Recording Requested by and
When Recorded Return to:
FOOTHILL CAPITAL CORPORATION
2450 Colorado Avenue
Suite 3000
Santa Monica, California 90404
Attention: Business Finance
Division Manager
STATE OF UTAH )
) ss.
COUNTY OF SALT LAKE )
ABSOLUTE ASSIGNMENT OF SUB-LEASES AND RENTS
-------------------------------------------
THIS DOCUMENT SECURES OBLIGATIONS WHICH CONTAIN
PROVISIONS FOR A VARIABLE RATE OF INTEREST.
THIS ABSOLUTE ASSIGNMENT OF SUB-LEASES AND RENTS, made as of
this 14th day of December, 2000, by EVANS & SUTHERLAND COMPUTER CORPORATION, a
Utah corporation ("Assignor"), with its chief executive office located at 600
Komas Drive, Salt Lake City, Utah 84108 to FOOTHILL CAPITAL CORPORATION, a
California corporation ("Assignee"), whose address is 2450 Colorado Avenue,
Suite 3000 West, Santa Monica, California 90404, Attention: Business Finance
Division Manager.
WITNESSETH THAT:
WHEREAS, Assignor, to evidence and secure a loan indebtedness
in the aggregate amount of up to THIRTY Million Dollars ($30,000,000), and
Assignee, have executed and Assignor has delivered to Assignee a Loan and
Security Agreement ("Loan Agreement") of even date herewith, payable as provided
in the Loan Agreement and finally maturing as provided in the Loan Agreement,
with interest as therein expressed, and has executed and delivered on the
aforesaid date and to secure said Loan Agreement, a Leasehold Deed of Trust,
Assignment of Rents, Security Agreement and Fixture Filing ("Mortgage": the Loan
Agreement and Mortgage are hereinafter collectively called the "Mortgage
Instruments") on Assignor's leasehold and possessory interest in that certain
real estate commonly known as 540 Arappen Drive, in the City
1
of Salt Lake City, County of Salt Lake, State of Utah more particularly
described in Exhibit "A" attached hereto and by reference made a part hereof,
including the Assignor's interest in the improvements now or hereafter located
thereon and the easements, rights and appurtenances thereunto belonging
(hereinafter collectively called the "Mortgaged Premises");
WHEREAS, Assignor is or will become the lessor under written
sub-leases for certain portions of the Mortgaged Premises, and Assignor may
hereafter make other sub-leases of the Mortgaged Premises or parts thereof; and
WHEREAS, Assignee has required the assignment hereinafter made
as a condition to making the above loan.
NOW, THEREFORE, Assignor, for good and valuable consideration,
the receipt of which is hereby acknowledged, does hereby BARGAIN, SELL,
TRANSFER, ASSIGN, CONVEY, SET OVER and DELIVER unto Assignee, as additional
security for the payment of the above described loan indebtedness and the
payment and performance of all the terms and conditions of the Mortgage
Instruments, and any and all amendments, extensions and renewals thereof, the
tenant sub-leases affecting the Mortgaged Premises or any part thereof as set
forth in Exhibit "B" attached hereto and made a part hereof, and any sub-leases
which may be executed at any time in the future during the life of this
Assignment, and all amendments, extensions and renewals of said sub-leases and
any of them, all of which are hereinafter called the "Sub-Leases";
TOGETHER WITH all of the income, rents, issues,
profits, and proceeds of the Sub-Leases;
TOGETHER WITH all of the right, power and authority of
Assignor to alter, modify or change the terms, conditions and provisions of any
or all of the Sub-Leases or to surrender, cancel or terminate the same or to
accept any surrender, cancellation or termination of same; and
TOGETHER WITH all of the credits, security, deposits, options,
rights, powers and privileges of Assignor under any or all of the Sub-Leases,
whether heretofore or hereafter existing.
1. All capitalized terms which are not defined herein shall
have the definitions assigned to such terms in the Loan Agreement. To the extent
that there are any conflicting provisions between the Mortgage and this
Assignment, the provisions of this Assignment shall govern.
2
2. Assignor hereby authorizes Assignee or Assignee's agents to
collect the aforesaid rents and revenues and hereby directs each tenant under a
Sub-Lease which affects a portion of the Mortgaged Premises to pay such rents
and revenues to Assignee or Assignee's agents; provided, however, that prior to
written notice given by Assignee to Assignor of the occurrence of an Event of
Default (as defined in the Mortgage) and the Assignee's intent to exercise its
rights to such rents and revenues (the "Default Notice"), Assignor shall collect
and receive all rents and revenues of the Mortgaged Premises and Assignor shall
apply the rents and revenues so collected to the amounts then due and payable in
connection with the Mortgage Instruments with the balance, so long as no
unrescinded Default Notice has been delivered, to the account of Assignor, it
being intended by Assignor and Assignee that this assignment of rents
constitutes an absolute present assignment and not an assignment for additional
security only.
3. Upon delivery of the Default Notice by Assignee to
Assignor, and without the necessity of Assignee entering upon and taking and
maintaining full control of the Mortgaged Premises in person, by agent or by a
court-appointed receiver, Assignee shall immediately be entitled to receive all
rents and revenues of the Mortgaged Premises as specified in this Assignment as
the same become due and payable, including but not limited to rents then due and
unpaid, and all such rents and revenue then held by Assignor or thereafter
delivered to Assignor shall, immediately upon delivery of the Default Notice, be
held by Assignor as trustee for the benefit of Assignee only. Assignor agrees
that commencing upon delivery of the Default Notice each tenant of the Mortgaged
Premises shall make such rents payable to and shall pay such rents directly to
Assignee or Assignee's agents on Assignee's written demand to each tenant
therefor, delivered to each tenant personally, by mail or by delivering such
demand to each rental unit, without any liability on the part of said tenant to
inquire further as to the existence of a default by Assignor. All such rents
collected by Assignee shall be credited against amounts due under each
respective Sub-Lease. Assignor shall execute any and all writings and letters
reasonably required by Assignee, to be delivered to such tenants, to effectuate
the intent of this paragraph.
4. Assignor hereby represents, warrants and covenants that
there are no presently effective assignments of said rents, except pursuant to
the Mortgage, that Assignor has not performed, and will not perform, any acts or
has not executed, and will not execute, any instrument which would prevent
Assignee from exercising its rights under this Assignment, or which would give
rise to any right of set-off
3
against, or reduction of, the rents payable under the Sub- Leases, and that at
the time of execution of this Assignment there has been no anticipation or
prepayment of any of the rents of the Mortgaged Premises for more than one month
prior to the due dates of such rents. Assignor covenants that Assignor will not
hereafter collect or accept payment of any rents of the Mortgaged Premises more
than one month prior to the due dates of such rents. Assignor further covenants
that Assignor will execute and deliver to Assignee such further assignments of
rents and revenues of the Mortgaged Premises as Assignee may from time to time
reasonably request.
5. Upon an Event of Default, Assignee may, in person, by agent
or by a court-appointed receiver, regardless of the adequacy of Assignee's
security, enter upon and take possession of and maintain full control of the
Mortgaged Premises in order to perform all acts necessary and appropri ate for
the operation and maintenance thereof including, but not limited to, the
execution, cancellation or modification of Sub-Leases (but only in accordance
with such Sub-Lease terms and conditions), the collection of all rents and
revenues of the Mortgaged Premises, the making of repairs to the Mortgaged
Premises and the execution or termination of contracts providing for the
management or maintenance of the Mortgaged Premises; all on such terms as are
reasonably deemed best to protect the security of this instrument. Upon such
taking of possession or control of the Mortgaged Premises, Assignee or its
agents shall thereafter prospectively honor the Sub- leases. In the event
Assignee elects to seek the appointment of a receiver for the Mortgaged Premises
upon an Event of Default, Assignor hereby expressly consents to the appointment
of such receiver upon ex parte applications without notice, if permitted under
applicable law. Assignee or the receiver shall be entitled to receive a
reasonable fee for so managing the Mortgaged Premises. Nothing contained herein
nor any collection of rents, payments or other sums by Assignee, or by a
receiver, shall be construed to make Assignee a "mortgagee- in-possession" of
the Mortgaged Premises so long as Assignee has not itself entered into actual
possession of the Mortgaged Premises.
6. All rents and revenues collected by Assignee subsequent to
delivery of the Default Notice by Assignee to Assignor shall be applied first to
the reasonable costs, if any, of taking control of and managing the Mortgaged
Premises and collecting the rents, including, but not limited to, reasonable
attorneys' fees, receiver's fees, premiums on insurance policies, taxes,
assessments and other charges on the Mortgaged Premises, and the costs of
discharging any obligation or liability of Assignor as lessor or landlord of
4
the Mortgaged Premises and then to the sums secured by the Mortgage Instruments.
Assignee or the receiver shall have access to the books and records used in the
operation and maintenance of the Mortgaged Premises and shall be liable to
account to Assignor only for those rents and revenues actually received.
Assignee shall not be liable to Assignor, anyone claiming under or through
Assignor or anyone having an interest in the Mortgaged Premises by reason of
anything done or left undone by Assignee under this Assignment.
7. If the rents of the Mortgaged Premises are not sufficient
to meet the costs, if any, of taking control of and managing the Mortgaged
Premises and collecting the rents, any reasonable funds expended by Assignee for
such purposes shall become obligations of Assignor to Assignee secured by the
Mortgage Instruments. Unless Assignee and Assignor agree in writing to other
terms of payment, such amounts shall be payable upon notice from Assignee to
Assignor requesting payment thereof and shall bear interest from the date of
disbursement until paid, at the Default Rate set forth in the Note.
8. Any entering upon and taking and maintaining of control of
the Mortgaged Premises by Assignee or the receiver, and any application of rents
as provided herein shall not cure or waive any default hereunder or invalidate
any other right or remedy of Assignee under applicable law or provided herein.
9. Except as may be permitted by the Loan Agreement, Assignor
will not (i) execute an assignment of the rents or any part thereof from the
Mortgaged Premises to any party other than Assignee unless such assignment shall
provide that it is subject and subordinate to this Assignment, and any
additional or subsequent assignment executed pursuant hereto, or (ii) except
where the tenant is in default thereunder, terminate or consent to the
cancellation or surrender of any Sub-Leases of the Mortgaged Premises or of any
part thereof, now existing or hereafter to be made or (iii) modify any such
Sub-Leases or give consent to any assignment or subletting, which modification,
assignment or subletting would materially impair the value of such Sub-Leases,
without Assignee's prior written consent, or (iv) accept prepayments of any
installments of rent or additional rent to become due under such Sub-Leases more
than one (1) month in advance, except prepayments in the nature of security for
the performance of the tenant's obligations thereunder, or (v) in any other
manner materially impair the value of the Mortgaged Premises or the security of
the Assignee for the payment of the indebtedness secured by the Mortgage
Instruments or (vi) enter into any Sub-Leases prohibited by the Loan Agreement.
5
10. Except as may be permitted by the Loan Agreement, Assignor
will not execute any Sub-Leases of all or a substantial portion of the Mortgaged
Premises without the prior written consent of Assignee. All tenants must take
actual occupancy of the Mortgaged Premises and Assignor will at all times
promptly and faithfully perform, or cause to be performed, all of the material
covenants, conditions and agreements contained in all Sub-Leases of the
Mortgaged Premises now or hereafter existing, on the part of the lessor
thereunder to be kept and performed. If any such Sub-Leases provides for the
giving by the tenant of certificates with respect to the status of such
Sub-Leases, Assignor shall exercise its right to request such certificates
within five (5) days of any demand therefor by Assignee.
11. Assignor shall furnish to Assignee, within fifteen (15)
days after a request by Assignee to do so, a written statement containing the
names of all tenants for the Mortgaged Premises, the terms of their respective
Sub-Leases, the spaces occupied, and the rentals paid and any security therefor.
12. In addition to the assignment granted herein, Assignor
shall, from time to time upon the reasonable request of Assignee, specifically
assign to Assignor, by an instrument in writing in such form as may be approved
by Assignor, all right, title and interest of Assignor in and to any and all
Sub-Leases now or hereafter on or affecting the Mortgaged Premises, together
with all security therefor and all monies payable thereunder, subject to the
conditional permission hereinabove given to Assignor to collect the rentals
under any such Sub-Leases. Assignor shall also execute and deliver to Assignee
any notification, financing statement or other document reasonably required by
Assignee to perfect the foregoing assignment or the assignment granted herein as
to any such Sub-Leases.
13. Each Sub-Leases of the Mortgaged Premises or of any part
thereof entered into after the date hereof shall provide that, in the event of
the enforcement by a receiver, trustee, or Assignee of the remedies provided for
by law or by this Assignment, any person succeeding to the interest of Assignor
as a result of such enforcement shall not be bound by any payment of rent or
additional rent for more than one (1) month in advance, provided, however, that
nothing herein set forth shall affect or impair the rights of Assignee to
terminate any one or more of such Sub-Leases in connection with the exercise of
its remedies hereunder.
6
14. Any notice hereunder by either party hereto to
the other shall be given as provided for in the Loan
Agreement.
15. Assignor hereby agrees to indemnify and hold the Assignee
harmless against and from (a) any and all liability, loss, damage and expense,
including reasonable attorneys' fees, which it may or shall incur or which may
be asserted under or in connection with this assignment or any of the
Sub-Leases, or by reason of any action permitted hereunder or at law taken by
the Assignee (including without limitation any action which Assignee in its
reasonable discretion may take to protect its interest in the Mortgaged
Premises), and (b) any and all claims and demands whatsoever which may be
incurred by or asserted against Assignor by reason of any alleged obligations or
undertakings on its part to perform or discharge any of the terms, covenants and
conditions contained in any of the Sub-Leases.
16. Should Assignee incur any such liability as described in
Paragraph 15, the amount thereof, together with interest thereon at the lower of
the highest rate permitted by law or the Default Rate under the Loan Agreement
shall be payable by Assignor to Assignee immediately upon demand, or at the
option of Assignee, Assignee may reimburse itself therefor out of any rents,
issues or profits of the Mortgaged Premises collected by Assignee.
17. Nothing contained herein shall operate or be construed to
obligate Assignee to perform any of the terms, covenants or conditions contained
in any Sub-Lease (unless required by law), or to take any measures, legal or
otherwise, to enforce collection of any of said rents or other payments.
18. Prior to actual entry into and taking possession of the
Mortgaged Premises by Assignee, this assignment shall not operate to place upon
Assignee any responsibility for the operation, control, care, management or
repair of the Mortgaged Premises, or for performance of the terms, covenants,
and conditions of any Sub-Leases, and the execution of this assignment by the
Assignor shall constitute conclusive evidence that all responsibility for the
operation, control, care, management and repair of the Mortgaged Premises is and
shall be that of Assignor prior to such actual entry and taking of possession.
19. Upon payment in full of the principal sum,
interest and other indebtedness evidenced by the Mortgage
Instruments, this Assignment shall be and become null and
void; otherwise, it shall remain in full force and effect as
7
herein provided and, with the covenants, warranties and representations herein
contained, shall bind Assignor and all subsequent ground lessees of the
Mortgaged Premises and inure to the benefit of Assignee and all subsequent
holders of the Mortgage Instruments. The term "Assignee," as used herein shall
be construed to mean as of any time the holder for the time being of the
Mortgage Instruments and all rights, options, powers, authority and remedies
herein granted to Assignee may be exercised or executed at any and all times or
from time to time by any holder for the time being of the Mortgage Instruments.
This Assignment may not be changed or terminated orally, but only by an
instrument in writing, signed by the party against whom enforcement of any
waiver, change, modification, termination or discharge is sought.
IN WITNESS WHEREOF, Assignor has caused this instrument to be
executed as of the date first above written.
"ASSIGNOR"
EVANS & SUTHERLAND COMPUTER
CORPORATION, a Utah corporation
By /s/ R. Gaynor
----------------------------------------------
Richard J. Gaynor,
Vice President and
Chief Financial Officer
8
STATE OF CALIFORNIA )
) ss.
COUNTY OF LOS ANGELES )
On December 14, 2000, before me, Greta Johnson, personally
appeared RICHARD J. GAYNOR, personally known to me (or proved to me on the basis
of satisfactory evidence) to be the person(s) whose name(s) is/are subscribed to
the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s), or the entity upon behalf of which
the person(s) acted, executed the instrument
WITNESS my hand and official seal.
/s/ Greta Johnson
----------------------------------------------
9
EXHIBIT A
The leasehold estate and interest which arise pursuant to that certain Lease
Agreement, dated November 21, 1972, by and between UNIVERSITY OF UTAH, a
corporate and body politic ("Lessor"), and MOUNTAIN CO-VENTURE, a general
partnership ("Lessee"), and amended by that certain Addendum To Lease Agreement,
dated April 3, 1973, and by that Second Addendum to Lease Agreement, dated June
4, 1973, and by that certain Third Addendum To Lease Agreement, dated December
7, 1973, and by that certain Fourth Addendum To Lease Agreement, dated September
12, 1979, and by that certain Fifth Addendum to Lease Agreement, dated April 9,
1987, [record notice of the existence of said Lease Agreement was originally
afforded by that certain Memorandum of Lease recorded June 21, 1973 as Entry No.
2548892, in Book 3355 at Page 354, of the Official Records of the Salt Lake
County Recorder. Further record notice was afforded by a Memorandum Of Ground
Lease recorded June 1, 2000 as Entry No. 7650611, in Book 8365 at Page 3592 of
the Official Records of the Salt Lake County Recorder; the Lessee's interest in
and to said Lease Agreement being now held by EVANS & SUTHERLAND COMPUTER
CORPORATION, a Utah corporation], in and to the following described tracts of
land:
BEGINNING at a point on the Westerly line of Arappen Drive, said point
being North 2324.780 feet and West 686.110 feet from the Salt Lake City
Survey Monument at the intersection of Sunnyside Avenue and Padley
Street, said Monument is located South 65(degree)48'24" West 3622.62
feet and East 97.00 feet and South 58.20 feet from the Southeast corner
of Section 3, Township 1 South, Range 1 East, Salt Lake Base and
Meridian, and running thence South 41(degree)00'00" West 212.00 feet;
thence North 49(degree)00'00" West 90.00 feet; thence South
41(degree)00'00" West 340.00 feet; thence North 49(degree)00'00" West
239.289 feet to a point on the arc of a 692.20 foot radius curve to the
right; thence Northeasterly 31.381 feet along said curve (chord bears:
North 39(degree)42'06" East 31.378 feet); thence North 41(degree)00'00"
East 475.63 feet to a point on the arc of a 45.00 foot radius curve to
the right; thence Northeasterly and Southeasterly 70.69 feet along said
curve (chord bears: North 86(degree)00'00" East 63.64 feet) to a point
on the Westerly line of Arappen Drive; thence South 49(degree)00'00"
East 285.00 feet along the said Westerly line to the point of
BEGINNING.
BEGINNING at a point North 1921.943 feet and West 1155.542 feet from
the Salt Lake City Survey Monument at the intersection of Sunnyside
Avenue and Padley Street, said Monument is located South
65(degree)48'24" West 3622.62 feet and East 97.00 feet and South 58.20
feet from the Southeast corner of Section 3, Township 1 South, Range 1
10
East, Salt Lake Base and Meridian, and running thence South
41(degree)00'00" West 70.00 feet; thence North 49(degree)00'00" West
220.927 feet to a point on the arc of a 692.20 foot radius curve;
thence Northeasterly 71.229 feet along said curve to the right (chord
bears: North 30(degree)28'00" East 71.20 feet); thence south
49(degree)00'00" East 233.943 feet to the point of BEGINNING.
EXCEPTING ANY PORTION LYING WITHIN THE BOUNDS OF WAKARA WAY AND/OR KOMAS DRIVE,
THE DEDICATION PLATS OF WHICH ARE FILED IN THE OFFICE OF THE SALT LAKE COUNTY
RECORDER.
11