WHEN RECORDED, RETURN TO:
Zions First National Bank
Commercial Loan Department
P.O. Box 25822 One South Main Street
Salt Lake City, Utah 84125
Attn: Michael R. Brough
ASSIGNMENT OF TENANT'S INTEREST IN GROUND LEASE
FOR SECURITY
This Assignment of Tenant's Interest in Ground Lease for Security (the
"Assignment") is made and executed this 31st day of May, 2000 (the "Closing
Date"), by Evans & Sutherland Computer Corporation, a Utah corporation (
"Borrower") and Zions First National Bank, a national banking association
("Lender").
RECITALS
A. Pursuant to the Promissory Note dated the Closing Date in
which Borrower appears as "Borrower" and Lender appears as "Lender" and which is
in the original principal amount of Fifteen Million Dollars ($15,000,000) (the
"Note"), and pursuant to the Loan Agreement dated the Closing Date wherein
Borrower appears as "Borrower" and Lender appears as "Lender" (the "Loan
Agreement"), Lender has loaned the proceeds of the Note to Borrower.
B. Pursuant to the Trust Deed, Assignment of Rents, Security Agreement
and Fixture Filing dated the Closing Date (the "Trust Deed"), in which Borrower
appears as "Trustor", Lender appears as "Trustee" and "Beneficiary", and which
encumbers Borrower's leasehold interest in the real property together with the
improvements thereon located in Salt Lake County, State of Utah, and more
particularly described in Exhibit A attached hereto and incorporated herein by
this reference (the "Property"), Borrower has granted Lender a lien on
Borrower's leasehold interest in the Property to secure the Note.
C. The University of Utah, a body corporate and politic ("Ground
Lessor") and Borrower entered into those certain ground lease agreement as more
particularly described in Exhibit B attached hereto and incorporated herein by
this reference (collectively the "Ground Lease").
D. Lender desires and Borrower agrees to further secure the Note and
the Loan Agreement with an assignment of the Ground Lease.
AGREEMENT
In exchange for good and valuable consideration the sufficiency and
receipt of which are hereby acknowledged, Borrower and Lender agree as follows:
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1. Assignment. Borrower hereby absolutely and unconditionally
assigns and transfers unto Lender for security all the right, title, and
interest of Borrower in and to the Ground Lease, together with all extensions,
renewals, modifications or replacements thereof, as well as all guaranties of
Borrower's obligations under any provisions thereof and under any and all
extensions and renewals thereof (collectively the "Lease"). This Assignment
shall inure to the benefit of Lender, its successors and assigns as security for
the payment of the principal and interest provided to be paid in or by the Note,
the performance of the agreements of Borrower contained in the Loan Agreement,
and the performance of the agreements of Borrower contained in the Loan
Documents and any other document evidencing, securing, or relating to the
disbursal or administration of the proceeds of the Note (all of which agreements
and obligations are collectively referred to as the "Obligation").
2. Default Remedies of Lender. If Borrower defaults, past any
applicable cure or grace period, on the Obligation, or this Assignment or if an
Event of Default occurs, Lender shall be authorized at its option to enter and
take possession of all or part of the Property, to perform all acts reasonably
necessary for the operation and maintenance of the Property, and to perform the
obligations of Borrower under the Lease in the same manner and to the same
extent that Borrower might reasonably so act. Lender shall further be authorized
to replace Borrower as lessee under the Lease upon foreclosure of Borrower's
interest therein.
3. Termination of Assignment. When Borrower pays Lender for the full
amount of the Obligation and such payment is evidenced by a recorded
satisfaction or release of the Trust Deed, this Assignment shall no longer be in
effect and shall be void. Lender shall execute such instruments as may be
reasonably required to evidence the termination of this Assignment.
4. Notice to Ground Lessor of Borrower's Default. Borrower shall
irrevocably authorize Ground Lessor, upon demand and notice from Lender of
Borrower's default, past any applicable cure or grace period, under the Loan
Documents, to accept from Lender performance of Borrower's obligations under the
Lease. In such situation, Lender shall not be liable to Ground Lessor for the
determination of the actual existence of any default, past any applicable cure
or grace period, claimed by Lender. Ground Lessor shall have the right to rely
upon any such notices from Lender, without any obligation or right to inquire as
to the actual existence of the default, notwithstanding any claim of Borrower to
the contrary. Upon the curing of all such defaults caused by Borrower under the
Loan Documents, Lender shall give Ground Lessor written notice of such cure.
5. Assignment of Borrower's Interest in Lease. Lender shall have the
right to assign Borrower's right, title, and interest in the Lease to any
subsequent holder of the Note and to any person acquiring title to the Property
through foreclosure or otherwise consistent with the terms of the Ground Lease
and any recorded covenants and restrictions against the Property.
6. Indemnification of Lender. Borrower shall indemnify and hold Lender
harmless of and from any and all liability, loss, or damage that Lender may
incur under the Lease or by reason of this Assignment other than such liability,
loss, or damage as may be occasioned by Lender's gross negligence or willful
misconduct. Such indemnification shall also cover any and all claims that may be
asserted against Lender by reason of any alleged obligation to be performed by
Lender under the Lease or Assignment unless Lender has taken possession or
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control of the Property or has succeeded to Borrower's interest under the Ground
Lease. Nothing in this paragraph shall be construed to bind Lender to the
performance of any Lease provisions, or to otherwise impose any liability upon
Lender unless Lender has taken possession or control of the Property or has
succeeded to Borrower's interest under the Ground Lease. This Assignment shall
not impose liability upon Lender for the operation and maintenance of the
premises or for carrying out the Lease terms before Lender has entered and taken
possession of the premises. Any loss or liability incurred by Lender by reason
of actual entry and taking possession under the Lease or in the defense of any
claims shall, at Lender's request, be reimbursed by Borrower. Such reimbursement
shall include interest at the rate of three percent (3%) per annum above
Lender's Base Rate (as defined in the Note), costs, expenses, and reasonable
attorneys' fees.
7. Quality of Borrower's Title to Lease. Borrower represents itself to
be the absolute owner of the leasehold interest in the Lease, with right and
title to assign it consistent with the terms of the Ground Lease and upon the
consent of Ground Lessor; that the Ground Lease is valid, in full force and
effect, and has not been modified or amended except as stated herein; that there
is no outstanding assignment or pledge thereof; that there are no existing
defaults under the provisions thereof on the part of any party; and that
Borrower is in possession and paying rent and other charges under the Ground
Lease as provided therein. Borrower covenants not to cancel, abridge, surrender,
or terminate the Ground Lease or change, alter, or modify it without the prior
written consent of Lender, which shall not be unreasonably withheld or delayed.
Any attempt at cancellation, surrender, termination, change, alteration,
modification, assignment, or subordination of the Lease without the written
consent of Lender shall be null and void.
8. No Merger. If the Property is under any lease or any portion thereof
which constitutes a part of the Property shall at any time become vested in one
owner, this Assignment and the lien created hereby shall not be destroyed or
terminated by application of the doctrine of merger and, in such event, Lender
shall continue to have and enjoy all of the rights and privileges of Lender as
to the separate estates. In addition, upon the foreclosure of the lien created
by this Assignment on the Property pursuant to the provisions of this
Assignment, any leases or subleases then existing and created by Borrower shall
not be destroyed or terminated by application of the law of merger or as a
matter of law or as a result of such foreclosure unless Lender or any purchaser
at any such foreclosure sale shall so elect. No act by or on behalf of Lender or
any such purchaser shall constitute a termination of any lease or sublease
unless Lender or such purchaser shall give written notice thereof to such tenant
or subtenant.
9. Delivery of Necessary Instruments to Lender. Borrower shall execute
and deliver to Lender and hereby irrevocably appoints Lender, its successors,
and assigns from and after an Event of Default, as its attorney in fact to
execute and deliver during the term of this Assignment, all further instruments
as Lender may deem necessary to make this Assignment and any further assignment
effective. The power hereby granted is coupled with an interest in the Property
and is irrevocable.
10. Lease Guaranties; Assignment of Lease; Alterations of Premises.
Borrower shall not materially alter, modify, cancel or terminate any guaranties
of the Lease without the written consent of Lender. Borrower shall not consent
to any Lease assignment or subletting, nor agree to a subordination of the Lease
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to any mortgage or other encumbrance, other than that of Lender, now or
hereafter affecting the Property without Lender's prior written consent which
shall not be unreasonably withheld or delayed. Borrower shall not permit a
material alteration of or addition to the Property without Lender's prior
written consent.
11. Borrower to Ensure Continued Performance under Lease. Borrower
shall perform all of its material covenants as lessee under the Lease, including
the obligation to pay rent to Ground Lessor. Lender shall promptly deliver to
Borrower copies of all notices of default Borrower has received or may hereafter
receive from Ground Lessor.
12. Changes in Obligation Terms. Notwithstanding any variation of the
terms of the Loan Documents, including increase or decrease in the principal
amount thereof or in the rate of interest payable thereunder or any extension of
time for payment thereunder or any release of part or parts of the real property
subject to the Trust Deed, the Lease and the benefits hereby assigned shall
continue as additional security in accordance with the terms of this Assignment.
13. Additions to and Replacement of Obligation. Lender may take
security in addition to the security already given Lender for the payment of the
principal and interest provided to be paid in or by the Loan Documents or
release such other security, and may release any party primarily or secondarily
liable on the Loan Documents, may grant or make extensions, renewals,
modifications, or indulgences with respect to the Loan Documents and
replacements thereof, which replacement of the Loan Documents may be on the same
or on terms different from the present terms of the Loan Documents, and may
apply any other security thereof held by it to the satisfaction of the
Obligation, without prejudice to any of its rights hereunder.
14. Exercise of Lender's Rights. Lender's failure to avail itself of
any of its rights under this Assignment for any period of time, or at any time
or times, shall not constitute a waiver thereof. Lender's rights and remedies
hereunder are cumulative, and not in lieu of, but in addition to, any other
rights and remedies Lender has under the Obligation and Trust Deed. Lender's
rights and remedies hereunder may be exercised as often as Lender deems
expedient.
15. Amendment, Modification, or Cancellation of Assignment. No
amendment, modification, cancellation, or discharge hereof, or of any part
hereof, shall be enforceable without Lender's prior written consent.
16. Notices. All notices shall be in writing and shall be deemed to
have been sufficiently given or served when personally delivered or when
deposited in the United States mail, by registered or certified mail, addressed
as follows:
Lender: Zions First National Bank
Commercial Loan Department
P.O. Box 25822
One South Main Street
Salt Lake City, Utah 84125
Attn: Michael R. Brough
With copies to: Callister Nebeker & McCullough
Gateway Tower East, Suite 900
10 East South Temple
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Salt Lake City, Utah 84133
Attn: T. Richard Davis
Borrower: Evans & Sutherland Computer Corporation
600 Komas Drive
Salt Lake City, Utah 84108
Attn: Chief Financial Officer
Evans & Sutherland Computer Corporation
600 Komas Drive
Salt Lake City, Utah 84108
Attn: Treasurer
With copies to: Snell & Wilmer, L.L.P. Law Offices
15 West South Temple, Suite 1200
Gateway Tower West
Salt Lake City, Utah 84101
Attn: Brian D. Cunningham
Such addresses may be changed by notice to the other party given in the same
manner provided in this Section.
17. Binding Effect. All agreements herein shall inure to the benefit
of, and bind the respective heirs, executors, administrators, successors, and
assigns of Borrower and Lender.
18. Governing Law. This Assignment shall be governed by, construed and
interpreted in accordance with the laws of the State of Utah.
19. Attorneys' Fees. In the event Lender institutes legal action
against Borrower with respect to this Assignment, Lender shall be entitled to an
award of reasonable attorneys' fees from Borrower. Lender shall also be entitled
to collect all reasonable attorneys' fees and costs incurred with respect to any
insolvency or bankruptcy action or proceeding involving Borrower.
20. Defined Terms. Unless otherwise defined in this Assignment,
capitalized terms used in this Assignment shall have the meanings set forth in
the Loan Agreement.
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DATED: March 31, 2000.
BORROWER
EVANS & SUTHERLAND COMPUTER CORPORATION,
a Utah corporation
By: /S/ R. GAYNOR
Richard J. Gaynor
Vice President and Chief Financial Officer
LENDER
Zions First National Bank,
a national banking association
By: /S/ M. BROUGH
Michael R. Brough
Vice President
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STATE OF UTAH )
: ss.
COUNTY OF SALT LAKE )
The foregoing instrument was acknowledged before me this day of May,
2000, by Richard J. Gaynor, Vice President and Chief Financial Officer of Evans
& Sutherland Computer Corporation, a Utah corporation.
NOTARY PUBLIC
My Commission Expires: Residing At:
STATE OF UTAH )
: ss.
COUNTY OF SALT LAKE )
The foregoing instrument was acknowledged before me this _____ day of
May, 2000, by Michael R. Brough, Vice President of Zions First National Bank, a
national banking association.
NOTARY PUBLIC
My Commission Expires: Residing At:
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EXHIBIT A
REAL PROPERTY DESCRIPTION
The real property located in Salt Lake County, State of Utah, and more
particularly described as follows:
[SEE ATTACHED EXHIBIT A]
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EXHIBIT B
DESCRIPTION OF GROUND LEASES
1. Lease Agreement dated November 21, 1972, as amended by an Addendum
to Lease Agreement dated November 21, 1972, a Second Addendum to Lease Agreement
dated June 4, 1973, a Third Addendum to Lease Agreement dated December 7, 1973,
and a Fourth Addendum to Lease Agreement dated September 12, 1979, all entered
into between Ground Lessor, as lessor, and Mountain Co-Venture, a general
partnership, as lessee, and as amended by a Fifth Addendum to Lease Agreement
dated April 9, 1987 entered into between Ground Lessor, as lessor, and Borrower,
as lessee, wherein Ground Lessor leases a portion of the Property known as
Building 540 to Borrower.
2. Lease Agreement dated September 4, 1979 entered into between Ground
Lessor, as lessor, and Tri Venture, a general partnership, as lessee, as amended
by a First Addendum to Lease Agreement dated April 9, 1987, and a Second
Addendum to Lease Agreement dated December 31, 1990, all entered into between
Ground Lessor, as lessor, and Borrower, as lessee, wherein Ground Lessor leases
a portion of the Property known as Building 560 to Borrower.
3. Lease Agreement dated November 21, 1973, as amended by a First
Addendum to Lease Agreement dated May 24, 1974, a Second Addendum to Lease
Agreement dated March 23, 1977, a Third Addendum to Lease Agreement dated
September 12, 1979, all entered into between Ground Lessor, as lessor, and Park
Enterprises, a general partnership, as lessee, and as amended by a Fourth
Addendum to Lease Agreement dated April 9, 1987 entered into between Ground
Lessor, as lessor, and Borrower, as lessee, wherein Ground Lessor leases a
portion of the Property known as Building 580 to Borrower.
4. Lease Agreement dated April 9, 1987, as amended by a First Addendum
to Lease Agreement dated December 31, 1990, all entered into between Ground
Lessor, as lessor, and Borrower, as lessee, wherein Ground Lessor leases a
portion of the Property known as Building 600 to Borrower.
5. Lease Agreement dated September 5, 1980 entered into between Ground
Lessor, as lessor, and Black Hawk Investment Company, a general partnership, as
lessee, and as amended by a First Amendment to Lease Agreement dated June 7,
1982, a Second Amendment to Lease Agreement dated September 28, 1982, a Third
Addendum to Lease Agreement dated April 9, 1987, and a Fourth Addendum to Lease
Agreement dated December 31, 1990, all entered into between Ground Lessor, as
lessor, and Borrower, as lessee, wherein Ground Lessor leases a portion of the
Property known as Building 650 to Borrower.
6. Lease Agreement dated April 1, 1988, as amended by a First Addendum
to Lease Agreement dated December 31, 1990, all entered into between Ground
Lessor, as lessor, and Borrower, as lessee, wherein Ground Lessor leases a
portion of the Property known as Building 770 to Borrower.
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7. Lease Agreement dated December 31, 1990 entered into between Ground
Lessor, as lessor, and Borrower, as lessee, wherein Ground Lessor leases a
portion of the Property known as Building 790 to Borrower.
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