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Participation Agreement Dated 4/30/97

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Sectors: Electronics and Miscellaneous Technology
Governing Law: New York, View New York State Laws
Effective Date: April 30, 1997
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PARTICIPATION AGREEMENT
dated as of April 30, 1997


among


APPLIED MATERIALS, INC.,
as Lessee and Construction Agent,


CREDIT SUISSE LEASING 92A, L.P.,
as Lessor and Borrower,


GREENWICH FUNDING CORPORATION,
as CP Lender,


THE PERSONS NAMED ON SCHEDULE I HERETO,
as Eurodollar Lenders,


and


CREDIT SUISSE FIRST BOSTON,
acting through its New York Branch,
as Agent


--------------------------------------------------


================================================================================


2
TABLE OF CONTENTS


PAGE ARTICLE 1. DEFINITIONS; INTERPRETATION................................................................. 2


ARTICLE 2. INITIAL CLOSING DATE........................................................................ 3


ARTICLE 3. ACQUISITIONS AND FUNDINGS................................................................... 3
SECTION 3.1. Existing Sites...................................................... 3
SECTION 3.2. Sites............................................................... 3
SECTION 3.3. Construction Costs.................................................. 3
SECTION 3.4. Equipment........................................................... 3
SECTION 3.5. Refinancing of Loans................................................ 4
SECTION 3.6. Lessor Participation................................................ 4
SECTION 3.7. CP Lender Participation............................................. 4
SECTION 3.8. Eurodollar Lenders Participation.................................... 5
SECTION 3.9. Notations on Notes.................................................. 6
SECTION 3.10. Advances; Limitations and Limits; CP
Lender Advance Limitations.......................................... 7
SECTION 3.11. Termination of Commitments.......................................... 9
SECTION 3.12. Obligations of Participants Several................................. 9
SECTION 3.13. Procedures for Advances............................................. 9
SECTION 3.14 Subordinated Mortgage; Subordinated
Security Agreement.................................................. 12
SECTION 3.15 Lessee Option to Increase Original
Estimated Construction Cost......................................... 12
SECTION 3.16. Lessee Directions................................................... 12


ARTICLE 4. YIELD; INTEREST; COMMITMENT FEES............................................................ 13
SECTION 4.1. Yield............................................................... 13
SECTION 4.2. Interest on CP Loans................................................ 14
SECTION 4.3. Interest on Eurodollar Loans........................................ 14
SECTION 4.4. Computations........................................................ 14
SECTION 4.5. Highest Lawful Rate................................................. 15
SECTION 4.6. Capitalized Interest and Capitalized
Yield............................................................... 16
SECTION 4.7. Commitment Fees..................................................... 17
SECTION 4.8. Collateralization................................................... 17


ARTICLE 5. CERTAIN INTENTIONS OF THE PARTIES........................................................... 18
SECTION 5.1. Nature of Transaction............................................... 18
SECTION 5.2. Amounts Due......................................................... 19


ARTICLE 6. CONDITIONS PRECEDENT TO ACQUISITIONS AND
ADVANCES.................................................................................... 20
SECTION 6.1. Conditions to Each Advance.......................................... 20
SECTION 6.2. Conditions to Site Advance.......................................... 22
SECTION 6.3. Conditions to each Equipment Advance................................ 27
SECTION 6.4. Conditions to each Construction Cost
Funding............................................................. 29


i 3


ARTICLE 7. COMPLETION DATE CONDITIONS.................................................................. 30


ARTICLE 8. REPRESENTATIONS AND WARRANTIES.............................................................. 32
SECTION 8.1. Representations and Warranties of Lessee............................ 32
SECTION 8.2. Representations and Warranties of CSL............................... 40
SECTION 8.3. Representations and Warranties of Agent............................. 42


ARTICLE 9. COVENANTS OF LESSEE......................................................................... 43
SECTION 9.1. Further Assurances.................................................. 43
SECTION 9.2. Consolidation, Merger, Sale, etc.................................... 44
SECTION 9.3. Corporate Existence................................................. 44
SECTION 9.4. Liens............................................................... 44
SECTION 9.5. Compliance Certificates............................................. 44
SECTION 9.6. Change of Name or Address........................................... 45
SECTION 9.7. Compliance with Law, Environmental
Matters............................................................. 45
SECTION 9.8. Investigation by Governmental
Authorities......................................................... 45
SECTION 9.9. Financial and Other Information..................................... 46
SECTION 9.10. Securities.......................................................... 48
SECTION 9.11. Interest Rates...................................................... 48
SECTION 9.12. Revolving Credit Facility........................................... 48


ARTICLE 10. OTHER COVENANTS AND AGREEMENTS.............................................................. 49
SECTION 10.1. Cooperation with Lessee............................................. 49
SECTION 10.2. Covenants of Lessor................................................. 49
SECTION 10.3. Lessor Transfers.................................................... 51
SECTION 10.4. Restrictions on and Effect of Transfer.............................. 52
SECTION 10.5. Covenants and Agreements of Lenders................................. 54
SECTION 10.6. Future Lenders...................................................... 56
SECTION 10.7. Agent under Participation Agreement and
Mortgages........................................................... 56


ARTICLE 11. INDEMNIFICATION............................................................................. 56
SECTION 11.1. General Indemnification............................................. 56
SECTION 11.2. General Tax Indemnity............................................... 58
SECTION 11.3. Withholding Tax Exemption........................................... 63
SECTION 11.4. Increased Costs and Reduced Return.................................. 64
SECTION 11.5. Eurodollar Rate Illegal, Unavailable or
Impracticable....................................................... 65
SECTION 11.6. Funding Losses...................................................... 66
SECTION 11.7. Limitations on Amounts Due Under Section
11.4................................................................ 67
SECTION 11.8. Gross-Up............................................................ 67
SECTION 11.9. Indemnity for Excessive Use and Sales
Below Fair Market Value............................................. 68
SECTION 11.10. Environmental Indemnity............................................. 68


ii


4


ARTICLE 12. AGENT....................................................................................... 70
SECTION 12.1. Appointment of Agent; Powers and
Authorization to Take Certain Actions............................... 70
SECTION 12.2. Reliance............................................................ 71
SECTION 12.3. Action Upon Instructions Generally.................................. 72
SECTION 12.4. Indemnification..................................................... 73
SECTION 12.5. Independent Credit Investigation.................................... 74
SECTION 12.6. Refusal to Act...................................................... 74
SECTION 12.7. Resignation or Removal of Agent;
Appointment of Successor............................................ 74
SECTION 12.8. Separate Agent...................................................... 75
SECTION 12.9. Termination of Agency............................................... 76
SECTION 12.10. Compensation of Agency.............................................. 76
SECTION 12.11. Limitations......................................................... 76


ARTICLE 13. MISCELLANEOUS............................................................................... 77
SECTION 13.1. Survival of Agreements.............................................. 77
SECTION 13.2. No Broker, etc...................................................... 77
SECTION 13.3. Notices............................................................. 78
SECTION 13.4. Counterparts........................................................ 78
SECTION 13.5. Amendments.......................................................... 78
SECTION 13.6. Headings, etc....................................................... 79
SECTION 13.7. Parties in Interest................................................. 79
SECTION 13.8. GOVERNING LAW....................................................... 79
SECTION 13.9. Payment of Transaction Expenses and
Other Costs......................................................... 80
SECTION 13.10. Severability........................................................ 80
SECTION 13.11. Liabilities of Lenders.............................................. 80
SECTION 13.12. Liabilities of Agent................................................ 81
SECTION 13.13. Lessor Obligations Nonrecourse; Payment
from Certain Lease and Guarantee
Obligations and Certain Proceeds of
Leased Property Only................................................ 81
SECTION 13.14. Consideration for Consents to Waivers
and Amendments...................................................... 81
SECTION 13.15. Payment Directions.................................................. 82
SECTION 13.16. Role of Arranger and its Affiliates................................. 82
SECTION 13.17. Notices to Lessor under Loan Agreement.............................. 82
SECTION 13.18. Submission to Jurisdiction; Waivers................................. 82
SECTION 13.19. No Proceedings..................................................... 83
SECTION 13.20. Final Agreement..................................................... 83
SECTION 13.21. Confidentiality..................................................... 83


SCHEDULES


SCHEDULE I Participants' Commitments SCHEDULE II Notice Information and Payment Instructions SCHEDULE III Filings and Recordings SCHEDULE IV Governmental Actions


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APPENDICES


APPENDIX 1 Definitions and Interpretation APPENDIX 2 Conditions Precedent to Document Closing Date


EXHIBITS


EXHIBIT A Form of Master Lease EXHIBIT B Form of Construction Agency Agreement EXHIBIT C Form of Architect's Certificate EXHIBIT D Form of Completion Date Certificate EXHIBIT E Form of Advance Request EXHIBIT F Form of Note Guarantee EXHIBIT G Form of Loan Agreement EXHIBIT H Form of Capital Asset Purchase Agreement EXHIBIT I Form of Mortgage and Security Agreement EXHIBIT J Form of Deed of Trust, Security Agreement and
Fixture Filing Statement EXHIBIT K Form of Hazardous Materials Undertaking and
Unsecured Indemnity EXHIBIT L Form of Assignment of Lease EXHIBIT M Form of Consent to Assignment of Lease EXHIBIT N Form of Assignment of Construction Agency
Agreement EXHIBIT O Form of Consent to Assignment of Construction
Agency Agreement EXHIBIT P Form of Security and Pledge Agreement EXHIBIT Q Form of Custodial Agreement EXHIBIT R Form of Security Agreement EXHIBIT S Form of Bill of Sale EXHIBIT T Form of Deed EXHIBIT U Form of Ground Lease EXHIBIT V Forms of Opinions of Counsel to Lessee EXHIBIT W Form of Opinion of Local Counsel Lessee EXHIBIT X Forms of Lessor Opinions EXHIBIT Y [Reserved] EXHIBIT Z Form of Transfer Letter EXHIBIT AA Form of Private Placement Certificate EXHIBIT BB Form of Tax Certificate EXHIBIT CC Form of Subordinated Mortgage EXHIBIT DD Form of Subordinated Security Agreement


iv 6
PARTICIPATION AGREEMENT


THIS PARTICIPATION AGREEMENT, dated as of April 30, 1997 (this "Participation Agreement"), is entered into by and among APPLIED MATERIALS, INC., a Delaware corporation, as Lessee and as Construction Agent; CREDIT SUISSE LEASING 92A, L.P., as Lessor and as Borrower; GREENWICH FUNDING CORPORATION, a Delaware corporation, as CP Lender; the Persons listed on Schedule I hereto (together with their respective permitted successors, assigns and transferees each a "Eurodollar Lender" and collectively "Eurodollar Lenders") and CREDIT SUISSE FIRST BOSTON, acting through its New York Branch, not in its individual capacity except as expressly stated herein, but solely as Agent for Lenders.


PRELIMINARY STATEMENT


In accordance with the terms of this Participation Agreement, the Lease, the Construction Agency Agreement, the Loan Agreement, the Capital Asset Purchase Agreement and the other Operative Documents:


A. At the request of Lessee, on the initial Advance
Date, Lessor contemplates acquiring the Existing Sites and, on
subsequent Advance Dates from time to time during the Commitment
Period, (i) interests in Land (either fee simple or ground leasehold
interests), (ii) interests in Facilities and/or (iii) interests in
Equipment.


B. Should Lessor acquire interests in Land or Land and
Facilities that constitute Construction Sites, using Advances funded
by Participants, Construction Agent on behalf of Lessor contemplates
either constructing Facilities on such Land or renovating or
rebuilding Facilities that exist on such Land.


C. Lessor intends to lease to Lessee and Lessee intends
to lease from Lessor pursuant to the Lease (i) the Developed Sites
and the Existing Sites, (ii) the Construction Sites and, upon
completion of construction, the Facilities constructed thereon, and
(iii) the Equipment.


D. As directed by Lessee, Lessor is willing to provide
3% of the funding for Site acquisitions, Facilities construction
and/or for Equipment acquisitions and will obtain the remaining 97%
of the costs of such acquisitions or construction from limited
recourse financing from (i) Eurodollar Lenders pursuant to the Loan
Agreement and (ii) CP Lender, out of the proceeds from the issuance
of


1


7
commercial paper by CP Lender and the loan of such proceeds to
Lessor, pursuant to the Loan Agreement.


E. The Lenders are willing to provide limited
recourse financing to Lessor for 97% of the acquisition cost
of such Site acquisitions, Facilities construction and
Equipment acquisitions.


F. A Capital Asset Purchase Agreement dated as of the
date hereof is being entered into among CP Lender, Purchasers and
Agent, as liquidity agent and as administrative agent, pursuant to
which Purchasers will extend commitments to purchase ratable shares
of all or a portion, as the case may be, of CP Lender's interest in
the Tranche A CP Notes and the Tranche B CP Notes to enable CP
Lender to make payments in respect of CP Lender's Commercial Paper.


G. To induce Lenders and Agent to make loans under the
Loan Agreement and to enter into this Participation Agreement and
the transactions contemplated hereby, AMAT desires to enter, and it
is a condition to the effectiveness hereof that AMAT enter, into the
Note Guarantee.


H. To secure their respective Investment Amounts and
Loans, Participants will have the benefit of a Lien on the Leased
Property and on substantially all of Lessor's rights against Lessee
under the Lease, and CP Lender will assign to Agent for the benefit
of Purchasers certain of its rights in respect of such Lien.


In consideration of the mutual agreements contained in this Participation Agreement and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:


ARTICLE 1.


DEFINITIONS; INTERPRETATION


Unless the context shall otherwise require, capitalized terms used and not defined herein shall have the meanings assigned thereto in Appendix 1 hereto for all purposes hereof; and the rules of interpretation set forth in Appendix 1 hereto shall apply to this Participation Agreement.


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ARTICLE 2.


INITIAL CLOSING DATE


The Document Closing Date shall occur on the earliest date (on or before May 15, 1997) on which all the conditions precedent thereto set forth in Appendix 2 hereto shall have been satisfied or waived by the applicable parties as set forth therein.


ARTICLE 3.


ACQUISITIONS AND FUNDINGS


SECTION 3.1. Existing Sites. Subject to the terms and conditions of this Participation Agreement, on the initial Advance Date (i) Agent shall make an advance, the proceeds of which shall be used to fund the Existing Sites Purchase Price and the Transaction Expenses incurred on or prior to such Advance Date, (ii) Lessor shall acquire the Existing Sites and (iii) Lessor and Lessee shall enter into a Site Lease Supplement for each such Site pursuant to which Lessor shall lease to Lessee the Existing Sites.


SECTION 3.2. Sites. Subject to the terms and conditions of this Participation Agreement, on each Advance Date that constitutes a Site Acquisition Date, (i) Agent shall make an advance (such advance or an advance pursuant to Section 3.1, a "Site Advance"), the proceeds of which shall be used to fund the Site Acquisition Cost of the Developed Sites or Construction Sites to be acquired on such Acquisition Date and related Transaction Expenses, (ii) Lessor shall acquire such Sites and (iii) Lessor and Lessee shall enter into a Site Lease Supplement for each such Site pursuant to which Lessor shall lease (or with respect to Land leased to Lessor pursuant to a Ground Lease, sublease) to Lessee such Developed Sites or Construction Sites.


SECTION 3.3. Construction Costs. Subject to the terms and conditions of this Participation Agreement, on each Advance Date that constitutes a Construction Cost Funding Date, Agent shall make an advance (a "Construction Advance"), the proceeds of which shall be used to reimburse Construction Agent for the payment of Construction Costs, and to fund Capitalized Interest and Capitalized Yield relating to any interest and Yield accrued during the Interest Period immediately preceding such Construction Advance on the aggregate outstanding principal amount of any Construction Advances made prior to such Advance Date.


SECTION 3.4. Equipment. Subject to the terms and conditions of this Participation Agreement, on each Advance Date


3 9 that constitutes an Equipment Acquisition Date, (i) Agent shall make an advance (an "Equipment Advance"), the proceeds of which shall be used to fund the Equipment Purchase Price and related Transaction Expenses with respect to the Units of Equipment in the Equipment Group to be acquired on such Equipment Acquisition Date, (ii) Lessor shall acquire such Units of Equipment, and (iii) Lessor and Lessee shall enter into an Equipment Lease Supplement pursuant to which Lessor shall lease to Lessee each Equipment Group funded by such Advance. Notwithstanding anything herein to the contrary, to the extent that, in connection with an acquisition of a Site or the making of a Construction Advance, Agent is also making an Advance for the acquisition of Equipment or related Transaction Expenses, the portion of such Advance that relates to the Equipment Cost of the Equipment so being acquired and the Transaction Expenses related thereto shall be considered an Equipment Advance separate from the Site Advance or Construction Advance relating to the Site for the purposes of this Participation Agreement.


SECTION 3.5. Refinancing of Loans. Subject to the terms and conditions hereof, on each Advance Date that constitutes a Refinancing Date, Agent shall make an Advance the proceeds of which will be used to repay all or portion of outstanding Eurodollar Loans or CP Loans (a "Refinancing Advance"). Notwithstanding anything to the contrary in Section 3.6 below, Lessor shall not be obligated to Fund any portion of a Refinancing Advance.


SECTION 3.6. Lessor Participation. Subject to the terms and conditions hereof, Lessor shall Fund (as Lessor's portion of an Advance pursuant to Sections 3.1 through 3.4 hereof) to Agent for an Advance by Agent to Lessee or Construction Agent, at the request of either such party from time to time during the Commitment Period on each Advance Date, an amount (each an "Investment" or "Investment Amount") in immediately available funds equal to Lessor's Commitment Percentage of the amount of the Advance being funded on such Advance Date. Notwithstanding any other provision hereof and in addition to the limitations s
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