<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 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: December 31, 1999
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 0-25434
BROOKS AUTOMATION, INC.
(Exact name of registrant as specified in its charter)
Delaware 04-3040660
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
15 Elizabeth Drive
Chelmsford, Massachusetts
(Address of principal executive offices)
01824
(Zip Code)
Registrant's telephone number, including area code: (978) 262-2400
---------------------------------------------
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 [ ]
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practical date (January 31, 2000):
Common stock, $0.01 par value 13,354,937 shares
<PAGE> 2
BROOKS AUTOMATION, INC.
INDEX
PAGE NUMBER
-----------
PART I. FINANCIAL INFORMATION
- ------- ---------------------
Item 1. Consolidated Financial Statements
Consolidated Balance Sheets as of December 31, 1999
(unaudited) and September 30, 1999 3
Consolidated Statements of Operations for the three
months ended December 31, 1999 and 1998 (unaudited) 4
Consolidated Statements of Cash Flows for the three
months ended December 31, 1999 and 1998 (unaudited) 5
Notes to Consolidated Financial Statements (unaudited) 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 13
Item 3. Quantitative and Qualitative Disclosures about Market Risk 27
PART II. OTHER INFORMATION
- -------- -----------------
Item 6. Exhibits and Reports on Form 8-K 28
Signatures 30
<PAGE> 3
BROOKS AUTOMATION, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
(In thousands, except per share data) (UNAUDITED)
December 31, September 30,
1999 1999
------------ -------------
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 61,097 $ 66,366
Accounts receivable, net, including related party receivables of $3,817
and $3,384, respectively 43,912 32,904
Inventories 29,997 28,917
Prepaid expenses and other current assets 2,754 2,999
Deferred income taxes 4,854 6,542
-------- --------
Total current assets 142,614 137,728
Fixed assets, net of accumulated depreciation of $26,071 and $24,119,
respectively 18,897 17,434
Intangible assets, net of accumulated amortization of $2,207 and $1,361,
respectively 13,065 13,719
Deferred income taxes 5,214 4,192
Other assets 4,004 4,072
-------- --------
Total assets $183,794 $177,145
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current portion of long-term debt and capital lease obligations $ 531 $ 537
Accounts payable 8,820 6,993
Deferred revenue 6,575 6,127
Accrued compensation and benefits 7,027 4,909
Accrued acquisition-related and restructuring costs 3,665 3,868
Accrued income taxes payable 3,196 2,093
Accrued expenses and other current liabilities 6,180 7,405
-------- --------
Total current liabilities 35,994 31,932
Long-term debt and capital lease obligations 683 801
Deferred income taxes 7 174
Other long-term liabilities 688 632
-------- --------
Total liabilities 37,372 33,539
-------- --------
Commitments and contingencies
Minority interests 1,367 1,460
-------- --------
Stockholders' equity
Preferred stock, $0.01, 1,000,000 shares authorized, none issued and
outstanding -- --
Common stock, $0.01 par value, 21,500,000 shares authorized, 12,781,181
and 12,760,084 shares issued and outstanding, respectively 128 128
Additional paid-in capital 168,982 168,827
Deferred compensation (58) (65)
Accumulated other comprehensive loss (1,210) (1,093)
Accumulated deficit (22,787) (25,651)
-------- --------
Total stockholders' equity 145,055 142,146
-------- --------
Total liabilities and stockholders' equity $183,794 $177,145
======== ========
</TABLE>
The accompanying notes are an integral part of these consolidated
financial statements.
<PAGE> 4
BROOKS AUTOMATION, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(In thousands, except per share data)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
DECEMBER 31,
1999 1998(1)
------- -------
<S> <C> <C>
Revenues
Product, including related party revenues of $6,973 and
$738, respectively $43,069 $15,398
Services 7,211 4,654
------- -------
Total revenues 50,280 20,052
------- -------
Cost of revenues
Product 22,175 8,987
Services 3,653 2,500
------- -------
Total cost of revenues 25,828 11,487
------- -------
Gross profit 24,452 8,565
------- -------
Operating expenses
Research and development 7,140 4,930
Selling, general and administrative 12,501 6,041
Amortization of acquired intangible assets 795 --
------- -------
Total operating expenses 20,436 10,971
------- -------
Income (loss) from operations 4,016 (2,406)
Interest income 643 771
Interest expense 38 75
Other income (expense) (41) (18)
------- -------
Income (loss) before income taxes and minority interests 4,580 (1,728)
Income tax provision (benefit) 1,808 (197)
------- -------
Income (loss) before minority interests 2,772 (1,531)
Minority interests in loss of consolidated subsidiary (93) --
------- -------
Net income (loss) 2,865 (1,531)
Accretion and dividends on preferred stock -- (225)
------- -------
Net income (loss) attributable to common stockholders $ 2,865 $(1,756)
======= =======
Earnings (loss) per share attributable to common stockholders
Basic $ 0.22 $ (0.16)
Diluted $ 0.21 $ (0.16)
Shares used in computing earnings (loss) per share
Basic 12,769 11,087
Diluted 13,411 11,087
</TABLE>
(1) Amounts have been restated to reflect the acquisition of Smart Machines
Inc. in a pooling of interests transaction effective August 31, 1999.
The accompanying notes are an integral part of these consolidated
financial statements.
<PAGE> 5
BROOKS AUTOMATION, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(In thousands)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
DECEMBER 31,
1999 1998(1)
-------- -------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ 2,865 $(1,531)
Adjustments to reconcile net income (loss) to net cash provided by
(used in) operating activities:
Depreciation and amortization 2,627 1,771
Compensation expense related to common stock options 7 52
Deferred income taxes 524 (748)
Minority interests (93) --
Changes in operating assets and liabilities:
Accounts receivable (10,820) 1,973
Inventories (872) 2,776
Prepaid expenses and other current assets 244 1,731
Accounts payable 1,687 (2,487)
Deferred revenue 398 174
Accrued acquisition-related and restructuring costs (203) (1,017)
Accrued expenses and other current liabilities 1,981 240
-------- -------
Net cash provided by (used in) operating activities (1,655) 2,934
-------- -------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of fixed assets (3,346) (1,313)
Purchase of businesses, net of cash acquired (147) --
Increase in other assets -- (235)
-------- -------
Net cash used in investing activities (3,493) (1,548)
-------- -------
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in short-term borrowings -- (21)
Proceeds from issuance of convertible notes -- 1,000
Payments of long-term debt (124) (230)
Issuance of long-term debt -- --
Proceeds from issuance of common stock, net of issuance
costs 155 45
-------- -------
Net cash provided by financing activities 31 794
-------- -------
Elimination of net cash activities of Smart Machines for
the three months ended December 31, 1998 -- (63)
-------- -------
Effects of exchange rate changes on cash and cash
equivalents (152) 133
-------- -------
Net increase (decrease) in cash and cash equivalents (5,269) 2,250
Cash and cash equivalents, beginning of period 66,366 69,479
-------- -------
Cash and cash equivalents, end of period $ 61,097 $71,729
======== =======
</TABLE>
(1) Amounts have been restated to reflect the acquisition of Smart Machines
Inc. in a pooling of interests transaction effective August 31, 1999.
The accompanying notes are an integral part of these consolidated
financial statements.
<PAGE> 6
BROOKS AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited)
1. BASIS OF PRESENTATION
The unaudited consolidated financial statements of Brooks Automation, Inc.
and its subsidiaries (the "Company") included herein have been prepared in
accordance with generally accepted accounting principles. In the opinion
of management, all material adjustments necessary for a fair presentation
of the results for the periods presented have been reflected.
The accompanying financial information should be read in conjunction with
the consolidated financial statements and notes thereto contained in the
Company's Annual Report on Form 10-K, filed with the United States
Securities and Exchange Commission for the year ended September 30, 1999.
The Company made several acquisitions during fiscal year 1999 which were
accounted for using the purchase method of accounting: the Infab Division
("Infab") of Jenoptik AG on September 30, 1999; Domain Manufacturing
Corporation ("Domain") on June 30, 1999 and Hanyon Technology, Inc.
("Hanyon") on April 2, 1999. Accordingly, the Company's Consolidated
Statements of Operations and of Cash Flows for the three months ended
December 31, 1999 include the results of these acquired entities.
In June 1999, the Company formed a joint venture in Korea with Samsung
Electronics ("Samsung"). This joint venture is 70% owned by the Company
and 30% owned by Samsung. The Company consolidates fully the financial
position and results of operations of the joint venture and accounts for
the minority interest in the consolidated financial statements.
The consolidated financial statements for the three months ended December
31, 1998 have been restated to reflect the acquisition of Smart Machines
Inc. ("Smart Machines") in a pooling of interests transaction effective
August 31, 1999.
In December 1998, the American Institute of Certified Public Accountants
issued Statement of Position ("SOP") 98-9, "Modification of SOP 97-2,
Software Revenue Recognition, With Respect to Certain Transactions", which
addresses software revenue recognition as it applies to certain
multiple-element arrangements. SOP 98-9 also amends SOP 98-4, "Deferral of
the Effective Date of a Provision of SOP 97-2", to extend the deferral of
certain passages of SOP 97-2 through fiscal years beginning on or before
March 15, 1999. Accordingly, provisions of SOP 98-9 are effective for the
Company's fiscal year 2000. Implementation of the provisions of this SOP
has not had a material effect on revenues or earnings.
2. BUSINESS ACQUISITIONS
In connection with the acquisitions of Infab, Domain and Hanyon, the
following pro forma results of operations have been prepared as though the
acquisitions had occurred as of the beginning of the period presented.
This pro forma financial information does not purport to be indicative of
the results of operations
<PAGE> 7
BROOKS AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) - Continued
that would have been attained had the acquisitions been made as of that
date or of results of operations that may occur in the future (in
thousands, except per share data):
Three Months
Ended
December 31,
1998
------------
Revenues $ 27,783
Net loss $(12,018)
Net loss attributable to common stockholders $(12,243)
Net loss per share applicable to common stockholders $ (1.02)
On August 31, 1999, the Company acquired Smart Machines in a transaction
recorded as a pooling of interests. The accompanying consolidated
financial statements and notes thereto have been restated to include the
financial position and results of operations for Smart Machines for all
periods prior to the acquisition. Revenues and net loss for the previously
separate companies are as follows (in thousands):
Three Months
Ended
December 31,
1998
------------
Revenues
Brooks Automation, Inc. $19,809
Smart Machines Inc. 243
-------
$20,052
=======
Net loss
Brooks Automation, Inc. $ (575)
Smart Machines Inc. (956)
-------
$(1,531)
=======
<PAGE> 8
BROOKS AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) - Continued
3. EARNINGS PER SHARE
The following table is a summary of net income (loss) attributable to
common stockholders used in the calculation of basic and diluted loss per
share (in thousands):
<TABLE>
<CAPTION>
Three months ended December 31,
-------------------------------
1999 1998
------ -------
<S> <C> <C>
Net income (loss) $2,865 $(1,531)
Accretion and dividends on preferred stock -- (225)
------ -------
Net income (loss) attributable to common stockholders for
basic and diluted earnings per share $2,865 $(1,756)
====== =======
</TABLE>
The following table is a summary of shares used in calculating basic and
diluted earnings per share (in thousands):
<TABLE>
<CAPTION>
Three months ended December 31,
-------------------------------
1999 1998
------ -------
<S> <C> <C>
Weighted average number of shares used in computing basic
earnings per share 12,769 11,087
Dilutive securities:
Common stock options and warrants 642 --
------ ------
Shares used in computing diluted earnings per share 13,411 11,087
====== ======
</TABLE>
Options and warrants to purchase approximately 493,000 shares of common
stock were excluded from the computation of diluted loss per share for the
three months ended December 31, 1998, as their effect would be
antidilutive.
4. COMPREHENSIVE INCOME (LOSS)
Comprehensive income (loss) for the Company is computed as the sum of net
income (loss) and the change in the cumulative translation adjustment.
Comprehensive income was $2,748,000 and comprehensive loss was $1,456,000
for the three-month periods ended December 31, 1999 and 1998,
respectively.
<PAGE> 9
BROOKS AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) - Continued
5. SEGMENT, GEOGRAPHIC, SIGNIFICANT CUSTOMERS AND RELATED PARTY INFORMATION
The Company has two reportable segments: tool automation and factory
automation. The tool automation segment provides a full complement of
semiconductor wafer and flat panel display substrate handling systems.
Tool automation product revenues are comprised of factory hardware and
tool control software products. Tool automation services revenue is
comprised of spare parts sales and tool control application consulting
services. The factory automation segment provides software products for
the semiconductor manufacturing execution system ("MES") market. Factory
automation product revenues include factory software and factory interface
hardware products. Factory automation services revenue primarily consists
of revenues related to consulting and software customization.
The Company evaluates performance and allocates resources based on
revenues and operating income. Operating income for each segment includes
selling, general and administrative expenses directly attributable to the
segment. Amortization of acquired intangible assets is excluded from the
segments' operating income. The Company's non-allocable overhead costs,
which include corporate general and administrative expenses, are allocated
between the segments based upon segment revenues.
Financial information for the Company's business segments is as follows
(in thousands):
<TABLE>
<CAPTION>
Tool Factory
Automation Automation Total
---------- ---------- -------
<S> <C> <C> <C>
THREE MONTHS ENDED DECEMBER 31, 1999
Revenue:
Product $28,197 $14,872 $43,069
Services 2,790 4,421 7,211
------- ------- -------
Total $30,987 $19,293 $50,280
======= ======= =======
Gross margin $12,243 $12,209 $24,452
Operating income (loss) $ 3,461 $ 1,350 $ 4,811
THREE MONTHS ENDED DECEMBER 31, 1998
Revenue:
Product $12,677 $ 2,721 $15,398
Services 2,625 2,029 4,654
------- ------- -------
Total $15,302 $ 4,750 $20,052
======= ======= =======
Gross margin $ 4,892 $ 3,673 $ 8,565
Operating income (loss) $(2,317) $ (89) $(2,406)
</TABLE>
<PAGE> 10
BROOKS AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) - Continued
A reconciliation of the Company's reportable segment operating income
(loss) to the corresponding consolidated amounts for the three-month
periods ended December 31, 1999 and 1998 is as follows (in thousands):
Three months ended
December 31,
---------------------
1999 1998
------ -------
Segment operating income (loss) $4,811 $(2,406)
Amortization of acquired intangibles 795 --
------ -------
Total operating income (loss) $4,016 $(2,406)
====== =======
Net revenues by geographic area are as follows (in thousands):
Three months ended
December 31,
---------------------
1999 1998
------- -------
North America $24,106 $ 8,045
Asia 14,286 7,650
Europe 11,888 4,357
------- -------
$50,280 $20,052
======= =======
One of the Company's directors is also a director of one of the Company's
customers. Net revenue recognized from this customer was $6,973,000 and
$738,000, or 13.9% and 3.7% of revenues, in the three months ended
December 31, 1999 and 1998, respectively. Amounts due from this customer
included in accounts receivable at December 31, 1999 and September 30,
1999 were $3,817,000 and $3,384,000, respectively. Related party amounts
included in accounts receivable are on standard terms and manner of
settlement.
In the three months ended December 31, 1999 there were no other customers
that accounted for more than 10% of revenues. In the three months ended
December 31, 1998, two other customers each accounted for more than 10% of
revenues; sales to these customers were 19.4% and 15.9% of revenues in the
quarter.
6. ACCOUNTS RECEIVABLE
Accounts receivable consist of the following (in thousands):
December 31, September 30,
1999 1999
------------ -------------
Accounts receivable $46,038 $34,591
Less allowances 2,126 1,687
------- -------
$43,912 $32,904
======= =======
<PAGE> 11
BROOKS AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) - Continued
7. INVENTORIES
Inventories consist of the following (in thousands):
December 31, September 30,
1999 1999
------------ -------------
Raw materials and purchased parts $19,594 $14,655
Work-in-process 7,339 10,154
Finished goods 3,064 4,108
------- -------
$29,997 $28,917
======= =======
8. ACQUISITION-RELATED AND RESTRUCTURING LIABILITIES
The activity related to the Company's acquisition-related and
restructuring liabilities during the three months ended December 31, 1999
is below (in thousands):
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------
Balance Balance
September 30, Purchase December 31,
1999 New Initiatives Accounting Utilization 1999
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Facilities $1,145 $ -- $ -- $ (48) $1,097
Depreciable assets -- -- -- -- --
Workforce-related 2,512 -- -- (155) 2,357
Other 211 -- -- -- 211
------ ---- ---- ----- ------
$3,868 $ -- $ -- $(203) $3,665
====== ==== ==== ===== ======
</TABLE>
9. CONTINGENCIES
There has been substantial litigation regarding patent and other
intellectual property rights in the semiconductor and related industries.
The Company has received notice from a third party alleging infringements
of such party's patent rights by certain of the Company's products. The
Company's patent counsel is investigating the claim and the Company
believes the patents claimed may be invalid. In the event of litigation
with respect to this claim, the Company is prepared to vigorously defend
its position. However, because patent litigation can be extremely
expensive and time consuming, the Company may seek to obtain a license to
one or more of the disputed patents. Based upon currently available
information, the Company would only do so if such license fees would not
be material to the Company's consolidated financial statements. Currently,
the Company does not believe it is probable that the future events related
to this threatened matter would have an adverse effect on the Company's
business.
<PAGE> 12
BROOKS AUTOMATION, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) - Continued
10. SUBSEQUENT EVENTS
On January 7, 2000, the Company entered into an agreement for an unsecured
revolving credit facility for borrowings and letters of credit of up to
$30.0 million. The credit facility will terminate at the end of two years.
The interest rates for borrowings and letters of credit under the facility
are expressed in relation to LIBOR and a margin of 1.75% to 2.25%, or from
0.25% to 0.75% above a base rate. The Company expects to use the
borrowings and letters of credit for working capital and general purposes,
including financing potential acquisitions.
On January 6, 2000, the Company completed the acquisition of the
businesses of Auto-Soft Corporation ("ASC") and AutoSimulations, Inc.
("ASI") from Daifuku America Corporation ("Daifuku America"), a U.S.
subsidiary of Daifuku Co., Ltd. of Japan. ASC is a leading material
handling software and systems integration company focusing on
manufacturing and distribution of logistic systems for the semiconductor
industry. ASI is a world leader in robotic and material handling
simulation, scheduling and real time dispatching software for the
semiconductor industry. At closing, the Company paid $27.0 million in
cash, 535,404 shares of Brooks common stock with a value of $14.7 million
and a $16.0 million promissory note payable in one year.
In February 2000, the Company entered into operating leases for
manufacturing and office facilities through 2010. These leases contain
renewal and sublease options. Future minimum annual lease payments are
approximately $1.4 million to $3.0 million over the term of the leases.
<PAGE> 13
BROOKS AUTOMATION, INC.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
FORWARD-LOOKING STATEMENTS
Certain statements in this quarterly report constitute "forward-looking
statements" which involve known risks, uncertainties and other factors which may
cause the actual results, performance or achievements of Brooks Automation, Inc.
("Brooks" or the "Company") to be materially different from any future results,
performance or achievements expressed or implied by such forward looking
statements. Such factors include the factors that may affect future results set
forth in Management's Discussion and Analysis of Financial Condition and Results
of Operations, which is included in this report. Precautionary statements made
herein should be read as being applicable to all related forward-looking
statements wherever they appear in this report.
OVERVIEW
The Company is a leading supplier of integrated tool and factory automation
solutions for the global semiconductor and related industries such as the data
storage and flat panel display manufacturing industries. The Company's product
revenues include sales of hardware and software products. The Company's service
revenues are primarily comprised of tool control application consulting
services, consulting, software customization and spare parts sales.
Many of the Company's customers purchase the Company's vacuum transfer robots
and other modules before purchasing the Company's vacuum central wafer handling
systems. The Company believes that once a customer has selected the Company's
products for a process tool, the customer is likely to rely on those products
for the life of that process tool model, which can be in excess of five years.
Conversely, losing a bid for a manufacturing execution system ("MES") does not
preclude the Company from securing optimization products to fit with a
competitor's MES.
A significant portion of the Company's revenues have been generated by sales to
customers in the United States, although the Company believes that a significant
portion of these customers incorporate the Company's products into equipment
sold to their foreign customers. The Company's foreign sales have occurred
principally in Japan, South Korea, Taiwan, Singapore and Europe.
The Company's foreign revenues are generally denominated in United States
dollars. Accordingly, foreign currency fluctuations have not had a significant
impact on the comparison of the results of operations for the periods presented.
The costs and expenses of the Company's international subsidiaries are generally
denominated in currencies other than the United States dollar. However, since
the functional currency of the Company's international subsidiaries is the local
currency, foreign currency translation adjustments are reflected as a component
of stockholders' equity under the caption "Accumulated other comprehensive
income (loss)". To the extent that the Company expands its international
operations or changes its pricing practices to denominate prices in foreign
currencies, the Company will be exposed to increased risk of currency
fluctuation.
The Company's business is highly dependent upon the capital expenditures of
semiconductor and flat panel display manufacturers which historically have been
cyclical, and the Company's ability to develop, manufacture and sell new
products and product enhancements. The Company's results will also be affected,
especially when measured on a quarterly basis, by the volume, composition and
timing of orders, conditions in industries served by the Company, competition
and general economic conditions.
<PAGE> 14
BROOKS AUTOMATION, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS - Continued
BASIS OF PRESENTATION
The Company made several acquisitions during fiscal year 1999 which were
accounted for using the purchase method of accounting: the Infab Division
("Infab") of Jenoptik AG on September 30, 1999; Domain Manufacturing Corporation
("Domain") on June 30, 1999 and Hanyon Technology, Inc. ("Hanyon") on April 2,
1999. Accordingly, the Company's Consolidated Statements of Operations and of
Cash Flows for the three months ended December 31, 1999 include the results of
these acquired entities.
In June 1999, the Company formed a joint venture in Korea with Samsung
Electronics ("Samsung"). This joint venture is 70% owned by the Company and 30%
owned by Samsung. The Company consolidates fully the financial position and
results of operations of the joint venture and accounts for the minority
interest in the financial statements.
The financial statements for the three months ended December 31, 1998 have been
restated to reflect the acquisition of Smart Machines Inc. ("Smart Machines") in
a pooling of interests transaction effective August 31, 1999.
RECENT DEVELOPMENTS
On January 6, 2000, the Company completed the acquisition of the businesses of
Auto-Soft Corporation ("ASC") and AutoSimulations, Inc. ("ASI") from Daifuku
America Corporation ("Daifuku America"), a U.S. subsidiary of Daifuku Co., Ltd.
of Japan. ASC is a leading material handling software and systems integration
company focusing on manufacturing and distribution of logistic systems for the
semiconductor industry. ASI is a world leader in robotic and material handling
simulation, scheduling and real time dispatching software for the semiconductor
industry. The Company acquired ASC and ASI for $27.0 million in cash, 535,404
shares of Brooks common stock with a value of $14.7 million and a $16.0 million
promissory note payable in one year.
RESULTS OF OPERATIONS
THREE MONTHS ENDED DECEMBER 31, 1999, COMPARED TO THREE MONTHS ENDED DECEMBER
31, 1998
For the three months ended December 31, 1999, the Company reported net income of
$2.9 million, compared to a net loss of $1.5 million in the same prior year
period. Net income before amortization of acquired intangible assets, net of
taxes, was $3.3 million in the three months ended December 31, 1999. There was
no amortization of acquired intangible assets for the three months ended
December 31, 1998.
<PAGE> 15
BROOKS AUTOMATION, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS - Continued
REVENUES
The Company reported revenues of $50.3 million in the three months ended
December 31, 1999, compared to $20.1 million in the same prior year period.
Product revenues increased $27.7 million, or 179.7%. This growth is primarily
attributable to the overall strength in the original equipment manufacturer
("OEM") markets, software business growth and acquisitions. Services revenues
increased $2.5 million, or 54.9%, primarily as a result of the Company's
acquisitions and the impact of those acquisitions on consulting services
associated with factory automation.
Foreign revenues were $26.2 million, or 52.1% of revenues, and $12.0 million, or
59.9% of revenues, in the three-month periods ended December 31, 1999 and 1998,
respectively. The Company expects that foreign revenues will continue to account
for a significant portion of total revenues.
GROSS PROFIT
Gross profit increased to 48.6% for the three months ended December 31, 1999,
compared to 42.7% for the same prior year period.
Gross profit on product revenues increased to 48.5% for the three months ended
December 31, 1999, from 41.6% in the comparable prior year period. The increase
is primarily attributable to improvements in manufacturing capacity utilization
and the acquisition of higher margin software product businesses, partially
offset by the Infab operations' historically lower margin structure. In future
periods, gross profit may be adversely affected by changes in product mix or
continued price competition.
Gross profit on service revenues was 49.3% for the three months ended December
31, 1999, an increase from 46.3% in the three months ended December 31, 1998.
The increase is primarily attributable to improved market conditions and change
in services mix. Included in the cost of services revenues are global support
customer costs, consisting primarily of personnel costs and travel expenses.
RESEARCH AND DEVELOPMENT
Research and development expenses increased by 44.8%, to $7.1 million in the
three months ended December 31, 1999, from $4.9 million in the comparable prior
year period. However, research and development expenses decreased as a
percentage of revenues, to 14.2% in the three months ended December 31, 1999,
from 24.6% in the same prior year period. The increase in absolute spending is
the result of the research and development efforts related to the Company's
recent acquisitions as well as incremental spending associated with the launch
of new atmospheric products and the transition to next generation vacuum wafer
handling products, partially offset by the elimination of redundant research and
development programs. The Company will continue to invest in research and
development to enhance existing and develop new tool and factory hardware and
software automation solutions for the semiconductor, data storage and flat panel
display manufacturing industries.
<PAGE> 16
BROOKS AUTOMATION, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS - Continued
SELLING, GENERAL AND ADMINISTRATIVE
Selling, general and administrative expenses increased by 106.9%, to $12.5
million, in the three months ended December 31, 1999, compared to $6.0 million
in the same prior year period. However, selling, general and administrative
expenses decreased as a percentage of revenues, to 24.9%, in the three months
ended December 31, 1999, from 30.1% in the comparable prior year period. The
increase in absolute spending is the result of expanded sales and marketing
activities as well as general and administration support costs associated with
the Company's recently completed acquisitions and infrastructure improvements,
while the improvement of these costs as a percentage of revenues reflects the
Company's efforts at expanding its product offerings and customer base.
AMORTIZATION OF ACQUIRED INTANGIBLE ASSETS
Amortization expense for acquired intangible assets totaled $0.8 million in the
three months ended December 31, 1999, and is related to acquired intangible
assets of the Infab, Domain and Hanyon acquisitions, all of which occurred
during the second half of fiscal 1999. There was no amortization expense for the
three months ended December 31, 1998.
INTEREST INCOME AND EXPENSE
Interest income decreased by 16.6%, to $0.6 million, in the three months ended
December 31, 1999, compared to $0.8 million in the same period of the prior
year, due primarily to lower cash and investment asset balances. Interest
expense decreased by 49.3%, to $38,000, in the three months ended December 31,
1999, from $75,000 in the comparable prior year period.
INCOME TAX PROVISION (BENEFIT)
The Company recorded net income tax expense of $1.8 million and net tax benefits
of $0.2 million in the three months ended December 31, 1999 and 1998,
respectively. The tax provision is attributable to federal, state, foreign and
withholding taxes. Federal and state taxes have been reduced for net operating
losses, research and development tax credits and a foreign sales corporation
benefit.
<PAGE> 17
BROOKS AUTOMATION, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS - Continued
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents were $61.1 million at December 31, 1999, a decrease of
$5.3 million from September 30, 1999. In connection with its acquisition of ASC
and ASI on January 6, 2000, the Company paid Daifuku America $27.0 million in
cash and issued Daifuku America a note in the amount of $16.0 million, which is
due on January 6, 2001.
Cash used in operations was $1.7 million, and is primarily attributable to an
increase in accounts receivable of $10.8 million, partially offset by
depreciation and amortization of $2.6 million, and increases of $1.7 million and
$2.0 million in accounts payable and accrued expenses and other current
liabilities, respectively.
Cash used in investing activities was $3.5 million, and was principally
comprised of $3.3 million used for capital additions, primarily in
telecommunications, systems infrastructure and for computer requirements. Cash
provided by financing activities was $31,000, comprised of $155,000 of proceeds
from the issuance of common stock, net of issuance costs, partially offset
by $124,000 for payments of long-term debt.
While the Company has no significant capital commitments, as the Company expands
its product offerings and prepares for expected growth, the Company anticipates
that it will continue to make capital expenditures to support its business. The
Company is also planning to expand its capacity in its new Chelmsford facility
and acquire capital equipment and management information systems. The Company
may also use its resources to acquire companies, technologies or products that
complement the business of the Company.
The Company has an unsecured revolving credit facility for borrowings and
letters of credit of up to $30.0 million. The credit facility will terminate in
January 2002. The interest rates for borrowings and letters of credit under the
facility are expressed in relation to LIBOR and a margin of 1.75% to 2.25%, or
from 0.25% to 0.75% above a base rate. In connection with the lease for its new
Chelmsford facility, the Company issued its landlord a letter of credit in the
amount of $1.0 million to secure the Company's obligations under the lease. This
reduced the amount available to the Company under the credit facility to $29.0
million. Under the terms of the credit facility, the Company is required to
comply with various covenants, including the maintenance of specified financial
ratios, as defined, and limits on the Company's annual level of capital
expenditures. At January 31, 2000, the Company was in compliance with these
covenants.
The Company believes that anticipated cash from operations, available funds and
borrowings available under the Company's bank lines of credit and the proceeds
from the proposed sale of common stock described below, will be adequate to fund
the Company's currently planned working capital and capital expenditure
requirements for at least the next twelve months. The sufficiency of the
Company's resources to fund its needs for capital is subject to known and
unknown risks, uncertainties and other factors which may have a material adverse
effect on the Company's business, including, without limitation, the factors
discussed under "Factors That May Affect Future Results."
The Company has filed a registration statement for a public offering of
3,250,000 shares of the Company's common stock. The Company is proposing to sell
2,750,000 of these shares and selling stockholders are proposing to sell 500,000
shares. The Company will not receive any of the proceeds from the shares sold by
the selling stockholders. The Company plans to apply any proceeds of the
offering, net of expenses, for working capital and general corporate purposes.
The Company cannot guarantee that it will complete the offering on favorable
terms, if at all.
<PAGE> 18
BROOKS AUTOMATION, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS - Continued
YEAR 2000 READINESS DISCLOSURE
The year 2000 issue is the potential for system and processing failure of
date-related data as the result of computer-controlled systems using two digits
rather than four digits to define the applicable year. For example, computer
programs that have time-sensitive software may recognize a date using "00" as
the year 1900 rather than the year 2000. This could result in system failure or
miscalculations causing disruptions of operations, including, among other
things, a temporary inability to process transactions, send invoices, or engage
in similar normal business activities. Problems associated with the year 2000
may not become apparent until some time after January 2000.
Internal infrastructure compliance. Brooks may be affected by year
2000 issues related to non-compliant information technology systems and other
systems operated or sold by Brooks or by third parties. Brooks has substantially
completed assessment of its internal information technology systems and
applications and believes that all critical applications are year 2000
compliant. Brooks also has evaluated its information technology hardware and its
non-information technology systems, including facilities and other operations,
such as financial, security and utility systems. As of the end of calendar year
1999, Brooks had completed the remediation of all items identified as
non-compliant.
Product compliance. Brooks has completed a Year 2000 readiness
evaluation of its current generation of released products and believes that
products distributed after December 31, 1998 are Year 2000 compliant. Brooks
cannot guarantee that product testing has identified all Year 2000 related
issues that could have an adverse affect on Brooks' financial condition and
results of operations.
Acquisitions. Brooks has acquired seven businesses since September
1998: Auto-Soft Corporation, AutoSimulations, Inc., Infab, Smart Machines,
FASTech, Hanyon and Domain. Brooks is in various stages of negotiation with
respect to the acquisition of several additional businesses. As part of Brooks'
due diligence examination of completing acquisitions, Brooks conducted a limited
evaluation of their year 2000 readiness. Brooks believes there are no
significant year 2000 related issues arising from the companies that Brooks has
acquired. Brooks cannot guarantee that it has identified and properly evaluated
year 2000 issues relating to the acquired companies. Brooks also can give no
assurance that it will properly identify year 2000 issues relating to any
companies acquired in the future.
Third Party Compliance. Although Brooks believes that its systems are
year 2000 compliant, Brooks utilizes third party equipment and software that may
not be year 2000 compliant. In addition, Brooks' products and software are often
sold integrated into or interfaced with third party equipment or software.
Failure of third party equipment or software to operate properly with regard to
the year 2000 and thereafter could require Brooks to incur unanticipated
expenses to remedy any problems, which could have a material adverse effect on
Brooks' business, results of operations and financial condition. Brooks may also
be vulnerable to any failures by its major suppliers, service providers and
customers to remedy their own internal information technology and
non-information technology system year 2000 issues which could, among other
things, have a material adverse effect on Brooks supplies and orders. At this
time, Brooks is unable to estimate the nature or extent of any potential
<PAGE> 19
BROOKS AUTOMATION, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS - Continued
adverse impact resulting from the failure of third parties, such as its
suppliers, service providers and customers, to achieve year 2000 compliance.
Moreover, such third parties, even if year 2000 compliant, could experience
difficulties resulting from year 2000 issues that may affect their suppliers,
service providers and customers. As a result, although Brooks does not currently
anticipate, based upon surveys, discussions and actual experience to date in
2000, that it will experience any material shipment delays from its major
product suppliers or any material sales delays from its major customers due to
year 2000 issues, there can be no assurance that these third parties will not
experience year 2000 problems or that any problems would have an adverse
material effect on Brooks' business, results of operations and financial
condition. Because the cost and timing of year 2000 compliance by third parties
such as suppliers, service providers and customers is not within Brooks'
control, Brooks cannot give any assurance with respect to the cost or timing of
such efforts or any potential adverse effects on Brooks of any failure by these
third parties to achieve year 2000 compliance.
Brooks relies on commercial or government suppliers for services
related to Brooks' infrastructure, including utilities, transportation,
financial, governmental, communications and other services. These suppliers pose
an undetermined risk to Brooks' facilities and operations worldwide. In some
cases, alternate suppliers of these services, such as electrical utilities, are
unavailable, and failure by a supplier could adversely impact Brooks.
Costs. Based on its investigation to date, Brooks does not expect the
total cost of its year 2000 assessment and planning to have a material adverse
effect on Brooks' business or financial results. On a cumulative basis, Brooks
has incurred approximately $800,000 in year 2000 compliance costs. Brooks does
not anticipate the need for additional significant expenditures.
Contingency Plan. Brooks has developed contingency plans, as
appropriate, and believes its year 2000 compliance efforts to be materially
complete in the event year 2000 problems relating to its operations arise.
Worst Case Scenario. To the extent that Brooks does not identify any
material non-compliant information technology systems or non-information
technology systems operated by Brooks or by third parties, such as Brooks'
suppliers, service providers and customers, the most reasonably likely worst
case year 2000 scenario is a systemic failure beyond the control of Brooks, such
as a prolonged telecommunications or electrical failure, or a general disruption
in United States or global business activities that could result in a
significant economic downturn. Brooks believes that the primary business risks,
in the event of such failure or other disruption, would include but not be
limited to, loss of customers or orders, increased operating costs, inability to
obtain inventory on a timely basis, disruptions in product shipments, or other
business interruptions of a material nature, as well as claims of mismanagement,
misrepresentation, or breach of contract, any of which could have a material
adverse effect on Brooks' business, results of operations and financial
condition.
<PAGE> 20
BROOKS AUTOMATION, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS - Continued
RECENTLY ENACTED ACCOUNTING PRONOUNCEMENTS
In December 1998, the American Institute of Certified Public Accountants issued
Statement of Position ("SOP") 98-9, "Modification of SOP 97-2, Software Revenue
Recognition, With Respect to Certain Transactions", which addresses software
revenue recognition as it applies to certain multiple-element arrangements. SOP
98-9 also amends SOP 98-4, "Deferral of the Effective Date of a Provision of SOP
97-2", to extend the deferral of certain passages of SOP 97-2 through fiscal
years beginning on or before March 15, 1999. Accordingly, provisions of SOP 98-9
are effective for the Company's fiscal year 2000. Implementation of the
provisions of this SOP has not had a material effect on revenues or earnings.
FACTORS THAT MAY AFFECT FUTURE RESULTS
You should carefully consider the risks described below and the other
information in this report before deciding to invest in shares of our common
stock. While these are the risks and uncertainties we believe are most important
for you to consider, you should know that they are not the only risks or
uncertainties facing us or which may adversely affect our business. If any of
the following risks or uncertainties actually occur, our business, financial
condition and operating results would likely suffer. In that event, the market
price of our common stock could decline and you could lose all or part of the
money you paid to buy our common stock.
RISKS RELATING TO OUR OPERATIONS
The Cyclical Demand of Semiconductor Manufacturers Affects our Operating
Results. Our business is significantly dependent on capital expenditures by
semiconductor manufacturers. The level of semiconductor manufacturers' capital
expenditures is dependent on the current and anticipated market demand for
semiconductors. Demand for semiconductors is cyclical and has historically
experienced periodic downturns. During these downturns, our revenues have
dropped and we have incurred losses. We believe that downturns in the
semiconductor manufacturing industry will occur in the future and will result in
decreased demand for our products. Despite the addition of our factory
automation business in fiscal 1999, our financial results will continue to be
dependent on capital expenditures by semiconductor manufacturers. Downturns in
the semiconductor business, when fewer new facilities are being built, could
harm our financial results as have downturns in the past.
Our Sales Volume Depends on the Sales Volume of our Original Equipment
Manufacturer Customers. We sell a majority of our tool automation products to
original equipment manufacturers who incorporate our products into their
equipment. Therefore, our revenues are directly dependent on the ability of
these customers to develop and market their equipment in a timely,
cost-effective manner.
We Rely on a Small Number of Customers for a Large Portion of our
Revenues. We receive a significant portion of our revenues in each fiscal
period from a limited number of customers. The loss of one or more of these
major customers, or a decrease in orders by one or more customers, would
adversely affect our business. Sales to our ten largest customers accounted for
56% of total revenues in the three months ended December 31, 1999 and 63% of
total revenues in fiscal 1999. Sales to Lam Research Corporation, our largest
customer, accounted for approximately 14% of total revenues in the three months
ended December 31, 1999 and 15% of our total revenues in 1999.
Delays in Shipment of a few of our Large Orders Could Substantially
Decrease our Revenues. Historically, a substantial portion of our quarterly and
annual revenues came from sales of a small number of large orders. These orders
consist of products with high selling prices compared to our other products. As
a result, the timing of the recognition of revenue from one of these large
orders can have a significant impact on our total revenues and operating results
for a particular period. Our operating results could be harmed if orders for
even a small number of large orders are canceled or rescheduled by customers or
cannot be filled due to delays in manufacturing, testing, shipping or product
acceptance.
We Have Significant Fixed Costs which are not Easily Reduced if Revenues
Fall Below Expectations. Our expense levels are based in part on our future
revenue expectations. Many of our expenses, particularly those relating to
capital equipment and manufacturing overhead, are relatively fixed. If we do not
meet our sales goals we may be unable to rapidly reduce these fixed costs. Our
ability to reduce expenses is further constrained because we must continue to
invest in research and development to maintain our competitive position and to
maintain service and support for our existing global customer base. Accordingly,
if we suffer an unexpected downturn in revenue, our inability to reduce fixed
costs rapidly could increase the adverse impact on our results of operations.
Our Lengthy Sales Cycle Requires us to Incur Significant Expenses with No
Assurance that we Will Generate Revenue. Our tool automation products are
generally incorporated into original equipment manufacturer equipment at the
design stage. To obtain new business from our original equipment
<PAGE> 21
manufacturer customers, we must develop products for selection by a potential
customer at the design stage. This often requires us to make significant
expenditures without any assurance of success. The original equipment
manufacturer's design decisions often precede the generation of volume sales, if
any, by a year or more. We also must complete successfully a lengthy evaluation
period before we can achieve volume sales of our manufacturing execution system
software and process optimization software to our factory automation customers.
We cannot guarantee that we will continue to achieve design wins or satisfy
evaluations by our factory automation customers of our software. We cannot
guarantee that the equipment manufactured by our original equipment
manufacturing customers will be commercially successful. If we or our original
equipment manufacturing customers fail to develop and introduce new products
successfully and in a timely manner, our business and financial results will
suffer.
Our International Business Operations Expose us to a Number of Difficulties
in Coordinating our Activities Abroad and in Dealing with Multiple Regulatory
Environments. Approximately 52% of our total revenues in the three months
ended December 31, 1999 and 41% of our total revenues in fiscal 1999 were
derived from customers located outside North America. We anticipate that
international sales will continue to account for a significant portion of our
revenues. Our vendors are located in several different foreign countries. As a
result of our international business operations, we are subject to various
risks, including:
- difficulties in staffing and managing operations in multiple locations in
many countries;
- challenges presented by collecting trade accounts receivable in foreign
jurisdictions;
- possible adverse tax consequences;
- governmental currency controls;
- changes in various regulatory requirements;
- political and economic changes and disruptions; and
- export/import controls and tariff regulations.
To support our international customers, we maintain locations in several
countries, including Japan, South Korea, Germany, United Kingdom, Malaysia,
Taiwan, Singapore and Canada. We cannot guarantee that we will be able to manage
these operations effectively. We cannot assure you that our investment in these
international operations will enable us to compete successfully in international
markets or to meet the service and support needs of our customers, some of whom
are located in countries where we have no infrastructure.
Although our international sales are primarily denominated in U.S. dollars,
changes in currency exchange rates can make it more difficult for us to compete
with foreign manufacturers on price. If our international sales increase
relative to our total revenues, these factors could have a more pronounced
effect on our operating results.
We Must Continually Improve our Technology to Remain Competitive.
Technology changes rapidly in the semiconductor, data storage and flat panel
display manufacturing industries. We believe our success will depend upon our
ability to enhance our existing products and to develop and market new products
to meet customer needs. We cannot guarantee that we will identify and adjust to
changing market conditions or succeed in introducing commercially rewarding
products or product enhancements. The success of our product development and
introduction depends on a number of factors, including:
- accurately identifying and defining new products;
- completing and introducing new product designs in a timely manner;
- market acceptance of our products and our customers' products; and
- determining a comprehensive, integrated product strategy.
<PAGE> 22
We Face Significant Competition Which Could Result in Decreased Demand for
Our Products or Services. The markets for our products are intensely
competitive and we may not be able to compete successfully. We believe that our
primary competition in the tool automation market is from integrated original
equipment manufacturers that satisfy their semiconductor and flat panel display
handling needs themselves rather than by purchasing systems or modules from an
independent supplier like us. Many of these original equipment manufacturers
have substantially greater resources than we do. Applied Materials, Inc., the
leading process equipment original equipment manufacturer, develops and
manufactures its own central wafer handling systems and modules. We may not be
successful in selling our products to original equipment manufacturers that
currently satisfy their wafer or substrate handling needs themselves, regardless
of the performance or the price of our products. Moreover, integrated original
equipment manufacturers may begin to commercialize their handling capabilities
and become our competitors.
We believe that the primary competitive factors in the end-user
semiconductor manufacturer market for factory automation software and process
control software are product functionality, price/performance, ease of use,
hardware and software platform compatibility, vendor reputation and financial
stability. The relative importance of these competitive factors may change over
time. We directly compete in this market with various competitors, including
Applied Materials-Consilium, PRI-Promis, IBM-Poseidon and numerous small,
independent software companies. We also compete with the in-house software
staffs of semiconductor manufacturers like NEC. Most of those manufacturers have
substantially greater resources than us.
We believe that the primary competitive factors in the factory interface
market are technical and technological capabilities, reliability,
price/performance, ease of integration and global sales and support capability.
In this market, we compete directly with Asyst, Fortrend, Kensington and Rorze.
Some of these competitors have substantial financial resources and extensive
engineering, manufacturing and marketing capabilities.
We believe our sale of products for the flat panel display process
equipment market is heavily dependent upon our penetration of the Japanese
market. In addressing the Japanese markets, we may be at a competitive
disadvantage to Japanese suppliers that, historically, have been the supplier of
choice to these markets.
Much of our Success and Value Lies in our Ownership and Use of Intellectual
Property and our Failure to Protect That Property Could Adversely Affect our
Future Growth. Our ability to compete is heavily affected by our ability to
protect our intellectual property. We rely primarily on trade secret laws,
confidentiality procedures, patents, copyrights, trademarks and licensing
arrangements to protect our intellectual property. The steps we have taken to
protect our technology may be inadequate. Existing trade secret, trademark and
copyright laws offer only limited protection. Our patents could be invalidated
or circumvented. The laws of certain foreign countries in which our products are
or may be developed, manufactured or sold may not fully protect our products or
intellectual property rights. This may make the possibility of piracy of our
technology and products more likely. We cannot guarantee that the steps we have
taken to protect our intellectual property will be adequate to prevent
misappropriation of our technology. There has been substantial litigation
regarding patent and other intellectual property rights in semiconductor-related
industries. We may engage in litigation to:
- enforce our patents;
- protect our trade secrets or know-how;
- defend ourselves against claims we infringe the rights of others; or
- determine the scope and validity of the patents or intellectual property
rights of others.
Any litigation could result in substantial cost to us and divert the
attention of our management, which could harm our operating results.
Our Operations Could Infringe on the Intellectual Property Rights of
Others. Particular aspects of our technology could be found to infringe on the
intellectual property rights or patents of others. Other
<PAGE> 23
companies may hold or obtain patents on inventions or may otherwise claim
proprietary rights to technology necessary to our business. We cannot predict
the extent to which we may be required to seek licenses or alter our products so
that they no longer infringe the rights of others. We cannot guarantee that the
terms of any licenses we may be required to seek will be reasonable. Similarly,
changing our products or processes to avoid infringing the rights of others may
be costly or impractical or could detract from the value of our products.
Our Business May be Harmed by Infringement Claims of General Signal or
Applied Materials. We received notice from General Signal Corporation alleging
infringements of its patent rights by certain of our products. The notification
advised us that General Signal was attempting to enforce its rights to those
patents in litigation against Applied Materials, and that, at the conclusion of
that litigation, General Signal intended to enforce its rights against us and
others. According to a press release issued by Applied Materials in November
1997, Applied Materials settled its litigation with General Signal by acquiring
ownership of five General Signal patents. Although not verified by us, these
five patents would appear to be the patents referred to by General Signal in its
prior notice to us. Applied Materials has not contacted us regarding these
patents.
We do not have Long-Term Contracts with our Customers and our Customers may
Cease Purchasing our Products at Any Time. We generally do not have long-term
contracts with our customers. As a result, our agreements with our customers do
not provide any assurance of future sales. Accordingly:
- our customers can cease purchasing our products at any time without
penalty;
- our customers are free to purchase products from our competitors;
- we are exposed to competitive price pressure on each order; and
- our customers are not required to make minimum purchases.
Year 2000 Readiness; Year 2000 Problems Could Disrupt our Business. The
year 2000 problem is the potential for system and processing failure of
date-related data as the result of computer-controlled systems using two digits
rather than four digits to define the applicable year. This could result in
system failure or miscalculations causing disruptions of operations, including,
among other things, temporary inability to process transactions, send invoices,
or engage in similar normal business activities. Problems associated with the
year 2000 may not become apparent until some time after January 2000.
We have evaluated our internal software and products for year 2000
problems. We believe that our products and business will not be substantially
affected by the year 2000 problem and that we have no significant exposure to
liabilities related to the year 2000 problem for the products that we have sold.
We have also communicated with others, including suppliers and customers whose
computer systems' functionality could directly impact our operations.
Although we believe our planning efforts are adequate to address our year
2000 concerns, undetected year 2000 problems may cause us to experience negative
consequences or significant costs. We cannot be sure that our suppliers,
customers or businesses that we may acquire will not experience similar
consequences or costs. Such consequences or costs could adversely affect our
business.
RISKS RELATING TO OUR GROWTH
Rapid Growth is Straining our Operations and Requiring us to Incur Costs to
Upgrade our Infrastructure. During the last two quarters, we have experienced
extremely rapid growth in our operations, the number of our employees, our
product offerings and the geographic area of our operations. Our growth places a
significant strain on our management, operations and financial systems. Our
future operating results will be dependent in part on our ability to continue to
implement and improve our operating and financial controls and management
information systems. If we fail to manage our growth effectively, our financial
condition, results of operations and business could be materially adversely
affected.
<PAGE> 24
Our Operating Results Would Be Harmed if One of our Key Suppliers Fails to
Deliver Components for Our Products. We currently procure many of our
components on an as needed, purchase order basis. We do not carry significant
inventories or have any long-term supply contracts with our vendors. With the
recent increased demand for semiconductor manufacturing equipment, our suppliers
are facing significant challenges in providing components on a timely basis. Our
inability to obtain components in required quantities or of acceptable quality
could result in significant delays or reductions in product shipments. This
would materially and adversely affect our operating results.
Our Business Could be Harmed if We Fail to Adequately Integrate the
Operations of Our Acquisitions. Our management must devote substantial time and
resources to the integration of the operations of our acquired businesses with
our business and with each other. If we fail to accomplish this integration
efficiently, we may not realize the anticipated benefits of our acquisitions.
The process of integrating supply and distribution channels, research and
development initiatives, computer and accounting systems and other aspects of
the operation of our acquired businesses, presents a significant challenge to
our management. This is compounded by the challenge of simultaneously managing a
larger entity. We have completed a number of acquisitions in a short period of
time. These businesses have operations and personnel located in Asia, Europe and
the United States and present a number of additional difficulties of
integration, including:
- difficulties in the assimilation of products and designs into integrated
solutions;
- difficulties in informing customers, suppliers and distributors of the
effects of the acquisitions and integrating them into our overall
operations;
- difficulties integrating personnel with disparate business backgrounds
and cultures;
- difficulties in defining and executing a comprehensive product strategy;
- difficulties in managing geographically remote units;
- difficulties associated with managing the risks of entering markets or
types of businesses in which we have limited or no direct experience; and
- difficulties in minimizing the loss of key employees of the acquired
businesses.
If we delay integrating or fail to integrate an acquired business or
experience other unforeseen difficulties, the integration process may require a
disproportionate amount of our management's attention and financial and other
resources. Our failure to adequately address these difficulties could harm our
business and financial results.
Our Business May be Harmed by Acquisitions We Complete in the Future. We
plan to continue to pursue additional acquisitions of related businesses. Our
identification of suitable acquisition candidates involves risks inherent in
assessing the values, strengths, weaknesses, risks and profitability of
acquisition candidates, including the effects of the possible acquisition on our
business, diversion of our management's attention and risks associated with
unanticipated problems or latent liabilities. If we are successful in pursuing
future acquisitions, we will be required to expend significant funds, incur
additional debt or issue additional securities, which may negatively affect our
results of operations and be dilutive to our stockholders. If we spend
significant funds or incur additional debt, our ability to obtain financing for
working capital or other purposes could decline and we may be more vulnerable to
economic downturns and competitive pressures. We cannot guarantee that we will
be able to finance additional acquisitions or that we will realize any
anticipated benefits from acquisitions that we complete. Should we successfully
acquire another business, the process of integrating acquired operations into
our existing operations may result in unforeseen operating difficulties and may
require significant financial resources that would otherwise be available for
the ongoing development or expansion of our existing business.
We May not be Able to Recruit and Retain Necessary Personnel Because of
Intense Competition for Highly Skilled Personnel. We need to hire and retain
substantial numbers of employees with technical backgrounds for both our
hardware and software engineering and support staffs. The market for these
<PAGE> 25
employees is intensively competitive, and we have occasionally experienced
delays in hiring these personnel. Due to the cyclical nature of the demand for
our products, we have had to reduce our workforce and then rebuild our workforce
as our business has gone through downturns followed by upturns. We currently
need to hire a number of highly skilled employees, especially in manufacturing,
to meet customer demand. Due to the competitive nature of the labor markets in
which we operate, this type of employment cycle increases our risk of not being
able to retain and recruit key personnel. Our inability to recruit, retain and
train adequate numbers of qualified personnel on a timely basis could adversely
affect our ability to develop, manufacture, install and support our products.
RISKS RELATING TO OUR COMMON STOCK
Our Operating Results Fluctuate Significantly, Which Could Negatively
Impact our Business and our Stock Price. Our margins, revenues and other
operating results can fluctuate significantly from quarter to quarter depending
upon a variety of factors, including:
- the level of demand for semiconductors in general;
- cycles in the market for semiconductor manufacturing equipment and
automation software;
- the timing and size of orders from our customer base;
- our ability to manufacture, test and deliver products in a timely and
cost-effective manner;
- our success in winning competitions for orders;
- the timing of our new product announcements and releases and those of our
competitors;
- the mix of products sold by us;
- competitive pricing pressures; and
- the level of automation required in fab extensions, upgrades and new
facilities.
We entered into the factory automation software business in fiscal 1999. We
believe a substantial portion of our revenues from this business will be
dependent on achieving project milestones. As a result, our revenue from this
business will be subject to fluctuations depending upon a number of factors,
including whether we can achieve project milestones on a timely basis, if at
all, as well as the timing and size of projects.
The Volatility of our Stock Price Could Adversely Affect an Investment in
our Stock. The market price of our common stock has fluctuated widely. For
example, between August 25, 1999 and August 31, 1999, the price of our common
stock dropped from approximately $25.13 to $21.75 per share. Between January 4,
2000 and January 27, 2000, the price of our common stock rose from approximately
$30.63 to $54.44 per share. Consequently, the current market price of our common
stock may not be indicative of future market prices, and we may not be able to
sustain or increase the value of an investment in our common stock. Factors
affecting our stock price may include:
- variations in operating results from quarter to quarter;
- changes in earnings estimates by analysts or our failure to meet
analysts' expectations;
- changes in the market price per share of our public company customers;
- market conditions in the industry;
- general economic conditions;
- low trading volume of our common stock; and
- the number of firms making a market in our common stock.
<PAGE> 26
In addition, the stock market has recently experienced extreme price and
volume fluctuations. These fluctuations have particularly affected the market
prices of the securities of high technology companies like us. These market
fluctuations could adversely affect the market price of our common stock.
Provisions of our Certificate of Incorporation, Bylaws and Contracts May
Discourage Takeover Offers and may Limit the Price Investors Would be Willing to
Pay for our Common Stock. Our certificate of incorporation and bylaws contain
provisions that may make an acquisition of us more difficult and discourage
changes in our management. These provisions could limit the price that certain
investors might be willing to pay in the future for shares of our common stock.
In addition, we have adopted a rights plan. In many potential takeover
situations, rights issued under the plan become exercisable to purchase our
common stock at a price substantially discounted from the then applicable market
price of our common stock. Because of its possible dilutive effect to a
potential acquiror, the rights plan would generally discourage third parties
from proposing a merger with or initiating a tender offer for us that is not
approved by our board of directors. Accordingly, the rights plan could have an
adverse impact on our stockholders who might want to vote in favor of the merger
or participate in the tender offer. In addition, shares of our preferred stock
may be issued upon terms the board of directors deems appropriate without
stockholder approval. Our ability to issue preferred stock in such a manner
could enable our board of directors to prevent changes in our management or
control.
<PAGE> 27
BROOKS AUTOMATION, INC.
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
INTEREST RATE EXPOSURE
Based on Brooks' overall interest exposure at December 31, 1999, including all
interest rate-sensitive instruments, a near-term change in interest rates within
a 95% confidence level based on historical interest rate movements would not
materially affect the consolidated results of operations or financial position.
CURRENCY RATE EXPOSURE
Brooks' foreign revenues are generally denominated in United States dollars.
Accordingly, foreign currency fluctuations have not had a significant impact on
the comparison of the results of operations for the periods presented. The costs
and expenses of Brooks' international subsidiaries are generally denominated in
currencies other than the United States dollar. However, since the functional
currency of Brooks' international subsidiaries is the local currency, foreign
currency translation adjustments do not impact operating results, but instead
are reflected as a component of stockholders' equity under the caption
"Accumulated other comprehensive income (loss)". To the extent Brooks expands
its international operations or changes its pricing practices to denominate
prices in foreign currencies, Brooks will be exposed to increased risk of
currency fluctuation.
STOCK PRICE
The stock prices of semiconductor equipment companies are subject to significant
fluctuations. Brooks' stock price may be affected by a variety of factors that
could cause the price of Brooks' common stock to fluctuate, perhaps
substantially, including: announcements of developments related to Brooks'
business; quarterly fluctuations of Brooks' actual or anticipated operating
results and order levels; general conditions in the semiconductor and flat panel
display industries or the worldwide economy; announcements of technological
innovations; new products or product enhancements by Brooks or its competitors;
developments in patents or other intellectual property rights and litigation;
and developments in Brooks' relationships with its customers and suppliers. In
addition, in recent years, both the stock market in general and the market for
shares of small capitalization and semiconductor industry-related companies in
particular have experienced extreme price fluctuations which have often been
unrelated to the operating performance of affected companies. Any such
fluctuations in the future could adversely affect the market price of Brooks'
common stock. There can be no assurance that the market price of the common
stock of Brooks will not decline.
<PAGE> 28
BROOKS AUTOMATION, INC.
PART II. OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) The following exhibits are included herein:
Exhibit No. Description
----------- -----------
10.1 Revolving Credit Agreement dated as of January 7,
2000 among Brooks Automation, Inc., ABN AMRO BANK
N.V. and the other lending institutions set forth
on Schedule 1 attached hereto and ABN AMBRO BANK
N.V., as Agent
10.2 Revolving Credit Note to ABN AMRO BANK N.V.
10.3 Lease Agreement Between W9/TIB Real Estate Limited
Partnership, as landlord, and Brooks Automation,
Inc., as tenant, for 15 Elizabeth Drive,
Chelmsford, MA
10.4 Lease Agreement Between W9/TIB Real Estate Limited
Partnership, as landlord, and Brooks Automation,
Inc., as tenant, for 16 Elizabeth Drive,
Chelmsford, MA
27.1 Financial Data Schedule for the quarterly period
ended December 31, 1999
27.2 Financial Data Schedule for the quarterly period
ended December 31, 1998, restated to reflect the
acquisition of Smart Machines Inc. in a pooling of
interests transaction effective August 31, 1999.
(b) The following reports on Form 8-K were filed during the quarterly
period ended December 31, 1999:
(1) Current report on Form 8-K filed on October 15, 1999, relating
to the acquisition of certain assets of the Infab Division of
Jenoptik AG by the Company.
(2) Amended current report on Form 8-K/A filed on December 14,
1999, relating to the acquisition of certain assets of the
Infab Division of Jenoptik AG by the Company.
The following financial statements of the Infab Division and
pro forma combined condensed financial statements of the
Company and the Infab Division were filed with the Form 8-K/A:
Independent Accountants' Report
Consolidated Balance Sheets as of December 31, 1997 and 1998
Consolidated Statements of Operations for the years ended
December 31, 1996, 1997 and 1998
Consolidated Statements of Cash Flows for the years ended
December 31, 1997 and 1998
Notes to the Consolidated Financial Statements
Fixed Asset Movement Schedules for the years ended
December 31, 1997 and 1998
Reconciliation of Net Income to U.S. GAAP
Unaudited Consolidated Balance Sheets as of December 31,
1998 and June 30, 1999
Unaudited Consolidated Statements of Operations for the six
months ended June 30, 1998 and 1999
Unaudited Consolidated Statements of Cash Flows for the six
months ended June 30, 1998 and 1999
Notes to the Unaudited Consolidated Financial Statements
<PAGE> 29
Unaudited Pro Forma Combined Condensed Balance Sheet as of
June 30, 1999
Unaudited Pro Forma Combined Condensed Statement of
Operations for the nine months ended June 30, 1999
Unaudited Pro Forma Combined Condensed Statement of
Operations for the year ended September 30, 1998
Notes to the Unaudited Pro Forma Combined Condensed
Financial Statements
<PAGE> 30
SIGNATURES
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.
BROOKS AUTOMATION, INC.
DATE: February 11, 2000 /s/ Robert J. Therrien
--------------------------------------------
Robert J. Therrien
Director and President
(Principal Executive Officer)
DATE: February 11, 2000 /s/ Ellen B. Richstone
--------------------------------------------
Ellen B. Richstone
Senior Vice President of Finance and
Administration and Chief Financial Officer
(Principal Financial Officer)
<PAGE> 31
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
10.1 Revolving Credit Agreement dated as of January 7, 2000 among
Brooks Automation, Inc., ABN AMRO BANK N.V. and the other
lending institutions set forth on Schedule 1 attached hereto and
ABN AMBRO BANK N.V., as Agent
10.2 Revolving Credit Note to ABN AMRO BANK N.V.
10.3 Lease Agreement Between W9/TIB Real Estate Limited Partnership,
as landlord, and Brooks Automation, Inc., as tenant, for 15
Elizabeth Drive, Chelmsford, MA
10.4 Lease Agreement Between W9/TIB Real Estate Limited Partnership,
as landlord, and Brooks Automation, Inc., as tenant, for 16
Elizabeth Drive, Chelmsford, MA
27.1 Financial Data Schedule for the quarterly period ended December
31, 1999
27.2 Financial Data Schedule for the quarterly period ended December
31, 1998, restated to reflect the acquisition of Smart Machines
Inc. in a pooling of interests transaction effective August 31,
1999.
<PAGE> 1
EXHIBIT 10.1
REVOLVING CREDIT AGREEMENT
dated as of January 7, 2000
among
BROOKS AUTOMATION, INC.,
ABN AMRO BANK N.V. and the other lending institutions set forth on Schedule 1
attached hereto
and
ABN AMRO BANK N.V., as Agent
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
1. DEFINITIONS AND RULES OF INTERPRETATION.........................................................1
1.1. Definitions..........................................................................1
1.2. Rules of Interpretation..............................................................18
2. THE REVOLVING CREDIT FACILITY...................................................................20
2.1. Commitment to Lend...................................................................20
2.2. Commitment Fee.......................................................................20
2.3. Reduction of Total Commitment........................................................20
2.4. The Revolving Credit Notes...........................................................21
2.5. Interest on Revolving Credit Loans...................................................21
2.6. Requests for Revolving Credit Loans..................................................21
2.6.1. General...................................................................21
2.7. Conversion Options...................................................................22
2.7.1. Conversion to Different Type of Revolving Credit Loan.....................22
2.7.2. Continuation of Type of Revolving Credit Loan.............................22
2.7.3. LIBOR Rate Loans..........................................................23
2.8. Funds for Revolving Credit Loan......................................................23
2.8.1. Funding Procedures........................................................23
2.8.2. Advances by Agent.........................................................23
2.9. Change in Borrowing Base.............................................................24
3. REPAYMENT OF THE REVOLVING CREDIT LOANS.........................................................24
3.1. Maturity.............................................................................24
3.2. Mandatory Repayments of Revolving Credit Loans.......................................24
3.3. Optional Repayments of Revolving Credit Loans........................................25
4. LETTERS OF CREDIT...............................................................................25
4.1. Letter of Credit Commitments.........................................................25
4.1.1. Commitment to Issue Letters of Credit.....................................25
4.1.2. Letter of Credit Applications.............................................26
4.1.3. Terms of Letters of Credit................................................26
4.1.4. Reimbursement Obligations of Banks........................................26
4.1.5. Participations of Banks...................................................27
4.2. Reimbursement Obligation of the Borrower.............................................27
4.3. Letter of Credit Payments............................................................28
4.4. Obligations Absolute.................................................................28
4.5. Reliance by Issuer...................................................................29
4.6. Letter of Credit Fee.................................................................29
5. CERTAIN GENERAL PROVISIONS......................................................................29
5.1. Closing .............................................................................29
5.2. Other Fees...........................................................................30
5.3. Funds for Payments...................................................................30
5.3.1. Payments to Agent.........................................................30
5.3.2. No Offset, etc............................................................30
5.4. Computations.........................................................................30
5.5. Inability to Determine LIBOR Rate....................................................31
</TABLE>
<PAGE> 3
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<TABLE>
<S> <C> <C>
5.6. Illegality...........................................................................31
5.7. Additional Costs, etc................................................................32
5.8. Capital Adequacy.....................................................................33
5.9. Certificate..........................................................................34
5.10. Indemnity............................................................................34
5.11. Interest After Default...............................................................34
5.11.1. Overdue Amounts..........................................................34
5.11.2. Amounts Not Overdue......................................................34
5.12. Replacement of Banks................................................................35
6. GUARANTIES......................................................................................35
6.1. Guaranties of Subsidiaries...........................................................35
7. REPRESENTATIONS AND WARRANTIES..................................................................36
7.1. Corporate Authority..................................................................36
7.1.1. Incorporation; Good Standing..............................................36
7.1.2. Authorization.............................................................36
7.1.3. Enforceability............................................................36
7.2. Governmental Approvals...............................................................36
7.3. Title to Properties; Leases..........................................................37
7.4. Financial Statements, Projections and Solvency.......................................37
7.4.1. Fiscal Year...............................................................37
7.4.2. Financial Statements......................................................37
7.4.3. Projections...............................................................37
7.4.4. Solvency..................................................................38
7.5. No Material Changes, etc.............................................................38
7.6. Franchises, Patents, Copyrights, etc.................................................38
7.7. Litigation...........................................................................38
7.8. No Materially Adverse Contracts, etc.................................................38
7.9. Compliance with Other Instruments, Laws, etc.........................................39
7.10. Tax Status...........................................................................39
7.11. No Event of Default..................................................................39
7.12. Holding Company and Investment Compa.ny Acts.........................................39
7.13. Absence of Financing Statements, etc.................................................40
7.14. Insurance............................................................................40
7.15. Certain Transactions.................................................................40
7.16. Employee Benefit Plans...............................................................40
7.16.1. In General...............................................................40
7.16.2. Terminability of Welfare Plans...........................................41
7.16.3. Guaranteed Pension Plans.................................................41
7.16.4. Multiemployer Plans......................................................41
7.17. Use of Proceeds.....................................................................42
7.17.1. General..................................................................42
7.17.2. Regulations U and X......................................................42
7.18. Environmental Compliance............................................................42
7.19. Subsidiaries, etc...................................................................44
7.20. Chief Executive Office..............................................................44
7.21. Year 2000 Problem...................................................................44
7.22. Disclosure..........................................................................44
7.23. Capitalization Documents............................................................45
8. AFFIRMATIVE COVENANTS OF THE BORROWER...........................................................45
</TABLE>
<PAGE> 4
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<TABLE>
<S> <C> <C>
8.1. Punctual Payment.....................................................................45
8.2. Maintenance of Office................................................................45
8.3. Records and Accounts.................................................................45
8.4. Financial Statements, Certificates and Information...................................46
8.5. Notices..............................................................................47
8.5.1. Defaults..................................................................47
8.5.2. Environmental Events......................................................47
8.5.3. Notification of Claim against Assets......................................48
8.5.4. Notice of Litigation and Judgments........................................48
8.6. Corporate Existence; Maintenance of Properties.......................................48
8.7. Insurance............................................................................49
8.7.1. Insurance.................................................................49
8.8. Taxes................................................................................49
8.9. Inspection of Properties and Books, etc..............................................49
8.9.1. General...................................................................49
8.9.2. Borrowing Base Component Reports. .......................................49
8.9.3. Appraisals. .............................................................50
8.10. Compliance with Laws, Contracts, Licenses, and Permits..............................50
8.11. Employee Benefit Plans..............................................................50
8.12. Use of Proceeds.....................................................................51
8.13. Fair Labor Standards Act............................................................51
8.14. Guarantors..........................................................................51
8.15. Additional Subsidiaries.............................................................52
8.16. Further Assurances..................................................................52
9. CERTAIN NEGATIVE COVENANTS OF THE BORROWER......................................................52
9.1. Restrictions on Indebtedness.........................................................52
9.2. Restrictions on Liens................................................................53
9.3. Restrictions on Investments..........................................................55
9.4. Restricted Payments..................................................................56
9.5. Merger, Consolidation and Disposition of Assets......................................56
9.5.1. Mergers and Acquisitions..................................................56
9.5.2. Disposition of Assets.....................................................58
9.6. Sale and Leaseback...................................................................58
9.7. Compliance with Environmental Laws...................................................59
9.8. AutoSimulations Debt.................................................................59
9.9. Employee Benefit Plans...............................................................59
9.10. Business Activities..................................................................60
9.11. Fiscal Year..........................................................................60
9.12. Transactions with Affiliates.........................................................60
9.13. Modification of Charter..............................................................60
9.14. Upstream Limitations.................................................................60
9.15. Inconsistent Agreements..............................................................61
9.16. Negative Pledge......................................................................61
10. FINANCIAL COVENANTS OF THE BORROWER............................................................61
10.1. Leverage Ratio.......................................................................61
10.2. Debt Service Coverage Ratio..........................................................61
10.3. Quick Ratio..........................................................................61
10.4. Capital Expenditures.................................................................61
11. CLOSING CONDITIONS.............................................................................62
</TABLE>
<PAGE> 5
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<TABLE>
<S> <C> <C>
11.1. Loan Documents.......................................................................62
11.1.1. Loan Documents...........................................................62
11.2. Certified Copies of Charter Documents...............................................62
11.3. Corporate Action....................................................................62
11.4. Incumbency Certificate..............................................................62
11.5. UCC Search Results..................................................................63
11.6. Certificates of Insurance...........................................................63
11.7. Borrowing Base Report...............................................................63
11.8. Accounts Receivable Aging Report....................................................63
11.9. Solvency Certificate................................................................63
11.10. Opinion of Counsel.................................................................63
11.11. Payment of Fees....................................................................63
12. CONDITIONS TO ALL BORROWINGS...................................................................64
12.1. Representations True; No Event of Default...........................................64
12.2. No Legal Impediment.................................................................64
12.3. Governmental Regulation.............................................................64
12.4. Proceedings and Documents...........................................................64
12.5. Borrowing Base Report...............................................................65
13. EVENTS OF DEFAULT; ACCELERATION; ETC...........................................................65
13.1. Events of Default and Acceleration..................................................65
13.2. Termination of Commitments..........................................................68
13.3. Remedies............................................................................68
14. SETOFF.........................................................................................69
15. THE AGENT......................................................................................70
15.1. Authorization.......................................................................70
15.2. Employees and Agents................................................................70
15.3. No Liability........................................................................71
15.4. No Representations..................................................................71
15.4.1. General..................................................................71
15.4.2. Closing Documentation, etc...............................................71
15.5. Payments............................................................................72
15.5.1. Payments to Agent........................................................72
15.5.2. Distribution by Agent....................................................72
15.5.3. Delinquent Banks.........................................................72
15.6. Holders of Revolving Credit Notes...................................................73
15.7. Indemnity...........................................................................73
15.8. Agent as Bank.......................................................................73
15.9. Resignation.........................................................................73
15.10. Notification of Defaults and Events of Default.....................................74
16. EXPENSES AND INDEMNIFICATION...................................................................74
16.1. Expenses............................................................................74
16.2. Indemnification.....................................................................75
16.3. Survival............................................................................75
17. TREATMENT OF CERTAIN CONFIDENTIAL INFORMATION..................................................75
17.1. Sharing of Information with Affiliates..............................................75
17.2. Confidentiality.....................................................................76
17.3. Prior Notification..................................................................76
17.4. Other...............................................................................77
18. SURVIVAL OF COVENANTS, ETC.....................................................................77
</TABLE>
<PAGE> 6
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<TABLE>
<S> <C> <C>
19. ASSIGNMENT AND PARTICIPATION...................................................................77
19.1. Conditions to Assignment by Banks...................................................77
19.2. Certain Representations and Warranties; Limitations; Covenants......................78
19.3. Register............................................................................79
19.4. New Revolving Credit Notes..........................................................79
19.5. Participations......................................................................80
19.6. Disclosure..........................................................................80
19.7. Assignee or Participant Affiliated with the Borrower................................81
19.8. Miscellaneous Assignment Provisions.................................................81
19.9. Assignment by Borrower..............................................................82
20. NOTICES, ETC...................................................................................82
21. GOVERNING LAW..................................................................................82
22. HEADINGS.......................................................................................83
23. COUNTERPARTS...................................................................................83
24. ENTIRE AGREEMENT, ETC..........................................................................83
25. WAIVER OF JURY TRIAL...........................................................................83
26. CONSENTS, AMENDMENTS, WAIVERS, ETC.............................................................84
27. SEVERABILITY...................................................................................84
</TABLE>
<PAGE> 7
REVOLVING CREDIT AGREEMENT
This REVOLVING CREDIT AGREEMENT is made as of January 7, 2000, by and
among BROOKS AUTOMATION, INC. (the "Borrower"), a Delaware corporation having
its principal place of business at 15 Elizabeth Drive, Chelmsford, Massachusetts
01824, ABN AMRO BANK N.V. and the other lending institutions listed on SCHEDULE
1 and ABN AMRO BANK N.V. as agent for itself and such other lending
institutions.
1. DEFINITIONS AND RULES OF INTERPRETATION.
1.1. DEFINITIONS. The following terms shall have the meanings set forth
in this ss.1 or elsewhere in the provisions of this Credit Agreement referred to
below:
ABN AMRO. ABN AMRO Bank N.V., in its individual capacity.
ACCOUNTS RECEIVABLE. All rights of the Borrower or any of the
Guarantors to payment for goods sold, leased or otherwise marketed in the
ordinary course of business and all rights of the Borrower or any of the
Guarantors to payment for services rendered in the ordinary course of business
and all sums of money or other proceeds due thereon pursuant to transactions
with account debtors, except for that portion of the sum of money or other
proceeds due thereon that relate to sales, use or property taxes in conjunction
with such transactions, recorded on books of account in accordance with
generally accepted accounting principles.
ACQUISITION CLOSING DATE. The first date on which the conditions set
forth in the AutoSimulations Merger Agreement have been satisfied and the
AutoSimulations Acquisition has occurred.
ADJUSTMENT DATE. The first day of the month immediately following the
month in which a Compliance Certificate is to be delivered by the Borrower
pursuant to ss.8.4(c).
AFFILIATE. Any Person that would be considered to be an affiliate of
the Borrower under Rule 144(a) of the Rules and Regulations of the Securities
and Exchange Commission, as in effect on the date hereof, if the Borrower were
issuing securities.
AGENT'S HEAD OFFICE. The Agent's head office located at 135 South
LaSalle Street, Chicago, Illinois, or at such other location as the Agent may
designate from time to time.
AGENT. ABN AMRO Bank N.V. acting as agent for the Banks.
<PAGE> 8
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AGENT'S SPECIAL COUNSEL. Bingham Dana LLP or such other counsel as may
be approved by the Agent.
APPLICABLE MARGIN. For each period commencing on an Adjustment Date
through the date immediately preceding the next Adjustment Date (each a "Rate
Adjustment Period"), the Applicable Margin shall be the applicable margin set
forth below with respect to the Borrower's Leverage Ratio as determined for the
period ending on the fiscal quarter ended immediately preceding the applicable
Rate Adjustment Period.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
LIBOR
BASE RATE RATE COMMITMENT LETTER OF
LEVEL LEVERAGE RATIO LOANS LOANS FEE RATE CREDIT RATE
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
I Greater than 1.00:1.00 0.75% 2.25% 0.375% 2.25%
- ------------------------------------------------------------------------------------------------------------------
II Less than or equal to 1.00:1.00 but 0.50% 2.00% 0.350% 2.00%
greater than or equal to 0.50:1.00
- ------------------------------------------------------------------------------------------------------------------
III Less than 0.50:1.00 0.25% 1.75% 0.300% 1.75%
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
Notwithstanding the foregoing, (a) for Revolving Credit Loans
outstanding, Letter of Credit Rate and the Commitment Fee Rate payable during
the period commencing on the Closing Date through the date immediately preceding
the first Adjustment Date to occur after December 31, 1999, the Applicable
Margin shall be at Level I set forth above and (b) if the Borrower fails to
deliver any Compliance Certificate pursuant to ss.8.4(c) hereof then, for the
period commencing on the next Adjustment Date to occur subsequent to such
failure through the date immediately following the date on which such Compliance
Certificate is delivered, the Applicable Margin shall be the highest Applicable
Margin set forth above.
ASSIGNMENT AND ACCEPTANCE. See ss.19.1.
AUTOSIMULATIONS ACQUISITION The acquisition by the Borrower on the
Acquisition Closing Date of all of the outstanding capital stock of each of
AutoSimulations, Inc., a Utah corporation and Auto Soft Corporation, a Utah
corporation, pursuant to the AutoSimulations Merger Agreement.
AUTOSIMULATIONS MERGER AGREEMENT. That certain Agreement and Plan of
Merger dated on or prior to the Closing Date by and among (a) the Borrower; (b)
ASI Merger Corp., a wholly-owned Subsidiary of the Borrower; (c) ASC Merger
Corp., a wholly-owned Subsidiary of the Borrower; (d) AutoSimulations, Inc., a
Utah corporation; (e) Auto Soft Corporation, a Utah corporation; (f) Daifuku
America Corporation, an Illinois corporation and sole stockholder of each of
AutoSimulations, Inc. and Auto Soft Corporation; and (g) Daifuku Co., Ltd., a
Japanese corporation and the parent of Daifuku America Corporation, with such
agreement to contain substantially the same terms as to the scope and nature of
the assets and liabilities being purchased and the aggregate purchase price
(including the amount of the purchase price, the type of consideration
<PAGE> 9
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which constitutes the purchase price and the timing of any payments of any
portion of the purchase price) as previously disclosed to the Agent prior to the
Closing Date.
BALANCE SHEET DATE. September 30, 1999.
BANKS. ABN AMRO and the other lending institutions listed on SCHEDULE 1
hereto and any other Person who becomes an assignee of any rights and
obligations of a Bank pursuant to ss.19.
BASE RATE. The higher of (a) the annual rate of interest announced from
time to time by ABN AMRO at its head office in Chicago, Illinois, as its "prime
commercial lending rate" or "prime rate" (or an analogous term) and (b) one-half
of one percent (1/2%) above the Federal Funds Effective Rate. For the purposes
of this definition, "Federal Funds Effective Rate" shall mean for any day, the
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 (or, if such day is not a
Business Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so published for any day that is a Business
Day, the average of the quotations for such day on such transactions received by
the Agent from three funds brokers of recognized standing selected by the Agent.
BASE RATE LOANS. Revolving Credit Loans bearing interest calculated by
reference to the Base Rate.
BORROWER. As defined in the preamble hereto.
BORROWING BASE. At the relevant time of reference thereto, an amount
determined by the Agent by reference to the most recent Borrowing Base Report
delivered to the Banks and the Agent pursuant to ss.8.4(e), as adjusted pursuant
to the provisions below, which is equal to the sum of:
(a) 85% of Eligible Accounts Receivable for which
invoices have been issued and are payable; PLUS
(b) the Discretionary Amount.
The Agent may, in its discretion, from time to time, upon ten (10) days' prior
notice to the Borrower, reduce the lending formula with respect to Eligible
Accounts Receivable to the extent that the Agent reasonably and in good faith
determines that the results of any commercial finance examination or a review of
any Accounts Receivable aging report delivered to the Agent indicate a material
deterioration in the Borrower's or its Subsidiaries' Eligible Accounts
Receivable from the Closing Date or from the date of the most Accounts
Receivable aging report delivered to the Agent, such that a lower advance rate
for Eligible Receivables is warranted.
<PAGE> 10
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BORROWING BASE REPORT. A Borrowing Base Report signed by a designated
officer of the Borrower and in substantially the form of EXHIBIT A hereto.
BUSINESS DAY. Any day on which banking institutions in Boston,
Massachusetts and Chicago, Illinois are open for the transaction of banking
business and, in the case of LIBOR Rate Loans, also a day which is a LIBOR
Business Day.
CAPITAL ASSETS. Fixed assets, both tangible (such as land, buildings,
fixtures, machinery and equipment) and intangible (such as patents, copyrights,
trademarks, franchises and good will); PROVIDED that Capital Assets shall not
include any item customarily charged directly to expense or depreciated over a
useful life of twelve (12) months or less in accordance with generally accepted
accounting principles.
CAPITAL EXPENDITURES. Amounts paid or Indebtedness incurred by the
Borrower or any of its Subsidiaries in connection with (a) the purchase or lease
by the Borrower or any of its Subsidiaries of Capital Assets that would be
required to be capitalized and shown on the balance sheet of such Person in
accordance with generally accepted accounting principles or (b) the lease of any
assets by the Borrower or any of its Subsidiaries as lessee under any Synthetic
Lease to the extent that such assets would have been Capital Assets had the
Synthetic Lease been treated for accounting purposes as a Capitalized Lease;
PROVIDED, HOWEVER, for purposes of this Credit Agreement, Capital Expenditures
shall not include any Capital Expenditures made in connection with any Permitted
Acquisition.
CAPITALIZATION DOCUMENTS. Collectively, the articles of incorporation
and by-laws of the Borrower and its Subsidiaries.
CAPITALIZED LEASES. Leases under which the Borrower or any of its
Subsidiaries is the lessee or obligor, the discounted future rental payment
obligations under which are required to be capitalized on the balance sheet of
the lessee or obligor in accordance with generally accepted accounting
principles.
CERCLA. See ss.7.18(a).
CLOSING DATE. The first date on which the conditions set forth in ss.11
have been satisfied and any Revolving Credit Loans are to be made or any Letter
of Credit is to be issued hereunder.
CODE. The Internal Revenue Code of 1986.
COMMITMENT. With respect to each Bank, the amount set forth on SCHEDULE
1 hereto as the amount of such Bank's commitment to make Revolving Credit Loans
to, and to participate in the issuance, extension and renewal of Letters of
Credit for the account of, the Borrower, as the same may
<PAGE> 11
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be reduced from time to time; or if such commitment is terminated pursuant to
the provisions hereof, zero.
COMMITMENT FEE RATE. As referred to as such in the table contained in
the definition of "Applicable Margin".
COMMITMENT PERCENTAGE. With respect to each Bank, the percentage set
forth on SCHEDULE 1 hereto as such Bank's percentage of the aggregate
Commitments of all of the Banks.
COMPLIANCE CERTIFICATE. See ss.8.4(c) hereof.
CONSOLIDATED OR CONSOLIDATED. With reference to any term defined
herein, shall mean that term as applied to the accounts of the Borrower and its
Subsidiaries, consolidated in accordance with generally accepted accounting
principles.
CONSOLIDATED CURRENT ASSETS. All assets of the Borrower and its
Subsidiaries on a consolidated basis that, in accordance with generally accepted
accounting principles, are properly classified as current assets, PROVIDED that
(a) notes and accounts receivable shall be included only if good and collectible
as determined by the Borrower in accordance with established practice
consistently applied and, with respect to such notes, only if payable on demand
or within one (1) year from the date as of which Consolidated Current Assets are
to be determined and if not directly or indirectly renewable or extendible at
the option of the debtors, by their terms, or by the terms of any instrument or
agreement relating thereto, beyond such year; and (b) inventory shall be
included only if and to the extent that the same shall consist of saleable
finished goods ready and available for shipment to purchasers thereof.
CONSOLIDATED CURRENT LIABILITIES. All liabilities and other
Indebtedness of the Borrower and its Subsidiaries outstanding hereunder and all
liabilities and other Indebtedness of the Borrower and its Subsidiaries on a
consolidated basis maturing on demand or within one (1) year from the date as of
which Consolidated Current Liabilities are to be determined, and such other
liabilities as may properly be classified as current liabilities in accordance
with generally accepted accounting principles, PROVIDED, (a) for purposes of
calculating liabilities of the Borrower under the Revolving Credit Loans for any
fiscal quarter, the amount shall be the average outstanding amount of Revolving
Credit Loans for such fiscal quarter; and (b) for purposes of this definition,
Consolidated Current Liabilities shall not include accruals of the Borrower and
its Subsidiaries and shall not include the Indebtedness of the Borrower to
Daifuku America Corporation incurred in connection with the AutoSimulations
Acquisition so long as such Indebtedness is subordinated to the Obligations
pursuant to the Subordination Agreement.
CONSOLIDATED NET INCOME (OR DEFICIT). The consolidated net income (or
deficit) of the Borrower and its Subsidiaries, after deduction of all expenses,
taxes, and other proper charges, determined in accordance with generally
<PAGE> 12
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accepted accounting principles, after eliminating therefrom all extraordinary
nonrecurring items of income.
CONSOLIDATED OPERATING CASH FLOW. For any period, an amount equal to
(a) EBITDA of the Borrower and its Subsidiaries for the fiscal quarter ending on
such date, LESS (b) the sum of (i) income taxes recorded on the Borrower's
financial statements pursuant to generally accepted accounting principles during
such period, PLUS (ii) to the extent not already deducted in the determination
of EBITDA, Capital Expenditures made during such period.
CONSOLIDATED TOTAL DEBT SERVICE. For any fiscal period with respect to
the Borrower and its Subsidiaries, the sum of (a) Consolidated Total Interest
Expense for such period, plus (b) any and all mandatory or required payments of
principal in respect of Indebtedness of the Borrower and its Subsidiaries made
or required to be made in such period.
CONSOLIDATED TOTAL INTEREST EXPENSE. For any period, the aggregate
amount of interest required to be paid or accrued by the Borrower and its
Subsidiaries during such period on all Indebtedness of the Borrower and its
Subsidiaries outstanding during all or any part of such period, whether such
interest was or is required to be reflected as an item of expense or
capitalized, including payments consisting of interest in respect of any
Capitalized Lease, or any Synthetic Lease and including commitment fees, agency
fees, facility fees, balance deficiency fees and similar fees or expenses in
connection with the borrowing of money.
CONTROLLED ENTITY. As to any Person, any other Person (other than a
Subsidiary) which, directly or indirectly, is in control of, is controlled by,
or is under common control with, such Person. For purposes of this definition,
"control" of a Person means the power, directly or indirectly, either to (a)
vote ten percent (10%) or more of the securities having ordinary voting power
for the election of directors of such Person or (b) direct or cause the
direction of the management and policies of such Person whether by contract or
otherwise.
CONVERSION REQUEST. A notice given by the Borrower to the Agent of the
Borrower's election to convert or continue a Revolving Credit Loan in accordance
with ss.2.7.
CREDIT AGREEMENT. This Revolving Credit Agreement, including the
Schedules and Exhibits hereto.
DEBT SERVICE COVERAGE RATIO. As at any date of determination, the ratio
of (a) Consolidated Operating Cash Flow of the Borrower and its Subsidiaries for
the fiscal quarter most recently ended to (b) Consolidated Total Debt Service of
the Borrower and its Subsidiaries for the fiscal quarter most recently ended,
PROVIDED, HOWEVER, when calculating the Debt Service Coverage Ratio for any
period in which a Permitted Acquisition has occurred, the calculation of Debt
Service Coverage Ratio shall be made on a Pro Forma Basis.
<PAGE> 13
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DEFAULT. See ss.13.1.
DELINQUENT BANK. See ss.15.5.3.
DERIVATIVE CONTRACT. As defined in paragraph (i) of the definition of
"Indebtedness".
DISCRETIONARY AMOUNT. As at any date of determination, an amount
determined by the Agent in its sole and absolute discretion which shall not
exceed $5,000,000 at any time and which amount shall not be more than $0.00 for
more than any period of ten (10) consecutive days.
DISTRIBUTION. The declaration or payment of any dividend on or in
respect of any shares of any class of capital stock of the Borrower, other than
dividends payable solely in shares of common stock of the Borrower; the
purchase, redemption, or other retirement of any shares of any class of capital
stock of the Borrower, directly or indirectly through a Subsidiary of the
Borrower or otherwise; the return of capital by the Borrower to its shareholders
as such; or any other distribution on or in respect of any shares of any class
of capital stock of the Borrower.
DOLLARS or $. Dollars in lawful currency of the United States of
America.
DOMESTIC LENDING OFFICE. Initially, the office of each Bank designated
as such in SCHEDULE 1 hereto; thereafter, such other office of such Bank, if
any, located within the United States that will be making or maintaining Base
Rate Loans.
DOMESTIC SUBSIDIARY. A Subsidiary which is not a Foreign Subsidiary.
DRAWDOWN DATE. The date on which any Revolving Credit Loan is made or
is to be made, and the date on which any Revolving Credit Loan is converted or
continued in accordance with ss.2.7.
EBITDA. With respect to the Borrower and its Subsidiaries for any
fiscal period, an amount equal to Consolidated Net Income for such period, PLUS,
to the extent deducted in the calculation of Consolidated Net Income and without
duplication, (a) depreciation and amortization for such period, (b) the one time
nonrecurring charge to be taken in the Borrower's fourth fiscal quarter of 1999
or first fiscal quarter of 2000 in an aggregate amount of not more than
$11,400,000, (c) income tax expense for such period, and (d) Consolidated Total
Interest Expense for such period, all as determined in accordance with generally
accepted accounting principles.
ELIGIBLE ACCOUNTS RECEIVABLE. The aggregate of the unpaid portions of
Accounts Receivable (net of any credits, rebates, offsets, holdbacks or other
adjustments or commissions payable to third parties that are adjustments to such
Accounts Receivable) (a) that the Borrower reasonably and in good faith
determines to be collectible; (b) that are with account debtors or other
obligors that (i) are not Affiliates of the Borrower (provided, however, for
purposes of this
<PAGE> 14
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Credit Agreement, Unoptic AG shall not be considered an Affiliate of the
Borrower unless it would also be a Controlled Entity), (ii) purchased the goods
or services giving rise to the relevant Account Receivable in an arm's length
transaction, and (iii) are not insolvent or involved in any case or proceeding,
whether voluntary or involuntary, under any bankruptcy, reorganization,
arrangement, insolvency, adjustment of debt, dissolution, liquidation or similar
law of any jurisdiction; (c) that are in payment of obligations that have been
fully performed, do not consist of progress billings (which for purposes of this
Credit Agreement, does not include payment of obligations under a milestone or
similar contract if such milestone or other condition to payment has been fully
satisfied and for which invoices for such payment have been issued and are
payable or, if such invoices have not been issued, which are readily
identifiable on the books and records of the Borrower as an Account Receivable
for which an invoice could, as if the date of determination, be issued and
which, if so issued, be immediately due and payable) or bill and hold invoices
and, if subject to any dispute or any other similar claims that would reduce the
cash amount payable therefor, that portion of such Account Receivable subject to
such dispute or claim shall be excluded from being an Eligible Account
Receivable; (d) that are not subject to any pledge, restriction, security
interest or other lien or encumbrance other than Permitted Liens permitted by
ss.9.2(b) - (e) hereof; (e) that are not outstanding for more than one hundred
twenty (120) days past the date of the respective invoices therefor; (f) that
are not due from an account debtor or other obligor located in Minnesota unless
the Borrower (i) has received a certificate of authority to do business and is
in good standing in such state or (ii) has filed a notice of business activities
report with the appropriate office or agency of such state for the current year;
(g) that are not due from any single account debtor or other obligor if more
than thirty percent (30%) of the aggregate amount of all Accounts Receivable
owing from such account debtor or other obligor would otherwise not be Eligible
Accounts Receivable; (h) that are payable in Dollars or such other currencies as
is reasonably acceptable to the Agent; and (i) for which invoices have been
issued and are payable or, if invoices have not been issued, which are readily
identifiable on the books and records of the Borrower as an Account Receivable
and for which invoices could, as of the date of determination, be issued and
which would, if so issued, be immediately due and payable.
ELIGIBLE ASSIGNEE. Any of (a) a commercial bank or finance company
organized under the laws of the United States, or any State thereof or the
District of Columbia, and having total assets in excess of $1,000,000,000; (b) a
savings and loan association or savings bank organized under the laws of the
United States, or any State thereof or the District of Columbia, and having a
net worth of at least $100,000,000, calculated in accordance with generally
accepted accounting principles; (c) a commercial bank organized under the laws
of any other country which is a member of the Organization for Economic
Cooperation and Development (the "OECD"), or a political subdivision of any such
country, and having total assets in excess of $1,000,000,000, PROVIDED that such
bank is acting through a branch or agency located in the country in which it is
organized or another country which is also a member of the OECD; (d) the central
bank of any country which is a member of the OECD; and (e) if,
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but only if, any Event of Default has occurred and is continuing, any other
bank, insurance company, commercial finance company or other financial
institution or other Person approved by the Agent, such approval not to be
unreasonably withheld.
EMPLOYEE BENEFIT PLAN. Any employee benefit plan within the meaning of
ss.3(3) of ERISA maintained or contributed to by the Borrower or any ERISA
Affiliate, other than a Guaranteed Pension Plan or a Multiemployer Plan.
ENVIRONMENTAL LAWS. See ss.7.18(a).
EPA. See ss.7.18(b).
ERISA. The Employee Retirement Income Security Act of 1974.
ERISA AFFILIATE. Any Person which is treated as a single employer with
the Borrower under ss.414 of the Code.
ERISA REPORTABLE EVENT. A reportable event with respect to a Guaranteed
Pension Plan within the meaning of ss.4043 of ERISA and the regulations
promulgated thereunder.
EUROCURRENCY RESERVE RATE. For any day with respect to a LIBOR Rate
Loan, the maximum rate (expressed as a decimal) at which any lender subject
thereto would be required to maintain reserves under Regulation D of the Board
of Governors of the Federal Reserve System (or any successor or similar
regulations relating to such reserve requirements) against "Eurocurrency
Liabilities" (as that term is used in Regulation D), if such liabilities were
outstanding. The Eurocurrency Reserve Rate shall be adjusted automatically on
and as of the effective date of any change in the Eurocurrency Reserve Rate.
EVENT OF DEFAULT. See ss.13.1.
EXCLUDED DOMESTIC SUBSIDIARIES. Collectively, Smart Machines of
California, Inc. and Midas Software, Inc., so long as such Subsidiaries continue
to have no assets and continue to be inactive Subsidiaries.
FOREIGN SUBSIDIARY. Any Subsidiary which conducts substantially all of
its business in countries other than the United States of America and that is
organized under the laws of a jurisdiction other than the United States of
America and the States (or the District of Columbia) thereof.
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. (a) When used in ss.10,
whether directly or indirectly through reference to a capitalized term used
therein, means (i) principles that are consistent with the principles
promulgated or adopted by the Financial Accounting Standards Board and its
predecessors, in effect for the fiscal year ended on the Balance Sheet Date, and
(ii) to the extent consistent with such principles, the accounting practice of
the Borrower reflected in its financial statements for the year ended on the
Balance Sheet Date, and (b) when used in general, other than as provided above,
means
<PAGE> 16
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principles that are (i) consistent with the principles promulgated or adopted by
the Financial Accounting Standards Board and its predecessors, as in effect from
time to time, and (ii) consistently applied with past financial statements of
the Borrower adopting the same principles, provided that in each case referred
to in this definition of "generally accepted accounting principles" a certified
public accountant would, insofar as the use of such accounting principles is
pertinent, be in a position to deliver an unqualified opinion (other than a
qualification regarding changes in generally accepted accounting principles) as
to financial statements in which such principles have been properly applied. No
"Accounting Change" (as hereinafter defined) shall affect financial covenants,
pricing, standards or other terms in this Credit Agreement; PROVIDED that the
Borrower shall prepare footnotes to each Compliance Certificate and the
financial statements required to be delivered hereunder that show the material
differences between the financial statements delivered hereunder (which reflect
such Accounting Changes) and the basis for calculating financial covenant
compliance and the Leverage Ratio set forth in computing the Applicable Margin
(in each case without reflecting such Accounting Charges). Accounting Changes
shall mean (a) changes in accounting principles required by generally accepted
accounting principles and implemented by the Borrower; and (b) changes in
accounting principles recommended by the Borrower's certified public accountants
and implemented by the Borrower.
GUARANTEED PENSION PLAN. Any employee pension benefit plan within the
meaning of ss.3(2) of ERISA maintained or contributed to by the Borrower or any
ERISA Affiliate the benefits of which are guaranteed on termination in full or
in part by the PBGC pursuant to Title IV of ERISA, other than a Multiemployer
Plan.
GUARANTOR. Collectively, (a) each Domestic Subsidiary of the Borrower
existing on the Closing Date other than the Excluded Domestic Subsidiaries and
each other Domestic Subsidiary of the Borrower which is required to be or become
a guarantor from time to time pursuant to ss.8.14 hereof and (b) each Foreign
Subsidiary of the Borrower which has delivered to the Agent an election to
become a Guarantor, duly executed by such Foreign Subsidiary and the Borrower
and which election request shall have been approved in writing by the Agent,
which approval shall be the sole and absolute discretion of the Agent.
GUARANTY. Collectively, each Guaranty, dated or to be dated on or prior
to the Closing Date or such later date as is required by ss.8.14, made by each
Guarantor in favor of the Banks and the Agent pursuant to which each Guarantor
guaranties to the Banks and the Agent the payment and performance of the
Obligations and in form and substance satisfactory to the Banks and the Agent.
HAZARDOUS SUBSTANCES. See ss.7.18(b).
INDEBTEDNESS. As to any Person and whether recourse is secured by or is
otherwise available against all or only a portion of the assets of such Person
and whether or not contingent, but without duplication:
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(a) every obligation of such Person for money borrowed,
(b) every obligation of such Person evidenced by bonds,
debentures, notes or other similar instruments, including obligations
incurred in connection with the acquisition of property, assets or
businesses,
(c) every reimbursement obligation of such Person with
respect to letters of credit, bankers' acceptances or similar
facilities issued for the account of such Person,
(d) every obligation of such Person issued or assumed as
the deferred purchase price of property or services (including
securities repurchase agreements but excluding trade accounts payable
or accrued liabilities arising in the ordinary course of business which
are not overdue or which are being contested in good faith),
(e) every obligation of such Person under any Capitalized
Lease,
(f) every obligation of such Person under any lease (a
"Synthetic Lease") treated as an operating lease under generally
accepted accounting principles and as a loan or financing for U.S.
income tax purposes,
(g) all sales by such Person of (i) accounts or general
intangibles for money due or to become due, (ii) chattel paper,
instruments or documents creating or evidencing a right to payment of
money or (iii) other receivables (collectively "receivables"), whether
pursuant to a purchase facility or otherwise, other than in connection
with the disposition of the business operations of such Person relating
thereto or a disposition of defaulted receivables for collection and
not as a financing arrangement, and together with any obligation of
such Person to pay any discount, interest, fees, indemnities,
penalties, recourse, expenses or other amounts in connection therewith,
(h) every obligation of such Person (an "equity related
purchase obligation") to purchase, redeem, retire or otherwise acquire
for value any shares of capital stock of any class issued by such
Person, any warrants, options or other rights to acquire any such
shares, or any rights measured by the value of such shares, warrants,
options or other rights,
(i) every obligation of such Person under any forward
contract, futures contract, swap, option or other financing agreement
or arrangement (including, without limitation, caps, floors, collars
and similar agreements), the value of which is dependent upon interest
rates, currency exchange rates, commodities or other indices (a
"Derivative Contract"),
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(j) every obligation in respect of Indebtedness of any
other entity (including any partnership in which such Person is a
general partner) to the extent that such Person is liable therefor as a
result of such Person's ownership interest in or other relationship
with such entity, except to the extent that the terms of such
Indebtedness provide that such Person is not liable therefor and such
terms are enforceable under applicable law,
(k) every obligation, contingent or otherwise, of such
Person guaranteeing, or having the economic effect of guarantying or
otherwise acting as surety for, any obligation of a type described in
any of clauses (a) through (j) (the "primary obligation") of another
Person (the "primary obligor"), in any manner, whether directly or
indirectly, and including, without limitation, any obligation of such
Person (i) to purchase or pay (or advance or supply funds for the
purchase of) any security for the payment of such primary obligation,
(ii) to purchase property, securities or services for the purpose of
assuring the payment of such primary obligation, or (iii) to maintain
working capital, equity capital or other financial statement condition
or liquidity of the primary obligor so as to enable the primary obligor
to pay such primary obligation.
The "amount" or "principal amount" of any Indebtedness at any time of
determination represented by (u) any Indebtedness, issued at a price that is
less than the principal amount at maturity thereof, shall be the amount of the
liability in respect thereof determined in accordance with generally accepted
accounting principles, (v) any Capitalized Lease shall be the principal
component of the aggregate of the rentals obligation under such Capitalized
Lease payable over the term thereof that is not subject to termination by the
lessee, (w) any sale of receivables shall be the amount of unrecovered capital
or principal investment of the purchaser (other than the Borrower or any of its
wholly-owned Subsidiaries) thereof, excluding amounts representative of yield or
interest earned on such investment, (x) any Synthetic Lease shall be the
stipulated loss value, termination value or other equivalent amount, (y) any
Derivative Contracts shall be the aggregate amount of the net liability amount
of the termination or loss payment required to be paid by such Person on all
Derivative Contracts if such derivative contracts were, at the time of
determination, to be terminated by reason of any event of default or early
termination event thereunder, whether or not such event of default or early
termination event has in fact occurred and (z) any equity related purchase
obligation shall be the maximum fixed redemption or purchase price thereof
inclusive of any accrued and unpaid dividends to be comprised in such redemption
or purchase price.
INTEREST PAYMENT DATE. (a) As to any Base Rate Loan, the last day of
the calendar month with respect to interest accrued during such calendar month,
including, without limitation, the calendar month which includes the Drawdown
Date of such Base Rate Loan; and (b) as to any LIBOR Rate Loan in respect of
which the Interest Period is (i) three (3) months or less, the last day of such
Interest Period and (ii) more than three (3) months, the date that is three
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(3) months from the first day of such Interest Period and, in addition, the last
day of such Interest Period.
INTEREST PERIOD. With respect to each Revolving Credit Loan, (a)
initially, the period commencing on the Drawdown Date of such Revolving Credit
Loan and ending on the last day of one of the periods set forth below, as
selected by the Borrower in a Loan Request or as otherwise required by the terms
of this Credit Agreement (i) for any Base Rate Loan, the last day of the
calendar month; and (ii) for any LIBOR Rate Loan, 1, 2, 3, or 6 months; and (b)
thereafter, each period commencing on the last day of the next preceding
Interest Period applicable to such Revolving Credit Loan and ending on the last
day of one of the periods set forth above, as selected by the Borrower in a
Conversion Request; PROVIDED that all of the foregoing provisions relating to
Interest Periods are subject to the following:
(a) if any Interest Period with respect to a LIBOR Rate Loan
would otherwise end on a day that is not a LIBOR Business Day, that
Interest Period shall be extended to the next succeeding LIBOR Business
Day unless the result of such extension would be to carry such Interest
Period into another calendar month, in which event such Interest Period
shall end on the immediately preceding LIBOR Business Day;
(b) if any Interest Period with respect to a Base Rate Loan
would end on a day that is not a Business Day, that Interest Period
shall end on the next succeeding Business Day;
(c) if the Borrower shall fail to give notice as provided in
ss.2.7, the Borrower shall be deemed to have requested a conversion of
the affected LIBOR Rate Loan to a Base Rate Loan and the continuance of
all Base Rate Loans as Base Rate Loans on the last day of the then
current Interest Period with respect thereto;
(d) any Interest Period relating to any LIBOR Rate Loan that
begins on the last LIBOR Business Day of a calendar month (or on a day
for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall end on the last LIBOR
Business Day of a calendar month; and
(e) any Interest Period that would otherwise extend beyond the
Revolving Credit Loan Maturity Date shall end on the Revolving Credit
Loan Maturity Date.
INTERNATIONAL STANDBY PRACTICES. With respect to any standby Letter of
Credit, International Standby Practices (ISP98), International Chamber of
Commerce Publication No. 590, or any successor code of standby letter of credit
practices among banks adopted by the Agent in the ordinary course of its
business as a standby letter of credit issuer and in effect at the time of
issuance of such Letter of Credit.
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INVESTMENTS. All expenditures made and all liabilities incurred
(contingently or otherwise) for the acquisition of stock or Indebtedness of, or
for loans, advances, capital contributions or transfers of property to, or in
respect of any guaranties (or other commitments as described under
Indebtedness), or obligations of, any Person. In determining the aggregate
amount of Investments outstanding at any particular time: (a) the amount of any
Investment represented by a guaranty shall be taken at not less than the
principal amount of the obligations guaranteed and still outstanding; (b) there
shall be included as an Investment all interest accrued with respect to
Indebtedness constituting an Investment unless and until such interest is paid;
(c) there shall be deducted in respect of each such Investment any amount
received as a return of capital (but only by repurchase, redemption, retirement,
repayment, liquidating dividend or liquidating distribution); (d) there shall
not be deducted in respect of any Investment any amounts received as earnings on
such Investment, whether as dividends, interest or otherwise, except that
accrued interest included as provided in the foregoing clause (b) may be
deducted when paid; and (e) there shall not be deducted from the aggregate
amount of Investments any decrease in the value thereof.
LETTER OF CREDIT. See ss.4.1.1.
LETTER OF CREDIT APPLICATION. See ss.4.1.1.
LETTER OF CREDIT FEE. See ss.4.6.
LETTER OF CREDIT PARTICIPATION. See ss.4.1.4.
LEVERAGE RATIO. As of any date of determination, the ratio of (a) Total
Funded Indebtedness of the Borrower and its Subsidiaries outstanding on such
date to (b) the EBITDA of the Borrower and its Subsidiaries for the Reference
Period ended on such date, PROVIDED, HOWEVER, when calculating the Leverage
Ratio for any period in which a Permitted Acquisition has occurred, the
calculation of the Leverage Ratio shall be made on a Pro Forma Basis.
LIBOR BUSINESS DAY. Any day on which commercial banks are open for
international business (including dealings in Dollar deposits) in London or such
other eurodollar interbank market as may be selected by the Agent in its sole
discretion acting in good faith.
LIBOR LENDING OFFICE. Initially, the office of each Bank designated as
such in SCHEDULE 1 hereto; thereafter, such other office of such Bank, if any,
that shall be making or maintaining LIBOR Rate Loans.
LIBOR RATE. For any Interest Period with respect to a LIBOR Rate Loan,
the rate of interest equal to (a) the rate determined by the Agent at which
Dollar deposits for such Interest Period are offered based on information
presented on Telerate Page 3750 as of 11:00 a.m. London time on the second LIBOR
Business Day prior to the first day of such Interest Period, divided by (b) a
number equal to 1.00 minus the Eurocurrency Reserve Rate, if applicable.
<PAGE> 21
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LIBOR RATE LOANS. Revolving Credit Loans bearing interest calculated by
reference to the LIBOR Rate.
LOAN DOCUMENTS. This Credit Agreement, the Revolving Credit Notes, the
Letter of Credit Applications, the Letters of Credit, the Syndication Side
Letter, the Subordination Agreement and the Guaranty.
LOAN REQUEST. See ss.2.6.
MAJORITY BANKS. As of any date, the Banks holding at least fifty one
percent (51%) of the outstanding principal amount of the Revolving Credit Notes
on such date; and if no such principal is outstanding, the Banks whose aggregate
Commitments constitutes at least fifty one percent (51%) of the Total
Commitment.
MATERIAL ADVERSE EFFECT. A material adverse effect on (a) the business,
condition (financial or otherwise), operations, performance, properties or
prospects of the Borrower and the Guarantors, taken as a whole; (b) the rights
and remedies of the Agent or any Bank under any Loan Document or (c) the ability
of the Borrower or any Guarantor to perform their respective obligations under
the Loan Documents.
MAXIMUM DRAWING AMOUNT. The maximum aggregate amount that the
beneficiaries may at any time draw under outstanding Letters of Credit, as such
aggregate amount may be reduced from time to time pursuant to the terms of the
Letters of Credit.
MULTIEMPLOYER PLAN. Any multiemployer plan within the meaning of
ss.3(37) of ERISA maintained or contributed to by the Borrower or any ERISA
Affiliate.
OBLIGATIONS. All indebtedness, obligations and liabilities of any of
the Borrower and its Subsidiaries to any of the Banks and the Agent,
individually or collectively, existing on the date of this Credit Agreement or
arising thereafter, direct or indirect, joint or several, absolute or
contingent, matured or unmatured, liquidated or unliquidated, secured or
unsecured, arising by contract, operation of law or otherwise, arising or
incurred under this Credit Agreement or any of the other Loan Documents or in
respect of any of the Revolving Credit Loans made or Reimbursement Obligations
incurred or any of the Revolving Credit Notes, Letter of Credit Application,
Letter of Credit or other instruments at any time evidencing any thereof.
OUTSTANDING. With respect to the Revolving Credit Loans, the aggregate
unpaid principal thereof as of any date of determination.
PBGC. The Pension Benefit Guaranty Corporation created by ss.4002 of
ERISA and any successor entity or entities having similar responsibilities.
PERMITTED ACQUISITION. See ss.9.5.1.
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PERMITTED LIENS. Liens, security interests and other encumbrances
permitted by ss.9.2.
PERSON. Any individual, corporation, partnership, trust, unincorporated
association, business, or other legal entity, and any government or any
governmental agency or political subdivision thereof.
PRO FORMA BASIS. Following a Permitted Acquisition, Total Funded
Indebtedness (or, in the case of Consolidated Total Interest Expense, all
Indebtedness) and EBITDA for the fiscal quarter in which such Permitted
Acquisition occurred and each of the three fiscal quarters immediately following
such Permitted Acquisition being calculated with reference to the audited
historical financial results of the Person so acquired (or, to the extent such
financial results are unaudited, such unaudited results shall have been prepared
in a manner which is acceptable to the Majority Banks) and the Borrower and its
Subsidiaries for the applicable Test Period after giving effect on a pro forma
basis to such Permitted Acquisition and assuming that such Permitted Acquisition
had been consummated at the beginning of such Test Period in the manner
described in (i), (ii) and (iii) below:
(i) all Indebtedness (whether under this Credit Agreement or
otherwise) and any other balance sheet adjustments incurred or made in
connection with the Permitted Acquisition shall be deemed to have been
incurred or made on the first day of the Test Period, and all
Indebtedness of the Person acquired or to be acquired in such Permitted
Acquisition which was or will have been repaid in connection with the
consummation of the Permitted Acquisition shall be deemed to have been
repaid concurrently with the incurrence of the Indebtedness incurred in
connection with the Permitted Acquisition;
(ii) all Indebtedness assumed to have been incurred pursuant
to the preceding clause (i) shall be deemed to have borne interest at
the sum of (a) the arithmetic mean of (x) the LIBOR Rate for LIBOR Rate
Loans having an Interest Period of one month in effect on the first day
of the Test Period and (y) the LIBOR Rate for LIBOR Rate Loans having
an Interest Period of one month in effect on the last day of the Test
Period PLUS (b) the Applicable Margin for LIBOR Rate Loans then in
effect (after giving effect to the Permitted Acquisition on a PRO FORMA
Basis); and
(iii) other reasonable cost savings, expenses and other income
statement or operating statement adjustments which are acceptable to
the Majority Banks and which are attributable to the change in
ownership and/or management resulting from such Permitted Acquisition
shall be deemed to have been realized on the first day of the Test
Period.
PURCHASE PRICE. As defined in ss.9.5.1 hereof.
RATE ADJUSTMENT PERIOD. See definition of "Applicable Margin".
<PAGE> 23
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RCRA. See ss.7.18(a).
REAL ESTATE. All real property at any time owned or leased (as lessee
or sublessee) by the Borrower or any of its Subsidiaries.
RECORD. The grid attached to a Revolving Credit Note, or the
continuation of such grid, or any other similar record, including computer
records, maintained by any Bank with respect to any Revolving Credit Loan
referred to in such Revolving Credit Note.
REFERENCE PERIOD. The period of (a) four (4) consecutive fiscal
quarters of the Borrower ending on the relevant date or (b) until four (4) full
fiscal quarters of the Borrower have elapsed after September 30, 1999, such
shorter period of one, two or three full fiscal quarters, elapsed since
September 30, 1999, with the relevant amount applicable to such shorter period
annualized for the period of four (4) consecutive fiscal quarters for which the
applicable covenant or test calculation is being performed by multiplying the
relevant amount by a fraction, whose numerator is four (4) and whose denominator
is such actual number of elapsed full fiscal quarters.
REGISTER. See ss.19.3.
REIMBURSEMENT OBLIGATION. The Borrower's obligation to reimburse the
Agent and the Banks on account of any drawing under any Letter of Credit as
provided in ss.4.2.
RESTRICTED PAYMENT. In relation to the Borrower and its Subsidiaries,
any (a) Distribution or (b) payment or prepayment by the Borrower or any
Subsidiary to any shareholder of the Borrower or to any other Affiliate of the
Borrower, a Subsidiary or a shareholder of the Borrower.
REVOLVING CREDIT LOAN MATURITY DATE. January 7, 2002.
REVOLVING CREDIT LOANS. Revolving credit loans made or to be made by
the Banks to the Borrower pursuant to ss.2.
REVOLVING CREDIT NOTES. See ss.2.4.
SARA. See ss.7.18(a).
SUBORDINATION AGREEMENT. The Subordination Agreement dated as of the
date hereof by and among the Borrower, the Agent and Daifuku American
Corporation and in form and substance acceptable to the Agent.
SUBSIDIARY. Any corporation, association, trust, or other business
entity of which the designated parent shall at any time own directly or
indirectly through a Subsidiary or Subsidiaries at least a majority (by number
of votes) of the outstanding Voting Stock.
<PAGE> 24
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SYNDICATION SIDE LETTER. That certain letter agreement, dated or to be
dated on or prior to the Closing Date, between the Borrower and the Agent, and
in form and substance satisfactory to the Agent.
SYNTHETIC LEASE. As such term is defined in paragraph (f) of the
definition of "Indebtedness".
TEST PERIOD. The period of all fiscal quarters (and any portion of a
fiscal quarter) being tested in any covenant calculation period prior to the
date of such Permitted Acquisition as set forth in the definition of "Pro Forma
Basis".
TOTAL COMMITMENT. The sum of the Commitments of the Banks, as in effect
from time to time.
TOTAL FUNDED INDEBTEDNESS. All Indebtedness of the Borrower and its
Subsidiaries for borrowed money, purchase money Indebtedness and with respect to
Capitalized Leases and Synthetic Leases, determined on a consolidated basis in
accordance with generally accepted accounting principles, PROVIDED, for purposes
of calculating Indebtedness of the Borrower under the Revolving Credit Loans for
any fiscal quarter, the amount shall be the average outstanding amount of
Revolving Credit Loans for such fiscal quarter.
TYPE. As to any Revolving Credit Loan, its nature as a Base Rate Loan
or a LIBOR Rate Loan.
UNIFORM CUSTOMS. With respect to any Letter of Credit, the Uniform
Customs and Practice for Documentary Credits (1993 Revision), International
Chamber of Commerce Publication No. 500 or any successor version thereto adopted
by the Agent in the ordinary course of its business as a letter of credit issuer
and in effect at the time of issuance of such Letter of Credit.
UNPAID REIMBURSEMENT OBLIGATION. Any Reimbursement Obligation for which
the Borrower does not reimburse the Agent and the Banks on the date specified
in, and in accordance with, ss.4.2.
VOTING STOCK. Stock or similar interests, of any class or classes
(however designated), the holders of which are at the time entitled, as such
holders, to vote for the election of a majority of the directors (or persons
performing similar functions) of the corporation, association, trust or other
business entity involved, whether or not the right so to vote exists by reason
of the happening of a contingency.
1.2. RULES OF INTERPRETATION.
(a) A reference to any document or agreement shall include
such document or agreement as amended, modified or supplemented from
time to time in accordance with its terms and the terms of this Credit
Agreement.
<PAGE> 25
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(b) The singular includes the plural and the plural includes
the singular.
(c) A reference to any law includes any amendment or
modification to such law.
(d) A reference to any Person includes its permitted
successors and permitted assigns.
(e) Accounting terms not otherwise defined herein have the
meanings assigned to them by generally accepted accounting principles
applied on a consistent basis by the accounting entity to which they
refer.
(f) The words "include", "includes" and "including" are not
limiting.
(g) All terms not specifically defined herein or by generally
accepted accounting principles, which terms are defined in the Uniform
Commercial Code as in effect in the Commonwealth of Massachusetts, have
the meanings assigned to them therein, with the term "instrument" being
that defined under Article 9 of the Uniform Commercial Code.
(h) Reference to a particular "ss." refers to that section of
this Credit Agreement unless otherwise indicated.
(i) The words "herein", "hereof", "hereunder" and words of
like import shall refer to this Credit Agreement as a whole and not to
any particular section or subdivision of this Credit Agreement.
(j) Unless otherwise expressly indicated, in the computation
of periods of time from a specified date to a later specified date, the
word "from" means "from and including," the words "to" and "until" each
mean "to but excluding," and the word "through" means "to and
including."
(k) This Credit Agreement and the other Loan Documents may use
several different limitations, tests or measurements to regulate the
same or similar matters. All such limitations, tests and measurements
are, however, cumulative and are to be performed in accordance with the
terms thereof.
(l) This Credit Agreement and the other Loan Documents are the
result of negotiation among, and have been reviewed by counsel to,
among others, the Agent and the Borrower and are the product of
discussions and negotiations among all parties. Accordingly, this
Credit Agreement and the other Loan Documents are not intended to be
construed against the Agent or any of the Banks merely on account of
the Agent's or any Bank's involvement in the preparation of such
documents.
<PAGE> 26
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2. THE REVOLVING CREDIT FACILITY.
2.1. COMMITMENT TO LEND. Subject to the terms and conditions set forth
in this Credit Agreement, each of the Banks severally agrees to lend to the
Borrower and the Borrower may borrow, repay, and reborrow from time to time from
the Closing Date up to but not including the Revolving Credit Loan Maturity Date
upon notice by the Borrower to the Agent given in accordance with ss.2.6, such
sums as are requested by the Borrower up to a maximum aggregate amount
outstanding (after giving effect to all amounts requested) at any one time equal
to such Bank's Commitment MINUS such Bank's Commitment Percentage of the sum of
the Maximum Drawing Amount and all Unpaid Reimbursement Obligations, PROVIDED
that the sum of the outstanding amount of the Revolving Credit Loans (after
giving effect to all amounts requested) PLUS the Maximum Drawing Amount and all
Unpaid Reimbursement Obligations shall not at any time exceed the lesser of (a)
the Total Commitment and (b) the Borrowing Base. The Revolving Credit Loans
shall be made PRO RATA in accordance with each Bank's Commitment Percentage.
Each request for a Revolving Credit Loan hereunder shall constitute a
representation and warranty by the Borrower that the conditions set forth in
ss.11 and ss.12, in the case of the initial Revolving Credit Loans to be made on
the Closing Date, and ss.12, in the case of all other Revolving Credit Loans,
have been satisfied on the date of such request.
2.2. COMMITMENT FEE. The Borrower agrees to pay to the Agent for the
accounts of the Banks in accordance with their respective Commitment Percentages
a commitment fee calculated at the applicable Commitment Fee Rate on the average
daily amount during each calendar quarter or portion thereof from the date
hereof to the Revolving Credit Loan Maturity Date by which the Total Commitment
MINUS the sum of the Maximum Drawing Amount and all Unpaid Reimbursement
Obligations exceeds the outstanding amount of Revolving Credit Loans during such
calendar quarter. The commitment fee shall be payable quarterly in arrears on
the first day of each calendar quarter for the immediately preceding calendar
quarter commencing on the first such date following the date hereof, with a
final payment on the Revolving Credit Maturity Date or any earlier date on which
the Commitments shall terminate.
2.3. REDUCTION OF TOTAL COMMITMENT. The Borrower shall have the right
at any time and from time to time upon five (5) Business Days prior written
notice to the Agent to reduce by $1,000,000 or an integral multiple of $500,000
in excess thereof or terminate entirely the Total Commitment, whereupon the
Commitments of the Banks shall be reduced PRO RATA in accordance with their
respective Commitment Percentages of the amount specified in such notice or, as
the case may be, terminated. Promptly after receiving any notice of the Borrower
delivered pursuant to this ss.2.3, the Agent will notify the Banks of the
substance thereof. Upon the effective date of any such reduction or termination,
the Borrower shall pay to the Agent for the respective accounts of the Banks the
full amount of any commitment fee then accrued on the amount of the reduction.
No reduction or termination of the Commitments may be reinstated.
<PAGE> 27
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2.4. THE REVOLVING CREDIT NOTES. The Revolving Credit Loans shall be
evidenced by separate promissory notes of the Borrower in substantially the form
of EXHIBIT B hereto (each a "Revolving Credit Note"), dated as of the Closing
Date and completed with appropriate insertions. One Revolving Credit Note shall
be payable to the order of each Bank in a principal amount equal to such Bank's
Commitment or, if less, the outstanding amount of all Revolving Credit Loans
made by such Bank, plus interest accrued thereon, as set forth below. The
Borrower irrevocably authorizes each Bank to make or cause to be made, at or
about the time of the Drawdown Date of any Revolving Credit Loan or at the time
of receipt of any payment of principal on such Bank's Revolving Credit Note, an
appropriate notation on such Bank's Revolving Credit Note Record reflecting the
making of such Revolving Credit Loan or (as the case may be) the receipt of such
payment. The outstanding amount of the Revolving Credit Loans set forth on such
Bank's Record shall be PRIMA FACIE evidence of the principal amount thereof
owing and unpaid to such Bank, but the failure to record, or any error in so
recording, any such amount on such Bank's Record shall not limit or otherwise
affect the obligations of the Borrower hereunder or under any Revolving Credit
Note to make payments of principal of or interest on any Revolving Credit Note
when due.
2.5. INTEREST ON REVOLVING CREDIT LOANS. Except as otherwise provided
in ss.5.11,
(a) Each Base Rate Loan shall bear interest for the period
commencing with the Drawdown Date thereof and ending on the last day of
the Interest Period with respect thereto at the rate per annum equal to
the Base Rate PLUS the Applicable Margin.
(b) Each LIBOR Rate Loan shall bear interest for the period
commencing with the Drawdown Date thereof and ending on the last day of
the Interest Period with respect thereto at the rate per annum equal to
the LIBOR Rate determined for such Interest Period PLUS the Applicable
Margin.
(c) The Borrower promises to pay interest on each Revolving
Credit Loan in arrears on each Interest Payment Date with respect
thereto.
2.6. REQUESTS FOR REVOLVING CREDIT LOANS.
2.6.1. GENERAL. The Borrower shall give to the Agent written
notice in the form of EXHIBIT C hereto (or telephonic notice confirmed
in a writing in the form of EXHIBIT C hereto) of each Revolving Credit
Loan requested hereunder (a "Loan Request") no later than (a) 10:00
a.m. (Chicago time) on the proposed Drawdown Date of any Base Rate Loan
and (b) 10:00 a.m. (Chicago time) two (2) LIBOR Business Days prior to
the proposed Drawdown Date of any LIBOR Rate Loan. Each such notice
shall specify (i) the principal amount of the Revolving Credit Loan
requested, (ii) the proposed Drawdown Date of such Revolving Credit
Loan, (iii) the Interest Period for such Revolving Credit
<PAGE> 28
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Loan and (iv) the Type of such Revolving Credit Loan. Promptly upon
receipt of any such notice, the Agent shall notify each of the Banks
thereof. Each Loan Request shall be irrevocable and binding on the
Borrower and shall obligate the Borrower to accept the Revolving Credit
Loan requested from the Banks on the proposed Drawdown Date. Each Loan
Request for a Base Rate Loan shall be in a minimum aggregate amount of
$250,000 or an integral multiple thereof, and each Loan Request for a
LIBOR Rate Loan shall be in a minimum aggregate amount of $500,000 or
an integral multiple thereof.
2.7. CONVERSION OPTIONS.
2.7.1. CONVERSION TO DIFFERENT TYPE OF REVOLVING CREDIT LOAN.
The Borrower may elect from time to time to convert any outstanding
Revolving Credit Loan to a Revolving Credit Loan of another Type,
PROVIDED that (a) with respect to any such conversion of a LIBOR Rate
Loan to a Base Rate Loan, the Borrower shall give the Agent at least
two (2) Business Days prior written notice of such election; (b) with
respect to any such conversion of a Base Rate Loan to a LIBOR Rate
Loan, the Borrower shall give the Agent at least two (2) LIBOR Business
Days prior written notice of such election; (c) with respect to any
such conversion of a LIBOR Rate Loan into a Revolving Credit Loan of
another Type, such conversion shall only be made on the last day of the
Interest Period with respect thereto and (d) no Revolving Credit Loan
may be converted into a LIBOR Rate Loan when any Default or Event of
Default has occurred and is continuing. On the date on which such
conversion is being made each Bank shall take such action as is
necessary to transfer its Commitment Percentage of such Revolving
Credit Loans to its Domestic Lending Office or its LIBOR Lending
Office, as the case may be. All or any part of outstanding Revolving
Credit Loans of any Type may be converted into a Revolving Credit Loan
of another Type as provided herein, PROVIDED that any partial
conversion shall be in an aggregate principal amount of $500,000 or a
whole multiple thereof. Each Conversion Request relating to the
conversion of a Revolving Credit Loan to a LIBOR Rate Loan shall be
irrevocable by the Borrower.
2.7.2. CONTINUATION OF TYPE OF REVOLVING CREDIT LOAN. Any
Revolving Credit Loan of any Type may be continued as a Revolving
Credit Loan of the same Type upon the expiration of an Interest Period
with respect thereto by compliance by the Borrower with the notice
provisions contained in ss.2.7.1; PROVIDED that no LIBOR Rate Loan may
be continued as such when any Default or Event of Default has occurred
and is continuing, but shall be automatically converted to a Base Rate
Loan on the last day of the first Interest Period relating thereto
ending during the continuance of any Default or Event of Default of
which officers of the Agent active upon the Borrower's account have
actual knowledge. In the event that the Borrower fails to provide any
such notice with respect to the continuation of any LIBOR Rate Loan as
such,
<PAGE> 29
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then such LIBOR Rate Loan shall be automatically converted to a Base
Rate Loan on the last day of the first Interest Period relating
thereto. The Agent shall notify the Banks promptly when any such
automatic conversion contemplated by this ss.2.7 is scheduled to occur.
2.7.3. LIBOR RATE LOANS. Any conversion to or from LIBOR Rate
Loans shall be in such amounts and be made pursuant to such elections
so that, after giving effect thereto, the aggregate principal amount of
all LIBOR Rate Loans having the same Interest Period shall not be less
than $500,000 or a whole multiple of $500,000 in excess thereof.
2.8. FUNDS FOR REVOLVING CREDIT LOAN.
2.8.1. FUNDING PROCEDURES. Not later than 11:00 a.m. (Chicago
time) on the proposed Drawdown Date of any Revolving Credit Loans, each
of the Banks will make available to the Agent, at the Agent's Head
Office, in immediately available funds, the amount of such Bank's
Commitment Percentage of the amount of the requested Revolving Credit
Loans. Upon receipt from each Bank of such amount, and upon receipt of
the documents required by ss.ss.11 and 12 and the satisfaction of the
other conditions set forth therein, to the extent applicable, the Agent
will make available to the Borrower the aggregate amount of such
Revolving Credit Loans made available to the Agent by the Banks. The
failure or refusal of any Bank to make available to the Agent at the
aforesaid time and place on any Drawdown Date the amount of its
Commitment Percentage of the requested Revolving Credit Loans shall not
relieve any other Bank from its several obligation hereunder to make
available to the Agent the amount of such other Bank's Commitment
Percentage of any requested Revolving Credit Loans.
2.8.2. ADVANCES BY AGENT. The Agent may, unless notified to
the contrary by any Bank prior to a Drawdown Date, assume that such
Bank has made available to the Agent on such Drawdown Date the amount
of such Bank's Commitment Percentage of the Revolving Credit Loans to
be made on such Drawdown Date, and the Agent may (but it shall not be
required to), in reliance upon such assumption, make available to the
Borrower a corresponding amount. If any Bank makes available to the
Agent such amount on a date after such Drawdown Date, such Bank shall
pay to the Agent on demand an amount equal to the product of (a) the
average computed for the period referred to in clause (c) below, of the
weighted average interest rate paid by the Agent for federal funds
acquired by the Agent during each day included in such period, TIMES
(b) the amount of such Bank's Commitment Percentage of such Revolving
Credit Loans, TIMES (c) a fraction, the numerator of which is the
number of days that elapse from and including such Drawdown Date to the
date on which the amount of such Bank's Commitment Percentage of such
Revolving Credit Loans shall become immediately available to the Agent,
and the denominator of which is 365. A statement of the Agent
<PAGE> 30
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submitted to such Bank with respect to any amounts owing under this
paragraph shall be PRIMA FACIE evidence of the amount due and owing to
the Agent by such Bank. If the amount of such Bank's Commitment
Percentage of such Revolving Credit Loans is not made available to the
Agent by such Bank within three (3) Business Days following such
Drawdown Date, the Agent agrees to provide the Borrower with notice of
such events (PROVIDED, the Agent shall not be liable for any failure to
so deliver such notice and the failure by the Agent to provide the
Borrower with any such notice shall in no manner alter the Borrower's
obligations under this ss.2.8.2) and the Agent shall be entitled to
recover such amount from the Borrower on demand, with interest thereon
at the rate per annum applicable to the Revolving Credit Loans made on
such Drawdown Date.
2.9. CHANGE IN BORROWING BASE. The Borrowing Base shall be determined
quarterly (or at such other interval as may be specified pursuant to ss.8.4(e))
by the Agent by reference to the Borrowing Base Report delivered to the Banks
and the Agent pursuant to ss.8.4(e). The Agent shall give to the Borrower
written notice of any change in the Borrowing Base determined by the Agent. In
the case of a reduction in the lending formula with respect to Eligible Accounts
Receivable, such notice shall be effective ten (10) days after its receipt by
the Borrower.
3. REPAYMENT OF THE REVOLVING CREDIT LOANS.
3.1. MATURITY. The Borrower promises to pay on the Revolving Credit
Loan Maturity Date, and there shall become absolutely due and payable on the
Revolving Credit Loan Maturity Date, all of the Revolving Credit Loans
outstanding on such date, together with any and all accrued and unpaid interest
thereon.
3.2. MANDATORY REPAYMENTS OF REVOLVING CREDIT LOANS. If at any time the
sum of the outstanding amount of the Revolving Credit Loans, the Maximum Drawing
Amount and all Unpaid Reimbursement Obligations exceeds the lesser of (a) the
Total Commitment and (b) the Borrowing Base, then the Borrower shall immediately
pay the amount of such excess to the Agent for the respective accounts of the
Banks for application: first, to any Unpaid Reimbursement Obligations; second,
to the Revolving Credit Loans; and third, to provide to the Agent cash
collateral for Reimbursement Obligations as contemplated by ss.4.2(b) and (c).
Each payment of any Unpaid Reimbursement Obligations or prepayment of Revolving
Credit Loans shall be allocated among the Banks, in proportion, as nearly as
practicable, to each Reimbursement Obligation or (as the case may be) the
respective unpaid principal amount of each Bank's Revolving Credit Note, with
adjustments to the extent practicable to equalize any prior payments or
repayments not exactly in proportion.
3.3. OPTIONAL REPAYMENTS OF REVOLVING CREDIT LOANS. The Borrower shall
have the right, at its election, to repay the outstanding amount of the
Revolving Credit Loans, as a whole or in part, at any time without penalty or
<PAGE> 31
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premium, PROVIDED that any full or partial prepayment of the outstanding amount
of any LIBOR Rate Loans pursuant to this ss.3.3 may be made only on the last day
of the Interest Period relating thereto. The Borrower shall give the Agent, no
later than 10:00 a.m., Chicago time, at least one (1) Business Days prior
written notice of any proposed prepayment pursuant to this ss.3.3 of Base Rate
Loans, and two (2) LIBOR Business Days notice of any proposed prepayment
pursuant to this ss.3.3 of LIBOR Rate Loans, in each case specifying the
proposed date of prepayment of Revolving Credit Loans and the principal amount
to be prepaid. Each such partial prepayment of the Revolving Credit Loans shall
be in an aggregate amount of $500,000 or integral multiple of $250,000 in excess
thereof, shall be accompanied by the payment of accrued interest on the
principal prepaid to the date of prepayment and shall be applied, in the absence
of instruction by the Borrower, first to the principal of Base Rate Loans and
then to the principal of LIBOR Rate Loans. Each partial prepayment shall be
allocated among the Banks, in proportion, as nearly as practicable, to the
respective unpaid principal amount of each Bank's Revolving Credit Note, with
adjustments to the extent practicable to equalize any prior repayments not
exactly in proportion.
4. LETTERS OF CREDIT.
4.1. LETTER OF CREDIT COMMITMENTS.
4.1.1. COMMITMENT TO ISSUE LETTERS OF CREDIT. Subject to the
terms and conditions hereof and the execution and delivery by the
Borrower of a letter of credit application on the Agent's customary
form (a "Letter of Credit Application"), the Agent on behalf of the
Banks and in reliance upon the agreement of the Banks set forth in
ss.4.1.4 and upon the representations and warranties of the Borrower
contained herein, agrees, in its individual capacity, to issue, extend
and renew for the account of the Borrower one or more standby or
documentary letters of credit (individually, a "Letter of Credit"), in
such form as may be requested from time to time by the Borrower and
agreed to by the Agent; PROVIDED, HOWEVER, that after giving effect to
such request, the sum of (a) the Maximum Drawing Amount on all Letters
of Credit, (b) all Unpaid Reimbursement Obligations, and (c) the amount
of all Revolving Credit Loans outstanding shall not exceed the lesser
of (i) the Total Commitment and (ii) the Borrowing Base.
Notwithstanding the foregoing, except in connection with Letters of
Credit issued to support Indebtedness assumed or incurred in any
connection with any Permitted Acquisition, the Agent shall have no
obligation to issue any Letter of Credit to support or secure any
Indebtedness of the Borrower or any of its Subsidiaries to the extent
that such Indebtedness was incurred prior to the proposed issuance date
of such Letter of Credit, unless in any such case the Borrower
demonstrates to the satisfaction of the Agent that (x) such prior
incurred Indebtedness were then fully secured by a prior perfected and
unavoidable security interest in collateral provided by the Borrower or
such Subsidiary to the proposed beneficiary of such Letter of Credit or
(y) such prior incurred Indebtedness were then
<PAGE> 32
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secured or supported by a letter of credit issued for the account of
the Borrower or such Subsidiary and the reimbursement obligation with
respect to such letter of credit was fully secured by a prior perfected
and unavoidable security interest in collateral provided to the issuer
of such letter of credit by the Borrower or such Subsidiary.
4.1.2. LETTER OF CREDIT APPLICATIONS. Each Letter of Credit
Application shall be completed to the satisfaction of the Agent. In the
event that any provision of any Letter of Credit Application shall be
inconsistent with any provision of this Credit Agreement, then the
provisions of this Credit Agreement shall, to the extent of any such
inconsistency, govern.
4.1.3. TERMS OF LETTERS OF CREDIT. Each Letter of Credit
issued, extended or renewed hereunder shall, among other things, (a)
provide for the payment of sight drafts for honor thereunder when
presented in accordance with the terms thereof and when accompanied by
the documents described therein, and (b) have an expiry date no later
than the date which is fourteen (14) days (or, if the Letter of Credit
is confirmed by a confirmer or otherwise provides for one or more
nominated persons, forty-five (45) days) prior to the Revolving Credit
Loan Maturity Date. Each Letter of Credit so issued, extended or
renewed shall be subject to the Uniform Customs or, in the case of a
standby Letter of Credit, either the Uniform Customs or the
International Standby Practices.
4.1.4. REIMBURSEMENT OBLIGATIONS OF BANKS. Each Bank severally
agrees that it shall be absolutely liable, without regard to the
occurrence of any Default or Event of Default or any other condition
precedent whatsoever, to the extent of such Bank's Commitment
Percentage, to reimburse the Agent on demand for the amount of each
draft paid by the Agent under each Letter of Credit to the extent that
such amount is not reimbursed by the Borrower pursuant to ss.4.2 (such
agreement for a Bank being called herein the "Letter of Credit
Participation" of such Bank).
4.1.5. PARTICIPATIONS OF BANKS. Each such payment made by a
Bank shall be treated as the purchase by such Bank of a participating
interest in the Borrower's Reimbursement Obligation under ss.4.2 in an
amount equal to such payment. Each Bank shall share in accordance with
its participating interest in any interest which accrues pursuant to
ss.4.2.
4.2. REIMBURSEMENT OBLIGATION OF THE BORROWER. In order to induce the
Agent to issue, extend and renew each Letter of Credit and the Banks to
participate therein, the Borrower hereby agrees to reimburse or pay to the
Agent, for the account of the Agent or (as the case may be) the Banks, with
respect to each Letter of Credit issued, extended or renewed by the Agent
hereunder,
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(a) except as otherwise expressly provided in ss.4.2(b) and
(c), on each date that any draft presented under such Letter of Credit
is honored by the Agent, or the Agent otherwise makes a payment with
respect thereto, (i) the amount paid by the Agent under or with respect
to such Letter of Credit, and (ii) the amount of any taxes, fees,
charges or other costs and expenses whatsoever incurred by the Agent or
any Bank in connection with any payment made by the Agent or any Bank
under, or with respect to, such Letter of Credit,
(b) upon the reduction (but not termination) of the Total
Commitment to an amount less than the Maximum Drawing Amount, an amount
equal to such difference, which amount shall be held by the Agent for
the benefit of the Banks and the Agent as cash collateral for all
Reimbursement Obligations, and
(c) upon the termination of the Total Commitment, or the
acceleration of the Reimbursement Obligations with respect to all
Letters of Credit in accordance with ss.13, an amount equal to the then
Maximum Drawing Amount on all Letters of Credit, which amount shall be
held by the Agent for the benefit of the Banks and the Agent as cash
collateral for all Reimbursement Obligations.
Each such payment shall be made to the Agent at the Agent's Head Office in
immediately available funds. Interest on any and all amounts remaining unpaid by
the Borrower under this ss.4.2 at any time from the date such amounts become due
and payable (whether as stated in this ss.4.2, by acceleration or otherwise)
until payment in full (whether before or after judgment) shall be payable to the
Agent on demand at the rate specified in ss.5.11 for overdue principal on the
Revolving Credit Loans.
4.3. LETTER OF CREDIT PAYMENTS. If any draft shall be presented or
other demand for payment shall be made under any Letter of Credit, the Agent
shall notify the Borrower of the date and amount of the draft presented or
demand for payment and of the date and time when it expects to pay such draft or
honor such demand for payment. If the Borrower fails to reimburse the Agent as
provided in ss.4.2 on or before the date that such draft is paid or other
payment is made by the Agent, the Agent may at any time thereafter notify the
Banks of the amount of any such Unpaid Reimbursement Obligation. No later than
3:00 p.m. (Chicago time) on the Business Day next following the receipt of such
notice, each Bank shall make available to the Agent, at the Agent's Head Office,
in immediately available funds, such Bank's Commitment Percentage of such Unpaid
Reimbursement Obligation, together with an amount equal to the product of (a)
the average, computed for the period referred to in clause (c) below, of the
weighted average interest rate paid by the Agent for federal funds acquired by
the Agent during each day included in such period, TIMES (b) the amount equal to
such Bank's Commitment Percentage of such Unpaid Reimbursement Obligation, TIMES
(c) a fraction, the numerator of which is the number of days that elapse from
and including the date the Agent paid the draft presented for honor or otherwise
made payment to the date on which such
<PAGE> 34
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Bank's Commitment Percentage of such Unpaid Reimbursement obligation shall
become immediately available to the Agent, and the denominator of which is 360.
The responsibility of the Agent to the Borrower and the Banks shall be only to
determine that the documents (including each draft) delivered under each Letter
of Credit in connection with such presentment shall be in conformity in all
material respects with such Letter of Credit.
4.4. OBLIGATIONS ABSOLUTE. The Borrower's obligations under this ss.4
shall be absolute and unconditional under any and all circumstances and
irrespective of the occurrence of any Default or Event of Default or any
condition precedent whatsoever or any setoff, counterclaim or defense to payment
which the Borrower may have or have had against the Agent, any Bank or any
beneficiary of a Letter of Credit. The Borrower further agrees with the Agent
and the Banks that the Agent and the Banks shall not be responsible for, and the
Borrower's Reimbursement Obligations under ss.4.2 shall not be affected by,
among other things, the validity or genuineness of documents or of any
endorsements thereon, even if such documents should in fact prove to be in any
or all respects invalid, fraudulent or forged, or any dispute between or among
the Borrower, the beneficiary of any Letter of Credit or any financing
institution or other party to which any Letter of Credit may be transferred or
any claims or defenses whatsoever of the Borrower against the beneficiary of any
Letter of Credit or any such transferee. The Agent and the Banks shall not be
liable for any error, omission, interruption or delay in transmission, dispatch
or delivery of any message or advice, however transmitted, in connection with
any Letter of Credit. The Borrower agrees that any action taken or omitted by
the Agent or any Bank under or in connection with each Letter of Credit and the
related drafts and documents, if done in good faith, shall be binding upon the
Borrower and shall not result in any liability on the part of the Agent or any
Bank to the Borrower.
4.5. RELIANCE BY ISSUER. To the extent not inconsistent with ss.4.4,
the Agent shall be entitled to rely, and shall be fully protected in relying
upon, any Letter of Credit, draft, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons
and upon advice and statements of legal counsel, independent accountants and
other experts selected by the Agent. The Agent shall be fully justified in
failing or refusing to take any action under this Credit Agreement unless it
shall first have received such advice or concurrence of the Majority Banks as it
reasonably deems appropriate or it shall first be indemnified to its reasonable
satisfaction by the Banks against any and all liability and expense which may be
incurred by it by reason of taking or continuing to take any such action. The
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Credit Agreement in accordance with a request of the Majority
Banks, and such request and any action taken or failure to act pursuant thereto
shall be binding upon the Banks and all future holders of the Revolving Credit
Notes or of a Letter of Credit Participation.
<PAGE> 35
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4.6. LETTER OF CREDIT FEE. The Borrower shall pay a fee (in each case,
a "Letter of Credit Fee") to the Agent in respect of each Letter of Credit an
amount equal to the Letter of Credit Rate per annum of the face amount of such
standby Letter of Credit, which Letter of Credit Fee shall be for the accounts
of the Banks in accordance with their respective Commitment Percentages. Such
Letter of Credit Fee shall be due and payable quarterly in arrears. In respect
of each Letter of Credit, the Borrower shall also pay to the Agent for the
Agent's own account, at such other time or times as such charges are customarily
made by the Agent, the Agent's customary issuance, amendment, negotiation or
document examination and other administrative fees as in effect from time to
time.
5. CERTAIN GENERAL PROVISIONS.
5.1. CLOSING . The Borrower agrees to pay to the Agent for the PRO RATA
accounts of the Banks on the Closing Date a closing fee in the amount set forth
in the Syndication Side Letter.
5.2. OTHER FEES. The Borrower shall pay to the Agent those other fees,
if any, provided for in the Syndication Side Letter, such fees to be due and
payable at the times specified in such Syndication Side Letter.
5.3. FUNDS FOR PAYMENTS.
5.3.1. PAYMENTS TO AGENT. All payments of principal, interest,
Reimbursement Obligations, commitment fees, Letter of Credit Fees and
any other amounts due hereunder or under any of the other Loan
Documents shall be made on the due date thereof to the Agent in
Dollars, for the respective accounts of the Banks and the Agent, at the
Agent's Head Office or at such other place that the Agent may from time
to time designate, in each case at or about 11:00 a.m. (Chicago,
Illinois, time or other local time at the place of payment) and in
immediately available funds.
5.3.2. NO OFFSET, ETC. All payments by the Borrower hereunder
and under any of the other Loan Documents shall be made without
recoupment, setoff or counterclaim and free and clear of and without
deduction for any taxes, levies, imposts, duties, charges, fees,
deductions, withholdings, compulsory loans, restrictions or conditions
of any nature now or hereafter imposed or levied by any jurisdiction or
any political subdivision thereof or taxing or other authority therein
unless the Borrower is compelled by law to make such deduction or
withholding. If any such obligation is imposed upon the Borrower with
respect to any amount payable by it hereunder or under any of the other
Loan Documents, the Borrower will pay to the Agent, for the account of
the Banks or (as the case may be) the Agent, on the date on which such
amount is due and payable hereunder or under such other Loan Document,
such additional amount in Dollars as shall be necessary to enable the
Banks or the Agent to receive the same net amount which the
<PAGE> 36
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Banks or the Agent would have received on such due date had no such
obligation been imposed upon the Borrower. The Borrower will deliver
promptly to the Agent certificates or other valid vouchers for all
taxes or other charges deducted from or paid with respect to payments
made by the Borrower hereunder or under such other Loan Document.
5.4. COMPUTATIONS. All computations of interest on the Base Rate Loans
and of commitment fees, Letter of Credit Fees or other fees shall, unless
otherwise expressly provided herein, be based on a 365-day year and paid for the
actual number of days elapsed, and all computations of interest on the LIBOR
Rate Loans shall be based on a 360-day year and paid for the actual number of
days elapsed. Except as otherwise provided in the definition of the term
"Interest Period" with respect to LIBOR Rate Loans, whenever a payment hereunder
or under any of the other Loan Documents becomes due on a day that is not a
Business Day, the due date for such payment shall be extended to the next
succeeding Business Day, and interest shall accrue during such extension. The
outstanding amount of the Revolving Credit Loans as reflected on the Records
from time to time shall be considered correct and binding on the Borrower unless
within five (5) Business Days after receipt of any notice by the Agent or any of
the Banks of such outstanding amount, the Agent or such Bank shall notify the
Borrower to the contrary.
5.5. INABILITY TO DETERMINE LIBOR RATE. In the event, prior to the
commencement of any Interest Period relating to any LIBOR Rate Loan, the Agent
shall determine or be notified by the Majority Banks that adequate and
reasonable methods do not exist for ascertaining the LIBOR Rate that would
otherwise determine the rate of interest to be applicable to any LIBOR Rate Loan
during any Interest Period, the Agent shall forthwith give notice of such
determination (which shall be conclusive and binding on the Borrower and the
Banks) to the Borrower and the Banks. In such event (a) any Loan Request or
Conversion Request with respect to LIBOR Rate Loans shall be automatically
withdrawn and shall be deemed a request for Base Rate Loans, (b) each LIBOR Rate
Loan will automatically, on the last day of the then current Interest Period
relating thereto, become a Base Rate Loan, and (c) the obligations of the Banks
to make LIBOR Rate Loans shall be suspended until the Agent or the Majority
Banks determine that the circumstances giving rise to such suspension no longer
exist, whereupon the Agent or, as the case may be, the Agent upon the
instruction of the Majority Banks, shall so notify the Borrower and the Banks.
5.6. ILLEGALITY. Notwithstanding any other provisions herein, if any
present or future law, regulation, treaty or directive or in the interpretation
or application thereof shall make it unlawful for any Bank to make or maintain
LIBOR Rate Loans, such Bank shall forthwith give notice of such circumstances to
the Borrower and the other Banks and thereupon (a) the commitment of such Bank
to make LIBOR Rate Loans or convert Revolving Credit Loans of another Type to
LIBOR Rate Loans shall forthwith be suspended and (b) such Bank's Revolving
Credit Loans then outstanding as LIBOR Rate Loans, if any, shall be converted
automatically to Base Rate Loans on the last day of each Interest Period
applicable to such LIBOR Rate Loans or within such earlier
<PAGE> 37
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period as may be required by law. The Borrower hereby agrees promptly to pay the
Agent for the account of such Bank, upon demand by such Bank, any additional
amounts necessary to compensate such Bank for any costs incurred by such Bank in
making any conversion in accordance with this ss.5.6, including any interest or
fees payable by such Bank to lenders of funds obtained by it in order to make or
maintain its LIBOR Rate Loans hereunder.
5.7. ADDITIONAL COSTS, ETC. If any present or future applicable law,
which expression, as used herein, includes statutes, rules and regulations
thereunder and interpretations thereof by any competent court or by any
governmental or other regulatory body or official charged with the
administration or the interpretation thereof and requests, directives,
instructions and notices at any time or from time to time hereafter made upon or
otherwise issued to any Bank or the Agent by any central bank or other fiscal,
monetary or other authority (whether or not having the force of law), shall:
(a) subject any Bank or the Agent to any tax, levy, impost,
duty, charge, fee, deduction or withholding of any nature with respect
to this Credit Agreement, the other Loan Documents, any Letters of
Credit, such Bank's Commitment or the Revolving Credit Loans (other
than taxes based upon or measured by the income or profits of such Bank
or the Agent), or
(b) materially change the basis of taxation (except for
changes in taxes on income or profits) of payments to any Bank of the
principal of or the interest on any Revolving Credit Loans or any other
amounts payable to any Bank or the Agent under this Credit Agreement or
any of the other Loan Documents, or
(c) impose or increase or render applicable (other than to the
extent specifically provided for elsewhere in this Credit Agreement)
any special deposit, reserve, assessment, liquidity, capital adequacy
or other similar requirements (whether or not having the force of law)
against assets held by, or deposits in or for the account of, or loans
by, or letters of credit issued by, or commitments of an office of any
Bank, or
(d) impose on any Bank or the Agent any other conditions or
requirements with respect to this Credit Agreement, the other Loan
Documents, any Letters of Credit, the Revolving Credit Loans, such
Bank's Commitment, or any class of loans, letters of credit or
commitments of which any of the Revolving Credit Loans or such Bank's
Commitment forms a part, and the result of any of the foregoing is
(i) to increase the cost to any Bank of making,
funding, issuing, renewing, extending or maintaining any of
the Revolving Credit Loans or such Bank's Commitment or any
Letter of Credit, or
<PAGE> 38
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(ii) to reduce the amount of principal, interest,
Reimbursement Obligation or other amount payable to such Bank
or the Agent hereunder on account of such Bank's Commitment,
any Letter of Credit or any of the Revolving Credit Loans, or
(iii) to require such Bank or the Agent to make any
payment or to forego any interest or Reimbursement Obligation
or other sum payable hereunder, the amount of which payment or
foregone interest or Reimbursement Obligation or other sum is
calculated by reference to the gross amount of any sum
receivable or deemed received by such Bank or the Agent from
the Borrower hereunder,
then, and in each such case, the Borrower will, upon demand made by such Bank or
(as the case may be) the Agent at any time and from time to time and as often as
the occasion therefor may arise, pay to such Bank or the Agent such additional
amounts as will be sufficient to compensate such Bank or the Agent for such
additional cost, reduction, payment or foregone interest or Reimbursement
Obligation or other sum, PROVIDED that the Borrower shall not be liable to any
Bank or the Agent for costs incurred more than sixty (60) days prior to receipt
by the Borrower of such demand for payment from such Bank or, as the case may
be, the Agent, unless such costs were incurred prior to such sixty (60) day
period as a result of such present or future applicable law being retroactive to
a date which occurred prior to such sixty (60) day period.
5.8. CAPITAL ADEQUACY. If after the date hereof any Bank or the Agent
determines that (a) the adoption of or change in any law, governmental rule,
regulation, policy, guideline or directive (whether or not having the force of
law) regarding capital requirements for banks or bank holding companies or any
change in the interpretation or application thereof by a court or governmental
authority with appropriate jurisdiction, or (b) compliance by such Bank or the
Agent or any corporation controlling such Bank or the Agent with any law,
governmental rule, regulation, policy, guideline or directive (whether or not
having the force of law) of any such entity regarding capital adequacy, has the
effect of reducing the return on such Bank's or the Agent's commitment with
respect to any Revolving Credit Loans to a level below that which such Bank or
the Agent could have achieved but for such adoption, change or compliance
(taking into consideration such Bank's or the Agent's then existing policies
with respect to capital adequacy and assuming full utilization of such entity's
capital) by any amount deemed by such Bank or (as the case may be) the Agent to
be material, then such Bank or the Agent may notify the Borrower of such fact.
To the extent that the amount of such reduction in the return on capital is not
reflected in the Base Rate, the Borrower and such Bank shall thereafter attempt
to negotiate in good faith, within thirty (30) days of the day on which the
Borrower receives such notice, an adjustment payable hereunder that will
adequately compensate such Bank in light of these circumstances. If the Borrower
and such Bank are unable to agree to such adjustment within thirty (30) days of
the date on which the Borrower receives such notice, then commencing on the date
of such notice (but not earlier than the effective date of
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any such increased capital requirement), the fees payable hereunder shall
increase by an amount that will, in such Bank's reasonable determination,
provide adequate compensation; PROVIDED that the Borrower shall not be liable to
any Bank or the Agent for costs incurred more than sixty (60) days prior to
receipt by the Borrower of the notice referred to in the immediately preceding
sentence from such Bank or the Agent, as the case may be. Each Bank shall
allocate such cost increases among its customers in good faith and on an
equitable basis.
5.9. CERTIFICATE. A certificate setting forth any additional amounts
payable pursuant to ss.ss.5.7 or 5.8 and a reasonably detailed explanation of
such amounts which are due, submitted by any Bank or the Agent to the Borrower,
shall be conclusive, absent manifest error, that such amounts are due and owing.
5.10. INDEMNITY. The Borrower agrees to indemnify each Bank and to hold
each Bank harmless from and against any loss, cost or expense (including loss of
anticipated profits) that such Bank may sustain or incur as a consequence of (a)
default by the Borrower in payment of the principal amount of or any interest on
any LIBOR Rate Loans as and when due and payable, including any such loss or
expense arising from interest or fees payable by such Bank to lenders of funds
obtained by it in order to maintain its LIBOR Rate Loans, (b) default by the
Borrower in making a borrowing or conversion after the Borrower has given (or is
deemed to have given) a Loan Request or a Conversion Request relating thereto in
accordance with ss.2.6 or ss.2.7 or (c) the making of any payment of a LIBOR
Rate Loan or the making of any conversion of any such Revolving Credit Loan to a
Base Rate Loan on a day that is not the last day of the applicable Interest
Period with respect thereto, including interest or fees payable by such Bank to
lenders of funds obtained by it in order to maintain any such Revolving Credit
Loans.
5.11. INTEREST AFTER DEFAULT.
5.11.1. OVERDUE AMOUNTS. Overdue principal and (to the extent
permitted by applicable law) interest on the Revolving Credit Loans and
all other overdue amounts payable hereunder or under any of the other
Loan Documents shall bear interest compounded monthly and payable on
demand at a rate per annum equal to two percent (2%) above the rate of
interest otherwise applicable to such Revolving Credit Loans pursuant
to ss.2.5 until such amount shall be paid in full (after as well as
before judgment).
5.11.2. AMOUNTS NOT OVERDUE. During the continuance of a
Default or an Event of Default the principal of the Revolving Credit
Loans not overdue shall, until such Default or Event of Default has
been cured or remedied or such Default or Event of Default has been
waived by the Majority Banks pursuant to ss.26, bear interest at a rate
per annum equal to two percent (2%) above the rate of interest
otherwise applicable to such Revolving Credit Loans pursuant to ss.2.5.
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5.12. REPLACEMENT OF BANKS. Within thirty (30) days after (a) any Bank
had demanded compensation from the Borrower pursuant to ss.ss.5.7 or 5.8 hereof,
or (b) there shall have occurred a change in law with respect to any Bank as a
consequence of which it shall have become unlawful for such Bank to make a LIBOR
Rate Loan on any Drawdown Date, as described in ss.5.6 hereof (any such Bank
described in the foregoing clauses (a) or (b) is hereinafter referred to as an
"Affected Bank"), the Borrower may request that the other Banks (collectively,
the "Non-Affected Banks") acquire all, but not less than all, of the Affected
Bank's Commitment or may designate a replacement bank or banks, which must be an
Eligible Assignee and which also must be reasonably acceptable to the Agent, to
acquire and assume all or any portion of the outstanding Revolving Credit Loans
and Commitment of the Affected Bank (the "Replacement Bank"). If the Borrower so
requests the Non-Affected Banks to acquire all or a portion of the Affected
Bank's Commitment, the Non-Affected Banks may elect to acquire all or any
portion of the Affected Banks outstanding Revolving Credit Loans and to assume
all or any portion of the Affected Bank's Commitment. If the Non-Affected Banks
do not elect to acquire and assume all or any portion of the Affected Bank's
outstanding Revolving Credit Loans and Commitment, the Replacement Bank may
acquire and assume that portion of the outstanding Revolving Credit Loans and
Commitments of the Affected Bank not otherwise acquired or assumed by the
Non-Affected Banks. The provisions of ss.19 hereof shall apply to all
reallocations pursuant to this ss.5.12, and the Affected Bank and any
Non-Affected Banks and/or replacement banks which are to acquire the Revolving
Credit Loans and Commitment of the Affected Bank shall execute and deliver to
the Agent, in accordance with the provisions of ss.19 hereof, such Assignments
and Acceptances and other instruments, including, without limitation, the
Revolving Credit Notes, as are required pursuant to ss.19 hereof to give effect
to such reallocations. On the effective date of the applicable Assignment and
Acceptance, the Borrower shall pay to the Affected Bank all interest accrued on
its Revolving Credit Loans up to but excluding such date, along with any fees
payable to such Affected Bank hereunder up to but excluding such date.
6. GUARANTIES.
6.1. GUARANTIES OF SUBSIDIARIES. The Obligations shall be guaranteed
pursuant to the terms of the Guaranty.
7. REPRESENTATIONS AND WARRANTIES.
The Borrower represents and warrants to the Banks and the Agent as
follows:
7.1. CORPORATE AUTHORITY.
7.1.1. INCORPORATION; GOOD STANDING. Each of the Borrower and
the Guarantors (a) is a corporation duly organized, validly existing
and in good standing under the laws of its state or other jurisdiction
of incorporation, (b) has all requisite corporate power to own its
property
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and conduct its business as now conducted and as presently
contemplated, and (c) is in good standing as a foreign corporation and
is duly authorized to do business in each jurisdiction where such
qualification is necessary except where a failure to be so qualified
would not have a Material Adverse Effect.
7.1.2. AUTHORIZATION. The execution, delivery and performance
of this Credit Agreement and the other Loan Documents to which the
Borrower or any Guarantor is or is to become a party and the
transactions contemplated hereby and thereby (a) are within the
corporate authority of such Person, (b) have been duly authorized by
all necessary corporate proceedings, (c) do not conflict with or result
in any breach or contravention of any provision of law, statute, rule
or regulation to which the Borrower or any Guarantor is subject or any
judgment, order, writ, injunction, license or permit applicable to the
Borrower or any Guarantor and (d) do not conflict with any provision of
the corporate charter or bylaws of, or any agreement or other
instrument binding upon, the Borrower or any Guarantor.
7.1.3. ENFORCEABILITY. The execution and delivery of this
Credit Agreement and the other Loan Documents to which the Borrower or
any Guarantor is or is to become a party will result in valid and
legally binding obligations of such Person enforceable against it in
accordance with the respective terms and provisions hereof and thereof,
except as enforceability is limited by bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or affecting
generally the enforcement of creditors' rights and except to the extent
that availability of the remedy of specific performance or injunctive
relief is subject to the discretion of the court before which any
proceeding therefor may be brought.
7.2. GOVERNMENTAL APPROVALS. The execution, delivery and performance by
the Borrower and any Guarantor of this Credit Agreement and the other Loan
Documents to which the Borrower or any Guarantor is or is to become a party and
the transactions contemplated hereby and thereby do not require the approval or
consent of, or filing with, any governmental agency or authority other than
those already obtained.
7.3. TITLE TO PROPERTIES; LEASES. Except as indicated on SCHEDULE 7.3
hereto, the Borrower and its Subsidiaries own all of the assets reflected in the
consolidated balance sheet of the Borrower and its Subsidiaries as at the
Balance Sheet Date or acquired since that date (except property and assets sold
or otherwise disposed of in the ordinary course of business since that date),
subject to no rights of others, including any mortgages, leases, conditional
sales agreements, title retention agreements, liens or other encumbrances except
Permitted Liens.
7.4. FINANCIAL STATEMENTS, PROJECTIONS AND SOLVENCY.
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7.4.1. FISCAL YEAR. The Borrower and each Guarantor has a
fiscal year which is the twelve months ending on September 30 of each
calendar year.
7.4.2. FINANCIAL STATEMENTS. There has been furnished to each
of the Banks a consolidated balance sheet of the Borrower and its
Subsidiaries as at the Balance Sheet Date, and a consolidated statement
of income of the Borrower and its Subsidiaries for the fiscal year then
ended, certified by PricewaterhouseCoopers LLP. Such balance sheet and
statement of income have been prepared in accordance with generally
accepted accounting principles and fairly present the financial
condition of the Borrower as at the close of business on the date
thereof and the results of operations for the fiscal year then ended.
There are no contingent liabilities of the Borrower or any of its
Subsidiaries as of such date involving material amounts, known to the
officers of the Borrower, which were not disclosed in such balance
sheet and the notes related thereto and which could reasonably be
expected to have a Material Adverse Effect.
7.4.3. PROJECTIONS. The projections of the annual operating
budgets of the Borrower and its Subsidiaries on a consolidated basis,
balance sheets and cash flow statements for the 2000 to 2001 fiscal
years, copies of which have been delivered to each Bank, disclose all
assumptions made with respect to general economic, financial and market
conditions used in formulating such projections. To the knowledge of
the Borrower or any of its Subsidiaries, no facts exist that
(individually or in the aggregate) would result in any material change
in any of such projections. The projections are based upon reasonable
estimates and assumptions, have been prepared on the basis of the
assumptions stated therein and reflect the reasonable estimates of the
Borrower and its Subsidiaries of the results of operations and other
information projected therein.
7.4.4. SOLVENCY. The Borrower and its Subsidiaries, on a
consolidated basis, both before and after giving effect to the
transactions contemplated by this Credit Agreement and the other Loan
Documents (a) are solvent; (b) have assets having a fair value in
excess of their liabilities; (c) have assets having a fair value in
excess of the amount required to pay their liabilities on existing
debts as such debts become due and payable, and (d) have, and expect to
continue to have, access to adequate capital for the conduct of their
business and the ability to pay their debts from time to time incurred
in connection with the operation of their business as such debts
mature.
7.5. NO MATERIAL CHANGES, ETC. Since the Balance Sheet Date there has
occurred no materially adverse change in the financial condition or business of
the Borrower and its Subsidiaries as shown on or reflected in the consolidated
balance sheet of the Borrower and its Subsidiaries as at the Balance Sheet Date,
or the consolidated statement of income for the fiscal year then ended,
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other than changes in the ordinary course of business that have not had any
Material Adverse Effect. Since the Balance Sheet Date, the Borrower has not made
any Distributions.
7.6. FRANCHISES, PATENTS, COPYRIGHTS, ETC. Each of the Borrower and
each Guarantor possesses all franchises, patents, copyrights, trademarks, trade
names, licenses and permits, and rights in respect of the foregoing, reasonably
adequate for the conduct of its business substantially as now conducted without
known conflict with any rights of others.
7.7. LITIGATION. Except as set forth in SCHEDULE 7.7 hereto, there are
no actions, suits, proceedings or investigations of any kind pending or
threatened against the Borrower or any of its Subsidiaries before any court,
tribunal or administrative agency or board that, if adversely determined, could
reasonably be expected, either in any case or in the aggregate, to have a
Material Adverse Effect or which question the validity of this Credit Agreement
or any of the other Loan Documents, or any action taken or to be taken pursuant
hereto or thereto.
7.8. NO MATERIALLY ADVERSE CONTRACTS, ETC. Except as set forth on
SCHEDULE 7.8 hereto, neither the Borrower nor any of its Subsidiaries is subject
to any charter, corporate or other legal restriction, or any judgment, decree,
order, rule or regulation that has or is expected in the future to have a
Material Adverse Effect. Neither the Borrower nor any of its Subsidiaries is a
party to any contract or agreement that has or is expected, in the judgment of
the Borrower's officers, to have any Material Adverse Effect.
7.9. COMPLIANCE WITH OTHER INSTRUMENTS, LAWS, ETC. Neither the Borrower
nor any Guarantor is in violation of any provision of its charter documents,
bylaws, or any agreement or instrument to which it may be subject or by which it
or any of its properties may be bound or any decree, order, judgment, statute,
license, rule or regulation, in any of the foregoing cases in a manner that
could result in the imposition of substantial penalties or have a Material
Adverse Effect.
7.10. TAX STATUS. Except as set forth on SCHEDULE 7.10 hereto, the
Borrower and its Subsidiaries (a) have made or filed all federal and state
income and all other tax returns, reports and declarations required by any
jurisdiction to which any of them is subject, except for those filings which the
failure to so file could not reasonably be expected to have a Material Adverse
Effect and where the Borrower reasonably believes it has maintained adequate
reserves for the payment of any obligations thereunder, (b) have paid all taxes
and other governmental assessments and charges shown or determined to be due on
such returns, reports and declarations, except those being contested in good
faith and by appropriate proceedings, the non-payment of which could not
reasonably be expected to have a Material Adverse Effect and (c) have set aside
on their books provisions reasonably adequate for the payment of all taxes for
periods subsequent to the periods to which such returns, reports or declarations
apply. There are no unpaid taxes in any material amount claimed to be due by the
taxing authority of any jurisdiction, and the officers of the
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Borrower know of no basis for any such claim. The Borrowing Base Report most
recently delivered to the Agent sets forth the amount of reserves established by
the Borrower and each of its Domestic Subsidiaries to, in the reasonable
judgment of the Borrower, are adequate to cover the Borrower's or such Domestic
Subsidiary's sales or use tax obligations in each jurisdiction where the
Borrower or such Domestic Subsidiary is required to pay such taxes. Such
reserves are adequate for the payment of all of such obligations.
7.11. NO EVENT OF DEFAULT. No Default or Event of Default has occurred
and is continuing.
7.12. HOLDING COMPANY AND INVESTMENT COMPANY ACTS. Neither the Borrower
nor any of its Subsidiaries is a "holding company", or a "subsidiary company" of
a "holding company", or an "affiliate" of a "holding company", as such terms are
defined in the Public Utility Holding Company Act of 1935; nor is it an
"investment company", or an "affiliated company" or a "principal underwriter" of
an "investment company", as such terms are defined in the Investment Company Act
of 1940.
7.13. ABSENCE OF FINANCING STATEMENTS, ETC. Except with respect to
Permitted Liens, there is no financing statement, security agreement, chattel
mortgage, real estate mortgage or other document filed or recorded with any
filing records, registry or other public office, that purports to cover, affect
or give notice of any present or possible future lien on, or security interest
in, any assets or property of the Borrower or any of its Subsidiaries or any
rights relating thereto.
7.14. INSURANCE. The Borrower and each of the Guarantors maintains with
financially sound and reputable insurers insurance with respect to its
properties and businesses against such casualties and contingencies as are in
accordance with sound business practices and with the details of such coverage
being more fully described on SCHEDULE 7.14 hereto.
7.15. CERTAIN TRANSACTIONS. Except as set forth on SCHEDULE 7.15 hereto
and except for arm's length transactions pursuant to which the Borrower or any
of its Subsidiaries makes payments in the ordinary course of business upon terms
no less favorable than the Borrower or such Subsidiary could obtain from third
parties, none of the officers, directors, or employees of the Borrower or any of
its Subsidiaries is presently a party to any transaction with the Borrower or
any of its Subsidiaries (other than for services as employees, officers and
directors), including any contract, agreement or other arrangement providing for
the furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the knowledge of the Borrower, any corporation,
partnership, trust or other entity in which any officer, director, or any such
employee has a substantial interest or is an officer, director, trustee or
partner.
7.16. EMPLOYEE BENEFIT PLANS.
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7.16.1. IN GENERAL. Each Employee Benefit Plan and each
Guaranteed Pension Plan has been maintained and operated in compliance
in all material respects with the provisions of ERISA and, to the
extent applicable, the Code, including but not limited to the
provisions thereunder respecting prohibited transactions and the
bonding of fiduciaries and other persons handling plan funds as
required by ss.412 of ERISA. The Borrower has heretofore delivered to
the Agent the most recently completed annual report, Form 5500, with
all required attachments, and actuarial statement required to be
submitted under ss.103(d) of ERISA, with respect to each Guaranteed
Pension Plan.
7.16.2. TERMINABILITY OF WELFARE PLANS. No Employee Benefit
Plan, which is an employee welfare benefit plan within the meaning of
ss.3(1) or ss.3(2)(B) of ERISA, provides benefit coverage subsequent to
termination of employment, except as required by Title I, Part 6 of
ERISA or the applicable state insurance laws. The Borrower may
terminate each such Plan at any time (or at any time subsequent to the
expiration of any applicable bargaining agreement) in the discretion of
the Borrower without liability to any Person other than for claims
arising prior to termination.
7.16.3. GUARANTEED PENSION PLANS. Each contribution required
to be made to a Guaranteed Pension Plan, whether required to be made to
avoid the incurrence of an accumulated funding deficiency, the notice
or lien provisions of ss.302(f) of ERISA, or otherwise, has been timely
made. No waiver of an accumulated funding deficiency or extension of
amortization periods has been received with respect to any Guaranteed
Pension Plan, and neither the Borrower nor any ERISA Affiliate is
obligated to or has posted security in connection with an amendment to
a Guaranteed Pension Plan pursuant to ss.307 of ERISA or ss.401(a)(29)
of the Code. No liability to the PBGC (other than required insurance
premiums, all of which have been paid) has been incurred by the
Borrower or any ERISA Affiliate with respect to any Guaranteed Pension
Plan and there has not been any ERISA Reportable Event (other than an
ERISA Reportable Event as to which the requirement of 30 days notice
has been waived), or any other event or condition which presents a
material risk of termination of any Guaranteed Pension Plan by the
PBGC. Based on the latest valuation of each Guaranteed Pension Plan
(which in each case occurred within twelve months of the date of this
representation), and on the actuarial methods and assumptions employed
for that valuation, the aggregate benefit liabilities of all such
Guaranteed Pension Plans within the meaning of ss.4001 of ERISA did not
exceed the aggregate value of the assets of all such Guaranteed Pension
Plans, disregarding for this purpose the benefit liabilities and assets
of any Guaranteed Pension Plan with assets in excess of benefit
liabilities.
7.16.4. MULTIEMPLOYER PLANS. Neither the Borrower nor any
ERISA Affiliate has incurred any material liability (including
secondary liability) to any Multiemployer Plan as a result of a
complete or partial
<PAGE> 46
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withdrawal from such Multiemployer Plan under ss.4201 of ERISA or as a
result of a sale of assets described in ss.4204 of ERISA. Neither the
Borrower nor any ERISA Affiliate has been notified that any
Multiemployer Plan is in reorganization or insolvent under and within
the meaning of ss.4241 or ss.4245 of ERISA or is at risk of entering
reorganization or becoming insolvent, or that any Multiemployer Plan
intends to terminate or has been terminated under ss.4041A of ERISA.
7.17. USE OF PROCEEDS.
7.17.1. GENERAL. The proceeds of the Revolving Credit Loans
shall be used for working capital and general corporate purposes
(including, without limitation, financing all or any portion of a
Permitted Acquisition). The Borrower will obtain Letters of Credit
solely for working capital and general corporate purposes (including,
without limitation, financing all or any portion of a Permitted
Acquisition).
7.17.2. REGULATIONS U AND X. No portion of any Revolving
Credit Loan is to be used, and no portion of any Letter of Credit is to
be obtained, for the purpose of purchasing or carrying any "margin
security" or "margin stock" as such terms are used in Regulations U and
X of the Board of Governors of the Federal Reserve System, 12 C.F.R.
Parts 221 and 224.
7.18. ENVIRONMENTAL COMPLIANCE. The Borrower has taken all necessary
steps to investigate the past and present condition and usage of the Real Estate
and the operations conducted thereon and, based upon such diligent
investigation, has determined that:
(a) none of the Borrower, its Domestic Subsidiaries or any
operator of the Real Estate or any operations thereon is in violation,
or alleged violation, of any judgment, decree, order, law, license,
rule or regulation pertaining to environmental matters, including
without limitation, those arising under the Resource Conservation and
Recovery Act ("RCRA"), the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 as amended ("CERCLA"), the
Superfund Amendments and Reauthorization Act of 1986 ("SARA"), the
Federal Clean Water Act, the Federal Clean Air Act, the Toxic
Substances Control Act, or any state or local statute, regulation,
ordinance, order or decree relating to health, safety or the
environment (hereinafter "Environmental Laws"), which violation could
reasonably be expected to have a Material Adverse Effect;
(b) neither the Borrower nor any of its Domestic Subsidiaries
has received notice from any third party including, without limitation,
any federal, state or local governmental authority, (i) that any one of
them has been identified by the United States Environmental Protection
Agency ("EPA") as a potentially responsible party under CERCLA with
respect to a site listed on the National Priorities List, 40 C.F.R.
Part 300
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Appendix B; (ii) that any hazardous waste, as defined by 42 U.S.C.
ss.6903(5), any hazardous substances as defined by 42 U.S.C.
ss.9601(14), any pollutant or contaminant as defined by 42 U.S.C.
ss.9601(33) and any toxic substances, oil or hazardous materials or
other chemicals or substances regulated by any Environmental Laws
("Hazardous Substances") which any one of them has generated,
transported or disposed of has been found at any site at which a
federal, state or local agency or other third party has conducted or
has ordered that any Borrower or any of its Domestic Subsidiaries
conduct a remedial investigation, removal or other response action
pursuant to any Environmental Law; or (iii) that it is or shall be a
named party to any claim, action, cause of action, complaint, or legal
or administrative proceeding (in each case, contingent or otherwise)
arising out of any third party's incurrence of costs, expenses, losses
or damages of any kind whatsoever in connection with the release of
Hazardous Substances;
(c) except as set forth on SCHEDULE 7.18 attached hereto: (i)
to the Borrower's knowledge, no portion of the Real Estate has been
used for the handling, processing, storage or disposal of Hazardous
Substances except in accordance with applicable Environmental Laws;
and, to the Borrower's knowledge, no underground tank or other
underground storage receptacle for Hazardous Substances is located on
any portion of the Real Estate; (ii) in the course of any activities
conducted by the Borrower, its Subsidiaries or operators of its
properties, no Hazardous Substances have been generated or are being
used on the Real Estate except in accordance with applicable
Environmental Laws, except where such noncompliance could not
reasonably be expected to have a Material Adverse Effect; (iii) to the
Borrower's knowledge, there have been no releases (i.e. any past or
present releasing, spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, disposing or dumping) or
threatened releases of Hazardous Substances on, upon, into or from the
properties of the Borrower or its Subsidiaries, which releases would
have a material adverse effect on the value of any of the Real Estate
or adjacent properties or the environment; (iv) to the Borrower's
knowledge, there have been no releases on, upon, from or into any real
property in the vicinity of any of the Real Estate which, through soil
or groundwater contamination, may have come to be located on, and which
would have a material adverse effect on the value of, the Real Estate;
and (v) in addition, any Hazardous Substances that have been generated
by or on behalf of the Borrower or its Subsidiaries on any of the Real
Estate have, to the Borrower's knowledge, been transported offsite only
by carriers having an identification number issued by the EPA, treated
or disposed of only by treatment or disposal facilities maintaining
valid permits as required under applicable Environmental Laws, which
transporters and facilities have been and are, to the best of the
Borrower's knowledge, operating in compliance with such permits and
applicable Environmental Laws; and
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(d) None of the Borrower and its Domestic Subsidiaries or any
of the other Real Estate is subject to any applicable environmental law
requiring the performance of Hazardous Substances site assessments, or
the removal or remediation of Hazardous Substances, or the giving of
notice to any governmental agency or the recording or delivery to other
Persons of an environmental disclosure document or statement by virtue
of the transactions set forth herein and contemplated hereby, or as a
condition to the effectiveness of any other transactions contemplated
hereby.
7.19. SUBSIDIARIES, ETC. SCHEDULE 7.19(a) sets forth the Subsidiaries
of the Borrower. Except as set forth on SCHEDULE 7.19(b) hereto, neither the
Borrower nor any Subsidiary of the Borrower is engaged in any joint venture or
partnership with any other Person.
7.20. CHIEF EXECUTIVE OFFICE. The Borrower's chief executive office is
at 15 Elizabeth Drive, Chelmsford, Massachusetts 01824, at which location its
books and records are kept. Each Guarantor's chief executive office is as set
forth in the Guaranty to which it is a party.
7.21. YEAR 2000 PROBLEM. The Borrower and its Subsidiaries have (a)
reviewed the areas within their businesses and operations which could be
adversely affected by failure to become "Year 2000 Compliant" (i.e. that
computer applications, imbedded microchips and other systems used by the
Borrower or any of its Subsidiaries or any of its material vendors, will be able
properly to recognize and perform properly date-sensitive functions involving
certain dates prior to and any date after December 31, 1999), (b) developed a
detailed plan and timetable to become Year 2000 Compliant in a timely manner,
and (c) committed adequate resources to support the Year 2000 plan of the
Borrower and its Subsidiaries. Based upon such review, the Borrower reasonably
believes that the Borrower and its Subsidiaries will become "Year 2000
Compliant" in a timely manner except to the extent that failure to do so will
not have a Material Adverse Effect.
7.22. DISCLOSURE. None of this Credit Agreement or any of the other
Loan Documents contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements herein or
therein not misleading. There is no fact known to the Borrower or any of its
Subsidiaries which materially adversely affects, or which is reasonably likely
in the future to have a Material Adverse Effect, exclusive of effects resulting
from changes in general economic conditions, legal standards or regulatory
conditions.
7.23. CAPITALIZATION DOCUMENTS. The Borrower and each Guarantor have
delivered to the Agent true and complete copies of all of the Capitalization
Documents and neither the Borrower nor any Guarantor has amended any such
documents in any material respects, except as may have been disclosed to and
consented to by the Agent.
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8. AFFIRMATIVE COVENANTS OF THE BORROWER.
The Borrower covenants and agrees that, so long as any Revolving Credit
Loan, Unpaid Reimbursement Obligation, Letter of Credit or Revolving Credit Note
is outstanding or any Bank has any obligation to make any Revolving Credit Loans
or the Agent has any obligation to issue, extend or renew any Letters of Credit:
8.1. PUNCTUAL PAYMENT. The Borrower will duly and punctually pay or
cause to be paid the principal and interest on the Revolving Credit Loans, all
Reimbursement Obligations, the Letter of Credit Fees, the commitment fees, the
Agent's fee and all other amounts provided for in this Credit Agreement and the
other Loan Documents to which the Borrower or any Guarantor is a party, all in
accordance with the terms of this Credit Agreement and such other Loan
Documents.
8.2. MAINTENANCE OF OFFICE. The Borrower will maintain its chief
executive office in Chelmsford, Massachusetts, or at such other place in the
United States of America as the Borrower shall designate upon written notice to
the Agent, where notices, presentations and demands to or upon the Borrower in
respect of the Loan Documents to which the Borrower is a party may be given or
made.
8.3. RECORDS AND ACCOUNTS. The Borrower will (a) keep, and cause each
of its Subsidiaries to keep, true and accurate records and books of account in
which full, true and correct entries will be made in accordance with generally
accepted accounting principles, (b) maintain in the reasonable judgment of the
Borrower adequate accounts and reserves for all taxes (including income taxes),
depreciation, depletion, obsolescence and amortization of its properties and the
properties of its Subsidiaries, contingencies, and other reserves, and (c) at
all times engage PricewaterhouseCoopers LLP or other independent certified
public accountants reasonably satisfactory to the Agent as the independent
certified public accountants of the Borrower and its Subsidiaries and will not
permit more than thirty (30) days to elapse between the cessation of such firm's
(or any successor firm's) engagement as the independent certified public
accountants of the Borrower and its Subsidiaries and the appointment in such
capacity of a successor firm as shall be reasonably satisfactory to the Agent.
8.4. FINANCIAL STATEMENTS, CERTIFICATES AND INFORMATION. The Borrower
will deliver to each of the Banks:
(a) as soon as practicable, but in any event not later than
ninety (90) days after the end of each fiscal year of the Borrower, the
consolidated balance sheet of the Borrower and its Subsidiaries and the
consolidating balance sheet of the Borrower and its Subsidiaries, each
as at the end of such year, and the related consolidated statement of
income and consolidated statement of cash flow and consolidating
statement of income and consolidating statement of cash flow for such
year, each
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setting forth in comparative form the figures for the previous fiscal
year and all such consolidated and consolidating statements to be in
reasonable detail, prepared in accordance with generally accepted
accounting principles, and, solely with respect to such consolidated
statements, certified without qualification by PricewaterhouseCoopers
LLP or by other independent certified public accountants reasonably
satisfactory to the Agent, together with a written statement from such
accountants to the effect that they have read a copy of this Credit
Agreement, and that, in making the examination necessary to said
certification, they have obtained no knowledge of any Default or Event
of Default, or, if such accountants shall have obtained knowledge of
any then existing Default or Event of Default they shall disclose in
such statement any such Default or Event of Default; PROVIDED that such
accountants shall not be liable to the Banks for failure to obtain
knowledge of any Default or Event of Default;
(b) as soon as practicable, but in any event not later than
forty-five (45) days after the end of each of the first three fiscal
quarters in each fiscal year of the Borrower, copies of the unaudited
consolidated balance sheet of the Borrower and its Subsidiaries and the
unaudited consolidating balance sheet of the Borrower and its
Subsidiaries, each as at the end of such quarter, and the related
consolidated statement of income and consolidated statement of cash
flow and consolidating statement of income and consolidating statement
of cash flow for the portion of the Borrower's fiscal year then
elapsed, all in reasonable detail and prepared in accordance with
generally accepted accounting principles, together with a certification
by the principal financial or accounting officer of the Borrower that
the information contained in such financial statements fairly presents
the financial position of the Borrower and its Subsidiaries on the date
thereof (subject to year-end adjustments);
(c) simultaneously with the delivery of the financial
statements referred to in subsections (a) and (b) above, a statement
certified by the principal financial or accounting officer of the
Borrower in substantially the form of EXHIBIT D hereto (the "Compliance
Certificate") and setting forth in reasonable detail computations
evidencing compliance with the covenants contained in ss.10 and (if
applicable) reconciliations to reflect changes in generally accepted
accounting principles since the Balance Sheet Date;
(d) contemporaneously with the filing or mailing thereof,
copies of all material of a financial nature filed with the Securities
and Exchange Commission or sent to the stockholders of the Borrower;
(e) within forty-five (45) days after the end of each fiscal
quarter or at such earlier time as the Agent may reasonably request, a
Borrowing Base Report setting forth the Borrowing Base as at the end of
such fiscal quarter or other date so requested by the Agent;
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(f) within forty-five (45) days after the end of each fiscal
quarter, an Accounts Receivable aging report;
(g) as soon as practicable, but in any event not later than
September 30 of each year, annual projections of the Borrower and its
Subsidiaries (such projections to include, without limitation, the
balance sheet, income statement and cash flow statement of the Borrower
and its Subsidiaries on a quarterly basis); and
(h) from time to time such other financial data and
information (including accountants, management letters) as the Agent
may reasonably request.
8.5. NOTICES.
8.5.1. DEFAULTS. The Borrower will promptly notify the Agent
and each of the Banks in writing of the occurrence of any Default or
Event of Default. If any Person shall give any notice or take any other
action in respect of a claimed default (whether or not constituting an
Event of Default) under this Credit Agreement or any other note,
evidence of indebtedness, indenture or other obligation in an amount in
excess of $500,000 to which or with respect to which the Borrower or
any of its Subsidiaries is a party or obligor, whether as principal,
guarantor, surety or otherwise, the Borrower shall forthwith give
written notice thereof to the Agent and each of the Banks, describing
the notice or action and the nature of the claimed default.
8.5.2. ENVIRONMENTAL EVENTS. The Borrower will promptly give
notice to the Agent and each of the Banks (a) of any violation of any
Environmental Law that the Borrower or any of its Subsidiaries reports
in writing or is reportable by such Person in writing (or for which any
written report supplemental to any oral report is made) to any federal,
state or local environmental agency and (b) upon becoming aware
thereof, of any inquiry, proceeding, investigation, or other action,
including a notice from any agency of potential environmental
liability, of any federal, state or local environmental agency or
board, that has the potential to have a Material Adverse Effect.
8.5.3. NOTIFICATION OF CLAIM AGAINST ASSETS. The Borrower
will, immediately upon becoming aware thereof, notify the Agent and
each of the Banks in writing of any setoff, claims (including, with
respect to the Real Estate, environmental claims), withholdings or
other defenses to which any of the Borrower's or any Guarantor's assets
are subject.
8.5.4. NOTICE OF LITIGATION AND JUDGMENTS. The Borrower will,
and will cause each of its Subsidiaries to, give notice to the Agent
and each of the Banks in writing within fifteen (15) Business Days of
becoming aware of any litigation or proceedings threatened in writing
or any pending litigation and proceedings affecting the Borrower or any
of
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its Subsidiaries or to which the Borrower or any of its Subsidiaries is
or becomes a party involving an uninsured claim against the Borrower or
any of its Subsidiaries that could reasonably be expected to have a
Material Adverse Effect and stating the nature and status of such
litigation or proceedings. The Borrower will, and will cause each of
its Subsidiaries to, give notice to the Agent and each of the Banks, in
writing, in form and detail reasonably satisfactory to the Agent,
within fifteen (15) Business Days of any judgment not covered by
insurance, final or otherwise, against the Borrower or any of its
Subsidiaries in an amount in excess of $500,000.
8.6. CORPORATE EXISTENCE; MAINTENANCE OF PROPERTIES. The Borrower will
do or cause to be done all things necessary to preserve and keep in full force
and effect its corporate existence, rights and franchises and those of the
Guarantors and will not, and will not cause or permit any of the Guarantors to,
convert to a limited liability company. It (a) will cause all of its properties
and those of its Subsidiaries used or useful in the conduct of its business or
the business of its Subsidiaries to be maintained and kept in good condition,
repair and working order and supplied with all necessary equipment, (b) will
cause to be made all necessary repairs, renewals, replacements, betterments and
improvements thereof, all as in the judgment of the Borrower may be necessary so
that the business carried on in connection therewith may be properly and
advantageously conducted at all times, and (c) will, and will cause each of its
Subsidiaries to, continue to engage primarily in the businesses now conducted by
them and in related businesses; PROVIDED that nothing in this ss.8.6 shall
prevent the Borrower from discontinuing the operation and maintenance of any of
its properties or any of those of its Subsidiaries if such discontinuance is, in
the judgment of the Borrower, desirable in the conduct of its or their business
and that do not in the aggregate have a Material Adverse Effect.
8.7. INSURANCE.
8.7.1. INSURANCE. The Borrower will, and will cause each of
its Subsidiaries to, maintain with financially sound and reputable
insurers insurance with respect to its properties and business against
such casualties and contingencies as shall be in accordance with the
general practices of businesses engaged in similar activities in
similar geographic areas and in amounts, containing such terms, in such
forms and for such periods as may be reasonable and prudent.
8.8. TAXES. The Borrower will, and will cause each of its Subsidiaries
to, duly pay and discharge, or cause to be paid and discharged, before the same
shall become overdue, all taxes, assessments and other governmental charges
imposed upon it and its real properties, sales and activities, or any part
thereof, or upon the income or profits therefrom, as well as all claims for
labor, materials, or supplies that if unpaid might by law become a lien or
charge upon any of its property; PROVIDED that any such tax, assessment, charge,
levy or claim need not be paid if the validity or amount thereof shall currently
be contested in good faith by appropriate proceedings and if the Borrower or
such
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Subsidiary shall have set aside on its books adequate reserves with respect
thereto; and PROVIDED FURTHER that the Borrower and each Subsidiary of the
Borrower will pay all such taxes, assessments, charges, levies or claims
forthwith upon the commencement of proceedings to foreclose any lien that may
have attached as security therefor.
8.9. INSPECTION OF PROPERTIES AND BOOKS, ETC.
8.9.1. GENERAL. The Borrower shall permit the Banks, through
the Agent or any of the Banks' other designated representatives, to
visit and inspect any of the properties of the Borrower or any of its
Subsidiaries, to examine the books of account of the Borrower and its
Subsidiaries (and to make copies thereof and extracts therefrom), and
to discuss the affairs, finances and accounts of the Borrower and its
Subsidiaries with, and to be advised as to the same by, its and their
officers, all at such reasonable times and intervals as the Agent or
any Bank may reasonably request.
8.9.2. BORROWING BASE COMPONENT REPORTS. Upon the reasonable
request of the Agent, and upon reasonable advance notice, or without
any notice if an Event of Default shall have occurred and be
continuing, upon the request of the Agent, the Borrower will obtain and
deliver to the Agent, or, if the Agent so elects, will cooperate with
the Agent in the Agent's obtaining, a report of an independent
collateral auditor reasonably satisfactory to the Agent (which may be
affiliated with one of the Banks) with respect to the Accounts
Receivable included in the Borrowing Base, which report shall indicate
whether or not the information set forth in the Borrowing Base Report
most recently delivered is accurate and complete in all material
respects based upon a review by such auditors of the Accounts
Receivable (including verification with respect to the amount, aging,
identity and credit of the respective account debtors and the billing
practices of the Borrower or its applicable Subsidiary). All such
collateral value reports shall be conducted and made at the expense of
the Borrower.
8.9.3. APPRAISALS. Upon the reasonable request of the Agent,
and upon reasonable advance notice, or without any notice if an Event
of Default shall have occurred and be continuing, upon the request of
the Agent, the Borrower will obtain and deliver to the Agent appraisal
reports in form and substance and from appraisers reasonably
satisfactory to the Agent, stating the then current business value of
each of the Borrower and its Subsidiaries. All such appraisals shall be
conducted and made at the expense of the Borrower.
8.10. COMPLIANCE WITH LAWS, CONTRACTS, LICENSES, AND PERMITS. The
Borrower will, and will cause each of its Subsidiaries to, comply in all
material respects with (a) the applicable laws and regulations wherever its
business is conducted, including all Environmental Laws except where such
noncompliance could not reasonably be expected to have a Material Adverse
Effect, (b) the
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provisions of its charter documents and by-laws, (c) all agreements and
instruments by which it or any of its properties may be bound except where such
noncompliance could not reasonably be expected to have a Material Adverse Effect
and (d) all applicable decrees, orders, and judgments except where such
noncompliance could not reasonably be expected to have a Material Adverse
Effect. If any authorization, consent, approval, permit or license from any
officer, agency or instrumentality of any government shall become necessary or
required in order that the Borrower or any of its Subsidiaries may fulfill any
of its obligations hereunder or any of the other Loan Documents to which the
Borrower or such Subsidiary is a party, the Borrower will, or (as the case may
be) will cause such Subsidiary to, immediately take or cause to be taken all
reasonable steps within the power of the Borrower or such Subsidiary to obtain
such authorization, consent, approval, permit or license and furnish the Agent
and the Banks with evidence thereof.
8.11. EMPLOYEE BENEFIT PLANS. The Borrower will (a) promptly upon
filing the same with the Department of Labor or Internal Revenue Service,
furnish to the Agent a copy of the most recent actuarial statement required to
be submitted under ss.103(d) of ERISA and Annual Report, Form 5500, with all
required attachments, in respect of each Guaranteed Pension Plan and (b)
promptly upon receipt or dispatch, furnish to the Agent any notice, report or
demand sent or received in respect of a Guaranteed Pension Plan under ss.ss.302,
4041, 4042, 4043, 4063, 4065, 4066 and 4068 of ERISA, or in respect of a
Multiemployer Plan, under ss.ss.4041A, 4202, 4219, 4242, or 4245 of ERISA.
8.12. USE OF PROCEEDS. The Borrower will use the proceeds of the
Revolving Credit Loans solely for working capital and general corporate purposes
(including, without limitation, financing all or any portion of a Permitted
Acquisition). The Borrower will obtain Letters of Credit solely for working
capital and general corporate purposes (including, without limitation, finance
all or any portion of a Permitted Acquisition).
8.13. FAIR LABOR STANDARDS ACT. The Borrower shall, and shall require
each Domestic Subsidiary to, at all times operate its business in compliance
with all material applicable provisions of the Fair Labor Standards Act of 1938,
as amended.
8.14. GUARANTORS. The Borrower will cause each Domestic Subsidiary
created, acquired, formed or otherwise existing on or after the Closing Date to
immediately become a Guarantor on the Closing Date (or within thirty (30) days
of having been acquired, formed or otherwise comes into existence) and shall
cause such Domestic Subsidiary to execute and deliver to the Agent for the
benefit of the Agent and the Banks a Guaranty, together with legal opinions in
substantially the same form as the legal opinions delivered pursuant to ss.11.10
hereof, to be delivered to the Agent and the Banks opining as to the
authorization, validity and enforceability of such Guaranty and as to the due
incorporation and legal existence of such Domestic Subsidiary. In addition, to
the extent any Foreign Subsidiary has elected to become a Guarantor hereunder
and the Agent has approved such election, the Borrower will cause
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such Foreign Subsidiary to execute and deliver to the Agent for the benefit of
the Agent and the Banks a Guaranty in form and substance acceptable to the
Agent, together with legal opinions in form and substance acceptable to the
Agent opining as to the authorization, validity and enforceability of such
Guaranty, as to due incorporation and legal existence of such Foreign Subsidiary
and such other local law issues as the Agent reasonably determines are
necessary. The parties hereto hereby acknowledge and agree that a Domestic
Subsidiary shall be considered a "Guarantor" hereunder for purposes of ss.ss.7
and 8 hereof at the time each such Domestic Subsidiary is created, acquired,
formed or otherwise exists, but shall not be considered a "Guarantor" for
purposes of ss.9 until such Person executes and delivers the Guaranty required
by ss.8.14 together with the requisite legal opinions, and a Foreign Subsidiary
will only be considered a "Guarantor" under all provisions of the Credit
Agreement after it has executed and delivered the Guaranty and legal opinion
required by this ss.8.14.
8.15. ADDITIONAL SUBSIDIARIES. If, after the Closing Date, the Borrower
or any of its Subsidiaries creates or acquires, either directly or indirectly,
any Subsidiary, it will immediately notify the Agent of such creation or
acquisition, as the case may be, and provide the Agent with an updated SCHEDULE
7.19(a) hereof and take all other actions required by ss.8.14 and ss.9.5.1
hereof.
8.16. FURTHER ASSURANCES. The Borrower will, and will cause each of its
Subsidiaries to, cooperate with the Banks and the Agent and execute such further
instruments and documents as the Agent shall reasonably request to carry out to
their satisfaction the transactions contemplated by this Credit Agreement and
the other Loan Documents.
9. CERTAIN NEGATIVE COVENANTS OF THE BORROWER.
The Borrower covenants and agrees that, so long as any Revolving Credit
Loan, Unpaid Reimbursement Obligation, Letter of Credit or Revolving Credit Note
is outstanding or any Bank has any obligation to make any Revolving Credit Loans
or the Agent has any obligations to issue, extend or renew any Letters of
Credit:
9.1. RESTRICTIONS ON INDEBTEDNESS. The Borrower will not, and will not
permit any of its Subsidiaries to, create, incur, assume, guarantee or be or
remain liable, contingently or otherwise, with respect to any Indebtedness other
than:
(a) Indebtedness to the Banks and the Agent arising under any
of the Loan Documents;
(b) endorsements for collection, deposit or negotiation and
warranties of products or services, in each case incurred in the
ordinary course of business;
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(c) Indebtedness of the Borrower or any Subsidiary assumed in
connection with the AutoSimulations Acquisitions and Auto Soft
Acquisitions, provided, (i) the aggregate amount of all such
Indebtedness assumed under this ss.9.1(c) does not exceed $5,000,000;
and (ii) such Indebtedness is on terms, and contains covenants,
conditions and defaults, which are acceptable to the Agent and the
Banks in all respects;
(d) Indebtedness incurred in connection with the acquisition
after the date hereof of any real or personal property by the Borrower
or such Subsidiary (other than Indebtedness incurred or assumed in
connection with any Permitted Acquisition) or under any Capitalized
Lease, PROVIDED that the aggregate principal amount of such
Indebtedness of the Borrower and its Subsidiaries shall not exceed the
aggregate amount of $3,000,000 at any one time;
(e) unsecured Indebtedness of the Borrower incurred or assumed
in connection with any Permitted Acquisition, provided that the
aggregate principal amount of such Indebtedness shall not exceed the
aggregate amount which equals ten percent (10%) of the Total Commitment
as in effect at the time of such incurrence or assumption of such
Indebtedness;
(f) Indebtedness existing on the date hereof and listed and
described on SCHEDULE 9.1 hereto;
(g) Indebtedness of a Subsidiary of the Borrower to the
Borrower or a Guarantor so long as such Subsidiary is a Guarantor
hereunder;
(h) Indebtedness of the Borrower or any of its Subsidiaries
consisting of Derivative Contracts so long as such Derivative Contracts
are entered into in the ordinary course of business consistent with
past practices and not for speculative purposes;
(i) Indebtedness of Foreign Subsidiaries to the Borrower or
any Guarantor in an aggregate amount not to exceed $1,500,000
outstanding at any one time; and
(j) unsecured Indebtedness of the Borrower or any Subsidiary
not otherwise provided for in this ss.9.1, provided the aggregate
amount of such Indebtedness permitted by this ss.9.1(j) does not exceed
$3,000,000 outstanding at any one time.
9.2. RESTRICTIONS ON LIENS. The Borrower will not, and will not permit
any of its Subsidiaries to, (a) create or incur or suffer to be created or
incurred or to exist any lien, encumbrance, mortgage, pledge, charge,
restriction or other security interest of any kind upon any of its property or
assets of any character whether now owned or hereafter acquired, or upon the
income or profits
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therefrom; (b) transfer any of such property or assets or the income or profits
therefrom for the purpose of subjecting the same to the payment of Indebtedness
or performance of any other obligation in priority to payment of its general
creditors; (c) acquire, or agree or have an option to acquire, any property or
assets upon conditional sale or other title retention or purchase money security
agreement, device or arrangement; (d) suffer to exist for a period of more than
thirty (30) days after the same shall have been incurred any Indebtedness or
claim or demand against it that if unpaid might by law or upon bankruptcy or
insolvency, or otherwise, be given any priority whatsoever over its general
creditors; (e) sell, assign, pledge or otherwise transfer any "receivables" as
defined in clause (g) of the definition of the term "Indebtedness," with or
without recourse; or (f) enter into or permit to exist any arrangement or
agreement, enforceable under applicable law, which directly or indirectly
prohibits the Borrower or any of its Subsidiaries from creating or incurring any
lien, encumbrance, mortgage, pledge, charge, restriction or other security
interest other than in favor of the Agent for the benefit of the Banks and the
Agent under the Loan Documents and other than customary anti-assignment
provisions in leases and licensing agreements entered into by the Borrower or
such Subsidiary in the ordinary course of its business, PROVIDED that the
Borrower or any of its Subsidiaries may create or incur or suffer to be created
or incurred or to exist:
(a) liens in favor of the Borrower on all or part of the
assets of Subsidiaries of the Borrower securing Indebtedness owing by
Subsidiaries of the Borrower to the Borrower;
(b) liens to secure taxes, assessments and other government
charges in respect of obligations not overdue or liens on properties to
secure claims for labor, material or supplies in respect of obligations
not overdue or liens which are being contested in good faith by
appropriate proceedings diligently conducted and with respect to which
adequate reserves are being maintained in accordance with generally
accepted accounting principles so long as such liens are not being
foreclosed;
(c) deposits or pledges made in connection with, or to secure
payment of, workmen's compensation, unemployment insurance, old age
pensions or other social security obligations;
(d) liens on properties in respect of judgments or awards that
have been in force for less than the applicable period for taking an
appeal so long as execution is not levied thereunder or in respect of
which the Borrower or such Subsidiary shall at the time in good faith
be prosecuting an appeal or proceedings for review and in respect of
which a stay of execution shall have been obtained pending such appeal
or review;
(e) liens of carriers, warehousemen, mechanics and
materialmen, and other like liens on properties in existence less than
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120 days from the date of creation thereof in respect of obligations
not overdue;
(f) encumbrances on Real Estate consisting of easements,
rights of way, zoning restrictions, restrictions on the use of real
property and defects and irregularities in the title thereto,
landlord's or lessor's liens under leases to which the Borrower or a
Subsidiary of the Borrower is a party, and other minor liens or
encumbrances none of which in the opinion of the Borrower interferes
materially with the use of the property affected in the ordinary
conduct of the business of the Borrower and its Subsidiaries, which
defects do not individually or in the aggregate have a Material Adverse
Effect;
(g) liens existing on the date hereof and listed on SCHEDULE
9.2 hereto; and
(h) purchase money security interests in or purchase money
mortgages on real or personal property acquired after the date hereof
to secure purchase money Indebtedness of the type and amount permitted
by ss.9.1(d), incurred in connection with the acquisition of such
property, which security interests or mortgages cover only the real or
personal property so acquired.
9.3. RESTRICTIONS ON INVESTMENTS. The Borrower will not, and will not
permit any of its Subsidiaries to, make or permit to exist or to remain
outstanding any Investment except Investments in:
(a) marketable direct or guaranteed obligations of the United
States of America that mature within one (1) year from the date of
purchase by the Borrower;
(b) demand deposits, certificates of deposit, bankers
acceptances and time deposits of United States banks having total
assets in excess of $1,000,000,000;
(c) securities commonly known as "commercial paper" issued by
a corporation organized and existing under the laws of the United
States of America or any state thereof that at the time of purchase
have been rated and the ratings for which are not less than "P 1" if
rated by Moody's Investors Service, Inc., and not less than "A 1" if
rated by Standard and Poor's Rating Group;
(d) Investments existing on the date hereof and listed on
SCHEDULE 9.3 hereto;
(e) Investments with respect to Indebtedness permitted by
ss.9.1(g) so long as such entities remain Subsidiaries of the Borrower
and remain a Guarantor;
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(f) Investments consisting of the Guaranty or Investments by
the Borrower or any Guarantor in Subsidiaries of the Borrower which are
also Guarantors;
(g) Investments consisting of promissory notes received as
proceeds of asset dispositions permitted by ss.9.5.2;
(h) Investments consisting of Permitted Acquisitions;
(i) Investments consisting of Capital Expenditures which are
permitted by ss.10.4 hereof;
(j) Investments with respect to Indebtedness permitted by
ss.9.1(i);
(k) Investments by any Foreign Subsidiary in the Borrower or
any Guarantor; and
(l) Investments not otherwise permitted by this ss.9.3 so long
as the aggregate amount of all such Investments does not exceed
$2,000,000.
9.4. RESTRICTED PAYMENTS. Neither the Borrower nor any of its
Subsidiaries will make any Restricted Payments; PROVIDED, HOWEVER, (a) Brooks
Automation Asia Ltd. shall be permitted to make Restricted Payments to its
shareholders pursuant to the terms of its joint venture agreement, PROVIDED, the
aggregate amount of such Restricted Payments being made shall not exceed in any
fiscal year, in the aggregate, the amount of investor earnings in such year
which is legally permitted to be distributed to shareholders; (b) the Borrower
shall be permitted to make Restricted Payments to the two employee shareholders
of Hanyon Technologies Co. Ltd. in the form of the repurchase by the Borrower of
the remaining 9.5% interests in Hanyon Technologies Co. Ltd. from such
shareholders so long as (i) such Restricted Payments are made by not later than
April 21, 2001 and (ii) the aggregate amount of such Restricted Payments does
not exceed an amount equal to the purchase price (excluding a gross up for
taxes) for the 90.5% of the interests of Hanyon Technologies Co. Ltd. (which
was, as of September 30, 1999, approximately $305,258), and which may be set off
by prior dividend payments to such shareholders and (c) so long as no Default or
Event of Default has occurred and is continuing or would exist as a result
thereof, (i) the Borrower and/or any Subsidiary shall be permitted to make any
Restricted Payment, other than a Distribution, as permitted by ss.9.12 hereof;
and (ii) any Subsidiary of the Borrower shall be permitted to make a Restricted
Payment to the Borrower.
9.5. MERGER, CONSOLIDATION AND DISPOSITION OF ASSETS.
9.5.1. MERGERS AND ACQUISITIONS. The Borrower will not, and
will not permit any of its Subsidiaries to, become a party to any
merger or consolidation, or agree to or effect any asset acquisition or
stock
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acquisition (other than the acquisition of assets in the ordinary
course of business consistent with past practices) except (a) the
merger or consolidation of one or more of the Subsidiaries of the
Borrower with and into the Borrower; (b) the merger or consolidation of
two or more Subsidiaries of the Borrower, PROVIDED, HOWEVER, to the
extent any Subsidiary is a Guarantor, the survivor of such merger or
consolidation shall be a Guarantor; (c) the AutoSimulations
Acquisition; and (d) any merger or asset or stock acquisition by the
Borrower or any of its Subsidiaries of Persons in the same or similar
line of business as the Borrower, or such Person's line of business is
incidental to the Borrower's existing line of business (a "Permitted
Acquisition") where (1) the Borrower has provided the Agent with
written notice of such Permitted Acquisition, which notice shall
include a reasonably detailed description of such Permitted
Acquisition; (2) the business to be acquired would not subject the
Agent or the Banks to any additional regulatory or third party
approvals in connection with the exercise of its rights and remedies
under this Credit Agreement or any other Loan Document; (3) no
contingent liabilities will be incurred or assumed in connection with
such Permitted Acquisition which could reasonably be expected to have a
Material Adverse Effect, and any Indebtedness incurred or assumed in
connection with such Permitted Acquisition shall have been permitted to
be incurred or assumed pursuant to ss.9.1(e) hereof; (4) the Borrower
has provided the Agent with such other information as was reasonably
requested by the Agent; (5) after the consummation of the Permitted
Acquisition, to the extent such acquisition was a stock acquisition,
either (A) the Person so acquired is merged with and into the Borrower
or its Subsidiary, with the Borrower or such Subsidiary, as the case
may be, being the survivor of such merger or (B) to the extent such
Person is not merged with and into the Borrower or a Subsidiary, such
Person shall become a Guarantor hereunder to the extent such Person is
a Domestic Subsidiary; (6) to the extent the aggregate Purchase Price
(as hereinafter defined) for such Permitted Acquisition is greater than
$7,000,000, the Borrower has demonstrated to the satisfaction of the
Agent, based on a pro forma Compliance Certificate, compliance with
ss.10 hereof immediately prior to and immediately after giving effect
to such Permitted Acquisition; (7) the aggregate amount of the Purchase
Price for all Permitted Acquisitions (or series of related
acquisitions) which are payable in anything other than the capital
stock of the Borrower shall not exceed $10,000,000 in any fiscal year;
(8) the board of directors and the shareholders (if required by
applicable law), or the equivalent, of each of the Borrower and the
Person to be acquired has approved such merger, consolidation or
acquisition and such Permitted Acquisition is otherwise considered
"friendly"; and (9) the Borrower has delivered to the Agent a
certificate of the chief financial officer of the Borrower to the
effect that (A) the Borrower and its Subsidiaries, on a consolidated
and consolidating basis, will be solvent upon the consummation of the
Permitted Acquisition; (B) to the extent required by (6) above, the pro
forma Compliance Certificate fairly presents the financial condition of
the Borrower and its Subsidiaries as of the date thereof and after
giving
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effect to such Permitted Acquisition; and (C) no Default or Event of
Default then exists or would result after giving effect to the
Permitted Acquisition. For purposes of this ss.10.5.1, the Purchase
Price shall be defined as the aggregate amount of consideration paid by
the Borrower to the seller on the Closing Date in any Permitted
Acquisition (including, without limitation, the aggregate amount of
Indebtedness incurred or assumed in connection therewith regardless of
the maturity date thereof). In addition, when valuing the capital stock
component of the Purchase Price, the value of the Borrower's capital
stock shall be valued in the manner consistent with the purchase
agreement pertaining to the Permitted Acquisition, and, to the extent
no such purchase agreement exists, or a valuation method is not
detailed therein, then the value shall equal the average of the fair
market value of the Borrower's capital stock for the ten (10) Business
Days immediately preceding the date on which such Permitted Acquisition
is consummated.
In the event any new Domestic Subsidiary is formed or acquired
as a result of or in connection with any acquisition, the Loan
Documents shall be amended and/or supplemented as necessary to make the
terms and conditions of the Loan Documents applicable to such Domestic
Subsidiary. Such Domestic Subsidiary shall, within thirty (30) days of
formation, creation or acquisition, become a Guarantor hereunder and
shall execute and deliver a Guaranty.
9.5.2. DISPOSITION OF ASSETS. The Borrower will not, and will
not permit any of its Subsidiaries to, become a party to or agree to or
effect any disposition of assets, other than (a) the sale of inventory,
the licensing of intellectual property and the disposition of obsolete
assets, in each case in the ordinary course of business consistent with
past practices; and (b) the sale or disposition of other assets,
provided that, in each case, (i) no Default of Event of Default has
occurred and is continuing and none would exist after giving effect
thereto or as a result thereof; (ii) the aggregate net cash proceeds
from all such sales or dispositions does not exceed $11,500,000 in any
fiscal year; and (iii) the Purchase Price shall be no less than the
fair market value of the applicable asset at the time of the sale or
disposition.
9.6. SALE AND LEASEBACK. The Borrower will not, and will not permit any
of its Subsidiaries to, enter into any arrangement, directly or indirectly,
whereby the Borrower or any Subsidiary of the Borrower shall sell or transfer
any property owned by it in order then or thereafter to lease such property or
lease other property that the Borrower or any Subsidiary of the Borrower intends
to use for substantially the same purpose as the property being sold or
transferred; PROVIDED, HOWEVER, notwithstanding anything to the contrary
contained in this ss.9.6, the Borrower shall be permitted subject to compliance
with the terms and conditions of the Credit Agreement, to enter into a sale and
leaseback transaction with respect to certain of its equipment where (a) in
connection with such sale and leaseback transaction the Borrower simultaneously
enters into a Capitalized Lease arrangement with the purchaser
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of such equipment; and (b) the Borrower had, at the time of the initial purchase
by the Borrower of the property, intended to enter into a Capitalized Lease
arrangement with respect to the property.
9.7. COMPLIANCE WITH ENVIRONMENTAL LAWS. The Borrower will not, and
will not permit any of its Subsidiaries to, (a) use any of the Real Estate or
any portion thereof for the handling, processing, storage or disposal of
Hazardous Substances other than in compliance with applicable laws, (b) cause or
permit to be located on any of the Real Estate any underground tank or other
underground storage receptacle for Hazardous Substances, (c) generate any
Hazardous Substances on any of the Real Estate other than in compliance with
applicable laws, (d) conduct any activity at any Real Estate or use any Real
Estate in any manner so as to cause a release (i.e. releasing, spilling,
leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping,
leaching, disposing or dumping) or threatened release of Hazardous Substances
on, upon or into the Real Estate or (e) otherwise conduct any activity at any
Real Estate or use any Real Estate in any manner that would violate any
Environmental Law or bring such Real Estate in violation of any Environmental
Law.
9.8. AUTOSIMULATIONS DEBT. The Borrower will not, and will not permit
any of its Subsidiaries to, amend, supplement or otherwise modify the terms of
any of the Indebtedness incurred pursuant to ss.9.1(c) or 9.1(e) if such
amendment or modification would have the effect of increasing the principal
amount of such Indebtedness or the rate of interest thereon, or making any
covenant, default or provision contained therein more onerous to the Borrower
than exists on the Closing Date. In addition, the Borrower will not amend,
supplement or otherwise modify the terms of the Subordination Agreement without
the prior written consent of the Agent.
9.9. EMPLOYEE BENEFIT PLANS. Neither the Borrower nor any ERISA
Affiliate will
(a) engage in any "prohibited transaction" within the meaning
of ss.406 of ERISA or ss.4975 of the Code which could result in a
material liability for the Borrower or any of its Subsidiaries; or
(b) permit any Guaranteed Pension Plan to incur an
"accumulated funding deficiency", as such term is defined in ss.302 of
ERISA, whether or not such deficiency is or may be waived; or
(c) fail to contribute to any Guaranteed Pension Plan to an
extent which, or terminate any Guaranteed Pension Plan in a manner
which, could result in the imposition of a lien or encumbrance on the
assets of the Borrower or any of its Subsidiaries pursuant to ss.302(f)
or ss.4068 of ERISA; or
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(d) amend any Guaranteed Pension Plan in circumstances
requiring the posting of security pursuant to ss.307 of ERISA or
ss.401(a)(29) of the Code; or
(e) permit or take any action which would result in the
aggregate benefit liabilities (with the meaning of ss.4001 of ERISA) of
all Guaranteed Pension Plans exceeding the value of the aggregate
assets of such Plans, disregarding for this purpose the benefit
liabilities and assets of any such Plan with assets in excess of
benefit liabilities.
9.10. BUSINESS ACTIVITIES. The Borrower will not, and will not permit
any of its Subsidiaries to, engage directly or indirectly (whether through
Subsidiaries or otherwise) in any type of business other than the businesses
conducted by them on the Closing Date and in related businesses.
9.11. FISCAL YEAR. The Borrower will not, and will not permit any of it
Subsidiaries to, change the date of the end of its fiscal year from that set
forth in ss.7.4.1 other than changing the date of any Subsidiary's fiscal year
end to correspond to the Borrower's fiscal year end date.
9.12. TRANSACTIONS WITH AFFILIATES. Except for the transactions set
forth in SCHEDULE 7.15, the Borrower will not, and will not permit any of its
Subsidiaries to, engage in any transaction with any Affiliate (other than for
services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any such Affiliate or, to the knowledge of the
Borrower, any corporation, partnership, trust or other entity in which any such
Affiliate has a substantial interest or is an officer, director, trustee or
partner, on terms more favorable to such Person than would have been obtainable
on an arm's-length basis in the ordinary course of business.
9.13. MODIFICATION OF CHARTER. Neither the Borrower nor any of its
Subsidiaries will consent to or agree to any amendment, supplement or other
modification to the Capitalization Documents without the prior written consent
of the Agent unless such amendment, supplement or modification is immaterial and
ministerial in nature and would not have any material adverse effect on the
Agent's or the Banks' rights under the Loan Documents or the Borrower's or any
of its Subsidiaries' obligations under the Loan Documents, including, without
limitation, an increase in the authorized capital stock of the Borrower or any
Subsidiary.
9.14. UPSTREAM LIMITATIONS. Neither the Borrower nor any of its
Subsidiaries will enter into, or permit any of its Subsidiaries to enter into,
any agreement, contract or arrangement (other than the Credit Agreement and the
other Loan Documents) restricting the ability of any Subsidiary to pay or make
dividends or distributions in cash or kind, to make loans, advances or other
payments of whatsoever nature or to make transfers or distributions of all or
any part of its assets to the Borrower or any Guarantor.
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9.15. INCONSISTENT AGREEMENTS. Neither the Borrower nor any of its
Subsidiaries will enter into any agreement containing any provision which would
be violated or breached by the performance by the Borrower or such Subsidiary of
its obligations hereunder or under any of the Loan Documents.
9.16. NEGATIVE PLEDGE. Neither the Borrower nor any of its Subsidiaries
will enter into any agreement (excluding this Credit Agreement and the other
Loan Documents) prohibiting the creation or assumption of any lien upon its
properties, revenues or assets or those of any of its Subsidiaries, whether now
owned or hereafter acquired other than agreements with Persons prohibiting any
such lien on assets in which such Person has a security interest which is
permitted by ss.9.2.
10. FINANCIAL COVENANTS OF THE BORROWER.
The Borrower covenants and agrees that, so long as any Revolving Credit
Loan, Unpaid Reimbursement Obligation, Letter of Credit or Revolving Credit Note
is outstanding or any Bank has any obligation to make any Revolving Credit Loans
or the Agent has any obligation to issue, extend or renew any Letters of Credit:
10.1. LEVERAGE RATIO. The Borrower will not at any time permit the
Leverage Ratio to exceed 1.50:1.00 at any time:
10.2. DEBT SERVICE COVERAGE RATIO. The Borrower will not permit the
Debt Service Coverage Ratio as at the end of any fiscal quarter, commencing with
the fiscal quarter ending March 31, 2000, to be less than 3.00:1.00.
10.3. QUICK RATIO. The Borrower will not permit the ratio of
Consolidated Current Assets to Consolidated Current Liabilities to be less than
1.25:1.00 at any time.
10.4. CAPITAL EXPENDITURES. The Borrower will not make, or permit any
Subsidiary of the Borrower to make, Capital Expenditures in any fiscal year that
exceed, in the aggregate, $13,000,000 for such fiscal year.
11. CLOSING CONDITIONS.
The obligations of the Banks to make the initial Revolving Credit Loans
and of the Agent to issue any initial Letters of Credit shall be subject to the
satisfaction of the following conditions precedent:
11.1. LOAN DOCUMENTS.
11.1.1. LOAN DOCUMENTS. Each of the Loan Documents shall have
been duly executed and delivered by the respective parties thereto,
shall be in full force and effect and shall be in form and substance
satisfactory to each of the Banks. Each Bank shall have received a
fully executed copy of each such document.
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11.2. CERTIFIED COPIES OF CHARTER DOCUMENTS. The Agent shall have
received from the Borrower and each of the Guarantors a copy, certified by a
duly authorized officer of such Person to be true and complete on the Closing
Date, of each of (a) its charter or other incorporation or formation documents
as in effect on such date of certification, and (b) its by-laws (or any such
comparable version of such articles in the case of a Foreign Subsidiary) as in
effect on such date.
11.3. CORPORATE ACTION. All corporate action necessary for the valid
execution, delivery and performance by the Borrower and each of the Guarantors
of this Credit Agreement and the other Loan Documents to which it is or is to
become a party shall have been duly and effectively taken, and evidence thereof
satisfactory to the Agent shall have been provided to the Agent.
11.4. INCUMBENCY CERTIFICATE. The Agent shall have received from the
Borrower and each the Guarantors an incumbency certificate (or similar
authorization document as is typical in the country of formation for a Foreign
Subsidiary), dated as of the Closing Date, signed by a duly authorized officer
of the Borrower or such Subsidiary, and giving the name and bearing a specimen
signature of each individual who shall be authorized: (a) to sign, in the name
and on behalf of each of the Borrower of such Subsidiary, each of the Loan
Documents to which the Borrower or such Subsidiary is or is to become a party;
(b) in the case of the Borrower, to make Loan Requests and Conversion Requests
and to apply for Letters of Credit; and (c) to give notices and to take other
action on its behalf under the Loan Documents.
11.5. UCC SEARCH RESULTS. The Agent shall have received from each of
the Borrower and its Domestic Subsidiaries the results of UCC searches,
indicating no liens other than Permitted Liens and otherwise in form and
substance satisfactory to the Agent.
11.6. CERTIFICATES OF INSURANCE. The Agent shall have received a
certificate of insurance from an independent insurance broker dated as of the
Closing Date, identifying insurers, types of insurance, insurance limits, and
policy terms.
11.7. BORROWING BASE REPORT. The Agent shall have received from the
Borrower the initial Borrowing Base Report dated as of the Closing Date.
11.8. ACCOUNTS RECEIVABLE AGING REPORT. The Agent shall have received
from the Borrower the most recent Accounts Receivable aging report of the
Borrower and its Subsidiaries dated as of a date which shall be no more than
thirty (30) days prior to the Closing Date and the Borrower shall have notified
the Agent in writing on the Closing Date of any material deviation from the
Accounts Receivable values reflected in such Accounts Receivable aging report
and shall have provided the Agent with such supplementary documentation as the
Agent may reasonably request.
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11.9. SOLVENCY CERTIFICATE. The Agent shall have received an officer's
certificate of the Borrower dated as of the Closing Date as to the solvency of
the Borrower and its Subsidiaries following the consummation of the transactions
contemplated herein and in form and substance satisfactory to the Banks.
11.10. OPINION OF COUNSEL. Each of the Banks and the Agent shall have
received a favorable legal opinion addressed to the Banks and the Agent, dated
as of the Closing Date, in form and substance satisfactory to the Banks and the
Agent, from:
(a) Brown, Rudnick, Freed & Gesmer, P.C., counsel to the
Borrower and its Subsidiaries;
(b) local counsel to Guarantors as applicable.
11.11. PAYMENT OF FEES. The Borrower shall have paid to the Banks or
the Agent, as appropriate, the closing fees pursuant to ss.5.1.
12. CONDITIONS TO ALL BORROWINGS.
The obligations of the Banks to make any Revolving Credit Loan,
including the Revolving Credit Loan and the Term Loan, and of the Agent to
issue, extend or renew any Letter of Credit, in each case whether on or after
the Closing Date, shall also be subject to the satisfaction of the following
conditions precedent:
12.1. REPRESENTATIONS TRUE; NO EVENT OF DEFAULT. Each of the
representations and warranties of any of the Borrower and its Subsidiaries
contained in this Credit Agreement, the other Loan Documents or in any document
or instrument delivered pursuant to or in connection with this Credit Agreement
shall be true as of the date as of which they were made and shall also be true
at and as of the time of the making of such Revolving Credit Loan or the
issuance, extension or renewal of such Letter of Credit, with the same effect as
if made at and as of that time (except to the extent of changes resulting from
transactions contemplated or permitted by this Credit Agreement and the other
Loan Documents and changes occurring in the ordinary course of business that
singly or in the aggregate are not materially adverse, and to the extent that
such representations and warranties relate expressly to an earlier date) and no
Default or Event of Default shall have occurred and be continuing.
12.2. NO LEGAL IMPEDIMENT. No change shall have occurred in any law or
regulations thereunder or interpretations thereof that in the reasonable opinion
of any Bank would make it illegal for such Bank to make such Revolving Credit
Loan or to participate in the issuance, extension or renewal of such Letter of
Credit or in the reasonable opinion of the Agent would make it illegal for the
Agent to issue, extend or renew such Letter of Credit.
12.3. GOVERNMENTAL REGULATION. Each Bank shall have received such
statements in substance and form reasonably satisfactory to such Bank as
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such Bank shall require for the purpose of compliance with any applicable
regulations of the Comptroller of the Currency or the Board of Governors of the
Federal Reserve System.
12.4. PROCEEDINGS AND DOCUMENTS. All proceedings in connection with the
transactions contemplated by this Credit Agreement, the other Loan Documents and
all other documents incident thereto shall be satisfactory in substance and in
form to the Banks and to the Agent and the Agent's Special Counsel, and the
Banks, the Agent and such counsel shall have received all information and such
counterpart originals or certified or other copies of such documents as the
Agent may reasonably request.
12.5. BORROWING BASE REPORT. The Agent shall have received the most
recent Borrowing Base Report required to be delivered to the Agent in accordance
with ss.8.4(e) and, if requested by the Agent, a Borrowing Base Report dated
within [thirty (30)] days of the Drawdown Date of such Revolving Credit Loan or
of the date of issuance, extension or renewal of such Letter of Credit.
13. EVENTS OF DEFAULT; ACCELERATION; ETC.
13.1. EVENTS OF DEFAULT AND ACCELERATION. If any of the following
events ("Events of Default" or, if the giving of notice or the lapse of time or
both is required, then, prior to such notice or lapse of time, "Defaults") shall
occur:
(a) the Borrower shall fail to pay any principal of the
Revolving Credit Loans or any Reimbursement Obligation when the same
shall become due and payable, whether at the stated date of maturity or
any accelerated date of maturity or at any other date fixed for
payment;
(b) the Borrower shall fail to pay any interest on the
Revolving Credit Loans, the commitment fee, any Letter of Credit Fee or
other sums due hereunder or under any of the other Loan Documents, when
the same shall become due and payable, whether at the stated date of
maturity or any accelerated date of maturity or at any other date fixed
for payment;
(c) the Borrower shall fail to comply with any of its
covenants contained in ss.8.1, 8.4, 8.5.1, 8.6, 8.8, 8.9, 8.12, 8.14,
8.16, 9 or 10;
(d) the Borrower or any of its Subsidiaries shall fail to
perform any term, covenant or agreement contained herein or in any of
the other Loan Documents (other than those specified elsewhere in this
ss.13.1) for thirty (30) days after written notice of such failure has
been given to the Borrower by the Agent;
(e) any representation or warranty of the Borrower or any of
its Subsidiaries in this Credit Agreement or any of the other Loan
Documents or in any other document or instrument delivered pursuant
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to or in connection with this Credit Agreement shall prove to have been
false in any material respect upon the date when made or deemed to have
been made or repeated;
(f) the Borrower or any of its Subsidiaries shall fail to pay
at maturity, or within any applicable period of grace, any obligation
for borrowed money or credit received or in respect of any Capitalized
Leases, in an amount in excess of $1,000,000, or fail to observe or
perform any material term, covenant or agreement contained in any
agreement by which it is bound, evidencing or securing borrowed money
or credit received or in respect of any Capitalized Leases, in an
amount in excess of $1,000,000, for such period of time as would permit
(assuming the giving of appropriate notice if required) the holder or
holders thereof or of any obligations issued thereunder to accelerate
the maturity thereof, or any such holder or holders shall rescind or
shall have a right to rescind the purchase of any such obligations;
(g) the Borrower or any of its Subsidiaries shall make an
assignment for the benefit of creditors, or admit in writing its
inability to pay or generally fail to pay its debts as they mature or
become due, or shall petition or apply for the appointment of a trustee
or other custodian, liquidator or receiver of the Borrower or any of
its Subsidiaries or of any substantial part of the assets of the
Borrower or any of its Subsidiaries or shall commence any case or other
proceeding relating to the Borrower or any of its Subsidiaries under
any bankruptcy, reorganization, arrangement, insolvency, readjustment
of debt, dissolution or liquidation or similar law of any jurisdiction,
now or hereafter in effect, or shall take any action to authorize or in
furtherance of any of the foregoing, or if any such petition or
application shall be filed or any such case or other proceeding shall
be commenced against the Borrower or any of its Subsidiaries and the
Borrower or any of its Subsidiaries shall indicate its approval
thereof, consent thereto or acquiescence therein or such petition or
application shall not have been dismissed within sixty (60) days
following the filing thereof;
(h) a decree or order is entered appointing any such trustee,
custodian, liquidator or receiver or adjudicating the Borrower or any
of its Subsidiaries bankrupt or insolvent, or approving a petition in
any such case or other proceeding, or a decree or order for relief is
entered in respect of the Borrower or any Subsidiary of the Borrower in
an involuntary case under federal bankruptcy laws as now or hereafter
constituted;
(i) there shall remain in force, undischarged, unsatisfied and
unstayed, for more than thirty days, whether or not consecutive, any
final judgment against the Borrower or any of its Subsidiaries that,
with other outstanding final judgments, undischarged, against the
Borrower or any of its Subsidiaries exceeds in the aggregate
$1,000,000;
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(j) if any of the Loan Documents shall be cancelled,
terminated, revoked or rescinded otherwise than in accordance with the
terms thereof or with the express prior written agreement, consent or
approval of the Banks, or any action at law, suit or in equity or other
legal proceeding to cancel, revoke or rescind any of the Loan Documents
shall be commenced by or on behalf of the Borrower or any of its
Subsidiaries party thereto or any of their respective stockholders, or
any court or any other governmental or regulatory authority or agency
of competent jurisdiction shall make a determination that, or issue a
judgment, order, decree or ruling to the effect that, any one or more
of the Loan Documents is illegal, invalid or unenforceable in
accordance with the terms thereof;
(k) the Borrower or any ERISA Affiliate incurs any liability
to the PBGC or a Guaranteed Pension Plan pursuant to Title IV of ERISA
in an aggregate amount exceeding $1,000,000, or the Borrower or any
ERISA Affiliate is assessed withdrawal liability pursuant to Title IV
of ERISA by a Multiemployer Plan requiring aggregate annual payments
exceeding $1,000,000, or any of the following occurs with respect to a
Guaranteed Pension Plan: (i) an ERISA Reportable Event, or a failure to
make a required installment or other payment (within the meaning of
ss.302(f)(1) of ERISA), PROVIDed that the Agent determines in its
reasonable discretion that such event (A) could be expected to result
in liability of the Borrower or any of its Subsidiaries to the PBGC or
such Guaranteed Pension Plan in an aggregate amount exceeding
$1,000,000 and (B) could constitute grounds for the termination of such
Guaranteed Pension Plan by the PBGC, for the appointment by the
appropriate United States District Court of a trustee to administer
such Guaranteed Pension Plan or for the imposition of a lien in favor
of such Guaranteed Pension Plan; or (ii) the appointment by a United
States District Court of a trustee to administer such Guaranteed
Pension Plan; or (iii) the institution by the PBGC of proceedings to
terminate such Guaranteed Pension Plan;
(l) the Borrower or any of its Subsidiaries shall be enjoined,
restrained or in any way prevented by the order of any court or any
administrative or regulatory agency from conducting any material part
of its business and such order shall continue in effect for more than
thirty (30) days;
(m) there shall occur any strike, lockout, labor dispute,
embargo, condemnation, act of God or public enemy, or other casualty,
which in any such case causes, for more than thirty (30) consecutive
days, the cessation or substantial curtailment of revenue producing
activities at any facility of the Borrower or any of its Subsidiaries
if such event or circumstance is not covered by business interruption
insurance and would have a Material Adverse Effect;
(n) there shall occur the loss, suspension or revocation of,
or failure to renew, any license or permit now held or hereafter
acquired by
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the Borrower or any of its Subsidiaries if such loss, suspension,
revocation or failure to renew would have a Material Adverse Effect;
(o) the Borrower or any of its Subsidiaries shall be indicted
for a state or federal crime, or any civil or criminal action shall
otherwise have been brought against the Borrower or any of its
Subsidiaries, a punishment for which in any such case could reasonably
be expected to have a Material Adverse Effect;
(p) any person or group of persons (within the meaning of
Section 13 or 14 of the Securities Exchange Act of 1934, as amended)
shall have acquired beneficial ownership (within the meaning of Rule
13d-3 promulgated by the Securities and Exchange Commission under said
Act) of thirty percent (30%) or more of the outstanding shares of
common stock of the Borrower; or, during any period of twelve
consecutive calendar months, individuals who were directors of the
Borrower on the first day of such period shall cease to constitute a
majority of the board of directors of the Borrower; or
(q) the Borrower shall at any time, legally or beneficially
own less than 100% of the shares of the capital stock of any Guarantor,
PROVIDED, HOWEVER, to the extent the Borrower owns less than 100% of
the capital stock of any Guarantor at the time such Subsidiary becomes
a Guarantor hereunder, then it shall only constitute an Event of
Default if the Borrower shall at any time, legally or beneficially own
a smaller percentage of the capital stock of such Subsidiary than the
Borrower owned on the date such Person became a Subsidiary of the
Borrower;
then, and in any such event, so long as the same may be continuing, the Agent
may, and upon the request of the Majority Banks shall, by notice in writing to
the Borrower declare all amounts owing with respect to this Credit Agreement,
the Revolving Credit Notes and the other Loan Documents and all Reimbursement
Obligations to be, and they shall thereupon forthwith become, immediately due
and payable without presentment, demand, protest or other notice of any kind,
all of which are hereby expressly waived by the Borrower; PROVIDED that in the
event of any Event of Default specified in ss.ss.13.1(g) or 13.1(h), all such
amounts shall become immediately due and payable automatically and without any
requirement of notice from the Agent or any Bank.
13.2. TERMINATION OF COMMITMENTS. If any one or more of the Events of
Default specified in ss.13.1(g) or ss.13.1(h) shall occur, any unused portion of
the credit hereunder shall forthwith terminate and each of the Banks shall be
relieved of all further obligations to make Revolving Credit Loans to the
Borrower and the Agent shall be relieved of all further obligations to issue,
extend or renew Letters of Credit. If any other Event of Default shall have
occurred and be continuing, the Agent may and, upon the request of the Majority
Banks, shall, by notice to the Borrower, terminate the unused portion of the
credit hereunder, and upon such notice being given such unused portion
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of the credit hereunder shall terminate immediately and each of the Banks shall
be relieved of all further obligations to make Revolving Credit Loans and the
Agent shall be relieved of all further obligations to issue, extend or renew
Letters of Credit. No termination of the credit hereunder shall relieve the
Borrower or any of its Subsidiaries of any of the Obligations.
13.3. REMEDIES. In case any one or more of the Events of Default shall
have occurred and be continuing, and whether or not the Banks shall have
accelerated the maturity of the Revolving Credit Loans pursuant to ss.13.1, each
Bank, if owed any amount with respect to the Revolving Credit Loans or the
Reimbursement Obligations, may, with the consent of the Majority Banks but not
otherwise, proceed to protect and enforce its rights by suit in equity, action
at law or other appropriate proceeding, whether for the specific performance of
any covenant or agreement contained in this Credit Agreement and the other Loan
Documents or any instrument pursuant to which the Obligations to such Bank are
evidenced, including as permitted by applicable law the obtaining of the EX
PARTE appointment of a receiver, and, if such amount shall have become due, by
declaration or otherwise, proceed to enforce the payment thereof or any other
legal or equitable right of such Bank. No remedy herein conferred upon any Bank
or the Agent or the holder of any Revolving Credit Note or purchaser of any
Letter of Credit Participation is intended to be exclusive of any other remedy
and each and every remedy shall be cumulative and shall be in addition to every
other remedy given hereunder or now or hereafter existing at law or in equity or
by statute or any other provision of law.
14. SETOFF.
Regardless of the adequacy of any collateral, during the continuance of
any Event of Default, any deposits or other sums credited by or due from any of
the Banks to the Borrower and any securities or other property of the Borrower
in the possession of such Bank may be applied to or set off by such Bank against
the payment of Obligations and any and all other liabilities, direct, or
indirect, absolute or contingent, due or to become due, now existing or
hereafter arising, of the Borrower to such Bank. Each of the Banks agrees with
each other Bank that (a) if an amount to be set off is to be applied to
Indebtedness of the Borrower to such Bank, other than Indebtedness evidenced by
the Revolving Credit Notes held by such Bank or constituting Reimbursement
Obligations owed to such Bank, such amount shall be applied ratably to such
other Indebtedness and to the Indebtedness evidenced by all such Revolving
Credit Notes held by such Bank or constituting Reimbursement Obligations owed to
such Bank, and (b) if such Bank shall receive from the Borrower, whether by
voluntary payment, exercise of the right of setoff, counterclaim, cross action,
enforcement of the claim evidenced by the Revolving Credit Notes held by, or
constituting Reimbursement Obligations owed to, such Bank by proceedings against
the Borrower at law or in equity or by proof thereof in bankruptcy,
reorganization, liquidation, receivership or similar proceedings, or otherwise,
and shall retain and apply to the payment of the Revolving Credit Note or
Revolving Credit Notes held by, or Reimbursement Obligations owed to, such Bank
any amount in excess of its ratable portion of
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the payments received by all of the Banks with respect to the Revolving Credit
Notes held by, and Reimbursement Obligations owed to, all of the Banks, such
Bank will make such disposition and arrangements with the other Banks with
respect to such excess, either by way of distribution, PRO TANTO assignment of
claims, subrogation or otherwise as shall result in each Bank receiving in
respect of the Revolving Credit Notes held by it or Reimbursement obligations
owed it, its proportionate payment as contemplated by this Credit Agreement;
PROVIDED that if all or any part of such excess payment is thereafter recovered
from such Bank, such disposition and arrangements shall be rescinded and the
amount restored to the extent of such recovery, but without interest.
15. THE AGENT.
15.1. AUTHORIZATION.
(a) The Agent is authorized to take such action on behalf of
each of the Banks and to exercise all such powers as are hereunder and
under any of the other Loan Documents and any related documents
delegated to the Agent, together with such powers as are reasonably
incident thereto, PROVIDED that no duties or responsibilities not
expressly assumed herein or therein shall be implied to have been
assumed by the Agent.
(b) The relationship between the Agent and each of the Banks
is that of an independent contractor. The use of the term "Agent" is
for convenience only and is used to describe, as a form of convention,
the independent contractual relationship between the Agent and each of
the Banks. Nothing contained in this Credit Agreement nor the other
Loan Documents shall be construed to create an agency, trust or other
fiduciary relationship between the Agent and any of the Banks.
(c) As an independent contractor empowered by the Banks to
exercise certain rights and perform certain duties and responsibilities
hereunder and under the other Loan Documents, the Agent is nevertheless
a "representative" of the Banks, as that term is defined in Article 1
of the Uniform Commercial Code, for purposes of actions for the benefit
of the Banks and the Agent with respect to all collateral security and
guaranties contemplated by the Loan Documents. Such actions include the
designation of the Agent as "secured party", "mortgagee" or the like on
all financing statements and other documents and instruments, whether
recorded or otherwise, relating to the attachment, perfection, priority
or enforcement of any security interests, mortgages or deeds of trust
in collateral security intended to secure the payment or performance of
any of the Obligations, all for the benefit of the Banks and the Agent.
15.2. EMPLOYEES AND AGENTS. The Agent may exercise its powers and
execute its duties by or through employees or agents and shall be entitled to
take, and to rely on, advice of counsel concerning all matters pertaining to its
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rights and duties under this Credit Agreement and the other Loan Documents. The
Agent may utilize the services of such Persons as the Agent in its sole
discretion may reasonably determine, and all reasonable fees and expenses of any
such Persons shall be paid by the Borrower.
15.3. NO LIABILITY. Neither the Agent nor any of its shareholders,
directors, officers or employees nor any other Person assisting them in their
duties nor any agent or employee thereof, shall be liable for any waiver,
consent or approval given or any action taken, or omitted to be taken, in good
faith by it or them hereunder or under any of the other Loan Documents, or in
connection herewith or therewith, or be responsible for the consequences of any
oversight or error of judgment whatsoever, except that the Agent or such other
Person, as the case may be, may be liable for losses due to its willful
misconduct or gross negligence.
15.4. NO REPRESENTATIONS.
15.4.1. GENERAL. The Agent shall not be responsible for the
execution or validity or enforceability of this Credit Agreement, the
Revolving Credit Notes, the Letters of Credit, any of the other Loan
Documents or any instrument at any time constituting, or intended to
constitute, collateral security for the Revolving Credit Notes, or for
the value of any such collateral security or for the validity,
enforceability or collectability of any such amounts owing with respect
to the Revolving Credit Notes, or for any recitals or statements,
warranties or representations made herein or in any of the other Loan
Documents or in any certificate or instrument hereafter furnished to it
by or on behalf of the Borrower or any of its Subsidiaries, or be bound
to ascertain or inquire as to the performance or observance of any of
the terms, conditions, covenants or agreements herein or in any
instrument at any time constituting, or intended to constitute,
collateral security for the Revolving Credit Notes or to inspect any of
the properties, books or records of the Borrower or any of its
Subsidiaries. The Agent shall not be bound to ascertain whether any
notice, consent, waiver or request delivered to it by the Borrower or
any holder of any of the Revolving Credit Notes shall have been duly
authorized or is true, accurate and complete. The Agent has not made
nor does it now make any representations or warranties, express or
implied, nor does it assume any liability to the Banks, with respect to
the credit worthiness or financial conditions of the Borrower or any of
its Subsidiaries. Each Bank acknowledges that it has, independently and
without reliance upon the Agent or any other Bank, and based upon such
information and documents as it has deemed appropriate, made its own
credit analysis and decision to enter into this Credit Agreement.
15.4.2. CLOSING DOCUMENTATION, ETC. For purposes of
determining compliance with the conditions set forth in ss.11, each
Bank that has executed this Credit Agreement shall be deemed to have
consented to, approved or accepted, or to be satisfied with, each
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document and matter either sent, or made available, by the Agent to
such Bank for consent, approval, acceptance or satisfaction, or
required thereunder to be to be consent to or approved by or acceptable
or satisfactory to such Bank, unless an officer of the Agent active
upon the Borrower's account shall have received notice from such Bank
prior to the Closing Date specifying such Bank's objection thereto and
such objection shall not have been withdrawn by notice to the Agent to
such effect on or prior to the Closing Date.
15.5. PAYMENTS.
15.5.1. PAYMENTS TO AGENT. A payment by the Borrower to the
Agent hereunder or any of the other Loan Documents for the account of
any Bank shall constitute a payment to such Bank. The Agent agrees
promptly to distribute to each Bank such Bank's PRO RATA share of
payments received by the Agent for the account of the Banks except as
otherwise expressly provided herein or in any of the other Loan
Documents.
15.5.2. DISTRIBUTION BY AGENT. If in the opinion of the Agent
the distribution of any amount received by it in such capacity
hereunder, under the Revolving Credit Notes or under any of the other
Loan Documents might involve it in liability, it may refrain from
making distribution until its right to make distribution shall have
been adjudicated by a court of competent jurisdiction. If a court of
competent jurisdiction shall adjudge that any amount received and
distributed by the Agent is to be repaid, each Person to whom any such
distribution shall have been made shall either repay to the Agent its
proportionate share of the amount so adjudged to be repaid or shall pay
over the same in such manner and to such Persons as shall be determined
by such court.
15.5.3. DELINQUENT BANKS. Notwithstanding anything to the
contrary contained in this Credit Agreement or any of the other Loan
Documents, any Bank that fails (a) to make available to the Agent its
PRO RATA share of any Revolving Credit Loan or to purchase any Letter
of Credit Participation or (b) to comply with the provisions of ss.14
with respect to making dispositions and arrangements with the other
Banks, where such Bank's share of any payment received, whether by
setoff or otherwise, is in excess of its PRO RATA share of such
payments due and payable to all of the Banks, in each case as, when and
to the full extent required by the provisions of this Credit Agreement,
shall be deemed delinquent (a "Delinquent Bank") and shall be deemed a
Delinquent Bank until such time as such delinquency is satisfied. A
Delinquent Bank shall be deemed to have assigned any and all payments
due to it from the Borrower, whether on account of outstanding
Revolving Credit Loans, Unpaid Reimbursement Obligations, interest,
fees or otherwise, to the remaining nondelinquent Banks for application
to, and reduction of, their respective PRO RATA shares of all
outstanding Revolving Credit Loans
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and Unpaid Reimbursement Obligations. The Delinquent Bank hereby
authorizes the Agent to distribute such payments to the nondelinquent
Banks in proportion to their respective PRO RATA shares of all
outstanding Revolving Credit Loans and Unpaid Reimbursement
Obligations. A Delinquent Bank shall be deemed to have satisfied in
full a delinquency when and if, as a result of application of the
assigned payments to all outstanding Revolving Credit Loans and Unpaid
Reimbursement Obligations of the nondelinquent Banks, the Banks'
respective PRO RATA shares of all outstanding Revolving Credit Loans
and Unpaid Reimbursement Obligations have returned to those in effect
immediately prior to such delinquency and without giving effect to the
nonpayment causing such delinquency.
15.6. HOLDERS OF REVOLVING CREDIT NOTES. The Agent may deem and treat
the payee of any Revolving Credit Note or the purchaser of any Letter of Credit
Participation as the absolute owner or purchaser thereof for all purposes hereof
until it shall have been furnished in writing with a different name by such
payee or by a subsequent holder, assignee or transferee.
15.7. INDEMNITY. The Banks ratably agree hereby to indemnify and hold
harmless the Agent and its affiliates from and against any and all claims,
actions and suits (whether groundless or otherwise), losses, damages, costs,
expenses (including any expenses for which the Agent or such affiliate has not
been reimbursed by the Borrower as required by ss.17), and liabilities of every
nature and character arising out of or related to this Credit Agreement, the
Revolving Credit Notes, or any of the other Loan Documents or the transactions
contemplated or evidenced hereby or thereby, or the Agent's actions taken
hereunder or thereunder, except to the extent that any of the same shall be
directly caused by the Agent's willful misconduct or gross negligence.
15.8. AGENT AS BANK. In its individual capacity, ABN AMRO shall have
the same obligations and the same rights, powers and privileges in respect to
its Commitment and the Revolving Credit Loans made by it, and as the holder of
any of the Revolving Credit Notes and as the purchaser of any Letter of Credit
Participations, as it would have were it not also the Agent.
15.9. RESIGNATION. The Agent may resign at any time by giving sixty
(60) days prior written notice thereof to the Banks and the Borrower. Upon any
such resignation, the Majority Banks shall have the right to appoint a successor
Agent. Unless a Default or Event of Default shall have occurred and be
continuing, such successor Agent shall be reasonably acceptable to the Borrower.
If no successor Agent shall have been so appointed by the Majority Banks and
shall have accepted such appointment within thirty (30) days after the retiring
Agent's giving of notice of resignation, then the retiring Agent may, on behalf
of the Banks, appoint a successor Agent, which shall be a financial institution
having a rating of not less than A or its equivalent by Standard & Poor's
Corporation. 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
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retiring Agent, and the retiring Agent shall be discharged from its duties and
obligations hereunder. After any retiring Agent's resignation, the provisions of
this Credit Agreement and the other Loan Documents shall continue in effect for
its benefit in respect of any actions taken or omitted to be taken by it while
it was acting as Agent.
15.10. NOTIFICATION OF DEFAULTS AND EVENTS OF DEFAULT. Each Bank hereby
agrees that, upon learning of the existence of a Default or an Event of Default,
it shall promptly notify the Agent thereof. The Agent hereby agrees that upon
receipt of any notice under this ss.15.10 it shall promptly notify the other
Banks of the existence of such Default or Event of Default.
16. EXPENSES AND INDEMNIFICATION.
16.1. EXPENSES. The Borrower agrees to pay (a) the reasonable costs of
producing and reproducing this Credit Agreement, the other Loan Documents and
the other agreements and instruments mentioned herein, (b) any taxes (including
any interest and penalties in respect thereto) payable by the Agent or any of
the Banks (other than taxes based upon the Agent's or any Bank's net income) on
or with respect to the transactions contemplated by this Credit Agreement (the
Borrower hereby agreeing to indemnify the Agent and each Bank with respect
thereto), (c) the reasonable fees, expenses and disbursements of the Agent's
Special Counsel or any local counsel to the Agent incurred in connection with
the preparation, syndication, administration or interpretation of the Loan
Documents and other instruments mentioned herein, each closing hereunder, any
amendments, modifications, approvals, consents or waivers hereto or hereunder,
or the cancellation of any Loan Document upon payment in full in cash of all of
the Obligations or pursuant to any terms of such Loan Document for providing for
such cancellation, (d) the fees, expenses and disbursements of the Agent or any
of its affiliates incurred by the Agent or such affiliate in connection with the
preparation, syndication, administration or interpretation of the Loan Documents
and other instruments mentioned herein, including all appraisal charges, (e) all
reasonable out-of-pocket expenses (including without limitation reasonable
attorneys' fees and costs, which attorneys may be employees of any Bank or the
Agent, and reasonable consulting, accounting, appraisal, investment banking and
similar professional fees and charges) incurred by any Bank or the Agent in
connection with (i) the enforcement of or preservation of rights under any of
the Loan Documents against the Borrower or any of its Subsidiaries or the
administration thereof after the occurrence of a Default or Event of Default and
(ii) any litigation, proceeding or dispute whether arising hereunder or
otherwise, in any way related to any Bank's or the Agent's relationship with the
Borrower or any of its Subsidiaries and (f) all reasonable fees, expenses and
disbursements of the Agent incurred in connection with UCC searches.
16.2. INDEMNIFICATION. The Borrower agrees to indemnify and hold
harmless the Agent, its affiliates and the Banks from and against any and all
claims, actions and suits whether groundless or otherwise, and from and against
any and all liabilities, losses, damages and expenses of every nature
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and character arising out of this Credit Agreement or any of the other Loan
Documents or the transactions contemplated hereby including, without limitation,
(a) any actual or proposed use by the Borrower or any of its Subsidiaries of the
proceeds of any of the Revolving Credit Loans or Letters of Credit, (b) the
Borrower or any of its Subsidiaries entering into or performing this Credit
Agreement or any of the other Loan Documents or (c) with respect to the Borrower
and its Subsidiaries and their respective properties and assets, the violation
of any Environmental Law, the presence, disposal, escape, seepage, leakage,
spillage, discharge, emission, release or threatened release of any Hazardous
Substances or any action, suit, proceeding or investigation brought or
threatened with respect to any Hazardous Substances (including, but not limited
to, claims with respect to wrongful death, personal injury or damage to
property), in each case including, without limitation, the reasonable fees and
disbursements of counsel and allocated costs of internal counsel incurred in
connection with any such investigation, litigation or other proceeding. In
litigation, or the preparation therefor, the Banks and the Agent and its
affiliates shall be entitled to select their own counsel and, in addition to the
foregoing indemnity, the Borrower agrees to pay promptly the reasonable fees and
expenses of such counsel. If, and to the extent that the obligations of the
Borrower under this ss.16.2 are unenforceable for any reason, the Borrower
hereby agrees to make the maximum contribution to the payment in satisfaction of
such obligations which is permissible under applicable law.
16.3. SURVIVAL. The covenants contained in this ss.16 shall survive
payment or satisfaction in full of all other Obligations.
17. TREATMENT OF CERTAIN CONFIDENTIAL INFORMATION.
17.1. SHARING OF INFORMATION WITH AFFILIATES. The Borrower acknowledges
that from time to time financial advisory, investment banking and other services
may be offered or provided to the Borrower or one or more of its Subsidiaries,
in connection with this Credit Agreement or otherwise, by an Affiliate of the
Agent or any Bank. The Borrower, for itself and each of its Subsidiaries, hereby
authorizes (a) such Affiliate to share with the Agent and each Bank any
information delivered to such Affiliate by the Borrower or any of its
Subsidiaries, and (b) the Agent and each Bank to share with such Affiliate any
information delivered to the Agent or such Bank by the Borrower or any of its
Subsidiaries pursuant to this Credit Agreement, or in connection with the
decision of such Bank to enter into this Credit Agreement; it being understood,
in each case, that any such Affiliate receiving such information shall be bound
by the confidentiality provisions of this Credit Agreement. Such authorization
shall survive the payment and satisfaction in full of all of Obligations.
17.2. CONFIDENTIALITY. Each of the Banks and the Agent agrees, on
behalf of itself and each of its affiliates, directors, officers, employees and
representatives, to use reasonable precautions to keep confidential, in
accordance with their customary procedures for handling confidential information
of the same nature and in accordance with safe and sound banking practices, any
non-public information supplied to it by the Borrower or any of
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its Subsidiaries pursuant to this Credit Agreement that is identified by such
Person as being confidential at the time the same is delivered to the Banks or
the Agent, PROVIDED that nothing herein shall limit the disclosure of any such
information (a) after such information shall have become public other than
through a violation of this ss.17, (b) to the extent required by statute, rule,
regulation or judicial process, (c) to counsel for any of the Banks or the
Agent, (d) to bank examiners or any other regulatory authority having
jurisdiction over any Bank or the Agent, or to auditors or accountants, (e) to
the Agent, any Bank or any Affiliate of any Bank or the Agent, (f) in connection
with any litigation to which any one or more of the Banks, the Agent or
Affiliate of the Agent or any Bank is a party, or in connection with the
enforcement of rights or remedies hereunder or under any other Loan Document,
(g) to a Subsidiary or affiliate of such Bank as provided in ss.17.1 or (h) to
any assignee or participant (or prospective assignee or participant) so long as
such assignee or participant agrees to be bound by the provisions of ss.19.6.
Moreover, each of the Agent, the Banks and any Affiliate of the Agent or any
Bank is hereby expressly permitted by the Borrower to refer to any of the
Borrower and its Subsidiaries in connection with any advertising, promotion or
marketing undertaken by the Agent, such Bank or such Affiliate and, for such
purpose, the Agent, such Bank or such Affiliate may utilize any trade name,
trademark, logo or other distinctive symbol associated with the Borrower or any
of its Subsidiaries or any of their businesses.
17.3. PRIOR NOTIFICATION. Unless specifically prohibited by applicable
law or court order, each of the Banks and the Agent shall, prior to disclosure
thereof, notify the Borrower of any request for disclosure of any such
non-public information by any governmental agency or representative thereof
(other than any such request in connection with an examination of the financial
condition of such Bank by such governmental agency) or pursuant to legal
process.
17.4. OTHER. In no event shall any Bank or the Agent be obligated or
required to return any materials furnished to it or any Affiliate of the Agent
or any Bank by the Borrower or any of its Subsidiaries. The obligations of each
Bank under this ss.17 shall supersede and replace the obligations of such Bank
under any confidentiality letter in respect of this financing signed and
delivered by such Bank to the Borrower prior to the date hereof and shall be
binding upon any assignee of, or purchaser of any participation in, any interest
in any of the Revolving Credit Loans or Reimbursement Obligations from any Bank.
18. SURVIVAL OF COVENANTS, ETC.
All covenants, agreements, representations and warranties made herein,
in the Revolving Credit Notes, in any of the other Loan Documents or in any
documents or other papers delivered by or on behalf of the Borrower or any of
its Subsidiaries pursuant hereto shall be deemed to have been relied upon by the
Banks and the Agent, notwithstanding any investigation heretofore or hereafter
made by any of them, and shall survive the making by the Banks of any of the
Revolving Credit Loans and the issuance, extension or renewal of any
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Letters of Credit, as herein contemplated, and shall continue in full force and
effect so long as any Letter of Credit or any amount due under this Credit
Agreement or the Revolving Credit Notes or any of the other Loan Documents
remains outstanding or any Bank has any obligation to make any Revolving Credit
Loans or the Agent has any obligation to issue, extend or renew any Letter of
Credit, and for such further time as may be otherwise expressly specified in
this Credit Agreement. All statements contained in any certificate or other
paper delivered to any Bank or the Agent at any time by or on behalf of the
Borrower or any of its Subsidiaries pursuant hereto or in connection with the
transactions contemplated hereby shall constitute representations and warranties
by the Borrower or such Subsidiary hereunder.
19. ASSIGNMENT AND PARTICIPATION.
19.1. CONDITIONS TO ASSIGNMENT BY BANKS. Except as provided herein,
each Bank may assign to one or more Eligible Assignees all or a portion of its
interests, rights and obligations under this Credit Agreement (including all or
a portion of its Commitment Percentage and Commitment and the same portion of
the Revolving Credit Loans at the time owing to it, the Revolving Credit Notes
held by it and its participating interest in the risk relating to any Letters of
Credit); PROVIDED that (a) each of the Agent and, unless a Default or Event of
Default shall have occurred and be continuing, the Borrower shall have given its
prior written consent to such assignment, which consent will not be unreasonably
withheld, (b) each such assignment shall be of a constant, and not a varying,
percentage of all the assigning Bank's rights and obligations under this Credit
Agreement, (c) each assignment shall be in an amount that is a whole multiple of
$5,000,000.00 and (d) so long as no Default of Event of Default has occurred and
is continuing, ABN AMRO shall not assign any portion of its Commitment hereunder
for a period of six months from the Closing Date unless consented to in writing
by the Borrower and (e) the parties to such assignment shall execute and deliver
to the Agent, for recording in the Register (as hereinafter defined), an
Assignment and Acceptance, substantially in the form of EXHIBIT E hereto (an
"Assignment and Acceptance"), together with any Revolving Credit Notes subject
to such assignment. Upon such execution, delivery, acceptance and recording,
from and after the effective date specified in each Assignment and Acceptance,
which effective date shall be at least five (5) Business Days after the
execution thereof, (i) the assignee thereunder shall be a party hereto and, to
the extent provided in such Assignment and Acceptance, have the rights and
obligations of a Bank hereunder, and (ii) the assigning Bank shall, to the
extent provided in such assignment and upon payment to the Agent of the
registration fee referred to in ss.19.3, be released from its obligations under
this Credit Agreement.
19.2. CERTAIN REPRESENTATIONS AND WARRANTIES; LIMITATIONS; COVENANTS.
By executing and delivering an Assignment and Acceptance, the parties to the
assignment thereunder confirm to and agree with each other and the other parties
hereto as follows:
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(a) other than the representation and warranty that it is the
legal and beneficial owner of the interest being assigned thereby free
and clear of any adverse claim, the assigning Bank makes no
representation or warranty, express or implied, and assumes no
responsibility with respect to any statements, warranties or
representations made in or in connection with this Credit Agreement or
the execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Credit Agreement, the other Loan Documents
or any other instrument or document furnished pursuant hereto or the
attachment, perfection or priority of any security interest or
mortgage,
(b) the assigning Bank makes no representation or warranty and
assumes no responsibility with respect to the financial condition of
the Borrower and its Subsidiaries or any other Person primarily or
secondarily liable in respect of any of the Obligations, or the
performance or observance by the Borrower and its Subsidiaries or any
other Person primarily or secondarily liable in respect of any of the
Obligations of any of their obligations under this Credit Agreement or
any of the other Loan Documents or any other instrument or document
furnished pursuant hereto or thereto;
(c) such assignee confirms that it has received a copy of this
Credit Agreement, together with copies of the most recent financial
statements referred to in ss.7.4 and ss.8.4 and such other documents
and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance;
(d) such assignee will, independently and without reliance
upon the assigning Bank, the Agent or any other Bank and based on such
documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking
action under this Credit Agreement;
(e) such assignee represents and warrants that it is an
Eligible Assignee;
(f) such assignee appoints and authorizes the Agent to take
such action as agent on its behalf and to exercise such powers under
this Credit Agreement and the other Loan Documents as are delegated to
the Agent by the terms hereof or thereof, together with such powers as
are reasonably incidental thereto;
(g) such assignee agrees that it will perform in accordance
with their terms all of the obligations that by the terms of this
Credit Agreement are required to be performed by it as a Bank;
(h) such assignee represents and warrants that it is legally
authorized to enter into such Assignment and Acceptance; and
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(i) such assignee acknowledges that it has made arrangements
with the assigning Bank satisfactory to such assignee with respect to
its PRO RATA share of Letter of Credit Fees in respect of outstanding
Letters of Credit.
19.3. REGISTER. The Agent shall maintain a copy of each Assignment and
Acceptance delivered to it and a register or similar list (the "Register") for
the recordation of the names and addresses of the Banks and the Commitment
Percentage of, and principal amount of the Revolving Credit Loans owing to and
Letter of Credit Participations purchased by, the Banks from time to time. The
entries in the Register shall be conclusive, in the absence of manifest error,
and the Borrower, the Agent and the Banks may treat each Person whose name is
recorded in the Register as a Bank hereunder for all purposes of this Credit
Agreement. The Register shall be available for inspection by the Borrower and
the Banks at any reasonable time and from time to time upon reasonable prior
notice. Upon each such recordation, the assigning Bank agrees to pay to the
Agent a registration fee in the sum of $3,500.00.
19.4. NEW REVOLVING CREDIT NOTES. Upon its receipt of an Assignment and
Acceptance executed by the parties to such assignment, together with each
Revolving Credit Note subject to such assignment, the Agent shall (a) record the
information contained therein in the Register, and (b) give prompt notice
thereof to the Borrower and the Banks (other than the assigning Bank). Within
five (5) Business Days after receipt of such notice, the Borrower, at its own
expense, shall execute and deliver to the Agent, in exchange for each
surrendered Revolving Credit Note, a new Revolving Credit Note to the order of
such Eligible Assignee in an amount equal to the amount assumed by such Eligible
Assignee pursuant to such Assignment and Acceptance and, if the assigning Bank
has retained some portion of its obligations hereunder, a new Revolving Credit
Note to the order of the assigning Bank in an amount equal to the amount
retained by it hereunder. Such new Revolving Credit Notes shall provide that
they are replacements for the surrendered Revolving Credit Notes, shall be in an
aggregate principal amount equal to the aggregate principal amount of the
surrendered Revolving Credit Notes, shall be dated the effective date of such
Assignment and Acceptance and shall otherwise be in substantially the form of
the assigned Revolving Credit Notes. Within five (5) days of issuance of any new
Revolving Credit Notes pursuant to this ss.19.4, and if requested by the holder
of any such Revolving Credit Note, the Borrower shall deliver an opinion of
counsel, addressed to the Banks and the Agent, in substantially the form of the
legal opinion delivered pursuant to ss.11.10 hereof relating to the due
authorization, execution and delivery of such new Revolving Credit Notes and the
legality, validity and binding effect thereof. The surrendered Revolving Credit
Notes shall be cancelled and returned to the Borrower.
19.5. PARTICIPATIONS. Each Bank may sell participations to one or more
banks or other entities in all or a portion of such Bank's rights and
obligations under this Credit Agreement and the other Loan Documents; PROVIDED
that (a) each such participation shall be in an amount of not less than
$1,000,000.00, (b) any such sale or participation shall not affect the rights
and duties of the
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selling Bank hereunder to the Borrower and (c) the only rights granted to the
participant pursuant to such participation arrangements with respect to waivers,
amendments or modifications of the Loan Documents shall be the rights to approve
waivers, amendments or modifications that would reduce the principal of or the
interest rate on any Revolving Credit Loans, extend the term or increase the
amount of the Commitment of such Bank as it relates to such participant, reduce
the amount of any commitment fees or Letter of Credit Fees to which such
participant is entitled or extend any regularly scheduled payment date for
principal or interest.
19.6. DISCLOSURE. The Borrower agrees that in addition to disclosures
made in accordance with standard and customary banking practices any Bank may
disclose information obtained by such Bank pursuant to this Credit Agreement to
assignees or participants and potential assignees or participants hereunder;
PROVIDED that such assignees or participants or potential assignees or
participants shall agree (a) to treat in confidence such information unless such
information otherwise becomes public knowledge, (b) not to disclose such
information to a third party, except as required by law or legal process and (c)
not to make use of such information for purposes of transactions unrelated to
such contemplated assignment or participation. For purposes of this ss.19.6 an
assignee or participant or potential assignee or participant may include a
counterparty with whom such Bank has entered into or potentially might enter
into a Derivative Contract referenced to credit or other risks or events arising
under this Credit Agreement or any other Loan Document.
19.7. ASSIGNEE OR PARTICIPANT AFFILIATED WITH THE BORROWER. If any
assignee Bank is an Affiliate of the Borrower, then any such assignee Bank shall
have no right to vote as a Bank hereunder or under any of the other Loan
Documents for purposes of granting consents or waivers or for purposes of
agreeing to amendments or other modifications to any of the Loan Documents or
for purposes of making requests to the Agent pursuant to ss.13.1 or ss.13.2, and
the determination of the Majority Banks shall for all purposes of this Credit
Agreement and the other Loan Documents be made without regard to such assignee
Bank's interest in any of the Revolving Credit Loans or Reimbursement
Obligations. If any Bank sells a participating interest in any of the Revolving
Credit Loans or Reimbursement Obligations to a participant, and such participant
is the Borrower or an Affiliate of the Borrower, then such transferor Bank shall
promptly notify the Agent of the sale of such participation. A transferor Bank
shall have no right to vote as a Bank hereunder or under any of the other Loan
Documents for purposes of granting consents or waivers or for purposes of
agreeing to amendments or modifications to any of the Loan Documents or for
purposes of making requests to the Agent pursuant to ss.13.1 or ss.13.2 to the
extent that such participation is beneficially owned by the Borrower or any
Affiliate of the Borrower, and the determination of the Majority Banks shall for
all purposes of this Credit Agreement and the other Loan Documents be made
without regard to the interest of such transferor Bank in the Revolving Credit
Loans or Reimbursement Obligations to the extent of such participation.
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19.8. MISCELLANEOUS ASSIGNMENT PROVISIONS. Any assigning Bank shall
retain its rights to be indemnified pursuant to ss.16 with respect to any claims
or actions arising prior to the date of such assignment. If any assignee Bank is
not incorporated under the laws of the United States of America or any state
thereof, it shall, prior to the date on which any interest or fees are payable
hereunder or under any of the other Loan Documents for its account, deliver to
the Borrower and the Agent certification as to its exemption from deduction or
withholding of any United States federal income taxes. Anything contained in
this ss.19 to the contrary notwithstanding, any Bank may at any time pledge all
or any portion of its interest and rights under this Credit Agreement (including
all or any portion of its Revolving Credit Notes) to any of the twelve Federal
Reserve Banks organized under ss.4 of the Federal Reserve Act, 12 U.S.C. ss.341,
PROVIDED that any foreclosure or similar action by such trustee or other
representative shall be subject to the other provisions of this ss.19. No such
pledge or the enforcement thereof shall release the pledgor Bank from its
obligations hereunder or under any of the other Loan Documents.
19.9. ASSIGNMENT BY BORROWER. The Borrower shall not assign or transfer
any of its rights or obligations under any of the Loan Documents without the
prior written consent of each of the Banks.
20. NOTICES, ETC.
Except as otherwise expressly provided in this Credit Agreement, all
notices and other communications made or required to be given pursuant to this
Credit Agreement or the Revolving Credit Notes or any Letter of Credit
Applications shall be in writing and shall be delivered in hand, mailed by
United States registered or certified first class mail, postage prepaid, sent by
overnight courier, or sent by telegraph, telecopy, facsimile or telex and
confirmed by delivery via courier or postal service, addressed as follows:
(a) if to the Borrower, at 15 Elizabeth Drive, Chelmsford,
Massachusetts 01824, Attention: Lynda Avallone, Treasurer, or at such
other address for notice as the Borrower shall last have furnished in
writing to the Person giving the notice;
(b) if to the Agent, at One Post Office Square, 39th Floor,
Boston, Massachusetts 02109, USA, Attention: Kevin F. Malone, Group
Vice President, or such other address for notice as the Agent shall
last have furnished in writing to the Person giving the notice; and
(c) if to any Bank, at such Bank's address set forth on
SCHEDULE 1 hereto, or such other address for notice as such Bank shall
have last furnished in writing to the Person giving the notice.
Any such notice or demand shall be deemed to have been duly given or
made and to have become effective (i) if delivered by hand, overnight courier or
facsimile to a responsible officer of the party to which it is directed, at the
time of the receipt thereof by such officer or the sending of such facsimile and
(ii) if
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sent by registered or certified first-class mail, postage prepaid, on the third
Business Day following the mailing thereof.
21. GOVERNING LAW.
THIS CREDIT AGREEMENT AND, EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED
THEREIN, EACH OF THE OTHER LOAN DOCUMENTS ARE CONTRACTS UNDER THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS AND SHALL FOR ALL PURPOSES BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SAID COMMONWEALTH OF MASSACHUSETTS
(EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). THE BORROWER
AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS CREDIT AGREEMENT OR ANY OF THE
OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE COMMONWEALTH OF
MASSACHUSETTS OR ANY FEDERAL COURT SITTING THEREIN AND CONSENTS TO THE
NONEXCLUSIVE JURISDICTION OF SUCH COURT AND SERVICE OF PROCESS IN ANY SUCH SUIT
BEING MADE UPON THE BORROWER BY MAIL AT THE ADDRESS SPECIFIED IN SS.20. THE
BORROWER HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE
VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN
INCONVENIENT COURT.
22. HEADINGS.
The captions in this Credit Agreement are for convenience of reference
only and shall not define or limit the provisions hereof.
23. COUNTERPARTS.
This Credit Agreement and any amendment hereof may be executed in
several counterparts and by each party on a separate counterpart, each of which
when executed and delivered shall be an original, and all of which together
shall constitute one instrument. In proving this Credit Agreement it shall not
be necessary to produce or account for more than one such counterpart signed by
the party against whom enforcement is sought.
24. ENTIRE AGREEMENT, ETC.
The Loan Documents and any other documents executed in connection
herewith or therewith express the entire understanding of the parties with
respect to the transactions contemplated hereby. Neither this Credit Agreement
nor any term hereof may be changed, waived, discharged or terminated, except as
provided in ss.26.
25. WAIVER OF JURY TRIAL.
The Borrower hereby waives its right to a jury trial with respect to
any action or claim arising out of any dispute in connection with this Credit
Agreement, the Revolving Credit Notes or any of the other Loan Documents, any
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rights or obligations hereunder or thereunder or the performance of such rights
and obligations. Except as prohibited by law, the Borrower hereby waives any
right it may have to claim or recover in any litigation referred to in the
preceding sentence any special, exemplary, punitive or consequential damages or
any damages other than, or in addition to, actual damages. The Borrower (a)
certifies that no representative, agent or attorney of any Bank or the Agent has
represented, expressly or otherwise, that such Bank or the Agent would not, in
the event of litigation, seek to enforce the foregoing waivers and (b)
acknowledges that the Agent and the Banks have been induced to enter into this
Credit Agreement, the other Loan Documents to which it is a party by, among
other things, the waivers and certifications contained herein.
26. CONSENTS, AMENDMENTS, WAIVERS, ETC.
Any consent or approval required or permitted by this Credit Agreement
to be given by the Banks may be given, and any term of this Credit Agreement,
the other Loan Documents or any other instrument related hereto or mentioned
herein may be amended, and the performance or observance by the Borrower or any
of its Subsidiaries of any terms of this Credit Agreement, the other Loan
Documents or such other instrument or the continuance of any Default or Event of
Default may be waived (either generally or in a particular instance and either
retroactively or prospectively) with, but only with, the written consent of the
Borrower and the written consent of the Majority Banks. Notwithstanding the
foregoing, the rate of interest on the Revolving Credit Notes (other than
interest accruing pursuant to ss.5.11.2 following the effective date of any
waiver by the Majority Banks of thE Default or Event of Default relating
thereto) or the amount of the commitment fee or Letter of Credit Fees may not be
decreased without the written consent of each Bank affected thereby; the amount
of the Commitments may not be increased without the written consent of the
Borrower and of each Bank affected thereby; the Revolving Credit Loan Maturity
Date may not be postponed without the written consent of each Bank affected
thereby; this ss.26 anD the definition of Majority Banks may not be amended,
without the written consent of all of the Banks; and the amount of any Letter of
Credit Fees payable for the Agent's account and ss.15 may not be amended without
thE written consent of the Agent. No waiver shall extend to or affect any
obligation not expressly waived or impair any right consequent thereon. No
course of dealing or delay or omission on the part of the Agent or any Bank in
exercising any right shall operate as a waiver thereof or otherwise be
prejudicial thereto. No notice to or demand upon the Borrower shall entitle the
Borrower to other or further notice or demand in similar or other circumstances.
27. SEVERABILITY.
The provisions of this Credit Agreement are severable and if any one
clause or provision hereof shall be held invalid or unenforceable in whole or in
part in any jurisdiction, then such invalidity or unenforceability shall affect
only such clause or provision, or part thereof, in such jurisdiction, and shall
not in
<PAGE> 86
-80-
any manner affect such clause or provision in any other jurisdiction, or any
other clause or provision of this Credit Agreement in any jurisdiction.
<PAGE> 87
-81-
IN WITNESS WHEREOF, the undersigned have duly executed this Credit
Agreement as a sealed instrument as of the date first set forth above.
BROOKS AUTOMATION, INC.
By: /s/ Ellen B. Richstone
-------------------------------------------
Name: Ellen B. Richstone
Title: Senior Vice President
ABN AMRO BANK N.V., individually and as Agent
By: /s/ Kevin F. Malone
-------------------------------------------
Name: Kevin F. Malone
Title: Group Vice President
By: /s/ Bruce W. Swords
-------------------------------------------
Name: Bruce W. Swords
Title: Vice President
<PAGE> 88
-82-
Schedule 1
Banks; Commitments
- --------------------------------------------------------------------------------
BANK COMMITMENT AMOUNT COMMITMENT PERCENTAGE
- --------------------------------------------------------------------------------
ABN AMRO Bank N.V.
135 South LaSalle Street $30,000,000 100%
Chicago, Illinois
LIBOR Lending Office: Same
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Total Commitment $30,000,000 100%
- --------------------------------------------------------------------------------
<PAGE> 1
EXHIBIT 10.2
REVOLVING CREDIT NOTE
$30,000,000 as of January 7, 2000
FOR VALUE RECEIVED, the undersigned BROOKS AUTOMATION, INC., a Delaware
corporation (the "Borrower"), hereby promises to pay to the order of ABN AMRO
BANK N.V., (the "Bank") at the Agent's Head Office (as such term is defined in
the Credit Agreement referred to below):
(a) prior to or on the Revolving Credit Loan Maturity Date the
principal amount of THIRTY MILLION DOLLARS ($30,000,000) or, if less,
the aggregate unpaid principal amount of Revolving Credit Loans
advanced by the Bank to the Borrower pursuant to the Revolving Credit
Agreement dated as of January 7, 2000 (as amended and in effect from
time to time, the "Credit Agreement"), among the Borrower, the Bank and
other parties thereto;
(b) the principal outstanding hereunder from time to time at
the times provided in the Credit Agreement; and
(c) interest on the principal balance hereof from time to time
outstanding from the Closing Date under the Credit Agreement through
and including the maturity date hereof at the times and at the rate
provided in the Credit Agreement.
This Note evidences borrowings under and has been issued by the
Borrower in accordance with the terms of the Credit Agreement. The Bank and any
holder hereof is entitled to the benefits of the Credit Agreement, the Guaranty
and the other Loan Documents, and may enforce the agreements of the Borrower
contained therein, and any holder hereof may exercise the respective remedies
provided for thereby or otherwise available in respect thereof, all in
accordance with the respective terms thereof. All capitalized terms used in this
Note and not otherwise defined herein shall have the same meanings herein as in
the Credit Agreement.
The Borrower irrevocably authorizes the Bank to make or cause to be
made, at or about the time of the Drawdown Date of any Revolving Credit Loan or
at the time of receipt of any payment of principal of this Note, an appropriate
notation on the grid attached to this Note, or the continuation of such grid, or
any other similar record, including computer records, reflecting the making of
such Revolving Credit Loan or (as the case may be) the receipt of such payment.
The outstanding amount of the Revolving Credit Loans set forth on the grid
attached to this Note, or the continuation of such grid, or any other similar
record, including computer records, maintained by the Bank with respect to any
Revolving Credit Loans shall be PRIMA FACIE evidence of the principal
<PAGE> 2
-2-
amount thereof owing and unpaid to the Bank, but the failure to record, or any
error in so recording, any such amount on any such grid, continuation or other
record shall not limit or otherwise affect the obligation of the Borrower
hereunder or under the Credit Agreement to make payments of principal of and
interest on this Note when due.
The Borrower has the right in certain circumstances and the obligation
under certain other circumstances to prepay the whole or part of the principal
of this Note on the terms and conditions specified in the Credit Agreement.
If any one or more of the Events of Default shall occur, the entire
unpaid principal amount of this Note and all of the unpaid interest accrued
thereon may become or be declared due and payable in the manner and with the
effect provided in the Credit Agreement.
No delay or omission on the part of the Bank or any holder hereof in
exercising any right hereunder shall operate as a waiver of such right or of any
other rights of the Bank or such holder, nor shall any delay, omission or waiver
on any one occasion be deemed a bar or waiver of the same or any other right on
any further occasion.
The Borrower and every endorser and guarantor of this Note or the
obligation represented hereby waives presentment, demand, notice, protest and
all other demands and notices in connection with the delivery, acceptance,
performance, default or enforcement of this Note, and assents to any extension
or postponement of the time of payment or any other indulgence, to any
substitution, exchange or release of collateral and to the addition or release
of any other party or person primarily or secondarily liable.
THIS NOTE AND THE OBLIGATIONS OF THE BORROWER HEREUNDER SHALL FOR ALL
PURPOSES BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE
COMMONWEALTH OF MASSACHUSETTS (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR
CHOICE OF LAW). THE BORROWER AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS
NOTE MAY BE BROUGHT IN THE COURTS OF THE COMMONWEALTH OF MASSACHUSETTS OR ANY
FEDERAL COURT SITTING THEREIN AND THE CONSENT TO THE NONEXCLUSIVE JURISDICTION
OF SUCH COURT AND THE SERVICE OF PROCESS IN ANY SUCH SUIT BEING MADE UPON THE
BORROWER BY MAIL AT THE ADDRESS SPECIFIED IN SS.20 OF THE CREDIT AGREEMENT. THE
BORROWER HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE
VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN
INCONVENIENT COURT.
This Note shall be deemed to take effect as a sealed instrument under
the laws of the Commonwealth of Massachusetts.
IN WITNESS WHEREOF, the undersigned has caused this Revolving Credit
Note to be signed in its corporate name and its corporate seal to be
<PAGE> 3
-3-
impressed thereon by its duly authorized officer as of the day and year first
above written.
[Corporate Seal]
BROOKS AUTOMATION, INC.
By: /s/ Lynda M. Avallone
----------------------------------
Name: Lynda M. Avallone
Title: Vice President and
Corporate Treasurer
<PAGE> 4
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
Amount of Balance of
Amount Principal Paid Principal Notation
Date of Loan or Prepaid Unpaid Made By:
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 1
EXHIBIT 10.3
EXECUTION COPY
Exchange.3078756.5
LEASE AGREEMENT BETWEEN
W9/TIB REAL ESTATE LIMITED PARTNERSHIP,
AS LANDLORD, AND
BROOKS AUTOMATION, INC., AS TENANT
DATED JANUARY 31, 2000
<PAGE> 2
BASIC LEASE INFORMATION
Lease Date: January 31, 2000
Tenant: BROOKS AUTOMATION, INC., a Delaware corporation
Landlord: W9/TIB REAL ESTATE LIMITED PARTNERSHIP, a Delaware
limited partnership
Premises: The entire building containing approximately 130,806
rentable square feet commonly known as 15 Elizabeth
Drive, Chelmsford, Massachusetts (the "BUILDING"), and
whose street address is 15 Elizabeth Drive, Chelmsford,
Massachusetts and the Land (hereinafter defined) and all
other improvements located thereon, including, without
limitation, the parking and loading areas on the Land,
and the walkways and driveways providing access to the
Building and such parking and loading areas. The
Premises are outlined on the plan attached to the Lease
as Exhibit A. The land on which the Building is located
(the "LAND") is described on Exhibit B. The term
"Building" includes the Land and the driveways, parking
facilities and similar improvements on the Land.
Provided that neither this Lease nor the 16 Elizabeth
Drive Lease (as hereinafter defined) has expired or been
earlier terminated and that both of said Leases are in
full force and effect, Tenant may use the parking and
loading areas located on the Land and the parking and
loading areas located on the Land (as such term is
defined in the 16 Elizabeth Drive Lease).
Term: Approximately one hundred twenty-five (125) months,
commencing on February 1, 2000 (the "COMMENCEMENT DATE")
and ending at 5:00 p.m. on June 30, 2010, subject to
adjustment and earlier termination as provided in the
Lease.
Basic Rent: Basic Rent shall be the following amounts for the
following periods of time:
<PAGE> 3
<TABLE>
<CAPTION>
Lease Month Annual Basic Rent Monthly Basic Rent
<S> <C> <C>
1-7 (i.e., 2/1/00-8/31/00) $ 575,190.00 $ 47,932.50
8-19 (i.e., 9/1/00-8/31/01) $ 607,145.00 $ 50,595.42
20-31 (i.e., 9/1/01-8/31/02) $ 639,100.00 $ 53,258.33
32-55 (i.e., 9/1/02-8/31/04) $1,569,672.00 $ 130,806.00
56-79 (i.e., 9/1/04-8/31/06) $1,700,478.00 $ 141,706.50
80-103 (i.e., 9/1/06-8/31/08) $1,831,284.00 $ 152,607.00
104-125 (i.e., 9/1/08-6/30/10) $1,962,090.00 $ 163,507.00
</TABLE>
As used herein, the term "LEASE MONTH" shall mean each
calendar month during the Term (and if the Commencement
Date does not occur on the first day of a calendar
month, the period from the Commencement Date to the
first day of the next calendar month shall be included
in the first Lease Month for purposes of determining the
duration of the Term and the monthly Basic Rent rate
applicable for such partial month).
Security Deposit: $1,000,000.00
Rent: Basic Rent, Taxes, Additional Rent, and all other
sums that Tenant may owe to Landlord or otherwise be
required to pay under the Lease.
Permitted Use: Subject to and to the extent permitted by all applicable
Laws, general office use, research and development,
light manufacturing, and warehousing and distribution.
Initial Liability
Insurance Amount: $3,000,000.00
Maximum Construction
Allowance: $5.50 per rentable square foot.
<PAGE> 4
<TABLE>
<CAPTION>
Tenant's Address: Prior to Commencement Date: Following Commencement Date:
- ----------------- --------------------------- ----------------------------
<S> <C> <C>
15 Elizabeth Drive 15 Elizabeth Drive
Chelmsford, MA 01824-4111 Chelmsford, MA 01824-4111
Attn: Jeffrey Myrdek, C.E.M., Attn: Jeffrey Myrdek, C.E.M,
Manager of Corporate Facilities Manager of Corporate Facilities
With a copy to: With a copy to:
Brown Rudnick Freed & Brown Rudnick Freed &
Gesmer, P.C. Gesmer, P.C.
One Financial Center One Financial Center
Boston, MA 02111 Boston, MA 02111
Attn: Carl E. Axelrod, Esq. Attn: Carl E. Axelrod, Esq.
Landlord's Address: For all Notices: With a copy to:
Archon Group, L.P. Choate, Hall & Stewart
1275 K Street NW, Suite 900 Exchange Place
Washington, DC 20005 53 State Street
Boston, MA 02109-2891
Attn: Anne Rickard Jackowitz, P.C.
</TABLE>
<PAGE> 5
The foregoing Basic Lease Information is incorporated into and made a part of
the Lease identified above. If any conflict exists between any Basic Lease
Information and the Lease, then the Lease shall control.
LANDLORD:
W9/TIB REAL ESTATE LIMITED PARTNERSHIP,
a Delaware limited partnership
By: W9/TIB Gen-Par, Inc., a Delaware
corporation, its general partner
By:
Name:
Title:
TENANT:
BROOKS AUTOMATION, INC.,
a Delaware corporation
By:
Name:
Title:
<PAGE> 6
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
1. Definitions and Basic Provisions 1
2. Lease Grant 1
3. Term 1
4. Rent 1
(a) Payment 1
(b) Operating Costs; Taxes; Electrical Costs 2
5. Delinquent Payment; Handling Charges 4
6. Security Deposit 4
7. Landlord's Obligations 7
(a) Services 7
(b) Landlord's Maintenance Obligations 8
(c) Excess Utility Use 8
(d) Restoration of Services; Abatement 9
(e) Landlord's Compliance with Applicable Legal
Requirements 9
8. Improvements; Alterations; Repairs; Maintenance. 9
(a) Improvements; Alterations 9
(b) Repairs; Maintenance 10
(c) Performance of Work 11
(d) Mechanic's Liens 11
(e) Utilities 12
(f) Floor Load; Heavy Machinery 12
9. Use 12
10. Assignment and Subletting 13
(a) Transfers 13
(b) Consent Standards 13
(c) Request for Consent 13
(d) Conditions to Consent 13
(e) Cancellation 14
(f) Additional Compensation 14
(g) Permitted Transfers 14
11. Insurance; Waivers; Subrogation; Indemnity 15
(a) Tenant's Insurance 15
</TABLE>
<PAGE> 7
<TABLE>
<S> <C> <C>
(b) Landlord's Insurance 16
(c) Waiver of Negligence; No Subrogation 16
(d) Indemnity 16
12. Subordination; Attornment; Notice to Landlord's Mortgagee 16
(a) Subordination 16
(b) Attornment 17
(c) Notice to Landlord's Mortgagee 17
(d) Landlord's Mortgagee's Protection Provisions 17
(e) Subordination, Non-Disturbance and Attornment
Agreement 17
13. Rules and Regulations 18
14. Condemnation 18
(a) Total Taking 18
(b) Partial Taking - Tenant's Rights 18
(c) Partial Taking - Landlord's Rights 18
(d) Award 18
15. Fire or Other Casualty 19
(a) Repair Estimate 19
(b) Landlord's and Tenant's Rights 19
(c) Landlord's Rights 19
(d) Repair Obligation 19
16. Personal Property Taxes 20
17. Events of Default 20
18. Remedies 21
19. Payment by Tenant; Non-Waiver 22
(a) Payment by Tenant 22
(b) No Waiver 22
20. Landlord's Lien 22
21. Surrender of Premises 22
22. Holding Over 23
23. Certain Rights Reserved by Landlord 23
24. [intentionally omitted] 24
25. Miscellaneous 24
</TABLE>
<PAGE> 8
<TABLE>
<S> <C> <C>
(a) Landlord Transfer 24
(b) Landlord's Liability 24
(c) Force Majeure 24
(d) Brokerage 24
(e) Estoppel Certificates 25
(f) Notices 25
(g) Separability 25
(h) Amendments; and Binding Effect 25
(i) Quiet Enjoyment 25
(j) No Merger 26
(k) No Offer 26
(l) Entire Agreement 26
(m) Waiver of Jury Trial 26
(n) Governing Law 26
(o) Joint and Several Liability 26
(p) Financial Reports 26
(q) Landlord's Fees 27
(r) Telecommunications 27
(s) Confidentiality 27
(t) Hazardous Materials 27
(u) List of Exhibits 28
(v) Time of Essence 28
(w) Signage 28
(x) Access 28
(y) Termination of Prior Lease 28
(z) Failure of Tenant to Continuously Occupy the Premises 29
(aa) Rooftop Equipment 29
(bb) Notice of Lease 30
(cc) Landlord's Authority, Etc. 31
(dd) Fiber Optic Lines 31
26. Other Provisions 31
</TABLE>
<PAGE> 9
LEASE
THIS LEASE AGREEMENT (this "LEASE") is entered into as of January 31,
2000, between W9/TIB REAL ESTATE LIMITED PARTNERSHIP, a Delaware limited
partnership ("LANDLORD"), and BROOKS AUTOMATION, INC., a Delaware corporation
("TENANT").
1. DEFINITIONS AND BASIC PROVISIONS. The definitions and basic provisions
set forth in the Basic Lease Information (the "BASIC LEASE INFORMATION")
executed by Landlord and Tenant contemporaneously herewith are incorporated
herein by reference for all purposes. Additionally, the following terms shall
have the following meanings when used in this Lease: "LAWS" means all federal,
state, and local laws, rules and regulations, all court orders, governmental
directives, and governmental orders, and all restrictive covenants affecting the
Property, and "LAW" shall mean any of the foregoing; "AFFILIATE" means any
person or entity which, directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common control with the
party in question; "TENANT PARTY" means any of the following persons: Tenant;
any assignees claiming by, through, or under Tenant; any subtenants claiming by,
through, or under Tenant; and any of their respective agents, contractors,
employees, and invitees; and "INCLUDING" means including, without limitation.
2. LEASE GRANT. Subject to the terms of this Lease, Landlord leases to
Tenant, and Tenant leases from Landlord, the Premises.
3. TERM. By occupying the Premises, Tenant shall be deemed to have
accepted the Premises in their condition as of the date of such occupancy.
Tenant shall execute and deliver to Landlord, within ten days after Landlord has
requested the same, an amendment substantially in the form of Exhibit E hereto
confirming the Commencement Date and the expiration date of the initial Term,
that Tenant has accepted the Premises, and that Landlord has performed all of
its obligations with respect to the Premises.
4. RENT.
(a) PAYMENT. Tenant shall timely pay to Landlord Basic Rent and all
additional sums to be paid by Tenant to Landlord under this Lease, without
notice, deduction or set off, except as otherwise expressly set forth herein, at
Landlord's address provided for in this Lease or as otherwise specified by
Landlord and shall be accompanied by all applicable state and local sales or use
taxes. Basic Rent, adjusted as herein provided, shall be payable monthly in
advance. The first monthly installment of Basic Rent shall be payable
contemporaneously with the execution of this Lease; thereafter, Basic Rent shall
be payable on the first day of each month beginning on the first day of the
second full calendar month of the Term. The monthly Basic Rent for any partial
month at the beginning of the Term shall equal the product of 1/365 of the
annual
<PAGE> 10
Basic Rent in effect during the partial month and the number of days in the
partial month from and after the Commencement Date, and shall be due on the
Commencement Date.
(b) OPERATING COSTS; TAXES; ELECTRICAL COSTS.
(1) Tenant shall pay all of the Operating Costs (defined
below) ("ADDITIONAL RENT"). Landlord may make a good faith estimate of the
Additional Rent to be due by Tenant for any calendar year or part thereof during
the Term, and Tenant shall pay to Landlord, on the Commencement Date and on the
first day of each calendar month thereafter, an amount equal to the estimated
Additional Rent for such calendar year or part thereof divided by the number of
months therein. From time to time (but not more than twice in any Lease Year),
Landlord may estimate and re-estimate the Additional Rent to be due by Tenant
and deliver a copy of the estimate or re-estimate to Tenant, which estimate
shall itemize each increased cost. Thereafter, the monthly installments of
Additional Rent payable by Tenant shall be appropriately adjusted in accordance
with the estimations so that, by the end of the calendar year in question,
Tenant shall have paid all of the Additional Rent as estimated by Landlord. Any
amounts paid based on such an estimate shall be subject to adjustment as herein
provided when actual Operating Costs are available for each calendar year.
(2) The term "OPERATING COSTS" shall mean all expenses and
disbursements (subject to the limitations set forth below) that Landlord incurs
in connection with the ownership, operation, and maintenance of the Premises,
determined in accordance with sound accounting principles consistently applied,
including, but not limited to, the following costs: (A) wages and salaries
(management fees, which management fees shall not exceed fair market management
fees for comparable buildings in the Greater Boston area) of all employees
engaged in the operation, maintenance, and security of the Premises, including
taxes, insurance and benefits relating thereto; (B) all supplies and materials
used in the operation, maintenance, repair, replacement, and security of the
Premises; (C) costs for improvements made to the Premises which, although
capital in nature, are expected to reduce the normal operating costs (including
all utility costs) of the Premises, as well as capital improvements made in
order to comply with any law hereafter promulgated by any governmental authority
and capital improvements related to roof replacement and replacement of rooftop
HVAC units, as amortized over the useful economic life of such improvements as
determined by Landlord in its reasonable discretion; (D) cost of all utilities,
except the cost of utilities reimbursable to Landlord by Tenant other than
pursuant to a provision similar to this Section 4.(b); (E) insurance expenses;
(F) repairs, replacements, and general maintenance of the Premises; (G) service
or maintenance contracts with independent contractors for the operation,
maintenance, repair, replacement, or security of the Premises (including,
without limitation, alarm service, window cleaning, and elevator maintenance);
and (H) accounting fees incurred by Landlord for the accounting services
performed in connection with the Premises.
Operating Costs shall not include costs for (i) capital
improvements made to the Premises, other than capital improvements described in
Section 4.(b)(2)(C) and except for items which are generally considered
maintenance and
<PAGE> 11
repair items, such as painting of common areas, replacement of carpet in
elevator lobbies, and the like; (ii) repair, replacements and general
maintenance paid by proceeds of insurance or by Tenant or other third parties;
(iii) interest, amortization or other payments on loans to Landlord or any
ground lease rent; (iv) depreciation; (v) leasing commissions; (vi) legal
expenses for services, other than those that benefit the Building tenants
generally (e.g., tax disputes); (vii) Taxes (defined below); (viii) franchise or
federal income taxes imposed on or measured by the income of Landlord from the
operation of the Building; (ix) any cost or expense to the extent to which
Landlord is paid or reimbursed (other than as a payment for Operating Costs);
(x) salaries and bonuses of officers and executives of Landlord; (xi) any fees,
costs, and commissions incurred in procuring or attempting to procure tenants
including, but not necessarily limited to brokerage commissions, finders fees,
attorney's fees and expenses, entertainment costs and travel expenses; (xii) the
cost of advertising or promotion for the Building; (xiii) reserves; (xiv)
Landlord's charitable or political contributions; (xv) Landlord's travel or
entertainment expenses; (xvi) depreciation of the Building; and (xvii) provided
Tenant is not in default of any provisions of this Lease beyond all applicable
notice and cure periods, fines or penalties arising solely out of Landlord's
breach of any obligation hereunder.
(3) Tenant shall also pay all of the Taxes for each year and
partial year falling within the Term in the same manner as provided above for
Additional Rent with regard to Operating Costs. "TAXES" shall mean taxes,
assessments, and governmental charges whether federal, state, county or
municipal, and whether they be by taxing districts or authorities presently
taxing or by others, subsequently created or otherwise, and any other taxes and
assessments attributable to the Premises (or its operation), excluding, however,
penalties and interest thereon and federal and state taxes on income (if the
present method of taxation changes so that in lieu of the whole or any part of
any Taxes, there is levied on Landlord a capital tax directly on the rents
received therefrom or a franchise tax, assessment, or charge based, in whole or
in part, upon such rents for the Premises, then all such taxes, assessments, or
charges, or the part thereof so based, shall be deemed to be included within the
term "TAXES" for purposes hereof). Taxes shall include the costs of consultants
retained in an effort to lower taxes and all costs incurred in disputing any
taxes or in seeking to lower the tax valuation of the Premises. For property tax
purposes, Tenant waives all rights to protest or appeal the appraised value of
the Premises, as well as the Building, and all rights to receive notices of
reappraisement. Taxes shall be deemed payable over the longest period allowed by
law. Tenant may file for and prosecute tax abatements pertaining to the Premises
only after it has notified Landlord that Tenant desires Landlord pursue a tax
abatement and Landlord elects not to pursue such a tax abatement and so notifies
Tenant in writing. If Tenant files for and prosecutes a tax abatement pertaining
to the Premises, Tenant shall simultaneously provide Landlord with all filings
made with the taxing authorities and with any other information reasonably
requested by Landlord.
(4) Intentionally Omitted.
<PAGE> 12
(5) By April 1 of each calendar year, or as soon thereafter as
reasonably practicable, Landlord shall furnish to Tenant a statement of
Operating Costs for the previous year, and of the Taxes for the previous year
(the "OPERATING COSTS AND TAX STATEMENT"). If the Operating Costs and Tax
Statement reveals that Tenant paid more for Operating Costs than the actual
amount for the year for which such statement was prepared, or more than its
actual share of Taxes for such year, then Landlord shall promptly credit or
reimburse Tenant for such excess; likewise, if Tenant paid less than Tenant's
actual Additional Rent or Taxes due, then Tenant shall promptly pay Landlord
such deficiency.
(6) Provided (A) Tenant is not in default hereunder, and (B)
Tenant has paid Landlord the Operating Costs in question, Tenant shall have the
right, exercisable not more than once each Lease Year, to examine Landlord's
books and records relating to Operating Costs for the prior Lease Year only.
Such examination shall be performed (i) at Landlord's office, (ii) at Tenant's
sole cost and expense, (iii) upon prior reasonable written notice to Landlord,
(iv) during normal business hours, and (v) within sixty (60) days after receipt
of the Operating Costs and Tax Statement. In the event Tenant's examination
reveals a discrepancy, Landlord shall promptly (but no later than thirty (30)
days) reimburse Tenant for the amount of any overpayment. If Tenant's
examination of Landlord's books and records reveals an overcharge of more than
five percent (5%), Landlord shall, within thirty (30) days after receipt of a
written invoice, reimburse Tenant for the reasonable costs of such audit. In
conducting such audit, Tenant shall use an independent certified public
accountant experienced in auditing Operating Costs, which accountant shall be
paid on an hourly basis (and not on a contingency or success fee basis). Such
audit shall be conducted in accordance with generally accepted rules of auditing
practices. Any information obtained by Tenant pursuant to the provisions of this
Section 3(b)(6) shall be treated as confidential.
(c) BILLING FOR ELECTRICITY. Tenant shall pay (as hereinafter
described) for the use of all electrical service to the Premises. Tenant shall
be billed directly by such utility company and Tenant agrees to pay each bill
promptly in accordance with its terms, and upon default in making any such
payment which continues for more than ten (10) days after written notice to
Tenant, Landlord may pay such charges and collect the same from Tenant. In the
event for any reason Tenant cannot be billed directly, Landlord shall forward
each bill received with respect to the Building to Tenant, which Tenant shall
pay within thirty (30) days of receiving each such bill unless the terms of the
each such bill specify otherwise.
5. DELINQUENT PAYMENT; HANDLING CHARGES. All past due payments required of
Tenant hereunder shall bear interest from the date due until paid at the lesser
of fifteen percent per annum or the maximum lawful rate of interest;
additionally, if Tenant fails to make any payment due hereunder more than once
in any Lease Year, Landlord may charge Tenant a fee equal to 5% of the
delinquent payment to reimburse Landlord for its cost and inconvenience incurred
as a consequence of Tenant's delinquency. In no event, however, shall the
charges permitted under this Section 5 or
<PAGE> 13
elsewhere in this Lease, to the extent they are considered to be interest under
applicable Law, exceed the maximum lawful rate of interest.
6. SECURITY DEPOSIT. Contemporaneously with the execution of this Lease,
Tenant shall pay to Landlord the Security Deposit, which Security Deposit shall
be the same Security Deposit held under this Lease and under the 16 Elizabeth
Drive Lease (as hereinafter defined in Section 17(b)) and shall be held by
Landlord to secure Tenant's performance of its obligations under this Lease and
under the 16 Elizabeth Drive Lease. If, for whatever reason, either this Lease
or the 16 Elizabeth Drive Lease terminates prior to the stated expiration date
and/or the Term of only one of said Leases is extended and no further
obligations are due and owing under the expired and/or terminated Lease, the
Security Deposit shall continue to secure Tenant's obligations under the
applicable Lease which has not expired and/or terminated. The Security Deposit
is not an advance payment of Rent or a measure or limit of Landlord's damages
upon an Event of Default (defined in Section 17). Landlord may, from time to
time following an Event of Default and without prejudice to any other remedy,
use all or a part of the Security Deposit to perform any obligation Tenant fails
to perform hereunder. Following any such application of the Security Deposit,
Tenant shall pay to Landlord on demand the amount so applied in order to restore
the Security Deposit to its original amount. Provided that Tenant has performed
all of its obligations hereunder, Landlord shall, within 30 days after the Term
ends, return to Tenant the portion of the Security Deposit which was not applied
to satisfy Tenant's obligations. The Security Deposit may be commingled with
other funds, and no interest shall be paid thereon. If Landlord transfers its
interest in the Premises and the transferee assumes Landlord's obligations under
this Lease, then Landlord may assign the Security Deposit to the transferee or
return same to Tenant and Landlord thereafter shall have no further liability
for the return of the Security Deposit.
In lieu of a cash Security Deposit, simultaneously with the execution and
delivery of this Lease, Tenant may deliver to Landlord an irrevocable and
unconditional standby letter of credit made payable to Landlord, its successors
and assigns, in the sum of $1,000,000.00 (the "LETTER OF CREDIT"), in the form
of the sample letter of credit attached hereto as Exhibit I or in such other
form as is reasonably acceptable to Landlord, which shall secure the performance
by Tenant of all obligations on the part of Tenant hereunder. The issuer of the
Letter of Credit shall be a banking institution with at least a rating of A and
otherwise reasonably acceptable to Landlord. Although Landlord shall only have
the right to draw under the Letter of Credit as set forth herein, under the
terms of the Letter of Credit, the sole condition to Landlord's draw upon the
Letter of Credit shall be presentment to the issuer thereof, prior to or on the
expiration date, of a demand for payment. The Letter of Credit shall be
self-renewing from year to year during the Term of this Lease so as to expire no
earlier than thirty (30) days following the Lease expiration date and shall
contain such other customary terms as Landlord requires in its reasonable
discretion. It is agreed: (i) that the Letter of Credit may be drawn upon to
cure any Event of Default that may exist, without prejudice to any other remedy
or remedies which Landlord may have on account thereof, and upon Landlord's
demand, Tenant shall reimburse the issuer for the amount so drawn so that the
Letter of Credit will be restored to its original amount; (ii) subject to the
provisions of clause (iv) below, that the Letter of
<PAGE> 14
Credit may be drawn upon if the Letter of Credit has not been extended or
renewed without amendment at least forty-five (45) days prior to any
then-current expiration date thereof; (iii) that if the rating of the issuer of
the Letter of Credit at any time drops below A, then, within sixty (60) days of
Landlord's demand, Tenant shall replace the Letter of Credit with another Letter
of Credit in a form reasonably acceptable to Landlord and with an issuer with a
rating of at least an A and otherwise reasonably acceptable to Landlord;
Landlord may draw on the existing Letter of Credit if, after Landlord requests
that Tenant replace the Letter of Credit as aforesaid, Landlord is not provided
with a substitute Letter of Credit in a form, and from an issuer, satisfactory
to Landlord as provided above upon the earlier of (x) the expiration of said
sixty-day period or (y) at least forty-five (45) days prior to the then-current
expiration date of the Letter of Credit; (iv) if at any time, but in any event,
at least sixty (60) days prior to the expiration of the Letter of Credit, Tenant
may seek Landlord's consent to switch issuers of the Letter of Credit provided
the prospective issuer has a rating of at least an A and is otherwise reasonably
acceptable to Landlord and the new form of Letter of Credit satisfies the
requirements of Landlord hereunder and is otherwise reasonably acceptable to
Landlord; Landlord may draw on the existing Letter of Credit if, after Tenant
requests Landlord's consent to switch issuers as aforesaid, Landlord is not
provided with a substitute Letter of Credit in a form, and from an issuer,
satisfactory to Landlord in its sole and absolute discretion at least forty-five
(45) days prior to the then-current expiration date of the Letter of Credit; (v)
that should the Premises be conveyed by Landlord, the Letter of Credit or any
portion thereof shall be assigned to Landlord's grantee, and if the same be
assigned as aforesaid, Tenant hereby releases Landlord from any and all
liability with respect to the Letter of Credit and its application or return,
and Tenant agrees to look to such grantee for such application or return,
provided such grantee assumes Landlord's obligations under this Lease (including
this Section 6); and (vi) that the Letter of Credit shall be returned to Tenant
upon the later of (a) thirty (30) days after the expiration of the Term or any
renewal or extension thereof, or (b) the date Tenant has vacated the Premises
and surrendered possession thereof to Landlord at the expiration of the Term or
any extension thereof as provided herein and has paid Landlord all sums due and
owing under this Lease.
Notwithstanding any of the foregoing provisions of this Section 6 to the
contrary, if Tenant has a Tangible Net Worth of at least $165,000,000.00 on the
eighteenth (18th) month after the Commencement Date (the "REDUCTION DATE"), the
Security Deposit (or the applicable Letter or Credit) shall be reduced by
$500,000.00, provided that on the Reduction Date (i) the Lease is in full force
and effect, (ii) no Event of Default exists, (iii) no Event of Default has
occurred, and (iv) Tenant has not assigned this Lease to anyone other than a
Permitted Transferee. If on the Reduction Date the Security Deposit (or the
applicable Letter of Credit) shall not be reduced because one or more of the
conditions set forth in clauses (i), (ii) or (iii) above cease to exist on the
Reduction Date, the Security Deposit (or applicable Letter of Credit) shall not
be reduced during any succeeding calendar year. If on the Reduction Date the
Security Deposit (or applicable Letter of Credit) shall not be reduced because
only the condition set forth in clause (iv) above (as opposed to the conditions
set forth in any of clauses (i), (ii) or (iii) above) ceases to exist on the
Reduction Date and/or Tenant does not have a Tangible Net Worth of at least
$165,000,000.00 on the Reduction Date, the Security Deposit (or applicable
Letter of
<PAGE> 15
Credit) shall be so reduced on the date that Tenant has achieved a Tangible Net
Worth of $165,000,000.00, provided the conditions set forth in clauses (i),
(ii), (iii) and (iv) above exist on such date. If the Security Deposit (or
applicable Letter of Credit) is reduced pursuant to the foregoing provisions,
Landlord shall return the amount of the reduction if Tenant paid the Security
Deposit in cash or Tenant may replace and/or amend the Letter of Credit
accordingly.
If Tenant initially provides Landlord with a cash Security Deposit, Tenant
may replace such cash Security Deposit with a Letter of Credit in accordance
with the provisions of the preceding paragraph. Upon Landlord's receipt of a
Letter of Credit satisfying the terms and conditions of the preceding paragraph,
Landlord shall promptly return the cash Security Deposit to Tenant.
For the purposes of this Section 6, a rating of at least A (or its
equivalent) shall mean that such issuer has a rating of at least A (or its
equivalent) from two (2) of the following four (4) rating agencies: Fitch
Investors Service, Moody's Investor Service, Standard & Poor's Corporation
and Duff & Phelps.
7. LANDLORD'S OBLIGATIONS
(a) SERVICES. Landlord shall furnish to Tenant the following
services (the cost of which services shall be considered Operating Costs): (1)
water at those points of supply to the Building as currently exist; (2) heated
and refrigerated air conditioning as appropriate, at such temperatures and in
such amounts as are standard for comparable buildings in the vicinity of the
Building; (3) janitorial service (which janitorial service shall include service
to the interior and exterior of the Building and the Premises and shall include
the services customarily provided to comparable properties by reputable
professional management companies, including, without limitation, maintenance,
repairs and replacement of (u) the parking area associated with the Building and
located on the Premises, (v) all grass, shrubbery and other landscape treatments
on the Premises, (w) the exterior of the Building (including painting), (x)
sprinkler systems and sewage lines, and (y) any other maintenance, repair or
replacement items normally associated with the foregoing) to the Premises on
weekdays, other than holidays, for Building-standard installations and such
window washing as may from time to time be reasonably required; (4) elevators
for ingress and egress to the floors of the Building, provided that Landlord may
reasonably limit the number of operating elevators during non-business hours and
holidays if any person(s) other than Tenant or any assignees or sublessees of
Tenant permitted hereunder occupies any portion of the Premises; and (5)
electrical current for equipment that does not require more than 110 volts and
whose electrical energy consumption does not exceed normal office usage. While
Tenant is the sole occupant of the Building, Tenant may, with Landlord's prior
written consent (which consent shall not be unreasonably withheld or delayed),
substitute at Tenant's expense any of the providers of the services described in
this Section 7.(a) with reputable, licensed (if applicable) third party service
providers located in the area in which the Building is located; provided,
however, Tenant shall provide Landlord with copies of all contracts with any
such service provider and said contracts shall be in form and substance
reasonably satisfactory to Landlord. If, in accordance with the provisions of
the
<PAGE> 16
preceding sentence, Tenant engages (at its own cost) providers for all of the
services to be provided by Landlord under this Section 7.(a), the management fee
included in Operating Costs shall be reduced to the greater of (i) $1,800.00 per
month or (ii) one and one-quarter percent (1-1/4%) of the gross revenues derived
by Landlord from the Premises. If Tenant engages providers of the services set
forth in this Section 7.(a) as aforesaid and any such services are provided, in
Landlord's reasonable discretion, at an unsatisfactory level as would
customarily be provided to comparable buildings, Landlord may, upon at least
twenty (20) days prior written notice to Tenant (except in the event of an
emergency or in situations where Landlord's prompt action is necessary to
prevent damage or deterioration to any portion of the Premises, in which case no
advance notice shall be required), elect to provide such services and the
management fee shall no longer be reduced; provided, however, to the extent the
twenty-day grace period exists, Landlord's election shall be deemed null and
void and of no further force and effect if Tenant causes the services being
performed at an unsatisfactory level to be performed at a satisfactory level
within the twenty-day period.
Landlord and Tenant hereby acknowledge and agree that, as of the
Commencement Date, Tenant shall engage providers of the services set forth in
this Section 7.(a). If Tenant is engaging providers of such services in
accordance with the provisions of this Lease, Landlord may perform periodic
inspections of the Building and all such inspection costs shall be considered an
Operating Cost and paid by Tenant in accordance with Section 4 above. However,
upon sixty (60) days prior written notice to Landlord, Tenant may elect to have
Landlord provide such services.
(b) LANDLORD'S MAINTENANCE OBLIGATIONS. This Lease is intended to be
a net lease; accordingly, Landlord's maintenance obligations (other than those
set forth in Section 7(a), if applicable) are limited to the repair, maintenance
and replacement of the Building's roof and the repair, maintenance and
replacement of the foundation and structural members of exterior walls (the
"BUILDING'S STRUCTURE"); Landlord shall not be responsible for (1) any such work
until Tenant notifies Landlord of the need therefor in writing, (2) for
alterations to the Building's Structure required by applicable law because of
Tenant's use of the Premises (which alterations shall be Tenant's
responsibility), (3) any such work caused by Tenant's negligence or its failure
to comply with the provisions of this Lease, or (4) any costs incurred by
Landlord in connection with the repair, maintenance and/or replacement of the
roof, which repair, maintenance and/or replacement costs shall be considered an
Operating Cost and paid by Tenant in accordance with Section 4 above. The
Building's Structure does not include skylights, windows, glass or plate glass,
doors, special fronts, or office entries, all which shall be maintained by
Tenant. Landlord's liability for any defects, repairs, replacements or
maintenance for which Landlord specifically is responsible for under this Lease
shall be limited to the cost of performing the work. Notwithstanding any
provisions of this Lease to the contrary, Landlord may replace the roof and the
roof membrane at any time, but shall be required to replace the roof and the
roof membrane if the cost to repair the roof and the roof membrane over an
aggregate twelve-month period exceeds $30,000.00 provided that such repair work
is not necessitated by either a catastrophic failure caused by severe weather
events or any act or omission by or on behalf of any Tenant Party.
<PAGE> 17
(c) EXCESS UTILITY USE. Landlord shall not be required to furnish
electrical current for equipment that requires more than the electrical capacity
currently provided in the Building (the "BASE BUILDING ELECTRICAL CAPACITY"). If
Tenant's requirements for consumption of electricity exceed the Base Building
Electrical Capacity, Landlord shall, at Tenant's expense, make reasonable
efforts to supply such service through the then-existing feeders and risers
serving the Building, and Tenant shall pay to Landlord the cost of such service
within ten days after Landlord has delivered to Tenant an invoice therefor.
Landlord may determine the amount of such additional consumption and potential
consumption by any verifiable method, including installation of a separate meter
in the Premises installed, maintained, and read by Landlord, at Tenant's
expense. Tenant shall not install any electrical equipment requiring special
wiring or requiring voltage in excess of the Base Building Electrical Capacity
unless approved in advance by Landlord. The use of electricity in the Building
shall not exceed the capacity of existing feeders and risers to or wiring in the
Building. Any risers or wiring required to meet Tenant's excess electrical
requirements shall, upon Tenant's written request, be installed by Landlord, at
Tenant's cost, if, in Landlord's judgment, the same are necessary and shall not
cause permanent damage to the Building or the Premises, cause or create a
dangerous or hazardous condition, or entail excessive or unreasonable
alterations, repairs, or expenses. If Tenant uses machines or equipment in the
Building which affect the temperature otherwise maintained by the air
conditioning system or otherwise overload any utility, Landlord may install
supplemental air conditioning units or other supplemental equipment in the
Building, and the cost thereof, including the cost of installation, operation,
use, and maintenance, shall be paid by Tenant to Landlord within ten (10) days
after Landlord has delivered to Tenant an invoice therefor.
(d) RESTORATION OF SERVICES; ABATEMENT. Landlord shall use
reasonable efforts to restore any service required of it that becomes
unavailable; however, such unavailability shall not render Landlord liable for
any damages caused thereby, be a constructive eviction of Tenant, constitute a
breach of any implied warranty, or, except as provided in the next sentence,
entitle Tenant to any abatement of Tenant's obligations hereunder. If, however,
Tenant is prevented from using the Premises for more than fifteen (15)
consecutive business days because of the unavailability of any such service and
such unavailability was not caused by a Tenant Party, then Tenant shall, as its
exclusive remedy be entitled to a reasonable abatement of Rent for each
consecutive day (after such 15-day period) that Tenant is so prevented from
using the Premises.
(e) LANDLORD'S COMPLIANCE WITH APPLICABLE LEGAL REQUIREMENTS.
Landlord shall comply with all legal requirements directly applicable to the
structural elements of the Building; but only to the extent that a failure to so
comply shall materially affect the Building, Tenant's use thereof or Tenant's
access thereto or results in Tenant being held responsible for the violation.
Landlord may contest in good faith the validity or application of any legal
requirements with which Landlord may be obligated to comply. Notwithstanding the
foregoing, all expenses incurred by Landlord to comply with all such legal
requirements enacted after the date of this Lease shall be considered an
Operating Cost and paid by Tenant in accordance with Section 4 above.
<PAGE> 18
8. IMPROVEMENTS; ALTERATIONS; REPAIRS; MAINTENANCE.
(a) IMPROVEMENTS; ALTERATIONS. Improvements to the Premises shall be
installed at Tenant's expense only in accordance with plans and specifications
which have been previously submitted to and approved in writing by Landlord. No
alterations or physical additions in or to the Premises may be made without
Landlord's prior written consent, which shall not be unreasonably withheld or
delayed; however, Landlord may withhold its consent to any alteration or
addition that would affect the Building's structure or its HVAC, plumbing,
electrical, or mechanical systems. Notwithstanding the foregoing, Tenant may
from time to time make alterations, additions or improvements to the Building,
without the consent of Landlord and without Landlord's approval of plans,
provided: (i) the cost thereof shall not exceed Twenty-Five Thousand Dollars
($25,000.00) in the aggregate in any consecutive twelve-month period; (ii)
Tenant shall, prior to commencing any such alterations, additions and/or
improvements in the Building in connection therewith, furnish Landlord with a
complete set of plans and specifications for any such alterations, additions
and/or improvements; (iii) such alterations, additions and/or improvements shall
not involve or affect the exterior or the structure of the Building or any of
the mechanical or plumbing systems of the Building or the base building
electrical system, as such base building electrical system exists after Tenant's
installation of the Work (but such alterations may include minor electrical
alterations not affecting the base building electrical system); and (iv) Tenant
shall comply with all requirements of this Lease with respect to such
alterations, additions and/or improvements other than obtaining the prior
approval of Landlord. Tenant shall not paint or install lighting or decorations,
signs, window or door lettering, or advertising media of any type on or about
the Premises without the prior written consent of Landlord, which shall not be
unreasonably withheld or delayed; however, Landlord may withhold its consent to
any such painting or installation which would affect the appearance of the
exterior of the Building or of any common areas of the Building. Notwithstanding
any provisions of the preceding sentence to the contrary, if Tenant is the sole
occupant of the Building, Landlord's prior written consent shall only be
required with respect to the painting or installation of lighting or
decorations, signs, window or door lettering, or advertising media of any type
on or about the Premises which would affect the exterior of the Building. All
alterations, additions, and improvements shall be constructed, maintained, and
used by Tenant, at its risk and expense, in accordance with all Laws; Landlord's
approval of the plans and specifications therefor shall not be a representation
by Landlord that such alterations, additions, or improvements comply with any
Law. Landlord shall cooperate with Tenant in obtaining any permits or licenses
sought by Tenant in connection with the Premises provided Landlord shall never
be required to pay any out-of-pocket expenses in connection therewith.
(b) REPAIRS; MAINTENANCE. Tenant shall maintain the Premises in a
clean, safe, and operable condition as exists after the construction of the Work
(as hereinafter defined) and any other alterations, additions or improvements
performed by Tenant, reasonable wear and tear and damage by fire, other casualty
and eminent domain excepted, consistent with the operation of a first class
building consistent with the
<PAGE> 19
Permitted Use, and shall not permit or allow to remain any waste or damage to
any portion of the Premises. If Tenant elects to engage providers for all
services in accordance with Section 7.(a) above, Tenant shall enter into
preventative maintenance/service contract(s) with maintenance contractor(s)
reasonably approved by Landlord for servicing the landscaping of the Premises
and all air conditioning, heating and ventilating equipment, elevators and other
equipment located within or serving the Premises. All preventative
maintenance/service contracts shall be in form and substance reasonably
satisfactory to Landlord and shall provide that the maintenance contractor shall
provide Landlord with quarterly reports respecting the maintenance of the
subject equipment. Upon request from Landlord, Tenant shall provide Landlord
with copies of all such preventative maintenance/service contracts maintained by
Tenant. Irrespective of whether or not Tenant elects to engage providers for all
services in accordance with Section 7.(a) above, Tenant shall repair or replace,
subject to Landlord's reasonable direction and supervision, any improvement or
system installed by Tenant within the Premises and any damage to the Building
caused by Tenant, Tenant's transferees, or their respective agents, contractors,
or invitees. If Tenant fails to make such repairs or replacements within fifteen
(15) days (or such shorter period of time required to prevent any damage from
occurring to the Premises) after the occurrence of such damage, then Landlord
may, after written notice to Tenant, make the same at Tenant's cost.
Notwithstanding any provisions of this Lease to the contrary, if the cost to
repair one of the existing rooftop HVAC units exceeds twenty-five percent (25%)
of the replacement cost for such unit, Landlord shall pay for such replacement
cost within twenty (20) business days after satisfaction of the following terms
and conditions: (i) Landlord and Tenant agree in writing on any such replacement
cost, on the specification of the new rooftop unit, and on the contractor to
install such new unit; (ii) Tenant shall ensure such new unit is installed in
accordance with applicable Laws; (iii) Tenant shall not be in default under this
Lease; (iv) this Lease shall be in full force and effect; (v) Tenant has
provided Landlord with evidence reasonably satisfactory to Landlord that the new
unit has been installed in accordance with applicable Laws; (vi) Tenant has
maintained and repaired such unit in accordance with the provisions of this
Lease; and (vii) such replacement costs shall be considered an Operating Cost
and paid by Tenant in accordance with Section 4 above.
(c) PERFORMANCE OF WORK. All work described in this Section 8 shall
be performed only by Landlord or by contractors and subcontractors reasonably
approved in writing by Landlord. Tenant shall cause all contractors and
subcontractors to procure and maintain insurance coverage naming Landlord as an
additional insured against such risks, in such amounts, and with such companies
as Landlord may reasonably require. All such work shall be performed in
accordance with all Laws and in a good and workmanlike manner so as not to
damage the Building (including the Premises, the structural elements, and the
plumbing, electrical lines, or other utility transmission facility). All such
work which may affect the Building's HVAC, electrical, plumbing, other
mechanical systems, or structural elements must be approved by the Building's
engineer of record, at Tenant's expense and, at Landlord's election, must be
performed by Landlord's usual contractor for such work, unless otherwise
approved by Landlord.
<PAGE> 20
Tenant shall provide sworn statements, including the names, addresses and
copies of contracts for all contractors, and upon completion of any work shall
promptly furnish Landlord with sworn owner's and contractor's statements and
full and final waivers of lien covering all labors and materials included in the
work in question.
(d) MECHANIC'S LIENS. Tenant shall not permit any mechanic's liens
to be filed against the Premises or the Building for any work performed,
materials furnished, or obligation incurred by or at the request of Tenant. If
such a lien is filed, then Tenant shall, within ten days after Landlord has
delivered notice of the filing thereof to Tenant, either pay the amount of the
lien or diligently contest such lien and deliver to Landlord a bond or other
security reasonably satisfactory to Landlord. If Tenant fails to timely take
either such action, then Landlord may pay the lien claim, and any amounts so
paid, including expenses and interest, shall be paid by Tenant to Landlord
within ten days after Landlord has invoiced Tenant therefor.
(e) UTILITIES. Tenant shall obtain and pay for all water, gas,
electricity, heat, telephone, sewer, sprinkler charges and other utilities and
services used at the Premises, together with all taxes, penalties, surcharges,
and maintenance charges pertaining thereto. To the extent Tenant is not billed
directly for any such utilities, any amounts payable by Tenant under this
Section shall be due within ten (10) days after Landlord has invoiced Tenant
therefor.
(f) FLOOR LOAD; HEAVY MACHINERY. (i) Tenant shall not place a load
upon any floor in the Building exceeding the floor load per square foot of area
which such floor was designed to carry or which is allowed by law. Landlord
reserves the right to prescribe the weight and position of all heavy business
machines and mechanical equipment, including safes, which shall be placed so as
to distribute the weight. Business machines and mechanical equipment shall be
placed and maintained by Tenant at Tenant's expense in settings sufficient, in
Landlord's judgment, to absorb and prevent vibration, noise and annoyance.
Tenant shall not move any safe, heavy machinery and/or heavy equipment into or
out of the Building without Landlord's prior consent, not to be unreasonably
withheld, conditioned or delayed, which consent may include a requirement to
provide insurance, naming Landlord as an insured, in such amounts as Landlord
may deem reasonable.
(ii) If such safe, machinery, equipment, freight, bulky matter
or fixtures requires special handling, Tenant agrees that all work in connection
therewith shall comply with applicable laws and regulations. Any such moving
shall be at the sole risk and hazard of Tenant, and Tenant will exonerate,
indemnify and save Landlord harmless against and from any liability, loss,
injury, claim or suit resulting directly or indirectly from such moving.
9. USE. Tenant shall occupy and use the Premises only for the Permitted
Use, and for no other purposes, and shall comply with all Laws relating to the
use, condition, access to, and occupancy of the Premises. The population density
within the Premises as a whole shall at no time exceed one person for each 200
rentable square feet
<PAGE> 21
in the Premises. The Premises shall not be used for any use which is
disreputable, creates extraordinary fire hazards, or results in an increased
rate of insurance on the Building or its contents, or for the storage of any
Hazardous Materials. If, because of a Tenant Party's acts, the rate of insurance
on the Building or its contents increases, then Tenant shall pay to Landlord the
amount of such increase on demand, and acceptance of such payment shall not
waive any of Landlord's other rights. If Tenant fails to cease or remediate such
acts within five (5) days after Landlord's request that Tenant do so, then such
acts shall be an Event of Default. Tenant shall conduct its business and control
each other Tenant Party so as not to create any nuisance or unreasonably
interfere with other tenants or Landlord in its management of the Building.
10. ASSIGNMENT AND SUBLETTING
(a) TRANSFERS. Except as provided in Section 10.(g), Tenant shall
not, without the prior written consent of Landlord, (1) assign, transfer, or
encumber this Lease or any estate or interest herein, whether directly or by
operation of law, (2) permit any other entity to become Tenant hereunder by
merger, consolidation, or other reorganization, (3) if Tenant is an entity other
than a corporation whose stock is publicly traded, permit the transfer of an
ownership interest in Tenant so as to result in a change in the current control
of Tenant, (4) sublet any portion of the Premises, (5) grant any license,
concession, or other right of occupancy of any portion of the Premises, or (6)
permit the use of the Premises by any parties other than Tenant (any of the
events listed in Section 10.(a)(1) through 10.(a)(6) being a "TRANSFER").
(b) CONSENT STANDARDS. Landlord shall not unreasonably withhold,
condition or delay its consent to any assignment or subletting of the Premises,
provided that the proposed transferee is creditworthy, has a good reputation in
the business community, will use the Premises for the Permitted Use (thus,
excluding, without limitation, uses for credit processing and telemarketing) and
will not use the Premises in any manner that would conflict with any exclusive
use agreement or other similar agreement entered into by Landlord with any other
tenant of the Building, is not a governmental entity, or subdivision or agency
thereof, and is not another occupant of the Building or person or entity with
whom Landlord is negotiating to lease space in the Building; otherwise, Landlord
may withhold its consent in its sole discretion.
(c) REQUEST FOR CONSENT. If Tenant requests Landlord's consent to a
Transfer, then Tenant shall provide Landlord with a written description of all
terms and conditions of the proposed Transfer, copies of the proposed
documentation, and the following information about the proposed transferee: name
and address; reasonably satisfactory information about its business and business
history; its proposed use of the Premises; banking, financial, and other credit
information; and general references sufficient to enable Landlord to determine
the proposed transferee's creditworthiness. Landlord shall approve such request,
or indicate its basis for refusing consent, within thirty (30) days after
receipt of such request and receipt of all of the information enumerated in the
preceding sentence. Concurrently with Tenant's notice of any request for consent
to a Transfer, Tenant shall pay to Landlord a fee of $750 to defray Landlord's
expenses in reviewing such request, and Tenant shall also reimburse Landlord
<PAGE> 22
immediately upon request for its reasonable attorneys' fees incurred in
connection with considering any request for consent to a Transfer.
(d) CONDITIONS TO CONSENT. If Landlord consents to a proposed
Transfer, then the proposed transferee shall deliver to Landlord a written
agreement whereby it expressly assumes Tenant's obligations hereunder; however,
any transferee of less than all of the space in the Premises shall be liable
only for obligations under this Lease that are properly allocable to the space
subject to the Transfer for the period of the Transfer. No Transfer shall
release Tenant from its obligations under this Lease, but rather Tenant and its
transferee shall be jointly and severally liable therefor. Landlord's consent to
any Transfer shall not waive Landlord's rights as to any subsequent Transfers.
If an Event of Default occurs while the Premises or any part thereof are subject
to a Transfer, then Landlord, in addition to its other remedies, may collect
directly from such transferee all rents becoming due to Tenant and apply such
rents against Rent. Tenant authorizes its transferees to make payments of rent
directly to Landlord upon receipt of notice from Landlord to do so. Tenant shall
pay for the cost of any demising walls or other improvements necessitated by a
proposed subletting or assignment.
(e) CANCELLATION. Landlord may, within 30 days after submission of
Tenant's written request for Landlord's consent to an assignment or subletting,
cancel this Lease as to the portion of the Premises proposed to be sublet or
assigned as of the date the proposed Transfer is to be effective. If Landlord
cancels this Lease as to any portion of the Premises, then this Lease shall
cease for such portion of the Premises and Tenant shall pay to Landlord all Rent
accrued through the cancellation date relating to the portion of the Premises
covered by the proposed Transfer. Thereafter, Landlord may lease such portion of
the Premises to the prospective transferee (or to any other person) without
liability to Tenant.
(f) ADDITIONAL COMPENSATION. Tenant shall pay to Landlord,
immediately upon receipt thereof, seventy-five percent (75%) of the excess of
(1) all compensation received by Tenant for a Transfer less the costs reasonably
incurred by Tenant with unaffiliated third parties in connection with such
Transfer (i.e., brokerage commissions, tenant finish work, and the like) over
(2) the Rent allocable to the portion of the Premises covered thereby.
(g) PERMITTED TRANSFERS. Notwithstanding Section 10.(a), Tenant may
Transfer all or part of its interest in this Lease or all or part of the
Premises (a "PERMITTED TRANSFER") to the following types of entities (a
"PERMITTED TRANSFEREE") without the written consent of Landlord:
(1) an Affiliate of Tenant;
(2) any corporation, limited partnership, limited liability
partnership, limited liability company or other business entity in which
or with which Tenant, or its corporate successors or assigns, is merged or
consolidated, in accordance with applicable statutory provisions governing
merger and
<PAGE> 23
consolidation of business entities, so long as (A) Tenant's
obligations hereunder are assumed by the entity surviving such merger
or created by such consolidation; and (B) the Tangible Net Worth of
the surviving or created entity is not less than the greater of (i)
the Tangible Net Worth of Tenant as of the date hereof, or (ii) the
Tangible Net Worth of Tenant at the time of any such Permitted
Transfer; or
(3) any corporation, limited partnership, limited liability
partnership, limited liability company or other business entity
acquiring all or substantially all of Tenant's assets if such entity's
Tangible Net Worth after such acquisition is not less than the greater
of (i) the Tangible Net Worth of Tenant as of the date hereof, or (ii)
the Tangible Net Worth of Tenant at the time of any such Permitted
Transfer.
Tenant shall promptly notify Landlord of any such Permitted Transfer.
Tenant shall remain liable for the performance of all of the obligations of
Tenant hereunder, or if Tenant no longer exists because of a merger,
consolidation, or acquisition, the surviving or acquiring entity shall expressly
assume in writing the obligations of Tenant hereunder. Additionally, the
Permitted Transferee shall comply with all of the terms and conditions of this
Lease, including the Permitted Use, and the use of the Premises by the Permitted
Transferee may not violate any other agreements affecting the Premises, the
Building, Landlord or other tenants of the Building. At least 30 days after the
effective date of any Permitted Transfer, Tenant agrees to furnish Landlord with
copies of the instrument effecting any of the foregoing Transfers and
documentation establishing Tenant's satisfaction of the requirements set forth
above applicable to any such Transfer. The occurrence of a Permitted Transfer
shall not waive Landlord's rights as to any subsequent Transfers. "TANGIBLE NET
WORTH" means the excess of total assets over total liabilities, in each case as
determined in accordance with generally accepted accounting principles
consistently applied ("GAAP"), excluding, however, from the determination of
total assets all assets which would be classified as intangible assets under
GAAP including, without limitation, goodwill, licenses, patents, trademarks,
trade names, copyrights, and franchises. Any subsequent Transfer by a Permitted
Transferee shall be subject to Landlord's prior written consent (which Landlord
may grant or deny in its sole discretion).
11. INSURANCE; WAIVERS; SUBROGATION; INDEMNITY
(a) TENANT'S INSURANCE. Tenant shall maintain throughout the Term
the following insurance policies: (1) commercial general liability insurance in
amounts of $3,000,000 per occurrence or such other amounts as Landlord may from
time to time reasonably require, insuring Tenant, Landlord, Landlord's agents
and their respective Affiliates against all liability for injury to or death of
a person or persons or damage to property arising from the use and occupancy of
the Premises, (2) insurance covering the full value of Tenant's property and
improvements, and other property (including property of others) in the Premises,
(3) contractual liability insurance sufficient to cover Tenant's indemnity
obligations hereunder (but only if such contractual liability insurance is not
already included in Tenant's commercial general liability insurance policy), (4)
worker's
<PAGE> 24
compensation insurance, containing a waiver of subrogation endorsement
acceptable to Landlord, and (5) business interruption insurance. Tenant's
insurance shall provide primary coverage to Landlord when any policy issued to
Landlord provides duplicate or similar coverage, and in such circumstance
Landlord's policy will be excess over Tenant's policy. Tenant shall furnish to
Landlord certificates of such insurance and such other evidence satisfactory to
Landlord of the maintenance of all insurance coverages required hereunder, and
Tenant shall obtain a written obligation on the part of each insurance company
to notify Landlord at least 30 days before cancellation or a material change of
any such insurance policies. All such insurance policies shall be in form, and
issued by companies, reasonably satisfactory to Landlord.
(b) LANDLORD'S INSURANCE. Landlord shall carry throughout the Term
of this Lease fire and extended coverage insurance on the Building for at least
90% of the full replacement value.
(c) WAIVER OF NEGLIGENCE; NO SUBROGATION. Landlord and Tenant each
waives any claim it might have against the other for any injury to or death of
any person or persons or damage to or theft, destruction, loss, or loss of use
of any property (a "LOSS"), to the extent the same is insured against under any
insurance policy that covers the Building, the Premises, Landlord's or Tenant's
fixtures, personal property, leasehold improvements, or business, or is required
to be insured against under the terms hereof, REGARDLESS OF WHETHER THE
NEGLIGENCE OF THE OTHER PARTY CAUSED SUCH LOSS; however, Landlord's waiver shall
not include any deductible amounts on insurance policies carried by Landlord.
Each party shall cause its insurance carrier to endorse all applicable policies
waiving the carrier's rights of recovery under subrogation or otherwise against
the other party.
(d) INDEMNITY. Subject to Section 11.(c), Tenant shall defend,
indemnify, and hold harmless Landlord and its representatives and agents from
and against all claims, demands, liabilities, causes of action, suits,
judgments, damages, and expenses (including attorneys' fees) arising from (1)
any Loss arising from any occurrence on the Premises during the Term or any
holdover by Tenant or any person or entity deriving rights from Tenant beyond
the expiration of the Term (other than any Loss arising out of a breach of
Tenant's obligations under Section 25.(t), which shall be subject to the
indemnity in such section) except to the extent caused by the negligence or
fault of Landlord or its agents or (2) Tenant's failure to perform its
obligations under this Lease except to the extent caused by the negligence or
fault of Landlord or its agents. This indemnity provision shall survive
termination or expiration of this Lease. If any proceeding is filed for which
indemnity is required hereunder, Tenant agrees, upon request therefor, to defend
the indemnified party in such proceeding at its sole cost utilizing counsel
reasonably satisfactory to the indemnified party.
12. SUBORDINATION; ATTORNMENT; NOTICE TO LANDLORD'S MORTGAGEE
(a) SUBORDINATION. This Lease shall be subordinate to any deed of
trust, mortgage, or other security instrument, or any ground lease, master
lease, or primary lease (any such security instrument or lease, a "MORTGAGE"),
that now or
<PAGE> 25
hereafter covers all or any part of the Premises (the mortgagee under any such
mortgage or the lessor under any such lease is referred to herein as a
"LANDLORD'S MORTGAGEE"). Any Landlord's Mortgagee may elect, at any time,
unilaterally, to make this Lease superior to its mortgage, ground lease, or
other interest in the Premises by so notifying Tenant in writing. Provided
Tenant receives a Non-Disturbance Agreement from each such Mortgagee, Tenant
shall execute agreements confirming the subordination or superiority of this
Lease to any Mortgage upon Landlord or Landlord's Mortgagee's reasonable
request.
(b) ATTORNMENT. Provided Tenant receives a Non-Disturbance Agreement
from such party, Tenant shall attorn to any party succeeding to Landlord's
interest in the Premises, whether by purchase, foreclosure, deed in lieu of
foreclosure, power of sale, termination of lease, or otherwise, upon such
party's request, and shall execute such agreements confirming such attornment as
such party may reasonably request.
(c) NOTICE TO LANDLORD'S MORTGAGEE. Tenant shall not seek to enforce
any remedy it may have for any default on the part of Landlord without first
giving written notice by certified mail, return receipt requested, specifying
the default in reasonable detail, to any Landlord's Mortgagee whose address has
been given to Tenant, and affording such Landlord's Mortgagee a reasonable
opportunity to perform Landlord's obligations hereunder.
(d) LANDLORD'S MORTGAGEE'S PROTECTION PROVISIONS. If Landlord's
Mortgagee shall succeed to the interest of Landlord under this Lease, Landlord's
Mortgagee shall not be: (1) liable for any act or omission of any prior lessor
(including Landlord); (2) bound by any rent or additional rent or advance rent
which Tenant might have paid for more than the current month to any prior lessor
(including Landlord), and all such rent shall remain due and owing,
notwithstanding such advance payment unless such rent is actually received by
Landlord's Mortgagee; (3) bound by any security or advance rental deposit made
by Tenant which is not delivered or paid over to Landlord's Mortgagee and with
respect to which Tenant shall look solely to Landlord for refund or
reimbursement; (4) bound by any termination, amendment or modification of this
Lease made without Landlord's Mortgagee's consent and written approval, except
for those terminations, amendments and modifications permitted to be made by
Landlord without Landlord's Mortgagee's consent pursuant to the terms of the
loan documents between Landlord and Landlord's Mortgagee; (5) subject to the
defenses which Tenant might have against any prior lessor (including Landlord);
and (6) subject to the offsets which Tenant might have against any prior lessor
(including Landlord) except for those offset rights which (A) are expressly
provided in this Lease, (B) relate to periods of time following the acquisition
of the Building by Landlord's Mortgagee, and (C) Tenant has provided written
notice to Landlord's Mortgagee and provided Landlord's Mortgagee a reasonable
opportunity to cure the event giving rise to such offset event. Landlord's
Mortgagee shall have no liability or responsibility under or pursuant to the
terms of this Lease or otherwise after it ceases to own an interest in the
Building. Nothing in this Lease shall be construed to require Landlord's
Mortgagee to see to the application of the proceeds of
<PAGE> 26
any loan, and Tenant's agreements set forth herein shall not be impaired on
account of any modification of the documents evidencing and securing any loan.
(e) SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT.
Simultaneously upon Tenant's execution of this Lease, Tenant shall execute a
Subordination, Non-Disturbance and Attornment Agreement in the form attached
hereto as Exhibit J. Landlord shall return a fully executed Subordination,
Non-Disturbance and Attornment Agreement in the form attached hereto as Exhibit
J, executed by Landlord and the Lender named therein to Tenant as soon as
reasonably possible. Landlord shall use reasonable efforts (which efforts shall
not require the expenditure of funds or the threat (or commencement) of
litigation) to obtain a so-called "nondisturbance agreement" from any future
Landlord's Mortgagee in the form attached hereto as Exhibit J or another form
reasonably acceptable to Tenant and such Landlord's Mortgagee or other
institutional lenders (either the form attached hereto as Exhibit J or such
other reasonably acceptable form being herein referred to as the
"NON-DISTURBANCE AGREEMENT"). The subordination of Tenant's rights hereunder to
any future Landlord's Mortgagee under Section 12.(a) and the attornment of
Tenant to any future Landlord Mortgagee under Section 12.(b) shall be
conditioned upon such future Landlord's Mortgagee's execution and delivery of a
Non-Disturbance Agreement.
13. RULES AND REGULATIONS. Tenant shall comply with the rules and
regulations of the Building which are attached hereto as Exhibit C. Landlord
may, from time to time, change such rules and regulations for the safety, care,
or cleanliness of the Building and related facilities, provided that such
changes are applicable to all tenants of the Building and will not unreasonably
interfere with Tenant's use of the Premises. Tenant shall be responsible for the
compliance with such rules and regulations by each Tenant Party.
14. CONDEMNATION.
(a) TOTAL TAKING. If the entire Building or Premises are taken by
right of eminent domain or conveyed in lieu thereof (a "TAKING"), this Lease
shall terminate as of the date of the Taking.
(b) PARTIAL TAKING - TENANT'S RIGHTS. If any part of the Building
becomes subject to a Taking and such Taking will prevent Tenant from conducting
its business in the Premises in a manner reasonably comparable to that conducted
immediately before such Taking for a period of more than 180 days, then Tenant
may terminate this Lease as of the date of such Taking by giving written notice
to Landlord within 30 days after the Taking, and Rent shall be apportioned as of
the date of such Taking. If Tenant does not terminate this Lease, then Rent
shall be abated on a reasonable basis as to that portion of the Premises
rendered untenantable by the Taking.
(c) PARTIAL TAKING - LANDLORD'S RIGHTS. If any material portion, but
less than all, of the Building becomes subject to a Taking, or if Landlord is
required to pay any of the proceeds received for a Taking to a Landlord's
Mortgagee, then Landlord
<PAGE> 27
may terminate this Lease by delivering written notice thereof to Tenant within
30 days after such Taking, and Rent shall be apportioned as of the date of such
Taking. If Landlord does not so terminate this Lease, then this Lease will
continue, but if any portion of the Premises has been taken, Rent shall abate as
provided in the last sentence of Section 14.(b).
(d) AWARD. If any Taking occurs, then Landlord shall receive the
entire award or other compensation for the land on which the Building is
situated, the Building, and other improvements taken, and Tenant may separately
pursue a claim (to the extent it will not reduce Landlord's award) against the
condemnor for the value of Tenant's personal property which Tenant is entitled
to remove under this Lease, moving costs, loss of business, and other claims it
may have.
15. FIRE OR OTHER CASUALTY
(a) REPAIR ESTIMATE. If the Premises or the Building are damaged by
fire or other casualty (a "CASUALTY"), Landlord shall, within ninety (90) days
after such Casualty, deliver to Tenant a good faith estimate (the "DAMAGE
NOTICE") of the time needed to repair the damage caused by such Casualty.
(b) LANDLORD'S AND TENANT'S RIGHTS. If a material portion of the
Premises or the Building is damaged by Casualty such that Tenant is prevented
from conducting its business in the Premises in a manner reasonably comparable
to that conducted immediately before such Casualty and Landlord estimates that
the damage caused thereby cannot be repaired within two hundred ten (210) days
after the Casualty, then Tenant may terminate this Lease by delivering written
notice to Landlord of its election to terminate within 30 days after the Damage
Notice has been delivered to Tenant. If Tenant does not so timely terminate this
Lease, then (subject to Section 15.(c)) Landlord shall repair the Building or
the Premises, as the case may be, as provided below, and Rent for the portion of
the Premises rendered untenantable by the damage shall be abated on a reasonable
basis from the date of damage until the completion of the repair, unless a
Tenant Party caused such damage, in which case, Tenant shall continue to pay
Rent without abatement.
(c) LANDLORD'S RIGHTS. If a Casualty damages a material portion of
the Building, and Landlord makes a good faith determination that restoring the
Premises would be uneconomical, or if Landlord is required to pay any insurance
proceeds arising out of the Casualty to a Landlord's Mortgagee, then Landlord
may terminate this Lease by giving written notice of its election to terminate
within 30 days after the Damage Notice has been delivered to Tenant, and Basic
Rent and Additional Rent shall be abated as of the date of the Casualty.
(d) REPAIR OBLIGATION. If neither party elects to terminate this
Lease following a Casualty, then Landlord shall, within a reasonable time after
such Casualty, begin to repair the Building and the Premises and shall proceed
with reasonable diligence to restore the Building and Premises to substantially
the same condition as they existed
<PAGE> 28
immediately before such Casualty; however, Landlord shall not be required to
repair or replace any of the furniture, equipment, fixtures, and other
improvements which may have been placed by, or at the request of, Tenant or
other occupants in the Building or the Premises, and Landlord's obligation to
repair or restore the Building or Premises shall be limited to the extent of the
insurance proceeds actually received by Landlord for the Casualty in question.
If the Premises are not substantially restored within two hundred ten (210) days
after a Casualty, Tenant shall have the right to terminate this Lease upon at
least sixty (60) days prior written notice; provided, however, if Landlord
substantially restores the Premises within said sixty-day period, Tenant's
termination notice shall be null and void and the provisions of this Lease shall
remain in full force and effect.
16. PERSONAL PROPERTY TAXES. Tenant shall be liable for all taxes levied
or assessed against personal property, furniture, or fixtures placed by Tenant
in the Premises. If any taxes for which Tenant is liable are levied or assessed
against Landlord or Landlord's property and Landlord elects to pay the same, or
if the assessed value of Landlord's property is increased by inclusion of such
personal property, furniture or fixtures and Landlord elects to pay the taxes
based on such increase, then Tenant shall pay to Landlord, upon demand, the part
of such taxes for which Tenant is primarily liable hereunder; however, Landlord
shall not pay such amount if Tenant notifies Landlord that it will contest the
validity or amount of such taxes before Landlord makes such payment, and
thereafter diligently proceeds with such contest in accordance with law and if
the non-payment thereof does not pose a threat of loss or seizure of the
Building or interest of Landlord therein or impose any fee or penalty against
Landlord.
17. EVENTS OF DEFAULT. Each of the following occurrences shall be an
"EVENT OF DEFAULT":
(a) Tenant's failure to pay Rent within five days after Landlord has
delivered notice to Tenant that the same is due; however, an Event of Default
shall occur hereunder without any obligation of Landlord to give any notice if
Landlord has given Tenant written notice under this Section 17.(a) on more than
one occasion during the twelve (12) month interval preceding such failure by
Tenant;
(b) an Event of Default occurs under that certain Lease Agreement
dated January 31, 2000 by and between Landlord and Tenant with respect to the
premises known and numbered as 16 Elizabeth Drive, Chelmsford, Massachusetts
(the "16 ELIZABETH DRIVE LEASE");
(c) Tenant abandons the Premises or any substantial portion thereof;
(d) Tenant fails to comply with the Permitted Use set forth herein
and the continuance of such failure for a period of five (5) days after Landlord
has delivered to Tenant written notice thereof;
(e) Tenant fails to provide any estoppel certificate within the time
period required under Section 25.(e) and such failure shall continue for five
days after written notice thereof from Landlord to Tenant;
<PAGE> 29
(f) Tenant's failure to perform, comply with, or observe any other
agreement or obligation of Tenant under this Lease and the continuance of such
failure for a period of more than 30 days after Landlord has delivered to Tenant
written notice thereof; provided that if the default is of such a nature that it
may not be reasonably cured within thirty (30) days, then no Event of Default
shall occur hereunder if Tenant commences curing within such thirty (30) day
period and thereafter diligently and continuously pursues such cure to
completion within a period of not more than seventy-five (75) days after the
delivery of such notice; and
(g) The filing of a petition by or against Tenant (the term "TENANT"
shall include, for the purpose of this Section 17.(g), any guarantor of Tenant's
obligations hereunder) (1) in any bankruptcy or other insolvency proceeding; (2)
seeking any relief under any state or federal debtor relief law; (3) for the
appointment of a liquidator or receiver for all or substantially all of Tenant's
property or for Tenant's interest in this Lease; or (4) for the reorganization
or modification of Tenant's capital structure; however, if such a petition is
filed against Tenant, then such filing shall not be an Event of Default unless
Tenant fails to have the proceedings initiated by such petition dismissed within
90 days after the filing thereof.
18. REMEDIES. Upon an Event of Default, Landlord may, in addition to all
other rights and remedies afforded Landlord hereunder, take any of the following
actions:
(a) Terminate this Lease by giving Tenant written notice thereof, in
which event Tenant shall pay to Landlord the sum of (1) all Rent accrued
hereunder through the date of termination, (2) all amounts due under Section
19.(a), and (3) an amount equal to (A) the total Rent that Tenant would have
been required to pay for the remainder of the Term plus Landlord's estimate of
aggregate expenses of reletting to the Premises, discounted to present value at
a per annum rate equal to the "Prime Rate" as published on the date this Lease
is terminated by The Wall Street Journal, Northeast Edition, in its listing of
"Money Rates," minus one percent, similarly discounted, minus (B) the then
present fair rental rate value of the Premises for such period;
(b) Terminate Tenant's right to possess the Premises without
terminating this Lease by giving written notice thereof to Tenant, in which
event Tenant shall pay to Landlord (1) all Rent and other amounts accrued
hereunder to the date of termination of possession, (2) all amounts due from
time to time under Section 19.(a), and (3) all Rent and other net sums required
hereunder to be paid by Tenant during the remainder of the Term, diminished by
any net sums thereafter received by Landlord through reletting the Premises
during such period, after deducting all out-of-pocket costs incurred by Landlord
in reletting the Premises. Landlord shall use reasonable efforts to relet the
Premises on such terms as Landlord in its sole discretion may determine
(including a term different from the Term, rental concessions, and alterations
to, and improvement of, the Premises); however, Landlord shall not be obligated
to relet the Premises before leasing other portions of the Building. Landlord
shall not be liable for, nor shall Tenant's obligations hereunder be diminished
because of, Landlord's failure to
<PAGE> 30
relet the Premises or to collect rent due for such reletting. Tenant shall not
be entitled to the excess of any consideration obtained by reletting over the
Rent due hereunder. Reentry by Landlord in the Premises shall not affect
Tenant's obligations hereunder for the unexpired Term; rather, Landlord may,
from time to time, bring an action against Tenant to collect amounts due by
Tenant, without the necessity of Landlord's waiting until the expiration of the
Term. Unless Landlord delivers written notice to Tenant expressly stating that
it has elected to terminate this Lease, all actions taken by Landlord to
dispossess or exclude Tenant from the Premises shall be deemed to be taken under
this Section 18.(b). If Landlord elects to proceed under this Section 18.(b), it
may at any time elect to terminate this Lease under Section 18.(a); or
(c) Additionally, upon five (5) days prior written notice, Landlord
may alter locks or other security devices at the Premises to deprive Tenant of
access thereto, and Landlord shall not be required to provide a new key or right
of access to Tenant.
Any and all remedies set forth in this Lease: (i) shall be in addition to
any and all other remedies Landlord may have at law or in equity; (ii) shall be
cumulative except as otherwise expressly provided herein; and (iii) may be
pursued successively or concurrently as Landlord may elect. The exercise of any
remedy by Landlord shall not be deemed an election of remedies or preclude
Landlord from exercising any other remedies in the future. Notwithstanding the
foregoing, Landlord shall only recover its damages allowed hereunder once.
19. PAYMENT BY TENANT; NON-WAIVER
(a) PAYMENT BY TENANT. Upon any Event of Default, Tenant shall pay
to Landlord all costs incurred by Landlord (including court costs and reasonable
attorneys' fees and expenses) in (1) obtaining possession of the Premises, (2)
removing and storing Tenant's or any other occupant's property, (3) repairing,
restoring, altering, remodeling, or otherwise putting the Premises into
condition acceptable to a new tenant, (4) if Tenant is dispossessed of the
Premises and this Lease is not terminated, reletting all or any part of the
Premises (including brokerage commissions, cost of tenant finish work, and other
costs incidental to such reletting), (5) performing Tenant's obligations which
Tenant failed to perform, and (6) enforcing, or advising Landlord of, its
rights, remedies, and recourses arising out of the Event of Default. To the full
extent permitted by law, Landlord and Tenant agree the federal and state courts
of the state in which the Premises are located shall have exclusive jurisdiction
over any matter relating to or arising from this Lease and the parties' rights
and obligations under this Lease.
(b) NO WAIVER. Landlord's acceptance of Rent following an Event of
Default shall not waive Landlord's rights regarding such Event of Default. No
waiver by Landlord of any violation or breach of any of the terms contained
herein shall waive Landlord's rights regarding any future violation of such
term. Landlord's acceptance of any partial payment of Rent shall not waive
Landlord's rights with regard to the remaining portion of the Rent that is due,
regardless of any endorsement or other statement on any instrument delivered in
payment of Rent or any writing delivered in
<PAGE> 31
connection therewith; accordingly, Landlord's acceptance of a partial payment of
Rent shall not constitute an accord and satisfaction of the full amount of the
Rent that is due.
20. LANDLORD'S LIEN. Intentionally omitted, provided that the deletion of
this Section shall not be construed to be a waiver of Landlord's lien rights
provided by law.
21. SURRENDER OF PREMISES. No act by Landlord shall be deemed an
acceptance of a surrender of the Premises, and no agreement to accept a
surrender of the Premises shall be valid unless it is in writing and signed by
Landlord. At the expiration or termination of this Lease, Tenant shall deliver
to Landlord the Premises with all improvements located therein in good repair
and condition, free of Hazardous Materials placed on the Premises during the
Term, broom-clean, reasonable wear and tear (and condemnation and Casualty
damage not caused by Tenant, as to which Sections 14 and 15 shall control)
excepted, and shall deliver to Landlord all keys to the Premises. Provided that
Tenant has performed all of its obligations hereunder, Tenant may remove all
unattached trade fixtures, furniture, and personal property placed in the
Premises or elsewhere in the Building by Tenant (but Tenant may not remove any
such item which was paid for, in whole or in part, by Landlord or any wiring or
cabling unless Landlord requires such removal). Additionally, at Landlord's
option, Tenant shall remove such alterations, additions, improvements, trade
fixtures, personal property, equipment, wiring, cabling, and furniture as
Landlord may request; however, Tenant shall not be required to remove any
addition or improvement to the Premises if Landlord has specifically agreed in
writing that the improvement or addition in question need not be removed. Tenant
shall repair all damage caused by such removal. All items not so removed shall,
at Landlord's option, be deemed to have been abandoned by Tenant and may be
appropriated, sold, stored, destroyed, or otherwise disposed of by Landlord
without notice to Tenant and without any obligation to account for such items;
any such disposition shall not be considered a strict foreclosure or other
exercise of Landlord's rights in respect of the security interest granted under
Section 20. The provisions of this Section 21 shall survive the end of the Term.
22. HOLDING OVER. If Tenant fails to vacate the Premises at the end of the
Term, then Tenant shall be a tenant at will and, in addition to all other
damages and remedies to which Landlord may be entitled for such holding over,
Tenant shall pay, in addition to the other Rent, a daily Basic Rent equal to the
greater of (a) 150% of the daily Basic Rent payable during the last month of the
Term, or (b) 125% of the prevailing rental rate in the Building for similar
space. The provisions of this Section 22 shall not be deemed to limit or
constitute a waiver of any other rights or remedies of Landlord provided herein
or at law. If Tenant fails to surrender the Premises upon the termination or
expiration of this Lease, in addition to any other liabilities to Landlord
accruing therefrom, Tenant shall protect, defend, indemnify and hold Landlord
harmless from all loss, costs (including reasonable attorneys' fees) and
liability resulting from such failure, including, without limiting the
generality of the foregoing, any claims made by any succeeding tenant founded
upon such failure to surrender, and any lost profits to Landlord resulting
therefrom.
<PAGE> 32
23. CERTAIN RIGHTS RESERVED BY LANDLORD. Provided that the exercise of
such rights does not unreasonably interfere with Tenant's occupancy of the
Premises, Landlord shall have the following rights:
(a) To decorate and to make inspections, repairs, alterations,
additions, changes, or improvements, whether structural or otherwise, in and
about the Building, or any part thereof; to enter upon the Premises (after
giving Tenant reasonable notice thereof, which may be oral notice, except in
cases of real or apparent emergency, in which case no notice shall be required)
and, during the continuance of any such work, to temporarily close doors,
entryways, public space, and corridors in the Building; to interrupt or
temporarily suspend Building services and facilities; to change the name of the
Building; and to change the arrangement and location of entrances or
passageways, doors, and doorways, corridors, elevators, stairs, restrooms, or
other public parts of the Building;
(b) To take such reasonable measures as Landlord deems advisable for
the security of the Building and its occupants; evacuating the Building for
cause, suspected cause, or for drill purposes; temporarily denying access to the
Building; and closing the Building after normal business hours and on Sundays
and holidays, subject, however, to Tenant's right to enter when the Building is
closed after normal business hours under such reasonable regulations as Landlord
may prescribe from time to time; and
(c) To enter the Premises at reasonable hours to show the Premises
to prospective purchasers, lenders, or, during the last 12 months of the Term,
tenants.
24. [INTENTIONALLY OMITTED]
25. MISCELLANEOUS.
(a) LANDLORD TRANSFER. Landlord may transfer any portion of the
Building and any of its rights under this Lease. If Landlord assigns its rights
under this Lease, then Landlord shall thereby be released from any further
obligations hereunder arising after the date of transfer, provided that the
assignee assumes Landlord's obligations hereunder in writing.
(b) LANDLORD'S LIABILITY. The liability of Landlord to Tenant for
any default by Landlord under the terms of this Lease shall be limited to
Tenant's actual direct, but not consequential, damages therefor and shall be
recoverable only from the interest of Landlord in the Building, and Landlord
shall not be personally liable for any deficiency. This Section shall not limit
any remedies which Tenant may have for Landlord's defaults which do not involve
the personal liability of Landlord.
(c) FORCE MAJEURE. Other than for Tenant's obligations under this
Lease that can be performed by the payment of money (e.g., payment of Rent and
maintenance of insurance), whenever a period of time is herein prescribed for
action to be
<PAGE> 33
taken by either party hereto, such party shall not be liable or responsible for,
and there shall be excluded from the computation of any such period of time, any
delays due to strikes, riots, acts of God, shortages of labor or materials, war,
governmental laws, regulations, or restrictions, or any other causes of any kind
whatsoever which are beyond the control of such party.
(d) BROKERAGE. Neither Landlord nor Tenant has dealt with any broker
or agent in connection with the negotiation or execution of this Lease, other
than Grubb & Ellis Management Services, Inc. and CRESA Partners, whose
commission shall be paid by Landlord. Tenant and Landlord shall each indemnify
the other against all costs, expenses, attorneys' fees, and other liability for
commissions or other compensation claimed by any broker or agent claiming the
same by, through, or under the indemnifying party.
(e) ESTOPPEL CERTIFICATES. From time to time, Tenant shall furnish
to any party designated by Landlord, within ten days after Landlord has made a
request therefor, a certificate signed by Tenant confirming and containing such
factual certifications and representations as to this Lease as Landlord may
reasonably request. Unless otherwise required by Landlord's Mortgagee or a
prospective purchaser or mortgagee of the Building, the initial form of estoppel
certificate to be signed by Tenant is attached hereto as Exhibit F.
(f) NOTICES. All notices and other communications given pursuant to
this Lease shall be in writing and shall be (1) mailed by first class, United
States Mail, postage prepaid, certified, with return receipt requested, and
addressed to the parties hereto at the address specified in the Basic Lease
Information, (2) hand delivered to the intended address, (3) sent by a
nationally recognized overnight courier service, or (4) sent by facsimile
transmission during normal business hours followed by a confirmatory letter sent
in another manner permitted hereunder. All notices shall be effective upon
delivery to the address of the addressee. The parties hereto may change their
addresses by giving notice thereof to the other in conformity with this
provision.
(g) SEPARABILITY. If any clause or provision of this Lease is
illegal, invalid, or unenforceable under present or future laws, then the
remainder of this Lease shall not be affected thereby and in lieu of such clause
or provision, there shall be added as a part of this Lease a clause or provision
as similar in terms to such illegal, invalid, or unenforceable clause or
provision as may be possible and be legal, valid, and enforceable.
(h) AMENDMENTS; AND BINDING EFFECT. This Lease may not be amended
except by instrument in writing signed by Landlord and Tenant. No provision of
this Lease shall be deemed to have been waived by Landlord unless such waiver is
in writing signed by Landlord, and no custom or practice which may evolve
between the parties in the administration of the terms hereof shall waive or
diminish the right of Landlord to insist upon the performance by Tenant in
strict accordance with the terms hereof. The terms and conditions contained in
this Lease shall inure to the benefit of and be binding upon the parties hereto,
and upon their respective successors in interest and
<PAGE> 34
legal representatives, except as otherwise herein expressly provided. This Lease
is for the sole benefit of Landlord and Tenant, and, other than Landlord's
Mortgagee, no third party shall be deemed a third party beneficiary hereof.
(i) QUIET ENJOYMENT. Provided Tenant has performed all of its
obligations hereunder, Tenant shall peaceably and quietly hold and enjoy the
Premises for the Term, without hindrance from Landlord or any party claiming by,
through, or under Landlord, but not otherwise, subject to the terms and
conditions of this Lease.
(j) NO MERGER. There shall be no merger of the leasehold estate
hereby created with the fee estate in the Premises or any part thereof if the
same person acquires or holds, directly or indirectly, this Lease or any
interest in this Lease and the fee estate in the leasehold Premises or any
interest in such fee estate.
(k) NO OFFER. The submission of this Lease to Tenant shall not be
construed as an offer, and Tenant shall not have any rights under this Lease
unless Landlord executes a copy of this Lease and delivers it to Tenant.
(l) ENTIRE AGREEMENT. This Lease constitutes the entire agreement
between Landlord and Tenant regarding the subject matter hereof and supersedes
all oral statements and prior writings relating thereto. Except for those set
forth in this Lease, no representations, warranties, or agreements have been
made by Landlord or Tenant to the other with respect to this Lease or the
obligations of Landlord or Tenant in connection therewith. The normal rule of
construction that any ambiguities be resolved against the drafting party shall
not apply to the interpretation of this Lease or any exhibits or amendments
hereto.
(m) WAIVER OF JURY TRIAL. To the maximum extent permitted by law,
Landlord and Tenant each waive right to trial by jury in any litigation arising
out of or with respect to this Lease.
(n) GOVERNING LAW. This Lease shall be governed by and construed in
accordance with the laws of the State in which the Premises are located.
(o) JOINT AND SEVERAL LIABILITY. If Tenant is comprised of more than
one party, each such party shall be jointly and severally liable for Tenant's
obligations under this Lease.
(p) FINANCIAL REPORTS. Within 15 days after Landlord's request,
Tenant will furnish Tenant's most recent audited financial statements (including
any notes to them) to Landlord, or, if no such audited statements have been
prepared, such other financial statements (and notes to them) as may have been
prepared by an independent certified public accountant or, failing those,
Tenant's internally prepared financial statements. If Tenant is a publicly
traded corporation, Tenant may satisfy its obligations hereunder by providing to
Landlord Tenant's most recent annual and quarterly reports. Tenant will discuss
its financial statements with Landlord and will give
<PAGE> 35
Landlord access to Tenant's books and records in order to enable Landlord to
verify the financial statements. Landlord will not disclose any aspect of
Tenant's financial statements that Tenant designates to Landlord as confidential
except (1) to Landlord's Mortgagee or prospective purchasers of the Building,
(2) in litigation between Landlord and Tenant, and (3) if required by court
order. Tenant shall not be required to deliver the financial statements required
under this Section 25.(p) more than once in any 12-month period unless requested
by Landlord's Mortgagee or a prospective buyer or lender of the Building or an
Event of Default occurs.
(q) LANDLORD'S FEES. Whenever Tenant requests Landlord to take any
action not required of it hereunder or give any consent required or permitted
under this Lease, Tenant will reimburse Landlord for Landlord's reasonable
out-of-pocket costs payable to third parties and incurred by Landlord in
reviewing the proposed action or consent, including without limitation
reasonable attorneys', engineers' or architects' fees, within ten days after
Landlord's delivery to Tenant of a statement of such costs. Tenant will be
obligated to make such reimbursement without regard to whether Landlord consents
to any such proposed action.
(r) TELECOMMUNICATIONS. Tenant and its telecommunications companies,
including but not limited to local exchange telecommunications companies and
alternative access vendor services companies shall have no right of access to
and within the Building, for the installation and operation of
telecommunications systems including but not limited to voice, video, data, and
any other telecommunications services provided over wire, fiber optic,
microwave, wireless, and any other transmission systems, for part or all of
Tenant's telecommunications within the Building and from the Building to any
other location without Landlord's prior written consent (which consent shall not
be unreasonably withheld or delayed). Notwithstanding any provisions of this
Section 25.(r) to the contrary, and provided Tenant obtains Landlord's prior
written consent as aforesaid, Tenant may make or perform certain installations
affecting Tenant's telecommunications systems provided that: (i) any such
installations only affect the Premises; (ii) no such installations affect any of
the Building HVAC, mechanical, electrical or plumbing systems; (iii) Tenant
shall promptly repair and restore any damage caused by any such installation;
and (iv) upon Landlord's request, at the earlier termination or expiration of
this Lease, Tenant shall restore the Premises to the condition that existed on
the date of this Lease.
(s) CONFIDENTIALITY. Tenant acknowledges that the terms and
conditions of this Lease are to remain confidential for Landlord's benefit, and
may not be disclosed by Tenant to anyone, by any manner or means, directly or
indirectly, without Landlord's prior written consent. The consent by Landlord to
any disclosures shall not be deemed to be a waiver on the part of Landlord of
any prohibition against any future disclosure.
(t) HAZARDOUS MATERIALS. The term "HAZARDOUS MATERIALS" means any
substance, material, or waste which is now or hereafter classified or considered
to be hazardous, toxic, or dangerous under any Law relating to pollution or the
protection or regulation of human health, natural resources or the environment,
or poses or threatens to
<PAGE> 36
pose a hazard to the health or safety of persons on the Premises or in the
Building. Tenant shall not use, generate, store, or dispose of, or permit the
use, generation, storage or disposal of Hazardous Materials on or about the
Premises or the Building except in a manner and quantity necessary for the
ordinary performance of Tenant's business, and then in compliance with all Laws.
If Tenant breaches its obligations under this Section 25.(t), Landlord may
immediately take any and all action reasonably appropriate to remedy the same,
including taking all appropriate action to clean up or remediate any
contamination resulting from Tenant's use, generation, storage or disposal of
Hazardous Materials. Tenant shall defend, indemnify, and hold harmless Landlord
and its representatives and agents from and against any and all claims, demands,
liabilities, causes of action, suits, judgments, damages and expenses (including
reasonable attorneys' fees and cost of clean up and remediation) arising from
Tenant's failure to comply with the provisions of this Section 25.(t). This
indemnity provision shall survive termination or expiration of the Lease.
(u) LIST OF EXHIBITS. All exhibits and attachments attached hereto
are incorporated herein by this reference.
<TABLE>
<S> <C> <C>
Exhibit A - Outline of Premises
Exhibit B - Legal Description of Building
Exhibit C - Building Rules and Regulations
Exhibit D - Tenant Finish-Work: Allowance
Exhibit E - Amendment No. 1
Exhibit F - Form of Tenant Estoppel Certificate
Exhibit G - Renewal Option
Exhibit H - [Intentionally Omitted]
Exhibit I - Sample Letter of Credit
Exhibit J - Form of Subordination, Non-Disturbance
and Attornment Agreement
</TABLE>
(v) TIME OF ESSENCE. Time is of the essence of this Lease and each
and all of its provisions.
(w) SIGNAGE. Tenant may install, at Tenant's risk and expense, one
(1) sign on the exterior facade of the Building, one (1) sign (4 feet x 4 feet)
on the ground in front of the main entrance of the Building, and one (1) company
identification/directional sign in the same location as the existing company
identification/directional sign and at a size no bigger than such existing sign,
in accordance with all Laws and subject to Landlord's prior approval and
consent, which approval and consent shall not be unreasonably withheld,
conditioned or delayed.
(x) ACCESS. Tenant shall have twenty-four (24) hour access to the
Premises seven (7) days a week (subject to force majeure, emergency, etc.).
(y) TERMINATION OF PRIOR LEASE. The Lease dated March 17, 1995 by
and between Teachers Insurance and Annuity Association of America (the successor
of
<PAGE> 37
which is Landlord) and Tenant, as amended by that certain First Amendment to
Lease dated as of May 15, 1998 by and between Landlord and Tenant (as amended
the "PRIOR LEASE") for the Premises shall be automatically terminated and,
subject to the provisions of this Section 25(y), of no further force and effect
upon the date ("TERMINATION DATE") that each of the following has occurred:
(i) the Commencement Date (as herein defined) has
occurred; and
(ii) Tenant has paid rent and all other amounts due and
payable by Tenant to Landlord for the period up
through and including the Termination Date under
the Prior Lease (including, without limitation,
all Taxes and Operating Expenses (as such terms
are defined under the Prior Lease) due and owing
up through and including the Termination Date
which may be adjusted after the Termination Date;
provided however, adjustments to Taxes and
Operating Expenses may be paid after the
Termination Date provided such Taxes and Operating
Expenses are paid in accordance with the
provisions of the Prior Lease), which obligations
shall survive the early termination of the Prior
Lease.
After the Termination Date, Tenant shall perform all obligations under the Prior
Lease which expressly survive the expiration or termination of such Lease,
including, without limitation, the provisions of Sections 10.1 and 14.25
thereof. Except as set forth herein, all rights and obligations of the parties
under the Prior Lease shall cease as of the Termination Date.
(z) FAILURE OF TENANT TO CONTINUOUSLY OCCUPY THE PREMISES. If, for
more than one hundred eighty (180) consecutive days or more than one hundred
eighty (180) days in a three hundred sixty-five (365) day period, Tenant (1)
vacates the Premises or (2) fails to continuously operate its business therein,
Landlord may terminate the Lease upon giving written notice to Tenant as of the
date specified in such notice. If Landlord terminates this Lease, then this
Lease shall terminate and neither party shall have any further obligations
hereunder as of the terminate date except as otherwise provided herein and
Tenant shall pay to Landlord all Rent accrued through the termination date.
Thereafter, Landlord may lease the Premises (or any portion thereof) to any
person without liability to Tenant.
(aa) ROOFTOP EQUIPMENT. Tenant may install, at Tenant's risk and
expense and to be used solely by Tenant, a dish style antennae of no more than
five (5) feet in diameter (the "ROOFTOP EQUIPMENT") on the roof of the Building
at a location approved by Landlord. The Rooftop Equipment shall be used only by
Tenant. Before installing the Rooftop Equipment, Tenant shall submit to Landlord
for its approval (which approval shall not be unreasonably withheld, conditioned
or delayed to the extent such plans and specifications do not reflect
alterations which affect the exterior or
<PAGE> 38
structure of the Building or its HVAC, plumbing or mechanical systems or its
base building electrical system) plans and specifications which (A) specify in
detail the design, location and size of the Rooftop Equipment (and, with respect
to the Rooftop Equipment, such specifications shall also contain the frequency
of such equipment) and (B) are sufficiently detailed to allow for the
installation of the Rooftop Equipment in a good and workmanlike manner and in
accordance with all laws, regulations, restrictions (governmental or otherwise)
and architectural guidelines in effect for the area in which the Building is
located as they may be amended from time to time (the "LEGAL REQUIREMENTS").
None of the Rooftop Equipment shall protrude more than five (5) feet above the
elevation of the roof on which it is installed and all such equipment must be
painted in a color reasonably acceptable to Landlord to minimize visibility. If
Landlord approves of such plans, Tenant shall install (in a good and workmanlike
manner), maintain and use the Rooftop Equipment in accordance with all Legal
Requirements and shall obtain all consents and permits required for the
installation and operation thereof; copies of all such permits and evidence of
such consents must be submitted to Landlord before Tenant begins to install the
Rooftop Equipment. Tenant shall thereafter maintain all permits necessary for
the maintenance and operation of the Rooftop Equipment while it is on the
Building and operate and maintain the Rooftop Equipment in such a manner so as
not to unreasonably interfere with any equipment (including any other satellite,
antennae, or other transmission facility) on the Building's roof or in the
Building. Landlord may require that Tenant screen the Rooftop Equipment with a
parapet or other screening device reasonably acceptable to Landlord. All
electrical usage for the Rooftop Equipment shall be separately metered or, at
Landlord's election, shall be placed on the same electrical meter as the
Premises. Tenant shall maintain the Rooftop Equipment and screening device in
good repair and condition. Landlord may relocate the Rooftop Equipment to
another location on the roof of the Building at its sole cost and expense upon
prior written notice to Tenant so long as the new location does not materially
interfere with Tenant's reception received by the satellite or antennae, unless
said relocation is requested because the Rooftop Equipment is unreasonably
interfering with other equipment on the Building's roof or in the Building (in
which case Tenant shall pay for the cost of such relocation). Upon Landlord's
written request (but not otherwise), Tenant shall, at its risk and expense,
remove the Rooftop Equipment (including all wiring related thereto), within five
(5) days after the occurrence of any of the following events: (i) the
termination of Tenant's right to possess the Premises; (ii) the termination of
the Lease; (iii) the expiration of the Term; or (iv) the Premises shall be
vacated by Tenant and any and all assignees and/or sublessees approved by
Landlord hereunder. If Tenant fails to do so, Landlord may remove all or any
part of the Rooftop Equipment and store or dispose of it in any manner Landlord
deems appropriate without liability to Tenant; Tenant shall reimburse Landlord
for all costs incurred by Landlord in connection therewith within ten (10) days
after Landlord's request therefor. Tenant shall repair any damage to the
Building caused by or relating to the Rooftop Equipment, including that which is
caused by its installation, maintenance, use, or removal and shall indemnify
Landlord against all liabilities, losses, damages, and costs arising from the
installation, maintenance, use, or removal of the Rooftop Equipment (UNLESS THE
LIABILITIES, LOSSES, DAMAGES, AND COSTS IN QUESTION WERE CAUSED BY LANDLORD'S
SOLE OR GROSS NEGLIGENCE OR WILFUL MISCONDUCT). All work relating to the Rooftop
Equipment shall, at Tenant's
<PAGE> 39
expense, be coordinated with Landlord's roofing contractor so as not to affect
any warranty for the Building's roof and shall not penetrate the roof.
(bb) NOTICE OF LEASE. Tenant agrees not to record this Lease and,
subject to the provisions of Section 25.(s) above, to keep the terms of this
Lease confidential, but each party hereto agrees, at the request of the others
to execute a so-called Notice of Lease in recordable form complying with
applicable law and reasonably satisfactory to Landlord's attorneys. In no event
shall such document set forth the Rent or other charges payable by Tenant
hereunder.
(cc) LANDLORD'S AUTHORITY, ETC. Landlord represents and warrants
that (i) it is the record owner of the Premises in fee simple, (ii) it has full
right and authority to execute this Lease, and (iii) this Lease does not
conflict with any other agreement to which Landlord is bound.
(dd) FIBER OPTIC LINES. Subject to the provisions of Section 8
above, Tenant, at its sole cost and expense and with Landlord's prior written
consent (which consent shall not be unreasonably withheld or delayed), may
install underground fiber optic lines within the Premises. Notwithstanding any
provisions of this Section 25.(dd) to the contrary, Landlord shall not be deemed
to have unreasonably withheld its consent to any installation that would affect
the Building's structure or its HVAC, plumbing, electrical, or mechanical
systems. Tenant shall promptly repair and restore any damage caused by any such
installation and, upon Landlord's request, at the earlier termination or
expiration of this Lease, Tenant shall restore the Premises to the condition
that existed on the date of this Lease. Any and all such installations of fiber
optic lines shall comply with all applicable Laws.
26. OTHER PROVISIONS. LANDLORD AND TENANT EXPRESSLY DISCLAIM ANY IMPLIED
WARRANTY THAT THE PREMISES ARE SUITABLE FOR TENANT'S INTENDED COMMERCIAL
PURPOSE, AND, EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN, TENANT'S OBLIGATION
TO PAY RENT HEREUNDER IS NOT DEPENDENT UPON THE CONDITION OF THE PREMISES OR THE
PERFORMANCE BY LANDLORD OF ITS OBLIGATIONS HEREUNDER, AND, EXCEPT AS OTHERWISE
EXPRESSLY PROVIDED HEREIN, TENANT SHALL CONTINUE TO PAY THE RENT, WITHOUT
ABATEMENT, SETOFF OR DEDUCTION, NOTWITHSTANDING ANY BREACH BY LANDLORD OF ITS
DUTIES OR OBLIGATIONS HEREUNDER, WHETHER EXPRESS OR IMPLIED.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 40
IN WITNESS WHEREOF, and in consideration of the mutual entry into this
Lease and for other good and valuable consideration, and intending to be legally
bound, each party hereto has caused this Lease Agreement to be duly executed as
a Massachusetts instrument under seal as of the day and year first above
written.
TENANT:
BROOKS AUTOMATION, INC., a Delaware
corporation
By:
Name:
Title:
LANDLORD:
W9/TIB REAL ESTATE LIMITED
PARTNERSHIP, a Delaware limited
partnership
By: W9/TIB Gen-Par, Inc., a Delaware
corporation, its general partner
By:
Name:
Title:
<PAGE> 41
EXHIBIT A
OUTLINE OF PREMISES
<PAGE> 42
EXHIBIT B
LEGAL DESCRIPTION OF BUILDING
The land, with all improvements now or hereafter constructed thereon, situated
in the Town of Chelmsford, Middlesex County, Massachusetts shown as Lot D-1 on a
plan of land entitled "Plan of Land in Chelmsford, Massachusetts as drawn for
Raymond A. & Barbara F. Carye," dated July, 1981 by Merrimac Engineering
Services, Inc., recorded with Middlesex County Northern District Registry of
Deeds in Plan Book 134, Plan 81, more particularly bounded and described as
follows:
NORTHEASTERLY: by Lot C-1 as shown on said plan One Hundred
Forty-Six and 38/100 (146.38) feet;
EASTERLY: by said Lot C-1 by three courses together
measuring Five Hundred Thirty-Five and
13/100 (535.13) feet;
NORTHERLY: by land now or formerly of New England Power
Company Four Hundred Twenty-Six and 80/100
(426.80) feet;
WESTERLY: by land now or formerly of Mass. Electric
Company as shown on said plan Five Hundred
Forty-Six and 86/100 (546.86) feet;
NORTHERLY: by land now or formerly of Mass. Electric
Company One Hundred Four and 59/100 (104.59)
feet;
SOUTHWESTERLY: by Turnpike Road as shown on said plan Three
Hundred Fifteen and 03/100 (315.03) feet;
SOUTHERLY, EASTERLY AND SOUTHERLY:
by Lot E and Elizabeth Drive as shown on
said plan by four courses together totaling
Five Hundred Thirty-Seven and 46/100
(537.46) feet.
Containing 7.63 acres according to said plan.
Together with an easement for drainage in common with others entitled thereto
crossing Lot C-1 dated July 14, 1982, recorded as Instrument No. ________ on
July 15, 1983 and as shown on plan recorded.
<PAGE> 43
LOT C-1 CONTAINS 4.5662 ACRES ACCORDING TO SAID PLAN. TOGETHER WITH THE
EASEMENTS, RIGHTS, BENEFITS AND APPURTENANCES DESCRIBED IN THE FOLLOWING
INSTRUMENTS (ALL RECORDING REFERENCES REFER TO THE MIDDLESEX NORTH DISTRICT
REGISTRY OF DEEDS): (A) EASEMENT DATED JUNE 18, 1980 RECORDED IN BOOK 2425, PAGE
127, AND (B) GRANT OF EASEMENT DATED MAY 11, 1981 AND RECORDED IN BOOK 2481,
PAGE 206.
<PAGE> 44
EXHIBIT C
BUILDING RULES AND REGULATIONS
The following rules and regulations shall apply to the Premises, the
Building, and the appurtenances thereto:
1. Sidewalks, doorways, vestibules, halls, stairways, and other similar
areas shall not be obstructed by Tenant or used by Tenant for purposes other
than ingress and egress to and from the Premises and for going from one to
another part of the Building.
2. Plumbing, fixtures and appliances shall be used only for the purposes
for which designed, and no sweepings, rubbish, rags or other unsuitable material
shall be thrown or deposited therein. Damage resulting to any such fixtures or
appliances from misuse by Tenant or its agents, employees or invitees, shall be
paid by Tenant.
3. No signs, advertisements or notices shall be painted or affixed on or
to any windows or doors or other part of the Building without the prior written
consent of Landlord. No curtains or other window treatments shall be placed
between the glass and the Building standard window treatments.
4. Tenant shall provide all door locks into the Premises, at the cost of
Tenant, and Tenant shall not place any additional door locks in the Premises
without providing Landlord with a key for such locks. Tenant shall furnish to
Landlord a reasonable number of keys to the Premises, at Tenant's cost.
5. Landlord may prescribe reasonable weight limitations and determine the
locations for safes and other heavy equipment or items, which shall in all cases
be placed in the Building so as to distribute weight in a manner reasonably
acceptable to Landlord which may include the use of such supporting devices as
Landlord may require. All damages to the Building caused by the installation or
removal of any property of Tenant, or done by Tenant's property while in the
Building, shall be repaired at the expense of Tenant.
6. Corridor doors, when not in use, shall be kept closed to the extent
required by applicable law. Nothing shall be swept or thrown into the corridors,
halls, elevator shafts or stairways. No birds or animals shall be brought into
or kept in, on or about the Premises. No portion of the Premises shall at any
time be used or occupied as sleeping or lodging quarters.
7. Tenant shall cooperate with Landlord's employees in keeping the
Premises neat and clean.
8. Tenant shall not make or permit any vibration or improper,
objectionable or unpleasant noises or odors in the Building or otherwise
interfere in any way with other tenants or persons having business with them.
<PAGE> 45
9. Tenant shall not use or keep in the Building any flammable or explosive
fluid or substance.
10. Landlord will not be responsible for lost or stolen personal property,
money or jewelry from the Premises or public or common areas regardless of
whether such loss occurs when the area is locked against entry or not.
11. Tenant shall not conduct any activity on or about the Premises or
Building which will draw pickets, demonstrators, or the like.
12. All vehicles are to be currently licensed, in good operating
condition, parked for business purposes having to do with Tenant's business
operated in the Premises, parked within designated parking spaces, one vehicle
to each space. No vehicle shall be parked as a "billboard" vehicle in the
parking lot. Any vehicle parked improperly may be towed away. Tenant, Tenant's
agents, employees, vendors and customers who do not operate or park their
vehicles as required shall subject the vehicle to being towed at the expense of
the owner or driver. Tenant shall indemnify, hold and save harmless Landlord of
any liability arising from the towing of any vehicles belonging to a Tenant
Party.
<PAGE> 46
EXHIBIT D
TENANT FINISH-WORK: ALLOWANCE
1. Except as set forth in this Exhibit, Tenant accepts the Premises in
their "AS-IS" condition on the date that this Lease is entered into.
2. Tenant shall provide to Landlord for its approval final working
drawings, prepared by an architect that has been approved by Landlord (which
approval shall not unreasonably be withheld, delayed or conditioned), of all
alterations, improvements and installations that Tenant proposes to construct,
install and complete in the Premises; such working drawings shall include the
partition layout, ceiling plan, electrical outlets and switches, telephone
outlets, drawings for any modifications to the mechanical and plumbing systems
of the Building, and detailed plans and specifications for the construction of
the alterations, improvements and installations called for under this Exhibit in
accordance with all applicable governmental laws, codes, rules, and regulations.
If any of Tenant's proposed construction work will affect the Building's HVAC,
electrical, mechanical, or plumbing systems, then the working drawings
pertaining thereto must be approved by the Building's engineer of record.
Landlord's approval or disapproval, as the case may be, of the final working
drawings (inclusive of any approval required by the Building's engineer of
record) shall be completed within ten (10) business days of Landlord's receipt
of such working drawings. If Landlord disapproves the final working drawings,
Landlord shall specify the reasons for such disapproval in writing to Tenant.
Landlord's approval of such working drawings shall not be unreasonably withheld,
delayed or conditioned, provided that (a) they comply with all applicable laws,
rules, and regulations, (b) such working drawings are sufficiently detailed to
allow construction of the alterations, improvements and installations in a good
and workmanlike manner, (c) the alterations, improvements and installations
depicted thereon conform to the rules and regulations promulgated from time to
time by Landlord for the construction of tenant alterations, improvements and
installations (a copy of which has been delivered to Tenant), and (d) the
alterations, improvements and installations do not affect the Building's
Structure or any of its HVAC, electrical, mechanical or plumbing systems. As
used herein, "WORKING DRAWINGS" shall mean the final working drawings approved
by Landlord, as amended from time to time by any approved changes thereto, and
"WORK" shall mean all alterations, improvements and installations to be
constructed in accordance with and as indicated on the Working Drawings.
Landlord's approval of the Working Drawings shall not be a representation or
warranty of Landlord that such drawings are adequate for any use or comply with
any law, but shall merely be the consent of Landlord thereto. Landlord shall, at
Tenant's request, sign the Working Drawings to evidence its review and approval
thereof. All changes in the Work must receive the prior written approval of
Landlord (which approval shall not be withheld, delayed or conditioned), and in
the event of any such approved change Tenant shall, upon completion of the Work,
furnish Landlord with an accurate, reproducible "as-built" plan of the
improvements as constructed.
<PAGE> 47
3. The Work shall be performed only by contractors and subcontractors
approved in writing by Landlord, which approval shall not be unreasonably
withheld or delayed. All contractors and subcontractors shall be required to
procure and maintain insurance against such risks, in such amounts, and with
such companies as Landlord may reasonably require. Certificates of such
insurance, with paid receipts therefor, must be received by Landlord before the
Work is commenced. Promptly upon Landlord's approval of the Working Drawings and
delivery of the Premises to Tenant, Tenant shall commence the construction of
the Work and diligently and continuously pursue the completion of the same. The
Work shall be performed in a good and workmanlike manner free of defects, shall
conform strictly with the Working Drawings, and shall be performed in such a
manner and at such times as not to interfere with or delay Landlord's other
contractors, the operation of the Building, and the occupancy thereof by other
tenants. All contractors and subcontractors shall contact Landlord and schedule
time periods during which they may use Building facilities in connection with
the Work (e.g., elevators, excess electricity, etc.).
4. The entire cost of performing the Work (including, without limitation,
design of the Work and preparation of the Working Drawings, costs of
construction, labor and materials, electrical usage during construction,
additional janitorial services, general tenant signage, related taxes and
insurance costs, all of which costs are herein collectively called the "TOTAL
CONSTRUCTION COSTS") in excess of the Construction Allowance (as hereinafter
defined) shall be paid by Tenant.
5. Landlord shall provide to Tenant a construction allowance (the
"CONSTRUCTION ALLOWANCE") equal to the lesser of (a) $5.50 per rentable square
foot in the Premises or (b) the Total Construction Costs, as adjusted for any
approved changes to the Work.
Subject to the terms and conditions of this Lease, Landlord shall pay the
Construction Allowance to Tenant for the purpose of financing a portion of the
Work. As conditions to Tenant's right to receive the Construction Allowance: (i)
Tenant shall not be in default under the Lease; (ii) the Lease shall be in full
force and effect; (iii) the Work, or a portion of the Work, shall be, in
Landlord's reasonable discretion, substantially complete; (iv) Tenant shall
furnish to Landlord: (A) if the entire Work is substantially complete, a
Certificate of Occupancy respecting the Premises; and (B) such evidence as
Landlord may reasonably require to evidence that all persons furnishing or
supplying labor and materials in connection with the construction of the Work,
or in the case of completion of a portion of the Work, have been paid and that
no lien exists of record with respect thereto; and (v) Tenant shall not request
any portion of the Construction Allowance more than once a month. Landlord shall
fund the Construction Allowance within twenty (20) business days from Tenant's
written request for the same provided that Tenant has complied with the
requirements set forth in the preceding sentence. Upon paying the full amount of
the Construction Allowance to Tenant in accordance with the provisions hereof,
Landlord shall have no further obligation to extend any credit to Tenant.
<PAGE> 48
6. In consideration for Landlord's management and supervision of services
performed in connection with the Work, Tenant shall pay to Landlord, within ten
(10) business days after demand therefor, the actual costs incurred by Landlord
to review and approve the Working Drawings and/or any drafts and/or
modifications thereto and to review the construction of the Work.
7. At Tenant's election and subject to Tenant's prior written notice of
same to Landlord, Tenant may use all or a portion of the Construction Allowance
(as defined above) to finance all or a portion of the Work as defined above
and/or all or a portion of the Work as defined in the 16 Elizabeth Drive Lease
subject to the provisions of this Lease as they relate to construction of the
Work as defined above and to the provisions of the 16 Elizabeth Drive Lease as
they relate to construction of the Work as defined in the 16 Elizabeth Drive
Lease.
<PAGE> 49
EXHIBIT E
AMENDMENT NO. 1
This Amendment No. 1 (this "AMENDMENT") is executed as of , 2000
between W9/TIB REAL ESTATE LIMITED PARTNERSHIP, a Delaware limited partnership
("LANDLORD"), and BROOKS AUTOMATION, INC., a Delaware corporation ("TENANT"),
for the purpose of amending the Lease Agreement between Landlord and Tenant
dated January 31, 2000 (the "LEASE"). Capitalized terms used herein but not
defined shall be given the meanings assigned to them in the Lease.
AGREEMENTS
For valuable consideration, whose receipt and sufficiency are
acknowledged, Landlord and Tenant agree as follows:
1. CONDITION OF PREMISES. Tenant has accepted possession of the Premises
pursuant to the Lease. Any improvements required by the terms of the Lease to be
made by Landlord have been completed to the full and complete satisfaction of
Tenant in all respects and Landlord has fulfilled all of its duties under the
Lease with respect to such initial tenant improvements. Furthermore, Tenant
acknowledges that the Premises are suitable for the Permitted Use.
2. COMMENCEMENT DATE. The Commencement Date of the Lease is
______________, 2000. If the Commencement Date set forth in the Lease is
different than the date set forth in the preceding sentence, then the
Commencement Date as contained in the Lease is amended to be the Commencement
Date set forth in the preceding sentence.
3. EXPIRATION DATE. The Term is scheduled to expire on , 199___.
If the scheduled expiration date of the initial Term as set forth in the Lease
is different than the date set forth in the preceding sentence, then the
scheduled expiration date as set forth in the Lease is hereby amended to the
expiration date set forth in the preceding sentence.
4. CONTACT NUMBERS. Tenant's telephone number in the Premises is .
Tenant's telecopy number in the Premises is .
5. RATIFICATION. Tenant hereby ratifies and confirms its obligations under
the Lease, and represents and warrants to Landlord that it has no defenses
thereto. Additionally, Tenant further confirms and ratifies that, as of the date
hereof, the Lease is and remains in good standing and in full force and effect,
and Tenant has no claims, counterclaims, set-offs or defenses against Landlord
arising out of the Lease or in any way relating thereto or arising out of any
other transaction between Landlord and Tenant.
6. BINDING EFFECT; GOVERNING LAW. Except as modified hereby, the Lease
shall remain in full effect and this Amendment shall be binding upon Landlord
and Tenant and their respective successors and assigns. If any inconsistency
exists or arises between the terms of this Amendment and the terms of the Lease,
the terms of this Amendment shall prevail. This Amendment shall be governed by
the laws of the State in which the Premises is located.
<PAGE> 50
7. COUNTERPARTS. This Amendment may be executed in multiple counterparts,
each of which shall constitute an original, but all of which shall constitute
one document.
Executed as of the date first written above.
TENANT:
BROOKS AUTOMATION, INC., a Delaware
corporation
By:
Name:
Title:
LANDLORD:
W9/TIB REAL ESTATE LIMITED
PARTNERSHIP, a Delaware limited
partnership
By: W9/TIB Gen-Par, Inc., a Delaware
corporation, its general partner
By:
Name:
Title:
<PAGE> 51
EXHIBIT F
FORM OF TENANT ESTOPPEL CERTIFICATE
The undersigned is the Tenant under the Lease (defined below) between
W9/TIB REAL ESTATE LIMITED PARTNERSHIP, a Delaware limited partnership, as
Landlord, and the undersigned as Tenant, of the Premises located at 15 Elizabeth
Drive, Chelmsford, Massachusetts, and hereby certifies as follows:
1. The Lease consists of the original Lease Agreement dated as of ,
199___ between Tenant and Landlord['s predecessor-in-interest] and the following
amendments or modifications thereto (if none, please state "none"):
The documents listed above are herein collectively referred to as the "LEASE"
and represent the entire agreement between the parties with respect to the
Premises. All capitalized terms used herein but not defined shall be given the
meaning assigned to them in the Lease.
2. The Lease is in full force and effect and has not been modified,
supplemented or amended in any way except as provided in Section 1 above.
3. The Term commenced on , 2000 and the Term expires,
excluding any renewal options, on , 200__, and Tenant has no option
to purchase all or any part of the Premises or the Building or, except as
expressly set forth in the Lease, any option to terminate or cancel the Lease.
4. Tenant currently occupies the Premises described in the Lease and
Tenant has not transferred, assigned, or sublet any portion of the Premises nor
entered into any license or concession agreements with respect thereto except as
follows (if none, please state "none"):
5. All monthly installments of Basic Rent, all Additional Rent and all
monthly installments of estimated Additional Rent have been paid when due
through . The current monthly installment of Basic Rent is $ .
<PAGE> 52
6. All conditions of the Lease to be performed by Landlord necessary to
the enforceability of the Lease have been satisfied and Landlord is not in
default thereunder. In addition, Tenant has not delivered any notice to Landlord
regarding a default by Landlord thereunder.
7. As of the date hereof, there are no existing defenses or offsets, or,
to the undersigned's knowledge, claims or any basis for a claim, that the
undersigned has against Landlord and no event has occurred and no condition
exists, which, with the giving of notice or the passage of time, or both, will
constitute a default under the Lease.
8. No rental has been paid more than thirty (30) days in advance and no
security deposit has been delivered to Landlord except as provided in the Lease.
9. If Tenant is a corporation, partnership or other business entity, each
individual executing this Estoppel Certificate on behalf of Tenant hereby
represents and warrants that Tenant is a duly formed and existing entity
qualified to do business in the state in which the Premises is located and that
Tenant has full right and authority to execute and deliver this Estoppel
Certificate and that each person signing on behalf of Tenant is authorized to do
so.
10. There are no actions pending against Tenant under any bankruptcy or
similar laws of the United States or any state.
11. Other than in compliance with all applicable laws and incidental to
the ordinary course of the use of the Premises, the undersigned has not used or
stored any hazardous substances in the Premises.
12. All tenant improvement work to be performed by Landlord under the
Lease has been completed in accordance with the Lease and has been accepted by
the undersigned and all reimbursements and allowances due to the undersigned
under the Lease in connection with any tenant improvement work have been paid in
full.
13. Tenant acknowledges that this Estoppel Certificate may be delivered to
Landlord, Landlord's Mortgagee or to a prospective mortgagee or prospective
purchaser, and their respective successors and assigns, and acknowledges that
Landlord, Landlord's Mortgagee and/or such prospective mortgagee or prospective
purchaser will be relying upon the statements contained herein in disbursing
loan advances or making a new loan or acquiring the property of which the
Premises are a part and that receipt by it of this certificate is a condition of
disbursing loan advances or making such loan or acquiring such property.
Executed as of , 199 .
TENANT:
<PAGE> 53
BROOKS AUTOMATION, INC., a Delaware
corporation
By:
Name:
Title:
<PAGE> 54
EXHIBIT G
RENEWAL OPTION
Provided no Event of Default exists and Tenant is occupying the entire
Premises at the time of such election, Tenant may renew this Lease for one
additional period of five (5) years, by delivering written notice of the
exercise thereof to Landlord not earlier than fifteen (15) months nor later than
twelve (12) months before the expiration of the Term. The Basic Rent payable for
each month during such extended Term shall be the prevailing rental rate (the
"PREVAILING RENTAL RATE"), at the commencement of such extended Term, for
renewals of space of equivalent quality, size, utility and location, with the
length of the extended Term and the credit standing of Tenant to be taken into
account. Within thirty (30) days after receipt of Tenant's notice to renew,
Landlord shall deliver to Tenant written notice of the Prevailing Rental Rate
and shall advise Tenant of the required adjustment to Basic Rent, if any, and
the other terms and conditions offered. Tenant shall, within ten (10) days after
receipt of Landlord's notice, notify Landlord in writing whether Tenant accepts
or rejects Landlord's determination of the Prevailing Rental Rate. If Tenant
timely notifies Landlord that Tenant accepts Landlord's determination of the
Prevailing Rental Rate (and failure of Tenant to notify Landlord within the time
period prescribed above shall be deemed acceptance) or if, after a timely
rejection by Tenant of such determination, the Prevailing Rental Rate is
determined according to the procedures set forth in this Exhibit, then, on or
before the commencement date of the extended Term, Landlord and Tenant shall
execute an amendment to this Lease extending the Term on the same terms provided
in this Lease, except as follows:
(a) Basic Rent shall be adjusted to the Prevailing Rental Rate;
(b) Tenant shall have no further renewal option unless expressly
granted by Landlord in writing; and
(c) Landlord shall lease to Tenant the Premises in their
then-current condition, and Landlord shall not provide to Tenant any
allowances (e.g., moving allowance, construction allowance, and the like)
or other tenant inducements.
If Tenant rejects Landlord's determination of the Prevailing Rental Rate, Tenant
may, but only within ten (10) days after receipt of Landlord's notice, require
by written notice to Landlord that the determination of Prevailing Rental Rates
be made by brokers. In such event, within ten (10) days thereafter, each party
shall select a qualified commercial real estate broker with at least ten (10)
years experience in appraising property and buildings in the city or submarket
in which the Premises are located. The two brokers shall give their opinion of
Prevailing Rental Rates within ten (10) days after their retention. In the event
the opinions of the two brokers differ and, after good faith efforts over the
succeeding ten (10) day period, they cannot mutually agree, the brokers shall
immediately and jointly appoint a third broker with the qualifications specified
above. This third broker shall immediately (within five (5) days) choose either
the determination of
<PAGE> 55
Landlord's broker or Tenant's broker and such choice of this third broker shall
be final and binding on Landlord and Tenant. Each party shall pay its own costs
for its real estate broker. The parties shall equally share the costs of any
third broker. The parties shall immediately confirm the renewal term, Basic Rent
and the other terms and conditions so determined, in writing.
Tenant's rights under this Exhibit shall terminate if (1) this Lease or
Tenant's right to possession of the Premises is terminated, (2) Tenant assigns
any of its interest in this Lease or sublets any portion of the Premises, (3)
Tenant fails to timely exercise its option under this Exhibit, time being of the
essence with respect to Tenant's exercise thereof, or (4) Landlord determines,
in its sole but reasonable discretion, that Tenant's financial condition or
creditworthiness has materially deteriorated since the date of this Lease.
<PAGE> 56
EXHIBIT H
[Intentionally Omitted]
<PAGE> 57
EXHIBIT I
SAMPLE LETTER OF CREDIT
Beneficiary/Landlord: Issuance Date:
W9/TIB Real Estate Limited Partnership ______________________, 2000
c/o Archon Group, L.P.
1275 K Street NW, Suite 900 Irrevocable Standby Letter
Washington, DC 20005 of Credit No. _______________
Applicant/Accountee/Tenant: Credit Amount:
Brooks Automation, Inc. USD $_____________________
15 Elizabeth Drive Up to an Aggregate Thereof
Chelmsford, MA 01824-4111 Date and Place of Expiry:
_______________, _____
At Our Counters in Boston, MA
Ladies and Gentlemen:
We hereby issue our irrevocable standby letter of credit in your favor for
the account of the applicant for an aggregate amount not to exceed
_______________________________US DOLLARS available for payment by presentation
of your draft(s) drawn on ourselves at sight, and accompanied by the following
documents:
1. Your statement/certificate, on your letterhead, signed by a person
purporting to be your authorized officer/representative, appropriately completed
in the following form:
A. "The undersigned, an authorized officer/representative of W9/TIB Real
Estate Limited Partnership (the "Landlord"), hereby certifies with regard to
__________ standby letter of credit no. __________ that Brooks Automation, Inc.
(the "Tenant") is in default relative to the Lease Agreement dated January 31,
2000 (the "Lease") by and between Landlord and Tenant and such default has
continued uncured beyond all applicable notice and grace periods."
OR
B. "We are in receipt of _______________ Notice of Non-Extension of its
letter of credit no. _______________ and Brooks Automation, Inc. (the "Tenant")
has failed to provide a replacement letter of credit reasonably acceptable to us
as of the date of our drawing and the Tenant remains liable to us pursuant to
the Lease."
2. The original of this letter of credit (for endorsement of drawing),
which will be returned unless the credit is fully utilized.
<PAGE> 58
Partial drawings are permitted.
Draft(s) must indicate the name of the issuing bank, the letter of credit
number and must be presented at this office (the address specified below).
It is a condition of this letter of credit that it shall be deemed
automatically extended without amendment for an additional period of one year
from the present or each future expiration date hereof, but not beyond July 31,
2010, unless at least forty-five (45) days prior to any such expiration date we
notify you by certified mail, that we elect not to so extend this letter of
credit for any such additional period. Upon receipt by you of such notice, you
may draw hereunder your draft(s) at sight on ourselves for the then full amount
of this letter of credit accompanied by your statement as specified above.
This letter of credit is transferable in its entirety, but not in part, to
any successor landlord under the Lease and may be successively transferred. If
it is your intention to transfer your interest hereunder, kindly return the
letter of credit to us for appropriate endorsement and furnish us with your
instructions. Please note your signature on your request for transfer must be
authenticated by your bank. (Transfer form is attached.) In the event of
transfer all required documents are to be signed by the transferee.
This letter of credit sets forth in full the terms of our obligations to
you, and our undertaking shall not in any way be amended or amplified by
reference to any documents, instruments or any agreement referred to herein or
to which this letter of credit related, and such reference, if any, shall not be
deemed to incorporate herein by reference any document, instrument or agreement.
Except as otherwise expressly stated herein, this letter of credit is
subject to the International Standby Practices (ISP98), the International
Chamber of Commerce, Publication No. 590, and shall, as to matters not governed
by ISP98, be governed by and construed in accordance with the laws of the
Commonwealth of Massachusetts.
We engage with you that all draft(s) drawn under and in compliance with
the terms and conditions of this letter of credit shall be duly honored on
presentation to us at our office at _______________, Boston, MA _______, Attn:
_______________, ____ Floor on or before the expiring date as specified above or
any automatically extended date herein before set forth.
Very truly yours,
By: _______________________________
Name:
Title:
<PAGE> 59
TRANSFER
This form is to be used where a Letter of Credit is transferred
in its entirety and no substitution of invoices is involved.
Date
Re: Credit issued or advised by
-----------------------------
Gentlemen:
For value received, the undersigned beneficiary hereby irrevocably transfers to:
(Name of Second Beneficiary)
(Address)
(Name of Advising Bank)
(Address)
all rights of the undersigned beneficiary to draw under the above Letter of
Credit in its entirety.
I. By this transfer, all rights of the undersigned beneficiary in such
Letter of Credit are transferred to the Second Beneficiary and the Second
Beneficiary shall have the sole rights as beneficiary thereof, including sole
rights relating to any amendment, whether increases or extensions or other
amendments and whether now existing or hereafter made. All amendments are to be
advised direct to the Second Beneficiary without necessity of any consent of or
notice to the undersigned beneficiary.
<PAGE> 60
The advice of such Letter of Credit is returned herewith, and we ask you
to endorse the transfer on the reverse thereof, and forward it direct to the
Second Beneficiary with your customary notice of transfer, or advise the letter
of credit to the Second Beneficiary by telex/SWIFT.
SIGNATURE AUTHENTICATED Very truly yours,
(Bank)
By: ______________________________
(Authorized Signature) Name:
Title:
<PAGE> 61
EXHIBIT J
SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
This AGREEMENT is made and entered into as of ___________________, 2000,
by and among LaSalle National Bank, as Trustee for GS Mortgage Securities
Corporation II Commercial Mortgage Pass-Through Certificates, Series 1998-GSFL1
("Lender"), W9/TIB Real Estate Limited Partnership ("Landlord") and Brooks
Automation, Inc. ("Tenant").
1. RECITALS.
1.1 Mortgage. Lender is the holder of a Promissory Note dated
________________, 19__, in the original principal amount of $_________________
of Landlord, which is secured, inter alia, by a Mortgage and Security Agreement
(the "Mortgage") and Assignment of Lease and Rents (the "Lease Assignment")
covering premises more particularly described in the Mortgage (the "Premises").
1.2 Lease. Landlord and Tenant entered into a Lease dated January
31, 2000 (the "Lease"), whereby Landlord demised to Tenant a portion of the
Premises (the "Demised Premises").
2. CONSIDERATION. The terms of the Lease constitute a material inducement
to Lender's consent thereto and entering into and performing this Agreement.
3. SUBORDINATION OF THE LEASE. This Lease shall be and is hereby made
subject and subordinate to the Mortgage.
4. NON-DISTURBANCE. Lender shall not, in the exercise of any right,
remedy, or privilege granted by the Mortgage or the Lease Assignment, or
otherwise available to Lender at law or in equity, disturb Tenant's possession
under the Lease so long as:
(a) Tenant is not in default beyond any applicable grace periods under any
provision of the Lease or this Agreement at the time Lender exercises any such
right, remedy or privilege; and
(b) The Lease at that time is in force and effect according to its
original terms, or with such amendments or modifications as Lender shall have
approved, if such approval is required by the terms of the Mortgage or the Lease
Assignment; and
(c) Tenant thereafter continues to fully and punctually perform all of its
obligations under the Lease without default thereunder beyond any applicable
cure period; and
<PAGE> 62
(d) Tenant attorns to or at the direction of Lender, as provided in
Paragraph 5. Without limiting the foregoing, and so long as the foregoing
conditions are met, Lender agrees that (i) Tenant will not be named as a party
to any foreclosure or other proceeding instituted by Lender to enforce the terms
of the Mortgage or the Lease Assignment; (ii) any sale or other transfer of the
Demised Premises or of the Landlord's interest in the Lease, pursuant to
foreclosure or any voluntary conveyance or other proceeding in lieu of
foreclosure, will be subject and subordinate to Tenant's possession under the
Lease; and (iii) the Lease will continue in force and effect according to its
original terms, or with such amendments as Lender shall have approved, if such
approval is required by the terms and conditions of the Mortgage or the Lease
Assignment.
5. ATTORNMENT. Tenant shall attorn to Lender, to any receiver or similar
official for the Demised Premises appointed at the instance and request, or with
the consent, of Lender and to any person who acquires the Demised Premises, or
the Landlord's interest in the Lease, or both, pursuant to Lender's exercise of
any right, remedy or privilege granted by the Mortgage, or otherwise at law or
in equity. Without limitation, Tenant shall attorn to any person or entity that
acquired the Demised Premises pursuant to foreclosure of the Mortgage, or by any
proceeding or voluntary conveyance in lieu of such foreclosure, or from Lender,
whether by sale, exchange or otherwise. Any attornment to anyone other than
Lender shall be conditioned upon Tenant receiving a non-disturbance from such
entity.
Upon any attornment under this Paragraph 5, the Lease shall continue in
full force and effect as a direct lease between Tenant and the person or entity
to whom Tenant attorns, except that such person or entity shall not be:
(i) liable for any breach, act or omission of any prior landlord; or
(ii) subject to any offsets, claims or defenses which Tenant might have
against any prior landlord; or
(iii) bound by any rent or additional rent or other payment in lieu of
rent which Tenant might have paid to any prior landlord more than 30 days in
advance of its due date under the Lease or which such person or entity has
physical possession of; or
(iv) bound by any amendment or modification of the Lease made without
Lender's written consent, where such consent is required by the Mortgage; or
(v) bound by any notice given by Tenant to Landlord, whether or not such
notice is given pursuant to the terms of the Lease, unless a copy thereof was
then also given to Lender; or
(vi) be liable for any security deposit or other sums held by any prior
landlord, unless actually received.
<PAGE> 63
The person or entity to whom Tenant attorns shall be liable to Tenant under the
Lease only during such person or entity's period of ownership, and such
liability shall not continue or survive as to the transferor after a transfer by
such person or entity of its interest in the Lease and the Demised Premises.
6. REPRESENTATIONS AND WARRANTIES.
6.1 Joint and Several. Landlord and Tenant hereby jointly and
severally represent and warrant to Lender as follows regarding the Lease:
(a) A true and correct copy of the Lease (inclusive of all riders and
exhibits thereto) is attached to the counterpart of this Agreement being
delivered to Lender. There are no other oral or written agreements,
understandings or the like between Landlord and Tenant relating to the Demised
Premises or the Lease transaction.
(b) Tenant has accepted possession of the Demised Premises, is in
occupancy thereof under the Lease, and the term commenced on ____________ ___ ,
2000.
(c) Under the Lease, Tenant is presently obligated to pay rent without
present right of defense or offset, at the rate of $47,932.50 per month. Rent is
paid through and including ______________ ___, 2000. No rent has been paid more
than 30 days in advance, and Tenant has no claim against the Landlord for any
deposits or other sums.
(d) The Lease has not been modified, altered or amended in any respect.
(e) All of the improvements contemplated by the Lease have been entirely
completed as required therein.
(f) The addresses for notices to be sent to Tenant and Landlord are as set
forth in the Lease.
(g) To Tenant's knowledge, Tenant has no right of first refusal, option or
other right to purchase the Premises or any part thereof, including, without
limitation, the Demised Premises.
6.2 Several. Landlord and Tenant severally represent and warrant to Lender
with respect to themselves, but not with respect to the other:
(a) The execution of the Lease was duly authorized, the Lease was properly
executed and is in full force and effect and is valid, binding and enforceable
against Tenant and Landlord and there exists no default, nor state of facts
which with notice, the passage of time, or both, could ripen into a default, on
the part of either Tenant or Landlord.
(b) There has not been filed by or against nor, to the best of the
knowledge and belief of the representing party, is there threatened against or
contemplated by, Landlord or Tenant, a petition in bankruptcy, voluntary or
otherwise, any assignment for
<PAGE> 64
the benefit of creditors, any petition seeking reorganization or arrangement
under the bankruptcy laws of the United States or of any state thereof, or any
other action brought under said bankruptcy laws.
(c) There has not been any assignment, hypothecation or pledge of the
Lease or rents accruing under the Lease, other than pursuant to the Mortgage and
the Lease Assignment. Tenant makes the representation set forth in this
subparagraph only to its best knowledge and belief.
7. RENTS. Landlord and Tenant jointly and severally acknowledge that the
Lease Assignment provides for the direct payment to Lender of all rents and
other monies due and to become due to Landlord under the Lease upon the
occurrence of certain conditions as set forth in the Lease Assignment without
Lender's taking possession of the Demised Premises or otherwise assuming
Landlord's position or any of Landlord's obligations under the Lease. Upon
receipt from Lender of written notice to pay all such rents and other monies to
or at the direction of Lender, Landlord authorizes and directs Tenant thereafter
to make all such payments to or at the direction of Lender, releases Tenant of
any and all liability to Landlord for any and all payment so made, and shall
defend, indemnify and hold Tenant harmless from and against any and all claims,
demands, losses, or liabilities asserted by, through or under Landlord (except
by Lender) for any and all payments so made. Upon receipt of such notice, Tenant
thereafter shall pay all monies then due and becoming due from Tenant under the
Lease to or at the direction of Lender, notwithstanding any provision of the
Lease to the contrary. Tenant agrees that neither Lender's demanding or
receiving any such payments, nor Lender's exercising any other right, remedy,
privilege, power or immunity granted by the Mortgage or the Lease Assignment,
will operate to impose any liability upon Lender for performance of any
obligation of Landlord under the Lease unless and until Lender elects otherwise
in writing. Such payments shall continue until Lender directs Tenant otherwise
in writing.
Tenant agrees not to pay any rent under the Lease more than 30 days in
advance without Lender's consent. The provisions of this Paragraph 7 will apply
from time to time throughout the term of the Lease.
8. CURE. If Tenant becomes entitled to terminate the Lease or offset,
withhold or abate rents because of any default by Landlord, then Tenant shall
give Lender written notice specifying Landlord's default. Lender then shall have
the right, but not the obligation, to cure the specified default within the
following time periods:
(a) Fifteen days after receipt of such notice with respect to defaults
that can be cured by the payment of money; or
(b) Thirty days after receipt of such notice with respect to any other
default; unless the cure requires Lender to obtain possession of the Demised
Premises, in which case such thirty day period shall not commence until Lender
acquires possession, so long
<PAGE> 65
as Lender proceeds promptly to acquire possession of the Demised Premises with
due diligence, by foreclosure of the Mortgage or otherwise.
Nothing contained in this Paragraph 8 shall require Lender to commence or
continue any foreclosure or other proceedings, or, if Lender acquires possession
of the Demised Premises, to continue such possession, if all defaults specified
by Tenant in its notice are cured. Possession by a receiver, or other similar
official appointed at the instance, or with the consent, of Lender shall
constitute possession by Lender for all purposes under this Paragraph 8.
9. ESTOPPEL LETTERS. Whenever reasonably requested by Lender, Landlord and
Tenant from time to time shall severally execute and deliver to or at the
direction of Lender, and without charge to Lender, one or more written
certifications of all of the matters as set forth in Paragraph 6, whether Tenant
has exercised any renewal option or options and any other information the Lender
may reasonably require to confirm the current status of the Lease, including,
without limitation, a confirmation that the Lease is and remains subordinated as
provided in this Agreement.
10. CASUALTY AND EMINENT DOMAIN. Landlord and Tenant jointly and severally
agree that the Mortgage permits Lender, at its option, to apply to the
indebtedness from time to time secured by the Mortgage any and all insurance
proceeds payable with respect to any casualty loss at the Demised Premises and
any and all awards or other compensation that may be payable for the
condemnation of all or any portion of the Demised Premises, or any interest
therein, or by way of negotiated settlement or conveyance in lieu of
condemnation; and Landlord and Tenant jointly and severally consent to any such
application by Lender. Notwithstanding the foregoing, Landlord and Lender agree
that any and all insurance or condemnation proceeds payable with respect to
Tenant's property or the interruption or relocation of Tenant's business (except
for rental loss insurance proceeds) will be paid to Tenant, so long as they do
not reduce the proceeds otherwise payable to Lender.
11. NOTICES. All notices, demands, and other communications that must or
may be given or made in connection with this Agreement must be in writing and,
unless receipt is expressly required, will be deemed delivered or made 5 days
after having been mailed by registered or certified mail, return receipt
requested, or by express mail, in any event with sufficient postage affixed, and
addressed to the parties as follows:
TO LENDER: c/o AMRESCO Services, L.P.
235 Peachtree Street, N.E.
Suite 900
Atlanta, Georgia 30303
Attn.: Private Sector Servicing
TO LANDLORD: W9/TIB Real Estate Limited Partnership
c/o Archon Group, L.P.
1275 K Street NW, Suite 900
<PAGE> 66
Washington, DC 20005
TO TENANT: Brooks Automation, Inc.
15 Elizabeth Drive
Chelmsford, MA 01824-4111
Attn: Jeffrey Myrdek, C.E.M., Manager of
Corporate Facilities
Such addresses may be changed by notice pursuant to this Paragraph 11; but
notice of change of address is effective only upon receipt. Landlord and Tenant
jointly and severally agree that they will furnish Lender with copies of all
notices relating to the Lease. All communications to Lender shall reference
"AMRESCO Loan No.: __________ ".
12. SUCCESSORS AND ASSIGNS. As used in this Agreement, the word "Tenant"
shall mean Tenant and any subsequent holder or holders of an interest under the
Lease, as the text may require, provided that the interest of such holder is
acquired in accordance with the terms and provisions of the Lease and the word
"Lender" shall mean Lender or any other subsequent holder or holders of the
Mortgage or any party acquiring title to the Demised Premises by purchase at a
foreclosure sale, by deed of the Lender, or otherwise. Subject to the foregoing,
this Agreement shall bind and inure to the benefit of Landlord, Tenant and
Lender, their legal representatives, successors and assigns. The terms Lease,
Mortgage and Lease Assignment shall include any and all amendments,
modifications, replacements, substitutions, extensions, renewals and supplements
thereto.
13. FURTHER ASSURANCES. Landlord and Tenant from time to time shall
execute and deliver at Lender's request all instruments that may be necessary or
appropriate to evidence their agreement hereunder provided such instrument
neither increases Tenant's obligations or decreases its rights under the Lease.
14. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all such
counterparts shall constitute one and the same instrument.
15. SEVERABILITY. A determination that any provision of this Agreement is
unenforceable or invalid shall not affect the enforceability or validity of any
other provision, and any determination that the application of any provision of
this Agreement to any person or to any person or to particular circumstances is
illegal or unenforceable shall not affect the enforceability or validity of such
provision as it may apply to other persons or circumstances.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 67
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
LENDER:
LASALLE NATIONAL BANK, as Trustee for GS Mortgage Securities Corporation II
Commercial Mortgage Pass-Through Certificates, Series 1998-GSFL1
By: AMRESCO Services, L.P.,
its authorized agent
By: AMRESCO Mortgage Capital, Inc.,
its general partner
By:_____________________________
Name:___________________________
Title: Servicing Officer
LANDLORD:
W9/TIB REAL ESTATE LIMITED
PARTNERSHIP, a Delaware limited partnership
By: W9/TIB Gen-Par, Inc., a Delaware
corporation, its general partner
By:
Name:
Title:
TENANT:
BROOKS AUTOMATION, INC.
By: __________________________________
Name:
Title:
<PAGE> 68
STATE OF _________)
)
COUNTY OF ________) _____________ ___, 2000
Then personally appeared the above-named _________________________________,
__________________________________ of AMRESCO Mortgage Capital, Inc., as general
partner of AMRESCO Services, L.P., as authorized agent for LaSalle National
Bank, as Trustee for GS Mortgage Securities Corporation II Commercial Mortgage
Pass-Through Certificates, Series 1998-GSFL1, and acknowledged the foregoing
instrument to be his/her free act and deed and the free act and deed of Bankers
Trust Company of California, N.A., before me,
____________________________________
(Seal)
Notary Public
My commission expires:
STATE OF _________)
)
COUNTY OF ________)_ _____________ ___, 2000
Then personally appeared the above-named _________________________________,
__________________________________ of W9/TIB Gen-Par, Inc., as General Partner
of W9/TIB Real Estate Limited Partnership, and acknowledged the foregoing
instrument to be his/her free act and deed, the free act and deed of W9/TIB
Gen-Par, Inc., and the free act and deed of W9/TIB Real Estate Limited
Partnership, before me,
____________________________________
(Seal)
Notary Public
My commission expires:
STATE OF )
)
COUNTY OF ) __________ __, 2000
Then personally appeared the above-named ________________________________,
______________________________________ of Brooks Automation, Inc., and
acknowledged the foregoing instrument to be his/her free act and deed and the
free act and deed of Brooks Automation, Inc., before me,
____________________________________
(Seal)
Notary Public
My commission expires:
<PAGE> 69
LIST OF DEFINED TERMS
<TABLE>
<CAPTION>
Page
----
<S> <C>
16 Elizabeth Drive Lease 20
Additional Rent 2
Affiliate 1
Amendment E-1
AS-IS D-1
Base Building Electrical Capacity 8
Basic Lease Information 1
Basic Rent i
Building's Structure 8
Building i
Casualty 19
Commencement Date i
Construction Allowance D-2
Damage Notice 19
Environmental Reports 28
Event of Default 20
GAAP 15
Hazardous Materials 27
including 1
Land i
Landlord 1
Landlord's Mortgagee 16
Law 1
Laws 1
Lease 1
Lease Month ii
Letter of Credit 5
Loss 16
Mortgage 16
Non-Disturbance Agreement 18
Operating Costs 2
Operating Costs and Tax Statement 3
Permitted Transfer 14
Permitted Transferee 14
Permitted Use ii
Premises i
Prevailing Rental Rate G-1
Reduction Date 6
Rent ii
Rooftop Equipment 29
Security Deposit ii
Taking 18
Tangible Net Worth 15
Taxes 3
Tenant 1
Tenant Party 1
</TABLE>
<PAGE> 70
<TABLE>
<CAPTION>
Page
----
<S> <C>
Tenant's Proportionate Share ii
Term i
Total Construction Costs D-2
Transfer 13
Work D-1
Working Drawings D-1
</TABLE>
<PAGE> 1
EXHIBIT 10.4
EXECUTION COPY
Exchange.3078329.5
LEASE AGREEMENT BETWEEN
W9/TIB REAL ESTATE LIMITED PARTNERSHIP,
AS LANDLORD, AND
BROOKS AUTOMATION, INC., AS TENANT
DATED JANUARY 31, 2000
<PAGE> 2
BASIC LEASE INFORMATION
Lease Date: January 31, 2000
Tenant: BROOKS AUTOMATION, INC., a Delaware corporation
Landlord: W9/TIB REAL ESTATE LIMITED PARTNERSHIP, a Delaware
limited partnership
Premises: The entire building containing approximately
80,407 rentable square feet commonly known as 16
Elizabeth Drive, Chelmsford, Massachusetts (the
"BUILDING"), and whose street address is 16 Elizabeth
Drive, Chelmsford, Massachusetts and the Land
(hereinafter defined) and all other improvements located
thereon, including, without limitation, the parking and
loading areas on the Land, and the walkways and
driveways providing access to the Building and such
parking and loading areas. The Premises are outlined on
the plan attached to the Lease as Exhibit A. The land on
which the Building is located (the "LAND") is described
on Exhibit B. The term "Building" includes the Land and
the driveways, parking facilities and similar
improvements on the Land. Provided that neither this
Lease nor the 15 Elizabeth Drive Lease (as hereinafter
defined) has expired or been earlier terminated and that
both of said Leases are in full force and effect, Tenant
may use the parking and loading areas located on the
Land and the parking and loading areas located on the
Land (as such term is defined in the 15 Elizabeth Drive
Lease).
Term: Approximately one hundred twenty- three (123)
months, commencing on April 1, 2000 (the "COMMENCEMENT
DATE") and ending at 5:00 p.m. on June 30, 2010, subject
to adjustment and earlier termination as provided in the
Lease.
Basic Rent: Basic Rent shall be the following amounts for the
following periods of time:
<TABLE>
<CAPTION>
Lease Month Annual Basic Rent Monthly Basic Rent
<S> <C> <C>
1-36 $824,171.75 $68,680.98
</TABLE>
<PAGE> 3
<TABLE>
<S> <C> <C>
37-60 $ 904,578.75 $75,381.56
61-84 $ 984,985.75 $82,082.15
85-123 $1,065,392.75 $88,782.73
</TABLE>
As used herein, the term "LEASE MONTH" shall mean
each calendar month during the Term (and if the
Commencement Date does not occur on the first day of a
calendar month, the period from the Commencement Date to
the first day of the next calendar month shall be
included in the first Lease Month for purposes of
determining the duration of the Term and the monthly
Basic Rent rate applicable for such partial month).
Security Deposit: $1,000,000.00
Rent: Basic Rent, Taxes, Additional Rent, and all other
sums that Tenant may owe to Landlord or otherwise be
required to pay under the Lease.
Permitted Use: Subject to and to the extent permitted by all
applicable Laws, general office use, research and
development, light manufacturing, and warehousing and
distribution.
Initial Liability
Insurance Amount: $3,000,000.00
Maximum Construction
Allowance: $10.00 per rentable square foot.
<TABLE>
<CAPTION>
Tenant's Address:
Following Commencement Date: Prior to Commencement Date:
- ---------------------------- ---------------------------
<S> <C>
15 Elizabeth Drive 15 Elizabeth Drive
Chelmsford, MA 01824-4111 Chelmsford, MA 01824-4111
Attn: Jeffrey Myrdek, C.E.M., Attn: Jeffrey Myrdek, C.E.M,
Manager of Corporate Facilities Manager of Corporate Facilities
</TABLE>
<PAGE> 4
<TABLE>
<S> <C>
With a copy to: With a copy to:
- --------------- ---------------
Brown Rudnick Freed & Brown Rudnick Freed &
Gesmer, P.C. Gesmer, P.C.
One Financial Center One Financial Center
Boston, MA 02111 Boston, MA 02111
Attn: Carl E. Axelrod, Esq. Attn: Carl E. Axelrod, Esq.
<CAPTION>
Landlord's Address: For all Notices: With a copy to:
---------------- ---------------
<S> <C> <C>
Archon Group, L.P. Choate, Hall & Stewart
1275 K Street NW, Suite 900 Exchange Place
Washington, DC 20005 53 State Street
Boston, MA 02109-2891
Attn: Anne Rickard Jackowitz, P.C.
</TABLE>
<PAGE> 5
The foregoing Basic Lease Information is incorporated into and made a part of
the Lease identified above. If any conflict exists between any Basic Lease
Information and the Lease, then the Lease shall control.
LANDLORD:
W9/TIB REAL ESTATE LIMITED
PARTNERSHIP, a Delaware limited
partnership
By: W9/TIB Gen-Par, Inc., a Delaware
corporation, its general partner
By:
Name:
Title:
TENANT:
BROOKS AUTOMATION, INC., a
Delaware corporation
By:
Name:
Title:____
<PAGE> 6
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
1. Definitions and Basic Provisions 1
2. Lease Grant 1
3. Term 1
4. Rent 1
(a) Payment 1
(b) Operating Costs; Taxes; Electrical Costs 2
5. Delinquent Payment; Handling Charges 5
6. Security Deposit 5
7. Landlord's Obligations 7
(a) Services 7
(b) Landlord's Maintenance Obligations 8
(c) Excess Utility Use 9
(d) Restoration of Services; Abatement 9
(e) Landlord's Compliance with Applicable Legal Requirements 10
8. Improvements; Alterations; Repairs; Maintenance. 10
(a) Improvements; Alterations 10
(b) Repairs; Maintenance 11
(c) Performance of Work 12
(d) Mechanic's Liens 12
(e) Utilities 12
(f) Floor Load; Heavy Machinery 12
9. Use 13
10. Assignment and Subletting 13
(a) Transfers 13
(b) Consent Standards 13
(c) Request for Consent 14
(d) Conditions to Consent 14
(e) Cancellation 14
(f) Additional Compensation 15
(g) Permitted Transfers 15
11. Insurance; Waivers; Subrogation; Indemnity 16
(a) Tenant's Insurance 16
</TABLE>
<PAGE> 7
<TABLE>
<S> <C>
(b) Landlord's Insurance 16
(c) Waiver of Negligence; No Subrogation 16
(d) Indemnity 17
12. Subordination; Attornment; Notice to Landlord's Mortgagee 17
(a) Subordination 17
(b) Attornment 17
(c) Notice to Landlord's Mortgagee 17
(d) Landlord's Mortgagee's Protection Provisions 17
(e) Subordination, Non-Disturbance and Attornment Agreement 18
13. Rules and Regulations 18
14. Condemnation 19
(a) Total Taking 19
(b) Partial Taking - Tenant's Rights 19
(c) Partial Taking - Landlord's Rights 19
(d) Award 19
15. Fire or Other Casualty 19
(a) Repair Estimate 19
(b) Landlord's and Tenant's Rights 19
(c) Landlord's Rights 20
(d) Repair Obligation 20
16. Personal Property Taxes 20
17. Events of Default 21
18. Remedies 22
19. Payment by Tenant; Non-Waiver 23
(a) Payment by Tenant 23
(b) No Waiver 23
20. Landlord's Lien 23
21. Surrender of Premises 23
22. Holding Over 24
23. Certain Rights Reserved by Landlord 24
24. [intentionally omitted] 25
25. Miscellaneous 25
</TABLE>
<PAGE> 8
<TABLE>
<S> <C>
(a) Landlord Transfer 25
(b) Landlord's Liability 25
(c) Force Majeure 25
(d) Brokerage 25
(e) Estoppel Certificates 26
(f) Notices 26
(g) Separability 26
(h) Amendments; and Binding Effect 26
(i) Quiet Enjoyment 26
(j) No Merger 26
(k) No Offer 27
(l) Entire Agreement 27
(m) Waiver of Jury Trial 27
(n) Governing Law 27
(o) Joint and Several Liability 27
(p) Financial Reports 27
(q) Landlord's Fees 28
(r) Telecommunications 28
(s) Confidentiality 28
(t) Hazardous Materials 28
(u) List of Exhibits 29
(v) Time of Essence 29
(w) Signage 29
(x) Access 29
(y) Failure of Tenant to Continuously Occupy the Premises 29
(z) Rooftop Equipment 30
(aa) Notice of Lease 31
(bb) Landlord's Authority, Etc. 31
(cc) Fiber Optic Lines 31
26. Other Provisions 31
</TABLE>
<PAGE> 9
LEASE
THIS LEASE AGREEMENT (this "LEASE") is entered into as of January 31,
2000, between W9/TIB REAL ESTATE LIMITED PARTNERSHIP, a Delaware limited
partnership ("LANDLORD"), and BROOKS AUTOMATION, INC., a Delaware corporation
("TENANT").
1. DEFINITIONS AND BASIC PROVISIONS. The definitions and basic provisions
set forth in the Basic Lease Information (the "BASIC LEASE INFORMATION")
executed by Landlord and Tenant contemporaneously herewith are incorporated
herein by reference for all purposes. Additionally, the following terms shall
have the following meanings when used in this Lease: "LAWS" means all federal,
state, and local laws, rules and regulations, all court orders, governmental
directives, and governmental orders, and all restrictive covenants affecting the
Property, and "LAW" shall mean any of the foregoing; "AFFILIATE" means any
person or entity which, directly or indirectly, through one or more
intermediaries, controls, is controlled by, or is under common control with the
party in question; "TENANT PARTY" means any of the following persons: Tenant;
any assignees claiming by, through, or under Tenant; any subtenants claiming by,
through, or under Tenant; and any of their respective agents, contractors,
employees, and invitees; and "INCLUDING" means including, without limitation.
2. LEASE GRANT. Subject to the terms of this Lease, Landlord leases to
Tenant, and Tenant leases from Landlord, the Premises.
3. TERM. Landlord shall deliver possession of the Premises to Tenant
promptly after each party executes this Lease (the "ESTIMATED DELIVERY DATE").
If the Premises are not delivered to Tenant on the Estimated Delivery Date, then
(a) Landlord shall not be in default hereunder or be liable for damages
therefor, and (b) Tenant shall accept possession of the Premises when Landlord
tenders possession thereof to Tenant. By occupying the Premises, Tenant shall be
deemed to have accepted the Premises in their condition as of the date of such
occupancy. Tenant shall execute and deliver to Landlord, within ten days after
Landlord has requested the same, an amendment substantially in the form of
Exhibit E hereto confirming the Commencement Date and the expiration date of the
initial Term, that Tenant has accepted the Premises, and that Landlord has
performed all of its obligations with respect to the Premises.
4. RENT.
(a) PAYMENT. Tenant shall timely pay to Landlord Basic Rent and all
additional sums to be paid by Tenant to Landlord under this Lease, without
notice, deduction or set off, except as otherwise expressly set forth herein, at
Landlord's address provided for in this Lease or as otherwise specified by
Landlord and shall be accompanied by all applicable state and local sales or use
taxes. Basic Rent, adjusted as herein provided, shall be payable monthly in
advance. The first monthly installment of Basic Rent shall be payable
contemporaneously with the execution of this Lease;
<PAGE> 10
thereafter, Basic Rent shall be payable on the first day of each month beginning
on the first day of the second full calendar month of the Term. The monthly
Basic Rent for any partial month at the beginning of the Term shall equal the
product of 1/365 of the annual Basic Rent in effect during the partial month and
the number of days in the partial month from and after the Commencement Date,
and shall be due on the Commencement Date.
(b) OPERATING COSTS; TAXES; ELECTRICAL COSTS.
(1) Tenant shall pay all of the Operating Costs (defined
below) ("ADDITIONAL RENT"). Landlord may make a good faith estimate of the
Additional Rent to be due by Tenant for any calendar year or part thereof during
the Term, and Tenant shall pay to Landlord, on the Commencement Date and on the
first day of each calendar month thereafter, an amount equal to the estimated
Additional Rent for such calendar year or part thereof divided by the number of
months therein. From time to time (but not more than twice in any Lease Year),
Landlord may estimate and re-estimate the Additional Rent to be due by Tenant
and deliver a copy of the estimate or re-estimate to Tenant, which estimate
shall itemize each increased cost. Thereafter, the monthly installments of
Additional Rent payable by Tenant shall be appropriately adjusted in accordance
with the estimations so that, by the end of the calendar year in question,
Tenant shall have paid all of the Additional Rent as estimated by Landlord. Any
amounts paid based on such an estimate shall be subject to adjustment as herein
provided when actual Operating Costs are available for each calendar year.
(2) The term "OPERATING COSTS" shall mean all expenses and
disbursements (subject to the limitations set forth below) that Landlord incurs
in connection with the ownership, operation, and maintenance of the Premises,
determined in accordance with sound accounting principles consistently applied,
including, but not limited to, the following costs: (A) wages and salaries
(management fees, which management fees shall not exceed fair market management
fees for comparable buildings in the Greater Boston area) of all employees
engaged in the operation, maintenance, and security of the Premises, including
taxes, insurance and benefits relating thereto; (B) all supplies and materials
used in the operation, maintenance, repair, replacement, and security of the
Premises; (C) costs for improvements made to the Premises which, although
capital in nature, are expected to reduce the normal operating costs (including
all utility costs) of the Premises, as well as capital improvements made in
order to comply with any law hereafter promulgated by any governmental authority
and capital improvements related to roof replacement and replacement of rooftop
HVAC units, as amortized over the useful economic life of such improvements as
determined by Landlord in its reasonable discretion; (D) cost of all utilities,
except the cost of utilities reimbursable to Landlord by Tenant other than
pursuant to a provision similar to this Section 4.(b); (E) insurance expenses;
(F) repairs, replacements, and general maintenance of the Premises; (G) service
or maintenance contracts with independent contractors for the operation,
maintenance, repair, replacement, or security of the Premises (including,
without limitation, alarm service, window cleaning, and elevator maintenance);
and (H) accounting fees incurred by Landlord for the accounting services
performed in connection with the Premises.
<PAGE> 11
Operating Costs shall not include costs for (i) capital
improvements made to the Premises, other than capital improvements described in
Section 4.(b)(2)(C) and except for items which are generally considered
maintenance and repair items, such as painting of common areas, replacement of
carpet in elevator lobbies, and the like; (ii) repair, replacements and general
maintenance paid by proceeds of insurance or by Tenant or other third parties;
(iii) interest, amortization or other payments on loans to Landlord or any
ground lease rent; (iv) depreciation; (v) leasing commissions; (vi) legal
expenses for services, other than those that benefit the Building tenants
generally (e.g., tax disputes); (vii) Taxes (defined below); (viii) franchise or
federal income taxes imposed on or measured by the income of Landlord from the
operation of the Building; (ix) any cost or expense to the extent to which
Landlord is paid or reimbursed (other than as a payment for Operating Costs);
(x) salaries and bonuses of officers and executives of Landlord; (xi) any fees,
costs, and commissions incurred in procuring or attempting to procure tenants
including, but not necessarily limited to brokerage commissions, finders fees,
attorney's fees and expenses, entertainment costs and travel expenses; (xii) the
cost of advertising or promotion for the Building; (xiii) any capital cost
necessary to cure any violation of any law, ordinance or regulation applicable
to the Building existing as of the date of the Lease or to remediate any
environmental condition (existing as of the date of the Lease); (xiv) reserves;
(xv) Landlord's charitable or political contributions; (xvi) Landlord's travel
or entertainment expenses; (xvii) depreciation of the Building; (xviii) provided
Tenant is not in default of any provisions of this Lease beyond all applicable
notice and cure periods, fines or penalties arising solely out of Landlord's
breach of any obligation hereunder; and (xix) all costs incurred to perform the
work outlined in the HVAC Replacement/Repair Specifications (as that term is
hereinafter defined in Exhibit D).
(3) Tenant shall also pay all of the Taxes for each year and
partial year falling within the Term in the same manner as provided above for
Additional Rent with regard to Operating Costs. "TAXES" shall mean taxes,
assessments, and governmental charges whether federal, state, county or
municipal, and whether they be by taxing districts or authorities presently
taxing or by others, subsequently created or otherwise, and any other taxes and
assessments attributable to the Premises (or its operation), excluding, however,
penalties and interest thereon and federal and state taxes on income (if the
present method of taxation changes so that in lieu of the whole or any part of
any Taxes, there is levied on Landlord a capital tax directly on the rents
received therefrom or a franchise tax, assessment, or charge based, in whole or
in part, upon such rents for the Premises, then all such taxes, assessments, or
charges, or the part thereof so based, shall be deemed to be included within the
term "TAXES" for purposes hereof). Taxes shall include the costs of consultants
retained in an effort to lower taxes and all costs incurred in disputing any
taxes or in seeking to lower the tax valuation of the Premises. For property tax
purposes, Tenant waives all rights to protest or appeal the appraised value of
the Premises, as well as the Building, and all rights to receive notices of
reappraisement. Taxes shall be deemed payable over the longest period allowed by
law. Tenant may file for and prosecute tax abatements pertaining to the Premises
only after it has notified Landlord that Tenant desires Landlord pursue a tax
abatement and
<PAGE> 12
Landlord elects not to pursue such a tax abatement and so notifies Tenant in
writing. If Tenant files for and prosecutes a tax abatement pertaining to the
Premises, Tenant shall simultaneously provide Landlord with all filings made
with the taxing authorities and with any other information reasonably requested
by Landlord.
(4) Intentionally Omitted.
(5) By April 1 of each calendar year, or as soon thereafter as
reasonably practicable, Landlord shall furnish to Tenant a statement of
Operating Costs for the previous year, and of the Taxes for the previous year
(the "OPERATING COSTS AND TAX STATEMENT"). If the Operating Costs and Tax
Statement reveals that Tenant paid more for Operating Costs than the actual
amount for the year for which such statement was prepared, or more than its
actual share of Taxes for such year, then Landlord shall promptly credit or
reimburse Tenant for such excess; likewise, if Tenant paid less than Tenant's
actual Additional Rent or Taxes due, then Tenant shall promptly pay Landlord
such deficiency.
(6) Provided (A) Tenant is not in default hereunder, and (B)
Tenant has paid Landlord the Operating Costs in question, Tenant shall have the
right, exercisable not more than once each Lease Year, to examine Landlord's
books and records relating to Operating Costs for the prior Lease Year only.
Such examination shall be performed (i) at Landlord's office, (ii) at Tenant's
sole cost and expense, (iii) upon prior reasonable written notice to Landlord,
(iv) during normal business hours, and (v) within sixty (60) days after receipt
of the Operating Costs and Tax Statement. In the event Tenant's examination
reveals a discrepancy, Landlord shall promptly (but no later than thirty (30)
days) reimburse Tenant for the amount of any overpayment. If Tenant's
examination of Landlord's books and records reveals an overcharge of more than
five percent (5%), Landlord shall, within thirty (30) days after receipt of a
written invoice, reimburse Tenant for the reasonable costs of such audit. In
conducting such audit, Tenant shall use an independent certified public
accountant experienced in auditing Operating Costs, which accountant shall be
paid on an hourly basis (and not on a contingency or success fee basis). Such
audit shall be conducted in accordance with generally accepted rules of auditing
practices. Any information obtained by Tenant pursuant to the provisions of this
Section 3(b)(6) shall be treated as confidential.
(c) BILLING FOR ELECTRICITY. Tenant shall pay (as hereinafter
described) for the use of all electrical service to the Premises. Tenant shall
be billed directly by such utility company and Tenant agrees to pay each bill
promptly in accordance with its terms, and upon default in making any such
payment which continues for more than ten (10) days after written notice to
Tenant, Landlord may pay such charges and collect the same from Tenant. In the
event for any reason Tenant cannot be billed directly, Landlord shall forward
each bill received with respect to the Building to Tenant, which Tenant shall
pay within thirty (30) days of receiving each such bill unless the terms of the
each such bill specify otherwise.
<PAGE> 13
5. DELINQUENT PAYMENT; HANDLING CHARGES. All past due payments required of
Tenant hereunder shall bear interest from the date due until paid at the lesser
of fifteen percent per annum or the maximum lawful rate of interest;
additionally, if Tenant fails to make any payment due hereunder more than once
in any Lease Year, Landlord may charge Tenant a fee equal to 5% of the
delinquent payment to reimburse Landlord for its cost and inconvenience incurred
as a consequence of Tenant's delinquency. In no event, however, shall the
charges permitted under this Section 5 or elsewhere in this Lease, to the extent
they are considered to be interest under applicable Law, exceed the maximum
lawful rate of interest.
6. SECURITY DEPOSIT. Contemporaneously with the execution of this Lease,
Tenant shall pay to Landlord the Security Deposit, which Security Deposit shall
be the same Security Deposit held under this Lease and under the 15 Elizabeth
Drive Lease (as hereinafter defined in Section 17(b)) and shall be held by
Landlord to secure Tenant's performance of its obligations under this Lease and
under the 15 Elizabeth Drive Lease. If, for whatever reason, either this Lease
or the 15 Elizabeth Drive Lease terminates prior to the stated expiration date
and/or the Term of only one of said Leases is extended and no further
obligations are due and owing under the expired and/or terminated Lease, the
Security Deposit shall continue to secure Tenant's obligations under the
applicable Lease which has not expired and/or terminated. The Security Deposit
is not an advance payment of Rent or a measure or limit of Landlord's damages
upon an Event of Default (defined in Section 17). Landlord may, from time to
time following an Event of Default and without prejudice to any other remedy,
use all or a part of the Security Deposit to perform any obligation Tenant fails
to perform hereunder. Following any such application of the Security Deposit,
Tenant shall pay to Landlord on demand the amount so applied in order to restore
the Security Deposit to its original amount. Provided that Tenant has performed
all of its obligations hereunder, Landlord shall, within 30 days after the Term
ends, return to Tenant the portion of the Security Deposit which was not applied
to satisfy Tenant's obligations. The Security Deposit may be commingled with
other funds, and no interest shall be paid thereon. If Landlord transfers its
interest in the Premises and the transferee assumes Landlord's obligations under
this Lease, then Landlord may assign the Security Deposit to the transferee or
return same to Tenant and Landlord thereafter shall have no further liability
for the return of the Security Deposit.
In lieu of a cash Security Deposit, simultaneously with the execution and
delivery of this Lease, Tenant may deliver to Landlord an irrevocable and
unconditional standby letter of credit made payable to Landlord, its successors
and assigns, in the sum of $1,000,000.00 (the "LETTER OF CREDIT"), in the form
of the sample letter of credit attached hereto as Exhibit J or in such other
form as is reasonably acceptable to Landlord, which shall secure the performance
by Tenant of all obligations on the part of Tenant hereunder. The issuer of the
Letter of Credit shall be a banking institution with at least a rating of A and
otherwise reasonably acceptable to Landlord. Although Landlord shall only have
the right to draw under the Letter of Credit as set forth herein, under the
terms of the Letter of Credit, the sole condition to Landlord's draw upon the
Letter of Credit shall be presentment to the issuer thereof, prior to or on the
expiration date, of a demand for payment. The Letter of Credit shall be
self-renewing from year to year during the Term
<PAGE> 14
of this Lease so as to expire no earlier than thirty (30) days following the
Lease expiration date and shall contain such other customary terms as Landlord
requires in its reasonable discretion. It is agreed: (i) that the Letter of
Credit may be drawn upon to cure any Event of Default that may exist, without
prejudice to any other remedy or remedies which Landlord may have on account
thereof, and upon Landlord's demand, Tenant shall reimburse the issuer for the
amount so drawn so that the Letter of Credit will be restored to its original
amount; (ii) subject to the provisions of clause (iv) below, that the Letter of
Credit may be drawn upon if the Letter of Credit has not been extended or
renewed without amendment at least forty-five (45) days prior to any
then-current expiration date thereof; (iii) that if the rating of the issuer of
the Letter of Credit at any time drops below A, then, within sixty (60) days of
Landlord's demand, Tenant shall replace the Letter of Credit with another Letter
of Credit in a form reasonably acceptable to Landlord and with an issuer with a
rating of at least an A and otherwise reasonably acceptable to Landlord;
Landlord may draw on the existing Letter of Credit if, after Landlord requests
that Tenant replace the Letter of Credit as aforesaid, Landlord is not provided
with a substitute Letter of Credit in a form, and from an issuer, satisfactory
to Landlord as provided above upon the earlier of (x) the expiration of said
sixty-day period or (y) at least forty-five (45) days prior to the then-current
expiration date of the Letter of Credit; (iv) if at any time, but in any event,
at least sixty (60) days prior to the expiration of the Letter of Credit, Tenant
may seek Landlord's consent to switch issuers of the Letter of Credit provided
the prospective issuer has a rating of at least an A and is otherwise reasonably
acceptable to Landlord and the new form of Letter of Credit satisfies the
requirements of Landlord hereunder and is otherwise reasonably acceptable to
Landlord; Landlord may draw on the existing Letter of Credit if, after Tenant
requests Landlord's consent to switch issuers as aforesaid, Landlord is not
provided with a substitute Letter of Credit in a form, and from an issuer,
satisfactory to Landlord in its sole and absolute discretion at least forty-five
(45) days prior to the then-current expiration date of the Letter of Credit; (v)
that should the Premises be conveyed by Landlord, the Letter of Credit or any
portion thereof shall be assigned to Landlord's grantee, and if the same be
assigned as aforesaid, Tenant hereby releases Landlord from any and all
liability with respect to the Letter of Credit and its application or return,
and Tenant agrees to look to such grantee for such application or return,
provided such grantee assumes Landlord's obligations under this Lease (including
this Section 6); and (vi) that the Letter of Credit shall be returned to Tenant
upon the later of (a) thirty (30) days after the expiration of the Term or any
renewal or extension thereof, or (b) the date Tenant has vacated the Premises
and surrendered possession thereof to Landlord at the expiration of the Term or
any extension thereof as provided herein and has paid Landlord all sums due and
owing under this Lease.
Notwithstanding any of the foregoing provisions of this Section 6 to the
contrary, if Tenant has a Tangible Net Worth of at least $165,000,000.00 on the
eighteenth (18th) month after the Commencement Date (the "REDUCTION DATE"), the
Security Deposit (or the applicable Letter or Credit) shall be reduced by
$500,000.00, provided that on the Reduction Date (i) the Lease is in full force
and effect, (ii) no Event of Default exists, (iii) no Event of Default has
occurred, and (iv) Tenant has not assigned this Lease to anyone other than a
Permitted Transferee. If on the Reduction Date the Security Deposit (or the
applicable Letter of Credit) shall not be reduced because one or more of the
conditions set
<PAGE> 15
forth in clauses (i), (ii) or (iii) above cease to exist on the Reduction Date,
the Security Deposit (or applicable Letter of Credit) shall not be reduced
during any succeeding calendar year. If on the Reduction Date the Security
Deposit (or applicable Letter of Credit) shall not be reduced because only the
condition set forth in clause (iv) above (as opposed to the conditions set forth
in any of clauses (i), (ii) or (iii) above) ceases to exist on the Reduction
Date and/or Tenant does not have a Tangible Net Worth of at least
$165,000,000.00 on the Reduction Date, the Security Deposit (or applicable
Letter of Credit) shall be so reduced on the date that Tenant has achieved a
Tangible Net Worth of $165,000,000.00, provided the conditions set forth in
clauses (i), (ii), (iii) and (iv) above exist on such date. If the Security
Deposit (or applicable Letter of Credit) is reduced pursuant to the foregoing
provisions, Landlord shall return the amount of the reduction if Tenant paid the
Security Deposit in cash or Tenant may replace and/or amend the Letter of Credit
accordingly.
If Tenant initially provides Landlord with a cash Security Deposit, Tenant
may replace such cash Security Deposit with a Letter of Credit in accordance
with the provisions of the preceding paragraph. Upon Landlord's receipt of a
Letter of Credit satisfying the terms and conditions of the preceding paragraph,
Landlord shall promptly return the cash Security Deposit to Tenant.
For the purposes of this Section 6, a rating of at least A (or its
equivalent) shall mean that such issuer has a rating of at least A (or its
equivalent) from two (2) of the following four (4) rating agencies: Fitch
Investors Service, Moody's Investor Service, Standard & Poor's Corporation and
Duff & Phelps.
<PAGE> 16
7. LANDLORD'S OBLIGATIONS
(a) SERVICES. Landlord shall furnish to Tenant the following
services (the cost of which services shall be considered Operating Costs): (1)
water at those points of supply to the Building as currently exist; (2) heated
and refrigerated air conditioning as appropriate, at such temperatures and in
such amounts as are standard for comparable buildings in the vicinity of the
Building; (3) janitorial service (which janitorial service shall include service
to the interior and exterior of the Building and the Premises and shall include
the services customarily provided to comparable properties by reputable
professional management companies, including, without limitation, maintenance,
repairs and replacement of (u) the parking area associated with the Building and
located on the Premises, (v) all grass, shrubbery and other landscape treatments
on the Premises, (w) the exterior of the Building (including painting), (x)
sprinkler systems and sewage lines, and (y) any other maintenance, repair or
replacement items normally associated with the foregoing) to the Premises on
weekdays, other than holidays, for Building-standard installations and such
window washing as may from time to time be reasonably required; (4) elevators
for ingress and egress to the floors of the Building, provided that Landlord may
reasonably limit the number of operating elevators during non-business hours and
holidays if any person(s) other than Tenant or any assignees or sublessees of
Tenant permitted hereunder occupies any portion of the Premises; and (5)
electrical current for equipment that does not require more than 110 volts and
whose electrical energy consumption does not exceed normal office usage. While
Tenant is the sole occupant of the Building, Tenant may, with Landlord's prior
written consent (which consent shall not be unreasonably withheld or delayed),
substitute at Tenant's expense any of the providers of the services described in
this Section 7.(a) with reputable, licensed (if applicable) third party service
providers located in the area in which the Building is located; provided,
however, Tenant shall provide Landlord with copies of all contracts with any
such service provider and said contracts shall be in form and substance
reasonably satisfactory to Landlord. If, in accordance with the provisions of
the preceding sentence, Tenant engages (at its own cost) providers for all of
the services to be provided by Landlord under this Section 7.(a), the management
fee included in Operating Costs shall be reduced to the greater of (i) $1,300.00
per month or (ii) one and one-quarter percent (1 1/4%) of the gross revenues
derived by Landlord from the Premises. If Tenant engages providers of the
services set forth in this Section 7.(a) as aforesaid and any such services are
provided, in Landlord's reasonable discretion, at an unsatisfactory level as
would customarily be provided to comparable buildings, Landlord may, upon at
least twenty (20) days prior written notice to Tenant (except in the event of an
emergency or in situations where Landlord's prompt action is necessary to
prevent damage or deterioration to any portion of the Premises, in which case,
no advance notice shall be required) elect to provide such services and the
management fee shall no longer be reduced; provided, however, to the extent the
twenty-day grace period exists, Landlord's election shall be deemed null and
void and of no further force and effect if Tenant causes the services being
performed at an unsatisfactory level to be performed at a satisfactory level
within the twenty-day period.
<PAGE> 17
Landlord and Tenant hereby acknowledge and agree that, as of the
Commencement Date, Tenant shall engage providers of the services set forth in
this Section 7.(a). If Tenant is engaging providers of such services in
accordance with the provisions of this Lease, Landlord may perform periodic
inspections of the Building and all such inspection costs shall be considered an
Operating Cost and paid by Tenant in accordance with Section 4 above. However,
upon sixty (60) days prior written notice to Landlord, Tenant may elect to have
Landlord provide such services.
(b) LANDLORD'S MAINTENANCE OBLIGATIONS. This Lease is intended to be
a net lease; accordingly, Landlord's maintenance obligations (other than those
set forth in Section 7(a), if applicable) are limited to the repair, maintenance
and replacement of the Building's roof and the repair, maintenance and
replacement of the foundation and structural members of exterior walls (the
"BUILDING'S STRUCTURE"); Landlord shall not be responsible for (1) any such work
until Tenant notifies Landlord of the need therefor in writing, (2) for
alterations to the Building's Structure required by applicable law because of
Tenant's use of the Premises (which alterations shall be Tenant's
responsibility), (3) any such work caused by Tenant's negligence or its failure
to comply with the provisions of this Lease, or (4) any costs incurred by
Landlord in connection with the repair, maintenance and/or replacement of the
roof, which repair, maintenance and/or replacement costs shall be considered an
Operating Cost and paid by Tenant in accordance with Section 4 above. The
Building's Structure does not include skylights, windows, glass or plate glass,
doors, special fronts, or office entries, all which shall be maintained by
Tenant. Landlord's liability for any defects, repairs, replacements or
maintenance for which Landlord specifically is responsible for under this Lease
shall be limited to the cost of performing the work. Notwithstanding any
provisions of this Lease to the contrary, Landlord may replace the roof and the
roof membrane at any time, but shall be required to replace the roof and the
roof membrane if the cost to repair the roof and the roof membrane over an
aggregate twelve-month period exceeds $30,000.00 provided that such repair work
is not necessitated by either a catastrophic failure caused by severe weather
events or any act or omission by or on behalf of any Tenant Party.
(c) EXCESS UTILITY USE. Landlord shall not be required to furnish
electrical current for equipment that requires more than the electrical capacity
currently provided in the Building (the "BASE BUILDING ELECTRICAL CAPACITY"). If
Tenant's requirements for consumption of electricity exceed the Base Building
Electrical Capacity, Landlord shall, at Tenant's expense, make reasonable
efforts to supply such service through the then-existing feeders and risers
serving the Building, and Tenant shall pay to Landlord the cost of such service
within ten days after Landlord has delivered to Tenant an invoice therefor.
Landlord may determine the amount of such additional consumption and potential
consumption by any verifiable method, including installation of a separate meter
in the Premises installed, maintained, and read by Landlord, at Tenant's
expense. Tenant shall not install any electrical equipment requiring special
wiring or requiring voltage in excess of the Base Building Electrical Capacity
unless approved in advance by Landlord. The use of electricity in the Building
shall not exceed the capacity of existing feeders and risers to or wiring in the
Building. Any risers or wiring required to meet Tenant's excess electrical
requirements shall, upon Tenant's written request, be installed
<PAGE> 18
by Landlord, at Tenant's cost, if, in Landlord's judgment, the same are
necessary and shall not cause permanent damage to the Building or the Premises,
cause or create a dangerous or hazardous condition, or entail excessive or
unreasonable alterations, repairs, or expenses. If Tenant uses machines or
equipment in the Building which affect the temperature otherwise maintained by
the air conditioning system or otherwise overload any utility, Landlord may
install supplemental air conditioning units or other supplemental equipment in
the Building, and the cost thereof, including the cost of installation,
operation, use, and maintenance, shall be paid by Tenant to Landlord within ten
(10) days after Landlord has delivered to Tenant an invoice therefor.
(d) RESTORATION OF SERVICES; ABATEMENT. Landlord shall use
reasonable efforts to restore any service required of it that becomes
unavailable; however, such unavailability shall not render Landlord liable for
any damages caused thereby, be a constructive eviction of Tenant, constitute a
breach of any implied warranty, or, except as provided in the next sentence,
entitle Tenant to any abatement of Tenant's obligations hereunder. If, however,
Tenant is prevented from using the Premises for more than fifteen (15)
consecutive business days because of the unavailability of any such service and
such unavailability was not caused by a Tenant Party, then Tenant shall, as its
exclusive remedy be entitled to a reasonable abatement of Rent for each
consecutive day (after such 15-day period) that Tenant is so prevented from
using the Premises.
(e) LANDLORD'S COMPLIANCE WITH APPLICABLE LEGAL REQUIREMENTS.
Landlord shall comply with all legal requirements directly applicable to the
structural elements of the Building; but only to the extent that a failure to so
comply shall materially affect the Building, Tenant's use thereof or Tenant's
access thereto or results in Tenant being held responsible for the violation.
Landlord may contest in good faith the validity or application of any legal
requirements with which Landlord may be obligated to comply. Notwithstanding the
foregoing, all expenses incurred by Landlord to comply with all such legal
requirements enacted after the date of this Lease shall be considered an
Operating Cost and paid by Tenant in accordance with Section 4 above.
8. IMPROVEMENTS; ALTERATIONS; REPAIRS; MAINTENANCE.
(a) IMPROVEMENTS; ALTERATIONS. Improvements to the Premises shall be
installed at Tenant's expense only in accordance with plans and specifications
which have been previously submitted to and approved in writing by Landlord. No
alterations or physical additions in or to the Premises may be made without
Landlord's prior written consent, which shall not be unreasonably withheld or
delayed; however, Landlord may withhold its consent to any alteration or
addition that would affect the Building's structure or its HVAC, plumbing,
electrical, or mechanical systems. Notwithstanding the foregoing, Tenant may
from time to time make alterations, additions or improvements to the Building,
without the consent of Landlord and without Landlord's approval of plans,
provided: (i) the cost thereof shall not exceed Twenty-Five Thousand Dollars
($25,000.00) in the aggregate in any consecutive twelve-month period; (ii)
Tenant shall, prior to commencing any such alterations, additions and/or
improvements in the Building in connection therewith, furnish Landlord with a
complete set of plans and specifications
<PAGE> 19
for any such alterations, additions and/or improvements; (iii) such alterations,
additions and/or improvements shall not involve or affect the exterior or the
structure of the Building or any of the mechanical or plumbing systems of the
Building or the base building electrical system, as such base building
electrical system exists after Tenant's installation of the Work (but such
alterations may include minor electrical alterations not affecting the base
building electrical system); and (iv) Tenant shall comply with all requirements
of this Lease with respect to such alterations, additions and/or improvements
other than obtaining the prior approval of Landlord. Tenant shall not paint or
install lighting or decorations, signs, window or door lettering, or advertising
media of any type on or about the Premises without the prior written consent of
Landlord, which shall not be unreasonably withheld or delayed; however, Landlord
may withhold its consent to any such painting or installation which would affect
the appearance of the exterior of the Building or of any common areas of the
Building. Notwithstanding any provisions of the preceding sentence to the
contrary, if Tenant is the sole occupant of the Building, Landlord's prior
written consent shall only be required with respect to the painting or
installation of lighting or decorations, signs, window or door lettering, or
advertising media of any type on or about the Premises which would affect the
exterior of the Building. All alterations, additions, and improvements shall be
constructed, maintained, and used by Tenant, at its risk and expense, in
accordance with all Laws; Landlord's approval of the plans and specifications
therefor shall not be a representation by Landlord that such alterations,
additions, or improvements comply with any Law. Landlord shall cooperate with
Tenant in obtaining any permits or licenses sought by Tenant in connection with
the Premises provided Landlord shall never be required to pay any out-of-pocket
expenses in connection therewith.
(b) REPAIRS; MAINTENANCE. Tenant shall maintain the Premises in a
clean, safe, and operable condition as exists after the construction of the Work
(as hereinafter defined) and any other alterations, additions or improvements
performed by Tenant, reasonable wear and tear and damage by fire, other casualty
and eminent domain excepted, consistent with the operation of a first class
building consistent with the Permitted Use, and shall not permit or allow to
remain any waste or damage to any portion of the Premises. If Tenant elects to
engage providers for all services in accordance with Section 7.(a) above, Tenant
shall enter into preventative maintenance/service contract(s) with maintenance
contractor(s) reasonably approved by Landlord for servicing the landscaping of
the Premises and all air conditioning, heating and ventilating equipment,
elevators and other equipment located within or serving the Premises. All
preventative maintenance/service contracts shall be in form and substance
reasonably satisfactory to Landlord and shall provide that the maintenance
contractor shall provide Landlord with quarterly reports respecting the
maintenance of the subject equipment. Upon request from Landlord, Tenant shall
provide Landlord with copies of all such preventative maintenance/service
contracts maintained by Tenant. Irrespective of whether or not Tenant elects to
engage providers for all services in accordance with Section 7.(a) above, Tenant
shall repair or replace, subject to Landlord's reasonable direction and
supervision, any improvement or system installed by Tenant within the Premises
and any damage to the Building caused by Tenant, Tenant's transferees, or their
respective agents, contractors, or invitees. If Tenant fails to make such
repairs or
<PAGE> 20
replacements within fifteen (15) days (or such shorter period of time required
to prevent any damage from occurring to the Premises) after the occurrence of
such damage, then Landlord may, after written notice to Tenant, make the same at
Tenant's cost. Notwithstanding any provisions of this Lease to the contrary, if
the cost to repair one of the existing rooftop HVAC units exceeds twenty-five
percent (25%) of the replacement cost for such unit, Landlord shall pay for such
replacement cost within twenty (20) business days after satisfaction of the
following terms and conditions: (i) Landlord and Tenant agree in writing on any
such replacement cost, on the specification of the new rooftop unit, and on the
contractor to install such new unit; (ii) Tenant shall ensure such new unit is
installed in accordance with applicable Laws; (iii) Tenant shall not be in
default under this Lease; (iv) this Lease shall be in full force and effect; (v)
Tenant has provided Landlord with evidence reasonably satisfactory to Landlord
that the new unit has been installed in accordance with applicable Laws; (vi)
Tenant has maintained and repaired such unit in accordance with the provisions
of this Lease; and (vii) such replacement costs shall be considered an Operating
Cost and paid by Tenant in accordance with Section 4 above.
(c) PERFORMANCE OF WORK. All work described in this Section 8 shall
be performed only by Landlord or by contractors and subcontractors reasonably
approved in writing by Landlord. Tenant shall cause all contractors and
subcontractors to procure and maintain insurance coverage naming Landlord as an
additional insured against such risks, in such amounts, and with such companies
as Landlord may reasonably require. All such work shall be performed in
accordance with all Laws and in a good and workmanlike manner so as not to
damage the Building (including the Premises, the structural elements, and the
plumbing, electrical lines, or other utility transmission facility). All such
work which may affect the Building's HVAC, electrical, plumbing, other
mechanical systems, or structural elements must be approved by the Building's
engineer of record, at Tenant's expense and, at Landlord's election, must be
performed by Landlord's usual contractor for such work, unless otherwise
approved by Landlord.
Tenant shall provide sworn statements, including the names, addresses and
copies of contracts for all contractors, and upon completion of any work shall
promptly furnish Landlord with sworn owner's and contractor's statements and
full and final waivers of lien covering all labors and materials included in the
work in question.
(d) MECHANIC'S LIENS. Tenant shall not permit any mechanic's liens
to be filed against the Premises or the Building for any work performed,
materials furnished, or obligation incurred by or at the request of Tenant. If
such a lien is filed, then Tenant shall, within ten days after Landlord has
delivered notice of the filing thereof to Tenant, either pay the amount of the
lien or diligently contest such lien and deliver to Landlord a bond or other
security reasonably satisfactory to Landlord. If Tenant fails to timely take
either such action, then Landlord may pay the lien claim, and any amounts so
paid, including expenses and interest, shall be paid by Tenant to Landlord
within ten days after Landlord has invoiced Tenant therefor.
<PAGE> 21
(e) UTILITIES. Tenant shall obtain and pay for all water, gas,
electricity, heat, telephone, sewer, sprinkler charges and other utilities and
services used at the Premises, together with all taxes, penalties, surcharges,
and maintenance charges pertaining thereto. To the extent Tenant is not billed
directly for any such utilities, any amounts payable by Tenant under this
Section shall be due within ten (10) days after Landlord has invoiced Tenant
therefor.
(f) FLOOR LOAD; HEAVY MACHINERY. (i) Tenant shall not place a load
upon any floor in the Building exceeding the floor load per square foot of area
which such floor was designed to carry or which is allowed by law. Landlord
reserves the right to prescribe the weight and position of all heavy business
machines and mechanical equipment, including safes, which shall be placed so as
to distribute the weight. Business machines and mechanical equipment shall be
placed and maintained by Tenant at Tenant's expense in settings sufficient, in
Landlord's judgment, to absorb and prevent vibration, noise and annoyance.
Tenant shall not move any safe, heavy machinery and/or heavy equipment into or
out of the Building without Landlord's prior consent, not to be unreasonably
withheld, conditioned or delayed, which consent may include a requirement to
provide insurance, naming Landlord as an insured, in such amounts as Landlord
may deem reasonable.
(ii) If such safe, machinery, equipment, freight, bulky matter
or fixtures requires special handling, Tenant agrees that all work in connection
therewith shall comply with applicable laws and regulations. Any such moving
shall be at the sole risk and hazard of Tenant, and Tenant will exonerate,
indemnify and save Landlord harmless against and from any liability, loss,
injury, claim or suit resulting directly or indirectly from such moving.
9. USE. Tenant shall occupy and use the Premises only for the Permitted
Use, and for no other purposes, and shall comply with all Laws relating to the
use, condition, access to, and occupancy of the Premises. The population density
within the Premises as a whole shall at no time exceed one person for each 200
rentable square feet in the Premises. The Premises shall not be used for any use
which is disreputable, creates extraordinary fire hazards, or results in an
increased rate of insurance on the Building or its contents, or for the storage
of any Hazardous Materials. If, because of a Tenant Party's acts, the rate of
insurance on the Building or its contents increases, then Tenant shall pay to
Landlord the amount of such increase on demand, and acceptance of such payment
shall not waive any of Landlord's other rights. If Tenant fails to cease or
remediate such acts within five (5) days after Landlord's request that Tenant do
so, then such acts shall be an Event of Default. Tenant shall conduct its
business and control each other Tenant Party so as not to create any nuisance or
unreasonably interfere with other tenants or Landlord in its management of the
Building.
10. ASSIGNMENT AND SUBLETTING
(a) TRANSFERS. Except as provided in Section 10.(g), Tenant shall
not, without the prior written consent of Landlord, (1) assign, transfer, or
encumber this Lease
<PAGE> 22
or any estate or interest herein, whether directly or by operation of law, (2)
permit any other entity to become Tenant hereunder by merger, consolidation, or
other reorganization, (3) if Tenant is an entity other than a corporation whose
stock is publicly traded, permit the transfer of an ownership interest in Tenant
so as to result in a change in the current control of Tenant, (4) sublet any
portion of the Premises, (5) grant any license, concession, or other right of
occupancy of any portion of the Premises, or (6) permit the use of the Premises
by any parties other than Tenant (any of the events listed in Section 10.(a)(1)
through 10.(a)(6) being a "TRANSFER").
(b) CONSENT STANDARDS. Landlord shall not unreasonably withhold,
condition or delay its consent to any assignment or subletting of the Premises,
provided that the proposed transferee is creditworthy, has a good reputation in
the business community, will use the Premises for the Permitted Use (thus,
excluding, without limitation, uses for credit processing and telemarketing) and
will not use the Premises in any manner that would conflict with any exclusive
use agreement or other similar agreement entered into by Landlord with any other
tenant of the Building, is not a governmental entity, or subdivision or agency
thereof, and is not another occupant of the Building or person or entity with
whom Landlord is negotiating to lease space in the Building; otherwise, Landlord
may withhold its consent in its sole discretion.
(c) REQUEST FOR CONSENT. If Tenant requests Landlord's consent to a
Transfer, then Tenant shall provide Landlord with a written description of all
terms and conditions of the proposed Transfer, copies of the proposed
documentation, and the following information about the proposed transferee: name
and address; reasonably satisfactory information about its business and business
history; its proposed use of the Premises; banking, financial, and other credit
information; and general references sufficient to enable Landlord to determine
the proposed transferee's creditworthiness. Landlord shall approve such request,
or indicate its basis for refusing consent, within thirty (30) days after
receipt of such request and receipt of all of the information enumerated in the
preceding sentence. Concurrently with Tenant's notice of any request for consent
to a Transfer, Tenant shall pay to Landlord a fee of $750 to defray Landlord's
expenses in reviewing such request, and Tenant shall also reimburse Landlord
immediately upon request for its reasonable attorneys' fees incurred in
connection with considering any request for consent to a Transfer.
(d) CONDITIONS TO CONSENT. If Landlord consents to a proposed
Transfer, then the proposed transferee shall deliver to Landlord a written
agreement whereby it expressly assumes Tenant's obligations hereunder; however,
any transferee of less than all of the space in the Premises shall be liable
only for obligations under this Lease that are properly allocable to the space
subject to the Transfer for the period of the Transfer. No Transfer shall
release Tenant from its obligations under this Lease, but rather Tenant and its
transferee shall be jointly and severally liable therefor. Landlord's consent to
any Transfer shall not waive Landlord's rights as to any subsequent Transfers.
If an Event of Default occurs while the Premises or any part thereof are subject
to a Transfer, then Landlord, in addition to its other remedies, may collect
directly from such transferee all rents becoming due to Tenant and apply such
rents against Rent. Tenant
<PAGE> 23
authorizes its transferees to make payments of rent directly to Landlord upon
receipt of notice from Landlord to do so. Tenant shall pay for the cost of any
demising walls or other improvements necessitated by a proposed subletting or
assignment.
(e) CANCELLATION. Landlord may, within 30 days after submission of
Tenant's written request for Landlord's consent to an assignment or subletting,
cancel this Lease as to the portion of the Premises proposed to be sublet or
assigned as of the date the proposed Transfer is to be effective. If Landlord
cancels this Lease as to any portion of the Premises, then this Lease shall
cease for such portion of the Premises and Tenant shall pay to Landlord all Rent
accrued through the cancellation date relating to the portion of the Premises
covered by the proposed Transfer. Thereafter, Landlord may lease such portion of
the Premises to the prospective transferee (or to any other person) without
liability to Tenant.
(f) ADDITIONAL COMPENSATION. Tenant shall pay to Landlord,
immediately upon receipt thereof, seventy-five percent (75%) of the excess of
(1) all compensation received by Tenant for a Transfer less the costs reasonably
incurred by Tenant with unaffiliated third parties in connection with such
Transfer (i.e., brokerage commissions, tenant finish work, and the like) over
(2) the Rent allocable to the portion of the Premises covered thereby.
(g) PERMITTED TRANSFERS. Notwithstanding Section 10.(a), Tenant may
Transfer all or part of its interest in this Lease or all or part of the
Premises (a "PERMITTED TRANSFER") to the following types of entities (a
"PERMITTED TRANSFEREE") without the written consent of Landlord:
(1) an Affiliate of Tenant;
(2) any corporation, limited partnership, limited liability
partnership, limited liability company or other business entity in which
or with which Tenant, or its corporate successors or assigns, is merged or
consolidated, in accordance with applicable statutory provisions governing
merger and consolidation of business entities, so long as (A) Tenant's
obligations hereunder are assumed by the entity surviving such merger or
created by such consolidation; and (B) the Tangible Net Worth of the
surviving or created entity is not less than the greater of (i) the
Tangible Net Worth of Tenant as of the date hereof, or (ii) the Tangible
Net Worth of Tenant at the time of any such Permitted Transfer; or
(3) any corporation, limited partnership, limited liability
partnership, limited liability company or other business entity acquiring
all or substantially all of Tenant's assets if such entity's Tangible Net
Worth after such acquisition is not less than the greater of (i) the
Tangible Net Worth of Tenant as of the date hereof, or (ii) the Tangible
Net Worth of Tenant at the time of any such Permitted Transfer.
<PAGE> 24
Tenant shall promptly notify Landlord of any such Permitted Transfer.
Tenant shall remain liable for the performance of all of the obligations of
Tenant hereunder, or if Tenant no longer exists because of a merger,
consolidation, or acquisition, the surviving or acquiring entity shall expressly
assume in writing the obligations of Tenant hereunder. Additionally, the
Permitted Transferee shall comply with all of the terms and conditions of this
Lease, including the Permitted Use, and the use of the Premises by the Permitted
Transferee may not violate any other agreements affecting the Premises, the
Building, Landlord or other tenants of the Building. At least 30 days after the
effective date of any Permitted Transfer, Tenant agrees to furnish Landlord with
copies of the instrument effecting any of the foregoing Transfers and
documentation establishing Tenant's satisfaction of the requirements set forth
above applicable to any such Transfer. The occurrence of a Permitted Transfer
shall not waive Landlord's rights as to any subsequent Transfers. "TANGIBLE NET
WORTH" means the excess of total assets over total liabilities, in each case as
determined in accordance with generally accepted accounting principles
consistently applied ("GAAP"), excluding, however, from the determination of
total assets all assets which would be classified as intangible assets under
GAAP including, without limitation, goodwill, licenses, patents, trademarks,
trade names, copyrights, and franchises. Any subsequent Transfer by a Permitted
Transferee shall be subject to Landlord's prior written consent (which Landlord
may grant or deny in its sole discretion).
11. INSURANCE; WAIVERS; SUBROGATION; INDEMNITY
(a) TENANT'S INSURANCE. Tenant shall maintain throughout the Term
the following insurance policies: (1) commercial general liability insurance in
amounts of $3,000,000 per occurrence or such other amounts as Landlord may from
time to time reasonably require, insuring Tenant, Landlord, Landlord's agents
and their respective Affiliates against all liability for injury to or death of
a person or persons or damage to property arising from the use and occupancy of
the Premises, (2) insurance covering the full value of Tenant's property and
improvements, and other property (including property of others) in the Premises,
(3) contractual liability insurance sufficient to cover Tenant's indemnity
obligations hereunder (but only if such contractual liability insurance is not
already included in Tenant's commercial general liability insurance policy), (4)
worker's compensation insurance, containing a waiver of subrogation endorsement
acceptable to Landlord, and (5) business interruption insurance. Tenant's
insurance shall provide primary coverage to Landlord when any policy issued to
Landlord provides duplicate or similar coverage, and in such circumstance
Landlord's policy will be excess over Tenant's policy. Tenant shall furnish to
Landlord certificates of such insurance and such other evidence satisfactory to
Landlord of the maintenance of all insurance coverages required hereunder, and
Tenant shall obtain a written obligation on the part of each insurance company
to notify Landlord at least 30 days before cancellation or a material change of
any such insurance policies. All such insurance policies shall be in form, and
issued by companies, reasonably satisfactory to Landlord.
<PAGE> 25
(b) LANDLORD'S INSURANCE. Landlord shall carry throughout the Term
of this Lease fire and extended coverage insurance on the Building for at least
90% of the full replacement value.
(c) WAIVER OF NEGLIGENCE; NO SUBROGATION. Landlord and Tenant each
waives any claim it might have against the other for any injury to or death of
any person or persons or damage to or theft, destruction, loss, or loss of use
of any property (a "LOSS"), to the extent the same is insured against under any
insurance policy that covers the Building, the Premises, Landlord's or Tenant's
fixtures, personal property, leasehold improvements, or business, or is required
to be insured against under the terms hereof, REGARDLESS OF WHETHER THE
NEGLIGENCE OF THE OTHER PARTY CAUSED SUCH LOSS; however, Landlord's waiver shall
not include any deductible amounts on insurance policies carried by Landlord.
Each party shall cause its insurance carrier to endorse all applicable policies
waiving the carrier's rights of recovery under subrogation or otherwise against
the other party.
(d) INDEMNITY. Subject to Section 11.(c), Tenant shall defend,
indemnify, and hold harmless Landlord and its representatives and agents from
and against all claims, demands, liabilities, causes of action, suits,
judgments, damages, and expenses (including attorneys' fees) arising from (1)
any Loss arising from any occurrence on the Premises during the Term or any
holdover by Tenant or any person or entity deriving rights from Tenant beyond
the expiration of the Term (other than any Loss arising out of a breach of
Tenant's obligations under Section 25.(t), which shall be subject to the
indemnity in such section) except to the extent caused by the negligence or
fault of Landlord or its agents or (2) Tenant's failure to perform its
obligations under this Lease except to the extent caused by the negligence or
fault of Landlord or its agents. This indemnity provision shall survive
termination or expiration of this Lease. If any proceeding is filed for which
indemnity is required hereunder, Tenant agrees, upon request therefor, to defend
the indemnified party in such proceeding at its sole cost utilizing counsel
reasonably satisfactory to the indemnified party.
12. SUBORDINATION; ATTORNMENT; NOTICE TO LANDLORD'S MORTGAGEE
(a) SUBORDINATION. This Lease shall be subordinate to any deed of
trust, mortgage, or other security instrument, or any ground lease, master
lease, or primary lease (any such security instrument or lease, a "MORTGAGE"),
that now or hereafter covers all or any part of the Premises (the mortgagee
under any such mortgage or the lessor under any such lease is referred to herein
as a "LANDLORD'S MORTGAGEE"). Any Landlord's Mortgagee may elect, at any time,
unilaterally, to make this Lease superior to its mortgage, ground lease, or
other interest in the Premises by so notifying Tenant in writing. Provided
Tenant receives a Non-Disturbance Agreement from each such Mortgagee, Tenant
shall execute agreements confirming the subordination or superiority of this
Lease to any Mortgage upon Landlord or Landlord's Mortgagee's reasonable
request.
<PAGE> 26
(b) ATTORNMENT. Provided Tenant receives a Non-Disturbance Agreement
from such party, Tenant shall attorn to any party succeeding to Landlord's
interest in the Premises, whether by purchase, foreclosure, deed in lieu of
foreclosure, power of sale, termination of lease, or otherwise, upon such
party's request, and shall execute such agreements confirming such attornment as
such party may reasonably request.
(c) NOTICE TO LANDLORD'S MORTGAGEE. Tenant shall not seek to enforce
any remedy it may have for any default on the part of Landlord without first
giving written notice by certified mail, return receipt requested, specifying
the default in reasonable detail, to any Landlord's Mortgagee whose address has
been given to Tenant, and affording such Landlord's Mortgagee a reasonable
opportunity to perform Landlord's obligations hereunder.
(d) LANDLORD'S MORTGAGEE'S PROTECTION PROVISIONS. If Landlord's
Mortgagee shall succeed to the interest of Landlord under this Lease, Landlord's
Mortgagee shall not be: (1) liable for any act or omission of any prior lessor
(including Landlord); (2) bound by any rent or additional rent or advance rent
which Tenant might have paid for more than the current month to any prior lessor
(including Landlord), and all such rent shall remain due and owing,
notwithstanding such advance payment unless such rent is actually received by
Landlord's Mortgagee; (3) bound by any security or advance rental deposit made
by Tenant which is not delivered or paid over to Landlord's Mortgagee and with
respect to which Tenant shall look solely to Landlord for refund or
reimbursement; (4) bound by any termination, amendment or modification of this
Lease made without Landlord's Mortgagee's consent and written approval, except
for those terminations, amendments and modifications permitted to be made by
Landlord without Landlord's Mortgagee's consent pursuant to the terms of the
loan documents between Landlord and Landlord's Mortgagee; (5) subject to the
defenses which Tenant might have against any prior lessor (including Landlord);
and (6) subject to the offsets which Tenant might have against any prior lessor
(including Landlord) except for those offset rights which (A) are expressly
provided in this Lease, (B) relate to periods of time following the acquisition
of the Building by Landlord's Mortgagee, and (C) Tenant has provided written
notice to Landlord's Mortgagee and provided Landlord's Mortgagee a reasonable
opportunity to cure the event giving rise to such offset event. Landlord's
Mortgagee shall have no liability or responsibility under or pursuant to the
terms of this Lease or otherwise after it ceases to own an interest in the
Building. Nothing in this Lease shall be construed to require Landlord's
Mortgagee to see to the application of the proceeds of any loan, and Tenant's
agreements set forth herein shall not be impaired on account of any modification
of the documents evidencing and securing any loan.
(e) SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT.
Simultaneously upon Tenant's execution of this Lease, Tenant shall execute a
Subordination, Non-Disturbance and Attornment Agreement in the form attached
hereto as Exhibit K. Landlord shall return a fully executed Subordination,
Non-Disturbance and Attornment Agreement in the form attached hereto as Exhibit
K, executed by Landlord and the Lender named therein to Tenant as soon as
reasonably possible. Landlord shall
<PAGE> 27
use reasonable efforts (which efforts shall not require the expenditure of funds
or the threat (or commencement) of litigation) to obtain a so-called
"nondisturbance agreement" from any future Landlord's Mortgagee in the form
attached hereto as Exhibit K or another form reasonably acceptable to Tenant and
such Landlord's Mortgagee or other institutional lenders (either the form
attached hereto as Exhibit K or such other reasonably acceptable form being
herein referred to as the "NON-DISTURBANCE AGREEMENT"). The subordination of
Tenant's rights hereunder to any future Landlord's Mortgagee under Section
12.(a) and the attornment of Tenant to any future Landlord Mortgagee under
Section 12.(b) shall be conditioned upon such future Landlord's Mortgagee's
execution and delivery of a Non-Disturbance Agreement.
13. RULES AND REGULATIONS. Tenant shall comply with the rules and
regulations of the Building which are attached hereto as Exhibit C. Landlord
may, from time to time, change such rules and regulations for the safety, care,
or cleanliness of the Building and related facilities, provided that such
changes are applicable to all tenants of the Building and will not unreasonably
interfere with Tenant's use of the Premises. Tenant shall be responsible for the
compliance with such rules and regulations by each Tenant Party.
14. CONDEMNATION.
(a) TOTAL TAKING. If the entire Building or Premises are taken by
right of eminent domain or conveyed in lieu thereof (a "TAKING"), this Lease
shall terminate as of the date of the Taking.
(b) PARTIAL TAKING - TENANT'S RIGHTS. If any part of the Building
becomes subject to a Taking and such Taking will prevent Tenant from conducting
its business in the Premises in a manner reasonably comparable to that conducted
immediately before such Taking for a period of more than 180 days, then Tenant
may terminate this Lease as of the date of such Taking by giving written notice
to Landlord within 30 days after the Taking, and Rent shall be apportioned as of
the date of such Taking. If Tenant does not terminate this Lease, then Rent
shall be abated on a reasonable basis as to that portion of the Premises
rendered untenantable by the Taking.
(c) PARTIAL TAKING - LANDLORD'S RIGHTS. If any material portion, but
less than all, of the Building becomes subject to a Taking, or if Landlord is
required to pay any of the proceeds received for a Taking to a Landlord's
Mortgagee, then Landlord may terminate this Lease by delivering written notice
thereof to Tenant within 30 days after such Taking, and Rent shall be
apportioned as of the date of such Taking. If Landlord does not so terminate
this Lease, then this Lease will continue, but if any portion of the Premises
has been taken, Rent shall abate as provided in the last sentence of Section
14.(b).
(d) AWARD. If any Taking occurs, then Landlord shall receive the
entire award or other compensation for the land on which the Building is
situated, the Building, and other improvements taken, and Tenant may separately
pursue a claim (to
<PAGE> 28
the extent it will not reduce Landlord's award) against the condemnor for the
value of Tenant's personal property which Tenant is entitled to remove under
this Lease, moving costs, loss of business, and other claims it may have.
15. FIRE OR OTHER CASUALTY
(a) REPAIR ESTIMATE. If the Premises or the Building are damaged by
fire or other casualty (a "CASUALTY"), Landlord shall, within 90 days after such
Casualty, deliver to Tenant a good faith estimate (the "DAMAGE NOTICE") of the
time needed to repair the damage caused by such Casualty.
(b) LANDLORD'S AND TENANT'S RIGHTS. If a material portion of the
Premises or the Building is damaged by Casualty such that Tenant is prevented
from conducting its business in the Premises in a manner reasonably comparable
to that conducted immediately before such Casualty and Landlord estimates that
the damage caused thereby cannot be repaired within two hundred ten (210) days
after the Casualty, then Tenant may terminate this Lease by delivering written
notice to Landlord of its election to terminate within 30 days after the Damage
Notice has been delivered to Tenant. If Tenant does not so timely terminate this
Lease, then (subject to Section 15.(c)) Landlord shall repair the Building or
the Premises, as the case may be, as provided below, and Rent for the portion of
the Premises rendered untenantable by the damage shall be abated on a reasonable
basis from the date of damage until the completion of the repair, unless a
Tenant Party caused such damage, in which case, Tenant shall continue to pay
Rent without abatement.
(c) LANDLORD'S RIGHTS. If a Casualty damages a material portion of
the Building, and Landlord makes a good faith determination that restoring the
Premises would be uneconomical, or if Landlord is required to pay any insurance
proceeds arising out of the Casualty to a Landlord's Mortgagee, then Landlord
may terminate this Lease by giving written notice of its election to terminate
within 30 days after the Damage Notice has been delivered to Tenant, and Basic
Rent and Additional Rent shall be abated as of the date of the Casualty.
(d) REPAIR OBLIGATION. If neither party elects to terminate this
Lease following a Casualty, then Landlord shall, within a reasonable time after
such Casualty, begin to repair the Building and the Premises and shall proceed
with reasonable diligence to restore the Building and Premises to substantially
the same condition as they existed immediately before such Casualty; however,
Landlord shall not be required to repair or replace any of the furniture,
equipment, fixtures, and other improvements which may have been placed by, or at
the request of, Tenant or other occupants in the Building or the Premises, and
Landlord's obligation to repair or restore the Building or Premises shall be
limited to the extent of the insurance proceeds actually received by Landlord
for the Casualty in question. If the Premises are not substantially restored
within two hundred ten (210) days after a Casualty, Tenant shall have the right
to terminate this Lease upon at least sixty (60) days prior written notice;
provided, however, if Landlord substantially
<PAGE> 29
restores the Premises within said sixty-day period, Tenant's termination notice
shall be null and void and the provisions of this Lease shall remain in full
force and effect.
16. PERSONAL PROPERTY TAXES. Tenant shall be liable for all taxes levied
or assessed against personal property, furniture, or fixtures placed by Tenant
in the Premises. If any taxes for which Tenant is liable are levied or assessed
against Landlord or Landlord's property and Landlord elects to pay the same, or
if the assessed value of Landlord's property is increased by inclusion of such
personal property, furniture or fixtures and Landlord elects to pay the taxes
based on such increase, then Tenant shall pay to Landlord, upon demand, the part
of such taxes for which Tenant is primarily liable hereunder; however, Landlord
shall not pay such amount if Tenant notifies Landlord that it will contest the
validity or amount of such taxes before Landlord makes such payment, and
thereafter diligently proceeds with such contest in accordance with law and if
the non-payment thereof does not pose a threat of loss or seizure of the
Building or interest of Landlord therein or impose any fee or penalty against
Landlord.
17. EVENTS OF DEFAULT. Each of the following occurrences shall be an
"EVENT OF DEFAULT":
(a) Tenant's failure to pay Rent within five days after Landlord has
delivered notice to Tenant that the same is due; however, an Event of Default
shall occur hereunder without any obligation of Landlord to give any notice if
Landlord has given Tenant written notice under this Section 17.(a) on more than
one occasion during the twelve (12) month interval preceding such failure by
Tenant;
(b) an Event of Default occurs under that certain Lease Agreement
dated January 31, 2000 by and between Landlord and Tenant with respect to the
premises known and numbered as 15 Elizabeth Drive, Chelmsford, Massachusetts
(the "15 ELIZABETH DRIVE LEASE");
(c) Tenant abandons the Premises or any substantial portion thereof;
(d) Tenant fails to comply with the Permitted Use set forth herein
and the continuance of such failure for a period of five (5) days after Landlord
has delivered to Tenant written notice thereof;
(e) Tenant fails to provide any estoppel certificate within the time
period required under Section 25.(e) and such failure shall continue for five
days after written notice thereof from Landlord to Tenant;
(f) Tenant's failure to perform, comply with, or observe any other
agreement or obligation of Tenant under this Lease and the continuance of such
failure for a period of more than 30 days after Landlord has delivered to Tenant
written notice thereof; provided that if the default is of such a nature that it
may not be reasonably cured within thirty (30) days, then no Event of Default
shall occur hereunder if Tenant commences curing within such thirty (30) day
period and thereafter diligently and
<PAGE> 30
continuously pursues such cure to completion within a period of not more than
seventy-five (75) days after the delivery of such notice; and
(g) The filing of a petition by or against Tenant (the term "TENANT"
shall include, for the purpose of this Section 17.(g), any guarantor of Tenant's
obligations hereunder) (1) in any bankruptcy or other insolvency proceeding; (2)
seeking any relief under any state or federal debtor relief law; (3) for the
appointment of a liquidator or receiver for all or substantially all of Tenant's
property or for Tenant's interest in this Lease; or (4) for the reorganization
or modification of Tenant's capital structure; however, if such a petition is
filed against Tenant, then such filing shall not be an Event of Default unless
Tenant fails to have the proceedings initiated by such petition dismissed within
90 days after the filing thereof.
18. REMEDIES. Upon an Event of Default, Landlord may, in addition to all
other rights and remedies afforded Landlord hereunder, take any of the following
actions:
(a) Terminate this Lease by giving Tenant written notice thereof, in
which event Tenant shall pay to Landlord the sum of (1) all Rent accrued
hereunder through the date of termination, (2) all amounts due under Section
19.(a), and (3) an amount equal to (A) the total Rent that Tenant would have
been required to pay for the remainder of the Term plus Landlord's estimate of
aggregate expenses of reletting to the Premises, discounted to present value at
a per annum rate equal to the "Prime Rate" as published on the date this Lease
is terminated by The Wall Street Journal, Northeast Edition, in its listing of
"Money Rates," minus one percent, similarly discounted, minus (B) the then
present fair rental rate value of the Premises for such period;
(b) Terminate Tenant's right to possess the Premises without
terminating this Lease by giving written notice thereof to Tenant, in which
event Tenant shall pay to Landlord (1) all Rent and other amounts accrued
hereunder to the date of termination of possession, (2) all amounts due from
time to time under Section 19.(a), and (3) all Rent and other net sums required
hereunder to be paid by Tenant during the remainder of the Term, diminished by
any net sums thereafter received by Landlord through reletting the Premises
during such period, after deducting all out-of-pocket costs incurred by Landlord
in reletting the Premises. Landlord shall use reasonable efforts to relet the
Premises on such terms as Landlord in its sole discretion may determine
(including a term different from the Term, rental concessions, and alterations
to, and improvement of, the Premises); however, Landlord shall not be obligated
to relet the Premises before leasing other portions of the Building. Landlord
shall not be liable for, nor shall Tenant's obligations hereunder be diminished
because of, Landlord's failure to relet the Premises or to collect rent due for
such reletting. Tenant shall not be entitled to the excess of any consideration
obtained by reletting over the Rent due hereunder. Reentry by Landlord in the
Premises shall not affect Tenant's obligations hereunder for the unexpired Term;
rather, Landlord may, from time to time, bring an action against Tenant to
collect amounts due by Tenant, without the necessity of Landlord's waiting until
the expiration of the Term. Unless Landlord delivers written notice to Tenant
expressly stating that it has elected to terminate this Lease, all actions taken
by Landlord
<PAGE> 31
to dispossess or exclude Tenant from the Premises shall be deemed to be taken
under this Section 18.(b). If Landlord elects to proceed under this Section
18.(b), it may at any time elect to terminate this Lease under Section 18.(a);
or
(c) Additionally, upon five (5) days prior written notice, Landlord
may alter locks or other security devices at the Premises to deprive Tenant of
access thereto, and Landlord shall not be required to provide a new key or right
of access to Tenant.
Any and all remedies set forth in this Lease: (i) shall be in addition to
any and all other remedies Landlord may have at law or in equity; (ii) shall be
cumulative except as otherwise expressly provided herein; and (iii) may be
pursued successively or concurrently as Landlord may elect. The exercise of any
remedy by Landlord shall not be deemed an election of remedies or preclude
Landlord from exercising any other remedies in the future. Notwithstanding the
foregoing, Landlord shall only recover its damages allowed hereunder once.
19. PAYMENT BY TENANT; NON-WAIVER
(a) PAYMENT BY TENANT. Upon any Event of Default, Tenant shall pay
to Landlord all costs incurred by Landlord (including court costs and reasonable
attorneys' fees and expenses) in (1) obtaining possession of the Premises, (2)
removing and storing Tenant's or any other occupant's property, (3) repairing,
restoring, altering, remodeling, or otherwise putting the Premises into
condition acceptable to a new tenant, (4) if Tenant is dispossessed of the
Premises and this Lease is not terminated, reletting all or any part of the
Premises (including brokerage commissions, cost of tenant finish work, and other
costs incidental to such reletting), (5) performing Tenant's obligations which
Tenant failed to perform, and (6) enforcing, or advising Landlord of, its
rights, remedies, and recourses arising out of the Event of Default. To the full
extent permitted by law, Landlord and Tenant agree the federal and state courts
of the state in which the Premises are located shall have exclusive jurisdiction
over any matter relating to or arising from this Lease and the parties' rights
and obligations under this Lease.
(b) NO WAIVER. Landlord's acceptance of Rent following an Event of
Default shall not waive Landlord's rights regarding such Event of Default. No
waiver by Landlord of any violation or breach of any of the terms contained
herein shall waive Landlord's rights regarding any future violation of such
term. Landlord's acceptance of any partial payment of Rent shall not waive
Landlord's rights with regard to the remaining portion of the Rent that is due,
regardless of any endorsement or other statement on any instrument delivered in
payment of Rent or any writing delivered in connection therewith; accordingly,
Landlord's acceptance of a partial payment of Rent shall not constitute an
accord and satisfaction of the full amount of the Rent that is due.
20. LANDLORD'S LIEN. Intentionally omitted, provided that the deletion of
this Section shall not be construed to be a waiver of Landlord's lien rights
provided by law.
<PAGE> 32
21. SURRENDER OF PREMISES. No act by Landlord shall be deemed an
acceptance of a surrender of the Premises, and no agreement to accept a
surrender of the Premises shall be valid unless it is in writing and signed by
Landlord. At the expiration or termination of this Lease, Tenant shall deliver
to Landlord the Premises with all improvements located therein in good repair
and condition, free of Hazardous Materials placed on the Premises during the
Term, broom-clean, reasonable wear and tear (and condemnation and Casualty
damage not caused by Tenant, as to which Sections 14 and 15 shall control)
excepted, and shall deliver to Landlord all keys to the Premises. Provided that
Tenant has performed all of its obligations hereunder, Tenant may remove all
unattached trade fixtures, furniture, and personal property placed in the
Premises or elsewhere in the Building by Tenant (but Tenant may not remove any
such item which was paid for, in whole or in part, by Landlord or any wiring or
cabling unless Landlord requires such removal). Additionally, at Landlord's
option, Tenant shall remove such alterations, additions, improvements, trade
fixtures, personal property, equipment, wiring, cabling, and furniture as
Landlord may request; however, Tenant shall not be required to remove any
addition or improvement to the Premises if Landlord has specifically agreed in
writing that the improvement or addition in question need not be removed. Tenant
shall repair all damage caused by such removal. All items not so removed shall,
at Landlord's option, be deemed to have been abandoned by Tenant and may be
appropriated, sold, stored, destroyed, or otherwise disposed of by Landlord
without notice to Tenant and without any obligation to account for such items;
any such disposition shall not be considered a strict foreclosure or other
exercise of Landlord's rights in respect of the security interest granted under
Section 20. The provisions of this Section 21 shall survive the end of the Term.
22. HOLDING OVER. If Tenant fails to vacate the Premises at the end of the
Term, then Tenant shall be a tenant at will and, in addition to all other
damages and remedies to which Landlord may be entitled for such holding over,
Tenant shall pay, in addition to the other Rent, a daily Basic Rent equal to the
greater of (a) 150% of the daily Basic Rent payable during the last month of the
Term, or (b) 125% of the prevailing rental rate in the Building for similar
space. The provisions of this Section 22 shall not be deemed to limit or
constitute a waiver of any other rights or remedies of Landlord provided herein
or at law. If Tenant fails to surrender the Premises upon the termination or
expiration of this Lease, in addition to any other liabilities to Landlord
accruing therefrom, Tenant shall protect, defend, indemnify and hold Landlord
harmless from all loss, costs (including reasonable attorneys' fees) and
liability resulting from such failure, including, without limiting the
generality of the foregoing, any claims made by any succeeding tenant founded
upon such failure to surrender, and any lost profits to Landlord resulting
therefrom.
23. CERTAIN RIGHTS RESERVED BY LANDLORD. Provided that the exercise of
such rights does not unreasonably interfere with Tenant's occupancy of the
Premises, Landlord shall have the following rights:
(a) To decorate and to make inspections, repairs, alterations,
additions, changes, or improvements, whether structural or otherwise, in and
about the Building, or
<PAGE> 33
any part thereof; to enter upon the Premises (after giving Tenant reasonable
notice thereof, which may be oral notice, except in cases of real or apparent
emergency, in which case no notice shall be required) and, during the
continuance of any such work, to temporarily close doors, entryways, public
space, and corridors in the Building; to interrupt or temporarily suspend
Building services and facilities; to change the name of the Building; and to
change the arrangement and location of entrances or passageways, doors, and
doorways, corridors, elevators, stairs, restrooms, or other public parts of the
Building;
(b) To take such reasonable measures as Landlord deems advisable for
the security of the Building and its occupants; evacuating the Building for
cause, suspected cause, or for drill purposes; temporarily denying access to the
Building; and closing the Building after normal business hours and on Sundays
and holidays, subject, however, to Tenant's right to enter when the Building is
closed after normal business hours under such reasonable regulations as Landlord
may prescribe from time to time; and
(c) To enter the Premises at reasonable hours to show the Premises
to prospective purchasers, lenders, or, during the last 12 months of the Term,
tenants.
24. [INTENTIONALLY OMITTED]
25. MISCELLANEOUS.
(a) LANDLORD TRANSFER. Landlord may transfer any portion of the
Building and any of its rights under this Lease. If Landlord assigns its rights
under this Lease, then Landlord shall thereby be released from any further
obligations hereunder arising after the date of transfer, provided that the
assignee assumes Landlord's obligations hereunder in writing.
(b) LANDLORD'S LIABILITY. The liability of Landlord to Tenant for
any default by Landlord under the terms of this Lease shall be limited to
Tenant's actual direct, but not consequential, damages therefor and shall be
recoverable only from the interest of Landlord in the Building, and Landlord
shall not be personally liable for any deficiency. This Section shall not limit
any remedies which Tenant may have for Landlord's defaults which do not involve
the personal liability of Landlord.
(c) FORCE MAJEURE. Other than for Tenant's obligations under this
Lease that can be performed by the payment of money (e.g., payment of Rent and
maintenance of insurance), whenever a period of time is herein prescribed for
action to be taken by either party hereto, such party shall not be liable or
responsible for, and there shall be excluded from the computation of any such
period of time, any delays due to strikes, riots, acts of God, shortages of
labor or materials, war, governmental laws, regulations, or restrictions, or any
other causes of any kind whatsoever which are beyond the control of such party.
<PAGE> 34
(d) BROKERAGE. Neither Landlord nor Tenant has dealt with any broker
or agent in connection with the negotiation or execution of this Lease, other
than Grubb & Ellis Management Services, Inc. and CRESA Partners, whose
commission shall be paid by Landlord. Tenant and Landlord shall each indemnify
the other against all costs, expenses, attorneys' fees, and other liability for
commissions or other compensation claimed by any broker or agent claiming the
same by, through, or under the indemnifying party.
(e) ESTOPPEL CERTIFICATES. From time to time, Tenant shall furnish
to any party designated by Landlord, within ten days after Landlord has made a
request therefor, a certificate signed by Tenant confirming and containing such
factual certifications and representations as to this Lease as Landlord may
reasonably request. Unless otherwise required by Landlord's Mortgagee or a
prospective purchaser or mortgagee of the Building, the initial form of estoppel
certificate to be signed by Tenant is attached hereto as Exhibit F.
(f) NOTICES. All notices and other communications given pursuant to
this Lease shall be in writing and shall be (1) mailed by first class, United
States Mail, postage prepaid, certified, with return receipt requested, and
addressed to the parties hereto at the address specified in the Basic Lease
Information, (2) hand delivered to the intended address, (3) sent by a
nationally recognized overnight courier service, or (4) sent by facsimile
transmission during normal business hours followed by a confirmatory letter sent
in another manner permitted hereunder. All notices shall be effective upon
delivery to the address of the addressee. The parties hereto may change their
addresses by giving notice thereof to the other in conformity with this
provision.
(g) SEPARABILITY. If any clause or provision of this Lease is
illegal, invalid, or unenforceable under present or future laws, then the
remainder of this Lease shall not be affected thereby and in lieu of such clause
or provision, there shall be added as a part of this Lease a clause or provision
as similar in terms to such illegal, invalid, or unenforceable clause or
provision as may be possible and be legal, valid, and enforceable.
(h) AMENDMENTS; AND BINDING EFFECT. This Lease may not be amended
except by instrument in writing signed by Landlord and Tenant. No provision of
this Lease shall be deemed to have been waived by Landlord unless such waiver is
in writing signed by Landlord, and no custom or practice which may evolve
between the parties in the administration of the terms hereof shall waive or
diminish the right of Landlord to insist upon the performance by Tenant in
strict accordance with the terms hereof. The terms and conditions contained in
this Lease shall inure to the benefit of and be binding upon the parties hereto,
and upon their respective successors in interest and legal representatives,
except as otherwise herein expressly provided. This Lease is for the sole
benefit of Landlord and Tenant, and, other than Landlord's Mortgagee, no third
party shall be deemed a third party beneficiary hereof.
(i) QUIET ENJOYMENT. Provided Tenant has performed all of its
obligations hereunder, Tenant shall peaceably and quietly hold and enjoy the
Premises for
<PAGE> 35
the Term, without hindrance from Landlord or any party claiming by, through, or
under Landlord, but not otherwise, subject to the terms and conditions of this
Lease.
(j) NO MERGER. There shall be no merger of the leasehold estate
hereby created with the fee estate in the Premises or any part thereof if the
same person acquires or holds, directly or indirectly, this Lease or any
interest in this Lease and the fee estate in the leasehold Premises or any
interest in such fee estate.
(k) NO OFFER. The submission of this Lease to Tenant shall not be
construed as an offer, and Tenant shall not have any rights under this Lease
unless Landlord executes a copy of this Lease and delivers it to Tenant.
(l) ENTIRE AGREEMENT. This Lease constitutes the entire agreement
between Landlord and Tenant regarding the subject matter hereof and supersedes
all oral statements and prior writings relating thereto. Except for those set
forth in this Lease, no representations, warranties, or agreements have been
made by Landlord or Tenant to the other with respect to this Lease or the
obligations of Landlord or Tenant in connection therewith. The normal rule of
construction that any ambiguities be resolved against the drafting party shall
not apply to the interpretation of this Lease or any exhibits or amendments
hereto.
(m) WAIVER OF JURY TRIAL. To the maximum extent permitted by law,
Landlord and Tenant each waive right to trial by jury in any litigation arising
out of or with respect to this Lease.
(n) GOVERNING LAW. This Lease shall be governed by and construed in
accordance with the laws of the State in which the Premises are located.
(o) JOINT AND SEVERAL LIABILITY. If Tenant is comprised of more than
one party, each such party shall be jointly and severally liable for Tenant's
obligations under this Lease.
(p) FINANCIAL REPORTS. Within 15 days after Landlord's request,
Tenant will furnish Tenant's most recent audited financial statements (including
any notes to them) to Landlord, or, if no such audited statements have been
prepared, such other financial statements (and notes to them) as may have been
prepared by an independent certified public accountant or, failing those,
Tenant's internally prepared financial statements. If Tenant is a publicly
traded corporation, Tenant may satisfy its obligations hereunder by providing to
Landlord Tenant's most recent annual and quarterly reports. Tenant will discuss
its financial statements with Landlord and will give Landlord access to Tenant's
books and records in order to enable Landlord to verify the financial
statements. Landlord will not disclose any aspect of Tenant's financial
statements that Tenant designates to Landlord as confidential except (1) to
Landlord's Mortgagee or prospective purchasers of the Building, (2) in
litigation between Landlord and Tenant, and (3) if required by court order.
Tenant shall not be required to deliver the financial statements required under
this Section 25.(p) more than once in any 12-month
<PAGE> 36
period unless requested by Landlord's Mortgagee or a prospective buyer or lender
of the Building or an Event of Default occurs.
(q) LANDLORD'S FEES. Whenever Tenant requests Landlord to take any
action not required of it hereunder or give any consent required or permitted
under this Lease, Tenant will reimburse Landlord for Landlord's reasonable
out-of-pocket costs payable to third parties and incurred by Landlord in
reviewing the proposed action or consent, including without limitation
reasonable attorneys', engineers' or architects' fees, within ten days after
Landlord's delivery to Tenant of a statement of such costs. Tenant will be
obligated to make such reimbursement without regard to whether Landlord consents
to any such proposed action.
(r) TELECOMMUNICATIONS. Tenant and its telecommunications companies,
including but not limited to local exchange telecommunications companies and
alternative access vendor services companies shall have no right of access to
and within the Building, for the installation and operation of
telecommunications systems including but not limited to voice, video, data, and
any other telecommunications services provided over wire, fiber optic,
microwave, wireless, and any other transmission systems, for part or all of
Tenant's telecommunications within the Building and from the Building to any
other location without Landlord's prior written consent (which consent shall not
be unreasonably withheld or delayed). Notwithstanding any provisions of this
Section 25.(r) to the contrary, and provided Tenant obtains Landlord's prior
written consent as aforesaid, Tenant may make or perform certain installations
affecting Tenant's telecommunications systems provided that: (i) any such
installations only affect the Premises; (ii) no such installations affect any of
the Building HVAC, mechanical, electrical or plumbing systems; (iii) Tenant
shall promptly repair and restore any damage caused by any such installation;
and (iv) upon Landlord's request, at the earlier termination or expiration of
this Lease, Tenant shall restore the Premises to the condition that existed on
the date of this Lease.
(s) CONFIDENTIALITY. Tenant acknowledges that the terms and
conditions of this Lease are to remain confidential for Landlord's benefit, and
may not be disclosed by Tenant to anyone, by any manner or means, directly or
indirectly, without Landlord's prior written consent. The consent by Landlord to
any disclosures shall not be deemed to be a waiver on the part of Landlord of
any prohibition against any future disclosure.
(t) HAZARDOUS MATERIALS. The term "HAZARDOUS MATERIALS" means any
substance, material, or waste which is now or hereafter classified or considered
to be hazardous, toxic, or dangerous under any Law relating to pollution or the
protection or regulation of human health, natural resources or the environment,
or poses or threatens to pose a hazard to the health or safety of persons on the
Premises or in the Building. Tenant shall not use, generate, store, or dispose
of, or permit the use, generation, storage or disposal of Hazardous Materials on
or about the Premises or the Building except in a manner and quantity necessary
for the ordinary performance of Tenant's business, and then in compliance with
all Laws. If Tenant breaches its obligations under this
<PAGE> 37
Section 25.(t), Landlord may immediately take any and all action reasonably
appropriate to remedy the same, including taking all appropriate action to clean
up or remediate any contamination resulting from Tenant's use, generation,
storage or disposal of Hazardous Materials. Tenant shall defend, indemnify, and
hold harmless Landlord and its representatives and agents from and against any
and all claims, demands, liabilities, causes of action, suits, judgments,
damages and expenses (including reasonable attorneys' fees and cost of clean up
and remediation) arising from Tenant's failure to comply with the provisions of
this Section 25.(t). This indemnity provision shall survive termination or
expiration of the Lease.
(u) LIST OF EXHIBITS. All exhibits and attachments attached hereto
are incorporated herein by this reference.
Exhibit A - Outline of Premises
Exhibit B - Legal Description of Building
Exhibit C - Building Rules and Regulations
Exhibit D - Tenant Finish-Work: Allowance
Exhibit D-1 - HVAC Replacement/Repair Specifications
Exhibit E - Amendment No. 1
Exhibit F - Form of Tenant Estoppel Certificate
Exhibit G - Renewal Option
Exhibit H - [Intentionally Omitted]
Exhibit I - Rent Abatement Provisions
Exhibit J - Sample Letter of Credit
Exhibit K - Form of Subordination, Non-Disturbance and
Attornment Agreement
(v) TIME OF ESSENCE. Time is of the essence of this Lease and each
and all of its provisions.
(w) SIGNAGE. Tenant may install, at Tenant's risk and expense, one
(1) sign on the exterior facade of the Building, one (1) sign (4 feet x 4 feet)
on the ground in front of the main entrance of the Building, and one (1) company
identification/directional sign in the same location as the existing company
identification/directional sign and at a size no bigger than such existing sign,
in accordance with all Laws and subject to Landlord's prior approval and
consent, which approval and consent shall not be unreasonably withheld,
conditioned or delayed.
(x) ACCESS. Tenant shall have twenty-four (24) hour access to the
Premises seven (7) days a week (subject to force majeure, emergency, etc.).
(y) FAILURE OF TENANT TO CONTINUOUSLY OCCUPY THE PREMISES. If, for
more than one hundred eighty (180) consecutive days or more than one hundred
eighty (180) days in a three hundred sixty-five (365) day period, Tenant (1)
vacates the Premises or (2) fails to continuously operate its business therein,
Landlord may terminate the Lease upon giving written notice to Tenant as of the
date specified in such notice. If Landlord
<PAGE> 38
terminates this Lease, then this Lease shall terminate and neither party shall
have any further obligations hereunder as of the terminate date except as
otherwise provided herein and Tenant shall pay to Landlord all Rent accrued
through the termination date. Thereafter, Landlord may lease the Premises (or
any portion thereof) to any person without liability to Tenant.
(z) ROOFTOP EQUIPMENT. Tenant may install, at Tenant's risk and
expense and to be used solely by Tenant, a dish style antennae of no more than
five (5) feet in diameter (the "ROOFTOP EQUIPMENT") on the roof of the Building
at a location approved by Landlord. The Rooftop Equipment shall be used only by
Tenant. Before installing the Rooftop Equipment, Tenant shall submit to Landlord
for its approval (which approval shall not be unreasonably withheld, conditioned
or delayed to the extent such plans and specifications do not reflect
alterations which affect the exterior or structure of the Building or its HVAC,
plumbing or mechanical systems or its base building electrical system) plans and
specifications which (A) specify in detail the design, location and size of the
Rooftop Equipment (and, with respect to the Rooftop Equipment, such
specifications shall also contain the frequency of such equipment) and (B) are
sufficiently detailed to allow for the installation of the Rooftop Equipment in
a good and workmanlike manner and in accordance with all laws, regulations,
restrictions (governmental or otherwise) and architectural guidelines in effect
for the area in which the Building is located as they may be amended from time
to time (the "LEGAL REQUIREMENTS"). None of the Rooftop Equipment shall protrude
more than five (5) feet above the elevation of the roof on which it is installed
and all such equipment must be painted in a color reasonably acceptable to
Landlord to minimize visibility. If Landlord approves of such plans, Tenant
shall install (in a good and workmanlike manner), maintain and use the Rooftop
Equipment in accordance with all Legal Requirements and shall obtain all
consents and permits required for the installation and operation thereof; copies
of all such permits and evidence of such consents must be submitted to Landlord
before Tenant begins to install the Rooftop Equipment. Tenant shall thereafter
maintain all permits necessary for the maintenance and operation of the Rooftop
Equipment while it is on the Building and operate and maintain the Rooftop
Equipment in such a manner so as not to unreasonably interfere with any
equipment (including any other satellite, antennae, or other transmission
facility) on the Building's roof or in the Building. Landlord may require that
Tenant screen the Rooftop Equipment with a parapet or other screening device
reasonably acceptable to Landlord. All electrical usage for the Rooftop
Equipment shall be separately metered or, at Landlord's election, shall be
placed on the same electrical meter as the Premises. Tenant shall maintain the
Rooftop Equipment and screening device in good repair and condition. Landlord
may relocate the Rooftop Equipment to another location on the roof of the
Building at its sole cost and expense upon prior written notice to Tenant so
long as the new location does not materially interfere with Tenant's reception
received by the satellite or antennae, unless said relocation is requested
because the Rooftop Equipment is unreasonably interfering with other equipment
on the Building's roof or in the Building (in which case Tenant shall pay for
the cost of such relocation). Upon Landlord's written request (but not
otherwise), Tenant shall, at its risk and expense, remove the Rooftop Equipment
(including all wiring related thereto), within five (5) days after the
occurrence of any of the following events:
<PAGE> 39
(i) the termination of Tenant's right to possess the Premises; (ii) the
termination of the Lease; (iii) the expiration of the Term; or (iv) the Premises
shall be vacated by Tenant and any and all assignees and/or sublessees approved
by Landlord hereunder. If Tenant fails to do so, Landlord may remove all or any
part of the Rooftop Equipment and store or dispose of it in any manner Landlord
deems appropriate without liability to Tenant; Tenant shall reimburse Landlord
for all costs incurred by Landlord in connection therewith within ten (10) days
after Landlord's request therefor. Tenant shall repair any damage to the
Building caused by or relating to the Rooftop Equipment, including that which is
caused by its installation, maintenance, use, or removal and shall indemnify
Landlord against all liabilities, losses, damages, and costs arising from the
installation, maintenance, use, or removal of the Rooftop Equipment (UNLESS THE
LIABILITIES, LOSSES, DAMAGES, AND COSTS IN QUESTION WERE CAUSED BY LANDLORD'S
SOLE OR GROSS NEGLIGENCE OR WILFUL MISCONDUCT). All work relating to the Rooftop
Equipment shall, at Tenant's expense, be coordinated with Landlord's roofing
contractor so as not to affect any warranty for the Building's roof and shall
not penetrate the roof.
(aa) NOTICE OF LEASE. Tenant agrees not to record this Lease and,
subject to the provisions of Section 25.(s) above, to keep the terms of this
Lease confidential, but each party hereto agrees, at the request of the others
to execute a so-called Notice of Lease in recordable form complying with
applicable law and reasonably satisfactory to Landlord's attorneys. In no event
shall such document set forth the Rent or other charges payable by Tenant
hereunder.
(bb) LANDLORD'S AUTHORITY, ETC. Landlord represents and warrants
that (i) it is the record owner of the Premises in fee simple, (ii) it has full
right and authority to execute this Lease, and (iii) this Lease does not
conflict with any other agreement to which Landlord is bound.
(cc) FIBER OPTIC LINES. Subject to the provisions of Section 8
above, Tenant, at its sole cost and expense and with Landlord's prior written
consent (which consent shall not be unreasonably withheld or delayed), may
install underground fiber optic lines within the Premises. Notwithstanding any
provisions of this Section 25.(cc) to the contrary, Landlord shall not be deemed
to have unreasonably withheld its consent to any installation that would affect
the Building's structure or its HVAC, plumbing, electrical, or mechanical
systems. Tenant shall promptly repair and restore any damage caused by any such
installation and, upon Landlord's request, at the earlier termination or
expiration of this Lease, Tenant shall restore the Premises to the condition
that existed on the date of this Lease. Any and all such installations of fiber
optic lines shall comply with all applicable Laws.
26. OTHER PROVISIONS. LANDLORD AND TENANT EXPRESSLY DISCLAIM ANY IMPLIED
WARRANTY THAT THE PREMISES ARE SUITABLE FOR TENANT'S INTENDED COMMERCIAL
PURPOSE, AND, EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN, TENANT'S OBLIGATION
TO PAY RENT HEREUNDER IS NOT DEPENDENT UPON THE CONDITION OF THE PREMISES OR THE
PERFORMANCE BY LANDLORD OF ITS OBLIGATIONS
<PAGE> 40
HEREUNDER, AND, EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN, TENANT SHALL
CONTINUE TO PAY THE RENT, WITHOUT ABATEMENT, SETOFF OR DEDUCTION,
NOTWITHSTANDING ANY BREACH BY LANDLORD OF ITS DUTIES OR OBLIGATIONS HEREUNDER,
WHETHER EXPRESS OR IMPLIED.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 41
IN WITNESS WHEREOF, and in consideration of the mutual entry into this
Lease and for other good and valuable consideration, and intending to be legally
bound, each party hereto has caused this Lease Agreement to be duly executed as
a Massachusetts instrument under seal as of the day and year first above
written.
TENANT:
BROOKS AUTOMATION, INC., a
Delaware corporation
By:
Name:
Title:
LANDLORD:
W9/TIB REAL ESTATE LIMITED
PARTNERSHIP, a Delaware limited partnership
By: W9/TIB Gen-Par, Inc., a Delaware
corporation, its general partner
By:
Name:
Title:
<PAGE> 42
EXHIBIT A
OUTLINE OF PREMISES
<PAGE> 43
EXHIBIT B
LEGAL DESCRIPTION OF BUILDING
A parcel of land in Chelmsford, Middlesex County, Massachusetts, lying on the
northeasterly side of Turnpike Road being shown as Lot E-1 on a plan entitled
"Plan of Land in Chelmsford, Massachusetts, prepared for Raymond A. and Barbara
F. Carye, Scale: 1" = 40', March 9, 1983, Vanesse/Hangen Engineering, Inc.,
Consulting Engineers & Planners, 184 High Street, Boston, Massachusetts"
recorded with the Middlesex County North District Registry of Deeds in Plan Book
139 as Plan 34, being described as follows:
Beginning at the southerly corner of said Lot E-1 on the northeasterly side of
Turnpike Road at a corner of land now or formerly owned by the Town of
Chelmsford.
Thence running by Turnpike Road N 40 52' 46" W 272.00 feet;
Thence running by Turnpike Road N 44 32' 33" W 132.34 feet;
Thence running by Turnpike Road N 42 13' 28" W 289.27 feet;
Thence running by land now or formerly of Raymond A. and Barbara F. Carye N 49
11' 07" E 299.68 feet;
Thence running by Elizabeth Drive southeasterly and northeasterly along a line
curving to the left, having a radius of 62.50 feet, a distance of 185.52 feet;
Thence running by Elizabeth Drive northeasterly along a line curving to the
right, having a radius of 25.00 feet, a distance of 9.72 feet;
Thence running by land now or formerly of Raymond A. and Barbara F. Carye on
said plan S 42 48' 14" E 304.30 feet;
Thence running by land now or formerly of Raymond A. and Barbara F. Carye S 16
22' 50" W 58.75 feet;
Thence running by land now or formerly of Raymond A. and Barbara F. Carye on
said plan S 20 33' 12" E 145.74 feet;
Thence running by land now or formerly of Raymond A. and Barbara F. Carye on
said plan S 46 00' 59" E 112.57 feet;
Thence running by land now or formerly of Raymond A. and Barbara F. Carye on
said plan S 00 59' 56" E 43.72 feet.
<PAGE> 44
EXHIBIT C
BUILDING RULES AND REGULATIONS
The following rules and regulations shall apply to the Premises, the
Building, and the appurtenances thereto:
1. Sidewalks, doorways, vestibules, halls, stairways, and other similar
areas shall not be obstructed by Tenant or used by Tenant for purposes other
than ingress and egress to and from the Premises and for going from one to
another part of the Building.
2. Plumbing, fixtures and appliances shall be used only for the purposes
for which designed, and no sweepings, rubbish, rags or other unsuitable material
shall be thrown or deposited therein. Damage resulting to any such fixtures or
appliances from misuse by Tenant or its agents, employees or invitees, shall be
paid by Tenant.
3. No signs, advertisements or notices shall be painted or affixed on or
to any windows or doors or other part of the Building without the prior written
consent of Landlord. No curtains or other window treatments shall be placed
between the glass and the Building standard window treatments.
4. Tenant shall provide all door locks into the Premises, at the cost of
Tenant, and Tenant shall not place any additional door locks in the Premises
without providing Landlord with a key for such locks. Tenant shall furnish to
Landlord a reasonable number of keys to the Premises, at Tenant's cost.
5. Landlord may prescribe reasonable weight limitations and determine the
locations for safes and other heavy equipment or items, which shall in all cases
be placed in the Building so as to distribute weight in a manner reasonably
acceptable to Landlord which may include the use of such supporting devices as
Landlord may require. All damages to the Building caused by the installation or
removal of any property of Tenant, or done by Tenant's property while in the
Building, shall be repaired at the expense of Tenant.
6. Corridor doors, when not in use, shall be kept closed to the extent
required by applicable law. Nothing shall be swept or thrown into the corridors,
halls, elevator shafts or stairways. No birds or animals shall be brought into
or kept in, on or about the Premises. No portion of the Premises shall at any
time be used or occupied as sleeping or lodging quarters.
7. Tenant shall cooperate with Landlord's employees in keeping the
Premises neat and clean.
8. Tenant shall not make or permit any vibration or improper,
objectionable or unpleasant noises or odors in the Building or otherwise
interfere in any way with other tenants or persons having business with them.
<PAGE> 45
9. Tenant shall not use or keep in the Building any flammable or explosive
fluid or substance.
10. Landlord will not be responsible for lost or stolen personal property,
money or jewelry from the Premises or public or common areas regardless of
whether such loss occurs when the area is locked against entry or not.
11. Tenant shall not conduct any activity on or about the Premises or
Building which will draw pickets, demonstrators, or the like.
12. All vehicles are to be currently licensed, in good operating
condition, parked for business purposes having to do with Tenant's business
operated in the Premises, parked within designated parking spaces, one vehicle
to each space. No vehicle shall be parked as a "billboard" vehicle in the
parking lot. Any vehicle parked improperly may be towed away. Tenant, Tenant's
agents, employees, vendors and customers who do not operate or park their
vehicles as required shall subject the vehicle to being towed at the expense of
the owner or driver. Tenant shall indemnify, hold and save harmless Landlord of
any liability arising from the towing of any vehicles belonging to a Tenant
Party.
<PAGE> 46
EXHIBIT D
TENANT FINISH-WORK: ALLOWANCE
1. Except as set forth in this Exhibit, Tenant accepts the Premises in
their "AS-IS" condition on the date that this Lease is entered into.
Notwithstanding the foregoing sentence, Landlord shall, at its sole cost and
expense, perform the following: (a) replace the landscape timbers as necessary;
(b) repair the sidewalk in front of the main entrance to the Building; and (c)
recaulk and reseal the Building. Further, and subject to the provisions of this
Section 1, Landlord agrees to pay to replace the four (4) rooftop HVAC units
known as units 4, 8, 9 and 12 and to repair the other existing HVAC rooftop
units in accordance with the specifications attached hereto as Exhibit D-1
(collectively, the "HVAC REPLACEMENT/REPAIR SPECIFICATIONS"). Landlord intends
to bid out the repair work enumerated in the HVAC Replacement/Repair
Specifications and to pay to Tenant, in accordance with the provisions of this
Section 1, the sum that would be required to be paid to the lowest bidder (the
"HVAC REPAIR ALLOWANCE") to perform such work. Tenant desires to have Thermo
Engineering, Inc. perform the work enumerated in the HVAC Replacement/Repair
Specifications, and shall be responsible for ensuring that Thermo Engineering,
Inc. performs such work in accordance with said Specifications. After completion
of such work in accordance with the HVAC Replacement/Repair Specifications,
Landlord shall pay to Tenant the HVAC Repair Allowance within twenty (20)
business days from Tenant's written request for the same provided that: (a)
Tenant shall not be in default under the Lease; (b) the Lease shall be in full
force and effect; and (c) Tenant has provided Landlord with evidence reasonably
satisfactory to Landlord that the work enumerated in the HVAC Replacement/Repair
Specifications have been completed in accordance with said Specifications.
2. Tenant shall provide to Landlord for its approval final working
drawings, prepared by an architect that has been approved by Landlord (which
approval shall not unreasonably be withheld, delayed or conditioned), of all
alterations, improvements and installations that Tenant proposes to construct,
install and complete in the Premises; such working drawings shall include the
partition layout, ceiling plan, electrical outlets and switches, telephone
outlets, drawings for any modifications to the mechanical and plumbing systems
of the Building, and detailed plans and specifications for the construction of
the alterations, improvements and installations called for under this Exhibit in
accordance with all applicable governmental laws, codes, rules, and regulations.
If any of Tenant's proposed construction work will affect the Building's HVAC,
electrical, mechanical, or plumbing systems, then the working drawings
pertaining thereto must be approved by the Building's engineer of record.
Landlord's approval or disapproval, as the case may be, of the final working
drawings (inclusive of any approval required by the Building's engineer of
record) shall be completed within ten (10) business days of Landlord's receipt
of such working drawings. If Landlord disapproves the final working drawings,
Landlord shall specify the reasons for such disapproval in writing to Tenant.
Landlord's approval of such working drawings shall not be unreasonably withheld,
delayed or conditioned, provided that (a) they comply with all applicable laws,
rules, and regulations, (b) such working drawings are sufficiently detailed to
allow construction of the alterations, improvements and installations in a good
<PAGE> 47
and workmanlike manner, (c) the alterations, improvements and installations
depicted thereon conform to the rules and regulations promulgated from time to
time by Landlord for the construction of tenant alterations, improvements and
installations (a copy of which has been delivered to Tenant), and (d) the
alterations, improvements and installations do not affect the Building's
Structure or any of its HVAC, electrical, mechanical or plumbing systems. As
used herein, "WORKING DRAWINGS" shall mean the final working drawings approved
by Landlord, as amended from time to time by any approved changes thereto, and
"WORK" shall mean all alterations, improvements and installations to be
constructed in accordance with and as indicated on the Working Drawings.
Landlord's approval of the Working Drawings shall not be a representation or
warranty of Landlord that such drawings are adequate for any use or comply with
any law, but shall merely be the consent of Landlord thereto. Landlord shall, at
Tenant's request, sign the Working Drawings to evidence its review and approval
thereof. All changes in the Work must receive the prior written approval of
Landlord (which approval shall not be withheld, delayed or conditioned), and in
the event of any such approved change Tenant shall, upon completion of the Work,
furnish Landlord with an accurate, reproducible "as-built" plan of the
improvements as constructed.
3. The Work shall be performed only by contractors and subcontractors
approved in writing by Landlord, which approval shall not be unreasonably
withheld or delayed. All contractors and subcontractors shall be required to
procure and maintain insurance against such risks, in such amounts, and with
such companies as Landlord may reasonably require. Certificates of such
insurance, with paid receipts therefor, must be received by Landlord before the
Work is commenced. Promptly upon Landlord's approval of the Working Drawings and
delivery of the Premises to Tenant, Tenant shall commence the construction of
the Work and diligently and continuously pursue the completion of the same. The
Work shall be performed in a good and workmanlike manner free of defects, shall
conform strictly with the Working Drawings, and shall be performed in such a
manner and at such times as not to interfere with or delay Landlord's other
contractors, the operation of the Building, and the occupancy thereof by other
tenants. All contractors and subcontractors shall contact Landlord and schedule
time periods during which they may use Building facilities in connection with
the Work (e.g., elevators, excess electricity, etc.).
4. The entire cost of performing the Work (including, without limitation,
design of the Work and preparation of the Working Drawings, costs of
construction, labor and materials, electrical usage during construction,
additional janitorial services, general tenant signage, related taxes and
insurance costs, all of which costs are herein collectively called the "TOTAL
CONSTRUCTION COSTS") in excess of the Construction Allowance (as hereinafter
defined) shall be paid by Tenant.
5. Landlord shall provide to Tenant a construction allowance (the
"CONSTRUCTION ALLOWANCE") equal to the lesser of (a) $10.00 per rentable square
foot in the Premises or (b) the Total Construction Costs, as adjusted for any
approved changes to the Work.
<PAGE> 48
Subject to the terms and conditions of this Lease, Landlord shall pay the
Construction Allowance to Tenant for the purpose of financing a portion of the
Work. As conditions to Tenant's right to receive the Construction Allowance: (i)
Tenant shall not be in default under the Lease; (ii) the Lease shall be in full
force and effect; (iii) the Work, or a portion of the Work, shall be, in
Landlord's reasonable discretion, substantially complete; (iv) Tenant shall
furnish to Landlord: (A) if the entire Work is substantially complete, a
Certificate of Occupancy respecting the Premises; and (B) such evidence as
Landlord may reasonably require to evidence that all persons furnishing or
supplying labor and materials in connection with the construction of the Work,
or in the case of completion of a portion of the Work, have been paid and that
no lien exists of record with respect thereto; and (v) Tenant shall not request
any portion of the Construction Allowance more than once a month. Landlord shall
fund the Construction Allowance within twenty (20) business days from Tenant's
written request for the same provided that Tenant has complied with the
requirements set forth in the preceding sentence. Upon paying the full amount of
the Construction Allowance to Tenant in accordance with the provisions hereof,
Landlord shall have no further obligation to extend any credit to Tenant.
6. In consideration for Landlord's management and supervision of services
performed in connection with the Work, Tenant shall pay to Landlord, within ten
(10) business days after demand therefor, the actual costs incurred by Landlord
to review and approve the Working Drawings and/or any drafts and/or
modifications thereto and to review the construction of the Work.
<PAGE> 49
EXHIBIT D-1
HVAC REPLACEMENT/REPAIR SPECIFICATIONS
Specific repairs required of individual rooftop units:
RTU 1:-Replace condenser fan motor and blade.
-Replace crankcase heater.
-Repair filter access panel.
RTU 2:-Repair economizer damper linkage.
-Replace indoor blower.
RTU 3:-No repairs needed.
RTU 4:-This unit will be replaced with a comparable unit (includes new curb,
electrical/gas connections).
RTU 5:-Replace combustion motor and wheel.
-Replace indoor blower bearing housing.
-Replace enthalpy switch.
-Replace disconnect switch.
RTU 6:-Install new suction unloader.
-Repair refrigerant leak at high-pressure switch.
-Replace six (6) burners.
-Replace economizer motor.
-Repair return-air linkage.
-Repair filter access panel.
RTU 7:-Replace sixteen (16) burners.
-Install second stage heat wire at thermostat.
-Repair economizer motor.
-Repair filter access panel.
RTU 8:-This unit will be replaced with a comparable unit (includes new curb,
electrical/gas connections).
RTU 9:-This unit will be replaced with a comparable unit (includes new curb,
electrical/gas connections).
RTU 10: -Replace six (6) burners.
-Repair economizer motor.
-Rewire unit to have compressors operate when cooling stage is on.
RTU 11: -Replace sixteen (16) burners.
-Repair economizer damper.
RTU 12: -This unit will be replaced with a comparable unit (includes new
curb, electrical/gas connections).
RTU 13: -Reset low voltage breaker.
<PAGE> 50
-Rewire unit to have compressor and economizer operate when cooling
stage is on.
-Repair liquid line at cap tube distributor.
-Repair economizer.
-Replace disconnect switch.
RTU 14: -Replace twelve (12) burners.
-Replace combustion blower motor and wheel.
-Replace disconnect switch.
RTU 15: -Replace set of rusted compressor overloads.
-Replace condenser fan motor and blade.
-Replace five (5) burners.
-Replace disconnect switch.
RTU 16: -Replace condenser fan motor and blade.
-Replace six (6) burners.
-Replace enthalpy and disconnect switches.
A/C 17: Telephone Room
-No repairs needed.
A/C 18: -Replace condenser fan motor and blade.
-Install new contactor, run cap and time delay in electrical panel.
A/C 19: Stand-up unit in room at rear of building.
- No repairs needed.
A/C 20: Shipping
-No repairs needed.
UH 1: Shipping
-Install new thermostat.
UH 2: Shipping
-Replace draft inducer motor.
Area Heater:High Bay
- No repairs needed.
<PAGE> 51
EXHIBIT E
AMENDMENT NO. 1
This Amendment No. 1 (this "AMENDMENT") is executed as of ,
2000 between W9/TIB REAL ESTATE LIMITED PARTNERSHIP, a Delaware limited
partnership ("LANDLORD"), and BROOKS AUTOMATION, INC., a Delaware corporation
("TENANT"), for the purpose of amending the Lease Agreement between Landlord and
Tenant dated January 31, 2000 (the "LEASE"). Capitalized terms used herein but
not defined shall be given the meanings assigned to them in the Lease.
AGREEMENTS
For valuable consideration, whose receipt and sufficiency are
acknowledged, Landlord and Tenant agree as follows:
1. CONDITION OF PREMISES. Tenant has accepted possession of the Premises
pursuant to the Lease. Any improvements required by the terms of the Lease to be
made by Landlord have been completed to the full and complete satisfaction of
Tenant in all respects and Landlord has fulfilled all of its duties under the
Lease with respect to such initial tenant improvements. Furthermore, Tenant
acknowledges that the Premises are suitable for the Permitted Use.
2. COMMENCEMENT DATE. The Commencement Date of the Lease is
______________, 2000. If the Commencement Date set forth in the Lease is
different than the date set forth in the preceding sentence, then the
Commencement Date as contained in the Lease is amended to be the Commencement
Date set forth in the preceding sentence.
3. EXPIRATION DATE. The Term is scheduled to expire on
, 199___. If the scheduled expiration date of the initial Term as set
forth in the Lease is different than the date set forth in the preceding
sentence, then the scheduled expiration date as set forth in the Lease is hereby
amended to the expiration date set forth in the preceding sentence.
4. CONTACT NUMBERS. Tenant's telephone number in the Premises is .
Tenant's telecopy number in the Premises is .
5. RATIFICATION. Tenant hereby ratifies and confirms its obligations under
the Lease, and represents and warrants to Landlord that it has no defenses
thereto. Additionally, Tenant further confirms and ratifies that, as of the date
hereof, the Lease is and remains in good standing and in full force and effect,
and Tenant has no claims, counterclaims, set-offs or defenses against Landlord
arising out of the Lease or in any way relating thereto or arising out of any
other transaction between Landlord and Tenant.
6. BINDING EFFECT; GOVERNING LAW. Except as modified hereby, the Lease
shall remain in full effect and this Amendment shall be binding upon Landlord
and Tenant and their respective successors and assigns. If any inconsistency
exists or arises between the terms of this Amendment and the terms of the Lease,
the terms of this Amendment shall prevail. This Amendment shall be governed by
the laws of the State in which the Premises is located.
<PAGE> 52
7. COUNTERPARTS. This Amendment may be executed in multiple counterparts,
each of which shall constitute an original, but all of which shall constitute
one document.
Executed as of the date first written above.
TENANT:
BROOKS AUTOMATION, INC., a
Delaware corporation
By:
Name:
Title:
LANDLORD:
W9/TIB REAL ESTATE LIMITED
PARTNERSHIP, a Delaware limited partnership
By: W9/TIB Gen-Par, Inc., a Delaware
corporation, its general partner
By:
Name:
Title:
<PAGE> 53
EXHIBIT F
FORM OF TENANT ESTOPPEL CERTIFICATE
The undersigned is the Tenant under the Lease (defined below) between
W9/TIB REAL ESTATE LIMITED PARTNERSHIP, a Delaware limited partnership, as
Landlord, and the undersigned as Tenant, of the Premises located at 16 Elizabeth
Drive, Chelmsford, Massachusetts, and hereby certifies as follows:
1. The Lease consists of the original Lease Agreement dated as of ,
199___ between Tenant and Landlord ['s predecessor-in-interest] and the
following amendments or modifications thereto (if none, please state "none"):
The documents listed above are herein collectively referred to as the "LEASE"
and represent the entire agreement between the parties with respect to the
Premises. All capitalized terms used herein but not defined shall be given the
meaning assigned to them in the Lease.
2. The Lease is in full force and effect and has not been modified,
supplemented or amended in any way except as provided in Section 1 above.
3. The Term commenced on , 2000 and the Term expires, excluding any
renewal options, on , 200__, and Tenant has no option to purchase all
or any part of the Premises or the Building or, except as expressly set forth in
the Lease, any option to terminate or cancel the Lease.
4. Tenant currently occupies the Premises described in the Lease and
Tenant has not transferred, assigned, or sublet any portion of the Premises nor
entered into any license or concession agreements with respect thereto except as
follows (if none, please state "none"):
5. All monthly installments of Basic Rent, all Additional Rent and all
monthly installments of estimated Additional Rent have been paid when due
through. The current monthly installment of Basic Rent is $ .
<PAGE> 54
6. All conditions of the Lease to be performed by Landlord necessary to
the enforceability of the Lease have been satisfied and Landlord is not in
default thereunder. In addition, Tenant has not delivered any notice to Landlord
regarding a default by Landlord thereunder.
7. As of the date hereof, there are no existing defenses or offsets, or,
to the undersigned's knowledge, claims or any basis for a claim, that the
undersigned has against Landlord and no event has occurred and no condition
exists, which, with the giving of notice or the passage of time, or both, will
constitute a default under the Lease.
8. No rental has been paid more than thirty (30) days in advance and no
security deposit has been delivered to Landlord except as provided in the Lease.
9. If Tenant is a corporation, partnership or other business entity, each
individual executing this Estoppel Certificate on behalf of Tenant hereby
represents and warrants that Tenant is a duly formed and existing entity
qualified to do business in the state in which the Premises is located and that
Tenant has full right and authority to execute and deliver this Estoppel
Certificate and that each person signing on behalf of Tenant is authorized to do
so.
10. There are no actions pending against Tenant under any bankruptcy or
similar laws of the United States or any state.
11. Other than in compliance with all applicable laws and incidental to
the ordinary course of the use of the Premises, the undersigned has not used or
stored any hazardous substances in the Premises.
12. All tenant improvement work to be performed by Landlord under the
Lease has been completed in accordance with the Lease and has been accepted by
the undersigned and all reimbursements and allowances due to the undersigned
under the Lease in connection with any tenant improvement work have been paid in
full.
13. Tenant acknowledges that this Estoppel Certificate may be delivered to
Landlord, Landlord's Mortgagee or to a prospective mortgagee or prospective
purchaser, and their respective successors and assigns, and acknowledges that
Landlord, Landlord's Mortgagee and/or such prospective mortgagee or prospective
purchaser will be relying upon the statements contained herein in disbursing
loan advances or making a new loan or acquiring the property of which the
Premises are a part and that receipt by it of this certificate is a condition of
disbursing loan advances or making such loan or acquiring such property.
Executed as of , 199 .
TENANT:
<PAGE> 55
BROOKS AUTOMATION, INC., a
Delaware corporation
By:
Name:
Title:_____
<PAGE> 56
EXHIBIT G
RENEWAL OPTION
Provided no Event of Default exists and Tenant is occupying the entire
Premises at the time of such election, Tenant may renew this Lease for one
additional period of five (5) years, by delivering written notice of the
exercise thereof to Landlord not earlier than fifteen (15) months nor later than
twelve (12) months before the expiration of the Term. The Basic Rent payable for
each month during such extended Term shall be the prevailing rental rate (the
"PREVAILING RENTAL RATE"), at the commencement of such extended Term, for
renewals of space of equivalent quality, size, utility and location, with the
length of the extended Term and the credit standing of Tenant to be taken into
account. Within thirty (30) days after receipt of Tenant's notice to renew,
Landlord shall deliver to Tenant written notice of the Prevailing Rental Rate
and shall advise Tenant of the required adjustment to Basic Rent, if any, and
the other terms and conditions offered. Tenant shall, within ten (10) days after
receipt of Landlord's notice, notify Landlord in writing whether Tenant accepts
or rejects Landlord's determination of the Prevailing Rental Rate. If Tenant
timely notifies Landlord that Tenant accepts Landlord's determination of the
Prevailing Rental Rate (and failure of Tenant to notify Landlord within the time
period prescribed above shall be deemed acceptance) or if, after a timely
rejection by Tenant of such determination, the Prevailing Rental Rate is
determined according to the procedures set forth in this Exhibit, then, on or
before the commencement date of the extended Term, Landlord and Tenant shall
execute an amendment to this Lease extending the Term on the same terms provided
in this Lease, except as follows:
(a) Basic Rent shall be adjusted to the Prevailing Rental Rate;
(b) Tenant shall have no further renewal option unless expressly
granted by Landlord in writing; and
(c) Landlord shall lease to Tenant the Premises in their
then-current condition, and Landlord shall not provide to Tenant any
allowances (e.g., moving allowance, construction allowance, and the like)
or other tenant inducements.
If Tenant rejects Landlord's determination of the Prevailing Rental Rate, Tenant
may, but only within ten (10) days after receipt of Landlord's notice, require
by written notice to Landlord that the determination of Prevailing Rental Rates
be made by brokers. In such event, within ten (10) days thereafter, each party
shall select a qualified commercial real estate broker with at least ten (10)
years experience in appraising property and buildings in the city or submarket
in which the Premises are located. The two brokers shall give their opinion of
Prevailing Rental Rates within ten (10) days after their retention. In the event
the opinions of the two brokers differ and, after good faith efforts over the
succeeding ten (10) day period, they cannot mutually agree, the brokers shall
immediately and jointly appoint a third broker with the qualifications specified
above. This third broker shall immediately (within five (5) days) choose either
the determination of
<PAGE> 57
Landlord's broker or Tenant's broker and such choice of this third broker shall
be final and binding on Landlord and Tenant. Each party shall pay its own costs
for its real estate broker. The parties shall equally share the costs of any
third broker. The parties shall immediately confirm the renewal term, Basic Rent
and the other terms and conditions so determined, in writing.
Tenant's rights under this Exhibit shall terminate if (1) this Lease or
Tenant's right to possession of the Premises is terminated, (2) Tenant assigns
any of its interest in this Lease or sublets any portion of the Premises, (3)
Tenant fails to timely exercise its option under this Exhibit, time being of the
essence with respect to Tenant's exercise thereof, or (4) Landlord determines,
in its sole but reasonable discretion, that Tenant's financial condition or
creditworthiness has materially deteriorated since the date of this Lease.
<PAGE> 58
EXHIBIT H
[Intentionally Omitted]
<PAGE> 59
EXHIBIT I
RENT ABATEMENT PROVISIONS
Basic Rent shall be conditionally abated during the first three (3) months
of the Term. Commencing with the fourth (4th) month of the Term, Tenant shall
make Basic Rent payments as otherwise provided in the Lease. Notwithstanding
such abatement of Basic Rent (a) all other sums due under the Lease, including
Additional Rent and Tenant's share of Taxes shall be payable as provided in the
Lease, and (b) any increases in Basic Rent set forth in the Lease shall occur on
the dates scheduled therefor.
The abatement of Basic Rent provided for in this Exhibit is conditioned
upon Tenant's full and timely performance of all of its obligations under the
Lease. If at any time during the Term an Event of Default by Tenant occurs, then
the abatement of Basic Rent provided for in this Exhibit shall immediately
become void, and Tenant shall promptly pay to Landlord, in addition to all other
amounts due to Landlord under this Lease, the full amount of all Basic Rent
herein abated.
<PAGE> 60
EXHIBIT J
SAMPLE LETTER OF CREDIT
Beneficiary/Landlord: Issuance Date:
W9/TIB Real Estate Limited Partnership. ______________________, 2000
c/o Archon Group, L.P.
1275 K Street NW, Suite 900 Irrevocable Standby Letter
Washington, DC 20005 of Credit No. _______________
Applicant/Accountee/Tenant: Credit Amount:
Brooks Automation, Inc. USD $_____________________
15 Elizabeth Drive Up to an Aggregate Thereof
Chelmsford, MA 01824-4111 Date and Place of Expiry:
_______________, _____
At Our Counters in Boston, MA
Ladies and Gentlemen:
We hereby issue our irrevocable standby letter of credit in your favor for
the account of the applicant for an aggregate amount not to exceed
_______________________________US DOLLARS available for payment by presentation
of your draft(s) drawn on ourselves at sight, and accompanied by the following
documents:
1. Your statement/certificate, on your letterhead, signed by a person
purporting to be your authorized officer/representative, appropriately completed
in the following form:
A. "The undersigned, an authorized officer/representative of W9/TIB Real
Estate Limited Partnership (the "Landlord"), hereby certifies with regard to
__________ standby letter of credit no. __________ that Brooks Automation, Inc.
(the "Tenant") is in default relative to the Lease Agreement dated January 31,
2000 (the "Lease") by and between Landlord and Tenant and such default has
continued uncured beyond all applicable notice and grace periods."
OR
B. "We are in receipt of _______________ Notice of Non-Extension of its
letter of credit no. _______________ and Brooks Automation, Inc. (the "Tenant")
has failed to provide a replacement letter of credit reasonably acceptable to us
as of the date of our drawing and the Tenant remains liable to us pursuant to
the Lease."
2. The original of this letter of credit (for endorsement of drawing),
which will be returned unless the credit is fully utilized.
<PAGE> 61
Partial drawings are permitted.
Draft(s) must indicate the name of the issuing bank, the letter of credit
number and must be presented at this office (the address specified below).
It is a condition of this letter of credit that it shall be deemed
automatically extended without amendment for an additional period of one year
from the present or each future expiration date hereof, but not beyond July 31,
2010, unless at least forty-five (45) days prior to any such expiration date we
notify you by certified mail, that we elect not to so extend this letter of
credit for any such additional period. Upon receipt by you of such notice, you
may draw hereunder your draft(s) at sight on ourselves for the then full amount
of this letter of credit accompanied by your statement as specified above.
This letter of credit is transferable in its entirety, but not in part, to
any successor landlord under the Lease and may be successively transferred. If
it is your intention to transfer your interest hereunder, kindly return the
letter of credit to us for appropriate endorsement and furnish us with your
instructions. Please note your signature on your request for transfer must be
authenticated by your bank. (Transfer form is attached.) In the event of
transfer all required documents are to be signed by the transferee.
This letter of credit sets forth in full the terms of our obligations to
you, and our undertaking shall not in any way be amended or amplified by
reference to any documents, instruments or any agreement referred to herein or
to which this letter of credit related, and such reference, if any, shall not be
deemed to incorporate herein by reference any document, instrument or agreement.
Except as otherwise expressly stated herein, this letter of credit is
subject to the International Standby Practices (ISP98), the International
Chamber of Commerce, Publication No. 590, and shall, as to matters not governed
by ISP98, be governed by and construed in accordance with the laws of the
Commonwealth of Massachusetts.
We engage with you that all draft(s) drawn under and in compliance with
the terms and conditions of this letter of credit shall be duly honored on
presentation to us at our office at _______________, Boston, MA _______, Attn:
_______________, ____ Floor on or before the expiring date as specified above or
any automatically extended date herein before set forth.
Very truly yours,
By: _______________________________
Name:
Title:
<PAGE> 62
TRANSFER
This form is to be used where a Letter of Credit is transferred
in its entirety and no substitution of invoices is involved.
Date
Re: Credit issued or advised by
-----------------------------
Gentlemen:
For value received, the undersigned beneficiary hereby irrevocably transfers to:
(Name of Second Beneficiary)
(Address)
(Name of Advising Bank)
(Address)
all rights of the undersigned beneficiary to draw under the above Letter of
Credit in its entirety.
I. By this transfer, all rights of the undersigned beneficiary in such Letter
of Credit are transferred to the Second Beneficiary and the Second Beneficiary
shall have the sole rights as beneficiary thereof, including sole rights
relating to any amendment, whether increases or extensions or other amendments
and whether now existing or hereafter made. All amendments are to be advised
direct to the Second Beneficiary without necessity of any consent of or notice
to the undersigned beneficiary.
<PAGE> 63
The advice of such Letter of Credit is returned herewith, and we ask you
to endorse the transfer on the reverse thereof, and forward it direct to the
Second Beneficiary with your customary notice of transfer, or advise the letter
of credit to the Second Beneficiary by telex/SWIFT.
SIGNATURE AUTHENTICATED Very truly yours,
(Bank)
By: ______________________________
(Authorized Signature) Name:
Title:
<PAGE> 64
EXHIBIT K
SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
This AGREEMENT is made and entered into as of ___________________, 2000,
by and among LaSalle National Bank, as Trustee for GS Mortgage Securities
Corporation II Commercial Mortgage Pass-Through Certificates, Series 1998-GSFL1
("Lender"), W9/TIB Real Estate Limited Partnership ("Landlord") and Brooks
Automation, Inc.
("Tenant").
1. RECITALS.
1.1 Mortgage. Lender is the holder of a Promissory Note dated
________________, 19__, in the original principal amount of $_________________
of Landlord, which is secured, inter alia, by a Mortgage and Security Agreement
(the "Mortgage") and Assignment of Lease and Rents (the "Lease Assignment")
covering premises more particularly described in the Mortgage (the "Premises").
1.2 Lease. Landlord and Tenant entered into a Lease dated January
31, 2000 (the "Lease"), whereby Landlord demised to Tenant a portion of the
Premises (the "Demised Premises").
2. CONSIDERATION. The terms of the Lease constitute a material inducement
to Lender's consent thereto and entering into and performing this Agreement.
3. SUBORDINATION OF THE LEASE. This Lease shall be and is hereby made
subject and subordinate to the Mortgage.
4. NON-DISTURBANCE. Lender shall not, in the exercise of any right,
remedy, or privilege granted by the Mortgage or the Lease Assignment, or
otherwise available to Lender at law or in equity, disturb Tenant's possession
under the Lease so long as:
(a) Tenant is not in default beyond any applicable grace periods under any
provision of the Lease or this Agreement at the time Lender exercises any such
right, remedy or privilege; and
(b) The Lease at that time is in force and effect according to its
original terms, or with such amendments or modifications as Lender shall have
approved, if such approval is required by the terms of the Mortgage or the Lease
Assignment; and
(c) Tenant thereafter continues to fully and punctually perform all of its
obligations under the Lease without default thereunder beyond any applicable
cure period; and
(d) Tenant attorns to or at the direction of Lender, as provided in
Paragraph 5. Without limiting the foregoing, and so long as the foregoing
conditions are met, Lender
<PAGE> 65
agrees that (i) Tenant will not be named as a party to any foreclosure or other
proceeding instituted by Lender to enforce the terms of the Mortgage or the
Lease Assignment; (ii) any sale or other transfer of the Demised Premises or of
the Landlord's interest in the Lease, pursuant to foreclosure or any voluntary
conveyance or other proceeding in lieu of foreclosure, will be subject and
subordinate to Tenant's possession under the Lease; and (iii) the Lease will
continue in force and effect according to its original terms, or with such
amendments as Lender shall have approved, if such approval is required by the
terms and conditions of the Mortgage or the Lease Assignment.
5. ATTORNMENT. Tenant shall attorn to Lender, to any receiver or similar
official for the Demised Premises appointed at the instance and request, or with
the consent, of Lender and to any person who acquires the Demised Premises, or
the Landlord's interest in the Lease, or both, pursuant to Lender's exercise of
any right, remedy or privilege granted by the Mortgage, or otherwise at law or
in equity. Without limitation, Tenant shall attorn to any person or entity that
acquired the Demised Premises pursuant to foreclosure of the Mortgage, or by any
proceeding or voluntary conveyance in lieu of such foreclosure, or from Lender,
whether by sale, exchange or otherwise. Any attornment to anyone other than
Lender shall be conditioned upon Tenant receiving a non-disturbance from such
entity.
Upon any attornment under this Paragraph 5, the Lease shall continue in
full force and effect as a direct lease between Tenant and the person or entity
to whom Tenant attorns, except that such person or entity shall not be:
(i) liable for any breach, act or omission of any prior landlord; or
(ii) subject to any offsets, claims or defenses which Tenant might have
against any prior landlord; or
(iii) bound by any rent or additional rent or other payment in lieu of
rent which Tenant might have paid to any prior landlord more than 30 days in
advance of its due date under the Lease or which such person or entity has
physical possession of; or
(iv) bound by any amendment or modification of the Lease made without
Lender's written consent, where such consent is required by the Mortgage; or
(v) bound by any notice given by Tenant to Landlord, whether or not such
notice is given pursuant to the terms of the Lease, unless a copy thereof was
then also given to Lender; or
(vi) be liable for any security deposit or other sums held by any prior
landlord, unless actually received.
The person or entity to whom Tenant attorns shall be liable to Tenant under the
Lease only during such person or entity's period of ownership, and such
liability shall not continue or survive as to the transferor after a transfer by
such person or entity of its interest in the Lease and the Demised Premises.
<PAGE> 66
6. REPRESENTATIONS AND WARRANTIES.
6.1 Joint and Several. Landlord and Tenant hereby jointly and
severally represent and warrant to Lender as follows regarding the Lease:
(a) A true and correct copy of the Lease (inclusive of all riders and
exhibits thereto) is attached to the counterpart of this Agreement being
delivered to Lender. There are no other oral or written agreements,
understandings or the like between Landlord and Tenant relating to the Demised
Premises or the Lease transaction.
(b) The term of the Lease is expected to commence on April 1, 2000.
(c) Under the Lease, Tenant shall be obligated to pay rent without present
right of defense or offset, at the rate of $68,680.98 per month commencing July
1, 2000. Rent is paid through and including N/A , 2000. No rent has been paid
more than 30 days in advance, and Tenant has no claim against the Landlord for
any deposits or other sums.
(d) The Lease has not been modified, altered or amended in any respect.
(e) All of the improvements contemplated by the Lease have been entirely
completed as required therein.
(f) The addresses for notices to be sent to Tenant and Landlord are as set
forth in the Lease.
(g) To Tenant's knowledge, Tenant has no right of first refusal, option or
other right to purchase the Premises or any part thereof, including, without
limitation, the Demised Premises.
6.2 Several. Landlord and Tenant severally represent and warrant to Lender
with respect to themselves, but not with respect to the other:
(a) The execution of the Lease was duly authorized, the Lease was properly
executed and is in full force and effect and is valid, binding and enforceable
against Tenant and Landlord and there exists no default, nor state of facts
which with notice, the passage of time, or both, could ripen into a default, on
the part of either Tenant or Landlord.
(b) There has not been filed by or against nor, to the best of the
knowledge and belief of the representing party, is there threatened against or
contemplated by, Landlord or Tenant, a petition in bankruptcy, voluntary or
otherwise, any assignment for the benefit of creditors, any petition seeking
reorganization or arrangement under the bankruptcy laws of the United States or
of any state thereof, or any other action brought under said bankruptcy laws.
<PAGE> 67
(c) There has not been any assignment, hypothecation or pledge of the
Lease or rents accruing under the Lease, other than pursuant to the Mortgage and
the Lease Assignment. Tenant makes the representation set forth in this
subparagraph only to its best knowledge and belief.
7. RENTS. Landlord and Tenant jointly and severally acknowledge that the
Lease Assignment provides for the direct payment to Lender of all rents and
other monies due and to become due to Landlord under the Lease upon the
occurrence of certain conditions as set forth in the Lease Assignment without
Lender's taking possession of the Demised Premises or otherwise assuming
Landlord's position or any of Landlord's obligations under the Lease. Upon
receipt from Lender of written notice to pay all such rents and other monies to
or at the direction of Lender, Landlord authorizes and directs Tenant thereafter
to make all such payments to or at the direction of Lender, releases Tenant of
any and all liability to Landlord for any and all payment so made, and shall
defend, indemnify and hold Tenant harmless from and against any and all claims,
demands, losses, or liabilities asserted by, through or under Landlord (except
by Lender) for any and all payments so made. Upon receipt of such notice, Tenant
thereafter shall pay all monies then due and becoming due from Tenant under the
Lease to or at the direction of Lender, notwithstanding any provision of the
Lease to the contrary. Tenant agrees that neither Lender's demanding or
receiving any such payments, nor Lender's exercising any other right, remedy,
privilege, power or immunity granted by the Mortgage or the Lease Assignment,
will operate to impose any liability upon Lender for performance of any
obligation of Landlord under the Lease unless and until Lender elects otherwise
in writing. Such payments shall continue until Lender directs Tenant otherwise
in writing.
Tenant agrees not to pay any rent under the Lease more than 30 days in
advance without Lender's consent. The provisions of this Paragraph 7 will apply
from time to time throughout the term of the Lease.
8. CURE. If Tenant becomes entitled to terminate the Lease or offset,
withhold or abate rents because of any default by Landlord, then Tenant shall
give Lender written notice specifying Landlord's default. Lender then shall have
the right, but not the obligation, to cure the specified default within the
following time periods:
(a) Fifteen days after receipt of such notice with respect to defaults
that can be cured by the payment of money; or
(b) Thirty days after receipt of such notice with respect to any other
default; unless the cure requires Lender to obtain possession of the Demised
Premises, in which case such thirty day period shall not commence until Lender
acquires possession, so long as Lender proceeds promptly to acquire possession
of the Demised Premises with due diligence, by foreclosure of the Mortgage or
otherwise.
Nothing contained in this Paragraph 8 shall require Lender to commence or
continue any foreclosure or other proceedings, or, if Lender acquires possession
of the Demised Premises, to continue such possession, if all defaults specified
by Tenant in its notice are
<PAGE> 68
cured. Possession by a receiver, or other similar official appointed at the
instance, or with the consent, of Lender shall constitute possession by Lender
for all purposes under this Paragraph 8.
9. ESTOPPEL LETTERS. Whenever reasonably requested by Lender, Landlord and
Tenant from time to time shall severally execute and deliver to or at the
direction of Lender, and without charge to Lender, one or more written
certifications of all of the matters as set forth in Paragraph 6, whether Tenant
has exercised any renewal option or options and any other information the Lender
may reasonably require to confirm the current status of the Lease, including,
without limitation, a confirmation that the Lease is and remains subordinated as
provided in this Agreement.
10. CASUALTY AND EMINENT DOMAIN. Landlord and Tenant jointly and severally
agree that the Mortgage permits Lender, at its option, to apply to the
indebtedness from time to time secured by the Mortgage any and all insurance
proceeds payable with respect to any casualty loss at the Demised Premises and
any and all awards or other compensation that may be payable for the
condemnation of all or any portion of the Demised Premises, or any interest
therein, or by way of negotiated settlement or conveyance in lieu of
condemnation; and Landlord and Tenant jointly and severally consent to any such
application by Lender. Notwithstanding the foregoing, Landlord and Lender agree
that any and all insurance or condemnation proceeds payable with respect to
Tenant's property or the interruption or relocation of Tenant's business (except
for rental loss insurance proceeds) will be paid to Tenant, so long as they do
not reduce the proceeds otherwise payable to Lender.
11. NOTICES. All notices, demands, and other communications that must or
may be given or made in connection with this Agreement must be in writing and,
unless receipt is expressly required, will be deemed delivered or made 5 days
after having been mailed by registered or certified mail, return receipt
requested, or by express mail, in any event with sufficient postage affixed, and
addressed to the parties as follows:
TO LENDER: c/o AMRESCO Services, L.P.
235 Peachtree Street, N.E.
Suite 900
Atlanta, Georgia 30303
Attn.: Private Sector Servicing
TO LANDLORD: W9/TIB Real Estate Limited Partnership
c/o Archon Group, L.P.
1275 K Street NW, Suite 900
Washington, DC 20005
TO TENANT: Brooks Automation, Inc.
15 Elizabeth Drive
Chelmsford, MA 01824-4111
Attn: Jeffrey Myrdek, C.E.M., Manager of
Corporate Facilities
<PAGE> 69
Such addresses may be changed by notice pursuant to this Paragraph 11; but
notice of change of address is effective only upon receipt. Landlord and Tenant
jointly and severally agree that they will furnish Lender with copies of all
notices relating to the Lease. All communications to Lender shall reference
"AMRESCO Loan No.: __________ ".
12. SUCCESSORS AND ASSIGNS. As used in this Agreement, the word "Tenant"
shall mean Tenant and any subsequent holder or holders of an interest under the
Lease, as the text may require, provided that the interest of such holder is
acquired in accordance with the terms and provisions of the Lease and the word
"Lender" shall mean Lender or any other subsequent holder or holders of the
Mortgage or any party acquiring title to the Demised Premises by purchase at a
foreclosure sale, by deed of the Lender, or otherwise. Subject to the foregoing,
this Agreement shall bind and inure to the benefit of Landlord, Tenant and
Lender, their legal representatives, successors and assigns. The terms Lease,
Mortgage and Lease Assignment shall include any and all amendments,
modifications, replacements, substitutions, extensions, renewals and supplements
thereto.
13. FURTHER ASSURANCES. Landlord and Tenant from time to time shall
execute and deliver at Lender's request all instruments that may be necessary or
appropriate to evidence their agreement hereunder provided such instrument
neither increases Tenant's obligations or decreases its rights under the Lease.
14. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all such
counterparts shall constitute one and the same instrument.
15. SEVERABILITY. A determination that any provision of this Agreement is
unenforceable or invalid shall not affect the enforceability or validity of any
other provision, and any determination that the application of any provision of
this Agreement to any person or to any person or to particular circumstances is
illegal or unenforceable shall not affect the enforceability or validity of such
provision as it may apply to other persons or circumstances.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
<PAGE> 70
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
LENDER:
LASALLE NATIONAL BANK, as Trustee for GS Mortgage Securities Corporation II
Commercial Mortgage Pass-Through Certificates, Series 1998-GSFL1
By: AMRESCO Services, L.P.,
its authorized agent
By: AMRESCO Mortgage Capital, Inc.,
its general partner
By:_____________________________
Name:___________________________
Title: Servicing Officer
LANDLORD:
W9/TIB REAL ESTATE LIMITED
PARTNERSHIP, a Delaware limited partnership
By: W9/TIB Gen-Par, Inc., a Delaware
corporation, its general partner
By:
Name:
Title:
TENANT:
BROOKS AUTOMATION, INC.
By: __________________________________
Name:
Title:
<PAGE> 71
STATE OF ____________ )
)
COUNTY OF __________ ) _____________ ___, 2000
Then personally appeared the above-named _________________________________,
__________________________________ of AMRESCO Mortgage Capital, Inc., as general
partner of AMRESCO Services, L.P., as authorized agent for LaSalle National
Bank, as Trustee for GS Mortgage Securities Corporation II Commercial Mortgage
Pass-Through Certificates, Series 1998-GSFL1, and acknowledged the foregoing
instrument to be his/her free act and deed and the free act and deed of Bankers
Trust Company of California, N.A., before me,
_________________________________
(Seal)
Notary Public
My commission expires:
STATE OF ____________ )
)
COUNTY OF __________ ) _____________ ___, 2000
Then personally appeared the above-named _________________________________,
__________________________________ of W9/TIB Gen-Par, Inc., as General Partner
of W9/TIB Real Estate Limited Partnership, and acknowledged the foregoing
instrument to be his/her free act and deed, the free act and deed of W9/TIB
Gen-Par, Inc., and the free act and deed of W9/TIB Real Estate Limited
Partnership, before me,
_________________________________
(Seal)
Notary Public
My commission expires:
STATE OF )
)
COUNTY OF ) __________ __, 2000
Then personally appeared the above-named ________________________________,
______________________________________ of Brooks Automation, Inc., and
acknowledged the foregoing instrument to be his/her free act and deed and the
free act and deed of Brooks Automation, Inc., before me,
_________________________________
(Seal)
Notary Public
My commission expires:
<PAGE> 72
LIST OF DEFINED TERMS
<TABLE>
<CAPTION>
Page
----
<S> <C>
15 Elizabeth Drive Lease 21
Additional Rent 2
Affiliate 1
Amendment E-1
AS-IS D-1
Basic Lease Information 1
Basic Rent i
Building i
Building's Structure 8
Casualty 19
Commencement Date i
Construction Allowance D-2
Damage Notice 19
Estimated Delivery Date 1
Event of Default 21
GAAP 16
Hazardous Materials 28
HVAC Repair Allowance D-1
HVAC Replacement/Repair Specifications D-1
including 1
Land i
Landlord 1
Landlord's Mortgagee 17
Law 1
Laws 1
Lease 1
Lease Month ii
Letter of Credit 5
Loss 16
Non-Disturbance Agreement 18
Operating Costs 2
Operating Costs and Tax Statement 4
Permitted Transfer 15
Permitted Transferee 15
Permitted Use ii
Premises i
Prevailing Rental Rate G-1
Reduction Date 7
Rent ii
Rooftop Equipment 30
Security Deposit ii
Taking 19
Tangible Net Worth 15
Taxes 3
Tenant 1
Tenant Party 1
</TABLE>
<PAGE> 73
<TABLE>
<S> <C>
Tenant's Proportionate Share ii
Term i
Total Construction Costs D-2
Transfer 13
Work D-2
Working Drawings D-2
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED STATEMENTS OF OPERATIONS, THE CONSOLIDATED BALANCE SHEETS AND THE
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FORM 10-Q FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 1999.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-2000
<PERIOD-START> OCT-01-1999
<PERIOD-END> DEC-31-1999
<EXCHANGE-RATE> 1
<CASH> 61,097
<SECURITIES> 0
<RECEIVABLES> 46,038
<ALLOWANCES> 2,126
<INVENTORY> 29,997
<CURRENT-ASSETS> 142,614
<PP&E> 44,968
<DEPRECIATION> 26,071
<TOTAL-ASSETS> 183,794
<CURRENT-LIABILITIES> 35,994
<BONDS> 1,214
0
0
<COMMON> 128
<OTHER-SE> 144,927
<TOTAL-LIABILITY-AND-EQUITY> 183,794
<SALES> 43,069
<TOTAL-REVENUES> 50,280
<CGS> 22,175
<TOTAL-COSTS> 25,828
<OTHER-EXPENSES> 7,935
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 38
<INCOME-PRETAX> 4,580
<INCOME-TAX> 1,808
<INCOME-CONTINUING> 2,865
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,865
<EPS-BASIC> 0.22
<EPS-DILUTED> 0.21
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED STATEMENTS OF OPERATIONS AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FORM 10-Q FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 1999.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1999
<PERIOD-START> OCT-01-1998
<PERIOD-END> DEC-31-1998
<EXCHANGE-RATE> 1
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 15,398
<TOTAL-REVENUES> 20,052
<CGS> 8,987
<TOTAL-COSTS> 11,487
<OTHER-EXPENSES> 4,930
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 75
<INCOME-PRETAX> (1,728)
<INCOME-TAX> (197)
<INCOME-CONTINUING> (1,531)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,531)
<EPS-BASIC> (0.16)
<EPS-DILUTED> (0.16)
</TABLE>
