commitment under the
Capital Asset Purchase Agreement terminated, such prepayment and
termination to be made in accordance with subsection (iii) of this
Section 2.2(e); and
(D) Excluding the initial Loan Year, Borrower shall have been
granted an Extension Effective Date during the Loan Year immediately
preceding the Loan Year in which the Extension Request is made.
(ii) For purposes of Section 2.2(e)(i)(C),
Borrower shall be permitted to replace any Non- Consenting Eurodollar Lender
with a replacement bank or other financial institution (a "Replacement Lender")
at any time on or prior to the date which is 180 days after the relevant
Extension Response Date; provided that (1) such replacement does not conflict
with any Applicable Laws and Regulations, (2) the Replacement Lender shall
purchase, at par, all Eurodollar Loans and other amounts owing to such
Non-Consenting Eurodollar Lender on or prior to the date of replacement, (3)
the Lessee shall be liable to such Non-Consenting Eurodollar Lender under
Section 11.6 of the
7
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Participation Agreement if any Eurodollar Loan owing to such Non-Consenting
Eurodollar Lender shall be prepaid (or purchased) other than on the last day of
the Interest Period relating thereto, (4) the Replacement Lender, if not
already a Eurodollar Lender, shall be reasonably satisfactory to the Agent and
Lessee, (5) such replacement shall be made in accordance with the provisions of
Section 10.4 of the Participation Agreement (provided that Lessee or the
relevant Replacement Lender shall be obligated to pay the Transaction Expenses
arising in connection therewith), and (6) the Replacement Lender shall have
agreed to be subject to all of the terms and conditions of this Loan Agreement
(including the extension of the Maturity Date contemplated by the relevant
Extension Request), the Participation Agreement and the other Operative
Documents and shall have expressly assumed the obligations of such
Non-Consenting Eurodollar Lender with respect to such Non-Consenting Eurodollar
Lender's pro rata Purchase Commitment under the Capital Asset Purchase
Agreement as it relates to outstanding CP Loans. Agent hereby agrees to
cooperate with Borrower in Borrower's efforts to arrange one or more
Replacement Lenders as contemplated by this Section 2.2(e)(ii).
(iii) For purposes of Section 2.2(e)(i)(C), Lessee
may, on behalf of Borrower, repay the outstanding Eurodollar Loans of each
Non-Consenting Eurodollar Lender and all other amounts owing under the
Operative Documents to such Non-Consenting Eurodollar Lender at any time on or
prior to the date which is 180 days after the relevant Extension Response Date;
provided that (1) Borrower, to the extent of amounts received from Lessee,
shall repay all outstanding principal and accrued and unpaid interest on such
Non-Consenting Eurodollar Lender's Eurodollar Loans and all other amounts owing
under the Operative Documents to such Non-Consenting Eurodollar Lender on or
prior to the date of such repayment, (2) the Lessee shall be liable to such
Non-Consenting Eurodollar Lender under Section 11.6 of the Participation
Agreement if any Eurodollar Loan owing to such Non-Consenting Eurodollar Lender
shall be prepaid other than on the last day of the Interest Period relating
thereto, (3) Lessee shall be obligated to pay the Transaction Expenses arising
in connection with such repayment, if any, (4) the Commitment of such
Non-Consenting Eurodollar Lender shall be terminated on and as of the relevant
Extension Response Date, (5) the Aggregate Commitment Amount shall be reduced
by the amount of the Commitment of such Non-Consenting Eurodollar Lender and
may not be reborrowed after being so repaid (and no remaining Eurodollar Lender
shall be obligated to Fund the Commitment of the Non-Consenting Eurodollar
Lender) and (6) the obligations of such Non-Consenting Eurodollar Lender (in
its capacity as a Purchaser) with respect to such Non-Consenting Eurodollar
Lender's (in its capacity as a Purchaser) pro rata Purchase Commitment under
the Capital Asset Purchase Agreement as it relates to outstanding CP
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Loans shall be terminated on and as of the relevant Extension Response Date,
and Borrower shall prepay CP Lender an amount equal to the product of (x) the
outstanding principal amount of CP Loans and (y) a fraction, the numerator of
which is such Non-Consenting Eurodollar Lender's (in its capacity as a
Purchaser) pro rata Purchase Commitment and the denominator of which is the
aggregate Purchase Commitment of all Eurodollar Lenders (in their capacity as
Purchasers) and Lessee shall be liable to CP Lender for any amount owing under
Section 11.6 of the Participation Agreement if such CP Loan is prepaid other
than on the last day of any related Interest Period.
(iv) If Borrower is reasonably satisfied as to the
matters set forth in Section 2.2(e)(i)(A)(w) (with respect to the truth and
correctness of its own representations and warranties) and (x), Borrower shall
promptly deliver the certificate described in Section 2.2(e)(i)(A)(z).
(v) The failure of Borrower to satisfy all of the
conditions set forth in Section 2.2(e)(i) on or prior to the expiration of the
time periods set forth above shall not constitute a breach or default hereunder
but rather shall be deemed a revocation of Borrower's Extension Request and
Borrower's rights under this Section 2.2(e) shall terminate.
SECTION 2.3 Interest Payment Loans. Subject to satisfaction of
the applicable conditions precedent set forth in Section 6.4 of the
Participation Agreement, on each date which is three Business Days prior to any
Payment Date, with respect to Loans with Interest Periods maturing on such
Payment Date, unless either (i) such Loan relates to a Construction Period
Site, such Payment Date occurs after the Outside Completion Date and the
Construction Completion Date has not occurred prior to such Outside Completion
Date, in which case payment of such accrued interest shall be made with funds
received from Lessee for such purpose, or (ii) otherwise requested by Borrower
at least three Business Days prior to such Payment Date by written notice to
Agent (stating that the payment of such accrued interest shall be made with
funds received from Lessee for such purpose), Borrower shall be deemed to have
requested a borrowing pursuant to Section 2.1 of a CP Loan (if such accrued
interest relates to outstanding CP Loans with Interest Periods maturing on such
Payment Date) or Section 2.2 of a Eurodollar Loan (if such accrued interest
relates to outstanding Eurodollar Loans with Interest Periods maturing on such
Payment Date) (an "Interest Payment Loan") in an amount equal to the aggregate
amount of accrued Capitalized Interest due and payable on such date with
respect to such CP Loans or Eurodollar Loans, as the case may be. The Funding
date with respect to any such borrowing shall be the relevant Payment Date and
the proceeds of such borrowing shall be deemed to be applied to pay such
accrued Capitalized Interest.
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On each such Funding date, an Interest Payment Loan shall be automatically
deemed made in accordance with such deemed request, and the outstanding
principal on the applicable Site Notes shall be increased by an amount equal to
such Capitalized Interest.
SECTION 2.4 Notations on Notes. Agent, on behalf of each Lender,
is hereby authorized to record on the grid attached to the Tranche A CP Site
Note, the Tranche B CP Site Note, the Tranche A Eurodollar Site Note, the
Tranche B Eurodollar Site Note, the Tranche A CP Equipment Note, the Tranche B
CP Equipment Note, the Tranche A Eurodollar Equipment Note, or Tranche B
Eurodollar Equipment Note as applicable, the date and amount of each Funding
with respect to such Note, the amount of all Capitalized Interest and Interest
Payment Loans, each payment or repayment of principal, the type of interest
rate applicable thereto from time to time, the length of each Interest Period
with respect thereto (including, in the case of a Eurodollar Note for which the
Base Rate may, from time to time, be applicable, the period for which such Base
Rate applies), and the interest rate for such Interest Period. Any such
recordation shall constitute prima facie evidence of the accuracy of the
information so recorded; provided, that the failure to make any such recording
or errors in such recordation shall not affect the obligation of Borrower under
such instrument.
SECTION 2.5 Procedure for Borrowing, Continuation or Ownership
Interest Conversion.
(a) Advance Request. Subject to the terms, conditions
and limitations set forth in the Participation Agreement and this Loan
Agreement, Borrower shall borrow from CP Lender or from the Eurodollar Lenders
pursuant to their Commitments on each Advance Date upon receipt by Agent from
Lessee (either as Lessee or in its capacity as Construction Agent) of an
Advance Request in accordance with Section 3.13 of the Participation Agreement.
(b) Notice to CP Lender or Eurodollar Lender. Agent
shall notify either CP Lender, if Lessee shall have specified a CP Loan Funding
in its Advance Request, or Eurodollar Lenders, if Lessee shall have specified a
Eurodollar Loan Funding in its Advance Request, of Agent's receipt of such
Advance Request on the date of such receipt. Based on such notice, on the
Funding date either (i) CP Lender, if a CP Loan is specified, may make the
amount of the borrowing available for the account of Borrower or (ii) each
Eurodollar Lender, if a Eurodollar Loan is specified, will make the amount of
its pro rata share of the borrowing available to Agent for the account of
Borrower, in either case, at the office of Agent referred to in Section 3.10(c)
of the Participation Agreement prior to 1:00 p.m., New York time, on the
specified Advance Date in funds immediately available to Agent. If a CP Loan
is specified in the
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Advance Request and CP Lender elects not to make such CP Loan or does not make
the full amount of the borrowing available, then such Advance Request shall be
deemed to have specified a Eurodollar Loan Funding for the amount of borrowing
not made by CP Lender, and, provided that Agent notifies each Eurodollar Lender
prior to 2:00 p.m., New York time, on the specified Advance Date (otherwise on
the next succeeding Business Day following such notice to the Eurodollar
Lenders), each Eurodollar Lender will Fund the amount of its pro rata share of
the borrowing not Funded by CP Lender in accordance with clause (ii) of this
Section 2.5(b); provided that until Lessee specifies an interest rate based on
the Eurodollar Rate in accordance with Section 2.5(c), the interest rate on
such Eurodollar Loan shall be based on the Base Rate. The proceeds of all such
Loans will be made available to Borrower by Agent by crediting the account of
Borrower on the books of Agent, or such other account of Borrower as shall have
been designated by Borrower to Agent, with the aggregate of the amounts made
available by CP Lender and/or the Eurodollar Lenders, as the case may be, in
like funds as received by Agent.
(c) Continuation of Outstanding Loans. Subject to the
terms and conditions hereof and of the Participation Agreement, with respect to
each outstanding Loan, (x) if on the third Business Day prior to the maturity
of any Interest Period Agent shall not have received an Advance Request for a
Refinancing Advance pursuant to Section 2.5(a), Borrower shall, or (y) on any
Business Day from time to time during any Base Rate Period, Borrower may, give
Agent irrevocable written notice (a "Continuation Notice") not later than 1:00
p.m., New York time, specifying the following:
(i) the last day of the maturing Interest Period, which, in
the case of clause (y) above, shall be the day three Business Days
after the date of delivery of the Continuation Notice (the
"Continuation Date");
(ii) if the maturing Interest Period relates to a CP Loan, the
length of the next succeeding Interest Period or Interest Periods and
the principal amount relating to each such Interest Period; provided,
however, that Borrower may not select Interest Periods such that more
than five Payment Dates would fall due in any calendar month; and
(iii) if the maturing Interest Period relates to a Eurodollar
Loan, whether a Eurodollar Rate or a Base Rate will be applicable to
the next succeeding Interest Period.
In the absence of delivery of an Advance Request or a Continuation Notice at
least three Business Days before the last day of the maturing Interest Period,
(x) with respect to CP
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Loans, such portion of the outstanding CP Loan as to which such expiring
Interest Period relates shall, on the Continuation Date, continue as a CP Loan
with a CP Rate Period of 30 days (except if the interest rate (on a per annum
basis) on the Commercial Paper would exceed 24%, in which case such CP Loan
shall automatically convert to a Eurodollar Loan with an interest rate based on
the Base Rate until such time as the Eurodollar Rate is specified in accordance
with clause (y) of the preceding sentence of this Section 2.5(c)), and (y) with
respect to Eurodollar Loans, such portion of the outstanding Eurodollar Loan as
to which such expiring Interest Period relates shall, on the Continuation Date,
continue as a Eurodollar Loan with an interest rate of the same type as applied
to the expiring Interest Period.
(d) Conversion of Ownership Interest. If, pursuant to
the Capital Asset Purchase Agreement, the Eurodollar Lenders (in their capacity
as Purchasers) are required to purchase Ownership Interests, then, on the date
of the purchase of such Ownership Interest (the "Ownership Interest Conversion
Date") Lessee automatically and without further act shall be deemed to have
given an Advance Request requesting a borrowing of Eurodollar Loans, and each
Eurodollar Lender automatically and without further act shall be deemed to have
Funded on the Ownership Interest Conversion Date Eurodollar Loans with an
interest rate equal to the Eurodollar Rate, subject to Section 2.5(e), and the
CP Loan in which such Eurodollar Lender acquires an Ownership Interest shall
thereupon be converted to and be deemed a Eurodollar Loan.
(e) Conversion into Base Rate Upon Loan Event of Default.
If a Loan Event of Default occurs and is continuing, then (i) each CP Loan
shall, on the last day of the applicable Interest Period, convert to a
Eurodollar Loan with an interest rate based on the Base Rate, (ii) with respect
to each Eurodollar Loan with an interest rate based on the Eurodollar Rate,
such interest rate shall, on the last day of the applicable Interest Period,
convert to the Base Rate and (iii) the obligation of the Lenders to make, or to
convert Loans into, CP Loans or Eurodollar Loans with interest based on the
Eurodollar Rate shall be suspended; provided, however, that the interest rate
of any Eurodollar Loan with an interest rate based on the Eurodollar Rate shall
be converted to the Base Rate immediately upon the Loans (or any of them) being
declared to be due and payable, or becoming payable, pursuant to Section 6.
(f) Fundings by Agent. Unless Agent shall have been
notified in writing by any Eurodollar Lender prior to a borrowing that such
Eurodollar Lender will not make its share of such borrowing available to Agent,
Agent may assume that such Eurodollar Lender is making such amount available to
Agent, and Agent may, in reliance upon such assumption, make available to
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Borrower a corresponding amount. If such amount is not made available to Agent
by the required time on the Funding date therefor, such Eurodollar Lender shall
pay to Agent, on demand, such amount with interest thereon at a rate equal to
the daily average Federal Funds Effective Rate for the period until such
Eurodollar Lender makes such amount immediately available to Agent. A
certificate of Agent submitted to any Eurodollar Lender with respect to any
amounts owing under this Section 2.5(f) shall be conclusive in the absence of
manifest error. If such Eurodollar Lender's share of such borrowing is not
made available to Agent by such Eurodollar Lender within three Business Days of
such Funding date, Agent shall also be entitled to recover such amount with
interest thereon at the Base Rate, on demand, from Borrower.
SECTION 2.6 Prepayments.
(a) Scheduled Repayments. Borrower shall, on each
Quarterly Payment Date, make scheduled repayments of principal to the Lenders
in an amount equal to the aggregate Equipment Fixed Rent payable by Lessee on
such date under the Equipment Lease Supplements. Agent shall, on the grid of
each Note, allocate such scheduled repayments among CP Lender and Eurodollar
Lenders, first to the Eurodollar Lenders and then to CP Lender as set forth in
Section 5.2, such allocation to be final and conclusive absent manifest error.
The amount to be applied to repayment of Eurodollar Loans shall be distributed
pro rata among the Eurodollar Lenders based on each Eurodollar Lender's
Commitment Percentage.
(b) Voluntary. Borrower may at any time and from time to
time prepay the Loans, in whole or in part, without premium or penalty (subject
to Section 11.6 of the Participation Agreement), upon at least four Business
Days' written notice to Agent, specifying the date and amount of prepayment and
the Site and/or Equipment Group to which such Loans are allocable. Upon
receipt of any such notice Agent shall promptly notify either CP Lender, if
such prepayment relates to CP Loans, or each Eurodollar Lender, if such
prepayment relates to Eurodollar Loans, thereof. If any such notice is given,
the amount specified in such notice shall be due and payable on the date
specified therein, together with any amounts payable pursuant to Section 11
(including without limitation Section 11.6) of the Participation Agreement.
Notwithstanding the foregoing, if such prepayment relates to the prepayment of
Eurodollar Loans with the proceeds of CP Loans or the repayment of CP Loans
with Eurodollar Loans then the notice and manner of prepayment shall be carried
out pursuant to Section 3.5 of the Participation Agreement and Section 5.6
hereof.
(c) Mandatory. Notwithstanding the foregoing, all
applicable amounts payable by Lessee pursuant to Section 16.2 of
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the Lease or Articles XX or XXII of the Lease shall be used to prepay the
outstanding Loans and shall be applied to the outstanding Loans and the
Borrower's Investment Amount in the manner set forth at Section 5.3.
SECTION 2.7 Computation of Interest. (a) All computations of
interest (including amounts based on the Overdue Rate) shall be made by Agent
pursuant to Section 4.4 of the Participation Agreement, subject to the
limitations of Section 4.5 of the Participation Agreement. CP Lender shall as
soon as practicable notify Borrower and Agent of each determination of a CP
Rate. Agent shall as soon as practicable notify Borrower, Lessee and each
Eurodollar Lender of each determination of a Eurodollar Rate. Any change in
the interest rate on a Eurodollar Loan resulting from a change in the Base Rate
or the Eurocurrency Reserve Requirements shall become effective as of the
opening of business on the day on which such change becomes effective. Agent
shall as soon as practicable notify Borrower, Lessee and each Eurodollar Lender
of the effective date and the amount of each such change in interest rate.
(b) Each determination of an interest rate by Agent or CP
Lender in accordance with any provision of this Loan Agreement shall be
conclusive and binding on Borrower and, in the case of a Eurodollar Loan,
Eurodollar Lenders in the absence of manifest error. Agent shall, at the
request of Borrower (which request shall not be made more frequently than once
during each fiscal quarter of Lessee), deliver to Borrower a statement showing
the quotations used by Agent in determining any interest rate pursuant to
subsection (a) of this Section 2.7.
SECTION 2.8 Pro Rata Treatment and Payments. (a) Each borrowing
by Borrower from Eurodollar Lenders hereunder shall be made pro rata among
Eurodollar Lenders according to the respective Commitment Percentages of each
such Eurodollar Lender and shall be allocated as Tranche A Eurodollar Loans and
Tranche B Eurodollar Loans as provided for at Section 2.2. Except as otherwise
provided in Section 5, each payment (including each prepayment) by Borrower on
account of principal of and interest on the (i) Eurodollar Loans shall be made
pro rata among Eurodollar Lenders (and their respective Tranche A Eurodollar
Loans and Tranche B Eurodollar Loans) according to the respective outstanding
principal amounts of the Eurodollar Loans then held by each such Eurodollar
Lender, and (ii) CP Loans shall be made pro rata among CP Lender's respective
Tranche A CP Loans and Tranche B CP Loans in accordance with the applicable
Tranche A Percentage and Tranche B Percentage.
(b) All payments (including prepayments) to be made by
Borrower hereunder and under the Notes, whether on account of principal,
interest or otherwise, shall be made without setoff or
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counterclaim and shall be made prior to 1:00 p.m., New York time, on the due
date thereof to Agent, for the account of either CP Lender or Eurodollar
Lenders, as the case may be, at Agent's office referred to in Section 13.3 of
the Participation Agreement, in Dollars and in immediately available funds.
Agent shall distribute such payments to Lenders promptly upon receipt in like
funds as received; provided, however, that any payments for the benefit of CP
Lender shall be paid to CP Administrative Agent. If any payment hereunder
(other than payments on the Loans) becomes due and payable on a day other than
a Business Day, such payment shall be extended to the next succeeding Business
Day. If any payment on a Loan becomes due and payable on a day other than a
Business Day, the maturity thereof shall be extended to the next succeeding
Business Day unless the result of such extension would be to extend such
payment into another calendar month, in which event such payment shall be made
on the immediately preceding Business Day. In the case of any extension of any
payment of principal pursuant to the preceding two sentences, interest thereon
shall be payable at the then applicable rate during such extension.
SECTION 3.
CONDITIONS PRECEDENT
The agreement of each Lender to make the Loan requested to be made by
it on any Advance Date is subject to the satisfaction of the conditions
precedent thereto set forth in Article 6 of the Participation Agreement.
SECTION 4.
COVENANTS AND LIMITATIONS
SECTION 4.1 Borrower Covenants. So long as the Commitments
remain in effect, any Note remains outstanding and unpaid or any other amount
is owing to any Lender or Agent hereunder or under the other Operative
Documents:
(a) Further Assurances. At any time and from time to
time, upon the written request of Agent, Borrower, at its sole expense, will
promptly and duly execute and deliver such further instruments and documents
and take such further action as Agent or the Required Lenders may reasonably
deem necessary for the purpose of obtaining or preserving the full benefits of
this Loan Agreement and the other Operative Documents and of the rights and
powers herein or therein granted.
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(b) Notices. If on any date Borrower shall obtain actual
knowledge of the occurrence of a Lease Default or Lease Event of Default,
Borrower will give written notice thereof to Agent within two Business Days
after such date.
(c) Discharge of Liens. Borrower will not create or
permit to exist at any time, and will, at its own expense, promptly take such
action as may be necessary to duly discharge, or cause to be discharged, all
Lessor Liens attributable to it, provided that Borrower shall not be required
to discharge any Lessor Lien while the same is being contested in good faith by
appropriate proceedings diligently prosecuted so long as such proceedings shall
not involve any material danger of impairment of any of the Liens contemplated
by the Security Documents or of the sale, forfeiture or loss of, and shall not
materially interfere with the disposition of, any of the Leased Property or
title thereto or any interest therein or the payment of Rent; provided,
further, that a Lessor Lien applicable to a particular Site or Equipment Group
shall be discharged by Borrower prior to any transfer or sale of such Site or
Equipment Group, and all Lessor Liens shall be discharged by Borrower prior to
the Maturity Date.
SECTION 4.2 Non-Recourse Obligations. Each Lender agrees that it
and each successor, assign, or participant of any Loan or Note of such Lender
will look solely to the amounts received by Agent under the Lease and the
proceeds of all other Collateral for payment of any and all amounts due
hereunder or under the other Operative Documents. No recourse to or against
Borrower (other than in respect of any obligations that may arise solely as a
result of Borrower's breach of its obligations under Section 4.1(c) or any
misrepresentation or breach of warranty made by Borrower under Section 8.2 of
the Participation Agreement) or any employee, officer, director, incorporator,
stockholder or agent of Borrower shall be had for the payment of any amount
owing by Borrower under this Agreement or the other Operative Documents, or for
the payment by Borrower of any fee in respect hereof or any other obligation or
claim of or against Borrower arising out of or based upon this Loan Agreement
or the other Operative Documents.
SECTION 5.
DISTRIBUTIONS OF PAYMENTS AND COLLATERAL PROCEEDS
SECTION 5.1 [RESERVED].
SECTION 5.2 Basic Rent. Each payment of Basic Rent (and any
payment of interest on overdue installments of Basic Rent) received by Agent
shall be distributed by Agent as promptly as
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possible (it being understood that any payments of Basic Rent received by Agent
on a timely basis and in accordance with the provisions of the Lease shall be
distributed on the date received in the funds so received) in the following
order of priority:
first, so much of the Basic Rent as shall equal the Equipment
Fixed Rent shall be distributed and paid pro rata to the Eurodollar
Lenders to reduce the outstanding principal portion of the Eurodollar
Equipment Loans;
second, so much of the Basic Rent as shall equal any remaining
Equipment Fixed Rent shall be distributed and paid to CP Lender to
reduce the outstanding principal portion of the CP Equipment Loans,
plus, on the Special Prepayment Date, an additional $10,000 of Basic
Rent shall be distributed to CP Lender, applied against the
outstanding principal portion of the Tranche B CP Loans and used to
pay maturing Commercial Paper on such date, and shall not be
distributed to Borrower as Yield pursuant to clause fifth;
third, so much of the Basic Rent as shall equal the aggregate
amount of interest (as well as any interest on (to the extent
permitted by Applicable Laws and Regulations) overdue interest) then
due on the CP Loans and/or the Eurodollar Loans (but excluding any
amounts described in clause fourth below), as the case may be, shall
be distributed and paid pro rata to CP Lender and/or the Eurodollar
Lenders, as applicable;
fourth, so much of the Basic Rent as shall equal the aggregate
amount of the advance made be Credit Suisse First Boston pursuant to
Section 2(k) of the Capital Asset Purchase Agreement, together with
interest (as well as any interest on (to the extent permitted by
Applicable Laws and Regulations) overdue interest) then due to Credit
Suisse First Boston as a result of such advance, shall be distributed
and paid to Credit Suisse First Boston; and
fifth, the balance, if any, of such Basic Rent payment
remaining thereafter shall be distributed to Borrower as a payment of
Yield due on the Investment Amount and Deemed Yield (as well as any
interest on (to the extent permitted by Applicable Laws and
Regulations) overdue Yield and Deemed Yield).
SECTION 5.3 Purchase Payments by Lessee. Any payment received by
Agent as a result of:
(a) the purchase of any Site or Equipment Group in
connection with Lessee's exercise of its Purchase Option under Section
20.1 of the Lease;
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(b) Lessee's compliance with its obligation to purchase a
Site or an Equipment Pool in accordance with Section 20.2 of the
Lease;
(c) Lessee's purchase of a Site pursuant to the
Construction Agency Agreement;
(d) the payment of the Equipment Group Balance in
accordance with Section 15.1(f)(i) of the Lease;
(e) the payment of the Property Balance in accordance
with Section 16.2(b) of the Lease; or
(f) the Lessee failing to fulfill one or more of the
conditions to exercise of the Remarketing Option pursuant to Article
XXII of the Lease and Agent's receipt pursuant to Article XXII of the
Lease of (i) the Gross Proceeds, if any, from the sale of certain
Sites and Equipment Pools, as the case may be, consented to by Agent,
the Borrower and the Required Participants and (ii) the remainder of
the Property Balance for such Site or Equipment constituting such
Equipment Pool from the Lessee,
shall be distributed by Agent as promptly as possible (it being understood that
any such payment received by Agent on a timely basis and in accordance with the
provisions of the Lease shall be distributed on the date on which such funds
are so received) as follows:
(x) in the case of a purchase or payment for all of
the Leased Property remaining subject to the Lease, to the
Participants pro rata in accordance with, and for application
to, their respective Participant Balances; or
(y) in the case of a purchase of or payment relating
to one or more Sites, but not of all Leased Property, to the
Participants pro rata in the proportion that the unpaid
principal amount of the related Site Loan held by each Lender
or the Investment Amount funded by Borrower, respectively, in
respect of such Site or Sites bears to the sum of (i) the
aggregate unpaid principal amount of the Site Loans of all of
the Lenders relating to such Site or Sites and (ii) all
Investment Amounts funded with respect to such Site or Sites;
or
(z) in the case of a purchase of or payment relating
to one or more Equipment Groups (including an entire Equipment
Pool), but not of all Leased Property, to the Participants pro
rata in the proportion that the
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unpaid principal amount of the related Equipment Loan held by
each Lender or the Investment Amount funded by Borrower,
respectively, in respect of such Equipment Group or Equipment
Groups bears to the sum of (i) the aggregate unpaid principal
amount of the Equipment Loans funded for such Equipment or
Equipment Groups by all of the Lenders and (ii) all Investment
Amounts funded for such Equipment Group or Equipment Groups.
SECTION 5.4 AMAT Recourse Amounts Payment by Lessee. The payment
by Lessee to Agent of the AMAT Recourse Amount relating to a Site or an
Equipment Pool plus, in the case of a Site that constitutes a 25% Property, the
excess of the Land Balance over the Land Proceeds, in each case in accordance
with Article XXII of the Lease upon Lessee's exercise of the Remarketing Option
with respect to such Site or such Equipment Pool shall be distributed by Agent
as promptly as possible (it being understood that any such payment received by
Agent on a timely basis in accordance with the provisions of the Lease shall be
distributed on the date on which such funds are so received) in the following
order of priority:
first, to the Tranche A Lenders for application to pay the
Tranche A Participant Balance relating to such Site or such Equipment
Pool of each Tranche A Lender; and
second, to the Tranche B Lenders for application to pay the
Tranche B Participant Balance relating to such Site or such Equipment
Pool of each Tranche B Lender, and in the case where the amounts so
distributed shall be insufficient to pay in full as aforesaid, then
pro rata among the Tranche B Lenders without priority of one Tranche B
Lender over the other in the proportion that each such Tranche B
Lender's Tranche B Participant Balance bears to the aggregate Tranche
B Participant Balances of all Tranche B Lenders; and
third, to Borrower for application to Borrower's Participant
Balance.
SECTION 5.5 Sales Proceeds and Other Payments from Remarketing of
Leased Properties. Any payments received by Agent as Gross Proceeds from the
sale of a Site or an Equipment Pool pursuant to Lessee's exercise of the
Remarketing Option pursuant to Article XXII of the Lease, together with any
payment made by Lessee to the extent of Excess Gross Proceeds pursuant to
Sections 21.1(d)(ii), 21.1(e) or 22.2(b) of the Lease or as a result of an
appraisal pursuant to Section 22.5 of the Lease or Section 11.9 of the
Participation Agreement, shall be distributed by Agent as promptly as possible
(it being understood that any such payment received by Agent on a timely basis
and in
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accordance with the provisions of the Lease shall be distributed on the date
received) in the funds so received in the following order of priority:
first, to the Tranche B Lenders for application to pay the
Tranche B Participant Balance relating to such Site or such Equipment
Pool of each Tranche B Lender, and in the case where the amount so
distributed shall be insufficient to pay in full as aforesaid, then
pro rata among the Tranche B Lenders without priority of one Tranche B
Lender over the other in the proportion that each Tranche B Lender's
Tranche B Participant Balance bears to the aggregate Tranche B
Participant Balances of all Tranche B Lenders,
second, to Borrower for application to Borrower's Participant
Balance, and
third, the balance, if any, of such Gross Proceeds and
payments remaining thereafter to, or as directed by, Lessee.
SECTION 5.6 Other Prepayment Amounts. Any Funding on an Advance
Date of CP Loans, the proceeds of which are to be used to repay outstanding
Eurodollar Loans or Eurodollar Loans the proceeds of which are to be used to
repay CP Loans, as provided for at Section 3.5 of the Participation Agreement
shall be distributed by Agent as promptly as possible (it being understood that
any such proceeds received by Agent on a timely basis and in accordance with
the provisions of the Participation Agreement shall be distributed on the date
received in funds so received) as follows:
(i) if such Advance is funded with CP Loans, the
proceeds from the CP Loans Funded on such Advance Date shall be paid
to the Eurodollar Lenders to pay in full the Participant Balance of
each Eurodollar Lender, and
(ii) if such Advance is funded with Eurodollar Loans,
the proceeds from the Eurodollar Loans Funded on such Advance Date
shall be paid to CP Lender to pay in full the Participant Balance of
CP Lender.
SECTION 5.7 Supplemental Rent. All payments of Supplemental Rent
received by Agent (excluding any amounts payable pursuant to any other
provision of this Section 5) shall be distributed promptly by Agent upon
receipt thereof to the Persons entitled thereto pursuant to the Operative
Documents.
SECTION 5.8 Excepted Payments. Notwithstanding any other
provision of this Loan Agreement or the Security Documents, any Excepted
Payment received at any time by Agent shall be
20
<PAGE> 24
distributed promptly to the Person entitled to receive such Excepted Payment
pursuant to the Operative Documents.
SECTION 5.9 Distribution of Payments after Loan Event of Default.
(a) All payments received and amounts realized by Agent after a Loan Event of
Default exists, including proceeds from the sale of any of the Collateral
(other than Pledge Collateral, the distribution of which is provided in Section
5.14), proceeds of any amounts from any insurer or any Governmental Authority
in connection with any Casualty or Condemnation, from Lessee as payment in
accordance with the Lease, including any payment received from Lessee pursuant
to Section 17 of the Lease, shall, if received by Borrower, be paid to Agent as
promptly as possible and shall be distributed by Agent as promptly as possible
(it being understood that any such payment received by Agent on a timely basis
and in accordance with the provisions of the Operative Documents shall be
distributed on the date received in the funds so received) in the following
order of priority:
first, so much of such payment or amount as shall be required
to reimburse Agent for any tax, expense or other loss incurred by
Agent (to the extent not previously reimbursed and to the extent
incurred in connection with any duties as Agent) and any unpaid
ongoing fees of Agent shall be distributed to Agent for its own
account;
second, so much of such payments or amounts as shall be
required to reimburse the then existing or prior Participants for
payments made by them to Agent pursuant to Section 12.4 of the
Participation Agreement (to the extent not previously reimbursed);
provided that, with respect to any Participant, such Participant shall
not be entitled to reimbursement pursuant to this clause second for
payments made by it under Section 12.4 of the Participation Agreement
to the extent that the amounts to be reimbursed would constitute a
Claim excluded from indemnification pursuant to Section 11.1 of the
Participation Agreement;
third, so much of such amount as shall be required to pay in
full each Lender's Participant Balance, and in the case that the
amount so to be distributed shall be insufficient to pay in full as
aforesaid, then, pro rata among Lenders without priority of one Lender
over the other in the proportion that each Lender's Participant
Balance bears to the aggregate Participant Balances of all of the
Lenders;
fourth, so much of such amount or amounts as shall be required
to pay in full the Participant Balance of Borrower; and
21
<PAGE> 25
fifth, the balance, if any, of such payment or amounts
remaining thereafter shall be promptly distributed to, or as directed
by, the Lessee.
(b) During the occurrence and continuance of a Loan Event of
Default, all amounts (other than Excepted Payments and proceeds from the
liquidation of Pledge Collateral) received or realized by Agent and otherwise
distributable pursuant to Sections 5.2 and 5.3 shall be distributed as provided
for in Section 5.9(a) above.
SECTION 5.10 Other Payments. (a) Except as otherwise provided in
Sections 5.2, 5.3, 5.9 and paragraph (b) below,
(i) any payment received by Agent for which no provision as
to the application thereof is made in the Operative Documents or
elsewhere in this Section 5, and
(ii) all payments received and amounts realized by Agent
under the Lease or otherwise with respect to the Collateral to the
extent received or realized at any time after indefeasible payment in
full of the Participant Balances of all of the Lenders and any other
amounts due and owing to Lenders or Agent,
shall be distributed forthwith by Agent in the order of priority set forth in
Section 5.3 (in the case of any payment described in clause (i) above) or in
Section 5.9 hereof (in the case of any payment described in clause (ii) above),
except that in the case of any payment described in clause (ii) above, such
payment shall be distributed omitting clause third of such Section 5.9; and the
balance, if any, (in the case of any payment described in clause (i) or (ii)
above) shall be distributed to, or as directed by, the Lessee.
(b) Except as otherwise provided in Sections 5.2 and 5.3
hereof, any payment received by Agent for which provision as to the application
thereof is made in an Operative Document but not elsewhere in this Section 5
shall be distributed forthwith by Agent to the Person and for the purpose for
which such payment was made in accordance with the terms of such Operative
Document.
SECTION 5.11. Casualty and Condemnation Amounts. Any amounts
payable to Agent as a result of a Casualty or Condemnation pursuant to Section
15.1 of the Lease (but excluding any amounts payable pursuant to Section
15.1(f)(i) or Section 16.2 of the Lease) shall, if no Lease Event of Default
exists, be paid over to Lessee for the rebuilding or restoration of the Leased
Property to which such Casualty or Condemnation applied, and any excess
proceeds shall be applied pursuant to Section 5.10 of this Loan Agreement. If
a Lease Event of Default exists, then
22
<PAGE> 26
during the continuance of such Lease Event of Default, all such amounts shall
be held by Agent as Collateral in the Account and upon exercise of Agent's
remedies hereunder shall be distributed pursuant to Section 5.9.
SECTION 5.12 Order of Application. To the extent any payment made
to any Participant pursuant to Sections 5.3, 5.4, 5.5, 5.8 or 5.13 is
insufficient to pay in full the Participant Balance of such Participant, then
each such payment shall first be applied to accrued interest or Yield and then
to principal or Investment Amounts, as applicable.
SECTION 5.13 Distribution of Advance for Prepayment of Outstanding
Loans. The portion of the proceeds of an Advance funded with a CP Loan
received by Agent that is to be used to repay outstanding Eurodollar Loans, as
set forth in the related Advance Request, shall be distributed by Agent to
Eurodollar Lenders for application to pay in full each such Eurodollar Lenders'
Participant Balance.
SECTION 5.14 Proceeds of Pledge Collateral. Any payments received
by Agent as proceeds from the sale of the Pledge Collateral shall be
distributed by Agent as promptly as possible (it being understood that any such
payment received by Agent on a timely basis and in accordance with the
provisions of the Pledge Agreement shall be distributed on the date received)
in the funds so received in the following order of priority:
first, to the Tranche A Lenders for application to pay in full
the Tranche A Participant Balance of each Tranche A Lender, and in the
case where the amount so distributed shall be insufficient to pay in
full as aforesaid, then pro rata among the Tranche A Lenders without
priority of one Tranche A Lender over the other in the proportion that
each Tranche A Lender's Tranche A Participant Balance bears to the
aggregate Tranche A Participant Balances of all Tranche A Lenders; and
second, the balance, if any, of such payment of proceeds
remaining thereafter shall be promptly distributed to, or as directed
by, the Lessee.
SECTION 6.
LOAN EVENT OF DEFAULT
SECTION 6.1 Loan Event of Default. Each of the following events
shall constitute a "Loan Event of Default" (whether any such event shall be
voluntary or involuntary or come about or be effected by operation of law or
pursuant to or in compliance with
23
<PAGE> 27
any judgment, decree or order of any court or any order, rule or regulation of
any Governmental Authority) and each such Loan Event of Default shall continue
so long as, but only as long as, it shall not have been remedied:
(a) the failure by Borrower to make any (i) payment of
interest or any repayment pursuant to Section 2.6(a) when due and such failure
shall continue unremedied for a period of five (5) days, (ii) any prepayment
when due pursuant to Section 2.6(b) or 2.6(c), or (iii) any payment due and
payable on the Maturity Date; or
(b) the failure by Borrower in any material respect to
timely perform any other covenant or condition herein and such failure shall
continue for a period of ninety (90) days after written notice thereof to
Borrower and Lessee from Agent; or
(c) any representation or warranty by Borrower in any
Operative Document or in any certificate or document delivered thereunder shall
have been incorrect in a material respect when made and shall remain material
when discovered and if curable shall continue unremedied for a period of 30
days after written notice thereof to Borrower from Agent; or
(d) Borrower shall (i) admit in writing its inability to
pay its debts generally as they become due, (ii) file a petition under the
United States bankruptcy laws or any other applicable insolvency law or statute
of the United States of America or any State or Commonwealth thereof, (iii)
make a general assignment for the benefit of its creditors, (iv) consent to the
appointment of a receiver of itself or the whole or any substantial part of its
property, (v) fail to cause the discharge of any custodian, trustee or receiver
appointed for Borrower or the whole or a substantial part of its property
within ninety (90) days after such appointment, (vi) file a petition or answer
seeking or consenting to reorganization under the United States bankruptcy laws
or any other applicable insolvency law or statute of the United States of
America or any State or Commonwealth thereof, or (vii) take corporate action
for the purposes of effectuating any of the foregoing;
(e) insolvency proceedings or a petition under the United
States bankruptcy laws or any other applicable insolvency law or statute of the
United States of America or any State or Commonwealth thereof shall be filed
against Borrower and not dismissed within ninety (90) days from the date of its
filing, or a court of competent jurisdiction shall enter an order or decree
appointing, without the consent of Borrower, a receiver of Borrower or the
whole or a substantial part of its property, and such order or decree shall not
be vacated or set aside within sixty (60) days from the date of the entry
thereof;
24
<PAGE> 28
(f) a Lease Event of Default shall occur and be
continuing.
SECTION 6.2 Remedies.
(a) (i) Subject to the provisions of clause (h) of this
Section 6.2, upon the occurrence of a Loan Event of Default, (A) if such event
is a Loan Event of Default specified in clauses (d) or (e) of Section 6.1 or a
Loan Event of Default arising from a Lease Event of Default specified in clause
(f) or clause (h) of Section 17.1 of the Lease, automatically the Eurodollar
Lenders' Commitments shall immediately terminate and the Loans hereunder (with
accrued interest thereon) and all other amounts owing under this Loan Agreement
and the Notes shall immediately become due and payable, and (B) if such event
is any other Loan Event of Default, either or both of the following actions may
be taken: (1) with the consent of the Required Lenders, Agent may, or upon the
request of the Required Lenders, Agent shall, by notice of default to Borrower,
declare the Eurodollar Lenders' Commitments to be terminated forthwith
whereupon the Eurodollar Lenders' Commitments shall immediately terminate and
(2) with the consent of the Required Lenders, Agent may, or upon the request of
the Required Lenders, Agent shall, by notice of default to Borrower, declare
the Loans hereunder (with accrued interest thereon) and all other amounts owing
under this Loan Agreement and the Notes to be due and payable forthwith,
whereupon the same shall immediately become due and payable; provided, however,
that notwithstanding the existence of any Loan Event of Default, so long as any
CP Loan shall be outstanding, no Eurodollar Lender's Commitment to the extent
necessary to purchase its pro rata share of the Ownership Interests in such CP
Loan under the Capital Asset Purchase Agreement shall terminate. Subject to
the limitations set forth in Section 6.2(a)(ii) and Section 6.2(g), upon the
occurrence of a Loan Event of Default, Agent shall, upon written instructions
of the Required Lenders, exercise any or all remedies available to it under the
Loan Documents by suit or suits or proceedings in equity, at law or in
bankruptcy, and whether for the specific performance of any covenant or
agreement herein contained or in execution or aid of any power herein granted,
or for foreclosure hereunder, or for the appointment of a receiver or receivers
for the Leased Property or any other property subject to any Lien held by
Agent, or for the recovery of judgment for the indebtedness secured thereby
(including the Investment Amounts due Lessor) or for the enforcement of any
other proper, legal or equitable remedy available under Applicable Laws and
Regulations; provided, however, notwithstanding the foregoing, if in accordance
with the provisions of this clause (a)(i) Agent undertakes to foreclose (by the
power of sale or judicial foreclosure) on the Leased Property or any other
property subject to any Lien held by Agent, then, to the extent necessary (and
only to the extent necessary)
25
<PAGE> 29
to outbid any independent third party which may be bidding at such foreclosure
sale, Agent shall credit bid for the Leased Property subject to the foreclosure
an amount equal to the lesser of (i) the Fair Market Value of such Leased
Property, and (ii) the amount secured by the Lien being foreclosed upon.
(ii) Notwithstanding anything stated to the contrary in Section
6.2(a)(i) or in the other Operative Documents, upon the occurrence of a Loan
Event of Default specified in clause (b), (c), (d) or (e) of Section 6.1 that
does not also constitute a Lease Event of Default, but subject to the proviso
set forth below, Agent's sole remedy shall be to exercise its rights under
Section 10.3 of the Participation Agreement to direct Borrower to transfer to a
Replacement Lessor (as such term is defined in Section 10.3(b) of the
Participation Agreement) all of Borrower's right, title, interest and duties
and obligations in respect to the Leased Property; provided, however, if
(A) Borrower fails or refuses for any reason whatsoever to cause such transfer
to a Replacement Lessor to be consummated within 60 days following Agent's
direction to do so, or
(B) as a result of a court order or bankruptcy stay, Agent is prohibited for
any reason from requesting Borrower to cause such transfer to a Replacement
Lessor,
then the limitations on Agent's remedies set forth in this Section 6.2(a)(ii)
shall no longer apply and Agent shall be free to exercise all rights set forth
above in Section 6.2(a)(i) without limitation. Except as expressly provided
above in this Section 6.2, presentment, demand, protest and all other notices
of any kind are hereby expressly waived.
(b) Upon the occurrence of any Loan Event of Default that
is also a Lease Event of Default and at any time thereafter so long as any Loan
Event of Default shall be continuing, Agent shall, upon the written
instructions of the Required Participants, exercise any or all of the rights
and powers and pursue any and all of the remedies available to it as the
assignee of Borrower's rights under the Lease and the other Operative Documents
for the benefit of all of the Participants.
(c) Without limiting the foregoing, upon the occurrence
of any Loan Event of Default that is also a Lease Event of Default, Agent shall
not, without the consent of Borrower, undertake any actions, suits or
proceedings against the Collateral pursuant to Section 6.2(a)(i) above without
also independently exercising substantial remedies in respect of the Lease.
26
<PAGE> 30
(d) Except as expressly provided above, no remedy under
this Section 6.2 is intended to be exclusive, but each shall be cumulative and
in addition to any other remedy provided under this Section 6.2 or under the
other Operative Documents or otherwise available at law or in equity. The
exercise by Agent or any Lender of any one or more of such remedies shall not
preclude the simultaneous or later exercise of any other remedy or remedies.
No express or implied waiver by Agent or any Lender of any Loan Event of
Default shall in any way be, or be construed to be, a waiver of any future or
subsequent Loan Event of Default. The failure or delay of Agent or any Lender
in exercising any rights granted it hereunder upon any occurrence of any of the
contingencies set forth herein shall not constitute a waiver of any such right
upon the continuation or recurrence of any such contingencies or similar
contingencies and any single or partial exercise of any particular right by
Agent or any Lender shall not exhaust the same or constitute a waiver of any
other right provided herein.
(e) No failure to exercise and no delay in exercising, on
the part of Agent or any Lender, any right, remedy, power or privilege
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power
or privilege.
(f) Notwithstanding the foregoing provisions of this
Section 6.2 or the terms and conditions of the other Operative Documents,
unless otherwise agreed to by the Required Lenders, it is agreed among the
Participants that until all of the Loans and other amounts due and owing to
Lenders have been indefeasibly paid in full, all causes of action and remedies
which may be pursued for the benefit of the Participants will be brought only
by Agent (or any co-agent permitted by the Operative Documents) at the
direction of the Participants which direction shall be given pursuant to this
Section 6.2 and Section 13.3 of the Participation Agreement.
(g) Notwithstanding anything to the contrary set forth in
this Section 6.2, if there exists a Loan Event of Default and no Lease Event of
Default exists, Agent shall not exercise remedies under the Security Documents
against Lessee.
(h) Notwithstanding the termination of the Eurodollar
Lenders' Commitments and the acceleration of the Loans and other amounts owing
under this Loan Agreement in accordance with the provisions of Section 6.2(a),
effective upon the transfer by Borrower to a Replacement Lessor of all of
Borrower's right, title, interest and duties and obligations in respect to the
Leased Property in accordance with the provisions of Section 10.3
27
<PAGE> 31
of the Participation Agreement, the Eurodollar Lenders' Commitments shall
automatically be reinstated and the Loan Event of Default(s) that gave rise to
such acceleration shall be deemed cured.
(i) Borrower shall be liable for any and all accrued and
unpaid amounts due hereunder before, after or during the exercise of any of the
foregoing remedies, including all reasonable legal fees and other reasonable
costs and expenses incurred by Agent or any Lender by reason of the occurrence
of any Loan Event of Default or the exercise of remedies with respect thereto.
SECTION 7.
MISCELLANEOUS
SECTION 7.1 Amendments and Waivers. Neither this Loan Agreement,
any other Loan Document, nor any terms hereof or thereof may be amended,
supplemented or modified except in accordance with the provisions of Section
13.5 of the Participation Agreement.
SECTION 7.2 Notices. All notices, requests and demands to or
upon the respective parties hereto shall be given in accordance with Section
13.3 of the Participation Agreement.
SECTION 7.3 No Waiver; Cumulative Remedies. No failure to
exercise and no delay in exercising, on the part of Agent or any Lender, any
right, remedy, power or privilege hereunder or under the other Loan Documents
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
SECTION 7.4 Survival of Representations and Warranties. All
representations and warranties made hereunder, in the other Loan Documents and
in any document, certificate or statement delivered pursuant hereto or in
connection herewith shall survive the execution and delivery of this Loan
Agreement and the Notes and the making of the Loans hereunder.
SECTION 7.5 Successors and Assigns; Assignment. This Loan
Agreement shall be binding upon and inure to the benefit of Borrower, Lenders,
Agent, all future lenders and their respective successors and assigns, except
that Borrower may not assign or transfer any of its rights or obligations under
this Loan
28
<PAGE> 32
Agreement and Lenders may not assign or transfer any of their rights or
obligations under this Loan Agreement or their interest in the Notes held by
Agent except in compliance with Section 10.4 of the Participation Agreement.
SECTION 7.6 Adjustments. If any Lender (a "Benefitted Lender")
shall at any time receive any payment of all or part of its Loans, or interest
thereon, or receive any collateral in respect thereof (whether voluntarily or
involuntarily, by setoff, pursuant to events or proceedings of the nature
referred to in Section 6.1(d) or (e), or otherwise), in a greater proportion
than any such payment to or collateral received by any other Lender, if any, in
respect of such other Lender's Loans, or interest thereon, such Benefitted
Lender shall purchase for cash from the other Lenders a participating interest
in such portion of each such other Lender's Loan, or shall provide such other
Lenders with the benefits of any such collateral, or the proceeds thereof, as
shall be necessary to cause such Benefitted Lender to share the excess payment
or benefits of such collateral or proceeds ratably with each of the Lenders;
provided, however, that if all or any portion of such excess payment or
benefits is thereafter recovered from such Benefitted Lender, such purchase
shall be rescinded, and the purchase price and benefits returned, to the extent
of such recovery, but without interest.
SECTION 7.7 Counterparts. This Loan Agreement may be executed by
one or more of the parties to this Loan Agreement on any number of separate
counterparts (including by telecopy), and all of said counterparts taken
together shall be deemed to constitute one and the same instrument. A set of
the copies of this Loan Agreement signed by all the parties shall be lodged
with Borrower and Agent.
SECTION 7.8 Severability. Any provision of this Loan Agreement
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.
SECTION 7.9 Intention. This Loan Agreement and the other
Operative Documents represent the agreement of Borrower, Agent and Lenders with
respect to the subject matter hereof, and there are no promises, undertakings,
representations or warranties by Agent or any Lender relative to subject matter
hereof not expressly set forth or referred to herein or in the other Operative
Documents.
29
<PAGE> 33
SECTION 7.10 GOVERNING LAW. THIS LOAN AGREEMENT AND THE NOTES
HAVE BEEN DELIVERED IN NEW YORK AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
UNDER THIS LOAN AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, INCLUDING
SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW BUT EXCLUDING ALL OTHER
CHOICE OF LAWS AND CONFLICTS RULES OF SUCH STATE.
SECTION 7.11 Prohibited Proceeding. Each of Borrower, Eurodollar
Lenders and Agent hereby agrees that, it shall not institute against, or join
any other person in instituting against, CP Lender any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceeding or other
proceedings under any federal or state bankruptcy or similar law, for one year
and a day after the latest maturing commercial paper note issued by CP Lender
is paid. This Section 7.11 shall survive termination of this Agreement.
SECTION 7.12 Source of Funds. Notwithstanding anything to the
contrary contained in this Loan Agreement, any obligations of CP Lender under
Section 7.6 shall be payable by CP Lender solely from excess cash flow from CP
Lender's operations which is not otherwise required to repay when due
commercial paper notes issued by CP Lender.
30
<PAGE> 34
IN WITNESS WHEREOF, the parties hereto have caused this Loan Agreement
to be duly executed and delivered by their proper and duly authorized officers
as of the day and year first above written.
CREDIT SUISSE LEASING 92A, L.P., as
Borrower
By: CREDIT SUISSE FIRST BOSTON,
acting through its New York
Branch, its General Partner
By: /s/ CARL WEATHERLEY-WHITE
------------------------------
Name: Carl Weatherley-White
----------------------------
Title: Vice President
---------------------------
By: /s/ MATT MOSER
------------------------------
Name: Matt Moser
----------------------------
Title: Associate
---------------------------
CREDIT SUISSE FIRST BOSTON,
acting through its New York Branch,
as Agent
By: /s/ CARL WEATHERLEY-WHITE
------------------------------
Name: Carl Weatherley-White
----------------------------
Title: Vice President
---------------------------
By: /s/ MATT MOSER
------------------------------
Name: Matt Moser
----------------------------
Title: Associate
---------------------------
S-1 LOAN AGREEMENT
<PAGE> 35
GREENWICH FUNDING CORPORATION,
as CP Lender
By: CREDIT SUISSE FIRST BOSTON,
acting through its New York
Branch, as Attorney-in-fact
By: /s/ THOMAS MEIER
------------------------------
Name: Thomas Meier
----------------------------
Title: Vice President
---------------------------
By: /s/ ALBERTO ZONCA
------------------------------
Name: Alberto Zonca
----------------------------
Title: Associate
---------------------------
S-2 LOAN AGREEMENT
<PAGE> 36
BANQUE NATIONALE DE PARIS,
as Eurodollar Lender
By: /s/ RAFAEL C. LUMANLAN
------------------------------
Name: Rafael C. Lumanlan
----------------------------
Title: Vice President
---------------------------
By: /s/ CHARLES H. DAY
------------------------------
Name: Charles H. Day
----------------------------
Title: Assistant Vice President
---------------------------
S-3 LOAN AGREEMENT
<PAGE> 37
CREDIT SUISSE FIRST BOSTON,
as Eurodollar Lender
By: /s/ CARL WEATHERLEY-WHITE
------------------------------
Name: Carl Weatherley-White
----------------------------
Title: Vice President
---------------------------
By: /s/ MATT MOSER
------------------------------
Name: Matt Moser
----------------------------
Title: Associate
---------------------------
S-4 LOAN AGREEMENT
<PAGE> 38
MELLON BANK, N.A.,
as Eurodollar Lender
By: /s/ EDWIN H. WIEST
------------------------------
Name: Edwin H. Wiest
----------------------------
Title: First Vice President
---------------------------
S-5 LOAN AGREEMENT
<PAGE> 39
UNION BANK OF CALIFORNIA, N.A.,
as Eurodollar Lender
By: /s/ WANDA HEADRICK
------------------------------
Name: Wanda Headrick
----------------------------
Title: Vice President
---------------------------
S-6 LOAN AGREEMENT
<PAGE> 40
SCHEDULE I
Eurodollar Lenders
Banque Nationale de Paris
Credit Suisse First Boston
Mellon Bank, N.A.
Union Bank of California, N.A.
<PAGE> 41
EXHIBIT A-CE
TO LOAN AGREEMENT
TRANCHE A CP EQUIPMENT NOTE
U.S. $8,600,000 April 30, 1997
FOR VALUE RECEIVED, the undersigned, Credit Suisse Leasing 92A, L.P.
("Borrower"), promises to pay, solely from amounts paid under the Lease and the
Collateral, to the order of Credit Suisse First Boston, acting through its New
York Branch, as Agent ("Agent"), on behalf of Greenwich Funding Corporation
("CP Lender"), the principal sum of Eight Million Six Hundred Thousand United
States Dollars (U.S. $8,600,000) or, if less, the aggregate unpaid amount of
all Tranche A CP Loans made by CP Lender to Lessor to Fund Equipment Advances
pursuant to the Loan Agreement among CP Lender, Borrower, the financial
institutions parties thereto (the "Eurodollar Lenders") and Agent, dated as of
April 30, 1997 (as amended, supplemented or otherwise modified from time to
time, the "Loan Agreement"). Each such loan shall mature on the Maturity Date
and be payable in accordance with the Loan Agreement. Capitalized terms used
but not otherwise defined herein shall have the meanings ascribed to such terms
in the Loan Agreement.
Borrower promises to make payments of principal on each Quarterly
Payment Date in the amount equal to the product of (A) the aggregate Equipment
Fixed Rent payable by Lessee on such date under the Equipment Lease Supplements
and (B) the Tranche A Percentage and (C) a fraction, the numerator of which is
the outstanding principal amount of this Tranche A CP Equipment Note and the
denominator of which is the aggregate outstanding principal amount of all
Notes.
Borrower further promises to make payments of interest on the unpaid
principal amount hereof from the date hereof until this Tranche A CP Equipment
Note is paid in full, at the rates and the times provided for below and in the
Loan Agreement:
(i) Each outstanding CP Loan shall bear interest for each day
during each Interest Period at a rate per annum equal to the CP Rate.
(ii) If all or a portion of the principal amount of any CP Loan,
any interest payable thereon or any other amount payable hereunder shall not be
paid when due (whether at the stated maturity, by acceleration or otherwise),
such overdue amount shall bear interest at a rate per annum which is equal to
the sum of (x) the rate necessary for CP Lender to pay when due the
<PAGE> 42
Interest Component on the outstanding Commercial Paper plus (y) the Overdue
Rate.
(iii) Interest accruing on each CP Loan shall be payable in arrears
on each applicable Payment Date, Refinancing Date, Continuation Date or any
other date of prepayment, conversion or continuation (on the amount prepaid,
converted or continued), and at maturity (whether by acceleration, demand or
otherwise), in an amount necessary to repay the Interest Component of all
Commercial Paper maturing on such date. Notwithstanding the foregoing,
interest accruing pursuant to clause (ii) above shall be payable from time to
time on demand and each prepayment of a CP Loan shall be accompanied by accrued
interest to the date of such prepayment on the amount prepaid together with any
breakage costs as contemplated by the Loan Agreement and the other Operative
Documents.
As provided in the Loan Agreement, this Tranche A CP Equipment Note is
required to be prepaid and may be accelerated under certain circumstances.
All payments hereunder shall be made at the payment office of Agent
(and for the account of CP Lender as provided for in the Loan Agreement), or as
Agent, on behalf of CP Lender, shall otherwise direct in writing, in lawful
money of the United States of America and in immediately available funds,
without setoff, counterclaim, withholding or deduction of any kind whatsoever.
The loans made pursuant to the Loan Agreement, the maturity thereof
and the interest rate applicable thereto, and all payments on account of
principal thereof, shall be recorded by Agent in its records. The entries in
the records of Agent shall be prima facie evidence of amounts outstanding
hereunder.
Borrower hereby waives presentment, demand, notice, protest and all
other demands or notices in connection with the delivery, acceptance,
performance, default or enforcement of this Tranche A CP Equipment Note. No
course of action or delay or omission of Agent or CP Lender in exercising any
right or remedy hereunder shall constitute or be deemed to be a waiver of any
right or remedy hereunder, and a waiver on one occasion shall not operate as a
bar to or a waiver of any such right or remedy on any further occasion.
Borrower agrees to pay on demand all out-of-pocket costs and expenses,
including reasonable attorneys' costs and fees, incurred or paid by Agent or CP
Lender in connection with the enforcement of this Tranche A CP Equipment Note.
The obligations of Borrower under this Tranche A CP Equipment Note and
the other Operative Documents (other than any
<PAGE> 43
obligations that may arise solely as a result of Borrower's breach of its
obligations under Section 10.2 of the Participation Agreement or any
misrepresentation or breach of warranty made by Borrower under Section 8.3 of
the Participation Agreement) shall be satisfied solely from amounts received by
Agent under the Lease and from proceeds of the Collateral. No recourse to or
against Borrower or any employee, officer, director, incorporator, stockholder,
partner or agent of Borrower shall be had for the payment for any amount owing
by Borrower under this Tranche A CP Equipment Note or any other Operative
Document.
THIS TRANCHE A CP EQUIPMENT NOTE HAS BEEN DELIVERED IN NEW YORK AND
THE OBLIGATIONS OF BORROWER UNDER THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF NEW YORK, INCLUDING SECTION
5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW BUT EXCLUDING ALL OTHER CHOICE
OF LAWS AND CONFLICTS RULES OF SUCH STATE. BORROWER HEREBY IRREVOCABLY WAIVES
ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY PROCEEDING BROUGHT IN CONNECTION WITH
THIS TRANCHE A CP EQUIPMENT NOTE.
CREDIT SUISSE LEASING 92A, L.P.,
AS BORROWER
By: CREDIT SUISSE FIRST BOSTON,
acting through its New York
Branch, as General Partner
By:
---------------------------
Name:
-------------------------
Title:
------------------------
By:
---------------------------
Name:
-------------------------
Title:
------------------------
<PAGE> 44
TRANCHE A CP EQUIPMENT NOTE
<TABLE>
<CAPTION>
Date of Funding or Amount of CP Loan or Outstanding Principal CP Rate CP Rate Period Comments
Payment Payment of CP Loan (after such
Funding or Payment)
<S> <C> <C> <C> <C> <C>
- - ---------------------------------------------------------------------------------------------------------------------
- - ---------------------------------------------------------------------------------------------------------------------
- - ---------------------------------------------------------------------------------------------------------------------
- - ---------------------------------------------------------------------------------------------------------------------
- - ---------------------------------------------------------------------------------------------------------------------
- - ---------------------------------------------------------------------------------------------------------------------
- - ---------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 45
EXHIBIT A-CS
TO LOAN AGREEMENT
TRANCHE A CP SITE NOTE
U.S. $____________ April 30, 1997
FOR VALUE RECEIVED, the undersigned, Credit Suisse Leasing 92A, L.P.
("Borrower"), promises to pay, solely from amounts paid under the Lease and the
Collateral, to the order of Credit Suisse First Boston, acting through its New
York branch, as Agent ("Agent"), on behalf of Greenwich Funding Corporation
("CP Lender"), the principal sum of ____________________________ United States
Dollars (U.S. $________________)(1) or, if less, the aggregate unpaid amount of
all Tranche A CP Loans made by CP Lender to Lessor to Fund Site Advances
pursuant to the Loan Agreement among CP Lender, Borrower, the financial
institutions parties thereto (the "Eurodollar Lenders") and Agent, dated as of
April 30, 1997 (as amended, supplemented or otherwise modified from time to
time, the "Loan Agreement"). Each such loan shall mature on the Maturity Date
and be payable in accordance with the Loan Agreement. Capitalized terms used
but not otherwise defined herein shall have the meanings ascribed to such terms
in the Loan Agreement.
Borrower promises to pay interest on the unpaid principal amount
hereof from the date hereof until this Tranche A CP Site Note is paid in full,
at the rates and the times provided for below and in the Loan Agreement:
(i) Each outstanding CP Loan shall bear interest for each day
during each Interest Period at a rate per annum equal to the CP Rate.
(ii) If all or a portion of the principal amount of any CP Loan,
any interest payable thereon or any other amount payable hereunder shall not be
paid when due (whether at the stated maturity, by acceleration or otherwise),
such overdue amount shall bear interest at a rate per annum which is equal to
the sum of (x) the rate necessary for CP Lender to pay when due the Interest
Component on the outstanding Commercial Paper plus (y) the Overdue Rate.
(iii) Interest accruing on each CP Loan shall be payable in arrears
on each applicable Payment Date, Refinancing Date,
- - ------------------
(1) This amount should be eighty-two percent (82%) of the aggregate Commitment
of all Participants.
A-CS-5
<PAGE> 46
Continuation Date or any other date of prepayment, conversion or continuation
(on the amount prepaid, converted or continued), and at maturity (whether by
acceleration, demand or otherwise), in an amount necessary to repay the
Interest Component of all Commercial Paper maturing on such date.
Notwithstanding the foregoing, interest accruing pursuant to clause (ii) above
shall be payable from time to time on demand and each prepayment of a CP Loan
shall be accompanied by accrued interest to the date of such prepayment on the
amount prepaid together with any breakage costs as contemplated by the Loan
Agreement and the other Operative Documents.
No principal amortization shall be required prior to the Maturity
Date, except as otherwise provided pursuant to Section 2.6(c) of the Loan
Agreement.
As provided in the Loan Agreement, this Tranche A CP Site Note is
required to be prepaid and may be accelerated under certain circumstances.
All payments hereunder shall be made at the payment office of Agent
(and for the account of CP Lender as provided for in the Loan Agreement), or as
Agent, on behalf of CP Lender, shall otherwise direct in writing, in lawful
money of the United States of America and in immediately available funds,
without setoff, counterclaim, withholding or deduction of any kind whatsoever.
The loans made pursuant to the Loan Agreement, the maturity thereof
and the interest rate applicable thereto, and all payments on account of
principal thereof, shall be recorded by Agent in its records. The entries in
the records of Agent shall be prima facie evidence of amounts outstanding
hereunder.
Borrower hereby waives presentment, demand, notice, protest and all
other demands or notices in connection with the delivery, acceptance,
performance, default or enforcement of this Tranche A CP Site Note. No course
of action or delay or omission of Agent or CP Lender in exercising any right or
remedy hereunder shall constitute or be deemed to be a waiver of any right or
remedy hereunder, and a waiver on one occasion shall not operate as a bar to or
a waiver of any such right or remedy on any further occasion.
Borrower agrees to pay on demand all out-of-pocket costs and expenses,
including reasonable attorneys' costs and fees, incurred or paid by Agent or CP
Lender in connection with the enforcement of this Tranche A CP Site Note.
The obligations of Borrower under this Tranche A CP Site Note and the
other Operative Documents (other than any obligations that may arise solely as
a result of Borrower's
A-CS-6
<PAGE> 47
breach of its obligations under Section 10.2 of the Participation Agreement or
any misrepresentation or breach of warranty made by Borrower under Section 8.3
of the Participation Agreement) shall be satisfied solely from amounts received
by Agent under the Lease and from proceeds of the Collateral. No recourse to
or against Borrower or any employee, officer, director, incorporator,
stockholder, partner or agent of Borrower shall be had for the payment for any
amount owing by Borrower under this Tranche A CP Site Note or any other
Operative Document.
THIS TRANCHE A CP SITE NOTE HAS BEEN DELIVERED IN NEW YORK AND THE
OBLIGATIONS OF BORROWER UNDER THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF NEW YORK, INCLUDING SECTION 5-1401
OF THE NEW YORK GENERAL OBLIGATIONS LAW BUT EXCLUDING ALL OTHER CHOICE OF LAWS
AND CONFLICTS RULES OF SUCH STATE. BORROWER HEREBY IRREVOCABLY WAIVES ANY AND
ALL RIGHT TO TRIAL BY JURY IN ANY PROCEEDING BROUGHT IN CONNECTION WITH THIS
TRANCHE A CP SITE NOTE.
CREDIT SUISSE LEASING 92A, L.P.,
AS BORROWER
By: CREDIT SUISSE FIRST BOSTON,
acting through its New York
Branch, as General Partner
By:
---------------------------
Name:
-------------------------
Title:
------------------------
By:
---------------------------
Name:
-------------------------
Title:
------------------------
A-CS-7
<PAGE> 48
TRANCHE A CP SITE NOTE
<TABLE>
<CAPTION>
Date of Funding or Amount of CP Loan or Outstanding Principal CP Rate CP Rate Period Comments
Payment Payment of CP Loan (after such
Funding or Payment)
<S> <C> <C> <C> <C> <C>
- - ---------------------------------------------------------------------------------------------------------------------
- - ---------------------------------------------------------------------------------------------------------------------
- - ---------------------------------------------------------------------------------------------------------------------
- - ---------------------------------------------------------------------------------------------------------------------
- - ---------------------------------------------------------------------------------------------------------------------
- - ---------------------------------------------------------------------------------------------------------------------
- - ---------------------------------------------------------------------------------------------------------------------
</TABLE>
A-CS-8
<PAGE> 49
EXHIBIT A-EE
TO LOAN AGREEMENT
TRANCHE A EURODOLLAR EQUIPMENT NOTE
U.S. $8,600,000 April 30, 1997
FOR VALUE RECEIVED, the undersigned, Credit Suisse Leasing 92A, L.P.
("Borrower"), promises to pay, solely from amounts paid under the Lease and the
Collateral, to the order of Credit Suisse First Boston, acting through its New
York branch, as Agent ("Agent"), on behalf of the Eurodollar Lenders, the
principal sum of Eight Million Six Hundred Thousand United States Dollars (U.S.
$8,600,000) or, if less, the aggregate unpaid amount of all Tranche A
Eurodollar Loans made by the Eurodollar Lenders to Lessor to Fund Equipment
Advances pursuant to the Loan Agreement among Greenwich Funding Corporation
("CP Lender"), Borrower, the financial institutions parties thereto (the
"Eurodollar Lenders") and Agent, dated as of April 30, 1997 (as amended,
supplemented or otherwise modified from time to time, the "Loan Agreement").
Each such loan shall mature on the Maturity Date and be payable in accordance
with the Loan Agreement. Capitalized terms used but not otherwise defined
herein shall have the meanings ascribed to such terms in the Loan Agreement.
Borrower promises to make payments of principal on each Quarterly
Payment Date in the amount equal to the product of (A) the aggregate Equipment
Fixed Rent payable by Lessee on such date under the Equipment Lease Supplements
and (B) the Tranche A Percentage and (C) a fraction, the numerator of which is
the outstanding principal amount of this Tranche A Eurodollar Equipment Note
and the denominator of which is the aggregate outstanding principal amount of
all Notes.
Borrower promises to make payments of interest on the unpaid principal
amount hereof from the date hereof until this Tranche A Eurodollar Equipment
Note is paid in full, at the rates and the times provided for below and in the
Loan Agreement:
(i) Each outstanding Eurodollar Loan shall bear interest for each
day during each Interest Period at a rate per annum equal to either the
Eurodollar Lender Rate or the Base Rate, as applicable, determined for such
Interest Period.
(ii) If all or a portion of the principal amount of any Eurodollar
Loan, any interest payable thereon or any other amount payable hereunder shall
not be paid when due (whether at the stated maturity, by acceleration or
otherwise), such overdue
A-EE-1
<PAGE> 50
amount shall bear interest at a rate per annum which is equal to the Overdue
Rate.
(iii) Interest accruing on each Eurodollar Loan shall be payable in
arrears on each applicable Payment Date, Refinancing Date, Continuation Date or
any other date of prepayment, conversion or continuation (on the amount
prepaid, converted or continued), and at maturity (whether by acceleration,
demand or otherwise). Notwithstanding the foregoing, interest accruing
pursuant to clause (ii) above shall be payable from time to time on demand and
each prepayment of a Eurodollar Loan shall be accompanied by accrued interest
to the date of such prepayment on the amount prepaid together with any breakage
costs as contemplated by the Loan Agreement and the other Operative Documents.
As provided in the Loan Agreement, this Tranche A Eurodollar Equipment
Note is required to be prepaid and may be accelerated under certain
circumstances.
All payments hereunder shall be made at the payment office of Agent
(and for the account of each Eurodollar Lender as provided for in the Loan
Agreement), or as Agent, on behalf of the Eurodollar Lenders, shall otherwise
direct in writing in lawful money of the United States of America and in
immediately available funds, without setoff, counterclaim, withholding or
deduction of any kind whatsoever.
The loans made pursuant to the Loan Agreement, the maturity thereof
and the interest rate applicable thereto, and all payments on account of
principal thereof, shall be recorded by Agent in its records. The entries in
the records of Agent shall be prima facie evidence of amounts outstanding
hereunder.
Borrower hereby waives presentment, demand, notice, protest and all
other demands or notices in connection with the delivery, acceptance,
performance, default or enforcement of this Tranche A Eurodollar Equipment
Note. No course of action or delay or omission of Agent or any Eurodollar
Lender in exercising any right or remedy hereunder shall constitute or be
deemed to be a waiver of any right or remedy hereunder, and a waiver on one
occasion shall not operate as a bar to or a waiver of any such right or remedy
on any further occasion.
Borrower agrees to pay on demand all out-of-pocket costs and expenses,
including reasonable attorneys' costs and fees, incurred or paid by Agent or
any Eurodollar Lender in connection with the enforcement of this Tranche A
Eurodollar Equipment Note.
The obligations of Borrower under this Tranche A Eurodollar Equipment
Note and the other Operative Documents (other than any
A-EE-2
<PAGE> 51
obligations that may arise solely as a result of Borrower's breach of its
obligations under Section 10.2 of the Participation Agreement or any
misrepresentation or breach of warranty made by Borrower under Section 8.3 of
the Participation Agreement) shall be satisfied solely from amounts received by
Agent under the Lease and from proceeds of the Collateral. No recourse to or
against Borrower or any employee, officer, director, incorporator, stockholder,
partner or agent of Borrower shall be had for the payment for any amount owing
by Borrower under this Tranche A Eurodollar Equipment Note or any other
Operative Document.
THIS TRANCHE A EURODOLLAR EQUIPMENT NOTE HAS BEEN DELIVERED IN NEW
YORK AND THE OBLIGATIONS OF BORROWER UNDER THIS NOTE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF NEW YORK, INCLUDING
SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW BUT EXCLUDING ALL OTHER
CHOICE OF LAWS AND CONFLICTS RULES OF SUCH STATE. BORROWER HEREBY IRREVOCABLY
WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY PROCEEDING BROUGHT IN
CONNECTION WITH THIS TRANCHE A EURODOLLAR EQUIPMENT NOTE.
CREDIT SUISSE LEASING 92A, L.P.,
AS BORROWER
By: CREDIT SUISSE FIRST BOSTON,
acting through its New York
Branch, as General Partner
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
A-EE-3
<PAGE> 52
TRANCHE A EURODOLLAR EQUIPMENT NOTE
<TABLE>
<CAPTION>
Date of Funding or Amount of Eurodollar Outstanding Principal Eurodollar Interest Period Comments
Payment Loan or Payment of Eurodollar Loan Rate or
(after such Funding Base Rate
or Payment)
<S> <C> <C> <C> <C> <C>
- - ---------------------------------------------------------------------------------------------------------------------
- - ---------------------------------------------------------------------------------------------------------------------
- - ---------------------------------------------------------------------------------------------------------------------
- - ---------------------------------------------------------------------------------------------------------------------
- - ---------------------------------------------------------------------------------------------------------------------
- - ---------------------------------------------------------------------------------------------------------------------
- - ---------------------------------------------------------------------------------------------------------------------
</TABLE>
A-EE-4
<PAGE> 53
EXHIBIT A-ES
TO LOAN AGREEMENT
TRANCHE A EURODOLLAR SITE NOTE
U.S. $____________ April 30, 1997
FOR VALUE RECEIVED, the undersigned, Credit Suisse Leasing 92A, L.P.
("Borrower"), promises to pay, solely from amounts paid under the Lease and the
Collateral, to the order of Credit Suisse First Boston, acting through its New
York branch, as Agent ("Agent"), on behalf of the Eurodollar Lenders, the
principal sum of ____________________________ United States Dollars (U.S.
$________________)(2) or, if less, the aggregate unpaid amount of all Tranche A
Eurodollar Loans made by the Eurodollar Lenders to Lessor to Fund Site Advances
pursuant to the Loan Agreement among Greenwich Funding Corporation ("CP
Lender"), Borrower, the financial institutions parties thereto (the "Eurodollar
Lenders") and Agent, dated as of April 30, 1997 (as amended, supplemented or
otherwise modified from time to time, the "Loan Agreement"). Each such loan
shall mature on the Maturity Date and be payable in accordance with the Loan
Agreement. Capitalized terms used but not otherwise defined herein shall have
the meanings ascribed to such terms in the Loan Agreement.
Borrower promises to make payments of interest on the unpaid principal
amount hereof from the date hereof until this Tranche A Eurodollar Site Note is
paid in full, at the rates and the times provided for below and in the Loan
Agreement:
(i) Each outstanding Eurodollar Loan shall bear interest for each
day during each Interest Period at a rate per annum equal to either the
Eurodollar Lender Rate or the Base Rate, as applicable, determined for such
Interest Period.
(ii) If all or a portion of the principal amount of any Eurodollar
Loan, any interest payable thereon or any other amount payable hereunder shall
not be paid when due (whether at the stated maturity, by acceleration or
otherwise), such overdue amount shall bear interest at a rate per annum which
is equal to the Overdue Rate.
(iii) Interest accruing on each Eurodollar Loan shall be payable in
arrears on each applicable Payment Date, Refinancing Date, Continuation Date or
any other date of prepayment,
______________________
(2) This amount should be eighty-two percent (82%) of the aggregate Commitment
of all Participants.
A-ES-5
<PAGE> 54
conversion or continuation (on the amount prepaid, converted or continued), and
at maturity (whether by acceleration, demand or otherwise). Notwithstanding
the foregoing, interest accruing pursuant to clause (ii) above shall be payable
from time to time on demand and each prepayment of a Eurodollar Loan shall be
accompanied by accrued interest to the date of such prepayment on the amount
prepaid together with any breakage costs as contemplated by the Loan Agreement
and the other Operative Documents.
No principal amortization shall be required prior to the Maturity
Date, except as otherwise provided pursuant to Section 2.6(c) of the Loan
Agreement.
As provided in the Loan Agreement, this Tranche A Eurodollar Site Note
is required to be prepaid and may be accelerated under certain circumstances.
All payments hereunder shall be made at the payment office of Agent
(and for the account of each Eurodollar Lender as provided for in the Loan
Agreement), or as Agent, on behalf of the Eurodollar Lenders, shall otherwise
direct in writing, in lawful money of the United States of America and in
immediately available funds, without setoff, counterclaim, withholding or
deduction of any kind whatsoever.
The loans made pursuant to the Loan Agreement, the maturity thereof
and the interest rate applicable thereto, and all payments on account of
principal thereof, shall be recorded by Agent in its records. The entries in
the records of Agent shall be prima facie evidence of amounts outstanding
hereunder.
Borrower hereby waives presentment, demand, notice, protest and all
other demands or notices in connection with the delivery, acceptance,
performance, default or enforcement of this Tranche A Eurodollar Site Note. No
course of action or delay or omission of Agent or any Eurodollar Lender in
exercising any right or remedy hereunder shall constitute or be deemed to be a
waiver of any right or remedy hereunder, and a waiver on one occasion shall not
operate as a bar to or a waiver of any such right or remedy on any further
occasion.
Borrower agrees to pay on demand all out-of-pocket costs and expenses,
including reasonable attorneys' costs and fees, incurred or paid by Agent or
any Eurodollar Lender in connection with the enforcement of this Tranche A
Eurodollar Site Note.
The obligations of Borrower under this Tranche A Eurodollar Site Note
and the other Operative Documents (other than any obligations that may arise
solely as a result of Borrower's breach of its obligations under Section 10.2
of the Participation
A-ES-6
<PAGE> 55
Agreement or any misrepresentation or breach of warranty made by Borrower under
Section 8.3 of the Participation Agreement) shall be satisfied solely from
amounts received by Agent under the Lease and from proceeds of the Collateral.
No recourse to or against Borrower or any employee, officer, director,
incorporator, stockholder, partner or agent of Borrower shall be had for the
payment for any amount owing by Borrower under this Tranche A Eurodollar Site
Note or any other Operative Document.
THIS TRANCHE A EURODOLLAR SITE NOTE HAS BEEN DELIVERED IN NEW YORK AND
THE OBLIGATIONS OF BORROWER UNDER THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF NEW YORK, INCLUDING SECTION
5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW BUT EXCLUDING ALL OTHER CHOICE
OF LAWS AND CONFLICTS RULES OF SUCH STATE. BORROWER HEREBY IRREVOCABLY WAIVES
ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY PROCEEDING BROUGHT IN CONNECTION WITH
THIS TRANCHE A EURODOLLAR SITE NOTE.
CREDIT SUISSE LEASING 92A, L.P.,
AS BORROWER
By: CREDIT SUISSE FIRST BOSTON,
acting through its New York
Branch, as General Partner
By:
--------------------------
Name:
------------------------
Title:
-----------------------
By:
--------------------------
Name:
------------------------
Title:
-----------------------
A-ES-7
<PAGE> 56
TRANCHE A EURODOLLAR SITE NOTE
<TABLE>
<CAPTION>
Date of Funding or Amount of Eurodollar Outstanding Principal Eurodollar Interest Period Comments
Payment Loan or Payment of Eurodollar Loan Lender
(after such Funding Rate or
or Payment) Base Rate
<S> <C> <C> <C> <C> <C>
- - ---------------------------------------------------------------------------------------------------------------------
- - ---------------------------------------------------------------------------------------------------------------------
- - ---------------------------------------------------------------------------------------------------------------------
- - ---------------------------------------------------------------------------------------------------------------------
- - ---------------------------------------------------------------------------------------------------------------------
- - ---------------------------------------------------------------------------------------------------------------------
- - ---------------------------------------------------------------------------------------------------------------------
</TABLE>
A-ES-8
<PAGE> 57
EXHIBIT B-CE
TO LOAN AGREEMENT
TRANCHE B CP EQUIPMENT NOTE
U.S. $1,100,000 April 30, 1997
FOR VALUE RECEIVED, the undersigned, Credit Suisse Leasing 92A, L.P.
("Borrower"), promises to pay, solely from amounts paid under the Lease and the
Collateral, to the order of Credit Suisse First Boston, acting through its New
York branch, as Agent ("Agent"), on behalf of Greenwich Funding Corporation
("CP Lender"), the principal sum of One Million One Hundred Thousand United
States Dollars (U.S. $1,100,000) or, if less, the aggregate unpaid amount of
all Tranche B CP Loans made by CP Lender to Lessor to Fund Equipment Advances
pursuant to the Loan Agreement among CP Lender, Borrower, the financial
institutions parties thereto (the "Eurodollar Lenders") and Agent, dated as of
April 30, 1997 (as amended, supplemented or otherwise modified from time to
time, the "Loan Agreement"). Each such loan shall mature on the Maturity Date
and be payable in accordance with the Loan Agreement. Capitalized terms used
but not otherwise defined herein shall have the meanings ascribed to such terms
in the Loan Agreement.
Borrower promises to make payments of principal on each Quarterly
Payment Date in the amount equal to the product of (A) the aggregate Equipment
Fixed Rent payable by Lessee on such date under the Equipment Lease Supplements
and (B) the Tranche B Percentage and (C) a fraction, the numerator of which is
the outstanding principal amount of this Tranche B CP Equipment Note and the
denominator of which is the aggregate outstanding principal amount of all
Notes.
Borrower further promises to make payments of interest on the unpaid
principal amount hereof from the date hereof until this Tranche B CP Equipment
Note is paid in full, at the rates and the times provided for below and in the
Loan Agreement:
(i) Each outstanding CP Loan shall bear interest for each day
during each Interest Period at a rate per annum equal to the CP Rate.
(ii) If all or a portion of the principal amount of any CP Loan,
any interest payable thereon or any other amount payable hereunder shall not be
paid when due (whether at the stated maturity, by acceleration or otherwise),
such overdue amount shall bear interest at a rate per annum which is equal to
the sum of (x) the rate necessary for CP Lender to pay when due the
B-CE-1
<PAGE> 58
Interest Component on the outstanding Commercial Paper plus (y) the Overdue
Rate.
(iii) Interest accruing on each CP Loan shall be payable in arrears
on each applicable Payment Date, Refinancing Date, Continuation Date or any
other date of prepayment, conversion or continuation (on the amount prepaid,
converted or continued), and at maturity (whether by acceleration, demand or
otherwise), in an amount necessary to repay the Interest Component of all
Commercial Paper maturing on such date. Notwithstanding the foregoing,
interest accruing pursuant to clause (ii) above shall be payable from time to
time on demand and each prepayment of a CP Loan shall be accompanied by accrued
interest to the date of such prepayment on the amount prepaid together with any
breakage costs as contemplated by the Loan Agreement and the other Operative
Documents.
No principal amortization shall be required prior to the Maturity
Date, except as otherwise provided pursuant to Section 2.6(c) of the Loan
Agreement.
As provided in the Loan Agreement, this Tranche B CP Equipment Note is
required to be prepaid and may be accelerated under certain circumstances.
All payments hereunder shall be made at the payment office of Agent
(and for the account of CP Lender as provided for in the Loan Agreement), or as
CP Lender shall otherwise direct in writing, in lawful money of the United
States of America and in immediately available funds, without setoff,
counterclaim, withholding or deduction of any kind whatsoever.
The loans made pursuant to the Loan Agreement, the maturity thereof
and the interest rate applicable thereto, and all payments on account of
principal thereof, shall be recorded by Agent in its records. The entries in
the records of Agent shall be prima facie evidence of amounts outstanding
hereunder.
Borrower hereby waives presentment, demand, notice, protest and all
other demands or notices in connection with the delivery, acceptance,
performance, default or enforcement of this Tranche B CP Equipment Note. No
course of action or delay or omission of Agent or CP Lender in exercising any
right or remedy hereunder shall constitute or be deemed to be a waiver of any
right or remedy hereunder, and a waiver on one occasion shall not operate as a
bar to or a waiver of any such right or remedy on any further occasion.
Borrower agrees to pay on demand all out-of-pocket costs and expenses,
including reasonable attorneys' costs and fees,
B-CE-2
<PAGE> 59
incurred or paid by Agent or CP Lender in connection with the enforcement of
this Tranche B CP Equipment Note.
The obligations of Borrower under this Tranche B CP Equipment Note and
the other Operative Documents (other than any obligations that may arise solely
as a result of Borrower's breach of its obligations under Section 10.2 of the
Participation Agreement or any misrepresentation or breach of warranty made by
Borrower under Section 8.3 of the Participation Agreement) shall be satisfied
solely from amounts received by Agent under the Lease and from proceeds of the
Collateral. No recourse to or against Borrower or any employee, officer,
director, incorporator, stockholder, partner or agent of Borrower shall be had
for the payment for any amount owing by Borrower under this Tranche B CP
Equipment Note or any other Operative Document.
THIS TRANCHE B CP EQUIPMENT NOTE HAS BEEN DELIVERED IN NEW YORK AND
THE OBLIGATIONS OF BORROWER UNDER THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF NEW YORK, INCLUDING SECTION
5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW BUT EXCLUDING ALL OTHER CHOICE
OF LAWS AND CONFLICTS RULES OF SUCH STATE. BORROWER HEREBY IRREVOCABLY WAIVES
ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY PROCEEDING BROUGHT IN CONNECTION WITH
THIS TRANCHE B CP EQUIPMENT NOTE.
CREDIT SUISSE LEASING 92A, L.P.,
AS BORROWER
By: CREDIT SUISSE FIRST BOSTON,
acting through its New York Branch,
as General Partner
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
By:
----------------------------
Name:
--------------------------
Title:
-------------------------
B-CE-3
<PAGE> 60
TRANCHE B CP EQUIPMENT NOTE
<TABLE>
<CAPTION>
Date of Funding or Amount of CP Loan or Outstanding Principal CP Rate CP Rate Period Comments
Payment Payment of CP Loan (after such
Funding or Payment)
<S> <C> <C> <C> <C> <C>
- - ---------------------------------------------------------------------------------------------------------------------
- - ---------------------------------------------------------------------------------------------------------------------
- - ---------------------------------------------------------------------------------------------------------------------
- - ---------------------------------------------------------------------------------------------------------------------
- - ---------------------------------------------------------------------------------------------------------------------
- - ---------------------------------------------------------------------------------------------------------------------
- - ---------------------------------------------------------------------------------------------------------------------
</TABLE>
B-CE-4
<PAGE> 61
EXHIBIT B-CS
TO LOAN AGREEMENT
TRANCHE B CP SITE NOTE
U.S. $____________ April 30, 1997
FOR VALUE RECEIVED, the undersigned, Credit Suisse Leasing 92A, L.P.
("Borrower"), promises to pay, solely from amounts paid under the Lease and the
Collateral, to the order of Credit Suisse First Boston, acting through its New
York branch, as Agent ("Agent"), on behalf of Greenwich Funding Corporation
("CP Lender"), the principal sum of ____________________________ United States
Dollars (U.S. $________________)(3) or, if less, the aggregate unpaid amount of
all Tranche B CP Loans made by CP Lender to Lessor to Fund Site Advances
pursuant to the Loan Agreement among CP Lender, Borrower, the financial
institutions parties thereto (the "Eurodollar Lenders") and Agent, dated as of
April 30, 1997 (as amended, supplemented or otherwise modified from time to
time, the "Loan Agreement"). Each such loan shall mature on the Maturity Date
and be payable in accordance with the Loan Agreement. Capitalized terms used
but not otherwise defined herein shall have the meanings ascribed to such terms
in the Loan Agreement.
Borrower promises to pay interest on the unpaid principal amount
hereof from the date hereof until this Tranche B CP Site Note is paid in full,
at the rates and the times provided for below and in the Loan Agreement:
(i) Each outstanding CP Loan shall bear interest for each day
during each Interest Period at a rate per annum equal to the CP Rate.
(ii) If all or a portion of the principal amount of any CP Loan,
any interest payable thereon or any other amount payable hereunder shall not be
paid when due (whether at the stated maturity, by acceleration or otherwise),
such overdue amount shall bear interest at a rate per annum which is equal to
the sum of (x) the rate necessary for CP Lender to pay when due the Interest
Component on the outstanding Commercial Paper plus (y) the Overdue Rate.
(iii) Interest accruing on each CP Loan shall be payable in arrears
on each applicable Payment Date, Refinancing Date,
__________________________________
(3) This amount should be fifteen percent (15%) of the aggregate Commitment of
all Participants.
B-CS-1
<PAGE> 62
Continuation Date or any other date of prepayment, conversion or continuation
(on the amount prepaid, converted or continued), and at maturity (whether by
acceleration, demand or otherwise), in an amount necessary to repay the
Interest Component of all Commercial Paper maturing on such date.
Notwithstanding the foregoing, interest accruing pursuant to clause (ii) above
shall be payable from time to time on demand and each prepayment of a CP Loan
shall be accompanied by accrued interest to the date of such prepayment on the
amount prepaid together with any breakage costs as contemplated by the Loan
Agreement and the other Operative Documents.
No principal amortization shall be required prior to the Maturity
Date, except as otherwise provided pursuant to Section 2.6(c) of the Loan
Agreement.
As provided in the Loan Agreement, this Tranche B CP Site Note is
required to be prepaid and may be accelerated under certain circumstances.
All payments hereunder shall be made at the payment office of Agent
(and for the account of CP Lender as provided for in the Loan Agreement), or as
CP Lender shall otherwise direct in writing, in lawful money of the United
States of America and in immediately available funds, without setoff,
counterclaim, withholding or deduction of any kind whatsoever.
The loans made pursuant to the Loan Agreement, the maturity thereof
and the interest rate applicable thereto, and all payments on account of
principal thereof, shall be recorded by Agent in its records. The entries in
the records of Agent shall be prima facie evidence of amounts outstanding
hereunder.
Borrower hereby waives presentment, demand, notice, protest and all
other demands or notices in connection with the delivery, acceptance,
performance, default or enforcement of this Tranche B CP Site Note. No course
of action or delay or omission of Agent or CP Lender in exercising any right or
remedy hereunder shall constitute or be deemed to be a waiver of any right or
remedy hereunder, and a waiver on one occasion shall not operate as a bar to or
a waiver of any such right or remedy on any further occasion.
Borrower agrees to pay on demand all out-of-pocket costs and expenses,
including reasonable attorneys' costs and fees, incurred or paid by Agent or CP
Lender in connection with the enforcement of this Tranche B CP Site Note.
The obligations of Borrower under this Tranche B CP Site Note and the
other Operative Documents (other than any obligations that may arise solely as
a result of Borrower's
B-CS-2
<PAGE> 63
breach of its obligations under Section 10.2 of the Participation Agreement or
any misrepresentation or breach of warranty made by Borrower under Section 8.3
of the Participation Agreement) shall be satisfied solely from amounts received
by Agent under the Lease and from proceeds of the Collateral. No recourse to
or against Borrower or any employee, officer, director, incorporator,
stockholder, partner or agent of Borrower shall be had for the payment for any
amount owing by Borrower under this Tranche B CP Site Note or any other
Operative Document.
THIS TRANCHE B CP SITE NOTE HAS BEEN DELIVERED IN NEW YORK AND THE
OBLIGATIONS OF BORROWER UNDER THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF NEW YORK, INCLUDING SECTION 5-1401
OF THE NEW YORK GENERAL OBLIGATIONS LAW BUT EXCLUDING ALL OTHER CHOICE OF LAWS
AND CONFLICTS RULES OF SUCH STATE. BORROWER HEREBY IRREVOCABLY WAIVES ANY AND
ALL RIGHT TO TRIAL BY JURY IN ANY PROCEEDING BROUGHT IN CONNECTION WITH THIS
TRANCHE B CP SITE NOTE.
CREDIT SUISSE LEASING 92A, L.P.,
AS BORROWER
By: CREDIT SUISSE FIRST BOSTON,
acting through its New York
Branch, as General Partner
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
B-CS-3
<PAGE> 64
TRANCHE B CP SITE NOTE
<TABLE>
<CAPTION>
Date of Funding or Amount of CP Loan or Outstanding Principal CP Rate CP Rate Period Comments
Payment Payment of CP Loan (after such
Funding or Payment)
<S> <C> <C> <C> <C> <C>
- - ---------------------------------------------------------------------------------------------------------------------
- - ---------------------------------------------------------------------------------------------------------------------
- - ---------------------------------------------------------------------------------------------------------------------
- - ---------------------------------------------------------------------------------------------------------------------
- - ---------------------------------------------------------------------------------------------------------------------
- - ---------------------------------------------------------------------------------------------------------------------
- - ---------------------------------------------------------------------------------------------------------------------
</TABLE>
B-CS-4
<PAGE> 65
EXHIBIT B-EE
TO LOAN AGREEMENT
TRANCHE B EURODOLLAR EQUIPMENT NOTE
U.S. $1,100,000 April 30, 1997
FOR VALUE RECEIVED, the undersigned, Credit Suisse Leasing 92A, L.P.
("Borrower"), promises to pay, solely from amounts paid under the Lease and the
Collateral, to the order of Credit Suisse First Boston, acting through its New
York branch, as Agent ("Agent"), on behalf of the Eurodollar Lenders, the
principal sum of One Million One Hundred Thousand United States Dollars (U.S.
$1,100,000) or, if less, the aggregate unpaid amount of all Tranche B
Eurodollar Loans made by the Eurodollar Lenders to Lessor to Fund Equipment
Advances pursuant to the Loan Agreement among Greenwich Funding Corporation
("CP Lender"), Borrower, the financial institutions parties thereto (the
"Eurodollar Lenders") and Agent, dated as of April 30, 1997 (as amended,
supplemented or otherwise modified from time to time, the "Loan Agreement").
Each such loan shall mature on the Maturity Date and be payable in accordance
with the Loan Agreement. Capitalized terms used but not otherwise defined
herein shall have the meanings ascribed to such terms in the Loan Agreement.
Borrower promises to make payments of principal on each Quarterly
Payment Date in the amount equal to the product of (A) the aggregate Equipment
Fixed Rent payable by Lessee on such date under the Equipment Lease Supplements
and (B) the Tranche B Percentage and (C) a fraction, the numerator of which is
the outstanding principal amount of this Tranche B Eurodollar Equipment Note
and the denominator of which is the aggregate outstanding principal amount of
all Notes.
Borrower promises to make payments of interest on the unpaid principal
amount hereof from the date hereof until this Tranche B Eurodollar Equipment
Note is paid in full, at the rates and the times provided for below and in the
Loan Agreement:
(i) Each outstanding Eurodollar Loan shall bear interest for each
day during each Interest Period at a rate per annum equal to either the
Eurodollar Lender Rate or the Base Rate, as applicable, determined for such
Interest Period.
(ii) If all or a portion of the principal amount of any Eurodollar
Loan, any interest payable thereon or any other amount payable hereunder shall
not be paid when due (whether at the stated maturity, by acceleration or
otherwise), such overdue
B-EE-1
<PAGE> 66
amount shall bear interest at a rate per annum which is equal to the Overdue
Rate.
(iii) Interest accruing on each Eurodollar Loan shall be payable in
arrears on each applicable Payment Date, Refinancing Date, Continuation Date or
any other date of prepayment, conversion or continuation (on the amount
prepaid, converted or continued), and at maturity (whether by acceleration,
demand or otherwise). Notwithstanding the foregoing, interest accruing
pursuant to clause (ii) above shall be payable from time to time on demand and
each prepayment of a Eurodollar Loan shall be accompanied by accrued interest
to the date of such prepayment on the amount prepaid together with any breakage
costs as contemplated by the Loan Agreement and the other Operative Documents.
No principal amortization shall be required prior to the Maturity
Date, except as otherwise provided pursuant to Section 2.6(c) of the Loan
Agreement.
As provided in the Loan Agreement, this Tranche B Eurodollar Equipment
Note is required to be prepaid and may be accelerated under certain
circumstances.
All payments hereunder shall be made at the payment office of Agent
(and for the account of each Eurodollar Lender as provided for in the Loan
Agreement), or as Agent, on behalf of the Eurodollar Lenders, shall otherwise
direct in writing, in lawful money of the United States of America and in
immediately available funds, without setoff, counterclaim, withholding or
deduction of any kind whatsoever.
The loans made pursuant to the Loan Agreement, the maturity thereof
and the interest rate applicable thereto, and all payments on account of
principal thereof, shall be recorded by Agent in its records. The entries in
the records of Agent shall be prima facie evidence of amounts outstanding
hereunder.
Borrower hereby waives presentment, demand, notice, protest and all
other demands or notices in connection with the delivery, acceptance,
performance, default or enforcement of this Tranche B Eurodollar Equipment
Note. No course of action or delay or omission of Agent or any Eurodollar
Lender in exercising any right or remedy hereunder shall constitute or be
deemed to be a waiver of any right or remedy hereunder, and a waiver on one
occasion shall not operate as a bar to or a waiver of any such right or remedy
on any further occasion.
Borrower agrees to pay on demand all out-of-pocket costs and expenses,
including reasonable attorneys' costs and fees,
B-EE-2
<PAGE> 67
incurred or paid by Agent or any Eurodollar Lender in connection with the
enforcement of this Tranche B Eurodollar Equipment Note.
The obligations of Borrower under this Tranche B Eurodollar Equipment
Note and the other Operative Documents (other than any obligations that may
arise solely as a result of Borrower's breach of its obligations under Section
10.2 of the Participation Agreement or any misrepresentation or breach of
warranty made by Borrower under Section 8.3 of the Participation Agreement)
shall be satisfied solely from amounts received by Agent under the Lease and
from proceeds of the Collateral. No recourse to or against Borrower or any
employee, officer, director, incorporator, stockholder, partner or agent of
Borrower shall be had for the payment for any amount owing by Borrower under
this Tranche B Eurodollar Equipment Note or any other Operative Document.
THIS TRANCHE B EURODOLLAR EQUIPMENT NOTE HAS BEEN DELIVERED IN NEW
YORK AND THE OBLIGATIONS OF BORROWER UNDER THIS NOTE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF NEW YORK, INCLUDING
SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW BUT EXCLUDING ALL OTHER
CHOICE OF LAWS AND CONFLICTS RULES OF SUCH STATE. BORROWER HEREBY IRREVOCABLY
WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY PROCEEDING BROUGHT IN
CONNECTION WITH THIS TRANCHE B EURODOLLAR EQUIPMENT NOTE.
CREDIT SUISSE LEASING 92A, L.P.,
AS BORROWER
By: CREDIT SUISSE FIRST BOSTON,
acting through its New York
Branch, as General Partner
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
B-EE-3
<PAGE> 68
TRANCHE B EURODOLLAR EQUIPMENT NOTE
<TABLE>
<CAPTION>
Date of Funding or Amount of Eurodollar Outstanding Principal Eurodollar Interest Period Comments
Payment Loan or Payment of Eurodollar Loan Rate or
(after such Funding Base Rate
or Payment)
<S> <C> <C> <C> <C> <C>
- - ---------------------------------------------------------------------------------------------------------------------
- - ---------------------------------------------------------------------------------------------------------------------
- - ---------------------------------------------------------------------------------------------------------------------
- - ---------------------------------------------------------------------------------------------------------------------
- - ---------------------------------------------------------------------------------------------------------------------
- - ---------------------------------------------------------------------------------------------------------------------
- - ---------------------------------------------------------------------------------------------------------------------
</TABLE>
B-EE-4
<PAGE> 69
EXHIBIT B-ES
TO LOAN AGREEMENT
TRANCHE B EURODOLLAR SITE NOTE
U.S. $____________ April 30, 1997
FOR VALUE RECEIVED, the undersigned, Credit Suisse Leasing 92A, L.P.
("Borrower"), promises to pay, solely from amounts paid under the Lease and the
Collateral, to the order of Credit Suisse First Boston, acting through its New
York branch, as Agent ("Agent"), on behalf of the Eurodollar Lenders, the
principal sum of ____________________________ United States Dollars (U.S.
$________________)(4) or, if less, the aggregate unpaid amount of all Tranche B
Eurodollar Loans made by the Eurodollar Lenders to Lessor to Fund Site Advances
pursuant to the Loan Agreement among Greenwich Funding Corporation ("CP
Lender"), Borrower, the financial institutions parties thereto (the "Eurodollar
Lenders") and Agent, dated as of April 30, 1997 (as amended, supplemented or
otherwise modified from time to time, the "Loan Agreement"). Each such loan
shall mature on the Maturity Date and be payable in accordance with the Loan
Agreement. Capitalized terms used but not otherwise defined herein shall have
the meanings ascribed to such terms in the Loan Agreement.
Borrower promises to make payments of interest on the unpaid principal
amount hereof from the date hereof until this Tranche B Eurodollar Site Note is
paid in full, at the rates and the times provided for below and in the Loan
Agreement:
(i) Each outstanding Eurodollar Loan shall bear interest for each
day during each Interest Period at a rate per annum equal to either the
Eurodollar Lender Rate or the Base Rate, as applicable, determined for such
Interest Period.
(ii) If all or a portion of the principal amount of any Eurodollar
Loan, any interest payable thereon or any other amount payable hereunder shall
not be paid when due (whether at the stated maturity, by acceleration or
otherwise), such overdue amount shall bear interest at a rate per annum which
is equal to the Overdue Rate.
(iii) Interest accruing on each Eurodollar Loan shall be payable in
arrears on each applicable Payment Date, Refinancing
_________________
(4) This amount should be fifteen percent (15%) of the aggregate Commitment of
all Participants.
B-ES-1
<PAGE> 70
Date, Continuation Date or any other date of prepayment, conversion or
continuation (on the amount prepaid, converted or continued), and at maturity
(whether by acceleration, demand or otherwise). Notwithstanding the foregoing,
interest accruing pursuant to clause (ii) above shall be payable from time to
time on demand and each prepayment of a Eurodollar Loan shall be accompanied by
accrued interest to the date of such prepayment on the amount prepaid together
with any breakage costs as contemplated by the Loan Agreement and the other
Operative Documents.
No principal amortization shall be required prior to the Maturity
Date, except as otherwise provided pursuant to Section 2.6(c) of the Loan
Agreement.
As provided in the Loan Agreement, this Tranche B Eurodollar Site Note
is required to be prepaid and may be accelerated under certain circumstances.
All payments hereunder shall be made at the payment office of Agent
(and for the account of each Eurodollar Lender as provided for in the Loan
Agreement), or as Agent, on behalf of the Eurodollar Lenders, shall otherwise
direct in writing, in lawful money of the United States of America and in
immediately available funds, without setoff, counterclaim, withholding or
deduction of any kind whatsoever.
The loans made pursuant to the Loan Agreement, the maturity thereof
and the interest rate applicable thereto, and all payments on account of
principal thereof, shall be recorded by Agent in its records. The entries in
the records of Agent shall be prima facie evidence of amounts outstanding
hereunder.
Borrower hereby waives presentment, demand, notice, protest and all
other demands or notices in connection with the delivery, acceptance,
performance, default or enforcement of this Tranche B Eurodollar Site Note. No
course of action or delay or omission of Agent or any Eurodollar Lender in
exercising any right or remedy hereunder shall constitute or be deemed to be a
waiver of any right or remedy hereunder, and a waiver on one occasion shall not
operate as a bar to or a waiver of any such right or remedy on any further
occasion.
Borrower agrees to pay on demand all out-of-pocket costs and expenses,
including reasonable attorneys' costs and fees, incurred or paid by Agent or
any Eurodollar Lender in connection with the enforcement of this Tranche B
Eurodollar Site Note.
The obligations of Borrower under this Tranche B Eurodollar Site Note
and the other Operative Documents (other than any obligations that may arise
solely as a result of Borrower's
B-ES-2
<PAGE> 71
breach of its obligations under Section 10.2 of the Participation Agreement or
any misrepresentation or breach of warranty made by Borrower under Section 8.3
of the Participation Agreement) shall be satisfied solely from amounts received
by Agent under the Lease and from proceeds of the Collateral. No recourse to
or against Borrower or any employee, officer, director, incorporator,
stockholder, partner or agent of Borrower shall be had for the payment for any
amount owing by Borrower under this Tranche B Eurodollar Site Note or any other
Operative Document.
THIS TRANCHE B EURODOLLAR SITE NOTE HAS BEEN DELIVERED IN NEW YORK AND
THE OBLIGATIONS OF BORROWER UNDER THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF NEW YORK, INCLUDING SECTION
5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW BUT EXCLUDING ALL OTHER CHOICE
OF LAWS AND CONFLICTS RULES OF SUCH STATE. BORROWER HEREBY IRREVOCABLY WAIVES
ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY PROCEEDING BROUGHT IN CONNECTION WITH
THIS TRANCHE B EURODOLLAR SITE NOTE.
CREDIT SUISSE LEASING 92A, L.P.,
AS BORROWER
By: CREDIT SUISSE FIRST BOSTON,
acting through its New York
Branch, as General Partner
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
By:
-----------------------------
Name:
---------------------------
Title:
--------------------------
B-ES-3
<PAGE> 72
TRANCHE B EURODOLLAR SITE NOTE
<TABLE>
<CAPTION>
Date of Funding or Amount of Eurodollar Outstanding Principal Eurodollar Interest Period Comments
Payment Loan or Payment of Eurodollar Loan Lender
(after such Funding Rate or
or Payment) Base Rate
<S> <C> <C> <C> <C> <C>
- - ---------------------------------------------------------------------------------------------------------------------
- - ---------------------------------------------------------------------------------------------------------------------
- - ---------------------------------------------------------------------------------------------------------------------
- - ---------------------------------------------------------------------------------------------------------------------
- - ---------------------------------------------------------------------------------------------------------------------
- - ---------------------------------------------------------------------------------------------------------------------
- - ---------------------------------------------------------------------------------------------------------------------
</TABLE>
B-ES-4
<PAGE> 1
Exhibit 10.7
- - --------------------------------------------------------------------------------
MASTER LEASE
dated as of April 30, 1997
between
CREDIT SUISSE LEASING 92A, L.P.,
as Lessor
and
APPLIED MATERIALS, INC.,
as Lessee
- - --------------------------------------------------------------------------------
Real Estate and Equipment Facility
- - --------------------------------------------------------------------------------
This Lease is subject to a lien in favor of Credit Suisse First Boston, acting
through its New York Branch, as Agent (the "Agent") under a Loan Agreement dated
as of April 30, 1997 among Credit Suisse Leasing 92A, L.P., the Lenders, and
Agent, as amended or supplemented from time to time. This Lease has been
executed in several counterparts. To the extent, if any, that this Lease
constitutes chattel paper (as such term is defined in the Uniform Commercial
Code as in effect in any applicable jurisdiction), no lien on this Lease may be
created through the transfer or possession of any counterpart other than the
original counterpart containing the receipt therefor executed by Agent on the
signature page hereof.
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
SECTION PAGE
- - ------- ----
<S> <C> <C>
ARTICLE I
DEFINITIONS; INTERPRETATION
1.1 Definitions; Interpretation.............................................................1
ARTICLE II
LEASE OF PROPERTIES; TERM
2.1 Acceptance and Lease of Site............................................................2
2.2 Acceptance Procedure for Site...........................................................2
2.3 Acceptance and Lease of Equipment.......................................................2
2.4 Acceptance Procedure for Equipment......................................................3
2.5 Term....................................................................................3
2.6 Title...................................................................................4
2.7 Other Property..........................................................................4
ARTICLE III
RENT
3.1 Rent....................................................................................4
3.2 Payment of Basic Rent...................................................................5
3.3 Payment of Supplemental Rent............................................................5
3.4 Method and Amount of Payment............................................................6
3.5 Late Payments...........................................................................6
ARTICLE IV
UTILITY CHARGES
4.1 Utility Charges for Site................................................................7
ARTICLE V
QUIET ENJOYMENT
5.1 Quiet Enjoyment of Leased Property......................................................7
ARTICLE VI
NET LEASE
6.1 Net Lease...............................................................................7
6.2 No Termination or Abatement.............................................................9
ARTICLE VII
SUBLETTING; ASSIGNMENT
7.1 Subletting and Assignment...............................................................9
</TABLE>
-i-
<PAGE> 3
TABLE OF CONTENTS
(CONTINUED)
<TABLE>
<CAPTION>
SECTION PAGE
- - ------- ----
<S> <C> <C>
ARTICLE VIII
CONDITION OF LEASED PROPERTY
8.1 Condition of the Sites and the Units of Equipment......................................10
8.2 Possession and Use of the Leased Property..............................................11
ARTICLE IX
COMPLIANCE WITH LEGAL AND INSURANCE REQUIREMENTS
9.1 Compliance with Applicable Laws and Regulations and
Insurance Requirements.................................................................12
ARTICLE X
MAINTENANCE
10.1 Maintenance and Repair; Return........................................................12
ARTICLE XI
MODIFICATIONS AND ALTERATIONS
11.1 Modifications of Sites................................................................13
11.2 Modifications and Alterations of Equipment............................................14
ARTICLE XII
TITLE
12.1 Warrant of Title......................................................................15
12.2 Grants and Releases of Easements on Sites.............................................16
ARTICLE XIII
PERMITTED CONTESTS
13.1 Permitted Contests in Respect of Applicable Laws
and Regulations.......................................................................17
ARTICLE XIV
INSURANCE
14.1 Public Liability and Workers' Compensation Insurance..................................18
14.2 Hazard and Other Insurance............................................................18
14.3 Coverage..............................................................................19
ARTICLE XV
CASUALTY; CONDEMNATION; ENVIRONMENTAL MATTERS
15.1 Casualty and Condemnation.............................................................20
15.2 Environmental Matters.................................................................25
</TABLE>
-ii-
<PAGE> 4
TABLE OF CONTENTS
(CONTINUED)
<TABLE>
<CAPTION>
SECTION PAGE
- - ------- ----
<S> <C> <C>
15.3 Notice of Environmental Matters.......................................................26
ARTICLE XVI
NOTIFICATION UPON CASUALTY, CONDEMNATION
OR ENVIRONMENTAL EVENT WITH RESPECT TO A SITE
16.1 Notification upon Certain Events......................................................26
16.2 Procedures............................................................................26
ARTICLE XVII
LEASE EVENTS OF DEFAULT
17.1 Lease Events of Default...............................................................27
17.2 Remedies..............................................................................30
17.3 Waiver of Certain Rights..............................................................33
17.4 Power of Sale and Foreclosure.........................................................33
17.5 Remedies Cumulative...................................................................34
ARTICLE XVIII
RIGHT TO PERFORM FOR LESSEE
18.1 Lessor's Right to Cure Lessee's Lease Defaults........................................34
ARTICLE XIX
PROCEDURES FOR TRANSFER OF PROPERTIES
19.1 Conveyance of Leased Property; Exercise of Purchase
Option or Obligation..................................................................34
ARTICLE XX
PURCHASE OPTION
20.1 Purchase Option.......................................................................36
20.2 Expiration Date Purchase Obligation...................................................38
20.3 Acceleration of Purchase Obligation...................................................39
ARTICLE XXI
RIGHT TO RENEW
21.1 Site Renewal..........................................................................39
21.2 Equipment Renewal.....................................................................40
ARTICLE XXII
REMARKETING
22.1 Option to Remarket Sites..............................................................41
22.2 Option to Remarket the Equipment......................................................43
</TABLE>
-iii-
<PAGE> 5
TABLE OF CONTENTS
(CONTINUED)
<TABLE>
<CAPTION>
SECTION PAGE
- - ------- ----
<S> <C> <C>
22.3 Conditions to and Requirements of Remarketing Options.................................44
22.4 Certain Obligations Continue..........................................................48
22.5 Appraisal.............................................................................48
ARTICLE XXIII
[RESERVED]
ARTICLE XXIV
HOLDING OVER
24.1 Holding Over..........................................................................50
ARTICLE XXV
RISK OF LOSS
25.1 Risk of Loss..........................................................................50
ARTICLE XXVI
OWNERSHIP OF THE LEASED PROPERTY
26.1 Nature of Transaction.................................................................51
ARTICLE XXVII
ESTOPPEL CERTIFICATES
27.1 Estoppel Certificates.................................................................53
ARTICLE XXVIII
INSPECTIONS; NO WAIVER
28.1 Right to Inspect......................................................................53
28.2 No Waiver.............................................................................54
ARTICLE XXIX
ACCEPTANCE OF SURRENDER
29.1 Acceptance of Surrender...............................................................54
ARTICLE XXX
NO MERGER OF TITLE
30.1 No Merger of Title....................................................................54
ARTICLE XXXI
NOTICES
31.1 Notices...............................................................................55
</TABLE>
-iv-
<PAGE> 6
TABLE OF CONTENTS
(CONTINUED)
<TABLE>
<CAPTION>
SECTION PAGE
- - ------- ----
<S> <C> <C>
ARTICLE XXXII
MISCELLANEOUS
32.1 Miscellaneous.........................................................................55
32.2 Amendment; Complete Agreements........................................................55
32.3 Successors and Assigns................................................................56
32.4 Headings and Table of Contents........................................................56
32.5 Counterparts..........................................................................56
32.6 GOVERNING LAW.........................................................................56
32.7 Liability of Lessor Limited...........................................................56
32.8 Original Lease........................................................................57
</TABLE>
APPENDIX 1 Definitions and Interpretation
EXHIBIT A-1 Form of Site Lease Supplement (California)
EXHIBIT A-2 Form of Site Lease Supplement (Other States)
EXHIBIT B Form of Equipment Lease Supplement
-v-
<PAGE> 7
MASTER LEASE
MASTER LEASE (including all Lease Supplements from time to time executed
and delivered, this "Lease"), dated as of April 30, 1997, between CREDIT SUISSE
LEASING, 92A, L.P., a Delaware limited partnership, having its principal office
at 11 Madison Avenue, 19th Floor, New York, New York, as Lessor and APPLIED
MATERIALS, INC., a Delaware corporation, having its principal office at 3050
Bowers Avenue, Santa Clara, California, as Lessee.
W I T N E S S E T H:
A. Lessor will, subject to the terms and conditions of the
Participation Agreement, (i) purchase the Existing Sites on the Document Closing
Date, (ii) purchase from one or more third parties designated by Lessee on each
Site Acquisition Date either (A) one or more Developed Sites and/or (B) one or
more Construction Sites (provided, however, if the Land with respect to a
Construction Site is owned by Lessee on the Site Acquisition Date, Lessee will
lease such Land to Lessor pursuant to a Ground Lease), and (iii) purchase from
one or more third parties designated by Lessee on each Equipment Acquisition
Date certain Units of Equipment.
B. Lessor desires to lease (or sublease) to Lessee, and Lessee desires
to lease (or sublease) from Lessor, each Site and each Unit of Equipment.
C. With respect to each Construction Site, Lessee, as Construction
Agent, will construct the Facility which will, as constructed, be the property
of Lessor and will become part of such Site subject to the terms of this Lease.
NOW, THEREFORE, in consideration of the foregoing, and of other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS; INTERPRETATION
1.1 Definitions; Interpretation. Capitalized terms used but not
otherwise defined in this Lease have the respective meanings specified in
Appendix 1 to this Lease; and the rules ofinterpretation set forth in Appendix 1
to this Lease shall apply to this Lease.
<PAGE> 8
ARTICLE II
LEASE OF PROPERTIES; TERM
2.1 Acceptance and Lease of Site. On each Site Acquisition Date,
Lessor, subject to the satisfaction or waiver of the conditions set forth in
Article 6 of the Participation Agreement, hereby agrees to accept delivery on
such Site Acquisition Date of the Land (fee title or, in the case of a
Construction Site where the Land is owned by Lessee, a leasehold interest) to be
delivered on such Site Acquisition Date together with any existing Facility
thereon pursuant to the terms of the Participation Agreement and the applicable
Site Lease Supplement and simultaneously to lease (or sublease) to Lessee for
the Site Term (as defined in Section 2.5(a)), Lessor's interest in such Land and
in such Facility together with any Facility or Modifications to an existing
Facility which thereafter may be constructed thereon pursuant to the
Construction Agency Agreement (in the case of any Construction Site) or this
Lease, and Lessee hereby agrees, expressly for the direct benefit of Lessor, to
lease commencing on such Site Acquisition Date from Lessor for the Site Term,
Lessor's interest in such Land to be delivered on such Site Acquisition Date
together with Lessor's interest in any existing Facility thereon or any Facility
or Modification to an existing Facility which thereafter may be constructed
thereon pursuant to the Construction Agency Agreement (in the case of any
Construction Site) and this Lease.
2.2 Acceptance Procedure for Site. Lessor hereby authorizes one or more
employees of Lessee, to be designated by Lessee, as the authorized
representative or representatives of Lessor to accept delivery on behalf of
Lessor of the Site identified on the applicable Advance Request. Lessee hereby
agrees that such acceptance of delivery by such authorized representative or
representatives and the execution and delivery by Lessee on each Site
Acquisition Date of a Site Lease Supplement (appropriately completed) shall,
without further act, constitute the irrevocable acceptance by Lessee of such
Site which is the subject thereof for all purposes of this Lease and the other
Operative Documents on the terms set forth therein and herein, and that such
Site, together with any Facility or Modifications to a Facility constructed
thereon pursuant to the Construction Agency Agreement and this Lease, shall be
deemed to be included in the Leased Property and shall be subject to the terms
and conditions of this Lease on such Site Acquisition Date.
2.3 Acceptance and Lease of Equipment. On each Equipment Acquisition
Date, Lessor, subject to the satisfaction or waiver of the conditions set forth
in Article 6 of the Participation Agreement, hereby agrees to accept delivery on
such Equipment Acquisition Date of the interest in the Units of Equipment of an
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Equipment Group to be delivered on such Equipment Acquisition Date pursuant to
the terms of the Participation Agreement and the applicable Equipment Lease
Supplement and simultaneously to lease to Lessee for the applicable Equipment
Term (as defined in Section 2.5(b)) Lessor's interest in such Units of Equipment
of an Equipment Group, and Lessee hereby agrees, expressly for the direct
benefit of Lessor, to lease commencing on such Equipment Acquisition Date from
Lessor for the applicable Equipment Term, Lessor's interest in such Units of
Equipment to be delivered on such Equipment Acquisition Date.
2.4 Acceptance Procedure for Equipment. Lessor hereby authorizes one or
more employees of Lessee, to be designated by Lessee, as the authorized
representative or representatives of Lessor to accept delivery on behalf of
Lessor of the Units of Equipment identified on Schedule I to each Equipment
Lease Supplement executed by Lessee on the related Equipment Acquisition Date.
Lessee hereby agrees that such acceptance of delivery by such authorized
representative or representatives and the execution and delivery by Lessee on
each Equipment Acquisition Date of an Equipment Lease Supplement (appropriately
completed) shall, without further act, constitute the irrevocable acceptance by
Lessee of such Units of Equipment which are the subject thereof for all purposes
of this Lease and the other Operative Documents on the terms set forth therein
and herein and that such Units of Equipment shall be deemed to be included in
the leasehold estate of this Lease and shall be subject to the terms and
conditions of this Lease on such Equipment Acquisition Date.
2.5 Term.
(a) Site Term. The term of the Site Lease Supplement with respect
to each Site (the "Site Term") shall begin on the Site Acquisition Date for such
Site and shall end on the date (such date, the "Site Expiration Date") which is
the earlier of (i) the day preceding the fifth (5th) anniversary of the Site
Acquisition Date, or, if the Site Term is renewed in accordance with Article XXI
hereof, the day preceding the anniversary date, requested by Lessee pursuant to
Section 21.1, of the Site Renewal Effective Date, (ii) the date on which such
Site Lease Supplement is terminated in accordance with the provisions of this
Lease or (iii) the Maturity Date.
(b) Equipment Term. The term with respect to an Equipment Group
subject to this Lease (the "Equipment Term")shall begin on the Equipment
Acquisition Date for such Equipment Group and shall end on the date (such date,
the "Equipment Pool Expiration Date") which is the earlier of (i) the day
preceding the Original Equipment Pool Expiration Date relating to the Equipment
Pool of which such Equipment Group constitutes a part,
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or, if the Equipment Term relating to the entire Equipment Pool is renewed in
accordance with Article XXI hereof, the day preceding the first (1st)
anniversary of the Equipment Renewal Effective Date relating to such Equipment
Pool, (ii) the date on which this Lease is terminated with respect to such
Equipment Group in accordance with the provisions of this Lease or (iii) the
Maturity Date.
(c) Lease Term. The term of this Lease (the "Term") shall begin on
the Document Closing Date and shall end on the date of the last occurring Site
Expiration Date or Equipment Pool Expiration Date.
2.6 Title. Each Site and Unit of Equipment is leased (or subleased) to
Lessee without any representation or warranty, express or implied, by Lessor and
subject to the rights of parties in possession, the existing state of title
(including, without limitation, the Permitted Exceptions), and all Applicable
Laws and Regulations. Lessee shall in no event have any recourse against Lessor
for any defect in or exception to title to any Leased Property other than
resulting from Lessor Liens.
2.7 Other Property. Lessee may from time to time own or hold under
lease from Persons other than Lessor, furniture, trade fixtures, equipment and
other tangible personal property (including software) located on or about any
Site and which personal property is not subject to this Lease. Lessor shall from
time to time, upon the reasonable request, and at the sole cost and expense of
Lessee, which request shall be accompanied by such supporting information and
documents as Lessor may reasonably require, promptly acknowledge in writing to
Lessee or other Persons that the particular items of furniture, trade fixtures
and equipment in question and which are located on a Site are not part of the
Leased Property and that, subject to the rights of Lessor under any other
Operative Documents, Lessor does not own or have any other right or interest in
or to such furniture, trade fixtures and equipment (other than the Equipment).
ARTICLE III
RENT
3.1 Rent. (a) During the Term, Lessee shall pay (i) Basic Rent when due
as specified in Section 3.2 below and (ii) Supplemental Rent when due as
specified in Section 3.3 below.
(b) Neither Lessee's inability or failure to take possession of all or
any portion of any Leased Property when delivered by Lessor, nor Lessor's
inability or failure to deliver
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all or any portion of any Leased Property to Lessee on or before the applicable
Site Acquisition Date or Equipment Acquisition Date, as the case may be, nor
Lessor's inability or failure to timely deliver any invoice for Rent or notice
relating to the calculation, method or place of payment, whether or not
attributable to any act or omission of Lessee or any act or omission of Lessor,
or for any other reason whatsoever, shall delay or otherwise affect Lessee's
obligation to pay Rent for such Leased Property in accordance with the terms of
this Lease.
3.2 Payment of Basic Rent. Lessee shall pay Basic Rent (i) on each
Payment Date, (ii) on the date required under Section 20.1 in connection with
Lessee's exercise of the Purchase Option, (iii) on the date required under
Section 22.3 in connection with Lessee's exercise of a Site Remarketing Option
or an Equipment Pool Remarketing Option, (iv) on demand as specified in Section
24.1 relating to a holdover by Lessee and (v) on any date on which this Lease
shall terminate with respect to any or all of the Leased Property. Basic Rent
shall be paid absolutely net to Lessor, so that this Lease shall yield to Lessor
the full amount thereof, without setoff, deduction or reduction.
3.3 Payment of Supplemental Rent. Lessee shall pay to Lessor or the
Person entitled thereto any and all Supplemental Rent promptly as the same shall
become due and payable. Lessee shall pay to Lessor, as Supplemental Rent, on
demand, among other things, (a) all amounts payable by Lessee to Lessor pursuant
to (i) Section 18.1 hereof or otherwise representing amounts advanced (other
than Advances) by any Participant or Agent directly on behalf of Lessee or for
the Leased Property and for which Lessee is obligated to repay or to reimburse
such Person pursuant to the Operative Documents, (ii) any provision hereof
requiring Lessee to indemnify Agent, Lessor or any other Participant, and (iii)
any provision requiring Lessee to make a payment upon termination of this Lease
with respect to any or all of the Leased Property, and (b) to the extent
permitted by Applicable Laws and Regulations, interest at the applicable Overdue
Rate on any installment of Basic Rent not paid when due for the period for which
the same shall be overdue and on any payment of Supplemental Rent not paid when
due or demanded, as the case may be, by Lessor for the period from the due date
or the date of any such demand, as the case may be, until the same shall be
paid. Supplemental Rent constituting Commitment Fees shall be paid in accordance
with Section 4.7 of the ParticipationAgreement. All other amounts constituting
Supplemental Rent, except for amounts relating to the Document Closing Date,
which amounts shall be paid on or before such date, shall be paid by Lessee to
Lessor within thirty (30) days of receiving an invoice therefor. The expiration
or other termination of Lessee's obligations to pay Basic Rent hereunder shall
not limit or modify the obligations of Lessee with respect to Supplemental Rent.
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Unless expressly provided otherwise in this Lease, in the event of any failure
on the part of Lessee to pay and discharge any Supplemental Rent as and when
due, Lessee shall also promptly pay and discharge any fine, penalty, interest or
cost which may be assessed or added under any agreement with a third party for
nonpayment or late payment of such Supplemental Rent, all of which shall also
constitute Supplemental Rent.
3.4 Method and Amount of Payment. Basic Rent and Supplemental Rent
shall be paid to Lessor (or, in the case of Supplemental Rent, to such Person as
may be entitled thereto) at such place as Lessor (or such other Person) shall
specify in writing to Lessee pursuant to Section 13.3 of the Participation
Agreement; provided that, so long as the Notes remain outstanding, Rent shall be
paid directly to Agent to the account at the bank set forth on Schedule II to
the Participation Agreement and to such other account or accounts at such other
bank or banks or in such other manner as Agent shall from time to time otherwise
direct at least three (3) Business Days prior to the date in which the payment
of such Rent is due. Each payment of Rent shall be made by Lessee prior to 1:00
p.m. New York time (and payments made after such time shall be deemed to have
been made on the next day) at the place of payment by wire transfer in funds
consisting of lawful currency of the United States of America which (in the case
of any amount payable to Lessor, Agent or any Participant) shall be immediately
available on the scheduled date when such payment shall be due. The provisions
of the foregoing sentence of this Section 3.4 shall be applicable only to Basic
Rent and to Supplemental Rent payable to, or on behalf of or for the account of,
Lessor, any Participant, Agent and any other Indemnitee. Any amounts payable by
Lessee to Lessor hereunder shall be payable in accordance with Section 5.2 of
the Participation Agreement.
3.5 Late Payments. If any Basic Rent shall not be paid when due, Lessee
shall pay to Lessor, or if any Supplemental Rent payable to or on behalf or for
the account of Lessor, any Participant, Agent or other Indemnitee is not paid
when due, Lessee shall pay to whomever shall be entitled thereto, in each case
as Supplemental Rent, interest at the Overdue Rate (to the maximum extent
permitted by law) on such overdue amount from and including the due date thereof
(not including any applicable grace period) to but excluding the Business Day of
payment thereof.
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ARTICLE IV
UTILITY CHARGES
4.1 Utility Charges for Site. Lessee shall pay or cause to be paid all
charges for electricity, power, gas, oil, water, telephone, sanitary sewer
service and all other rents and utilities used in or on each Site during the
Term. Lessee shall be entitled to receive any credit or refund with respect to
any utility charge paid by Lessee and the amount of any credit or refund
received by Lessor on account of any utility charges paid by Lessee, net of the
costs and expenses reasonably incurred by Lessor in obtaining such credit or
refund, shall be promptly paid over to Lessee. All charges for utilities imposed
with respect to a Site for a billing period during which this Lease expires or
terminates (except pursuant to Sections 20.1, 20.2 or 20.3) shall be adjusted
and prorated on a daily basis between Lessee and the purchaser of the Site, and
each such party shall pay or reimburse the other for its pro rata share thereof;
provided, that in no event shall Lessor have any liability therefor.
ARTICLE V
QUIET ENJOYMENT
5.1 Quiet Enjoyment of Leased Property. Subject to the rights of Lessor
contained in Article XVII and the other terms of the Operative Documents, Lessee
(and any of its permitted subtenants) shall peaceably and quietly have, hold and
enjoy the Leased Property for the applicable Site Term or Equipment Term, free
of any claim or other action by Lessor or anyone rightfully claiming by, through
or under Lessor (other than Lessee) with respect to any matters arising from and
after the applicable Acquisition Date. Such right of quiet enjoyment is
independent of, and shall not affect Lessor's, Agent's or, if permitted, any
Participant's rights otherwise to initiate legal action to enforce, the
obligations of Lessee under this Lease or the other Operative Documents.
ARTICLE VI
NET LEASE
6.1 Net Lease. This Lease shall constitute a net lease. Any present or
future law to the contrary notwithstanding, this Lease shall not terminate, nor
shall Lessee be entitled to any abatement, suspension, deferment, reduction,
setoff, counterclaim, or defense with respect to the Rent, nor shall the
obligations of Lessee hereunder be affected (except as expressly
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herein permitted and by performance of the obligations in connection therewith
and subject to the limitations set forth in Section 5.2(b) of the Participation
Agreement) by reason of: (i) any defect in the condition, merchantability,
design, construction, quality or fitness for use of any Leased Property or any
part thereof, or the failure of any Leased Property to comply with all
Applicable Laws and Regulations, including any inability to occupy or use any
Leased Property by reason of such noncompliance; (ii) any damage to, removal,
abandonment, salvage, loss, contamination of or Release from, scrapping or
destruction of or any requisition or taking of any Leased Property or any part
thereof; (iii) any restriction, prevention or curtailment of or interference
with any use of any Leased Property or any part thereof including eviction; (iv)
any defect in title to or rights to any Leased Property or any Lien on such
title or rights or on any Leased Property (other than Lessor Liens); (v) any
change, waiver, extension, indulgence or other action or omission or breach in
respect of any obligation or liability of or by Lessor, Agent or any
Participant; (vi) any bankruptcy, insolvency, reorganization, composition,
adjustment, dissolution, liquidation or other like proceedings relating to
Lessee, Lessor, Agent, any Participant or any other Person, or any action taken
with respect to this Lease by any trustee or receiver of Lessee, Lessor, Agent,
any Participant or any other Person, or by any court, in any such proceeding;
(vii) any claim that Lessee has or might have against any Person, including
without limitation Lessor, any vendor, manufacturer, contractor of or for any
Leased Property, Agent or any Participant; (viii) any failure on the part of
Lessor to perform or comply with any of the terms of this Lease, of any other
Operative Document or of any other agreement; (ix) any invalidity or
unenforceability or illegality or disaffirmance of this Lease against or by
Lessee or any provision hereof or any of the other Operative Documents or any
provision of any thereof; (x) the impossibility or illegality of performance by
Lessee, Lessor or both; (xi) any action by any court, administrative agency or
other Governmental Authority; (xii) any restriction, prevention or curtailment
of or interference with the construction on or any use of any Leased Property or
any part thereof; (xiii) the failure of Lessee to achieve any accounting or tax
benefits or the characterization of the transaction intended by Article XXVI; or
(xiv) any other cause or circumstances whether similar or dissimilar to the
foregoing and whether or not Lessee shall have notice or knowledge of any of the
foregoing. The parties intend that the obligations of Lessee hereunder shall be
covenants and agreements that are separate and independent from any obligations
of Lessor hereunder or under any other Operative Documents and the obligations
of Lessee shall continue unaffected unless such obligations shall have been
modified or terminated in accordance with an express provision of this Lease.
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6.2 No Termination or Abatement. Lessee shall remain obligated under
this Lease in accordance with its terms and shall not take any action to
terminate, rescind or avoid this Lease, notwithstanding any action for
bankruptcy, insolvency, reorganization, liquidation, dissolution, or other
proceeding affecting Lessor, Agent or any Participant, or any action with
respect to this Lease which may be taken by any trustee, receiver or liquidator
of Lessor, Agent or any Participant or by any court with respect to Lessor,
Agent or any Participant. Lessee hereby waives all right (i) to terminate or
surrender this Lease (except as provided herein) or (ii) to avail itself of any
abatement, suspension, deferment, reduction, setoff, counterclaim or defense
with respect to any Rent. Lessee shall remain obligated under this Lease in
accordance with its terms and Lessee hereby waives to the fullest extent
possible any and all rights now or hereafter conferred by statute or otherwise
to modify or to avoid strict compliance with its obligations under this Lease.
Notwithstanding any such statute or otherwise, Lessee shall be bound by all of
the terms and conditions contained in this Lease.
ARTICLE VII
SUBLETTING; ASSIGNMENT
7.1 Subletting and Assignment. Lessee may not assign this Lease or any
of its rights or obligations hereunder in whole or in part to any Person. Lessee
may, without the consent of Lessor, sublease all or any portion of any Leased
Property to any Person. No sublease or other relinquishment of possession of any
Leased Property shall in any way discharge or diminish any of Lessee's
obligations to Lessor hereunder and Lessee shall remain directly and primarily
liable under this Lease as to the Leased Property, or portion thereof, so
sublet. Any sublease of any Leased Property shall be in writing, shall prohibit
further subleases and may not have a term which extends beyond the applicable
Site Expiration Date or Equipment Pool Expiration Date, as the case may be,
unless Lessor and Agent have approved the sublease. Notwithstanding the
foregoing, all subleases shall be made subject to and subordinated to this Lease
and to the rights of Lessor hereunder, and unless Lessor, Lessee, and the
subtenant have entered into a nondisturbance and attornment agreement acceptable
to Lessor and Agent, shall expressly provide for the surrender of the related
Leased Property after a Lease Event of Default hereunder. With respect to any
sublease to any Person that is not an Affiliate of Lessee, Lessee shall not
sublease the Leased Property to a person who shall then be engaged in any
proceedings for relief under any bankruptcy or insolvency law or laws relating
to relief of debtors. With respect to any sublease to a person who is not an
Affiliate of Lessee, all of Lessee's right, title and interest in, to and
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under each sublease are hereby pledged by Lessee to Agent, as collateral for
Lessee's obligations under the Operative Documents, and Lessee shall, at its
expense do any further act and execute, acknowledge, deliver, file, register and
record any further documents which Agent may reasonably request in order to
create, perfect, preserve and protect Agent's security interest in such
sublease. Lessee shall not permit or consent to any renewal or extension of a
sublease at any time when a Lease Event of Default has occurred and is
continuing. Lessee shall promptly deliver to Agent and Lessor a copy of any
sublease relating to fifty percent (50%) or more of the rentable square footage
of a Facility or Site (computed on the basis of net rentable square feet) which
Lessee enters into with a Person other than a Subsidiary of Lessee.
ARTICLE VIII
CONDITION OF LEASED PROPERTY
8.1 Condition of the Sites and the Units of Equipment. LESSEE
ACKNOWLEDGES AND AGREES THAT ALTHOUGH LESSOR WILL OWN AND HOLD TITLE TO THE
SITE, LESSEE IS SOLELY RESPONSIBLE UNDER THE TERMS OF THE CONSTRUCTION AGENCY
AGREEMENT FOR THE DESIGN, DEVELOPMENT, BUDGETING AND CONSTRUCTION OF THE
FACILITY AND ANY ALTERATIONS OR MODIFICATIONS. LESSEE FURTHER ACKNOWLEDGES AND
AGREES THAT: (i) EACH OF THE UNITS OF EQUIPMENT LEASED BY IT IS OF A SIZE,
DESIGN, CAPACITY AND MANUFACTURE SELECTED BY LESSEE; (ii) LESSEE IS SATISFIED
THAT THE SAME IS SUITABLE FOR ITS PURPOSES; AND (iii) NEITHER LESSOR, AGENT NOR
ANY PARTICIPANT IS A MANUFACTURER THEREOF OR A DEALER IN LEASED PROPERTY OF SUCH
KIND. LESSEE HAS EXAMINED THE SITES AND THE UNITS OF EQUIPMENT AND AS AMONG
LESSEE, LESSOR, AGENT AND EACH OF THE PARTICIPANTS IN CONNECTION WITH THE
OVERALL TRANSACTION HAS FOUND THE SAME TO BE SATISFACTORY IN ALL RESPECTS LESSEE
FURTHER ACKNOWLEDGES AND AGREES THAT IT IS LEASING EACH SITE AND UNIT OF
EQUIPMENT "AS IS" WITHOUT REPRESENTATION, WARRANTY OR COVENANT (EXPRESS OR
IMPLIED) BY LESSOR, AGENT, OR ANY PARTICIPANT AND IN EACH CASE SUBJECT TO (A)
THE EXISTING STATE OF TITLE, (B) THE RIGHTS OF ANY PARTIES IN POSSESSION
THEREOF, (C) ANY STATE OF FACTS WHICH A PHYSICAL INSPECTION OR AN ACCURATE
SURVEY MIGHT SHOW, AND (D) VIOLATIONS OF APPLICABLE LAWS AND REGULATIONS WHICH
MAY EXIST ON THE DATE HEREOF. NEITHER LESSOR, AGENT, NOR ANY PARTICIPANT HAS
MADE OR SHALL BE DEEMED TO HAVE MADE ANY REPRESENTATION, WARRANTY OR COVENANT
(EXPRESS OR IMPLIED) OR SHALL BE DEEMED TO HAVE ANY LIABILITY WHATSOEVER AS TO
THE TITLE, VALUE, HABITABILITY, USE, CONDITION, DESIGN, OPERATION, OR FITNESS
FOR USE OF ANY SITE OR UNIT OF EQUIPMENT (OR ANY PART THEREOF), OR ANY OTHER
REPRESENTATION, WARRANTY OR COVENANT WHATSOEVER, EXPRESS OR IMPLIED, WITH
RESPECT TO ANY SITE OR UNIT OF EQUIPMENT (OR ANY PART THEREOF) AND NEITHER
LESSOR, AGENT, NOR ANY PARTICIPANT
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SHALL BE LIABLE FOR ANY LATENT, HIDDEN, OR PATENT DEFECT THEREIN OR THE FAILURE
OF ANY LEASED PROPERTY, OR ANY PART THEREOF, TO COMPLY WITH ANY APPLICABLE LAWS
AND REGULATIONS. Lessee has been afforded full opportunity to inspect the Leased
Property, is satisfied with the results of its inspections and is entering into
this Lease solely on the basis of the results of its own inspections, and all
risks incident to the matters discussed in the preceding sentence, as between
Lessor, Agent and Participants, on the one hand, and Lessee, on the other, are
to be borne by Lessee. The provisions of this Article VIII have been negotiated,
and, except to the extent otherwise expressly stated, the foregoing provisions
are intended to be a complete exclusion and negation of any representations or
warranties by any of Lessor, Agent or Participants, express or implied, with
respect to the Leased Property (or any portion thereof or interest therein),
that may arise pursuant to any Applicable Laws and Regulations now or hereafter
in effect or otherwise. Provided that no Lease Event of Default has occurred and
is continuing, neither Section 6.1 nor this Section 8.1 shall prevent Lessee's
right to enforce manufacturers' or suppliers' warranties with respect to any
Leased Property against a manufacturer or supplier.
8.2 Possession and Use of the Leased Property. Each Site may be used
for any Permitted Use that does not diminish or impair in any material respect
(a) the value of such Site from the Fair Market Value as of the related Site
Acquisition Date as stated in the appraisal delivered pursuant to Section 6.2(a)
of the Participation Agreement or (b) the utility or useful life of such Site
from that which existed on the related Site Acquisition Date and in a manner
consistent with the standards applicable to properties of a similar nature and
usage in the geographic area in which such Site is located and in any event not
less than the standards applied by Lessee for other comparable properties owned
or leased by Lessee or its Affiliates. Lessee shall not permit any Unit of
Equipment or any Part relating to such Unit of Equipment to be used for any
purpose other than the operation for which it was designed. Lessee shall pay, or
cause to be paid, all charges and costs required in connection with the use of
the Leased Property as contemplated by this Lease and, to the extent applicable,
the Construction Agency Agreement. Lessee shall not commit or permit any waste
of the Leased Property or any part thereof which would, individually or in the
aggregate, have a Material Adverse Effect. Lessee shall at all times keep each
Unit of Equipment in a location in which the security interest created in such
Unit of Equipment by the Operative Documents shall remain a perfected, first
priority security interest (other than Permitted Liens), and Lessee shall not
move any Unit of Equipment without first making any filings or recordings
necessary (including amendments and continuations) to maintain
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the security interest therein as an uninterrupted, perfected, first priority
security interest (other than Permitted Liens).
ARTICLE IX
COMPLIANCE WITH LEGAL AND INSURANCE REQUIREMENTS
9.1 Compliance with Applicable Laws and Regulations and Insurance
Requirements. Subject to the terms of Article XIII relating to Permitted
Contests, Lessee, at its sole cost and expense, shall (a) comply in all respects
with all Applicable Laws and Regulations (including all Environmental Laws
applicable to the record owner of the Sites) and Insurance Requirements relating
to the Leased Property, including the use, construction, operation, maintenance,
repair and restoration thereof and the remarketing thereof pursuant to Article
XXII, whether or not compliance therewith shall require structural or
extraordinary changes in the Facilities or interfere with the use and enjoyment
of the Leased Property, except where the failure to so comply would not
individually or in the aggregate have a Material Adverse Effect, and (b)
procure, maintain and comply in all respects with all licenses, permits, orders,
approvals, consents and other authorizations required for the construction, use,
maintenance, operation, repair and restoration of the Leased Property, except
where the failure to so procure, maintain and comply would not, individually or
in the aggregate, have a Material Adverse Effect.
ARTICLE X
MAINTENANCE
10.1 Maintenance and Repair; Return. (a) Lessee, at its sole cost and
expense, shall maintain each Site and Unit of Equipment in good condition and in
good repair (ordinary wear and tear excepted) and operating order, and make all
necessary repairs thereto, of every kind and nature whatsoever, whether interior
or exterior, ordinary or extraordinary, structural or nonstructural, in each
case as required by all Applicable Laws and Regulations and Insurance
Requirements and shall make all Required Modifications and Required Equipment
Alterations. All of the foregoing obligations shall be carried out by Lessee on
a basis and within the time period consistent with the operation and maintenance
of properties and equipment comparable in type to the applicable Site or Unit of
Equipment, and in no event less than the standards applied by Lessee in the
operation and maintenance of other comparable properties owned or leased by
Lessee or its Affiliates. Lessee shall not permit the names, initials or
insignia of any Person other than Lessor or Agent to
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be placed on any Unit of Equipment as designation that may be interpreted as a
claim of ownership or a Lien. Lessee shall maintain, and, upon reasonable notice
during normal business hours, shall permit Lessor and Agent to inspect any
records, logs and other materials required by any Governmental Authority having
jurisdiction to be maintained or filed in respect of the Leased Property.
(b) Lessor shall under no circumstances be required to build any
improvements on any Leased Property, make any repairs, replacements, alterations
or renewals of any nature or description to any Leased Property, make any
expenditure whatsoever in connection with this Lease or maintain any Leased
Property in any way. Lessor shall not be required to maintain, repair or rebuild
all or any part of any Site or Unit of Equipment, and Lessee waives any right to
(i) require Lessor to maintain, repair, or rebuild all or any portion of the
Leased Property, or (ii) make repairs at the expense of Lessor pursuant to any
Applicable Laws and Regulations, Insurance Requirement, contract, agreement,
covenant, condition or restriction in effect at any time during the Term.
(c) Unless Lessee has exercised its rights to purchase and purchases in
accordance with Section 20.1 a Site or Equipment Group pursuant to its Purchase
Option, Lessee shall, upon the expiration or earlier termination of the
applicable Site Lease Supplement or Equipment Group Supplement, vacate and
surrender the Leased Property to Lessor free and clear of all Liens other than
Permitted Exceptions and Lessor Liens, in as good condition as it was on the
date it became subject to this Lease, ordinary wear and tear excepted, and in
compliance with all Applicable Laws and Regulations (and in any event without
(x) any asbestos installed or maintained in any part of any Facility, (y) any
polychlorinated biphenyls (PCBs) in, on or used or located at any Site, and (z)
any other Hazardous Substances, except for Permitted Hazardous Substances);
provided, however, that if Lessee elects the Remarketing Option, nothing in this
Section 10.1(c) shall relieve Lessee of its obligation to deliver an
Environmental Audit and an environmental assessment satisfying the requirements
of Section 22.1(b).
ARTICLE XI
MODIFICATIONS AND ALTERATIONS
11.1 Modifications of Sites. (a) Lessee, at its sole cost and expense,
may at any time and from time to time make alterations, renovations,
improvements and additions to any Site or any part thereof and substitutions and
replacements therefor (collectively, "Modifications"); provided that: (i) except
for
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any Modification required to be made pursuant to Applicable Laws and Regulations
or an Insurance Requirement (a "Required Modification"), no Modification shall
impair in any material respect the value, utility or useful life of such Site or
any part thereof from that which existed immediately prior to such Modification;
(ii) the Modification shall be done expeditiously and in a good and workmanlike
manner; (iii) Lessee shall comply in all material respects with all Applicable
Laws and Regulations (including all Environmental Laws) and Insurance
Requirements applicable to the Modification, including the obtaining of all
permits and certificates of occupancy, and the structural integrity of the Site
shall not be adversely affected in any material respect; (iv) subject to the
terms of Article XIII relating to permitted contests, Lessee shall pay all costs
and expenses and shall discharge (or cause to be insured or bonded over) within
sixty (60) days after the same shall be filed (or otherwise become effective)
any Liens arising with respect to the Modification; and (v) such Modifications
shall comply with Sections 8.2 and 10.1. All Modifications (other than those
that both are not Required Modifications and are readily removable without
impairing in any material respect the value, utility or remaining useful life of
the applicable Site) shall remain part of the realty and shall be subject to
this Lease, and title thereto shall immediately vest in Lessor.
(b) Lessee shall deliver to Lessor and Agent a brief written narrative
of the work to be done in connection with any Modification (excluding
construction and alterations performed pursuant to the Construction Agency
Agreement) to any Site the cost of which is anticipated to exceed $5,000,000 in
the aggregate.
11.2 Modifications and Alterations of Equipment. In case any Unit of
Equipment, or any item of equipment, part or appliance therein (each, a "Part")
is required to be altered, added to or modified in order to comply with any
Applicable Laws and Regulations or Insurance Requirement (a "Required Equipment
Alteration"), Lessee agrees to make such Required Equipment Alteration at its
sole cost and expense. Lessee shall have the right to make any modification,
alteration or improvement to any Unit of Equipment, or to remove any Part which
has become worn out, broken or obsolete, provided in each case that Lessee
continues to be in compliance with Section 9.1 and that such action (a) will not
impair in any material respect the value, utility or useful life of the
applicable Unit of Equipment or any Part thereof from that which existed
immediately prior to such Alteration, or impair its originally intended use or
function or decrease its economic useful life in any material respect, and (c)
is done in a good and workmanlike manner. All Parts affixed to or installed as a
part of any Unit of Equipment, excluding temporary replacements, shall thereupon
become subject to the
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security interest under this Lease. If no Lease Event of Default or Lease
Default shall exist, Lessee may remove, at its expense, any Part at any time
during the Term (such Part, a "Removable Part"): (i) which is in addition to,
and not in replacement of or substitution for, any Part originally incorporated
or installed in or attached to a Unit of Equipment on the date such item became
subject to this Lease or any Part in replacement of or substitution for any such
Part originally incorporated or installed or attached to such Unit of Equipment;
(ii) which is not a Required Equipment Alteration; and (iii) which can be
removed from any Unit of Equipment without causing damage to such Unit of
Equipment or diminishing or impairing the value, utility or useful life which
such Unit of Equipment would have had at such time had such addition not
occurred; provided, that: (x) such removal will not impair the value, utility or
useful life which the Unit of Equipment would have had at such time had such
Part not been affixed or placed to or on such Unit of Equipment; and (y) such
Part is not necessary for the continued normal use of such Unit of Equipment.
Lessee shall repair all damage to any Unit of Equipment resulting from any
alteration so as to restore such Unit of Equipment to the condition in which it
existed prior to such alteration (ordinary wear and tear excepted). Neither
Lessor, Agent nor any Participant shall have any obligation to pay for or to
reimburse Lessee for any alteration required or permitted by this Section 11.2.
All Parts incorporated or installed in or attached or added to any Unit of
Equipment as the result of alterations, modifications or additions under this
Section 11.2, except Removable Parts while removed from any Unit of Equipment,
shall, without further act, vest in Lessor to secure Lessee's performance of its
obligations under the Operative Documents, in the manner provided in Section
26.1(d) and the other applicable provisions of Article XII shall apply with
respect to such Parts. Upon the removal by Lessee of any Removable Part as
provided herein, such Removable Part shall no longer be deemed part of the Unit
of Equipment from which it was removed. Any Removable Part not removed by Lessee
as provided herein prior to the end of the applicable Site Term or Equipment
Term or other termination of the Lease shall become part of the Leased Property.
ARTICLE XII
TITLE
12.1 Warrant of Title. (a) Lessee agrees that except as otherwise
provided herein and subject to the terms of Article XIII relating to Permitted
Contests, Lessee shall not directly or indirectly create or allow to remain, and
shall promptly discharge at its sole cost and expense, any Lien, defect,
attachment, levy, title retention agreement or claim upon
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any Leased Property or any Modifications to a Site or any Unit of Equipment, or
any Lien, attachment, levy or claim with respect to the Rent or with respect to
any amounts held by Agent pursuant to the Loan Agreement or the other Loan
Documents, other than Permitted Liens and Lessor Liens.
(b) Nothing contained in this Lease shall be construed as constituting
the consent or request of Lessor, expressed or implied, to or for the
performance by any contractor, mechanic, laborer, materialman, supplier or
vendor of any labor or services or for the furnishing of any materials for any
construction, alteration, addition, repair or demolition of or to any Site or
any part thereof. NOTICE IS HEREBY GIVEN THAT NEITHER LESSOR, NOR ANY
PARTICIPANT NOR AGENT IS OR SHALL BE LIABLE FOR ANY LABOR, SERVICES OR MATERIALS
FURNISHED OR TO BE FURNISHED TO LESSEE, OR TO ANYONE HOLDING A SITE OR UNIT OF
EQUIPMENT OR ANY PART OR PORTION THEREOF THROUGH OR UNDER LESSEE, AND THAT NO
MECHANIC'S OR OTHER LIENS FOR ANY SUCH LABOR, SERVICES OR MATERIALS SHALL ATTACH
TO OR AFFECT THE INTEREST OF LESSOR, AGENT OR ANY PARTICIPANT IN AND TO ANY
LEASED PROPERTY.
12.2 Grants and Releases of Easements on Sites. Provided that no Lease
Event of Default shall have occurred and be continuing and subject to the
provisions of Articles VIII, IX, X and XI, Lessor hereby consents in each
instance to the following actions by Lessee, in the name and stead of Lessor,
but at Lessee's sole cost and expense: (a) the granting of easements, licenses,
rights-of-way and other rights and privileges in the nature of easements
reasonably necessary or desirable for the use, repair, or maintenance of any
Site as herein provided; (b) the release of existing easements or other rights
in the nature of easements which are for the benefit of any Site; (c) the
dedication or transfer of unimproved portions of any Site for road, highway or
other public purposes; (d) the execution of petitions to have a Site annexed to
any municipal corporation or utility district; and (e) the execution of
amendments to any covenants and restrictions affecting any Site; provided,
however, that in each case (i) such grant, release, dedication, transfer,
annexation or amendment does not materially impair the value, utility or
remaining useful life of the applicable Site, (ii) such grant, release,
dedication, transfer, annexation or amendment is reasonably necessary or
desirable in connection with the use, maintenance, alteration or improvement of
the applicable Site, (iii) such grant, release, dedication, transfer, annexation
or amendment will not cause the applicable Site or any portion thereof to fail
to comply in any material respect with the provisions of this Lease or any other
Operative Documents and in any material respect with all Applicable Laws and
Regulations (including, without limitation, all applicable zoning, planning,
building and subdivision ordinances, all applicable restrictive covenants and
all applicable architectural approval
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requirements); (iv) all governmental consents or approvals required prior to
such grant, release, dedication, transfer, annexation or amendment have been
obtained, and all filings required prior to such action have been made; (v) such
grant, release, dedication, transfer, annexation or amendment will not result in
any material down-zoning of the applicable Site or any portion thereof or a
material reduction in the maximum density or development rights available to the
applicable Site under all Applicable Laws and Regulations; (vi) Lessee shall
remain obligated under this Lease and under any instrument executed by Lessee
consenting to the assignment of Lessor's interest in this Lease as security for
indebtedness, in each such case in accordance with their terms, as though such
grant, release, dedication, transfer, annexation or amendment had not been
effected and (vii) Lessee shall pay and perform any obligations of Lessor under
such grant, release, dedication, transfer, annexation or amendment. Without
limiting the effectiveness of the foregoing, provided that no Lease Event of
Default shall have occurred and be continuing, Lessor shall, upon the request of
Lessee, and at Lessee's sole cost and expense, execute and deliver any
instruments necessary or appropriate to confirm any such grant, release,
dedication, transfer, annexation or amendment to any Person permitted under this
Section 12.2.
ARTICLE XIII
PERMITTED CONTESTS
13.1 Permitted Contests in Respect of Applicable Laws and Regulations.
If, to the extent and for so long as (a) a test, challenge, appeal or proceeding
for review of any Applicable Laws and Regulations relating to any Site or Units
of Equipment shall be prosecuted diligently and in good faith in appropriate
proceedings by Lessee or (b) compliance with such Applicable Laws and
Regulations shall have been excused or exempted by a valid nonconforming use,
permit, waiver, extension or forbearance, Lessee shall not be required to comply
with such Applicable Laws and Regulations but only if and so long as any such
test, challenge, appeal, proceeding or noncompliance shall constitute a
Permitted Contest.
Lessor will not be required to join in any proceedings pursuant to this
Section 13.1 unless a provision of any Applicable Laws and Regulations requires,
or, in the good faith opinion of Lessee, it is helpful to Lessee, that such
proceedings be brought by or in the name of Lessor; and in that event Lessor
will join in the proceedings or permit them or any part thereof to be brought in
its name if and so long as (i) no Lease Event of Default or Lease Default has
occurred and is continuing and (ii) Lessee pays all related expenses and
indemnifies Lessor, Agent
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and Participants to the satisfaction of the respective indemnitees.
ARTICLE XIV
INSURANCE
14.1 Public Liability and Workers' Compensation Insurance. During the
Term for each Site and the Unit of Equipment, Lessee shall procure and carry, at
Lessee's sole cost and expense, commercial general liability insurance for
claims for injuries or death sustained by persons or damage to property while on
or using such Leased Property and such other public liability coverages as are
ordinarily procured by Lessee or its Affiliates who own or operate similar
properties or as required by Lessor or Agent. Such insurance shall be on terms
and in amounts that are no less favorable than insurance maintained by Lessee
with respect to similar properties that it owns and that are in accordance with
normal industry practice, but in any case shall provide liability coverage of at
least $10,000,000 per person and $10,000,000 for property damage per occurrence.
The policy shall be endorsed to name Lessor, Agent and each Participant as
additional insureds (or the insurer shall issue a certificate to such Persons to
such effect). The policy shall also specifically provide that the policy shall
be considered primary insurance which shall apply to any loss or claim before
any contribution by any insurance which Lessor, Agent or Participants may have
in force. Lessee shall, in the construction of the Facilities (including in
connection with any Modifications thereof) and the operation of the Sites and
the Units of Equipment comply with the applicable workers' compensation laws and
protect Lessor, Agent and Participants against any liability under such laws.
14.2 Hazard and Other Insurance. During the Term, Lessee shall keep, or
cause to be kept, subject to the last sentence of this paragraph, each Site and
the Equipment insured against loss or damage by fire and other risks on terms
and in amounts that are no less than the full replacement cost of such Leased
Property (without taking into account any depreciation) and no less favorable
than insurance covering other similar properties or equipment owned by Lessee
and that are in accordance with normal industry practice. During the
construction of any Facility, Lessee shall also maintain builders' risk
insurance. All insurance proceeds in respect of any loss or occurrence for which
the proceeds related thereto are (i) less than or equal to $1,000,000 for a Unit
of Equipment or $5,000,000 for a Site, in the absence of the occurrence and
continuance of a Lease Event of Default or Lease Default, shall be adjusted by
and paid to Lessee for application toward the reconstruction, repair or
refurbishment of the applicable Leased Property and (ii) equal to
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or greater than $1,000,000 for a Unit of Equipment or $5,000,000 for a Site
shall be adjusted jointly by Lessee and Lessor (unless a Lease Event of Default
or Lease Default has occurred and is continuing, in which case such proceeds
shall be adjusted solely by Lessor) and held by Lessor for application in
accordance with Article XV. In addition, Lessee shall at all times during the
Term maintain business interruption insurance covering, for a period of no less
than thirty (30) days, actual losses for any period during which the earnings of
Lessee are impaired as a result of any property damage or other casualty.
Notwithstanding the above or any other term in this Lease, Lessee may
self-insure, by way of deductible provisions or retentions in insurance policies
or otherwise, the risks required to be insured against by this Section 14.2.
14.3 Coverage. (a) Lessee shall furnish Lessor and Agent with
certificates showing the insurance required under Sections 14.1 and 14.2 to be
in effect and naming Lessor, Agent, and each Participant as additional insureds
and showing the mortgagee endorsement required by Section 14.3(c). All such
insurance shall be at the sole cost and expense of Lessee. Such certificates
shall include a provision for thirty (30) days' advance written notice by the
insurer to Lessor and Agent in the event of cancellation or reduction of such
insurance.
(b) Lessee agrees that the insurance policy or policies required by
Section 14.2, shall include an appropriate clause pursuant to which such policy
shall provide that it will not be invalidated should Lessee waive, in writing,
prior to a loss, any or all rights of recovery against any party for losses
covered by such policy, and that the insurance in favor of Lessor, Agent and
Participants, and their respective rights under and interests in such policies
shall not be invalidated or reduced by any act or omission or negligence of
Lessee or any other Person having any interest in the Leased Property. Lessee
hereby waives any and all such rights against Lessor, Agent, and Participants to
the extent of payments made under such policies.
(c) All such insurance shall be written by an insurance company or
companies selected by Lessee which is rated in Best's Insurance Guide or any
successor thereto (or if there be none, an organization having a similar
national reputation) a general policyholder rating of at least "A" and a
financial rating of at least "VIII" or be otherwise acceptable to Agent and
Required Participants. All insurance policies required by Section 14.2 shall
include a standard form mortgagee endorsement in favor of Agent.
(d) Lessor shall not carry separate insurance concurrent in kind or
form or contributing in the event of loss with any insurance required under this
Article XIV except that Lessor may
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carry separate liability insurance so long as (i) Lessee's insurance is
designated as primary and in no event excess or contributory to any insurance
Lessor may have in force which would apply to a loss covered under Lessee's
policy and (ii) each such insurance policy will not cause Lessee's insurance
required under this Article XIV to be subject to a coinsurance exception of any
kind.
(e) Lessee shall pay as they become due all premiums for the insurance
required by Section 14.1 and Section 14.2, and shall renew or replace each
policy prior to the expiration date thereof. Throughout the Term, at the time
each of Lessee's insurance policies is renewed (but in no event less frequently
than once each year), Lessee shall deliver to Lessor and Agent certificates of
insurance evidencing that all insurance required by this Article XIV is being
maintained by Lessee with respect to each Leased Property and is in effect.
ARTICLE XV
CASUALTY; CONDEMNATION; ENVIRONMENTAL MATTERS
15.1 Casualty and Condemnation. (a) Subject to the provisions of this
Article XV and Article XVI (in the event Lessee delivers, or is obligated to
deliver, a Loss Determination Notice certifying a Significant Event has
occurred), and prior to the occurrence and continuation of a Lease Event of
Default, Lessee shall be entitled to receive (and Lessor hereby irrevocably
assigns to Lessee all of Lessor's right, title and interest in) any award,
compensation or insurance proceeds to which Lessee or Lessor may become entitled
by reason of their respective interests in the Leased Property (i) if all or a
portion of the Sites or Equipment is damaged or destroyed in whole or in part by
a Casualty or (ii) if the use, access, occupancy, easement rights or title to
such Leased Property or any part thereof, is the subject of a Condemnation;
provided, however, if a Lease Event of Default shall have occurred and be
continuing, such award, compensation or insurance proceeds shall be paid
directly to Agent or, if received by Lessee, shall be held in trust for Agent,
and shall be paid over by Lessee to Agent (or, if the Loans have been fully
paid, to Lessor) and held in accordance with the terms of this Section 15.1(a).
If, contrary to such provision, any such award, compensation or insurance
proceeds are paid to Lessor, any Lender, or Lessee rather than to Agent, Lessor,
Lenders and Lessee, as the case may be, hereby agree to transfer any such
payment to Agent. All amounts held by Lessor or Agent when a Lease Event of
Default or Lease Default exists hereunder on account of any award, compensation
or insurance proceeds either paid directly to Lessor or Agent or turned over to
Lessor or Agent shall either be (i)
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paid to Lessee for the repair of damage caused by such Casualty or Condemnation
in accordance with Section 15.1(e), or (ii) applied to the purchase price of the
related Leased Property on the related Termination Date, with any Excess
Proceeds being payable to Lessee.
(b) Lessee may appear in any proceeding or action to negotiate,
prosecute, adjust or appeal any claim for any award, compensation or insurance
payment on account of any such Casualty or Condemnation and shall pay all costs
and expenses thereof. At Lessee's reasonable request, and at Lessee's sole cost
and expense, Lessor and Agent shall participate in any such proceeding, action,
negotiation, prosecution or adjustment. Lessor and Lessee agree that this Lease
shall control the rights of Lessor and Lessee in and to any such award,
compensation or insurance payment.
(c) If Lessor or Lessee shall receive notice of a Casualty or of an
actual, pending or threatened Condemnation of a Leased Property or any interest
therein, which Casualty or Condemnation will in such party's reasonable good
faith judgment have a cost in excess of $1,000,000 to repair or restore or
result in a reduction in Fair Market Value of $1,000,000 or more with respect to
a Site, and $500,000 or more with respect to a Unit of Equipment, Lessor or
Lessee, as the case may be, shall give notice thereof to the other and to Agent
promptly after the receipt of such notice.
(d) In the event of a Casualty or receipt of notice by Lessee or Lessor
of a Condemnation with respect to a Site which would give rise to a notification
pursuant to Section 15.1(c), Lessee shall deliver to Lessor and Agent a Loss
Determination Notice with respect to such Site pursuant to Section 16.1, which
Loss Determination Notice may be given by Lessee together with the notice
delivered pursuant to Section 15.1(c). If Lessee has not delivered such Loss
Determination Notice within ninety (90) days after such occurrence, then, if
Lessor has determined that a Significant Event has occurred, Lessor may deliver
to Lessee within thirty (30) days after the end of the ninety (90) day period
within which Lessee has to deliver a Loss Determination Notice, a written notice
terminating the Lease with respect to such Site. If Lessee has not timely
delivered the Loss Determination Notice and Lessor has not timely delivered a
notice terminating the Lease with respect to a Site, then this Lease shall
(subject to the terms and conditions thereof) remain in full force and effect as
to such Site. If Lessee delivers a Loss Determination Notice certifying that a
Significant Event has occurred or Lessor delivers the notice provided for above
in this Subsection 15.1(d) within the time periods set forth above, this Lease
shall terminate as to such Site (but not as to the remaining Sites) and Lessee
shall purchase (or cause a designee
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to purchase) such affected Site on the next Quarterly Payment Date (or, if such
Quarterly Payment Date is within thirty (30) days of Lessor's receipt of such
Loss Determination Notice, on the Quarterly Payment Date next following such
Quarterly Payment Date) (a "Termination Date") pursuant to Article XVI hereof.
(e) If pursuant to this Section 15.1 this Lease shall continue in full
force and effect following a Casualty or Condemnation with respect to the
affected Site, Lessee shall, at its sole cost and expense (and, without
limitation, if any award, compensation or insurance payment is not sufficient to
restore such Site in accordance with this Section 15.1(e), Lessee shall pay the
shortfall), diligently repair any damage to the applicable Site caused by such
Casualty or Condemnation in conformity with the requirements of Sections 10.1
and 11.1 using the as-built Plans and Specifications for the applicable Site (as
modified to give effect to any subsequent Modifications, any Condemnation
affecting the Site and all Applicable Laws and Regulations) so as to restore the
applicable Site to at least the same value and useful life as existed
immediately prior to such Casualty or Condemnation. In such event, title to the
applicable Site shall remain with Lessor. Upon completion of any restoration
costing $1,000,000 or more, Lessee shall furnish Lessor an architect's
certificate of substantial completion and a Responsible Employee's Certificate
confirming that such restoration has been completed pursuant to this Lease.
(f) Upon a Significant Casualty with respect to an Equipment Group,
Lessee shall give prompt written notice thereof (a "Loss Notice") to Lessor,
which notice shall specify whether Lessee will:
(i) repay the applicable Equipment Group Balance, plus all
accrued and unpaid interest on the Loans, all accrued and unpaid Yield
on the Investment Amounts, and all other amounts owing by Lessee under
the Operative Documents with respect to such Equipment Group, which
repayment shall be made no later than the next scheduled Quarterly
Payment Date occurring after such Significant Casualty, provided, that
in any event such repayment shall be made no later than the last day of
the applicable Site Term or Equipment Term (the "Loss Settlement Date");
or
(ii) replace each of the Units of Equipment in the Equipment
Group with respect to which the Significant Casualty has occurred
pursuant to the provisions of Section 15.1(h); provided, that upon the
occurrence and during the continuance of a Lease Event of Default or a
Lease Default, Lessee shall be obligated, at the option of Required
Participants, to make the payments referred to in clause (i)
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above and shall not be entitled to exercise any right or election of
replacement as set forth in this clause (ii).
If Lessee has elected, or is required, to pay the Equipment Group
Balance and other amounts pursuant to clause (i) above, Lessee shall continue to
make all payments of Rent, if any, due in respect of such Unit of Equipment
until and including the Loss Settlement Date.
(g) In no event shall a Casualty or Condemnation with respect to any
Unit of Equipment or Site as to which this Lease remains in full force and
effect under this Section 15.1 affect Lessee's obligations to pay Rent pursuant
to Article III or to perform its obligations and pay any amounts due on the
Lease Expiration Date or pursuant to Articles XX and XXII.
(h) As soon as practicable after a Casualty involving a Unit of
Equipment (unless such event constitutes a Significant Casualty, in which event
the provisions of Section 15.1(f)(ii) hereof shall apply), Lessee shall repair
and rebuild the affected portions of such Unit of Equipment (or cause such
affected portions to be repaired and rebuilt) to the condition required to be
maintained by Section 10.1. In the event that any Part which may from time to
time be incorporated or installed in or attached to any Unit of Equipment
becomes at any time worn out, damaged or permanently rendered unfit for use for
any reason whatsoever, Lessee, at its sole cost and expense, will promptly
replace, or cause to be replaced, such Part with a replacement Part (a
"Replacement Part") in accordance with Lessee's customary practices, and as may
be required to comply with Sections 10.1 and 11.2 hereof. In addition, Lessee
may, at its sole cost and expense, remove in the ordinary course of maintenance,
service, repair, overhaul or testing, any Part, whether or not worn out,
destroyed, seized, confiscated, damaged beyond repair or permanently rendered
unfit for use; provided, that Lessee will, at its sole cost and expense, replace
such Part with a Replacement Part as promptly as is commercially reasonable. All
Replacement Parts shall be free and clear of all Liens (other than Permitted
Liens and Lessor Liens) and shall be in as good operating condition as, and
shall have a value and utility at least equal to, the Parts replaced, assuming
such replaced Parts and the Units of Equipment were in the condition and repair
required to be maintained by the terms of Section 10.1. Except as provided in
Section 11.2 hereof, any Part at any time removed from any Unit of Equipment
shall remain subject to this Lease no matter where located, until such time as
such Part shall be replaced by a Part which has been incorporated or installed
in or attached to such Unit of Equipment and which meets the requirements for a
Replacement Part specified above. Immediately upon any Replacement Part becoming
incorporated or installed in or attached to any such Unit of Equipment as above
provided,
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without further act: (i) title to the replaced Part (the "Replaced Part") shall
thereupon vest in Lessee, free and clear of all rights of Lessor, and shall no
longer be deemed a Part hereunder; (ii) such Replacement Part shall thereupon
vest in Lessor, as provided in Section 26.1 (in the same manner as the
underlying Unit of Equipment); and (iii) such Replacement Part shall become
subject to this Lease, the security interest created hereunder, and the
applicable Equipment Lease Supplement, and shall be deemed part of such Unit of
Equipment for all purposes hereof to the same extent as the Parts incorporated
or installed in or attached to such Unit of Equipment on the date such Unit of
Equipment became subject to this Lease.
(i) Upon the satisfaction of the conditions specified in Section
15.1(h), and the Replacement Part becoming subject to this Lease and the
security interest created hereunder, Lessor shall execute and deliver to Lessee
such documents as may be reasonably necessary to release the Replaced Part from
the terms and scope of this Lease (but without representations or warranties,
except that the Replaced Part is free and clear of all Lessor Liens), in such
form as may be reasonably requested by Lessee and are in form and substance
satisfactory to Required Participants, all at the sole cost and expense of
Lessee.
(j) In addition to the foregoing, if Lessee elects to replace any Unit
of Equipment (a "Replaced Unit") with a substitute Unit of Equipment (a
"Replacement Unit") as permitted by Sections 15.1(f)(ii) and (h) above:
(i) any such Replacement Unit shall satisfy one of the following
conditions: (x) the Replacement Unit shall be of identical manufacture
and model as the Replaced Unit and the condition of such Replacement
Unit shall satisfy the provisions of this Lease, or (y) such Replacement
Unit shall have a utility, a fair market value, and an economic useful
life at least equal to those of the Replaced Unit immediately prior to
such substitution, assuming that the Replaced Unit was in the condition
and repair required to be maintained by the terms of this Lease, and, if
the Equipment Purchase Price for the Replaced Unit was greater than
$500,000, Lessee shall have provided to Lessor and each Participant, at
Lessee's expense, an Appraisal or other documentation satisfactory to
Lessor and each Participant in their sole and absolute discretion with
respect to the determination of such utility, Fair Market Value and
economic useful life of the Replacement Unit or (z) such Replacement
Unit shall otherwise be acceptable to each of the Participants in its
respective sole and absolute discretion; and
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(ii) Lessee shall have satisfied each of the conditions set forth
in Sections 6.3(b), (c), (i) and (j) of the Participation Agreement, and
if the Unit of Equipment has an Equipment Purchase Price of greater than
$500,000 or is being replaced as a result of a Significant Event, then
also Sections 6.3(d), (e), (f), (g), and (h) of the Participation
Agreement in connection with the acquisition of Equipment on an
Equipment Acquisition Date with respect to the proposed replacement.
Upon the satisfaction of the conditions specified in this Section 15.1(j) and
the Replacement Unit becoming subject to this Lease and the security interest
created hereunder, Lessor shall execute and deliver to Lessee such instruments
(without representation or warranty) as may be reasonably required to release
the Replaced Unit from the terms and scope of this Lease, in such form as may be
reasonably requested by Lessee and in form and substance satisfactory to Lessor,
all at Lessee's sole cost and expense.
15.2 Environmental Matters. Upon Lessee's actual knowledge of the
presence of Hazardous Substances in any portion of any Site in concentrations
and conditions that constitute an Environmental Violation (i) Lessee shall
comply with all notification obligations required under Applicable Laws and
Regulations and (ii) if such condition would require in excess of $1,000,000 in
remediation costs, Lessee shall promptly notify Lessor in writing of such
condition. In the event of such Environmental Violation, Lessee shall, not later
than thirty (30) days after Lessee has actual knowledge of such Environmental
Violation, either (x) if such Environmental Violation is a Significant Event,
deliver to Lessor and Agent a Responsible Employee's Certificate and a Loss
Determination Notice certifying that such Environmental Violation is a
Significant Event with respect to the applicable Site pursuant to Section 16.1,
or (y) if such Environmental Violation is not a Significant Event, deliver to
Lessor and Agent a Loss Determination Notice certifying that such Environmental
Violation is not a Significant Event and at Lessee's sole cost and expense,
promptly and diligently commence any response, clean up, remedial or other
action required by any Governmental Authority having jurisdiction in respect
thereof. If such Environmental Violation is not a Significant Event, Lessee
shall, upon completion of remedial action by Lessee, cause to be prepared by an
environmental consultant reasonably acceptable to Lessor a report describing the
Environmental Violation and the actions taken by Lessee (or its agents) in
response to such Environmental Violation, and a statement by the consultant that
the Environmental Violation has been remedied in compliance in all material
respects with applicable Environmental Law. Each such Environmental Violation
shall be remedied prior to the Lease Expiration Date. Nothing in
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this Article XV shall reduce or limit Lessee's obligations under Sections 11.1,
11.2 or 11.3 of the Participation Agreement or the Unsecured Environmental
Indemnities.
15.3 Notice of Environmental Matters. Promptly, but in any event within
sixty (60) Business Days from the date Lessee has actual knowledge thereof,
Lessee shall provide to Lessor written notice of any pending or, to Lessee's
knowledge, threatened claim, action or proceeding involving any Environmental
Law or any Release on or in connection with any Site, which claim, action or
proceeding would require in excess of $1,000,000 in remediation costs. All such
notices shall describe in reasonable detail the nature of the claim, action or
proceeding and Lessee's proposed response thereto. In addition, Lessee shall
provide to Lessor, within sixty (60) Business Days of receipt, copies of all
material written communications with any Governmental Authority relating to any
Environmental Law in connection with any Site. Lessee shall also promptly
provide such detailed reports of any such material environmental claims as may
reasonably be requested by Lessor and Agent.
ARTICLE XVI
NOTIFICATION UPON CASUALTY, CONDEMNATION
OR ENVIRONMENTAL EVENT WITH RESPECT TO A SITE
16.1 Notification upon Certain Events. Lessee shall deliver a written
notice in the form described in Section 16.2(a) (a "Loss Determination Notice")
with respect to the affected Site, as specified in Sections 15.1(d) and 15.2,
together with, if such event constitutes a Significant Event, a Responsible
Employee's Certificate certifying that (A) in the case of a Condemnation, such
Condemnation is a Significant Condemnation, (B) in the case of a Casualty, such
Casualty is a Significant Casualty or (C) in the case of an Environmental
Violation, in the reasonable, good-faith judgment of Lessee, the cost to
remediate the same will cause the same to be a Significant Event.
16.2 Procedures. (a) A Loss Determination Notice shall contain: (i) a
certification as to whether or not a Casualty, Condemnation or Environmental
Violation constitutes a Significant Event and (ii) if a Significant Event is
specified, (A) notice of termination of this Lease with respect to the affected
Site on the next occurring Quarterly Payment Date (unless such Quarterly Payment
Date is within thirty (30) days of Lessor's receipt of such Loss Determination
Notice, in which event such notice shall specify the Quarterly Payment Date next
following such Quarterly Payment Date) (the "Termination Date"), such
termination to be effective upon Lessee's payment of the Property Balance and
the other amounts specified in (b) below for such Site; and (B) a
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binding and irrevocable agreement of Lessee to pay the Property Balance and the
other amounts specified in (b) below for such Site and purchase such Site on
such Termination Date.
(b) On each Termination Date (including, without limitation, any
Termination Date described in Section 15.1(d)), Lessee shall pay to Lessor the
Property Balance for the applicable Site, plus all other amounts owing in
respect of Rent for such Site (including Supplemental Rent) theretofore
accruing, and Lessor shall convey Lessor's interest in such Site or the
remaining portion thereof, if any, to Lessee all in accordance with Section
19.1, as well as any Net Proceeds with respect to the Casualty or Condemnation
giving rise to the termination of this Lease with respect to such Site
theretofore received by Lessor; provided that if a Lease Event of Default or
Lease Default shall have occurred and be continuing, the Excess Proceeds, if
any, shall be paid to Lessor.
ARTICLE XVII
LEASE EVENTS OF DEFAULT
17.1 Lease Events of Default. The occurrence of any one or more of the
following events (whether such event shall be voluntary or involuntary or come
about or be effected by operation of law or pursuant to or in compliance with
any judgment, decree or order of any court or any order, rule or regulation of
any administrative or governmental body) shall constitute a "Lease Event of
Default":
(a) Lessee shall fail to make payment of (i) any Basic Rent
within five (5) days after the same has become due and payable or (ii)
any Purchase Option Price, Property Balance or AMAT Recourse Amount,
including, without limitation, amounts due pursuant to Articles XV and
XVI or Sections 20.1, 20.2, 20.3, 22.1 or 22.2 after the same has become
due and payable;
(b) Lessee shall fail to make payment of any Supplemental Rent
(other than Supplemental Rent referred to in clause (a) of this Section)
due and payable within thirty (30) days after receipt of notice thereof;
(c) Lessee shall (i) fail to maintain insurance as required by
Article XIV of this Lease, provided, that so long as the required
insurance coverage remains in place and there is a downgrade in the
rating of an insurer who at the time of obtaining the insurance complied
with such requirements, a default shall not arise hereunder if within
thirty (30) days of the earlier of notice or the actual
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knowledge of a Responsible Officer of Lessee of such downgrade, Lessee
provides replacement coverage complying with Article XIV, or (ii) breach
or fail to comply with Sections 9.2, 9.3 and 9.12 of the Participation
Agreement;
(d) any representation or warranty set forth in this Lease or in
any other Operative Document or in any document entered into in
connection herewith or therewith or in any document, certificate or
financial or other statement delivered in connection herewith or
therewith shall be false or inaccurate in any material respect;
(e) Lessee shall fail to observe or perform any term, covenant or
condition of Lessee under this Lease, the Participation Agreement or any
other Operative Document to which it is a party other than those
described in Section 17.1(a), (b), (c) or (d) hereof, and such failure
shall remain uncured for a period of thirty-five (35) days after receipt
of written notice thereof; provided, however, that as to any breach by
Lessee or failure of Lessee to perform its obligations, if such failure
is (1) capable of being cured, (2) cannot be cured within thirty-five
(35) days, and (3) Lessee is at all times diligently and in good faith
pursuing the cure thereof, then the cure period for such failures shall
be extended for the period necessary for an additional fifty-five (55)
days;
(f) Lessee shall (i) admit in writing its inability to pay its
debts generally as they become due, (ii) file a petition under the
United States bankruptcy laws or any other applicable insolvency law or
statute of the United States of America or any State or Commonwealth
thereof, (iii) make a general assignment for the benefit of its
creditors, (iv) consent to the appointment of a receiver of itself or
the whole or any substantial part of its property, (v) fail to cause the
discharge of any custodian, trustee or receiver appointed for Lessee or
the whole or a substantial part of its property within sixty (60) days,
after such appointment, (vi) file a petition or answer seeking or
consenting to reorganization under the United States bankruptcy laws or
any other applicable insolvency law or statute of the United States of
America or any State or Commonwealth thereof, or (vii) take corporate
action for the purposes of effectuating any of the foregoing.
(g) a Construction Agency Agreement Event of Default
or Loan Event of Default shall have occurred and be
continuing;
(h) insolvency proceedings or a petition under the
United States bankruptcy laws or any other applicable
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insolvency law or statute of the United States of America or any State
or Commonwealth thereof shall be filed against Lessee and not dismissed
within sixty (60) days from the date of its filing, or a court of
competent jurisdiction shall enter an order or decree appointing,
without the consent of Lessee, a receiver of Lessee or the whole or a
substantial part of its property, and such order or decree shall not be
vacated or set aside within sixty (60) days from the date of the entry
thereof;
(i) any member of the ERISA Group shall fail to pay when due an
amount or amounts aggregating in excess of $10,000,000 which it shall
have become liable to pay under Title IV of ERISA; or notice of intent
to terminate a Material Plan shall be filed under Title IV of ERISA by
any member of the ERISA Group, any plan administrator or any combination
of the foregoing; or the PBGC shall institute proceedings under Title IV
of ERISA to terminate, to impose liability (other than for premiums
under Section 4007 of ERISA) in respect of, or to cause a trustee to be
appointed to administer any Material Plan; or a condition shall exist by
reason of which the PBGC would be entitled to obtain a decree
adjudicating that any Material Plan must be terminated; or there shall
occur a complete or partial withdrawal from, or a default, within the
meaning of Section 4219(c)(5) of ERISA, with respect to, one or more
Multiemployer Plans which could cause one or more members of the ERISA
Group to incur a current payment obligation in excess of $10,000,000;
(j) a final judgment or final judgments for the payment of money
are entered by a court or courts of competent jurisdiction against
Lessee or any of its Subsidiaries and such judgment or judgments remain
undischarged, unbonded or unstayed for a period (during which execution
shall not be effectively stayed) of thirty (30) days; provided, that the
aggregate of all such judgments exceeds $10,000,000;
(k) (i) any Operative Document shall (except in accordance with
its terms or with the written consent of Agent), in whole or in part,
terminate, cease to be the legally valid, binding and enforceable
obligation of Lessee in accordance with its terms; (ii) except as
otherwise permitted under the Operative Documents, any Lien granted
pursuant to any Operative Document shall, in whole or in part, cease to
be a perfected first priority security interest (other than Permitted
Liens), provided however, that with respect to any Lien which fails to
be so effective or perfected, Lessee shall have the earlier of thirty
(30) days from its knowledge of such condition or receipt of
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notice thereof to cure such failure; or (iii) Lessee or any of its
Affiliates shall, directly or indirectly, contest in any manner in any
court the effectiveness, validity, binding nature or enforceability of
any of the Security Documents or any Lien granted under any of the
Operative Documents;
(l) there shall have occurred any event of default in the
performance or observance of any obligation or condition with respect to
any amount or amounts of indebtedness owing by or guaranteed by Lessee
or its Subsidiaries the effect of which is to cause or permit the
acceleration of the maturity of indebtedness (including the Credit
Agreement) having a principal amount in excess of $10,000,000
(individually or in the aggregate) prior to its expressed or stated
maturity or to permit the beneficiary of any such guarantee of
indebtedness having a principal amount in excess of $10,000,000
(individually or in the aggregate) to make a demand for payment or
performance thereunder.
17.2 Remedies. Upon the occurrence of any Lease Event of Default and at
any time thereafter and subject to Lessee's rights to purchase Leased Property
pursuant to Section 20.1, Lessor may, so long as such Lease Event of Default is
continuing, do one or more of the following as Lessor in its sole discretion
shall determine, without limiting any other right or remedy Lessor may have on
account of such Lease Event of Default (including, without limitation, the
obligation of Lessee to purchase the Leased Property as set forth in Section
20.3):
(a) Lessor may, by notice to Lessee, rescind or terminate this
Lease as to any or all of the Leased Property as of the date specified
in such notice subject to Lessee's rights to purchase Leased Property
pursuant to Section 20.1; however, (A) no reletting, reentry or taking
of possession of any Leased Property (or any portion thereof) by Lessor
will be construed as an election on Lessor's part to terminate this
Lease unless a written notice of such intention is given to Lessee, (B)
notwithstanding any reletting, reentry or taking of possession, Lessor
may at any time thereafter elect to terminate this Lease for a
continuing Lease Event of Default, and (C) no act or thing done by
Lessor or any of its agents, representatives or employees and no
agreement accepting a surrender of the Leased Property shall be valid
unless the same be made in writing and executed by Lessor;
(b) Lessor may (i) demand that Lessee, and Lessee shall upon the
written demand of Lessor, return any Leased Property demanded by Lessor
promptly to Lessor in the manner and condition required by, and
otherwise in accordance with all of the provisions of, Articles VIII, IX
and X hereof as
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if such Leased Property were being returned at the end of the applicable
Site Term or Equipment Term, and Lessor shall not be liable for the
reimbursement of Lessee for any costs and expenses incurred by Lessee in
connection therewith and (ii) without prejudice to any other remedy
which Lessor may have for possession of any Leased Property, and to the
extent and in the manner permitted by Applicable Laws and Regulations,
enter upon such Leased Property and take immediate possession of (to the
exclusion of Lessee or any other person) such Leased Property or any
part thereof and expel or remove Lessee and any other Person who may be
occupying such Leased Property, by summary proceedings or otherwise, all
without liability to Lessee for or by reason of such entry or taking of
possession, whether for the restoration of damage to property caused by
such taking or otherwise and, in addition to Lessor's other damages,
Lessee shall be responsible for all costs and expenses incurred by
Lessor and/or Agent in connection with any reletting, including, without
limitation, brokers' fees and all costs of any alterations or repairs
made by Lessor;
(c) Lessor may (i) sell all or any part of any one or more Sites
or Units of Equipment at public or private sale, as Lessor may
determine, free and clear of any rights of Lessee and without any duty
to account to Lessee with respect to such action or inaction or any
proceeds with respect thereto (except to the extent required by clause
(ii) below if Lessor shall elect to exercise its rights thereunder) in
which event Lessee's obligation to pay Basic Rent hereunder for periods
commencing after the date of such sale shall be terminated or
proportionately reduced, as the case may be; and (ii) if Lessor shall so
elect, demand that Lessee pay to Lessor, and Lessee shall pay to Lessor,
on the date of such sale, as liquidated damages for loss of a bargain
and not as a penalty (the parties agreeing that Lessor's actual damages
would be difficult to predict, but the aforementioned liquidated damages
represent a reasonable approximation of such amount) (in lieu of Basic
Rent due for periods commencing on or after the Payment Date coinciding
with such date of sale (or, if the sale date is not a Payment Date, the
Payment Date next preceding the date of such sale)), an amount equal to
(A) the excess, if any, of (1) the Lease Balance, calculated as of such
Payment Date (plus all Supplemental Rent, Site Rent and Equipment
Variable Rent due and unpaid to and including such Payment Date) over
(2) the net proceeds of such sale (that is, after deducting all costs
and expenses incurred by Lessor, Agent, and Participants incident to
such conveyance, including, without limitation, repossession costs,
brokerage commissions, prorations, transfer taxes, fees and expenses for
counsel, title insurance fees, survey costs, recording
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fees, and any repair or alteration costs); plus (B) interest at the
Overdue Rate on the foregoing amount from such Payment Date until the
date of payment;
(d) Lessor may, at its option, not terminate the Lease with
respect to any Leased Property, and continue to collect all Basic Rent,
Supplemental Rent, and all other amounts due Lessor (together with all
costs of collection) and enforce Lessee's obligations under this Lease
as and when the same become due, or are to be performed, and at the
option of Lessor, upon any abandonment of any Leased Property by Lessee
or re-entry of same by Lessor, Lessor may, in its sole and absolute
discretion, elect not to terminate this Lease and may make such
reasonable alterations and necessary repairs in order to relet such
Leased Property, and relet such Leased Property or any part thereof for
such term or terms (which may be for a long term extending beyond the
Term of this Lease) and at such rental or rentals and upon such other
terms and conditions as Lessor in its reasonable discretion may deem
advisable; and upon each such reletting all rentals actually received by
Lessor from such reletting shall be applied to Lessee's obligations
hereunder and the other Operative Documents in such order, proportion
and priority as Lessor may elect in Lessor's sole and absolute
discretion; it being agreed that under no circumstances shall Lessee
benefit from its default from any increase in market rents. If such
rentals received from such reletting during any period be less than the
Rent with respect to such Leased Property to be paid during that period
by Lessee hereunder, Lessee shall pay any deficiency, as calculated by
Lessor, to Lessor on the next Payment Date;
(e) Unless a Leased Property has been sold in its entirety,
Lessor may, whether or not Lessor shall have exercised or shall
thereafter at any time exercise any of its rights under paragraph (b),
(c) or (d) of this Section 17.2 with respect to such Leased Property or
portions thereof, demand, by written notice to Lessee specifying a date
(a "Termination Date") not earlier than thirty (30) days after the date
of such notice with respect to a Lease Event of Default arising under
Section 9.12 of the Participation Agreement or ten (10) days with
respect to any other Lease Event of Default, that Lessee purchase, on
such Termination Date, such Leased Property (or the remaining portion
thereof) in accordance with the provisions of Article XIX and Section
20.2;
(f) Lessor may exercise any other right or remedy that may be
available to it under Applicable Laws and Regulations, or proceed by
appropriate court action (legal or equitable) to enforce the terms
hereof or to recover
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damages for the breach hereof. Separate suits may be brought to collect
any such damages for any period(s), and such suits shall not in any
manner prejudice Lessor's right to collect any such damages for any
subsequent period(s), or Lessor may defer any such suit until after the
expiration of the Term, in which event such suit shall be deemed not to
have accrued until the expiration of the Term.
(g) Lessor may retain and apply against Lessor's damages all sums
which Lessor would, absent such Lease Event of Default, be required to
pay to, or turn over to, Lessee pursuant to the terms of this Lease; or
(h) Lessee acknowledges that sales for cash or on credit to a
wholesaler, retailer or user of any Equipment, at a public or private
auction are all commercially reasonable. Any notice required by law of
an intended disposition by Lessor shall be deemed reasonable and
properly given if given at least ten (10) days before such disposition.
17.3 Waiver of Certain Rights. If this Lease shall be terminated
pursuant to Section 17.2, Lessee waives, to the fullest extent permitted by law,
(a) any notice of re-entry or the institution of legal proceedings to obtain
re-entry or possession; (b) any right of redemption, re-entry or repossession;
(c) the benefit of any laws now or hereafter in force exempting property from
liability for rent or for debt or limiting Lessor with respect to the election
of remedies; and (d) any other rights which might otherwise limit or modify any
of Lessor's rights or remedies under this Article XVII.
17.4 Power of Sale and Foreclosure. Lessee hereby grants a Lien against
such Leased Property WITH POWER OF SALE, and that, upon the occurrence of any
Lease Event of Default, Lessor shall have the power and authority, to the extent
provided by law, after proper notice and lapse of such time as may be required
by law, to sell such Leased Property at the time and place of sale fixed by
Lessor in said notice of sale, either as a whole, or in separate lots or parcels
or items and in such order as Lessor may elect, at auction to the highest bidder
for cash in lawful money of the United States payable at the time of sale;
accordingly, it is acknowledged that A POWER OF SALE HAS BEEN GRANTED IN THIS
INSTRUMENT; A POWER OF SALE MAY ALLOW LESSOR TO TAKE THE APPLICABLE LEASED
PROPERTY AND SELL IT WITHOUT GOING TO COURT IN A FORECLOSURE ACTION UPON DEFAULT
BY LESSEE UNDER THIS INSTRUMENT, and (ii) upon the occurrence of a Lease Event
of Default, Lessor, in lieu of or in addition to exercising any power of sale
hereinabove given, may proceed by a suit or suits in equity or at law, whether
for a foreclosure hereunder, or for the sale of the Leased Property, or against
Lessee on a recourse
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basis for the Lease Balance and all accrued and unpaid interest on the Loans,
all accrued and unpaid Yield on the Investment Amounts, and all other amounts
owing by Lessee under the Operative Documents with respect to such Leased
Property, or for the specific performance of any covenant or agreement herein
contained or in aid of the execution of any power herein granted, or for the
appointment of a receiver pending any foreclosure hereunder or the sale of the
Leased Property, or for the enforcement of any other appropriate legal or
equitable remedy.
17.5 Remedies Cumulative. The remedies herein provided and in each
Lease Supplement shall be cumulative and in addition to (and not in limitation
of) any other rights or remedies available under Applicable Laws and
Regulations, equity or otherwise, including, without limitation, any mortgage
foreclosure remedies.
ARTICLE XVIII
RIGHT TO PERFORM FOR LESSEE
18.1 Lessor's Right to Cure Lessee's Lease Defaults. Lessor, without
waiving or releasing any obligation or Lease Event of Default, may (but shall be
under no obligation to) remedy any Lease Default or Lease Event of Default for
the account and at the sole cost and expense of Lessee, including the failure by
Lessee to maintain the insurance required by Article XIV, and may, to the
fullest extent permitted by law, and notwithstanding any right of quiet
enjoyment in favor of Lessee or any other person, enter upon any Site or
location where Units of Equipment are maintained for such purpose and take all
such action thereon as may be necessary or appropriate therefor. No such entry
shall be deemed an eviction of Lessee. All reasonable out-of-pocket costs and
expenses so incurred (including fees and expenses of counsel), together with
interest thereon at the Overdue Rate from the date on which such sums or
expenses are paid by Lessor, shall be paid by Lessee to Lessor on demand.
ARTICLE XIX
PROCEDURES FOR TRANSFER OF PROPERTIES
19.1 Conveyance of Leased Property; Exercise of Purchase Option or
Obligation. (a) Subject to Article XX, in connection with any termination of
this Lease or any Lease Supplement with respect to any Leased Property pursuant
to the terms of Section 15.1 or Article XVI, or in connection with Lessee's
exercise of its Purchase Option or Expiration Date Purchase Obligation, upon the
date on which this Lease is to terminate with respect to the applicable Leased
Property or upon the Site Expiration Date or
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Equipment Pool Expiration Date, as the case may be, with respect to the
applicable Leased Property, and upon tender by Lessee of the amounts set forth
in Sections 15.1, 16.2(b), 20.1, 20.2 or 20.3, as applicable:
(i) Lessor shall execute and deliver to Lessee (or to Lessee's
designee) at Lessee's sole cost and expense an assignment of Lessor's
right, title and interest in the applicable Leased Property (which shall
include an assignment of all of Lessor's right, title and interest in
and to any Net Proceeds not previously received by Lessor), in each case
in recordable form (with respect to any Site) and otherwise in
conformity with local custom and free and clear of the Lien of the
applicable Mortgage and any Lessor Liens; and
(ii) the applicable Leased Property shall be conveyed to Lessee
"AS IS" and in its then present physical condition.
(b) If Lessee properly exercises the Remarketing Option with respect to
any Leased Property then Lessee shall, upon consummation of any sale, and at its
sole cost and expense, transfer possession of the applicable Leased Property to
the independent purchaser(s) thereof, in each case by surrendering the same into
the possession of Lessor or such purchaser(s), as the case may be, free and
clear of all Liens other than Lessor Liens and the lien of the applicable
Mortgage, in good condition (as modified by Modifications permitted by this
Lease), ordinary wear and tear excepted, and in compliance with Applicable Laws
and Regulations. As a condition to Lessee's rights hereunder, Lessee shall
obtain all necessary governmental consents and approvals and make all
governmental filings required by Lessee or Lessor in connection with any third
party sale. Lessee shall, on and within a reasonable time before and up to one
year after the Site Expiration Date or Equipment Expiration Date with respect to
such Leased Property, cooperate reasonably with Lessor and the independent
purchaser(s) of such Leased Property in order to facilitate the purchase by such
purchaser(s) of such Leased Property, which cooperation shall include the
following, all of which Lessee shall do on or before the Site Expiration Date or
Equipment Expiration Date, as the case may be, or as soon thereafter as is
reasonably practicable: providing all books and records regarding the
maintenance and ownership of such Leased Property and all know-how, data and
technical information relating thereto, providing a current copy of the Plans
and Specifications for any Sites subject to such Remarketing Option, granting or
assigning all licenses necessary for the operation and maintenance of such
Leased Property and cooperating reasonably in seeking and obtaining all
necessary Governmental
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Action. The obligations of Lessee under this paragraph shall survive the
expiration or termination of this Lease.
ARTICLE XX
PURCHASE OPTION
20.1 Purchase Option. (a) Provided that Lessee shall not have given
notice of its intention to exercise the Remarketing Option with respect to any
Equipment Pool or Site which it desires to purchase, and without limitation of
Lessee's purchase obligation pursuant to Sections 20.2 or 20.3 and subject to
the limitations herein, Lessee shall at any time have the option exercisable by
giving Lessor irrevocable written notice (the "Purchase Notice") of Lessee's
election to exercise such option to purchase one or more (including all) Sites
or Equipment Groups (or, subject to the limitations set forth in clause (b)
below, with respect to a Site, a portion thereof) on the date specified in such
Purchase Notice at a price equal to the Property Balance (or, in the case of a
purchase of a portion of a Site pursuant to clause (b) below, the purchase price
paid by a third party for the portion of the Site as provided for in Subsection
20.1(b)(ix) below) with respect to such Site or Equipment Group (or, in the case
of all Leased Property, the Lease Balance) (the "Purchase Option Price") plus
all other amounts then due and payable in respect of Rent for such Leased
Property (including Supplemental Rent) theretofore accruing; provided, however,
that Lessee shall only be permitted to purchase an Equipment Group (unless
Lessee purchases the entire related Equipment Pool) if, after taking into
account such purchase, the aggregate Property Balance of the Units of Equipment
then remaining subject to this Lease equals or exceeds the Required Percentage
Amount.
(b) In addition to Lessee's option to purchase one or more Sites as
provided above, Lessee shall also have the option to purchase a portion of a
Site upon satisfaction of the following conditions: (i) Lessee shall deliver to
Lessor, Agent and Participants an Appraisal setting forth the Fair Market Value
(as separate and independent pieces of property) of the portion being purchased
by Lessee as of the date of purchase and the remaining portion as of the
applicable Site Expiration Date, (ii) the purchase price for such portion of a
Site shall be equal to or greater than the Fair Market Value of such portion
determined in such Appraisal, (iii) the sum of the purchase price of the portion
being purchased by Lessee and the Fair Market Value as determined in such
Appraisal of the remaining portion shall not be less than seventy-five percent
(75%) of the Site Balance for such Site, (iv) the portion of the Site being
purchased by Lessee and the remaining portion shall each constitute a legal
parcel under applicable subdivision laws, (v) the remaining portion of
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the Site shall not be dependant upon the portion being sold for services,
utilities, parking or access unless perpetual easements have been granted for
the benefit of the remaining portion of the Site in form satisfactory to Lessor
and Agent and otherwise in accordance with applicable subdivision and zoning
laws and regulations, (vi) any improvements situated on the remaining portion of
the Site shall be situated entirely on the remaining portion of the Site and no
portion of the improvements situated on the remaining portion of the Site shall
be situated on the portion of the Site being purchased by Lessee, (vii) Lessee
shall deliver to Lessor, Agent and Participants a Title Policy complying with
the requirements of Section 6.2(d) of the Participation Agreement in an amount
equal to the Fair Market Value of the remaining portion as determined in the
Appraisal, with such endorsements as reasonably requested by Agent, including
endorsements with respect to the subdivision map act and zoning laws and
regulations, (viii) Lessee shall execute and deliver such modifications,
amendments or supplements to the documents delivered on any Advance Date
relating to the Site pursuant to Section 6.2 of the Participation Agreement as
reasonably requested by Agent, (ix) Lessee shall have entered into a written
agreement (a copy of which shall be given to Lessor and Agent prior to a
purchase or sale of any portion of the Site) with an unrelated third party to
sell to such third party the portion Lessee has elected to purchase hereunder
and there shall not exist any understanding, agreement or arrangement whereby
Lessee or any of its Affiliates agrees to repurchase or lease back such portion
of the Site, which sale shall be consummated concurrently with Lessee's purchase
hereunder (and Lessee may direct Lessor to deliver a deed directly to such third
party) and the Gross Proceeds from the sale to the unrelated third party of the
portion of the Site so sold less the amount, if any, Lessee may elect to retain
from such Gross Proceeds (such amount not to exceed the Withheld Amount for such
Site) shall be paid to Agent and (x) Lessee shall not enter into an agreement
with respect to retaining or regarding any interest in such portion purchased
within six (6) months following such sale to the third party.
(c) Lessee shall deliver the Purchase Notice to Lessor (x) if no Lease
Event of Default exists, not more than one hundred eighty (180) days and not
less than thirty (30) days prior to such purchase or (y) if a Lease Event of
Default (other than a Lease Event of Default relating to the payment of Rent)
exists, not more than thirty (30) days after the commencement of such Lease
Event of Default (unless waived by Lessor) and not less than ten (10) days prior
to such purchase or (z) if a Lease Event of Default in the payment of Rent
exists (unless waived by Lessor), not more than ten (10) days after the
commencement of such Lease Event of Default and not less than five (5) days
prior to such purchase; provided that Lessee may not deliver a Purchase
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Notice or exercise the Purchase Option if there exists a Lease Event or Default
under Section 17.1(f) or (h). If Lessee exercises its option to purchase any
Leased Property pursuant to this Section 20.1 (the "Purchase Option"), Lessor
shall transfer to Lessee all of Lessor's right, title and interest in and to
such Leased Property as of the date specified in the Purchase Notice upon
receipt of the Purchase Option Price and all Rent and other amounts then due and
payable under this Lease and any other Operative Document, in accordance with
Section 19.1(a). If a Lease Event of Default or Lease Default relates solely to
a specific Site or Equipment Group but not all Leased Property, the exercise of
such Purchase Option and the purchase of such Leased Property in accordance with
the requirements hereof shall be deemed to have cured such Lease Event of
Default or Lease Default to the extent such Lease Event of Default or Lease
Default is no longer continuing with respect to any Leased Property remaining
subject to this Lease or Lessee after the consummation of the purchase pursuant
to the exercise of such Purchase Option; provided, however, that at the time of
such purchase, if any Site other than an Existing Site is then subject to the
Lease, the exercise of such Purchase Option shall not cause the aggregate Lease
Balance of the Leased Property then remaining subject to this Lease to decline
below the Required Percentage Amount.
20.2 Expiration Date Purchase Obligation. With respect to any Site or
Equipment Pool, unless (a) Lessee shall have properly exercised the Purchase
Option pursuant to Section 20.1 and purchased such Site or Equipment Pool
pursuant thereto, or (b) Lessee shall have properly exercised the Remarketing
Option and shall have fulfilled all of the conditions of Sections 22.1 and 22.3,
in the case of such Site, or Sections 22.2 and 22.3, in the case of such
Equipment Pool, and Lessor shall have sold its interest in such Site or
Equipment Pool pursuant thereto, then, subject to the terms, conditions and
provisions set forth in this Article XX, and in accordance with the terms of
Section 19.1(a), Lessee shall pay to Lessor on the Site Expiration Date the Site
Balance plus all accrued and unpaid interest on the Loans, all accrued and
unpaid Yield on the Investment Amounts, and all other amounts owing by Lessee
under the Operative Documents with respect to such Site, in the case of any such
Site, or on the Equipment Pool Expiration Date the aggregate Equipment Group
Balances for the Equipment Groups constituting such Equipment Pool plus all
accrued and unpaid interest on the Loans, all accrued and unpaid Yield on the
Investment Amounts, and all other amounts owing by Lessee under the Operative
Documents with respect to such Equipment Groups, in the case of such Equipment
Pool, and Lessor shall convey to Lessee, on such Site Expiration Date or
Equipment Pool Expiration Date, as applicable, all of Lessor's interest in such
Site or Equipment Pool.
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20.3 Acceleration of Purchase Obligation. Lessee shall be obligated to
purchase for an amount equal to the Lease Balance plus all accrued and unpaid
interest on the Loans, all accrued and unpaid Yield on the Investment Amounts,
and all other amounts owing by Lessee under the Operative Documents, Lessor's
interest in all of the Leased Property (notwithstanding any prior election to
exercise its Purchase Option pursuant to Section 20.1) (i) automatically and
without notice upon the occurrence of any Lease Event of Default specified in
clause (g) or (h) of Section 17.1 and (ii) as provided for at Section 17.2(e),
immediately upon written demand of Lessor upon the occurrence and continuance of
any other Lease Event of Default.
ARTICLE XXI
RIGHT TO RENEW
21.1 Site Renewal. Subject to the conditions set forth herein, Lessee
may, by written notice to Lessor, each Participant and Agent given not earlier
than one hundred eighty (180) days and not later than ninety (90) days prior to
the then current Site Expiration Date with respect to a Site, request (a "Site
Renewal Request") that the Site Term be extended as to such Site to the date
requested by Lessee which is not later than five (5) years after such Site
Expiration Date (the "Site Renewal Option"). Such renewal shall be subject to
and conditioned upon the following:
(a) on both the date of the Site Renewal Request and the date
that such renewal becomes effective, no Lease Default or Lease Event of
Default shall have occurred and be continuing, and Lessee shall be
deemed to have represented the same to Lessor;
(b) Lessee shall not have exercised the Site Remarketing Option
with respect to any Site or, on or after the fifth anniversary of the
Document Closing Date, the Equipment Remarketing Option with respect to
any Equipment Pool;
(c) the Maturity Date shall have been extended pursuant to
Section 2.2(e) of the Loan Agreement such that the Site Renewal Term for
such Site will expire on or before the extended Maturity Date;
(d) Lessor and Agent shall have obtained at Lessee's sole cost
and expense an appraisal performed by an independent appraisal company
chosen by Agent and acceptable to Lessee, not to be unreasonably
withheld, and indicating the Fair Market Value of such Site on the date
of such
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appraisal and at the end of the Site Renewal Term, which Fair Market
Value at the end of the Site Renewal Term shall equal or exceed 75% of
the Site Balance with respect to such Site; and
(e) If the Site is a Construction Site, the Construction
Completion Date shall have occurred as to such Construction Site.
21.2 Equipment Renewal. Subject to the conditions set forth herein,
Lessee may, with respect to all but not less than all of the Equipment Groups
constituting an Equipment Pool, by written notice to Lessor, each Participant
and Agent given not earlier than one hundred eighty (180) days and not later
than ninety (90) days prior to the Original Equipment Pool Expiration Date for
such Equipment Pool, request (an "Equipment Renewal Request") that the Equipment
Term for such Equipment Groups be extended to the date which is twelve (12)
months after such Original Equipment Pool Expiration Date (the "Equipment
Renewal Option"). Such renewal shall be subject to and conditioned upon the
following:
(a) on both the date of the Equipment Renewal Request and the
date that such renewal becomes effective, no Lease Default or Lease
Event of Default shall have occurred and be continuing, and Lessee shall
be deemed to have represented the same to Lessor;
(b) Lessee shall not have exercised any Remarketing
Option; and
(c) the Equipment Renewal Term for the Equipment Groups
constituting such Equipment Pool shall expire on or before the Maturity
Date as in effect as of the date such renewal becomes effective.
(d) Lessor and Agent shall have received from Lessee
documentation demonstrating to Agent that all of the Equipment in such
Equipment Group has (i) a remaining useful life as of the date of such
renewal and (ii) a Fair Market Value as of the date of such renewal and
the end of such renewal period which is sufficient, in the reasonable
judgment of Lessor and Agent, to support such additional twelve (12)
month renewal.
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ARTICLE XXII
REMARKETING
22.1 Option to Remarket Sites. Subject to the fulfillment of each of
the conditions set forth in this Article XXII (other than Section 22.2), Lessee
shall have the option (the "Site Remarketing Option") to market a Site subject
to a Lease Supplement during the Site Remarketing Period related to such Site
and sell such Site on the related Site Expiration Date.
Lessee's effective exercise and consummation of the Site Remarketing
Option with respect to such Site shall be subject to the due and timely
fulfillment of each of the following provisions:
(a) Satisfaction of the conditions set forth at Section 22.3,
including the payment to Agent of the AMAT Recourse Amount pursuant to
Section 22.3(h) and the Gross Proceeds pursuant to Section 22.3(i).
(b) Not later than ninety (90) days prior to such Site Expiration
Date, Lessee shall deliver to Lessor an Environmental Audit for such
Site. Such Environmental Audit shall be dated as of a date not earlier
than the first day of such Site Remarketing Period and shall be prepared
by an environmental consultant selected by Lessor in Lessor's reasonable
discretion and shall contain conclusions reasonably satisfactory to
Lessor as to the environmental status of such Site. If any such
Environmental Audit indicates any exceptions, Lessee shall have also
delivered a Phase Two environmental assessment by such environmental
consultant at least sixty (60) days prior to such Site Expiration Date
showing the completion of the remediation of such exceptions in
compliance with Applicable Laws and Regulations, except that any such
exception that existed on, and was disclosed in the Environmental Audit
delivered prior to, the related Site Acquisition Date and for which a
long-term remediation program complying with Applicable Laws and
Regulations (and providing for remediation beyond the Site Expiration
Date) was in place on the Site Acquisition Date, will not require
completion of remediation prior to such Site Expiration Date so long as
the Person or Persons responsible for such remediation are in compliance
with such long-term remediation program on the Site Expiration Date.
(c) If such Site is a Construction Site, not later than one day
prior to Lessor's receipt of the Site Remarketing Notice, the
Construction Completion Date shall have occurred as to such Construction
Site.
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(d) If such Site is a 25% Property, then:
(i) If the Land Proceeds exceed the sum of the Land
Balance with respect to such Site as of such Site Expiration Date
and the Prior Shortfalls, if any, as of such Site Expiration
Date, then the portion of the Land Proceeds in excess thereof
shall be paid to Lessee on such Site Expiration Date. If the Land
Proceeds are less than the Land Balance with respect to such Site
as of such Site Expiration Date, Lessee shall pay to Agent, as
Supplemental Rent, on such Site Expiration Date, in addition to
the Land Proceeds, an additional amount equal to the amount that
the Land Balance exceeds the Land Proceeds.
(ii) If the sum of the Improvements Proceeds and the AMAT
Recourse Amount paid by Lessee with respect to such Site exceeds
the sum of the Improvements Balance with respect to such Site as
of such Site Expiration Date and the Prior Shortfalls, if any, as
of such Site Expiration Date (without duplication of any Prior
Shortfalls satisfied by clause (i) above), then the excess shall
be paid to Lessee on such date. If the sum of the Improvements
Proceeds and the AMAT Recourse Amount paid by Lessee with respect
to such Site is less than the sum of the Improvements Balance
with respect to such Site as of such Site Expiration Date and
such Prior Shortfalls, Lessee also shall pay to Agent, as
Supplemental Rent, on such Site Expiration Date, in addition to
the Improvements Proceeds and any other amounts payable under
this Section 22.1, an additional recourse payment equal to the
lesser of (i) such deficiency and (ii) the Excess Gross Proceeds.
(e) If such Site is not a 25% Property, then: If the Gross
Proceeds from the sale of such Site and the AMAT Recourse Amount paid by
Lessee with respect to such Site exceed the sum of the Site Balance with
respect to such Site as of such Site Expiration Date and the Prior
Shortfalls as of such Site Expiration Date, then the excess shall be
paid to Lessee on such Site Expiration Date. If the sum of the Gross
Proceeds and the AMAT Recourse Amount paid by Lessee with respect to
such Site is less than the Site Balance with respect to such Site on
such Site Expiration Date, then Lessee also shall pay to Agent on such
Site Expiration Date, in addition to the Gross Proceeds and any other
amounts payable under this Section 22.1, an additional recourse payment
equal to the lesser of (i) such deficiency and (ii) the Excess Gross
Proceeds.
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If any of the foregoing provisions shall not be fulfilled as of the
dates set forth above with respect to such Site, or such Site is not purchased
on the Site Expiration Date, then Lessor shall declare by written notice to
Lessee the Site Remarketing Option to be null and void (whether or not it has
been theretofore exercised by Lessee) as to such Site, in which event all of
Lessee's rights with respect to such Site under this Section 22.1 shall
immediately terminate and Lessee shall be obligated to purchase such Site
pursuant to Section 20.2 on such Site Expiration Date. Except as expressly set
forth herein, Lessee shall have no right, power or authority to bind Lessor in
connection with any proposed sale of such Site.
22.2 Option to Remarket the Equipment. Subject to the fulfillment of
each of the conditions set forth in this Section 22.2, Lessee shall have the
option (the "Equipment Pool Remarketing Option") with respect to each Equipment
Pool to market during the related Equipment Remarketing Period not less than all
of the Equipment constituting such Equipment Pool and sell such Equipment on the
related Equipment Pool Expiration Date.
Lessee's effective exercise and consummation of the Equipment Pool
Remarketing Option with respect to such Equipment Pool shall be subject to the
due and timely fulfillment of each of the following provisions:
(a) Satisfaction of the conditions set forth at Section 22.3,
including the payment to Agent of the AMAT Recourse Amount pursuant to
Section 22.3(h) and the Gross Proceeds pursuant to Section 22.3(i).
(b) If the sum of the Gross Proceeds from the sale of the
Equipment constituting such Equipment Pool plus the AMAT Recourse Amount
paid by Lessee with respect to such Equipment Pool exceeds the sum of
(A) the aggregate Equipment Group Balances of the Equipment Groups
constituting such Equipment Pool as of the related Equipment Pool
Expiration Date and (B) the Prior Shortfalls, if any, as of such
Equipment Pool Expiration Date, then the excess shall be paid to Lessee
on such Equipment Pool Expiration Date. If the sum of the Gross Proceeds
and the AMAT Recourse Amount with respect to such Equipment Pool is less
than the aggregate Equipment Group Balances of the Equipment Groups
constituting such Equipment Pool on the related Equipment Pool
Expiration Date and such Prior Shortfalls, then Lessee also shall pay to
Agent on or prior to such Equipment Pool Expiration Date, as
Supplemental Rent, in addition to such Gross Proceeds and any other
amounts payable pursuant to this Section 22.2, an additional
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recourse amount equal to the lesser of (i) such deficiency and (ii) the
Excess Gross Proceeds.
If any of the foregoing provisions shall not be fulfilled as of the
dates set forth above with respect to an Equipment Pool, or all of the Equipment
constituting such Equipment Pool is not purchased as aforesaid, then Lessor
shall declare by written notice to Lessee the Equipment Pool Remarketing Option
to be null and void (whether or not it has been theretofore exercised by Lessee)
as to such Equipment Pool, in which event all of Lessee's rights with respect to
the Equipment constituting such Equipment Pool under this Section 22.2 shall
immediately terminate and Lessee shall be obligated to purchase all of the
Equipment constituting such Equipment Pool pursuant to Section 20.2 on the
related Equipment Pool Expiration Date. Except as expressly set forth herein,
Lessee shall have no right, power or authority to bind Lessor in connection with
any proposed sale of any Equipment.
22.3 Conditions to and Requirements of Remarketing Options. Lessee's
effective exercise and consummation of a Remarketing Option with respect to a
Site or an Equipment Pool (for purposes of Sections 22.1 and 22.2, the "Subject
Property") shall be subject to the due and timely fulfillment of each of the
following conditions and requirements as of the dates set forth below:
(a) Not earlier than three hundred sixty (360) or later than one
hundred eighty (180) days prior to the Applicable Expiration Date,
Lessee shall give to Lessor written notice of Lessee's exercise of its
Remarketing Option with respect to the Subject Property, which exercise
shall be irrevocable (the "Remarketing Notice"). If Lessee fails to give
Lessor the Remarketing Notice prior to such date, Lessee shall have no
right to exercise such Remarketing Option.
(b) On the date Lessor receives the Remarketing Notice and during
the applicable Remarketing Period, no Lease Event of Default or Lease
Default shall exist.
(c) All subleases with respect to the Subject Property shall have
been terminated prior to Lessor's receipt of the Remarketing Notice and
Lessee shall not enter into any additional subleases with respect to the
Subject Property during the Remarketing Period.
(d) Lessee shall have completed in all material respects all
Modifications (in the case of a Site) and restoration, repair and
rebuilding of the Subject Property pursuant to Sections 11.1 and 15.1
(as the case may be), in
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the case of a Site, or pursuant to Sections 11.2 and 15.1, in the case
of the Equipment, and shall have fulfilled in all material respects all
of the conditions and requirements in connection therewith pursuant to
such Sections, in each case by the date on which Lessor receives the
Remarketing Notice (time being of the essence), regardless of whether
the same shall be within Lessee's control. Lessee shall have also paid
the cost of all Modifications (in the case of a Site), restoration,
repair and rebuilding commenced or to be commenced prior to the Site
Expiration Date or the Equipment Pool Expiration Date, as applicable,
relating to the Subject Property. Lessee shall not have been excused
pursuant to Section 13.1 from complying with any Applicable Laws and
Regulations that involved the extension of the ultimate imposition of
such Applicable Laws and Regulations beyond the Site Expiration Date or
the Equipment Pool Expiration Date, as the case may be, with respect to
the Subject Property. Any Permitted Liens on the Subject Property shall
have been removed prior to the Site Expiration Date or the Equipment
Pool Expiration Date, as the case may be, relating to the Subject
Property.
(e) Lessee shall, at its sole cost and expense, deliver to Lessor
not less than thirty (30) days after the commencement of the Remarketing
Period for the Subject Property reports of engineers and other experts
as Lessor may reasonably request to determine if the Subject Property is
in the condition and state of repair and maintenance required by this
Lease. Lessee, at its sole cost and expense, shall cause the repair or
other remediation of any discrepancies between the actual condition of
the Subject Property and the condition required under this Lease, such
repair or remediation to be completed not later than the applicable Site
Expiration Date or Equipment Pool Expiration Date. Prior to entering
into any agreement to sell the Subject Property during the applicable
Remarketing Period, Lessee shall bond over with a reputable bonding
company that is financially sound and solvent and otherwise reasonably
appropriate considering the amount of the bond being provided by the
bonding company, for the benefit of the prospective purchaser of the
Subject Property, all Permitted Liens (other than Lessor Liens)
described in clauses (iii), (iv) and (vi) of the definition of
"Permitted Liens", including Permitted Liens that remain on the Subject
Property following the sale or return thereof, and such bonding shall
continue until all such Liens have been removed.
(f) During the applicable Remarketing Period, Lessee shall, as
nonexclusive agent for Lessor, use its best commercial efforts to sell
the Subject Property and will
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attempt to obtain the highest all-cash purchase price therefor and for
not less than the Fair Market Value thereof. Lessee, at its sole cost
and expense, will be responsible for hiring brokers and making the
Subject Property available for inspection by prospective purchasers.
Lessee shall promptly upon request permit inspection of any Subject
Property and any maintenance records relating to the Subject Property by
Lessor, any Participant and any potential purchasers, and shall
otherwise do all things necessary to sell and deliver possession of the
Subject Property to any purchaser. All such marketing of the Subject
Property shall be at Lessee's sole cost and expense and Lessee shall pay
as Supplemental Rent the costs and expenses of Lessor and each
Participant in connection with any such bidding and sale process
pursuant to this Article XXII as well as all costs and expenses incurred
by any Person (including a buyer or potential buyer) to place the
Subject Property in the condition required by Sections 9.1 and 10.1, all
of which shall be completed prior to the Site Expiration Date or the
Equipment Pool Expiration Date, as the case may be. None of the
foregoing costs or expenses shall be deducted from the Gross Proceeds.
Lessee shall allow Lessor and any potential qualified purchaser
reasonable access to the Subject Property for the purpose of inspecting
the same.
(g) Lessee shall submit all bids to Lessor, Agent and
Participants, and Lessor will have the right to review the same and the
right to submit any one or more bids. All bids shall be on an all-cash
basis unless Lessor, Agent and Participants shall otherwise agree in
their sole discretion. Lessee shall procure bids from one or more bona
fide prospective purchasers and shall deliver to Lessor, Agent and
Participants within five (5) Business Days of the receipt of any bid a
written certificate of Lessee specifying the terms and conditions of
such bid together with a binding written unconditional irrevocable offer
by such purchaser or purchasers offering such bid to purchase the
Subject Property. No such purchaser shall be Lessee, or any Subsidiary
or Affiliate of Lessee or any Person with whom Lessee or any Affiliate
of Lessee has an understanding or arrangement regarding the future
ownership or use of the Subject Property, but who may be Lessor or any
Participant or any Affiliate thereof, or any Person contacted by Lessor.
The written offer must specify the terms and conditions of such offer
and the closing date as of the Site Expiration Date or the Equipment
Pool Expiration Date, as applicable.
(h) Lessee shall pay to Agent on or prior to the Applicable
Expiration Date (or to such other Person as Agent shall notify to Lessee
in writing, or in the case of
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Supplemental Rent, to the Person entitled thereto) an amount equal to
the AMAT Recourse Amount with respect to the applicable Site or
Equipment Pool plus all Rent and all other amounts hereunder which have
accrued or will accrue prior to or as of the Applicable Expiration Date,
in the type of funds specified in Section 3.4 hereof.
(i) After Lessee shall have certified to Lessor all bids received
with respect to the Subject Property, Lessor or any Participant or any
Affiliate thereof, or any Person contacted by Lessor may submit a
further bid or bids to Lessee not later than thirty (30) Business Days
after Lessor's receipt of notice thereof. In the event that Lessor or
any Participant or any such Affiliate or any Person contacted by Lessor,
any Participant or any such Affiliate shall not have submitted further
bids to Lessee, and provided that no Lessee Default or Lessee Event of
Default shall have occurred and be continuing on the date of such sale
and no Significant Casualty, Significant Condemnation or Significant
Event shall have occurred with respect to the Subject Property, Lessee
shall consummate the sale of the Subject Property to the highest bidder
therefor on the Site Expiration Date or the Equipment Pool Expiration
Date, as the case may be, contemporaneously with Lessee's surrender of
the Subject Property pursuant to Section 19.1(b); provided, however,
that with respect to an Equipment Pool, in no event shall the bid to be
accepted be less than, nor shall such sale be consummated if such bid is
less than, the aggregate Tranche B Participant Balances attributable to
such Equipment Pool. Upon consummation of a sale, Lessee shall cause
such purchaser to pay in cash the Gross Proceeds directly to Agent. Upon
Agent's receipt of such Gross Proceeds, (i) Lessee shall transfer all of
Lessee's right, title and interest in the Subject Property to such
highest bidder, and (ii) subject to the prior or current payment by
Lessee of (x) the amounts set forth in paragraphs (d) or (e) of Section
22.1, in the case of a Site, or paragraph (b) of Section 22.2, in the
case of an Equipment Pool, and, in the case of either a Site or an
Equipment Pool, paragraph (k) of this Section 22.3 and Section 22.5
below and (y) all Rent and other amounts hereunder which have accrued or
will accrue prior to or as of the Site Expiration Date or the Equipment
Pool Expiration Date, as applicable (including all Supplemental Rent
arising as a result of such sale), Lessor shall transfer by quitclaim
deed, with a covenant against Lessor Liens, in form satisfactory to
Lessor and Lessee, Lessor's right, title and interest in and to the
Subject Property. Lessor shall not have any responsibility for procuring
any purchaser.
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(j) In connection with the sale of the Subject Property, Lessee
will provide to the purchaser all customary "seller's" indemnities,
representations and warranties regarding title, absence of Liens (except
Lessor Liens) and the condition of the Subject Property, including,
without limitation, an environmental indemnity. Lessee shall have
obtained, at its sole cost and expense, all required governmental and
regulatory consents and approvals and shall have made all filings as
required by Applicable Laws and Regulations in order to carry out and
complete the transfer of the Subject Property. As to Lessor, any such
sale shall be made on an "as is, with all faults" basis without
representation or warranty by Lessor other than the absence of Lessor
Liens. Any agreement as to such sale shall be made subject to Lessor's
rights hereunder.
(k) Lessee shall pay directly, and not from the Gross Proceeds,
all prorations, credits, costs and expenses of the sale of the Subject
Property, whether incurred by Lessor or Lessee, including without
limitation, the cost of all title insurance, surveys, environmental
reports, appraisals, transfer taxes, Lessor's reasonable attorneys'
fees, Lessee's attorneys' fees, broker's fees, commissions, escrow fees,
recording fees, and all applicable documentary and other transfer taxes.
22.4 Certain Obligations Continue. During the applicable Remarketing
Period, the obligation of Lessee to pay Rent with respect to the Subject
Property (including the installment of Basic Rent due on the Site Expiration
Date or the Equipment Pool Expiration Date, as the case may be) shall continue
undiminished until payment in full to Agent of the amounts set forth in Sections
22.1 and 22.3 above, with respect to a Site, or Sections 22.2 and 22.3 above,
with respect to an Equipment Pool, and all other amounts due to Lessor and Agent
with respect to the Subject Property under the Operative Documents. Lessor shall
have the right, but shall be under no duty, to solicit bids, to inquire into the
efforts of Lessee to obtain bids or otherwise to take action in connection with
any such sale, other than as expressly provided in this Article XXII.
22.5 Appraisal. If (a) with respect to a Site that is a 25% Property, at
the end of the Site Remarketing Period the sum of the Land Balance and the
Improvements Proceeds with respect to the sale of the Site plus the AMAT
Recourse Amount with respect to such Site will be less than the outstanding Site
Balance with respect to such Site as of the Site Expiration Date, or (b) with
respect to a Site that is not a 25% Property, at the end of the Site Remarketing
Period the sum of the Gross Proceeds with respect to the sale of the Site plus
the AMAT Recourse Amount with respect to such Site will be less than the
outstanding Site
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Balance with respect to such Site as of the Site Expiration Date, or (c) with
respect to an Equipment Pool, at the end of the Equipment Remarketing Period for
such Equipment Pool the sum of the Gross Proceeds with respect to the sale of
the Equipment constituting such Equipment Pool plus the aggregate AMAT Recourse
Amounts with respect to the Equipment constituting such Equipment Pool will be
less than the aggregate outstanding Equipment Group Balances with respect to the
Equipment Groups constituting such Equipment Pool as of the related Equipment
Pool Expiration Date, then, in the case of each of clauses (a), (b) and (c),
Lessor (upon direction from any Participant) shall engage one or more
appraisers, at Lessee's sole cost and expense, to determine (by appraisal
methods satisfactory to Required Participants) the Fair Market Value of such
Site on the Site Expiration Date or the Equipment constituting such Equipment
Pool on the Equipment Pool Expiration Date, as the case may be. Such Appraisal
may also be prepared for the purposes of the Excessive Use and End of Term
Indemnity set forth at Section 11.9 of the Participation Agreement. If the
Appraisal concludes that the Fair Market Value of the Site as of the Site
Expiration Date or the aggregate Fair Market Value of the Equipment constituting
such Equipment Pool as of the Equipment Pool Expiration Date, as the case may
be, is in excess of the Gross Proceeds received therefor, Lessee shall promptly
pay to Agent, as Supplemental Rent, an amount equal to (w) in the case of a Site
that is a 25% Property, the product of such excess multiplied by the
Improvements Percentage, which together with the Improvements Proceeds and the
AMAT Recourse Amount so paid to Agent shall not exceed the Improvements Balance
determined immediately before the application of the foregoing amounts, or (x)
in the case of a Site that is not a 25% Property, such excess, which, together
with the Gross Proceeds and the AMAT Recourse Amount with respect to such Site
so paid to Agent, shall not exceed the Site Balance with respect to such Site
determined immediately before the application of the foregoing amounts, or (y)
in the case of such Equipment Pool, such excess, which, together with Gross
Proceeds and the aggregate AMAT Recourse Amounts with respect to the Equipment
constituting such Equipment Pool so paid to Agent, shall not exceed the
aggregate Equipment Group Balances with respect to the Equipment constituting
such Equipment Pool determined immediately before the application of the
foregoing amounts.
ARTICLE XXIII
[RESERVED]
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ARTICLE XXIV
HOLDING OVER
24.1 Holding Over. If Lessee shall for any reason remain in possession
of a Leased Property after the expiration or earlier termination of this Lease
as to such Leased Property (unless such Leased Property is conveyed to Lessee),
such possession shall be as a tenancy at sufferance during which time Lessee
shall continue to pay Supplemental Rent that would be payable by Lessee
hereunder were the Lease then in full force and effect with respect to such
Leased Property and Lessee shall continue to pay Basic Rent at an annual rate
equal to the average rate of Basic Rent payable hereunder during the Term;
provided, however, that from and after the sixtieth (60th) day Lessee shall
remain in possession of such Leased Property after such expiration or earlier
termination, Lessee shall pay Basic Rent at an annual rate equal to the Overdue
Rate. Such Basic Rent shall be payable from time to time upon demand by Lessor.
During any period of tenancy at sufferance, Lessee shall, subject to the second
preceding sentence, be obligated to perform and observe all of the terms,
covenants and conditions of this Lease, but shall have no rights hereunder other
than the right, to the extent given by law to tenants at sufferance, to continue
its occupancy and use of such Leased Property. Nothing contained in this Article
XXIV shall constitute the consent, express or implied, of Lessor to the holding
over of Lessee after the expiration or earlier termination of this Lease as to
any Leased Property (unless such Leased Property is conveyed to Lessee), and
nothing contained herein shall be read or construed to relieve Lessee of its
obligations to purchase or remarket the Leased Property on the Lease Expiration
Date pursuant to Articles XX or XXII or as preventing Lessor from maintaining a
suit for possession of such Leased Property or exercising any other remedy
available to Lessor at law or in equity or hereunder.
ARTICLE XXV
RISK OF LOSS
25.1 Risk of Loss. During the Term the risk of loss of or decrease in
the enjoyment and beneficial use of such Leased Property as a result of the
damage or destruction thereof by fire, the elements, casualties, thefts, riots,
wars or otherwise is assumed by Lessee, and Lessor shall in no event be
answerable or accountable therefor.
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ARTICLE XXVI
OWNERSHIP OF THE LEASED PROPERTY
26.1 Nature of Transaction. It is the intention of the
parties that:
(a) the Overall Transaction constitutes an "operating lease"
pursuant to SFAS No. 13 from Lessor to Lessee for purposes of Lessee's financial
reporting;
(b) for federal, state and local income or franchise tax,
bankruptcy (including the substantive law upon which bankruptcy proceedings are
based), real estate and Uniform Commercial Code purposes:
(i) the Overall Transaction constitutes a loan by Participants to
Lessee and preserves beneficial ownership in the Leased Property in
Lessee, and obligations of Lessee to pay Site Rent and Equipment
Variable Rent shall be treated as payments of interest, and the payment
by Lessee of any amounts in respect of the Equipment Fixed Rent and the
Lease Balance shall be treated as repayments of principal;
(ii) this Lease grants a security interest and a mortgage lien,
as the case may be, in all of the Sites, the Equipment and the other
Collateral in favor of the Lessor; and
(iii) the Mortgage and the Security Agreement create liens and
security interests in the Collateral in favor of Agent for the benefit
of all Participants.
Accordingly, and notwithstanding any provision of this Participation Agreement
to the contrary, the parties hereto agree and declare that: (i) the transactions
contemplated by this Lease are intended to have a dual, rather than single,
form, as evidenced by the statements set forth in Sections 26.1(a) and (b)
above, and (ii) all references in this Participation Agreement to the "lease" of
the Leased Property which fail to reference such dual form do so as a matter of
convenience only and do not reflect the intent of the parties hereto as to the
true characterization of such arrangements. Notwithstanding the intentions of
the parties set forth above, Lessee acknowledges and agrees that none of Agent,
any Participant or their representatives have made any representations or
warranties 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 from its own experts concerning the Operative
Documents as it deems appropriate.
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(c) Specifically, without limiting the generality of subsection (b) of
this Section 26.1, Lessor and Lessee intend and agree that with respect to the
nature of the transactions evidenced by this Lease in the context of the
exercise of remedies under the Operative Documents, including, without
limitation, in the case of any insolvency or receivership proceedings or a
petition under the United States bankruptcy laws or any other applicable
insolvency laws or statute of the United States of America or any State or
Commonwealth thereof affecting Lessee, Lessor or any Participant or any
enforcement or collection actions, the transactions evidenced by this Lease are
loans made by Lessor and the Lenders as unrelated third party lenders to Lessee
secured by the Leased Property (it being understood that Lessee hereby mortgages
and warrants and grants a security interest in the Leased Property (consisting
of a fee mortgage with respect to each Site transferred by the related Deed and
all Facilities thereon from time to time) to Lessor and Agent for the benefit of
all of the Participants to secure Lessee's obligations under the Lease and to
pay all amounts thereunder and under the other Operative Documents, including
Lessee's obligations under the Note Guarantee, effective in the case of each
Leased Property on the related Site Acquisition Date or Equipment Acquisition
Date, as the case may be).
(d) Specifically, without limiting the generality of subsection (b) of
this Section 26.1, Lessor and Lessee further intend and agree that, for the
purpose of securing Lessee's obligations for the repayment of the
above-described amounts, (i) this Lease shall also be deemed to be a security
agreement and financing statement within the meaning of Article 9 of the Uniform
Commercial Code and a real property mortgage or deed of trust; (ii) the
conveyance provided for in Article II shall be deemed to be a grant by Lessee to
Lessor and the Lenders of a mortgage lien and security interest in all of
Lessee's right, title and interest in and to the Leased Property and all
proceeds of the conversion, voluntary or involuntary, of the foregoing into
cash, investments, securities or other property, whether in the form of cash,
investments, securities or other property (it being understood that Lessee
hereby mortgages and warrants and grants a security interest in all of the
Leased Property to Lessor and Agent for the benefit of all of the Participants
to secure Lessee's repayment of such amounts); (iii) the possession by Lessor,
Agent, or any of their agents of notes and such other items of property as
constitute instruments, money, negotiable documents or chattel paper shall be
deemed to be "possession by the secured party" for purposes of perfecting the
security interest pursuant to Section 9-305 of the Uniform Commercial Code; and
(iv) notifications to Persons holding such property, and acknowledgements,
receipts or confirmations from financial intermediaries, bankers or agents (as
applicable) of Lessee shall be deemed to have been given for the purpose of
perfecting such
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security interest under Applicable Laws and Regulations. Lessor and Lessee
shall, to the extent consistent with this Lease, take such actions and execute,
deliver, file and record such other documents, financing statements, mortgages
and deeds of trust as may be necessary to ensure that such security interest is
a perfected security interest of first priority under Applicable Laws and
Regulations and will be maintained as such throughout the Term.
ARTICLE XXVII
ESTOPPEL CERTIFICATES
27.1 Estoppel Certificates. At any time and from time to time upon not
less than twenty (20) days' prior request by Lessor or Lessee (the "Requesting
Party"), the other party (whichever party shall have received such request, the
"Certifying Party") shall furnish to the Requesting Party (but in the case of
Lessor, as Certifying Party, not more than four times per year unless required
to satisfy the requirements of any subleases and only to the extent that the
required information has been provided to Lessor by Lessee or Agent) a
certificate signed by an individual having the office of vice president or
higher in the Certifying Party certifying that this Lease is in full force and
effect (or that this Lease is in full force and effect as modified and setting
forth the modifications); the dates to which the Basic Rent and Supplemental
Rent have been paid; to the best knowledge of the signer of such certificate,
whether or not the Requesting Party is in default under any of its obligations
hereunder (and, if so, the nature of such alleged default); and such other
matters under this Lease as the Requesting Party may reasonably request. Any
such certificate furnished pursuant to this Article XXVII may be relied upon by
the Requesting Party, and any existing or prospective mortgagee, purchaser or
lender, and any accountant or auditor, of, from or to the Requesting Party (or
any Affiliate thereof).
ARTICLE XXVIII
INSPECTIONS; NO WAIVER
28.1 Right to Inspect. During the Term, Lessee shall upon reasonable
notice from Lessor (except that no notice shall be required if a Lease Default
or Lease Event of Default has occurred and is continuing), permit Lessor, Agent
and their respective authorized representatives to inspect any Leased Property
during normal business hours, provided that such inspections shall not
reasonably interfere with Lessee's business operations at the Leased Property
and shall be in accordance with
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Lessee's standard security procedures and the confidentiality restrictions set
forth in Section 13.21 of the Participation Agreement.
28.2 No Waiver. No failure by Lessor or Lessee to insist upon the strict
performance of any term hereof or to exercise any right, power or remedy upon a
default hereunder, and no acceptance of full or partial payment of Rent during
the continuance of any such default, shall constitute a waiver of any such
default or of any such term. To the fullest extent permitted by law, no waiver
of any default shall affect or alter this Lease, and this Lease shall continue
in full force and effect with respect to any other then existing or subsequent
default.
ARTICLE XXIX
ACCEPTANCE OF SURRENDER
29.1 Acceptance of Surrender. No surrender to Lessor of this Lease or of
all or any portion of any Leased Property or of any part thereof or of any
interest therein shall be valid or effective unless agreed to and accepted in
writing by Lessor and, prior to the payment or performance of all obligations
under the Loan Agreement, this Lease and the other Operative Documents and
termination of the Commitments, and no act by Lessor or Agent or any
representative or agent of Lessor or Agent, other than a written acceptance,
shall constitute an acceptance of any such surrender.
ARTICLE XXX
NO MERGER OF TITLE
30.1 No Merger of Title. There shall be no merger of this Lease or of
the leasehold estate created hereby by reason of the fact that the same Person
may acquire, own or hold, directly or indirectly, in whole or in part, (a) this
Lease or the leasehold estate created hereby or any interest in this Lease or
such leasehold estate, (b) the fee estate or leasehold title in any Leased
Property, except as may expressly be stated in a written instrument duly
executed and delivered by the appropriate Person or (c) a beneficial interest in
Lessor.
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ARTICLE XXXI
NOTICES
31.1 Notices. Unless otherwise specified herein, all notices, requests,
demands or other communications to or upon the respective parties hereto shall
be in writing and shall be delivered and shall be deemed to have been given in
accordance with Section 13.3 of the Participation Agreement.
ARTICLE XXXII
MISCELLANEOUS
32.1 Miscellaneous. Anything contained in this Lease to the contrary
notwithstanding, all claims against and liabilities of Lessee or Lessor arising
from events commencing prior to the expiration or earlier termination of this
Lease shall survive such expiration or earlier termination. If any term or
provision of this Lease or any application thereof shall be declared invalid or
unenforceable, the remainder of this Lease and any other application of such
term or provision shall not be affected thereby. If any right or option of
Lessee provided in this Lease, including any right or option described in
Articles XV, XVI, XX, XXI or XXII, would, in the absence of the limitation
imposed by this sentence, be invalid or unenforceable as being in violation of
the rule against perpetuities or any other rule of law relating to the vesting
of an interest in or the suspension of the power of alienation of property, then
such right or option shall be exercisable only during the period which shall end
twenty-one (21) years after the date of death of the last survivor of the
descendants of Franklin D. Roosevelt, the former President of the United States,
Henry Ford, the deceased automobile manufacturer, and John D. Rockefeller, the
founder of the Standard Oil Company, known to be alive on the date of the
execution, acknowledgement and delivery of this Lease.
32.2 Amendment; Complete Agreements. Neither this Lease nor any of the
terms hereof may be terminated, amended, supplemented, waived or modified
orally, but only by an instrument in writing signed by the party against which
the enforcement of the termination, amendment, supplement, waiver or
modification shall be sought. This Lease, together with the other Operative
Documents, is intended by the parties as a final expression of their agreement
and as a complete and exclusive statement of the terms thereof, all
negotiations, considerations and representations between the parties having been
incorporated herein and therein. No course of prior dealings between the parties
or their officers, employees, agents or Affiliates shall be relevant or
admissible to supplement, explain, or vary any of
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the terms of this Lease or any other Operative Document. Acceptance of, or
acquiescence in, a course of performance rendered under this or any prior
agreement between the parties or their Affiliates shall not be relevant or
admissible to determine the meaning of any of the terms of this Lease or any
other Operative Document. No representations, undertakings, or agreements have
been made or relied upon in the making of this Lease other than those
specifically set forth in the Operative Documents.
32.3 Successors and Assigns. All the terms and provisions of this Lease
shall inure to the benefit of the parties hereto and their respective successors
and permitted assigns.
32.4 Headings and Table of Contents. The headings and table of contents
in this Lease are for convenience of reference only and shall not limit or
otherwise affect the meaning hereof.
32.5 Counterparts. This Lease may be executed in any number of
counterparts, each of which shall be an original, but all of which shall
together constitute one and the same instrument.
32.6 GOVERNING LAW. THIS LEASE HAS BEEN DELIVERED IN NEW YORK AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES UNDER THIS LEASE SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK,
INCLUDING SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW BUT EXCLUDING
ALL OTHER CHOICE OF LAWS AND CONFLICTS RULES OF SUCH STATE, EXCEPT AS TO MATTERS
RELATING TO THE CREATION OF THE LEASEHOLD AND SUBLEASEHOLD ESTATES HEREUNDER AND
THE EXERCISE OF RIGHTS AND REMEDIES WITH RESPECT THERETO, WHICH SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATES IN WHICH SUCH
ESTATES ARE LOCATED. WITHOUT LIMITING THE FOREGOING, IN THE EVENT THAT THIS
LEASE IS DEEMED TO CONSTITUTE A FINANCING, WHICH IS THE INTENTION OF THE
PARTIES, THE LAWS OF THE STATE OF NEW YORK, INCLUDING SECTION 5-1401 OF THE NEW
YORK GENERAL OBLIGATIONS LAW BUT EXCLUDING ALL OTHER CHOICE OF LAWS AND
CONFLICTS RULES OF SUCH STATE, SHALL GOVERN THE CREATION, TERMS AND PROVISIONS
OF THE INDEBTEDNESS EVIDENCED HEREBY, BUT THE LIEN CREATED HEREBY AND THE
ENFORCEMENT OF SAID LIEN SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAW OF THE STATES IN WHICH SUCH ESTATES ARE LOCATED.
32.7 Liability of Lessor Limited. The parties hereto agree that CSL
shall have no personal liability whatsoever to Lessee or its respective
successors and assigns for any Claim based on or in respect of this Lease or any
of the other Operative Documents or arising in any way from the transactions
contemplated hereby or thereby; provided, however, that CSL shall be liable in
its individual capacity (a) for its own willful misconduct or gross
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negligence (or negligence in the handling of funds), (b) for liabilities that
may result from the incorrectness of any representation or warranty expressly
made by it in its individual capacity in Section 8.2 of the Participation
Agreement, (c) for any Tax based on or measured by any fees, commission or
compensation received by it for acting as Lessor as contemplated by the
Operative Documents, or (d) for any liabilities resulting solely from Lessor
Liens. It is understood and agreed that, except as provided in the preceding
proviso: (i) CSL shall have no personal liability under any of the Operative
Documents as a result of acting pursuant to and consistent with any of the
Operative Documents; (ii) all obligations of CSL to Lessee are solely
nonrecourse obligations except to the extent that it has received payment from
others; and (iii) all such personal liability of CSL is expressly waived and
released as a condition of, and as consideration for, the execution and delivery
of the Operative Documents by CSL.
32.8 Original Lease. The single executed original of this Lease marked
"THIS COUNTERPART IS THE ORIGINAL EXECUTED COUNTERPART" on the signature page
thereof and containing the receipt of Agent therefor on or following the
signature page thereof shall be the Original Executed Counterpart of this Lease
(the "Original Executed Counterpart"). To the extent that this Lease constitutes
chattel paper, as such term is defined in the Uniform Commercial Code as in
effect in any applicable jurisdiction, no security interest in this Lease may be
created through the transfer or possession of any counterpart other than the
Original Executed Counterpart.
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IN WITNESS WHEREOF, the parties have caused this Lease be duly executed
and delivered as of the date first above written.
LESSEE:
APPLIED MATERIALS, INC.
By /s/ GERALD F. TAYLOR
------------------------------------
Name: Gerald F. Taylor
Title: Senior Vice President and
Chief Financial Officer
By /s/ NANCY H. HANDEL
------------------------------------
Name: Nancy H. Handel
Title: Vice President,
Corporate Finance and Treasurer
S-1 LEASE
<PAGE> 65
LESSOR:
CREDIT SUISSE LEASING 92A, L.P.
BY: CREDIT SUISSE FIRST BOSTON, ACTING
THROUGH ITS NEW YORK BRANCH, AS
GENERAL PARTNER
By /s/ CARL WEATHERLEY-WHITE
------------------------------------
Name: Carl Weatherley-White
Title: Vice President
By /s/ MATT MOSER
------------------------------------
Name: Matt Moser
Title: Associate
S-2 LEASE
