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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-Q
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED DECEMBER 25, 1999
COMMISSION FILE NUMBER: 0-22511
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RF MICRO DEVICES, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
NORTH CAROLINA 56-1733461
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
</TABLE>
7625 THORNDIKE ROAD
GREENSBORO, NORTH CAROLINA 27409-9421
(Address of principal executive offices, including zip code)
(336) 664-1233
(Registrant's telephone number, including area code)
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 [ ]
As of February 1, 2000, there were 79,809,699 shares of the registrant's
common stock outstanding.
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RF MICRO DEVICES, INC.
INDEX
<TABLE>
<CAPTION>
PAGE
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Part I. FINANCIAL INFORMATION
Item 1. Financial Statements.............................. 3
Condensed Consolidated Statements of Income -- Three
months ended December 31, 1999 and 1998............... 3
Condensed Consolidated Statements of Income -- Nine
months ended December 31, 1999 and 1998............... 4
Condensed Consolidated Balance Sheets -- December 31,
1999 and March 31, 1999............................... 5
Condensed Consolidated Statements of Cash Flows -- Nine
months ended December 31, 1999 and 1998............... 6
Notes to Condensed Consolidated Financial Statements... 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.................... 10
Part II. OTHER INFORMATION
Item 2. Changes in Securities and Use of Proceeds......... 16
Item 6. Exhibits and Reports on Form 8-K.................. 16
</TABLE>
2
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PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
RF MICRO DEVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
----------------------------
DECEMBER 31, DECEMBER 31,
1999 1998
------------ ------------
<S> <C> <C>
Revenues:
Product sales............................................. $72,856 $40,993
Engineering revenue....................................... 305 524
------- -------
Total revenues.................................... 73,161 41,517
Operating costs and expenses:
Cost of goods sold........................................ 37,530 26,959
Research and development.................................. 9,061 3,774
Marketing and selling..................................... 5,394 2,682
General and administrative................................ 2,665 1,133
------- -------
Total operating costs and expenses................ 54,650 34,548
------- -------
Income from operations...................................... 18,511 6,969
Other income (expense), net................................. 835 (226)
------- -------
Income before income taxes.................................. 19,346 6,743
------- -------
Income tax expense.......................................... 6,771 1,146
------- -------
Net income.................................................. $12,575 $ 5,597
======= =======
Earnings per share:
Basic..................................................... $ .16 $ .08
Diluted................................................... $ .15 $ .08
Shares used in per share calculation:
Basic..................................................... 79,412 68,848
Diluted................................................... 86,075 72,788
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements.
3
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RF MICRO DEVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
------------------------------
DECEMBER 31, DECEMBER 31,
1999 1998
------------- -------------
<S> <C> <C>
Revenues:
Product sales............................................. $203,596 $95,660
Engineering revenue....................................... 535 713
-------- -------
Total revenues.................................... 204,131 96,373
Operating costs and expenses:
Cost of goods sold........................................ 110,004 64,252
Research and development.................................. 22,469 9,774
Marketing and selling..................................... 13,667 7,378
General and administrative................................ 6,580 3,124
-------- -------
Total operating costs and expenses................ 152,720 84,528
-------- -------
Income from operations...................................... 51,411 11,845
Other income (expense), net................................. 3,147 (253)
-------- -------
Income before income taxes.................................. 54,558 11,592
-------- -------
Income tax expense.......................................... 19,095 1,967
-------- -------
Net income.................................................. $ 35,463 $ 9,625
======== =======
Earnings per share:
Basic..................................................... $ .45 $ .15
Diluted................................................... $ .42 $ .14
Shares used in per share calculation :
Basic..................................................... 79,190 66,208
Diluted................................................... 85,389 70,508
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements.
4
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RF MICRO DEVICES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1999 1999
------------ ---------
(UNAUDITED) (AUDITED)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents.............................. $ 30,351 $147,545
Short-term investments................................. 44,925 --
Accounts receivable, net............................... 46,797 23,697
Inventories............................................ 39,991 27,335
Current deferred tax asset............................. 900 898
Other current assets................................... 337 243
-------- --------
Total current assets.............................. 163,301 199,718
Property and equipment, net................................. 140,694 67,431
Technology licenses, net.................................... 14,430 3,078
Restricted cash............................................. 6,783 3,860
Non-current deferred tax asset.............................. 1,088 1,088
Other assets................................................ 4,022 583
-------- --------
Total assets...................................... $330,318 $275,758
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued liabilities............... $ 31,615 $ 24,700
Income taxes payable................................... 6,081 2,854
Current obligations under capital leases............... 4,389 4,246
-------- --------
Total current liabilities......................... 42,085 31,800
Obligations under capital leases, less current maturities... 9,363 12,587
Non-current deferred tax liability.......................... 465 465
-------- --------
Total liabilities................................. 51,913 44,852
Shareholders' equity:
Preferred stock, no par value; 5,000,000 shares
authorized; no shares issued and outstanding........... -- --
Common stock, no par value; 150,000,000 shares authorized;
79,508,651 shares and 78,753,952 issued and outstanding
at December 31, 1999 and March 31, 1999,
respectively........................................... 242,751 224,746
Deferred compensation....................................... (6,135) (165)
Retained earnings........................................... 41,789 6,325
-------- --------
Total shareholders' equity........................ 278,405 230,906
-------- --------
Total liabilities and shareholders' equity........ $330,318 $275,758
======== ========
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements.
5
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RF MICRO DEVICES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
---------------------------
DECEMBER 31, DECEMBER 31,
1999 1998
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net income.................................................. $ 35,463 $ 9,625
Adjustments to reconcile net income to net cash provided by
operating activities:
(Loss) on sale of equipment............................... -- (78)
Depreciation and amortization............................. 10,252 2,923
Amortization of deferred compensation..................... 173 --
Change in operating assets and liabilities:
(Increase) decrease in:
Accounts receivable.................................... (23,100) (7,326)
Inventories............................................ (12,656) (6,069)
Current deferred tax asset............................. (1) --
Other assets........................................... (145) (932)
Accounts payable....................................... 5,881 4,063
Accrued liabilities.................................... 1,034 3,006
Deferred revenue....................................... -- 247
Income taxes payable................................... 3,227 1,974
--------- --------
Net cash provided by operating activities......... 20,128 7,433
Cash flows from investing activities:
Purchase of capital equipment/leasehold improvements... (83,326) (12,443)
Proceeds from sale of equipment........................ -- 31
Capitalization of fabrication facility construction
costs................................................. -- (1,227)
Purchase of short-term investments..................... (48,314) --
Purchase of technology license......................... (1,500) --
--------- --------
Net cash used in investing activities............. (133,140) (13,639)
Cash flows from financing activities:
Proceeds from exercise of options...................... 1,822 75
Proceeds from exercise of warrant...................... -- 10,000
Increase in restricted cash............................ (2,923) (3,860)
Repayment of capital lease obligations................. (3,081) (2,781)
--------- --------
Net cash provided by (used in) financing
activities...................................... (4,182) 3,434
--------- --------
Net (decrease) in cash and cash equivalents....... (117,194) (2,772)
Cash and cash equivalents at the beginning of the period.... 147,545 16,360
--------- --------
Cash and cash equivalents at the end of the period.......... $ 30,351 $ 13,588
========= ========
</TABLE>
See accompanying Notes to Condensed Consolidated Financial Statements.
6
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RF MICRO DEVICES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying consolidated financial statements have been prepared in
conformity with generally accepted accounting principles. However, certain
information or footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed, or omitted, pursuant to the rules and regulations of the Securities
and Exchange Commission. In the opinion of management, the statements include
all adjustments (which are of a normal and recurring nature) necessary for the
fair presentation of the results of the interim periods presented. These
financial statements should be read in conjunction with the Company's audited
financial statements for the year ended March 31, 1999.
The consolidated financial statements include the accounts of the Company
and its wholly owned subsidiary, RF Micro Devices UK Ltd. All significant
intercompany accounts and transactions have been eliminated in consolidation
The Company uses a 52- or 53-week fiscal year ending on the Saturday
closest to March 31 of each year. The Company's other fiscal quarters end on the
Saturday closest to June 30, September 30, and December 31 of each year. For
purposes of this report (including the Unaudited Consolidated Condensed
Financial Statements included herein), each fiscal year is described as having
ended on March 31, and each of the first three quarters of each fiscal year is
described as having ended on June 30, September 30 and December 31.
On March 31, 1999, the Company effected a two-for-one stock split upon
which the Company's shareholders of record on March 17, 1999 were issued a
certificate representing one additional share of the Company's common stock for
each share of the Company's common stock held on such record date. On August 18,
1999, the Company effected a two-for-one split of its common stock upon which
the Company's shareholders of record on August 2, 1999 were issued a certificate
representing one additional share of the Company's common stock for each share
of the Company's common stock held on such record date. All earnings per share
and share count information has been restated to reflect the impact of these
stock splits.
2. RESEARCH AND DEVELOPMENT COSTS
The Company charges all research and development costs to expense as
incurred.
3. INCOME TAXES
The provision for income taxes has been recorded based on the current
estimate of the Company's annual effective tax rate. This rate differs from the
federal statutory rate primarily because of the reduction of the valuation
allowances on deferred tax assets.
4. INVENTORIES
The components of inventories are as follows (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1999 1999
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<S> <C> <C>
Raw materials............................................... $ 8,171 $ 6,628
Work in process............................................. 32,809 18,118
Finished goods.............................................. 9,272 6,975
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50,252 31,721
Inventory allowances........................................ (10,261) (4,386)
-------- -------
Total inventory................................... $ 39,991 $27,335
======== =======
</TABLE>
7
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RF MICRO DEVICES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(UNAUDITED)
5. EARNINGS PER SHARE
The weighted average shares used in the calculation of diluted earnings per
share represent the weighted average shares outstanding plus the dilutive effect
of outstanding stock options, warrants, and other potential common shares
outstanding. The following table sets forth the computation of basic and diluted
earnings per share (in thousands, except per share data):
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
--------------------------- ---------------------------
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1999 1998 1999 1998
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Numerator for basic and diluted earnings per
share:
Net income.................................... $12,575 $ 5,597 $35,463 $ 9,625
Denominator:
Denominator for basic earnings per
share -- weighted average shares............ 79,412 68,848 79,190 66,208
Effect of dilutive securities:
Stock options and warrants.................... 6,663 3,940 6,199 4,300
Denominator for diluted earnings per share --
adjusted weighted average shares and assumed
conversions................................. 86,075 72,788 85,389 70,508
------- ------- ------- -------
Basic earnings per share...................... $ .16 $ .08 $ .45 $ .15
======= ======= ======= =======
Diluted earnings per share.................... $ .15 $ .08 $ .42 $ .14
======= ======= ======= =======
</TABLE>
6. DEFERRED COMPENSATION
During the third quarter, the Company issued shares of restricted stock
resulting in deferred compensation of approximately $6.0 million. This amount is
being charged to compensation expense over the period in which the restrictions
lapse which is generally five years.
7. LEASES
On August 13, 1999, as modified effective December 31, 1999, the Company
entered into a synthetic lease. A synthetic lease is an asset-based financing
structured to be treated as an operating lease for accounting purposes, but as a
capital lease for tax purposes. At the end of the third quarter of fiscal year
2000, the synthetic lease transaction was largely secured by cash collateral.
The modification effective December 31, 1999 resulted in the release of the cash
collateral and the synthetic lease is now secured by substantially all of the
personal property assets of the Company. The lease has a term expiring November
3, 2004. At the end of the term, the lease can be extended upon the agreement of
the parties or the Company may buy out the lease. The interest rates or yield
rates embedded in the lease (and used to calculate lease payments) are either:
- the Eurodollar Rate plus margins varying from 150 basis points to 300
basis points per annum (based on certain quarterly financial covenant
testing and depending on whether the underlying source of funding is in
the form of a promissory note or an equity certificate), or
- at our election and under certain other circumstances where funding
based on the Eurodollar Rate is not available, the ABR Rate plus margins
varying from zero basis points to 75 basis points per annum (based on
certain quarterly financial covenant testing and depending on whether
the underlying source of funding is in the form of a promissory note or
an equity certificate). The Eurodollar Rate is a rate of interest
determined under the lease documents by reference to one or more sources
for the London interbank offered rate or LIBOR. The ABR Rate is a rate
of interest determined under the
8
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RF MICRO DEVICES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(UNAUDITED)
lease documents equal to the greater of (a) the prime lending rate of
the primary lender or its successor (as determined under the lease
documents) or (b) the federal funds effective rate (as determined under
the lease documents) plus 0.5%
This lease is expected to provide up to $100 million in financing for a new
wafer fabrication facility currently under construction. The $100 million of
financing is expected to fund approximately $57 million for the building and $43
million of equipment.
9
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
INTRODUCTION
We design, develop, manufacture and market proprietary radio frequency
integrated circuits, or RFICs, for wireless communications applications such as
cellular and personal communication services, cordless telephony, wireless local
area networks, wireless local loop, industrial radios, wireless security and
remote meter reading. We offer a broad array of products -- including
amplifiers, mixers, modulators/demodulators and single chip transmitters,
receivers and transceivers -- that represent a substantial majority of the RFICs
required in wireless subscriber equipment. We design and offer products using
three distinct process technologies: gallium arsenide heterojunction bipolar
transistor, or GaAs HBT; silicon bipolar transistor; and, to a lesser extent,
gallium arsenide metal semiconductor field effect transistor, or GaAs MESFET. We
have also recently begun to design products using the silicon germanium process
technology.
We began manufacturing our own GaAs HBT products at our new wafer
fabrication facility in September 1998, and we are now concentrating our efforts
on increasing our manufacturing capacity to satisfy customer demand for GaAs HBT
products, which is currently greater than we can meet. In September 1999, we
began construction on a second wafer fabrication facility. Before September
1998, TRW Inc., which is our largest shareholder, manufactured all of our GaAs
HBT products. TRW has granted us a perpetual non-royalty bearing license to use
its GaAs HBT process to design and manufacture products for commercial wireless
applications. In November 1999, we expanded our license with TRW to cover
certain wired applications. Our GaAs HBT power amplifiers and small signal
devices have been designed into advanced subscriber equipment made by leading
original equipment manufacturers, or OEMs, such as Nokia Mobile Phones Ltd., LG
Information and Communications, Ltd., Hyundai Electronics Industries Co. Ltd.,
Samsung Electronics Co., Ltd., and Motorola, Inc. Through a delivery strategy
called Optimum Technology Matching(R), we also offer silicon, silicon germanium,
and GaAs MESFET components to complement our GaAs HBT products. Optimum
Technology Matching(R) allows us to offer RFIC solutions, on a
component-by-component basis, that best fulfill OEMs' performance, cost and
time-to-market requirements.
RESULTS OF OPERATIONS
The following table sets forth our consolidated statement of operations
data expressed as a percentage of total revenues for the periods indicated:
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
--------------------------- ---------------------------
DECEMBER 31, DECEMBER 31, DECEMBER 31, DECEMBER 31,
1999 1998 1999 1998
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenues...................................... 100.0% 100.0% 100.0% 100.0%
Operating costs and expenses:
Cost of goods sold.......................... 51.3 64.9 53.9 66.7
Research and development.................... 12.4 9.1 11.0 10.1
Marketing and selling....................... 7.4 6.5 6.7 7.7
General and administrative.................. 3.6 2.7 3.2 3.2
----- ----- ----- -----
Total operating costs and
expenses.......................... 74.7 74.8 83.2 87.7
Income from operations........................ 25.3 16.8 25.2 12.3
Other income (expense), net................... 1.1 (.5) 1.5 (.3)
----- ----- ----- -----
Income before income taxes.................... 26.4 16.3 26.7 12.0
Income tax expense............................ (9.3) (2.8) (9.4) (2.0)
----- ----- ----- -----
Net income.................................... 17.2% 13.5% 17.4% 10.0%
===== ===== ===== =====
</TABLE>
REVENUES
Revenues increased 76.2% to $73.2 million for the three months ended
December 31, 1999 from $41.5 million for the three months ended December 31,
1998. The increase in revenues during the three months ended December 31, 1999
reflected strong growth in both the GaAs HBT product line (a 73.7% increase over
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the third quarter of fiscal 1999) and the silicon product line (a 123.5%
increase over the third quarter of fiscal 1999). One sales representative firm,
Jittek, accounted for 16.7% of our revenue during the third quarter of fiscal
2000. For the nine-month period ended December 31, 1999, revenues increased
111.8% to $204.1 million from $96.4 million in the same period in fiscal 1999.
This increase was primarily attributable to increased shipments as the result of
our capacity expansion efforts for three-volt HBT power amplifiers and small
signal devices to be used in a variety of applications.
International shipments accounted for $41.6 million, or 56.8% of revenues,
for the three months ended December 31, 1999, compared to $27.0 million, or
65.0%, for the three months ended December 31, 1998. Sales to South Korean
customers totaled $12.3 million, or 16.9% of revenues for the third quarter of
fiscal 2000, compared to $12.2 million, or 29.4% of revenues, for the quarter
ended December 31, 1998, and $15.1 million, or 22% of revenues for the three
months ended September 30, 1999. Although we experienced a small year-to-year
increase in sales to South Korean customers in our third quarter, our shipments
in this market decreased from the previous quarter and this market remains
unstable.
GROSS PROFIT
Our gross profit margin was 48.7% for the three months ended December 31,
1999 compared to 35.1% for the three months ended December 31, 1998. For the
nine-months ended December 31, 1999, our gross profit margin increased to 46.1%
compared to 33.3% for the nine months ended December 31, 1998. The increase in
our gross profit margin during both periods is primarily attributable to an
increase in the percentage of revenues derived from lower cost output from our
GaAs HBT wafer fabrication facility and lower costs on purchased wafers under
supply agreements providing for annual price reductions.
We have historically experienced significant fluctuations in gross profit
margins. In certain cases, we believe that our gross profit margins have been
significantly affected by low manufacturing, assembly and test yields, and there
can be no assurance that future operating results will not be similarly
affected. We currently expect our gross profit margins to continue to improve as
an increasing percentage of our GaAs HBT products are fabricated at our wafer
fabrication facility, where production costs per wafer are anticipated to be
lower; however, there can be no assurance that this will be the case. Further,
we sell products in intensely competitive markets, and we believe that downward
pressure on average selling prices will continue to occur in the future.
RESEARCH AND DEVELOPMENT
Research and development expenses for the three months ended December 31,
1999 increased 140.1% to $9.1 million, compared to $3.8 million for the three
months ended December 31, 1998. For the nine months ended December 31, 1999,
research and development expenses increased 129.8% to $22.5 million, compared to
$9.8 million for the nine months ended December 31, 1998. These increases were
primarily attributable to increased salaries and benefits, recruiting expenses
related to increased headcount, increased software expenses related to software
used in the development and design of standard and custom products, and spending
increases for development wafers and mask sets. Research and development
expenses as a percentage of total revenues increased to 12.4% for the three
months ended December 31, 1999 from 9.1% for the three months ended December 31,
1998. For the nine-month period ended December 31, 1999, research and
development expenses as a percent of revenue increased to 11.0% from 10.1% for
the nine months ended December 31, 1998. We plan to continue to make substantial
investments in research and development and expect that such expenses will
continue to increase in absolute dollar amounts in future periods.
MARKETING AND SELLING
Marketing and selling expenses for the three months ended December 31, 1999
were $5.4 million, compared to $2.7 million for the three months ended December
31, 1998, an increase of 100.0%. For the nine months ended December 31, 1999,
marketing and selling expenses increased 85.2% to $13.7 million, compared to
$7.4 million for the nine months ended December 31, 1998. These increases were
primarily attributable to increased salaries and benefits related to increased
headcount and to increases in commission expense. Marketing and selling expenses
as a percentage of revenue for the three months ended December 31, 1999
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increased to 7.4% from 6.5% for the three months ended December 31, 1998. For
the nine-month period ended December 31, 1999, marketing and sales expenses as a
percentage of revenue declined to 6.7% from 7.7% for the nine months ended
December 31, 1998. We plan to continue to make substantial investments in
marketing and selling and expect that such expenses will continue to increase in
absolute dollar amounts in future periods.
GENERAL AND ADMINISTRATIVE
General and administrative expenses for the three months ended December 31,
1999 were $2.7 million compared to $1.1 million for the three months ended
December 31, 1998, an increase of 135.2%. For the nine months ended December 31,
1999, general and administrative expenses increased 110.6% to $6.6 million,
compared to $3.1 million for the nine months ended December 31, 1998. These
increases were attributable primarily to increased salaries and benefits related
to headcount increases, increased outside legal and accounting expenses, and
consulting costs associated with our SAP implementation. General and
administrative expenses as a percentage of revenues increase to 3.6% from 2.7%
for the three months ended December 31, 1999 as compared to the three months
ended December 31, 1998. For the nine-month period ended December 31, 1999,
general and administrative expenses as a percent of revenue remained at 3.2% as
compared to the nine months ended December 31, 1998.
OTHER INCOME (EXPENSE), NET
Other income (expense), net, for the three months ended December 31, 1999
reflected net income of $835,000 compared to net expense of $226,000 for the
three months ended December 31, 1998. For the nine months ended December 31,
1999 other income (expense), net, reflected net income of $3.1 million compared
to net expense of $253,000 for the nine months ended December 31, 1998. The
increase in other income during these periods is attributable to increased
interest income resulting from the investment of the proceeds of our secondary
stock offering completed in January 1999.
INCOME TAX EXPENSE
Our effective tax rate was 35% for the three-month period ended December
31, 1999. Our effective rate is less than the combined federal and state
statutory rate of approximately 40% due to the reduction of the valuation
allowance on the deferred tax assets. Income tax expense for the three months
ended December 31, 1999 was approximately $6.8 million as compared to $1.1
million for the corresponding period ended December 31, 1998 when the effective
rate was 17.0%. Income tax expense for the nine months ended December 31, 1999
was approximately $19.1 million with an effective rate of 35% as compared to
$2.0 million for the corresponding period ended December 31, 1998, when the
effective rate was 17.0%.
LIQUIDITY AND CAPITAL RESOURCES
We have funded our operations to date through sales of equity and debt
securities, bank borrowings, capital equipment leases and revenues from product
sales. We completed our initial public offering in September 1997, and raised
approximately $37.6 million, net of offering expenses. In January 1999, we
completed a secondary public offering and raised approximately $133.4 million,
net of offering expenses. As of December 31, 1999, we had working capital of
approximately $121.2 million, including $30.4 million in cash and cash
equivalents. Operating activities generated $20.1 million in cash for the
nine-month period ended December 31, 1999. This was primarily attributable to
net income of $35.5 million, an increase in accounts payable of $5.9 million,
and an increase in taxes payable of $3.2 million partially offset by increases
in accounts receivable of $23.1 million, and inventories of $12.7 million,. Cash
provided by operating activities for the nine months ended December 31, 1998 was
$7.4 million. The cash provided by operating activities during this period was
primarily attributable to an increase in accounts payable and accrued
liabilities of $7.1 million, increases in taxes payable of $2.0 million, and net
income of $9.6 million. These increases were partially offset by increases in
accounts receivable of $7.3 million and inventories of $6.1 million.
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The $133.1 million of cash used by investing activities for the nine months
ended December 31, 1999 was substantially related to the purchase of $40.0
million of capital equipment, primarily for use in our wafer fabrication
facility, $28.6 million for the construction and outfitting of our new facility
housing molecular beam epitaxy (MBE) wafer fabrication equipment, $13.0 million
capitalized for the construction of our new corporate headquarters, $48.3
million for the purchase of short-term investments, $1.7 million capitalized as
the result of our SAP implementation and $1.5 million to access silicon
germanium fabrication technology from IBM. The $13.6 million of cash used by
investing activities for the nine months ended December 31, 1998 was primarily
related to expenditures associated with the construction of our first GaAs HBT
wafer fabrication facility and general corporate capital equipment requirements.
The $4.2 million of cash used by financing activities for the nine-month
period ended December 31, 1999 related primarily to the repayment of capital
lease obligations and increases in restricted cash associated with the financing
of our new wafer fabrication facility. The $3.4 million of cash provided by
financing activities for the nine-month period ended December 31, 1998 related
primarily to the receipt of $10.0 million of proceeds from the exercise by TRW
of a warrant covering 4,000,000 shares of common stock, partially offset by $2.8
million in repayment of capital lease obligations and an increase in cash
restricted as part of the lease terms for our wafer fabrication facility.
At December 31, 1999, we had total long-term capital commitments of $24.2
million, with $12.5 million relating to expansion of our first wafer fabrication
facility and $11.7 million for general corporate requirements. The $12.5 million
in long-term capital commitments relating to the wafer fabrication facility
represents continued investment in the second phase expansion, as well as a
portion of an expected additional $48.3 million investment to increase further
wafer fabrication capacity that consisted of moving our MBE wafer starting
equipment out of the facility to a new leased location, reconfiguring the space
currently occupied by this equipment with additional wafer production equipment
and hiring additional production personnel. We completed the move of our MBE
equipment in October 1999 and are now producing MBE wafers from our new
facility. We believe this additional investment in wafer fabrication capacity,
which is expected to be completed by mid-2000, will bring our total wafer
production capacity to approximately 50,000 wafers per year. We expect to fund
this investment through a combination of existing cash on hand and capital
leases.
During the quarter ended September 30, 1999, we began construction of a
second wafer fabrication facility. The full capacity output of the first phase
of this facility is anticipated to be the equivalent of approximately 60,000
four-inch wafers and is projected to be completed and begin commencement of
production wafers in late 2000. Construction for the first phase is currently on
schedule. An anticipated second phase of construction, which is expected to be
completed near the end of 2001, would increase the facility's total output to
the equivalent of 210,000 four-inch wafers per year. The projected cost for this
facility is approximately $110 million for the first phase and $140 million for
the second phase. The funding for the first phase will come primarily from a
synthetic lease arrangement that we entered into on August 13, 1999, as modified
effective December 31, 1999. A synthetic lease is an asset-based financing
structured to be treated as an operating lease for accounting purposes, and a
capital lease for tax purposes. At the end of the third quarter of fiscal year
2000, the synthetic lease transaction was largely secured by cash collateral.
The modification effective December 31, 1999 resulted in the release of the cash
collateral and the synthetic lease is now secured by substantially all of the
personal property assets of the company. The lease has a term expiring November
3, 2004. At the end of the term, the lease can be extended upon the agreement of
the parties or we may buy out the lease. The interest rates or yield rates
embedded in the lease (and used to calculate lease payments) are either
- the Eurodollar Rate plus margins varying from 150 basis points to 300
basis points per annum (based on certain quarterly financial covenant
testing and depending on whether the underlying source of funding is in
the form of a promissory note or an equity certificate), or
- at our election and under certain other circumstances where funding
based on the Eurodollar Rate is not available, the ABR Rate plus margins
varying from zero basis points to 75 basis points per annum (based on
certain quarterly financial covenant testing and depending on whether
the underlying source of funding is in the form of a promissory note or
an equity certificate). The Eurodollar Rate is
13
<PAGE> 14
a rate of interest determined under the lease documents by reference to
one or more sources for the London interbank offered rate or LIBOR. The
ABR Rate is a rate of interest determined under the lease documents
equal to the greater of (a) the prime lending rate of the primary lender
or its successor (as determined under the lease documents) or (b) the
federal funds effective rate (as determined under the lease documents)
plus 0.5%.
Additionally, state and local governments have awarded us a series of
incentives in the form of property tax abatements in connection with our
investment in wafer fabrication and other facilities that approximate $5.5
million payable over a one- to four-year period. We expect to use these
incentives to offset infrastructure and other capital costs associated with our
expansion activities.
During the quarter ended December 31, 1999, we began construction of an
integrated RFIC test facility. The purpose of this facility is to ensure that we
have adequate capacity to test all the products we sell. This facility will be
completed in phases as the need for capacity arises due to increases in
production of our products. The projected cost for the initial phase of this
project is expected to be approximately $7.5 million in upfit costs of a leased
facility and $13.0 million in equipment. The upfit of the leased facility is
currently expected to be complete by the end of the second quarter of fiscal
year 2001. The equipment will be added over time as the need for test capacity
develops and the expenditure of the $13.0 million is currently expected to be
completed by middle of fiscal year 2002. If we add more capacity to this
facility we will purchase additional test equipment, but we currently have no
definitive plans to do so. We expect to fund this investment through a
combination of cash on hand and under capital leases.
We currently have eight capital lease facilities with four equipment
financing companies under which we have financed the cost of capital equipment
and leasehold improvements associated with our first wafer fabrication facility.
We have financed an aggregate of $23.4 million of leased property under these
facilities. Lease terms range from 36 months to 60 months with effective
interest factors ranging from 8.6% to 11.1%. At December 31, 1999, the minimum
future lease payments under these leases (excluding interest) were $13.8
million.
In November 1999, we expanded our license arrangements with TRW in order to
use this GaAs HBT technology to manufacture products for commercial coaxial and
other non-fiber wire applications. In consideration for this expanded license,
we granted TRW two warrants for the purchase of shares of our common stock. The
first warrant is for 250,000 shares of common stock and is exercisable after
December 31, 2000 and expires on June 30, 2001. The second warrant is for
500,000 shares of common stock and is exercisable after December 31, 2000 and
expires on December 31, 2001, but will become null and void if we fail to
achieve of certain annualized sales milestones. The value of these warrants has
been estimated to be $10.0 million, which represents the cost of our right to
use TRW's technology for these new applications. Accordingly, a related
intangible asset has been recorded on our balance sheet. Amortization of this
intangible asset will commence when we begin shipping products in production
volumes that were developed under this expanded license.
We believe that the aggregate net proceeds from the follow-on public
offering, along with cash generated from operations and new financing
arrangements as described above, will be sufficient to meet our capital
requirements for at least the next 12 months. Nonetheless, we may elect to sell
additional equity securities or to obtain additional credit facilities. Our
future capital requirements may differ materially from those currently
anticipated and will depend on many factors, including, but not limited to,
market acceptance of our products, volume pricing concessions, capital
improvements to new and existing facilities, technological advances and our
relationships with suppliers and customers. In addition, we may require
increased working capital to accommodate planned growth. In the event that the
funds generated by the follow-on offering, together with existing resources and
cash from operations, are not sufficient to meet our future requirements, we may
seek additional debt or equity financing. There can be no assurance that any
additional equity financing will not be dilutive to the holders of our common
stock. Further, there can be no assurance that additional equity or debt
financing, if required, will be available on acceptable terms or at all.
14
<PAGE> 15
YEAR 2000 ISSUES
Prior to January 1, 2000, we evaluated all of our internal software and
current products against Year 2000 concerns. We also completed a project to
upgrade all internal software and to conduct testing on both our information
technology systems and our other equipment and machinery to further ensure that
all aspects of our business would be Year 2000 compliant. These procedures have
not had any material effect on our customers and have not required any material
expenditure or other material diversion of resources.
Prior to January 1, 2000, we also contacted substantially all parties with
which we have material relationships, including TRW and Nokia and our other
material customers and suppliers, to try to determine their Year 2000
preparedness and to analyze the risk to us if they had significant business
interruptions because of Year 2000 noncompliance. Based on this survey, we
concluded that these parties were either substantially Year 2000 compliant or
that any noncompliance would not have a material effect on our operations. To
date, Year 2000 impacts on third parties have not materially affected our
business, financial condition or operations, although we intend to continue to
monitor third-party preparedness throughout the Year 2000 transition period.
As of the date of this filing, February 8, 2000, we have not experienced
any interruptions in our business or operations as a result of Year 2000 issues.
However, disruptions associated with Year 2000 issues may not be readily
apparent and could arise later in the calendar year. We will continue to monitor
these issues closely.
Our total cost related to the Year 2000 issue is approximately $150,000,
which has been included in our information technology expense budget. As of
December 31, 1999, this project was essentially complete, except as noted above.
To date, there have been no material deferments of other information technology
projects resulting from the work taking place on our Year 2000 program.
RISKS AND UNCERTAINTIES
The preceding Management's Discussion and Analysis of Financial Condition
and Results of Operations contains forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934 that relate to our future plans, objectives, estimates and
goals. Words such as "expects," "anticipates," "intends," "plans," "believes,"
and "estimates," and variations of such words and similar expressions identify
such forward-looking statements. Our business is subject to numerous risks and
uncertainties, including probable variability in our quarterly operating
results, manufacturing capacity constraints, risks associated with our operation
of our current wafer fabrication facility and the construction of an additional
facility, dependence on a limited number of customers, variability in production
yields, our ability to manage rapid growth, dependence on third parties and
risks associated with doing business in Asia and other areas of the world. These
and other risks and uncertainties, which are described in more detail in our
Annual Report on Form 10-K filed with the Securities and Exchange Commission,
could cause actual results and developments to be materially different from
those expressed or implied by any of these forward-looking statements.
15
<PAGE> 16
PART II
OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
(c) Recent Sales of Unregistered Securities
On November 15, 1999, we issued two warrants to TRW Inc. in consideration
for the grant by TRW to us of a nonexclusive license to utilize TRW's GaAs HBT
technology to manufacture products for commercial coaxial and other non-fiber
wired communication applications. These warrants have an aggregate value of
$10.0 million, which represents the cost of our right to use TRW's technology
for these new applications.
The first warrant entitles TRW to purchase up to 250,000 shares of our
common stock. It is exercisable at any time after December 31, 2000 and expires
on June 30, 2001. The second warrant entitles TRW to purchase up to 500,000
shares of our common stock. It becomes exercisable at any time after December
31, 2000 and expires December 31, 2001, except that this warrant will not become
exercisable, and will be forfeited, unless we reach a defined annualized sales
target of products through use of our expanded license rights. The exercise
price of both warrants is equal to 75% of the average closing prices of our
common stock during the ten trading days immediately preceding December 31,
2000.
We issued these warrants in reliance on the exemption from registration
provided in Section 4(2) of the Securities Act of 1933, as amended, based on the
sophistication of the purchaser and the nature of this arm's-length negotiated
transaction.
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
<TABLE>
<S> <C> <C>
Exhibit 4.1 -- Warrant No. 99-1, dated November 15, 1999, for the purchase
of up to 250,000 shares of common stock.
Exhibit 4.2 -- Warrant No. 99-2, dated November 15, 1999, for the purchase
of up to 500,000 shares of common stock.*
Exhibit 10.1 -- Lease Agreement, dated November 5, 1999, between Highwoods
Realty Limited Partnership and RF Micro Devices, Inc.
Exhibit 10.2 -- License Agreement, dated November 15, 1999, between TRW Inc.
and RF Micro Devices, Inc.
Exhibit 10.3 -- Cooperation Agreement, dated November 15, 1999, between TRW
Inc. and RF Micro Devices, Inc.
Exhibit 10.4 -- 1997 Key Employees Stock Option Plan of RF Micro Devices,
Inc., as amended.
Exhibit 10.5 -- 1999 Stock Incentive Plan of RF Micro Devices, Inc., as
amended.
Exhibit 10.6 -- Stock Option Agreement, dated October 27, 1998, between RF
Micro Devices, Inc. and Walter H. Wilkinson, Jr., as
amended.
Exhibit 10.7 -- Stock Option Agreement, dated October 27, 1998, between RF
Micro Devices, Inc. and Albert E. Paladino, as amended.
Exhibit 10.8 -- Stock Option Agreement dated October 27, 1998, between RF
Micro Devices, Inc. and Erik H. van der Kaay, as amended.
</TABLE>
16
<PAGE> 17
<TABLE>
<S> <C> <C>
Exhibit 10.9 -- Amended, Restated and Replacement Participation Agreement,
dated as of December 31, 1999, among RF Micro Devices, Inc.,
as the Construction Agent and as the Lessee; First Security
Bank, National Association, not individually, except as
expressly stated therein, but solely as the Owner Trustee
under the RFMD Real Estate Trust 1999-1; the Various Banks
and Other Lending Institutions Which Are Parties Thereto
from Time to Time, as the Holders; the Various Banks and
Other Lending Institutions Which Are Parties Thereto from
Time to Time, as the Lenders; and First Union National Bank,
as the Agent for the Lenders and respecting the Security
Documents, as the Agent for the Lenders and the Holders, to
the extent of their interests.
Exhibit 10.10 -- Amended, Restated and Replacement Lease Agreement, dated as
of December 31, 1999, between First Security Bank, National
Association, not individually, but solely as the Owner
Trustee under the RFMD Real Estate Trust 1999-1, as Lessor,
and RF Micro Devices, Inc., as Lessee.
Exhibit 10.11 -- Amended, Restated and Replacement Credit Agreement, dated as
of December 31, 1999, among First Security Bank, National
Association, not individually, except as expressly stated
therein, but solely as the Owner Trustee under the RFMD Real
Estate Trust 1999-1, as the Borrower; the Several Lenders
from Time to Time Parties thereto; and First Union National
Bank, as the Agent.
Exhibit 27.1 -- Financial Data Schedule
</TABLE>
- - ---------------
* We have requested that a portion of this exhibit be given confidential
treatment.
(b) Reports on Form 8-K
We did not file any reports on Form 8-K during the three months ended
December 31, 1999.
17
<PAGE> 18
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.
RF Micro Devices, Inc.
/s/ DAVID A. NORBURY
--------------------------------------
David A. Norbury
President and Chief Executive Officer
(Principal Executive Officer)
Dated: February 8, 2000
/s/ WILLIAM A. PRIDDY, JR.
--------------------------------------
William A. Priddy, Jr.
Vice President, Finance and
Administration
and Chief Financial Officer
(Principal Financial and Accounting
Officer)
Dated: February 8, 2000
18
<PAGE> 1
EXHIBIT 4.1
NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAS BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE
SECURITIES LAWS OF ANY STATE AND NEITHER THIS WARRANT NOR SUCH SECURITIES MAY BE
SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT AND LAWS UNLESS RF MICRO DEVICES, INC. RECEIVES AN
OPINION OF COUNSEL, WHICH MAY BE HOLDER'S IN-HOUSE COUNSEL, REASONABLY
ACCEPTABLE TO IT THAT SUCH REGISTRATION IS NOT REQUIRED. TRANSFER OF THIS
WARRANT IS RESTRICTED. SEE PARAGRAPH 11.
250,000 Shares WARRANT NO. 99-1
RF MICRO DEVICES, INC.
A North Carolina Corporation
(Void after 5:00 p.m.,
Washington D.C. Time, on June 30, 2001)
THIS CERTIFIES THAT, for value received, TRW Inc. (the
"Holder") is entitled at any time after December 31, 2000 and at any time before
5:00 p.m. Washington D.C. time on June 30, 2001 (the "Expiration Time") to
purchase up to 250,000 (two hundred fifty thousand) shares (the "RFMD Shares")
of common stock, no par value (the "Common Shares"), of RF Micro Devices, Inc.
(the "Company") at the price per RFMD Share as determined in paragraph 1 of this
Warrant, subject to adjustment as provided in paragraph 5 of this Warrant (that
price, as it may be adjusted from time to time, being referred to as the
"Warrant Price").
1. The Warrant Price shall be the average of the Closing
Prices of the Common Shares during the ten (10) Trading Days immediately
preceding December 31, 2000 (the "Pricing Period") multiplied by 0.75. The
Closing Price for each day shall be the reported last sales price regular way
or, in case no such reported sale takes place on
<PAGE> 2
such day, the average of the reported closing bid and asked prices regular way,
in either case on the New York Stock Exchange or, if the Common Shares are not
listed or admitted to trading on such Exchange, on the principal national
securities exchange on which the Common Shares are listed or admitted to trading
(based on the aggregate dollar value of all securities listed or admitted to
trading) or, if not listed or admitted to trading on any national securities
exchange, on the NASDAQ National Market System or, if the Common Shares are not
listed or admitted to trading on any national securities exchange or quoted on
the NASDAQ National Market System, the average of the closing bid and asked
prices in the over-the-counter market as furnished by any New York Stock
Exchange member firm selected from time to time by the Company for that purpose.
The Closing Prices during the Pricing Period shall be adjusted to take into
account any stock divisions, stock combinations, stock recapitalizations or
reclassifications, stock dividends and the like in order that the Closing Prices
during the entire Pricing Period shall have the same reference point as the
Closing Price immediately prior to December 31, 2000. The average of the Closing
Prices shall be a simple average and shall not be weighted according to trading
volume or any other manner. "Trading Day" shall mean a day on which the national
securities exchange or the NASDAQ National Market System used to determine the
Closing Price is open for the transaction of business or the reporting of trades
or, if the Closing Price is not so determined, a day on which the New York Stock
Exchange is open for the transaction of business.
2. To exercise this Warrant, this Warrant must be surrendered
prior to the Expiration Time at the office of the Company at 7625 Thorndike
Road, Greensboro, North Carolina 27409 (or such other address as the Company may
specify in writing to
-2-
<PAGE> 3
the Holder of this Warrant at least ten days before this Warrant is exercised)
with the attached Notice of Exercise duly completed and executed, accompanied by
evidence of a wire transfer of immediately available funds to the Company's
money market account #__________ with Silicon Valley Bank, Santa Clara,
California, ABA Routing #__________ (or such other account as the Company may
specify in writing to the Holder of this Warrant at least ten days before this
Warrant is exercised) in full payment of the purchase price of the RFMD Shares
with respect to which this Warrant is exercised. This Warrant may be exercised
in whole or in part as to any whole number of RFMD Shares. If this Warrant is
exercised in part, upon surrender of this Warrant for exercise, the Company will
issue to the Holder a new Warrant to purchase the remaining number of RFMD
Shares which may be purchased upon exercise of this Warrant (before taking
account of adjustments by reason of paragraphs 5, 6 and 7) and the number of
RFMD Shares with respect to which it is exercised (before taking account of
adjustments by reason of paragraphs 5, 6 and 7). The new Warrant will bear the
same date as this Warrant and will be identical to this Warrant in all respects,
except as to the number of RFMD Shares as to which it may be exercised.
3. The RFMD Shares as to which this Warrant is exercised will
be deemed to be issued when this Warrant is exercised. Holder agrees that prior
to the exercise of this Warrant, it will comply with the provisions of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act")
as in effect from time to time. If action is taken by the Federal Trade
Commission or the United States Department of Justice to enjoin Holder's
exercise of this Warrant, the Company agrees reasonably to cooperate with Holder
to contest such enjoinment at the expense of this Holder. A certificate
representing the RFMD Shares will be issued to the Holder of this
-3-
<PAGE> 4
Warrant promptly after it is exercised. The certificate may bear a legend to the
effect that the RFMD Shares it represents have not been registered under the
Securities Act of 1933, as amended (the "Act"), or any applicable state
securities laws, and may only be transferred in a transaction registered under
the Act or such laws or exempt from the registration requirements of the Act or
such laws. In addition, any other legend required by any other agreement between
the Company and Holder may be included on the certificate or certificates for
such RFMD Shares.
4. This Warrant will expire, and the right to purchase the
RFMD Shares by exercise of this Warrant will terminate, at the Expiration Time;
provided, however, that if Holder has complied with the filing provisions of the
HSR Act at least thirty days prior to the Expiration Time, but the waiting
period imposed by the HSR Act has not terminated or lapsed, then the Expiration
Time will be extended until ten days after such termination or lapse. After that
time this Warrant will be void.
5. The Warrant Price will be subject to adjustment from time
to time as follows:
(a) If, at any time after December 31, 2000, the Company (i)
pays a dividend on its Common Stock in Common Stock, (ii) splits or
subdivides its outstanding shares of Common Stock, or (iii) combines
its outstanding shares of Common Stock into a smaller number of shares,
the Warrant Price in effect immediately prior to each of those events
will be adjusted proportionately so that the adjusted Warrant Price
will bear the same relation to the Warrant Price in effect immediately
prior to the event as the total number of shares of Common Stock
outstanding immediately prior to the event will bear to the total
number of shares of Common Stock outstanding immediately after the
event.
-4-
<PAGE> 5
(b) An adjustment made pursuant to subparagraph (a) of this
paragraph will become effective immediately after the corresponding
record date in the case of a dividend and immediately after the
effective date in the case of a subdivision or combination.
No adjustment of the Warrant Price will be made if the amount
of such adjustment would be less than 2% of the Warrant Price, but any such
adjustment that would otherwise be required to be made and has not previously
been made will be carried forward and be made at the time of and together with
the next subsequent adjustment which, together with all adjustments so carried
forward, amount in the aggregate to 2% or more of the Warrant Price. As used in
this Warrant, "Common Stock" includes any class of the Company's capital stock,
now or hereafter authorized, having the right to participate in the distribution
of either earnings or assets of the Company without limitation as to amount or
percentage. At no time will the Warrant Price be less than $.01 per share.
6. (a) In case the Company shall at any time or from time to
time (i) subdivide its outstanding shares of Common Stock into a greater number
of shares or (ii) combine its outstanding shares of Common Stock into a smaller
number of shares, then the number of RFMD Shares, in effect immediately prior to
such event, shall be proportionately increased in the case of a subdivision and
proportionately decreased in the case of combination. Any adjustment under this
subparagraph 6(a) shall become effective at the close of business on the date
the subdivision or combination becomes effective.
(b) In case the Company shall at any time or from time to time
makes, or fixes a record date for the determination of holders of the Common
Stock
-5-
<PAGE> 6
entitled to receive, a dividend or other distribution payable in additional
shares of Common Stock, then and in such event the number of RFMD Shares then in
effect shall be increased as of the time of such issuance or, in the event such
record date is fixed, as of the close of business on such record date, by
multiplying the number of RFMD Shares then in effect by a fraction (x) the
denominator of which is the total number of shares of the Common Stock issued
and outstanding immediately prior to the time of such issuance or the close of
business on such record date, and (y) the numerator of which shall be the total
number of shares of the Common Stock issued and outstanding immediately prior to
the time of such issuance or the close of business on such record date plus the
number of shares of the Common Stock issuable in payment of such dividend or
distribution; provided, however, that if such record date is fixed and such
dividend is not fully paid or if such distribution is not fully made on the date
fixed therefor, the number of RFMD Shares shall be recomputed accordingly based
on the number of additional shares of Common Stock actually issued as of the
close of business on the date originally fixed for the payment of such dividend
or the making of such distribution and thereafter the number of RFMD Shares
shall be adjusted pursuant to this subparagraph 6(b) at the time of actual
payment of any additional dividends or distributions of Common Stock.
(c) In case the Company shall issue rights or warrants to all
or substantially all holders of its Common Stock entitling them to subscribe for
or purchase shares of Common Stock at a price per share less than the Fair
Market Value (as hereinafter defined) per share of the Common Stock on the date
fixed for the determination of shareholders entitled to receive such rights or
warrants, the number of RFMD Shares, in effect at the opening of business on the
day following the date fixed for such determination, shall be increased by
multiplying such number of RFMD Shares by a fraction of which the denominator
shall be the number of shares of Common Stock outstanding at the close of
business on the date fixed for such determination plus the
-6-
<PAGE> 7
number of shares of Common Stock which the aggregate of the offering price of
the total number of shares of Common Stock so offered for subscription or
purchase would purchase at such Fair Market Value, and the numerator shall be
the number of shares of Common Stock outstanding at the close of business on the
date fixed for such determination plus the number of shares of Common Stock so
offered for subscription or purchase, such adjustment to become effective
immediately after the opening of business on the day following the date fixed
for such determination; provided, however, in the event that all the shares of
Common Stock offered for subscription or purchase are not delivered upon the
exercise of such rights or warrants, the number of RFMD Shares shall be
readjusted to the number of RFMD Shares that would have been in effect had the
numerator and the denominator of the foregoing fraction and the resulting
adjustment been made based upon the number of shares of Common Stock actually
delivered upon the number of shares of Common Stock offered for subscription or
purchase. For the purposes of this subparagraph (c), the number of shares of
Common Stock at any time outstanding shall not include shares held in the
treasury of the Company. "Fair Market Value" shall mean, as to shares of Common
Stock the simple average of the daily Closing Prices for the ten (10)
consecutive Trading Days immediately preceding the day in question.
7. (a) In case of a distribution to all holders of the
Company's Common Stock of shares of its capital stock (other than Common Stock)
or evidences of its indebtedness or property, or a capital reorganization of the
Company, a reclassification of the Common Stock, a consolidation of the Company
with or merger of the Company into another corporation or entity (but only if
such consolidation or merger is consummated after December 31, 2000) (other than
a consolidation or merger in which the Company is the continuing entity) or a
sale of the properties and assets of the Company (but only if such sale is
consummated after December 31, 2000) as, or
-7-
<PAGE> 8
substantially as, an entirety and distribution of the proceeds of sale, after
such distribution, capital reorganization, reclassification, consolidation,
merger or sale, on exercise of this Warrant the Holder will receive the number
of shares of stock or other securities or property which the Holder would have
received if this Warrant had been exercised immediately before the first such
corporate event and the Holder had retained what it would have received as a
result of each such corporate event. The split or subdivision or combination of
shares of Common Stock at any time outstanding into a greater or lesser number
of shares of Common Stock will not be deemed to be a reclassification of the
Common Stock of the Company for the purposes of this paragraph. The Company will
not effect any consolidation or merger unless prior to or simultaneously with
its consummation the successor entity (if other than the Company) resulting from
the consolidation agrees in writing to deliver to the Holder of this Warrant on
exercise of this Warrant the shares of stock or other securities or property to
which the Holder becomes entitled because of that exercise.
(b) In the event that at any time prior to December 31, 2000,
the Company (i) consolidates or merges with another corporation or entity (other
than a consolidation or merger of the Company in which the Company is the
continuing entity) or (ii) sells its properties and assets as, or substantially
as, an entirety and distributes the proceeds, this Warrant shall terminate
immediately upon the consummation of such consolidation, merger or sale and the
Holder shall be promptly paid by the Company (or the Company's
successor-in-interest, as the case may be) a dollar amount equal to the number
of RFMD Shares purchasable hereunder multiplied by the positive difference (if
any) between the Closing Price of the Common Shares as of the last Trading Day
immediately prior to the effective date of such consolidation, merger or sale
and $71.50 (as adjusted for any stock divisions, stock combinations, stock
recapitalizations, stock reclassifications, stock dividends or similar
transactions occurring after the date of this Warrant).
-8-
<PAGE> 9
8. Whenever the Warrant Price and/or the number of RFMD Shares
is adjusted as provided in this Warrant, the Company will compute the adjusted
Warrant Price and/or the number of RFMD Shares or other assets the Holder would
receive on exercise of this Warrant in full and will provide a notice to the
Holder within thirty (30) days of the date of such adjustment stating that the
Warrant Price and/or the number of RFMD Shares has been adjusted and setting
forth the adjusted Warrant Price and/or the number of RFMD Shares and what the
Holder would receive upon exercise of this Warrant in full. The Company will
also provide a notice to the Holder describing any event that would trigger an
adjustment in the Warrant Price and/or the number of RFMD Shares in the absence
of the last paragraph of paragraph 5. Such notice will be given within thirty
(30) days of the effective date of such event.
9. The Company will at all times keep a sufficient number of
authorized but unissued RFMD Shares to permit exercise in full of this Warrant.
The Company represents and warrants that all RFMD Shares which are delivered on
exercise of this Warrant (and payment of the Warrant Price therefor) will, upon
delivery, be duly issued, fully paid and non-assessable.
10. The Holder will not, by reason of holding this Warrant,
have any right to vote, to receive dividends or other distributions, or any
other rights of a shareholder, with regard to the RFMD Shares.
11. The Holder may not assign, sell or otherwise transfer,
dispose of, make any short sale of, pledge or hypothecate, grant any option for
the purpose of, or enter into any hedging, synthetic sale or similar transaction
with the same economic effect as a sale of, this Warrant or any of the Holder's
rights under it, except (i) to a corporation controlling, controlled by or under
common control with the Holder (which
-9-
<PAGE> 10
shall take this Warrant subject to the transfer restrictions in this paragraph)
or (ii) by merger or consolidation of Holder with or into another corporation or
entity if the Holder is not the surviving corporation (which shall take this
Warrant subject to the transfer restrictions in this paragraph), and any
transfer or attempted transfer or other prohibited assignment of this Warrant
will be null and void and of no force or effect.
12. Any notices or other communications to the holder of this
Warrant will be addressed to TRW Inc., Space & Electronics Group, One Space
Park, Redondo Beach, California 90278, Attention: Vice President, Finance, with
a copy to TRW Inc., 1900 Richmond Road, Cleveland, Ohio 44124, Attention:
Secretary, or to such other address as the Holder may specify in writing to the
Company.
13. This Warrant will be governed by, and construed under, the
laws of the State of North Carolina.
14. This Warrant may not be modified without the written
consent of the Company and the Holder.
Dated: November 15, 1999 RF MICRO DEVICES, INC.
By: /s/ William A. Priddy
---------------------
-10-
<PAGE> 11
NOTICE OF EXERCISE
By this Notice, TRW Inc. exercises the Warrant to which this
Notice is attached with respect to _______________ shares of the Common Stock of
RF Micro Devices, Inc.
TRW Inc. represents to RF Micro Devices, Inc. that TRW Inc.
will be acquiring the securities which are being purchased by exercise of the
Warrant for investment, and not with a view to their resale or distribution.
[Cross out the preceding paragraph if the resale of the shares
being issued on exercise of this Warrant has been registered under the
Securities Act of 1933, as amended.]
TRW INC.
Dated: ____________________ By: __________________________
-11=
<PAGE> 1
EXHIBIT 4.2
RF MICRO DEVICES, INC. HAS REQUESTED THAT A CERTAIN PORTION OF THIS EXHIBIT BE
GIVEN CONFIDENTIAL TREATMENT. SUCH PORTION HAS BEEN REDACTED IN THIS DOCUMENT
AND FILED SEPARATELY WITH THE COMMISSION. THE REDACTED MATERIAL IS DENOTED
HEREIN BY ******.
NEITHER THIS WARRANT NOR THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAS BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), OR THE
SECURITIES LAWS OF ANY STATE AND NEITHER THIS WARRANT NOR SUCH SECURITIES MAY BE
SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT AND LAWS UNLESS RF MICRO DEVICES, INC. RECEIVES AN
OPINION OF COUNSEL, WHICH MAY BE HOLDER'S IN-HOUSE COUNSEL, REASONABLY
ACCEPTABLE TO IT THAT SUCH REGISTRATION IS NOT REQUIRED. TRANSFER OF THIS
WARRANT IS RESTRICTED. SEE PARAGRAPH 11.
500,000 Shares WARRANT NO. 99-2
RF MICRO DEVICES, INC.
A North Carolina Corporation
(Void after 5:00 p.m.,
Washington D.C. Time, on December 31, 2001)
THIS CERTIFIES THAT, for value received, TRW Inc. (the
"Holder") is entitled at any time after December 31, 2000 and at any time before
5:00 p.m. Washington D.C. time on December 31, 2001 (the "Expiration Time") to
purchase up to 500,000 (five hundred thousand) shares (the "RFMD Shares") of
common stock, no par value (the "Common Shares"), of RF Micro Devices, Inc. (the
"Company") at the price per RFMD Share as determined in paragraph 1 of this
Warrant, subject to adjustment as provided in paragraph 5 of this Warrant (that
price, as it may be adjusted from time to time, being referred to as the
"Warrant Price").
<PAGE> 2
1. (a) The Warrant Price shall be the average of the Closing
Prices of the Common Shares during the ten (10) Trading Days immediately
preceding December 31, 2000 (the "Pricing Period") multiplied by 0.75. The
Closing Price for each day shall be the reported last sales price regular way
or, in case no such reported sale takes place on such day, the average of the
reported closing bid and asked prices regular way, in either case on the New
York Stock Exchange or, if the Common Shares are not listed or admitted to
trading on such Exchange, on the principal national securities exchange on which
the Common Shares are listed or admitted to trading (based on the aggregate
dollar value of all securities listed or admitted to trading) or, if not listed
or admitted to trading on any national securities exchange, on the NASDAQ
National Market System or, if the Common Shares are not listed or admitted to
trading on any national securities exchange or quoted on the NASDAQ National
Market System, the average of the closing bid and asked prices in the
over-the-counter market as furnished by any New York Stock Exchange member firm
selected from time to time by the Company for that purpose. The Closing Prices
during the Pricing Period shall be adjusted to take into account any stock
divisions, stock combinations, stock recapitalizations or reclassifications,
stock dividends and the like in order that the Closing Prices during the entire
Pricing Period shall have the same reference point as the Closing Price
immediately prior to December 31, 2000. The average of the Closing Prices shall
be a simple average and shall not be weighted according to trading volume or any
other manner. "Trading Day" shall mean a day on which the national securities
exchange or the NASDAQ National Market System used to determine the Closing
Price is open for the transaction of business or the reporting of trades or, if
the Closing Price is not so
-2-
<PAGE> 3
determined, a day on which the New York Stock Exchange is open for the
transaction of business.
(b) This Warrant shall not be exercisable, and shall become
null and void, unless the Company has "Annualized Sales" of Licensed Products
(as defined in the License Agreement, dated as of November 15, 1999, between the
Company and the Holder) of at least $******. For the purposes of this Warrant,
"Annualized Sales" may be calculated as of any fiscal quarter ending on or prior
to the Expiration Time and shall be equal to the product of four times the gross
revenues from the sale of the Licensed Products during such fiscal quarter,
computed in accordance with generally accepted accounting principles. The
Company shall deliver to the Holder a regular quarterly report that shows its
revenues from sales of Licensed Products during the preceding fiscal quarter and
its Annualized Sales of Licensed Products as of such fiscal quarter end. The
Expiration Time shall be extended until the fifth (5th) business day after the
delivery by the Company of its quarterly report for the quarter ending December
31, 2001 if the Annualized Sales threshold has not been met prior to such
quarter. In the event of a "Change in Control" of the Company at any time prior
to the Expiration Time, the Annualized Sale requirement described in this
subparagraph shall have no effect and the Warrant will become exercisable at the
time provide elsewhere in, and pursuant to the terms of, this Warrant. As used
herein, "Change in Control" means the occurrence of any of the following: (i)
the sale by the Company of all or substantially all of its assets; or (ii) the
participation by the Company as constituent corporation in a merger or
consolidation if the shareholders of the Company immediately prior to the
effective time of such transaction own less than fifty percent (50%) of the
outstanding voting securities of the surviving corporation.
-3-
<PAGE> 4
2. To exercise this Warrant, this Warrant must be surrendered
prior to the Expiration Time at the office of the Company at 7625 Thorndike
Road, Greensboro, North Carolina 27409 (or such other address as the Company may
specify in writing to the Holder of this Warrant at least ten days before this
Warrant is exercised) with the attached Notice of Exercise duly completed and
executed, accompanied by evidence of a wire transfer of immediately available
funds to the Company's money market account #____________ with Silicon Valley
Bank, Santa Clara, California, ABA Routing #____________ (or such other account
as the Company may specify in writing to the Holder of this Warrant at least ten
days before this Warrant is exercised) in full payment of the purchase price of
the RFMD Shares with respect to which this Warrant is exercised. This Warrant
may be exercised in whole or in part as to any whole number of RFMD Shares. If
this Warrant is exercised in part, upon surrender of this Warrant for exercise,
the Company will issue to the Holder a new Warrant to purchase the remaining
number of RFMD Shares which may be purchased upon exercise of this Warrant
(before taking account of adjustments by reason of paragraphs 5, 6 and 7) and
the number of RFMD Shares with respect to which it is exercised (before taking
account of adjustments by reason of paragraphs 5, 6 and 7). The new Warrant will
bear the same date as this Warrant and will be identical to this Warrant in all
respects, except as to the number of RFMD Shares as to which it may be
exercised.
3. The RFMD Shares as to which this Warrant is exercised will
be deemed to be issued when this Warrant is exercised. Holder agrees that prior
to the exercise of this Warrant, it will comply with the provisions of the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act")
as in effect from time to time. If action is taken by the Federal Trade
Commission or the United States
-4-
<PAGE> 5
Department of Justice to enjoin Holder's exercise of this Warrant, the Company
agrees reasonably to cooperate with Holder to contest such enjoinment at the
expense of this Holder. A certificate representing the RFMD Shares will be
issued to the Holder of this Warrant promptly after it is exercised. The
certificate may bear a legend to the effect that the RFMD Shares it represents
have not been registered under the Securities Act of 1933, as amended (the
"Act"), or any applicable state securities laws, and may only be transferred in
a transaction registered under the Act or such laws or exempt from the
registration requirements of the Act or such laws. In addition, any other legend
required by any other agreement between the Company and Holder may be included
on the certificate or certificates for such RFMD Shares.
4. This Warrant will expire, and the right to purchase the
RFMD Shares by exercise of this Warrant will terminate, at the Expiration Time;
provided, however, that if Holder has complied with the filing provisions of the
HSR Act at least thirty days prior to the Expiration Time, but the waiting
period imposed by the HSR Act has not terminated or lapsed, then the Expiration
Time will be extended until ten days after such termination or lapse. After that
time this Warrant will be void.
5. The Warrant Price will be subject to adjustment from time
to time as follows:
(a) If, at any time after December 31, 2000, the Company (i)
pays a dividend on its Common Stock in Common Stock, (ii) splits or
subdivides its outstanding shares of Common Stock, or (iii) combines
its outstanding shares of Common Stock into a smaller number of shares,
the Warrant Price in effect immediately prior to each of those events
will be adjusted proportionately so that the adjusted Warrant Price
will bear the same relation to the Warrant Price in
-5-
<PAGE> 6
effect immediately prior to the event as the total number of shares of
Common Stock outstanding immediately prior to the event will bear to
the total number of shares of Common Stock outstanding immediately
after the event.
(b) An adjustment made pursuant to subparagraph (a) of this
paragraph will become effective immediately after the corresponding
record date in the case of a dividend and immediately after the
effective date in the case of a subdivision or combination.
No adjustment of the Warrant Price will be made if the amount
of such adjustment would be less than 2% of the Warrant Price, but any such
adjustment that would otherwise be required to be made and has not previously
been made will be carried forward and be made at the time of and together with
the next subsequent adjustment which, together with all adjustments so carried
forward, amount in the aggregate to 2% or more of the Warrant Price. As used in
this Warrant, "Common Stock" includes any class of the Company's capital stock,
now or hereafter authorized, having the right to participate in the distribution
of either earnings or assets of the Company without limitation as to amount or
percentage. At no time will the Warrant Price be less than $.01 per share.
6. (a) In case the Company shall at any time or from time to
time (i) subdivide its outstanding shares of Common Stock into a greater number
of shares or (ii) combine its outstanding shares of Common Stock into a smaller
number of shares, then the number of RFMD Shares, in effect immediately prior to
such event, shall be proportionately increased in the case of a subdivision and
proportionately decreased in the case of combination. Any adjustment under this
subparagraph 6(a) shall become effective at the close of business on the date
the subdivision or combination becomes
-6-
<PAGE> 7
effective.
(b) In case the Company shall at any time or from time to time
makes, or fixes a record date for the determination of holders of the Common
Stock entitled to receive, a dividend or other distribution payable in
additional shares of Common Stock, then and in such event the number of RFMD
Shares then in effect shall be increased as of the time of such issuance or, in
the event such record date is fixed, as of the close of business on such record
date, by multiplying the number of RFMD Shares then in effect by a fraction (x)
the denominator of which is the total number of shares of the Common Stock
issued and outstanding immediately prior to the time of such issuance or the
close of business on such record date, and (y) the numerator of which shall be
the total number of shares of the Common Stock issued and outstanding
immediately prior to the time of such issuance or the close of business on such
record date plus the number of shares of the Common Stock issuable in payment of
such dividend or distribution; provided, however, that if such record date is
fixed and such dividend is not fully paid or if such distribution is not fully
made on the date fixed therefor, the number of RFMD Shares shall be recomputed
accordingly based on the number of additional shares of Common Stock actually
issued as of the close of business on the date originally fixed for the payment
of such dividend or the making of such distribution and thereafter the number of
RFMD Shares shall be adjusted pursuant to this subparagraph 6(b) at the time of
actual payment of any additional dividends or distributions of Common Stock.
(c) In case the Company shall issue rights or warrants to all
or substantially all holders of its Common Stock entitling them to subscribe for
or purchase shares of Common Stock at a price per share less than the Fair
Market Value (as hereinafter defined) per share of the Common Stock on the date
fixed for the determination of shareholders entitled to receive such rights or
warrants, the number of
-7-
<PAGE> 8
RFMD Shares, in effect at the opening of business on the day following the date
fixed for such determination, shall be increased by multiplying such number of
RFMD Shares by a fraction of which the denominator shall be the number of shares
of Common Stock outstanding at the close of business on the date fixed for such
determination plus the number of shares of Common Stock which the aggregate of
the offering price of the total number of shares of Common Stock so offered for
subscription or purchase would purchase at such Fair Market Value, and the
numerator shall be the number of shares of Common Stock outstanding at the close
of business on the date fixed for such determination plus the number of shares
of Common Stock so offered for subscription or purchase, such adjustment to
become effective immediately after the opening of business on the day following
the date fixed for such determination; provided, however, in the event that all
the shares of Common Stock offered for subscription or purchase are not
delivered upon the exercise of such rights or warrants, the number of RFMD
Shares shall be readjusted to the number of RFMD Shares that would have been in
effect had the numerator and the denominator of the foregoing fraction and the
resulting adjustment been made based upon the number of shares of Common Stock
actually delivered upon the number of shares of Common Stock offered for
subscription or purchase. For the purposes of this subparagraph (c), the number
of shares of Common Stock at any time outstanding shall not include shares held
in the treasury of the Company. "Fair Market Value" shall mean, as to shares of
Common Stock the simple average of the daily Closing Prices for the ten (10)
consecutive Trading Days immediately preceding the day in question.
7. (a) In case of a distribution to all holders of the
Company's Common Stock of shares of its capital stock (other than Common Stock)
or evidences of its indebtedness or property, or a capital reorganization of the
Company, a reclassification of the Common Stock, a consolidation of the Company
with or merger of the Company
-8-
<PAGE> 9
into another corporation or entity (but only if such consolidation or merger is
consummated after December 31, 2000) (other than a consolidation or merger in
which the Company is the continuing entity) or a sale of the properties and
assets of the Company (but only if such sale is consummated after December 31,
2000) as, or substantially as, an entirety and distribution of the proceeds of
sale, after such distribution, capital reorganization, reclassification,
consolidation, merger or sale, on exercise of this Warrant the Holder will
receive the number of shares of stock or other securities or property which the
Holder would have received if this Warrant had been exercised immediately before
the first such corporate event and the Holder had retained what it would have
received as a result of each such corporate event. The split or subdivision or
combination of shares of Common Stock at any time outstanding into a greater or
lesser number of shares of Common Stock will not be deemed to be a
reclassification of the Common Stock of the Company for the purposes of this
paragraph. The Company will not effect any consolidation or merger unless prior
to or simultaneously with its consummation the successor entity (if other than
the Company) resulting from the consolidation agrees in writing to deliver to
the Holder of this Warrant on exercise of this Warrant the shares of stock or
other securities or property to which the Holder becomes entitled because of
that exercise.
(b) In the event that at any time prior to December 31, 2000,
the Company (i) consolidates or merges with another corporation or entity (other
than a consolidation or merger of the Company in which the Company is the
continuing entity) or (ii) sells its properties and assets as, or substantially
as, an entirety and distributes the proceeds, this Warrant shall terminate
immediately upon the consummation of such consolidation, merger or sale and the
Holder shall be promptly paid by the Company (or the Company's
successor-in-interest, as the case may be) a dollar amount equal to the number
of RFMD Shares purchasable hereunder multiplied by the positive difference (if
any) between the Closing Price of the Common Shares as of the last Trading Day
-9-
<PAGE> 10
immediately prior to the effective date of such consolidation, merger or sale
and $71.50 (as adjusted for any stock divisions, stock combinations, stock
recapitalizations, stock reclassifications, stock dividends or similar
transactions occurring after the date of this Warrant).
8. Whenever the Warrant Price and/or the number of RFMD Shares
is adjusted as provided in this Warrant, the Company will compute the adjusted
Warrant Price and/or the number of RFMD Shares or other assets the Holder would
receive on exercise of this Warrant in full and will provide a notice to the
Holder within thirty (30) days of the date of such adjustment stating that the
Warrant Price and/or the number of RFMD Shares has been adjusted and setting
forth the adjusted Warrant Price and/or the number of RFMD Shares and what the
Holder would receive upon exercise of this Warrant in full. The Company will
also provide a notice to the Holder describing any event that would trigger an
adjustment in the Warrant Price and/or the number of RFMD Shares in the absence
of the last paragraph of paragraph 5. Such notice will be given within thirty
(30) days of the effective date of such event.
9. The Company will at all times keep a sufficient number of
authorized but unissued RFMD Shares to permit exercise in full of this Warrant.
The Company represents and warrants that all RFMD Shares which are delivered on
exercise of this Warrant (and payment of the Warrant Price therefor) will, upon
delivery, be duly issued, fully paid and non-assessable.
10. The Holder will not, by reason of holding this Warrant,
have any right to vote, to receive dividends or other distributions, or any
other rights of a shareholder, with regard to the RFMD Shares.
11. The Holder may not assign, sell or otherwise transfer,
dispose of, make any short sale of, pledge or hypothecate, grant any option for
the purpose of, or
-10-
<PAGE> 11
enter into any hedging, synthetic sale or similar transaction with the same
economic effect as a sale of, this Warrant or any of the Holder's rights under
it, except (i) to a corporation controlling, controlled by or under common
control with the Holder (which shall take this Warrant subject to the transfer
restrictions in this paragraph) or (ii) by merger or consolidation of Holder
with or into another corporation or entity if the Holder is not the surviving
corporation (which shall take this Warrant subject to the transfer restrictions
in this paragraph), and any transfer or attempted transfer or other prohibited
assignment of this Warrant will be null and void and of no force or effect.
12. Any notices or other communications to the holder of this
Warrant will be addressed to TRW Inc., Space & Electronics Group, One Space
Park, Redondo Beach, California 90278, Attention: Vice President, Finance, with
a copy to TRW Inc., 1900 Richmond Road, Cleveland, Ohio 44124, Attention:
Secretary, or to such other address as the Holder may specify in writing to the
Company.
13. This Warrant will be governed by, and construed under, the
laws of the State of North Carolina.
14. This Warrant may not be modified without the written
consent of the Company and the Holder.
Dated: November 15, 1999 RF MICRO DEVICES, INC.
By: /s/ William A. Priddy
---------------------
-11-
<PAGE> 12
NOTICE OF EXERCISE
By this Notice, TRW Inc. exercises the Warrant to which this
Notice is attached with respect to _______________ shares of the Common Stock of
RF Micro Devices, Inc.
TRW Inc. represents to RF Micro Devices, Inc. that TRW Inc.
will be acquiring the securities which are being purchased by exercise of the
Warrant for investment, and not with a view to their resale or distribution.
[Cross out the preceding paragraph if the resale of the shares
being issued on exercise of this Warrant has been registered under the
Securities Act of 1933, as amended.]
TRW INC.
Dated: ____________________ By: __________________________
-12-
<PAGE> 1
EXHIBIT 10.1
LEASE PROVISIONS & EXHIBITS
LANDLORD: HIGHWOODS REALTY LIMITED PARTNERSHIP
TENANT: R.F. MICRO DEVICES, INC. LEASE DATE: November 5, 1999
BUILDING ADDRESS: 486 Gallimore Dairy Road, Suite A, Greensboro,
North Carolina 27409
NOTICES ADDRESS: 7625 Thorndike Rd., Greensboro, North Carolina 27409
RENTABLE SQUARE FOOTAGE: 120,000
LEASE TERM: Fifteen (15) years RENT COMMENCEMENT: March 1, 2000
TERM: MONTHLY RENT: ANNUAL RENT: PRICE P.R.S.F: R.S.F.:
- - ---- ------------ ----------- ------------- ------
03/01/00 - 08/31/00 $16,900.00 $202,800.00 $3.38 *60,000
09/01/00 - 02/28/03 $30,500.00 $366,000.00 $3.05 120,000
03/01/03 - 02/28/15 Increase based on Consumer Price Index (See Section 3)
*Tenant shall occupy the entire Building square footage (120,000 sf).
ALL RENTS ARE DUE ON THE 1ST DAY OF EACH MONTH
OPTION TO RENEW: Provided Tenant is not in default hereunder, Tenant shall have
an option to renew this Lease for two (2) periods of ten (10) years. The rental
rate will be adjusted for changes in the Consumer Price Index during the
preceding fifteen (15) year period. The rental rate for the initial year of the
renewal term will be the basis for all future Consumer Price Index adjustments.
NOTICE: Tenant shall provide Landlord six (6) month prior written notice of its
intent to renew the Lease.
FIRST RIGHT OF REFUSAL:
TENANT IMPROVEMENTS: Tenant agrees to lease the building from "shell" condition.
Landlord will not provide any funds for improvements of any kind to the leased
space.
BROKER: Coldwell Banker - Commercial, Attn: Joe Douglas
COMMISSION PAID: 4.00% on the First Ten (10) Years of Lease Term
PRO-RATA %: 100%
EXPENSE PASS THRU'S:
Taxes: Entire Cost
Insurance: Entire Cost
Common Area Maintenance: Entire Cost
<PAGE> 2
PAID DIRECTLY BY TENANT:
x Janitorial x Extermination
x Garbage x Light Bulbs
x Water/Sewer x Interior Maintenance
x Security x Signage
x Electrical/Gas x Plate Glass Breakage
x HVAC x Fire Extinguisher Maintenance
EXHIBITS ATTACHED:
TBA A Legal Description
TBA B Building Layout/Specs
x C Rules & Regulations
x D Insurance Requirements
x E Parking Rules & Regulations
*The terms set forth in this Lease Provisions and Exhibits page are for
convenience only. To the extent that there are any inconsistencies between the
terms of the Lease Agreement and the provisions set forth on this page, the
terms of the Lease Agreement shall control.
<PAGE> 3
NORTH CAROLINA }
} LEASE AGREEMENT
GUILFORD COUNTY }
THIS LEASE, made and entered into this the 5 day of November, 1999,
by and between HIGHWOODS REALTY LIMITED PARTNERSHIP, a North Carolina Limited
Partnership, hereinafter referred to as "Landlord" and R.F. MICRO DEVICES, INC.,
A NORTH CAROLINA Corporation, hereinafter referred to as "Tenant".
RECITALS
Landlord is seized of the business premises described herein, having
space therein to let. Tenant desires to lease such space from Landlord. The
parties desire to enter into a Lease Agreement defining their respective rights,
duties and liabilities relating to the premises.
IN CONSIDERATION of the mutual covenants contained herein, the parties
agree as follows:
1. DESCRIPTION OF PREMISES: Landlord is the owner of a 120,000 rentable square
foot building (the "Building") located ON CERTAIN REAL PROPERTY at 486 GALLIMORE
DAIRY ROAD, SUITE A, GREENSBORO, GUILFORD COUNTY, NORTH CAROLINA, being more
fully described on Exhibit "A" attached hereto and hereby made a part hereof.
The Leased Space shall consist of THE REAL PROPERTY DESCRIBED ON
EXHIBIT "A" ATTACHED HERETO TOGETHER WITH THE Building and other improvements in
the amount of 120,000 rentable square feet, as outlined in red on Exhibit "B"
attached hereto, said space AND REAL PROPERTY, hereinafter referred to as the
"Premises". The entire Premises shall be for the exclusive use of Tenant, its
agents, servants, employees and invitees for office and related uses. The
Premises are more commonly known as Suite A.
Landlord represents and warrants that it is the owner in fee simple of
the Premises and that there are no covenants, restrictions or zoning or other
regulations which prevent, or are violated by, this Lease or the use of the
Premises as contemplated herein.
2. TERM: The term of this Lease shall be for a period of FIFTEEN (15) YEARS,
beginning MARCH 1, 2000, the "Commencement Date", continuing through FEBRUARY
28, 2015, the "Termination Date". FOR PURPOSES OF THIS LEASE, THE BUILDING SHALL
BE DEEMED COMPLETED UPON ISSUANCE OF A CERTIFICATE OF OCCUPANCY FROM THE
APPLICABLE GOVERNMENTAL AUTHORITY, AND A CERTIFICATE OF ARCHITECT FROM LOCKWOOD
GREENE INDICATING THAT THE PROPERTY HAS BEEN SUBSTANTIALLY COMPLETED IN
ACCORDANCE WITH TENANT APPROVED CONSTRUCTION DRAWINGS. THE LEASE, ALONG WITH
TENANT'S RENTAL OBLIGATION, SHALL COMMENCE UPON THE ISSUANCE OF A CERTIFICATE OF
OCCUPANCY AND CERTIFICATE OF ARCHITECT SUPPLIED BY LOCKWOOD GREENE.
3. BASE RENT: Tenant shall pay rental for the Premises Leased AS FOLLOWS:
TERM: MONTHLY RENT: ANNUAL RENT: PRICE P.R.S.F: R.S.F.:
- - ---- ------------ ----------- ------------- ------
03/01/00 - 08/31/00 $16,900.00 $202,800.00 $3.38 60,000
09/01/00 - 02/28/03 $30,500.00 $366,000.00 $3.05 120,000
RENT SHALL INCREASE ON THE THIRD ANNIVERSARY OF THE COMMENCEMENT DATE
BY 4.5% FROM THE PREVIOUS LEASE YEAR. Rent shall also increase on THE SIXTH,
NINTH, AND TWELFTH ANNIVERSARIES of the Commencement Date by the same percentage
as EIGHTY PERCENT (80%) OF THE percentage increase in the Consumer Price Index -
All Items - All Urban Consumers ("CPI"), issued by the U.S. Department of Labor,
for each prior THIRTY-SIX (36) MONTH PERIOD. However, in no event shall the base
rent decrease as a result of a decrease in CPI.
AS SOON AS PRACTICABLE AFTER THE CPI FOR THE ANNIVERSARY DATE BECOMES
AVAILABLE, THE LANDLORD SHALL FURNISH TO TENANT A STATEMENT FOR SETTING FORTH
THE ADJUSTMENT, IF ANY, TO RENT AS REQUIRED BY THIS PARAGRAPH 3. FROM THE
BEGINNING OF EACH LEASE YEAR UNTIL LANDLORD SHALL FURNISH TENANT WITH A
STATEMENT AS AFORESAID, TENANT SHALL CONTINUE TO PAY RENT AT THE RATE IT SHALL
HAVE BEEN OBLIGATED TO PAY DURING THE PRECEDING LEASE YEAR. BEGINNING WITH THE
FIRST DAY OF THE CALENDAR MONTH FOLLOWING THE DATE UPON WHICH LANDLORD SHALL
HAVE DELIVERED TO TENANT EACH SUCH STATEMENT, TENANT SHALL PAY RENT AT THE RATE
REQUIRED BY THIS PARAGRAPH 3 AND SHALL PAY LANDLORD ANY DIFFERENCE BETWEEN RENT
IT SHALL HAVE PAID LANDLORD FOR SUCH YEAR AND THE ADJUSTED RENTAL IT SHALL HAVE
BEEN OBLIGATED TO PAY LANDLORD FOR SUCH YEAR UNDER THIS PARAGRAPH 3. IT IS
AGREED THAT IN THE EVENT THE AFORESAID INDEX IS DISCONTINUED OR REVISED, ANY
OTHER INDEX WITH WHICH IT IS REPLACED SHALL BE USED IN ORDER TO OBTAIN
SUBSTANTIALLY THE SAME RESULTS AS WOULD BE OBTAINED IF THERE HAD BEEN NO SUCH
DISCONTINUATION OR REVISION.
All rental payments are payable in advance on the first (1st) day of
each month without prior offset or deduction, EXCEPT AS SET FORTH IN THE LEASE,
to Landlord at Landlord's address specified in Section 41 hereof entitled
"NOTICES" or at such other place as Landlord may direct. In the event any Tenant
check tendered to Landlord in payment of its obligations hereunder is returned
by Tenant's bank for insufficient funds, any and all REASONABLE charges incurred
by Landlord as a result shall be billed to Tenant by Landlord as additional rent
hereunder.
<PAGE> 4
4. OCCUPANCY AND ACCEPTANCE OF PREMISES: Landlord shall deliver actual
possession of the Premises to Tenant on the Commencement Date according to the
specifications indicated in Exhibit "B" attached hereto and by this reference
made a part hereof, provided Landlord is able to furnish to Tenant evidence
obtained from local governmental authorities having jurisdiction that the
Premises have been duly inspected and approved for Tenant's occupancy. If the
Premises are ready for Tenant's occupancy prior to the Commencement Date,
Landlord shall so notify Tenant and Tenant may accept such early occupancy,
provided, however, in such event Tenant shall pay to Landlord base rental
calculated on a daily basis assuming a 365 day year, for each day Tenant shall
occupy the Premises prior to the Commencement Date. If permission is given to
Tenant to occupy the Demised Premises prior to the date of commencement of the
term hereof, such occupancy shall be subject to all the provisions of this Lease
except those relating to the term of this Lease.
Upon Tenant's occupancy of the Premises Tenant shall render to
Landlord, within ten (10) days of such occupancy date, a written notice listing
each and every respect in which the Premises are incomplete according to such
building specifications as noted above; Landlord shall then have sixty (60) days
from its receipt of said notice to complete those items contained in such
listing. The existence of such items shall not alter the Tenant obligation to
pay rent pursuant to Section 3.
During Tenant's move-in, a representative of the Tenant must be on-site
with any moving company to ensure proper treatment of Premises. Elevators in
multi-story office buildings must remain in use for the general public during
business hours. Any specialized use of elevators must be coordinated with the
Landlord's Property Manager. All packing materials and refuse must be properly
disposed of. Any damage or destruction due to moving will be the sole
responsibility of the Tenant.
Tenant shall, at its own expense, comply with all future governmental
regulations to include those relating to the Americans with Disabilities Act
(ADA). LANDLORD WARRANTS THAT THE PREMISES COMPLIES WITH SUCH GOVERNMENTAL
REGULATIONS AS OF THE COMMENCEMENT DATE OF THIS LEASE.
NOTWITHSTANDING ANYTHING STATED ABOVE TO THE CONTRARY, THE TENANT SHALL
HAVE THE RIGHT TO ENTER INTO THE PREMISES PRIOR TO THE COMMENCEMENT DATE TO
BEGIN WORK NECESSARY FOR THE TENANT'S UPFITTING OF THE PREMISES. ALL WORK
PERFORMED BY THE TENANT AND THE TENANT'S CONTRACTORS OR SUBCONTRACTORS SHALL BE
COORDINATED WITH THE LANDLORD AND THE LANDLORD'S CONTRACTORS SO AS TO NOT
INTERFERE WITH THE WORK PERFORMED BY THE LANDLORD'S CONTRACTORS. TENANT AGREES
TO INDEMNIFY AND HOLD THE LANDLORD HARMLESS FROM ANY LOSS, COST AND EXPENSE
SUFFERED BY THE LANDLORD AS A RESULT OF THE TENANT OR TENANT'S CONTRACTORS'
PRESENCE ON THE PREMISES PRIOR TO THE COMMENCEMENT DATE. SHOULD LANDLORD FAIL TO
DELIVER THE PREMISES IN ACCORDANCE WITH TENANT APPROVED CONSTRUCTION DRAWINGS BY
_________________, THEN TENANT SHALL HAVE THE RIGHT TO TERMINATE THE LEASE.
5. AUDIT: If Tenant disputes the amount of operating expenses as set forth in
the invoice from the Landlord within forty -five days after receipt thereof, and
provided Tenant is not then in default under this Lease, Tenant shall have the
right upon notice to have Landlord's book and records relating to operating
expenses audited by a qualified professional selected by Tenant or by Tenant
itself. If after such audit Tenant still disputes the amount of operating
expenses, a certification as to the proper amount shall be made by Landlord's
independent certified public accountant in consultation with Tenant's
professional, which certification shall be final and conclusive. If such audit
reveals that operating expenses were overstated by FIVE PERCENT (5%) or more in
the calendar year audited Landlord shall within thirty (30) days after the
certification pay to Tenant the amount of any overstatement which it had
collected from Tenant. However, if such certification does not show that
Landlord had made such an overstatement then Tenant shall pay both the costs of
its professional as well as the reasonable charges of Landlord's independent
certified public accountant engaged to determine the correct amount of operating
expenses. If the certification shows that Landlord has undercharged Tenant then
Tenant shall within thirty (30) days pay to Landlord the amount of any
undercharge.
Books and records necessary to accomplish any audit permitted under
this Section shall be retained for twelve months after the end of each calendar
year, and on receipt of notice of Tenant's dispute of the operating expenses
shall be made available to Tenant to conduct the audit, which may be either at
the Premises, or at Landlord's office in Winston-Salem, North Carolina .
In the event that the Tenant elects to have a professional audit
Landlord's operating expenses as provided in this Lease, such audit must be
conducted by an independent nationally or regionally recognized accounting firm
that is not being compensated by Tenant on a contingency fee basis. All
information obtained through such audit as well as any compromise, settlement or
adjustment reached as a result of such audit shall be held in strict confidence
by Tenant and its officers, agents, and employees and as a condition to such
audit, the Tenant's auditor shall execute a written agreement agreeing that the
auditor is not being compensated on a contingency fee basis and that all
information obtained through such audit as well as any compromise, settlement or
adjustment reached as a result of such audit, shall be held in strict confidence
and shall not be revealed in any manner to any person except upon the prior
written consent of the Landlord, which consent shall not be unreasonably
withheld in Landlord's sole discretion, or if required pursuant to any
litigation between Landlord and Tenant materially related to the facts disclosed
by such audit, or if required by law.
No subtenant shall have any right to conduct an audit and no assignee
shall conduct an audit for any period during which such assignee was not in
possession of the Premises.
<PAGE> 5
6. LATE PAYMENT OF RENT: All monthly installments of rent herein stipulated are
due in advance without prior offset or deduction, EXCEPT AS SET FORTH IN THIS
LEASE, on the FIRST (1ST) DAY OF EACH MONTH during the term hereof, as set forth
in Section 3 hereof entitled "BASE RENT". All rents not received on the first
(1st) day of the month shall be deemed "past due" and all rents not received by
the Landlord by the tenth (10th) day of each month during the term hereof shall
be subject to a charge of 5% of the amount due.
In any such event, Landlord shall so invoice Tenant for any such
charge, which shall become due immediately upon Tenant's receipt of the invoice
but in no event later than ten (10) days from the invoice date.
Once any payment of rent is thirty (30) days past due, the total due,
including the 5% charge, shall bear interest at eighteen (18) percent per annum.
7. NO ACCORD AND SATISFACTION: No acceptance by Landlord of a lesser sum than
the Base Rent, late charges, additional rent and other sums then due shall be
deemed to be other than on account of the earliest installment of such payments
due, nor shall any endorsement or statement on any check or any letter
accompanying any check or payment be deemed as accord and satisfaction, and
Landlord may accept such check or payment without prejudice to Landlord's right
to recover the balance of such installment or pursue any other remedy in this
Lease provided.
8. USE: Premises shall be used for such office, assembly, storage, distribution
and manufacturing activities as are allowed under existing zoning and recorded
covenants. Tenant shall not conduct, or allow to be conducted, on or within the
Premises any business or permit any act which in any way increases the cost of
fire insurance on the building or constitutes a nuisance or is contrary to or in
violation of the laws, statutes or ordinances of local state or federal
governments having jurisdiction and Tenant agrees to comply, at Tenant's
expense, with all governmental regulations, to include those relating to the
Americans with Disabilities Act (ADA). TENANT WILL PAY TO BRING THE PREMISES
INTO COMPLIANCE WITH ANY REVISIONS TO THE AMERICANS WITH DISABILITIES ACT (ADA)
AFTER THE COMMENCEMENT DATE OF THE LEASE. Any violation of this provision by
Tenant shall be a material breach of this Lease, entitling Landlord to exercise
any rights or remedies contained herein or provided by law or other authority.
LANDLORD AND TENANT HEREBY AGREE THAT THE MANUFACTURING OF WAFERS AS
CONTEMPLATED BY THE TENANT DOES NOT VIOLATE EXISTING ZONING OR ANY RECORDED
RESTRICTIVE COVENANTS.
It is hereby agreed and understood that the following functions are
prohibited outside the building walls or in the parking or service areas:
storage of any item; manufacture or assembly of any product; refuse
accumulation; rallies or meetings; any conduct of business. Personal property of
Tenant of any type or size shall be permitted outside the Premises only during
times of loading or unloading operations.
9. QUIET ENJOYMENT: The Landlord covenants that Tenant, upon paying the Landlord
the rental stipulated herein together with all other charges reserved herein,
and performing the covenants, promises and agreements herein, shall peaceably
and quietly have, hold and enjoy the Premises and all rights, easements,
appurtenances and privilege belonging or appertaining thereto, during the full
term hereby granted and any extensions or renewals thereof.
10. COMMON AREAS: As used in this Lease, Common Areas shall mean all areas of
the entire building and appurtenances which are available for the common use of
tenants and which are not held for the exclusive use of the Tenant or other
tenants, including but not limited to: the parking areas and entrances and exits
thereto, driveways and truck service ways, sidewalks, landscaped areas, access
roads, building equipment rooms, and other areas and facilities provided for the
common or joint use and benefit of occupants of the Building, their employees,
agents, customers and invitees. Landlord reserves the right, from time to time,
to reasonable alter said common areas, including converting common areas into
leasable areas, constructing additional parking facilities in the common areas,
increasing or decreasing common area land and/or facilities and to exercise
control and management of the common areas and to establish, modify, change and
enforce such reasonable Rules and Regulations as Landlord in its discretion may
deem desirable for the management of the Building.
Tenants agrees to abide by and conform to such rules and regulations
and shall be responsible for the compliance with same by its employees, agents,
customers and invitees. The failure of Landlord to enforce any of such Rules and
Regulations against Tenant or any other tenant shall not be deemed to be a
waiver of same.
Landlord shall have the right to restrict or close all or any portion
of the common areas at such times and for such periods as may, in the opinion of
the Landlord, be necessary to prevent a dedication thereof, or to preserve the
status thereof as private property, or to prevent the accrual of any rights in
any person; and Landlord may also close said common areas for purposes of
maintenance and repair as may be required from time to time.
Tenant shall pay to Landlord its proportionate share of the entire
common area maintenance cost. Tenant's proportionate share shall be the relation
of Tenant's 120,000 rentable square foot area to the 120,000 rentable square
foot of total building area, or 100%.
During the term hereof, Landlord shall notify Tenant of its
proportionate share due for such cost. Landlord shall have the option through
the Lease term to require Tenant's reimbursement on either a monthly, quarterly
or annual basis, at Landlord's sole
<PAGE> 6
discretion, to become due and payable as additional rent within ten (10) days,
if invoiced monthly or thirty (30) days, if invoiced quarterly or annually, from
the date of invoice.
11. ASSIGNMENT AND SUBLETTING: Tenant covenants and agrees that neither this
Lease nor the term hereby granted, nor any part thereof, will be assigned,
mortgaged, pledged, encumbered or otherwise transferred, by operation of law or
otherwise, and that neither the Premises, nor any part thereof, will be sublet
or advertised for subletting or occupied, by anyone other than Tenant, or for
any purpose other than as hereinabove set forth, without the prior written
consent of Landlord not to be unreasonably withheld. Landlord's withholding of
consent shall be deemed reasonable if the use or occupancy of the Premises by
such sublessee or assignee could make Landlord responsible for any costs of
compliance with the Americans with Disabilities Act (ADA) or any other
legislation by any governmental body.
12. LANDLORD'S REPAIRS: The Landlord shall maintain and keep in good condition
and repair the roof, parking areas and exterior landscaping, exterior and
supporting walls of the Building together with repairs necessary due to
structural defects, if any. Landlord shall also maintain and repair the
electrical wiring (from the utility company's distribution lines to the
Premises, including the electrical service exclusive of fuses, fuse blocks,
breaker units or meter deposits) servicing the Premises, the water line
servicing the Premises, and the sanitary sewer lines and/or septic tank
servicing the Premises. However, the Landlord shall not be responsible for such
maintenance and repairs in the event the same are required as a result of the
negligence or willful act of the Tenant or its clients, customers, licensees,
assignees, agents, employees or invitees and further, in any such event the cost
of such maintenance and repairs so required shall be the sole responsibility of
the Tenant.
TO THE EXTENT ANY REPAIRS REQUIRED TO BE PERFORMED BY THE LANDLORD ARE
REQUIRED, THE TENANT SHALL IMMEDIATELY NOTIFY THE LANDLORD THAT SUCH REPAIRS ARE
NECESSARY. PROVIDED TENANT'S REQUEST IS REASONABLE, LANDLORD SHALL IMMEDIATELY
COMMENCE SUCH REPAIRS AND COMPLETE SUCH REPAIRS AS SOON AS POSSIBLE. TENANT
SHALL HAVE THE RIGHT TO COMPLETE ANY REPAIRS NOT COMPLETED BY THE LANDLORD IN A
TIMELY FASHION, AND OFFSET SUCH COST IN THE NEXT MONTH'S RENT (NOT TO EXCEED ONE
MONTH). TENANT SHALL PROVIDE TO LANDLORD WRITTEN DOCUMENTATION OF SAID COSTS.
13. TENANT REPAIRS; ALTERATIONS: The Tenant shall effect, at its sole cost and
expense, all maintenance and repairs to the interior of said Premises, including
without limitation, the floor and wall coverings (whether paint or otherwise);
lights, light fixtures, and light bulbs; interior and exterior doors and door
locks, overhead doors; ceiling tiles; water heaters; windows, frames, glass,
window blinds; all heating, ventilating and air conditioning equipment; all
plumbing and electrical not described in Section 12 above; security systems and
any other improvements not required to be maintained by Landlord in the
immediately preceding Section hereof, except in the event the improvements
installed by Landlord may be defective in material or labor in installation. All
such repairs and replacements required by this section shall be made only by
persons approved in advance by Landlord, NOT TO BE UNREASONABLY WITHHELD. Should
Tenant fail to comply with the maintenance and repairs required above, the
Landlord shall have the right, AFTER TEN (10) DAYS PRIOR WRITTEN NOTICE TO
TENANT, to enter on the Premises and make necessary repairs and perform and
maintenance required. Any REASONABLE cost incurred by Landlord shall be paid by
the Tenant at cost plus ten percent (10%) overhead and ten percent (10%) for
profit.
Tenant shall submit to the Landlord for Landlords' prior written
approval all of the plans and specifications for any alterations, additions or
improvements in and to the Premises which tenant may deem desirable or necessary
in its use and occupancy thereof. Such alterations, additions or improvements
shall not be made without the prior written approval of Landlord. If any changes
are made to the plans by the Landlord, Tenant shall review final plans and
provide written approval prior to Landlord starting upfit construction All such
alterations, additions or improvements shall be made in accordance with
applicable city, county, state and federal laws and ordinances, and building and
zoning rules and regulations and all present and future governmental regulations
relating to the Americans with Disabilities Act (ADA). Landlord's approval
hereunder shall not be deemed as warranty that tenant's alterations meet such
ADA regulations, however, such consent shall carry a requirement that such
alterations will be constructed by Tenant, at its own expense, in full
compliance with all existing ADA governmental regulations. Tenant shall be
liable for all damages or injuries which may result to any person or property by
reason of or resulting from any alterations, additions or improvements made by
it to the Premises and shall hold the Landlord harmless with respect thereto.
All additions and improvements made by the Tenant, EXCEPT TRADE FIXTURES, shall
become a part of the Premises and shall, upon the termination or expiration of
this Lease, belong to Landlord except as may be otherwise set forth in a letter
agreement or other written instrument executed by the parties hereto and
attached to this Lease as an amendment hereto and thereby made a part hereof.
In the event Tenant performs any alterations, additions or improvements
to the Premises, Tenant agrees that it shall provide to Landlord a reproducible
set of as-built plans for Landlord's files.
If Tenant fails to perform Tenant's obligations under this Section,
Landlord may at its option enter upon the Premises after ten (10) days prior
written notice to Tenant, perform such obligation on Tenant's behalf, and the
cost thereof together with interest thereon shall become due and payable as
additional rental to Landlord together with Tenant's next rental installment.
At Landlord's option, Landlord may require that Tenant remove any or
all alterations or improvements at Tenant's expense upon termination of the
Lease.
<PAGE> 7
14. HEATING, VENTILATION AND AIR CONDITIONING: The Tenant shall at its sole cost
and expense keep in force a maintenance contract for the entire term of this
Lease on all heating, air conditioning and ventilation equipment pertaining to
the Premises, providing for service inspections to be done ON A ROUTINE BASIS AS
PROPOSED BY SUCH CONTRACT. Tenant shall submit a copy of said contract to
Landlord within ten (10) days after occupancy of the Premises. Landlord must
approve the terms of the maintenance contract and the firm Tenant chooses as the
maintenance contractor, SUCH APPROVAL NOT TO BE UNREASONABLY WITHHELD.
Landlord shall be responsible for replacement of any defective motor or
compressor within the system provided it is not as a result of negligence or
willful act of the Tenant, its clients, customers, licensees, assignees, agents,
employees, or invitees. However, Tenant's failure to provide the required
maintenance contract shall release Landlord form any and all liability for said
equipment.
Upon termination of this Lease, Tenant will deliver the HVAC equipment
in good operating condition.
15. FEDERAL REGULATION AND/OR PROHIBITION OF CFC'S: Due to an environmental
threat that the earth's ozone layer has deteriorated, there is international
concern for the control of Chlorofluorocarbons ("CFC's") and possible ban
thereof. Future legislation could impose:
1) New maintenance standards and procedures on HVAC equipment in order
to reduce the amount of freon existing in the system; or
2) Conversion of the equipment in order to accommodate the use of a
substitute chemical; or
3) Replacement of the equipment in the event the equipment does not
comply with the required performance and maintenance standards.
Landlord and Tenant hereby acknowledge that any costs associated with
the above shall be considered a maintenance item and SHALL BE PAID BY TENANT.
NOTWITHSTANDING THE PRECEDING SENTENCE, IN THE EVENT THAT ANY SUCH
RULES AND REGULATIONS AS DESCRIBED ABOVE ARE ENACTED WHICH REQUIRE SIGNIFICANT
CHANGES TO THE HVAC EQUIPMENT OF THE PREMISES DURING THE LAST THREE YEARS OF THE
TERM OF THIS LEASE (INCLUDING THE RENEWAL TERM), THE COST OF BRINGING THE HVAC
EQUIPMENT ON THE PREMISES INTO COMPLIANCE WITH SUCH RULES OR REGULATIONS SHALL
BE PRORATED AMONG THE TENANT AND THE LANDLORD BASED UPON THE ANTICIPATED USEFUL
LIFE OF THE HVAC EQUIPMENT, AS MODIFIED, AND THE REMAINING NUMBER OF YEARS LEFT
IN THE TERM OF THIS LEASE.
16. SUBORDINATION AND ATTORNMENT: TENANT AGREES THAT THIS LEASE IS SUBJECT AND
SUBORDINATE TO ANY AND ALL MORTGAGES OR DEEDS OF TRUST NOW OR HEREAFTER PLACED
ON THE PROPERTY OF WHICH THE PREMISES ARE A PART, AND THIS CLAUSE SHALL BE SELF
OPERATIVE WITHOUT ANY FURTHER INSTRUMENT NECESSARY TO EFFECT SUCH SUBORDINATION;
HOWEVER, IF REQUESTED BY LANDLORD, TENANT SHALL PROMPTLY EXECUTE AND DELIVER TO
LANDLORD ANY SUCH CERTIFICATES AS LANDLORD MAY REASONABLY REQUEST EVIDENCING
SUCH SUBORDINATION OF THIS LEASE TO OR THE ASSIGNMENT OF THIS LEASE AS
ADDITIONAL SECURITY FOR SUCH MORTGAGES OR DEEDS OF TRUST. PROVIDED, HOWEVER, IN
EACH CASE, THE HOLDER OF THE MORTGAGE OR DEED OF TRUST SHALL AGREE THAT THIS
LEASE SHALL NOT BE DIVESTED BY FORECLOSURE OR OTHER DEFAULT PROCEEDINGS SO LONG
AS TENANT SHALL NOT BE IN DEFAULT UNDER THE TERMS OF THIS LEASE BEYOND ANY
APPLICABLE CURE PERIOD SET FORTH IN THIS LEASE. TENANT SHALL CONTINUE ITS
OBLIGATIONS UNDER THIS LEASE IN FULL FORCE AND EFFECT NOTWITHSTANDING ANY SUCH
DEFAULT PROCEEDINGS UNDER A MORTGAGE OR DEED OF TRUST AND SHALL ATTORN TO THE
MORTGAGEE, TRUSTEE OR BENEFICIARY OF SUCH MORTGAGE OR DEED OF TRUST, AND THEIR
SUCCESSORS OR ASSIGNS, AND TO THE TRANSFEREE UNDER ANY FORECLOSURE OR DEFAULT
PROCEEDINGS. THE SUBORDINATION CONTAINED IN THIS PARAGRAPH 16 SHALL NOT APPLY
UNLESS AND UNTIL THE MORTGAGEE OR DEED OF TRUST HOLDER AGREES TO THE
NONDISTURBANCE PROVISIONS SET FORTH ABOVE.
In the event of the sale, assignment, or transfer by Landlord of its
interest in the Premises to a successor in interest who expressly assumes the
obligation of the Landlord hereunder, AND WHO IS FINANCIALLY SOUND AND
ADEQUATELY CAPITALIZED, the Landlord shall thereupon be released or discharged
from all of its covenants and obligations hereunder, except such obligations
shall have accrued prior to any such sale, assignment or transfer; and Tenant
agrees to look solely to any successor in interest of the Landlord for
performance of any such obligations. Tenant shall have ten (10) days from its
receipt of Landlord's request to deliver any such fully executed documents to
Landlord. Tenant's failure to execute and deliver any such documents shall
constitute a default hereunder.
17. CHANGE IN OWNERSHIP OF PREMISES: If the ownership of the Premises or the
name or address of the party entitled to receive rent hereunder shall be
changed, the Tenant may, until receipt of proper notice of such change(s),
continue to pay the rent and other charges herein reserved accrued and to accrue
hereunder to the party to whom and in the manner in which the last preceding
installment of rent or other charge was paid, and each such payment shall, to
the extent thereof, exonerate and discharge the Tenant.
<PAGE> 8
18. CONDEMNATION: If the whole of the Building, or such substantial portion
thereof as will make Premises unusable for the purposes referred to herein,
shall be condemned by any legally constituted authority for any public use or
purpose, then in either of said events the term hereby granted shall cease from
the time when possession thereof is taken by the condemning authority, and
rental shall be accounted for as between Landlord and Tenant as of that date. In
the event the portion condemned is such that the remaining portion can, after
restoration and repair, be made usable for Tenant's purposes, then this Lease
shall not terminate; however, the rent shall be reduced equitably to the amount
of the Premises taken. In such an event, Landlord shall make such repairs as may
be necessary as soon as the same can be reasonably accomplished, NOT TO EXCEED
120 DAYS. Such termination, however, shall be without prejudice to the rights of
either Landlord or Tenant, or both, to recover compensation and damage caused by
condemnation from the condemnor. It is further understood and agreed that
neither the Tenant nor Landlord shall have any rights in any award made to the
other by any condemnation authority.
Any minor condemnation or taking of the Premises for the construction
or maintenance of streets or highways shall not be considered a condemnation or
taking for the purposes of this Section 18 so long as the Premises shall not be
materially or adversely affected, ingress and egress for the remainder of the
Premises shall be adequate for the business of Tenant, and the provisions of any
loan documents of Landlord's lender which encumber the Premises are complied
with, AND PROVIDED SUFFICIENT PARKING SPACES REMAIN AS REQUIRED UNDER APPLICABLE
ZONING REQUIREMENTS.
19. RIGHT OF LANDLORD TO ENTER; "FOR RENT" SIGNS: The Tenant agrees that the
Landlord or its agents may at all reasonable times enter upon the Premises for
the purpose of inspection or repair of the Building or the building systems and
such other purposes as Landlord may deem necessary or proper for the reasonable
protection of Landlord's interest in the Premises. In addition, the Landlord may
enter the Premises at all reasonable times to exhibit the Premises to
prospective purchasers. During the two (2) months immediately preceding the
final expiration of the term created hereunder or any renewal thereof, the
Landlord, may exhibit the Premises to prospective tenants and/or affix a notice
that the premises are for rent; such notice shall not be greater than four (4)
square feet in area, and shall be affixed to a suitable part thereof, exclusive
of doors and windows and so as not to obstruct the Tenant's signs.
20. TAXES: TENANT agrees to pay before they become delinquent all taxes,
assessments and governmental charges of any kind and nature whatsoever
(hereinafter referred to as "taxes") lawfully levied or assessed against the
PREMISES DURING THE TERM OF THE LEASE. TO THE EXTENT THAT TAXES ARE LEVIED OR
ASSESSED FOR ANY YEAR IN WHICH THE TENANT OCCUPIES THE PREMISES FOR ONLY A
PORTION OF SUCH YEAR, TAXES SHALL BE PRORATED BETWEEN THE TENANT AND THE
LANDLORD BASED UPON THE ACTUAL NUMBER OF DAYS THAT THE TENANT OCCUPIES THE
PREMISES DURING SUCH YEAR.
If at any time during the term of this Lease, the present method of
taxation shall be changed so that in lieu of the whole or any part of any taxes,
assessments or governmental charges levied, assessed or imposed on real estate
and the improvements thereof, there shall be levied, assessed or imposed on
Landlord a capital levy or other tax directly on the rents received therefrom
and/or a franchise tax, assessment levy or charge measured by or based, in whole
or in part, upon such rents for the present or any future building or building
on the Premises, then all such taxes, assessments, levies or charges, or the
part thereof so measured or based, shall be deemed to be included with the term
"taxes" for the purposes hereof.
Tenant shall pay to Landlord its proportionate share of the entire cost
of all taxes referenced herein. Tenant's proportionate share shall be the
relation of Tenant's 120,000 rentable square foot area to the 120,000 rentable
square feet of total building area, or 100%. Real estate taxes, as referenced
herein, shall be defined as the amount of the total tax invoice (property
assessment x tax rate) and shall exclude any discount or late penalty charge and
shall include any charge or fee incurred by Landlord as a result of its attempt
in securing a reduction in the assessed value of the Property.
During the term hereof, Landlord shall notify Tenant of its
proportionate share due for such cost. Landlord shall have the option through
the Lease term to require Tenant's reimbursement on either a monthly, quarterly
or annual basis, at Landlord's sole discretion, to become due and payable as
additional rent within ten (10) days, if invoiced monthly or thirty (30) days if
invoiced quarterly or annually from the date of invoice.
21. FIRE, EXTENDED COVERAGE AND LIABILITY INSURANCE: Landlord agrees to keep in
force policies of fire and extended coverage insurance which shall insure the
Building against such perils or loss as Landlord may deem appropriate including
loss of rents, vandalism and malicious mischief, in an amount equal to one
hundred percent (100%) of the replacement cost of the Building and the
improvements installed by the Landlord. LANDLORD SHALL DELIVER CERTIFICATES OF
SUCH INSURANCE TO TENANT PRIOR TO COMMENCEMENT OF THIS LEASE AND AT LEAST TEN
DAYS PRIOR TO EXPIRATION OF ANY EXISTING CERTIFICATE. SUCH CERTIFICATE SHALL
PROVIDE THAT THE INSURANCE CANNOT BE TERMINATED BY THE INSURER WITHOUT PROVIDING
THIRTY (30) DAYS PRIOR WRITTEN NOTICE TO TENANT.
Tenant agrees to maintain and keep in force, at its expense and
throughout the entire term hereof, insurance against fire and such other risks
as are from time to time included in standard extended coverage endorsements
including vandalism and malicious mischief, insuring Tenant's stock-in-trade,
trade fixtures, furniture, furnishings, special equipment and all other items of
personal
<PAGE> 9
property of Tenant located on or within the Premises and all such other
improvements as are made by the Tenant to the Premises. Tenant shall furnish to
Landlord a certificate evidencing Tenant's maintenance of such insurance
policies throughout the term hereof. All the furnishings, fixtures, equipment
effects and property of every kind, nature and description of Tenant and of all
persons claiming by, through or under Tenant which, during the continuance of
this Lease or any occupancy of the Premise by Tenant or anyone claiming under
Tenant, may be the Premises or elsewhere in the Building shall be at the sole
risk and hazard of Tenant, and if the whole or any part thereof shall be
destroyed or damaged by fire, water or otherwise, or by leakage or bursting of
water pipes, steam pipes or other pipes, by theft, or from any other cause, no
part of said loss or damage is to be charged to or to be borne by Landlord
unless the same shall be due to the gross negligence or willful misconduct of
Landlord.
In addition to the policies of fire and extended coverage insurance to
be kept and maintained by Landlord and Tenant herein, Landlord and Tenant shall
each obtain and keep in force during the term hereof and any extension or
renewal terms, policies of comprehensive general liability providing bodily
injury and liability property damage with combined single limits of at least
Five Hundred Thousand Dollars ($500,000.00). In addition thereto, Tenant shall
provide "umbrella coverage" in the amount of One Million Dollars
($1,000,000.00). The Tenant shall, in addition, name the Landlord as an
ADDITIONAL insured under such liability policies and shall provide the Landlord
a certificate of same within thirty (30) days after the execution of this Lease,
as shown on Exhibit "D".
Tenant agrees to pay to the Landlord its proportionate share of the
entire cost that Landlord may incur in the cost of maintaining the policies
required hereunder. Tenant's proportionate share shall be the relation of
Tenant's rentable square foot area to the 120,000 rentable square feet of total
building area, or 100%.
During the term hereof, Landlord shall notify Tenant of its
proportionate share due for such cost. Landlord shall have the option through
the Lease term to require Tenant's reimbursement on either a monthly, quarterly
or annual basis, at Landlord's sole discretion, to become due and payable as
additional rent within ten (10) days, if invoiced monthly or thirty (30) days if
invoiced quarterly or annually from the date of invoice.
22. DAMAGE AND DESTRUCTION: IF THE BUILDING, IMPROVEMENTS OR OTHER PORTIONS OF
THE PREMISES ARE RENDERED PARTIALLY OR WHOLLY UNTENANTABLE FROM FIRE OR OTHER
CASUALTY, AND IF SUCH DAMAGE CANNOT, IN LANDLORD'S REASONABLE ESTIMATION, BE
MATERIALLY RESTORED WITHIN ONE HUNDRED EIGHTY (180) DAYS OF SUCH DAMAGE, THEN
LANDLORD MAY, IN ITS SOLE OPTION, TERMINATE THIS LEASE AS OF THE DATE OF SUCH
FIRE OR CASUALTY. LANDLORD SHALL EXERCISE ITS OPTION PROVIDED HEREIN BY WRITTEN
NOTICE TO TENANT WITHIN SIXTY (60) DAYS OF SUCH FIRE OR CASUALTY. FOR PURPOSES
HEREOF, THE BUILDING, OR OTHER PORTIONS OF THE PREMISES SHALL BE DEEMED
"MATERIALLY RESTORED" IF THEY ARE IN SUCH CONDITION AS WOULD NOT PREVENT OR
MATERIALLY INTERFERE WITH TENANT'S USE OF THE PREMISES FOR THE PURPOSES FOR
WHICH IT WAS THEN BEING USED.
IF THIS LEASE IS NOT TERMINATED PURSUANT TO THE ABOVE PARAGRAPH, THEN
LANDLORD SHALL PROCEED WITH ALL DUE DILIGENCE TO REPAIR AND RESTORE THE
BUILDING, AT LANDLORD'S COST, ONCE IT HAS BEEN ASSURED OF THE EXISTENCE OF AND
PAYMENT OF THE INSURANCE PROCEEDS (EXCEPT THAT LANDLORD MAY ELECT NOT TO REBUILD
IF SUCH DAMAGE OCCURS DURING THE LAST YEAR OF THE TERM OF THE LEASE EXCLUSIVE OF
ANY OPTION WHICH IS UNEXERCISED AT THE DATE OF SUCH DAMAGE).
<PAGE> 10
IF THE LEASE SHALL BE TERMINATED PURSUANT TO THE ABOVE PARAGRAPH, THE
TERM OF THIS LEASE SHALL END ON THE DATE OF SUCH DAMAGE AS IF THE DATE HAD BEEN
ORIGINALLY FIXED IN THIS LEASE FOR THE EXPIRATION OF TERM HEREOF. IF THE LEASE
SHALL NOT BE TERMINATED BY LANDLORD PURSUANT TO THE ABOVE PARAGRAPH AND IN THE
EVENT THAT THE LANDLORD SHOULD FAIL TO COMPLETE SUCH REPAIRS AND MATERIAL
RESTORATION WITHIN ONE HUNDRED EIGHTY (180) DAYS AFTER THE DATE OF SUCH DAMAGE,
TENANT MAY AT ITS OPTION AND AS ITS SOLE REMEDY TERMINATE THIS LEASE BY
DELIVERING WRITTEN NOTICE TO LANDLORD WHEREUPON THE LEASE SHALL END ON THE DATE
OF SUCH NOTICE AS IF THE DATE OF SUCH NOTICE WERE THE DATE ORIGINALLY FIXED IN
THIS LEASE FOR THE EXPIRATION OF THE TERM HEREOF; PROVIDED, HOWEVER, THAT IF
CONSTRUCTION IS DELAYED BECAUSE OF CHANGES, DELETIONS OR ADDITIONS IN
CONSTRUCTION REQUESTED BY TENANT, STRIKES, LOCKOUTS, CASUALTIES, ACTS OF GOD,
WAR, MATERIAL OR LABOR SHORTAGES, GOVERNMENTAL REGULATION OR CONTROL OR OTHER
CAUSES BEYOND THE REASONABLE CONTROL OF LANDLORD, THE PERIOD FOR RESTORATION,
REPAIR OR REBUILDING SHALL BE EXTENDED FOR THE AMOUNT OF TIME LANDLORD IS SO
DELAYED.
TENANT AGREES THAT DURING ANY PERIOD OF RESTORATION OR REPAIR OF THE
PREMISES, TENANT SHALL CONTINUE THE OPERATION OF THE TENANT'S BUSINESS WITHIN
THE PREMISES TO THE EXTENT PRACTICABLE, DURING THE PERIOD FROM THE DATE OF
DAMAGE UNTIL THE DATE THAT THE UNTENANTABLE PORTION OF THE PREMISES IS
MATERIALLY RESTORED, THE RENT SHALL BE REDUCED TO THE EXTENT OF THE PROPORTION
OF THE PREMISES WHICH IS UNTENABLE, HOWEVER, THERE SHALL BE NO ABATEMENT OF
OTHER SUMS TO BE PAID BY TENANT TO LANDLORD AS REQUIRED BY THIS LEASE.
IN NO EVENT SHALL LANDLORD BE REQUIRED TO REBUILD, REPAIR OR REPLACE
ANY PART OF THE PARTITIONS, FIXTURES, ADDITIONS AND OTHER IMPROVEMENTS WHICH MAY
HAVE BEEN PLACED IN OR ABOUT THE PREMISES BY TENANT AFTER THE COMMENCEMENT DATE,
HOWEVER, LANDLORD HAS THE RIGHT BUT NOT THE OBLIGATION TO REBUILD, REPAIR OR
REPLACE AT TENANT'S EXPENSE SO MUCH OF THE PARTITIONS, FIXTURES, ADDITIONS AND
OTHER IMPROVEMENTS AS MAY BE NECESSARY TO INSURE THAT THE PREMISES ARE
MATERIALLY RESTORED.
23. LIABILITIES OF THE PARTIES: Tenant waives all claims against Landlord for
damages to goods or for injuries to persons on or about the Premises or common
areas from any cause arising at any time other than damages or injuries directly
resulting from Landlord OR LANDLORD'S AGENTS OR EMPLOYEES negligence OR WILLFUL
MISCONDUCT. The tenant will indemnify Landlord on account of any damage or
injury to any persons, or to the goods of any person, arising from the use of
the Premises by the Tenant, or arising form the failure of Tenant to keep the
Premises in good condition as provided herein. The Landlord shall not be liable
to the Tenant for any damage by or from any act or negligence of any occupant of
the same Building, or by any owner or occupant of adjoining or contiguous
property.
LANDLORD WAIVES ALL CLAIMS AGAINST TENANT FOR DAMAGES TO GOODS OR FOR
INJURIES TO PERSONS ON OR ABOUT THE PREMISES OR COMMON AREAS FROM ANY CAUSE
ARISING AT ANY TIME OTHER THAN DAMAGES OR INJURIES DIRECTLY RESULTING FROM
TENANT OR TENANT'S AGENTS OR EMPLOYEES NEGLIGENCE OR WILLFUL MISCONDUCT OR
TENANT'S BREACH OF ITS OBLIGATION UNDER THIS LEASE. THE LANDLORD WILL INDEMNIFY
TENANT ON ACCOUNT OF ANY DAMAGE OR INJURY TO ANY PERSONS, OR TO THE GOODS OF ANY
PERSON ARISING FROM THE NEGLIGENCE OR WILLFUL MISCONDUCT OF LANDLORD, ITS AGENTS
OR EMPLOYEES.
The Tenant agrees to pay for all damages to the Building, as well as
all damage or injuries suffered by Tenant or occupants thereof caused by misuse
or neglect of the Premises by the Tenant TO THE EXTENT NOT COVERED BY INSURANCE.
Landlord is specifically not responsible under any circumstance for any
damage to any computer, computer component, or computer peripheral, hardware or
software damaged by any interruption, usage or variation for whatever reason in
the electrical distribution system in the building.
Notwithstanding any other term or provision herein contained, it is
specifically understood and agreed that there shall be no personal liability of
Landlord (nor Landlord's agent, if any) in respect to any of the covenants,
conditions or provisions of this Lease. In the event of a breach or default by
Landlord of any of its obligations under this Lease, Tenant shall look solely to
the equity of the Landlord in the property for the satisfaction of Tenant's
remedies.
24. PARKING: The Landlord warrants that it will, without charge and throughout
the term of this Lease and any extensions or renewals thereof, provide the
Tenant with parking around the demised Premises which complies with applicable
city or county code. Tenant agrees to comply with the parking rules contained in
the Parking Rules and Regulations attached hereto as Exhibit "E" together with
all reasonable modifications and additions thereto which Landlord may from time
to time make.
25. SIGNS: Landlord hereby agrees to allow Tenant to have a lighted or
spot-lighted sign, as long as such sign complies with standard building
finished. Said sign shall be at the sole expense of the Tenant.
26. UTILITIES: Landlord will provide utility service connections to the
Premises, including electrical service, natural gas (where available), water and
sewer.
TENANT SHALL PROCURE FOR ITS OWN ACCOUNT AND SHALL PAY THE COST OF ALL
WATER, GAS, ELECTRIC POWER AND FUEL CONSUMED OR USED IN OR AT SAID PREMISES,
INCLUDING APPROPRIATE DEPOSITS AS REQUIRED. LANDLORD SHALL NOT BE LIABLE TO
TENANT IN DAMAGES OR
<PAGE> 11
OTHERWISE FOR ANY INTERRUPTIONS, CURTAILMENT OR SUSPENSION OF UTILITY SERVICE.
TENANT'S RESPONSIBILITY FOR THE PAYMENT OF SAID UTILITIES SHALL BEGIN UPON
ENTERING THE PREMISES FOR THE PURPOSE OF CONSTRUCTION AND FIXTURING.
TENANT SHALL BE DIRECTLY RESPONSIBLE FOR THE COST AND EXPENSE
ASSOCIATED WITH ALL UTILITIES USED BY THE TENANT IN THE PREMISES.
27. HEAT, VENTILATION, AND CLIMATE CONTROL COMFORT: Landlord has installed HVAC
equipment to provide adequate comfort (72 - 76 degrees) for normal office user
load requirements (one ton per 300 square feet). If determined before or during
Tenant's occupancy that the Tenant's use of high heat output equipment or other
intensive uses (i.e.: computer rooms, telephone rooms or work stations at
greater density than one person per 100 square feet), requires additional
cooling equipment, Landlord will install necessary additional HVAC equipment at
Tenant's sole expense.
28. PLATE GLASS BREAKAGE: Notwithstanding anything herein to the contrary,
except by negligence of Landlord, Tenant shall be solely responsible for repair
and replacement in the event of plate glass damage or breakage.
29. GARBAGE REMOVAL: Tenant will be responsible for providing a container for
garbage and arrange for its systematic pickup.
30. JANITORIAL SERVICES: Tenant shall provide janitorial services and supplies
to the Premises, at its own expense.
31. FIRE EXTINGUISHERS: Tenant covenants during the Term and such further time
as Tenant occupies any part of the Premises to keep the Premises equipped with
all safety appliances, included but not limited to an operating fire
extinguisher, required by law or ordinance or any other regulation of any public
or private authority having jurisdiction over the Premises (including insurance
underwriters or rating bureaus) because of any use made by Tenant and to procure
all licenses and permits so required because of such use and, if required by
Landlord, to do any work so required because of such use, it being understood
that the foregoing provisions shall not be construed to broaden in any way
Tenant's permitted uses.
32. EXTERMINATION: The Tenant shall, at its sole cost and expense, on at least a
quarterly basis, employ professional exterminators to control pests within the
Premises and supply Landlord with a copy of the contract therefor.
33. STORING OF FLAMMABLE MATERIALS: THE TENANT AGREES THAT IT WILL STORE ANY
DANGEROUS/FLAMMABLE MATERIALS IN ACCORDANCE WITH ALL APPLICABLE LAWS.
34. REPLACEMENT OF LIGHT BULBS: Tenant shall, at its sole cost and expense,
replace all light bulbs within the Premises.
35. KITCHEN APPLIANCES AND EQUIPMENT: In the event of installation of a kitchen
or kitchen equipment by either Landlord or Tenant, such maintenance and repair
of all items contained within the area shall be at the sole cost and expense of
Tenant, to include but not limited to: maintenance, repair and replacement of a
microwave oven, refrigerator, stove, ice maker, coffee maker, garbage disposal,
dishwasher, sink, faucet or any other item within the area. Tenant hereby
acknowledges to Landlord that any fixtures, EXCLUDING TRADE FIXTURES, described
herein are to become a part of the Premises and notwithstanding Section 36
herein, upon Tenant's vacating the Premises, all fixtures shall remain the
property of Landlord.
36. REMOVAL OF TENANT'S FIXTURES: The Tenant shall have the privilege at any
time, on or before vacating the Premises, of removing any or all of its personal
property, equipment and fixtures, and Tenant shall repair any damage caused by
the removal thereof and shall leave the Premises in good and clean condition and
repair.
37. DEFAULT BY TENANT: In the event Tenant shall fail to pay the monthly rental
rate by the due date; AND SUCH FAILURE CONTINUES FOR FIVE (5) BUSINESS DAYS
AFTER TENANT RECEIVES NOTICE OF SUCH NONPAYMENT, WHICH NOTICE SHALL NOT BE GIVEN
MORE THAN TWO (2) TIMES ANNUALLY DURING THE TERM OF THIS LEASE, or if Tenant is
adjudicated a bankrupt; or if Tenant files a petition in bankruptcy under any
section or provision of the bankruptcy law; or if an involuntary petition in
bankruptcy is filed against Tenant, and same is not withdrawn or dismissed
within sixty (60) days from filing thereof, or if a receiver or trustee is
appointed for Tenant's property and the order appointing such receiver or
trustee remains in force for thirty (30) days after the entry of such order; or
if, whether voluntarily or involuntarily, Tenant takes advantage of any debtor
relief proceedings under any present or future law, reduced payment thereof
deferred; or if Tenant makes an assignment for the benefit of the creditors; or
if Tenant's effects shall be levied upon or attached under process against
Tenant, not satisfied or dissolved within thirty (30) days after written notice
from Landlord to Tenant to obtain satisfaction thereof; or if Tenant shall
vacate or abandon the Premises; or if Tenant shall fail to perform or observe
any other covenant, agreement, or condition to be performed or kept by the
Tenant under the terms and provisions of this Lease, and such
<PAGE> 12
failure shall continue to thirty (30) days after written notice thereof has been
given by Landlord to the Tenant; then in any one of such events, Landlord shall
have the right, at the option of the Landlord, then or at any time thereafter
while such defaults continue, to elect either: (1) to cure such default or
defaults at the expense of Tenant and without prejudice to any other remedies
which it might otherwise have, any payment made or expenses incurred by Landlord
in curing such default shall bear interest thereon at 18% 10% per annum, or at
such maximum legal rate as permitted by North Carolina law, whichever shall be
lower, to be and become additional rent to be paid by Tenant with the next
installment of rent falling due thereafter; or (2) to re-enter the Premises and
dispossess Tenant and anyone claiming under tenant, with or without an order of
the court, and remove their effects, and take complete possession of the
Premises and then elect to take any one or (to the extent not inconsistent) more
of the following actions: (I) declare this Lease forfeited and the term ended;
or (ii) elect to continue this Lease in full force and effect, but with the
right at any time thereafter to declare this Lease forfeited and the term ended;
or (iii) declare Tenant's right to possession of the Premises to be terminated;
or (iv) exercise any other remedies or maintain any action permitted to
landlords pursuant to the laws of the State of North Carolina, or any other
applicable law. In such re-entry the Landlord may, without committing trespass,
have all persons and Tenant's personal property removed from the Premises.
Tenant hereby covenants in such event for itself and all others occupying the
Premises under Tenant; to peacefully yield up and surrender the Premises to the
Landlord. Should Landlord declare either (I) this Lease forfeited and the term
ended; (ii) the termination of Tenant's right to possession of the Premises;
then in any one such events, Landlord shall be entitled to recover from Tenant
the rental and all other sums due and owing by Tenant to the date of
termination, plus the costs of curing all of Tenant's defaults existing at or
prior to the date of termination, plus rental for the balance of the term under
this Lease less any rental obtained by Landlord on another Lease for the balance
of the term remaining under this Lease. Should Landlord, following default as
aforesaid, elect to continue this Lease in full force, Landlord shall use its
best efforts to rent the Premises by private negotiations, with or without
advertising, and on the best terms available for the remainder of the term
hereof, or for such longer or shorter period as Landlord shall deem advisable.
Tenant shall remain liable for payment of all rentals and other charges and
costs imposed on Tenant herein, in the amounts, at the times and upon the
conditions as herein provided, but Landlord shall credit against such liability
of the Tenant all amounts received by Landlord from such re-letting after first
reimbursing itself for all costs incurred in curing Tenant's defaults and
re-entering, preparing and refinishing the Premises for re-letting, and the
Premises, and for the payment of any procurement fee and commission paid to
obtain another tenant, and for all attorney fees and legal costs incurred by
Landlord.
AS USED IN THIS LEASE THE TERM "ATTORNEY'S FEES" OR "REASONABLE ATTORNEY'S FEES"
SHALL MEAN ACTUAL FEES INCURRED AT CUSTOMARY HOURLY RATES NOTWITHSTANDING ANY
STATUTORY PRESUMPTION.
38. RE-ENTRY BY LANDLORD: No re-entry by Landlord or any action brought by
Landlord to oust Tenant from the premises shall operate to terminate this Lease
unless Landlord shall give written notice of termination to Tenant, in which
event Tenant's liability shall be as above provided. No right or remedy granted
to Landlord herein is intended to be exclusive of any other right or remedy, and
each and every right and remedy herein provided shall be cumulative and in
addition to any other right or remedy hereunder or now or hereafter existing in
law or equity or by statute. In the event of termination of this Lease, Tenant
waives any and all rights to redeem the Premises either given by any statute now
in effect or hereafter enacted.
39. WAIVER OF RIGHTS: No waiver by Landlord of any provision hereof shall be
deemed to be a waiver of any other provision hereof or of any subsequent breach
by Tenant of the same or any other provision. Landlord's consent to or approval
of any act shall not be deemed to render unnecessary the obtaining of Landlord's
consent to or approval of any subsequent act by Tenant. The acceptance of rent
hereunder by Landlord shall not be a waiver of any preceding breach by Tenant of
any provision hereof other than the failure of Tenant to pay the particular rent
as accepted regardless of Landlord's knowledge of said preceding breach at the
time of acceptance of such rent.
<PAGE> 13
41. NOTICES: All notices provided for herein shall be in writing and shall be
deemed to have been given when deposited in he United States mails, postage
fully prepaid, and directed to the parties hereto at their respective addresses
given below:
Landlord: HIGHWOODS/FORSYTH LIMITED PARTNERSHIP
380 Knollwood Street, Suite 430
Winston-Salem, North Carolina 27103
Tenant: R.F. MICRO DEVICES, INC.
7914 PIEDMONT TRIAD PARKWAY
GREENSBORO, NORTH CAROLINA 27409
Either party may, in addition, deliver written notice by hand delivery.
Further, the parties hereto may give or receive notice by or from their
respective attorneys and may, by like notice, designate a new address to which
subsequent notice shall be directed.
42. COMPLIANCE WITH LAWS: In addition to other provisions herein, Tenant shall
promptly execute and comply with all laws, ordinances, rules, regulations and
requirements of any or all federal, state and municipal authorities having
jurisdiction over the manner in which the Tenant's business is conducted, but
only insofar as these laws, ordinances, rules and regulations and requirements
are violated by the conduct of Tenant's business.
43. RULES AND REGULATIONS: Tenant, its agents, servants and invitees shall
observe faithfully and comply strictly with the rules and regulations set forth
on the schedule designated BUILDING RULES AND REGULATIONS, attached hereto as
Exhibit "C" and by this reference made a part hereof. Landlord shall have the
right, from time to time, during the term of this Lease to make reasonable
changes in, and additions to, said rules and regulations, provided such changes
and additions do not unreasonably affect the conduct of Tenant's business in the
Premises. Any failure by Landlord to enforce any said rules and regulations now
or hereafter in effect, either against Tenant or any other tenant in the
Building, shall not constitute a waiver of such rules and regulations. The
defined words in this Lease, whenever used in said rules and regulations, shall
have the same meanings as herein.
<PAGE> 14
44. HAZARDOUS WASTE: AS USED IN THIS AGREEMENT, "HAZARDOUS MATERIALS" SHALL MEAN
ANY HAZARDOUS OR TOXIC SUBSTANCE, MATERIAL, WATER, OR SIMILAR TERM WHICH IS
REGULATED BY LOCAL AUTHORITIES, THE STATE OF NORTH CAROLINA OR THE UNITED STATES
OF AMERICA, INCLUDING, BUT NOT LIMITED TO, ANY MATERIAL, SUBSTANCE, WASTE OR
SIMILAR TERM WHICH IS (I) DEFINED AS A HAZARDOUS MATERIAL UNDER THE LAWS OF THE
STATE OF NORTH CAROLINA; (II) DEFINED AS A HAZARDOUS SUBSTANCE UNDER SECTION 311
OF THE FEDERAL WATER POLLUTION CONTROL ACT (33 U.S.C. SECTION 1317); (III)
DEFINED AS A HAZARDOUS WASTER UNDER SECTION 1004 OF THE FEDERAL RESOURCE
CONSERVATION AND RECOVERY ACT (42 U.S.C. SECTION 6901 ET SEQ.); (IV) DEFINED AS
A HAZARDOUS WASTE SUBSTANCE UNDER SECTION 101 OF THE COMPREHENSIVE ENVIRONMENTAL
RESPONSE, COMPENSATION AND LIABILITY ACT, (42 U.S.C. SECTION 9601 ET SEQ.); (V)
DEFINED AS A HAZARDOUS WASTE OR TOXIC SUBSTANCE, WASTE, MATERIAL OR SIMILAR TERM
IN RULES AND REGULATIONS, AS AMENDED FROM TIME TO TIME, WHICH ARE ADOPTED BY ANY
ADMINISTRATIVE AGENCY INCLUDING, BUT NOT LIMITED TO, THE ENVIRONMENTAL
PROTECTION AGENCY, THE OCCUPATIONAL SAFETY AND HEALTH ADMINISTRATION, AND ANY
SUCH SIMILAR LOCAL, STATE OR FEDERAL AGENCY HAVING JURISDICTION OVER THE
PREMISES WHETHER OR NOT SUCH RULES AND REGULATIONS HAVE THE FORCE OF LAW; (VI)
DEFINED AS A HAZARDOUS OR TOXIC WASTE, SUBSTANCE, MATERIAL OR SIMILAR TERM IN
ANY STATUTE, REGULATION, RULE OR LAW ENACTED OR ADOPTED AT ANY TIME AFTER THE
DATE OF THIS AGREEMENT BY LOCAL AUTHORITIES, THE STATE OF NORTH CAROLINA, OR THE
FEDERAL GOVERNMENT.
THE TENANT AGREES THAT ANY DISCHARGE FROM THE PREMISES OF ANY HAZARDOUS
MATERIAL SHALL COMPLY WITH APPLICABLE LAWS AND/OR PERMIT. TENANT SHALL
IMMEDIATELY NOTIFY THE LANDLORD OF ANY DISCHARGE THAT DOES NOT MATERIALLY COMPLY
WITH APPLICABLE LAWS AND/OR PERMITTED LEVELS.
THE TENANT SHALL PROMPTLY PAY, DISCHARGE, OR REMOVE ANY LIEN UPON THE
PREMISES RELATING TO THE PRESENCE OF ANY HAZARDOUS MATERIAL, AND SHALL INDEMNIFY
AND HOLD HARMLESS THE LANDLORD, FROM ANY AND ALL LOSS, DAMAGE OR EXPENSE
RESULTING FROM SUCH HAZARDOUS MATERIAL THAT EXISTS UPON OR IS DISCHARGES FROM
THE PREMISES IN VIOLATION OF LAW BY TENANT.
THIS INDEMNIFICATION OF LANDLORD BY TENANT INCLUDES, WITHOUT
LIMITATION, COSTS INCURRED IN CONNECTION WITH ANY INVESTIGATION OF SITE
CONDITIONS OR ANY CLEAN-UP, REMEDIAL, REMOVAL OR RESTORATION WORK REQUIRED BY
ANY FEDERAL, STATE OR LOCAL GOVERNMENTAL AGENCY OR POLITICAL SUBDIVISION BECAUSE
OF HAZARDOUS MATERIALS PRESENT IN THE SOIL OR GROUND WATER ON OR UNDER THE
PREMISES. WITHOUT LIMITING THE FOREGOING, IF THE PRESENCE OF ANY HAZARDOUS
MATERIAL ON THE PREMISES AND BUILDING CAUSED OR PERMITTED BY TENANT RESULTS IN
LEVELS OF HAZARDOUS MATERIALS, TENANT SHALL PROMPTLY TAKE ALL ACTIONS AT ITS
SOLE EXPENSE THAT ARE NECESSARY TO RETURN THE SAME TO THE CONDITION EXISTING
PRIOR TO THE INTRODUCTION OF ANY SUCH HAZARDOUS MATERIAL THERETO, PROVIDED THAT
LANDLORD'S APPROVAL OF SUCH ACTIONS SHALL FIRST BE OBTAINED, WHICH APPROVAL
SHALL NOT BE UNREASONABLY WITHHELD SO LONG AS SUCH ACTIONS WOULD NOT POTENTIALLY
HAVE ANY MATERIAL ADVERSE LONG-TERM OR SHORT-TERM EFFECT ON THE PREMISES AND
BUILDING. THE FOREGOING INDEMNITY SHALL SURVIVE THE EXPIRATION OR EARLIER
TERMINATION OF THIS LEASE. IF TENANT FAILS TO TAKE SUCH ACTION AND UNLESS
TENANT'S FAILURE IS DUE TO LANDLORD'S UNREASONABLY WITHHOLDING APPROVAL OF
TENANT'S ACTIONS, LANDLORD MAY TAKE ACTION AND LANDLORD SHALL BE ENTITLED TO
RECOVER FROM TENANT, UPON DEMAND IN WRITING, ALL COSTS OF SUCH ACTION. THIS
INDEMNIFICATION EXCLUDES ANY AND ALL ENVIRONMENTAL CONDITIONS THAT ARE CURRENTLY
PRESENT ON THE PREMISES.
45. SURRENDER: The Tenant shall surrender the Premises in good and clean
condition and repair, excepting only normal wear and tear and damage by fire or
other casualty damage covered by insurance and paid to Landlord. Tenant shall
not remain in the Premises without the benefit of a written Lease or renewal
agreement executed by the parties hereto prior to the expiration of the then
existing term. No other holding over of the Premises shall be allowed on any
basis whatsoever.
The delivery of keys or other such tender of possession of the Premises
to Landlord or to an employee of Landlord shall not operate as a termination of
this Lease or a surrender of the Premises.
Any pro-rated rent or damages in excess of the security deposit held
by Landlord shall be invoiced by Landlord and payable by Tenant within ten (10)
days from the date of invoice.
46. HOLDOVER: In the event Tenant remains in possession of the leased premises
after the expiration of the term of this Lease, without having first extended
this Lease by written agreement with Landlord, such holding over shall not be
construed as a renewal or extension of this Lease. Such holding over shall be
deemed to have created and be construed as tenancy from month to month,
terminable on 30 days notice in writing from either party to the other. The
monthly rental to be paid shall be 150% of the monthly rental payable during the
last month of the term of this Lease. All other terms and conditions of this
Lease shall continue to be applicable for both Landlord and Tenant.
If Tenant fails to surrender the Premises to Landlord on expiration of
the term as required by this Section, Tenant shall hold Landlord harmless from
all damages resulting from Tenant's failure to surrender the Premises, including
without limitation, claims made by the succeeding Tenant resulting from Tenant's
failure to surrender the Premises.
<PAGE> 15
47. LIENS: If Tenant shall cause any material to be furnished to the Premises or
labor to be performed thereon or therein, Landlord shall not under any
circumstances be liable for the payment of any expenses incurred or for the
value of any work done or material furnished. All such work shall be at Tenant's
expense and Tenant shall be solely and wholly responsible to all contractors,
laborers, and materialmen furnishing labor and material to the Premises. Nothing
herein shall authorize the Tenant or any person dealing through, with or under
Tenant to charge the Premises or any interest of the Landlord therein or this
Lease with any mechanic's liens or other liens or encumbrances whatsoever. On
the contrary, (and notice is hereby given) the right and power to charge any
lien or encumbrance of any kind against the Landlord or its estate is hereby
expressly denied.
48. BENEFITS, BURDENS AND ENTIRE AGREEMENT: This Lease is binding on and
benefits the parties hereto and their respective heirs, legal representatives,
successors, nominees and assigns. Liability hereunder shall be joint and several
upon all who sign this agreement. Throughout this agreement the masculine gender
shall be deemed to include the feminine, the feminine the masculine, the
singular the plural and the plural the singular.
This Lease contains the entire agreement between the parties hereto
with respect to the Premises leased hereunder; further, this Lease may not be
modified, altered or amended except by an instrument in writing, executed by the
parties hereto or their respective heirs, legal representatives, successors,
nominees or assigns and which instrument shall be attached hereto as an
amendment to this Lease and shall thereby become a part hereof.
49. ATTORNEY'S FEES: If either Landlord or Tenant files an action to enforce any
agreement contained in this Lease, or for breach of any covenant or condition,
the prevailing party in any such action, or the party settling to its benefit,
shall be reimbursed by the other party for reasonable attorneys' fees in the
action.
In the event Landlord refers a default by Tenant to an attorney for
collection and a suit is not filed, Tenant agrees to pay reasonable attorney
fees if action is not filed thereunder.
50. GOVERNING LAW: This Lease shall be governed by and construed under the laws
of the State of North Carolina.
51. ESTOPPEL CERTIFICATES: Tenant shall execute and deliver to Landlord, upon
its occupancy of the Premises, a certificate/statement provided by Landlord,
certifying that this Lease is unmodified and in full force and effect and other
factual data relating to the Lease or the Premises which Landlord may reasonably
request. Furthermore, Tenant may be required, from time to time during the term
of the Lease, to execute and deliver to Landlord a certificate/statement for
purposes of refinancing, syndication, sale of property, etc. In such event,
Tenant shall have ten (10) days from its receipt thereof from Landlord to
execute and deliver such fully executed certificate/statement to Landlord.
Tenant's failure to execute said certificate shall constitute a default
hereunder. DURING THE TERM OF THIS LEASE, THE LANDLORD WILL, UPON WRITTEN
REQUEST BY TENANT, PROVIDE TENANT WITH SIMILAR ESTOPPEL CERTIFICATES AS
DESCRIBED ABOVE.
52. BROKERAGE FEES: Landlord and Tenant represent to each other that no broker
other than JOE DOUGLAS WITH COLDWELL BANKER - COMMERCIAL has represented either
party in respect to this transaction and that a brokerage fee of 4.00% ON THE
FIRST TEN (10) YEARS OF THE LEASE TERM shall be paid to Broker by Landlord.
53. CHRONIC DEFAULTS: Tenant will be in "Chronic Default" under this Lease if
Tenant commits a default (either a Monetary or Non-Monetary Default) during any
365-day period in which any of the following combinations of default has already
occurred (even though said defaults may have been timely cured):
(1) Two Monetary Defaults; or
(2) Three Non-Monetary Defaults; or
(3) One Monetary Default and two Non-Monetary Defaults
(a) Remedies. If Tenant is in Chronic Default, Landlord may immediately
exercise any or all remedies available under this Lease or at law or in equity,
all without giving Tenant any notice or an opportunity to cure the last default
causing Tenant's Chronic Default (notwithstanding any notice and cure provision
or other lease provision to the contrary).
(b) Definitions. For the purpose of this Section, (1) a Monetary
Default occurs if Tenant fails to pay any sum of money when due (including, but
not limited to, Base Rent, Additional Rent, Percentage Rent, Escalation Rent,
Common Area Maintenance Charges, Utility Charges, Pass-thru Expenses, or other
Rent); (2) a Non-Monetary Default occurs if Tenant fails to perform any of its
obligations under this Lease other than the timely payment of money.
54. EVIDENCE OF AUTHORITY: If requested by Landlord, Tenant shall furnish
appropriate legal documentation evidencing the valid existence and good standing
of Tenant and the authority of any parties signing this Lease to act for Tenant.
If Tenant signs as a corporation, each of the persons executing this Lease on
behalf of Tenant does hereby covenant and warrant that Tenant is a duly
authorized and existing corporation, that Tenant has and is qualified to do
business in North Carolina, that the corporation has full right and authority to
enter into this Lease and that each of the persons signing on behalf of the
corporation is authorized to do so.
<PAGE> 16
55. LEASE REVIEW; DATE OF EXECUTION: The submission of this Lease to Tenant for
review does not constitute a reservation of or option for the Premises, and this
Lease shall become effective as a contract only upon execution and delivery by
both Landlord and Tenant. The date of execution shall be entered on the top of
the first page of this Lease by Landlord, and shall be the date on which the
last party signed the Lease, or as otherwise may be specifically agreed by both
parties. Such date, once inserted, shall be established as the final date of
ratification by all parties to this Lease, and shall be the date for use
throughout this Lease as the "date of execution" or "execution date".
56. OPTION TO RENEW: PROVIDED TENANT IS NOT IN DEFAULT HEREUNDER, TENANT SHALL
HAVE AN OPTION TO RENEW THIS LEASE FOR TWO (2) PERIODS OF TEN (10) YEARS. THE
RENTAL RATE WILL BE ADJUSTED FOR CHANGES IN THE CONSUMER PRICE INDEX DURING THE
PRECEDING FIFTEEN (15) YEAR PERIOD. THE RENTAL RATE FOR THE INITIAL YEAR OF THE
RENEWAL TERM WILL BE THE BASIS FOR ALL FUTURE CONSUMER PRICE INDEX ADJUSTMENTS.
RENT SHALL BE ADJUSTED IN SAME MANNER AS DESCRIBED IN THIS LEASE ON THE 16TH,
18TH, 20TH, 22ND, 24TH, 26TH, 28TH, 30TH, 32ND, AND 34TH ANNIVERSARIES OF THE
COMMENCEMENT DATE. TENANT SHALL PROVIDE LANDLORD SIX (6) MONTH PRIOR WRITTEN
NOTICE OF ITS INTENT TO RENEW THE LEASE.
57. TENANT IMPROVEMENTS: TENANT AGREES TO LEASE THE BUILDING FROM "SHELL"
CONDITION. LANDLORD WILL NOT PROVIDE ANY FUNDS FOR IMPROVEMENTS OF ANY KIND TO
THE LEASED SPACE.
58. FIRST RIGHT OF REFUSAL: PROVIDED TENANT IS NOT IN DEFAULT HEREUNDER, TENANT
SHALL HAVE A FIRST RIGHT OF REFUSAL ON ALL CONTIGUOUS SPACE. TENANT SHALL HAVE
FIVE (5) BUSINESS DAYS TO RESPOND IN WRITING AFTER NOTICE OF THIRD PARTY
INTEREST HAS BEEN GIVEN. TENANT'S FAILURE TO LEASE THE SPACE WITHIN FIVE (5)
BUSINESS DAYS AS SPECIFIED SHALL NULLIFY ALL OF TENANT'S RIGHTS CONTAINED
HEREIN.
59. BEGINNING MARCH 1, 2000 THROUGH AUGUST 31, 2000, TENANT SHALL BE REQUIRED TO
PAY RENT ON 60,000 SQUARE FEET OF THE PREMISES WHILE OCCUPYING THE ENTIRE
BUILDING (120,000 SQUARE FEET).
<PAGE> 17
IN WITNESS WHEREOF, the parties hereto have executed this Lease
Agreement or have caused their duly authorized representatives to execute same
in two (2) original counterparts, as of the day and year first above written.
LANDLORD:
HIGHWOODS/FORSYTH LIMITED PARTNERSHIP, a North
Carolina Limited Partnership
By: Highwoods Properties, Inc., General Partner
Attest:
By:
- - ---------------------------- -------------------------------------------
Secretary _________ President
(Corporate Seal)
TENANT:
R.F. MICRO DEVICES, INC., A NORTH CAROLINA
CORPORATION
Attest:
By:
- - ---------------------------- ------------------------------------------
Secretary ________ President
(Corporate Seal)
<PAGE> 18
STATE OF NORTH CAROLINA )
) ACKNOWLEDGMENT
COUNTY OF FORSYTH )
I, __________________________________________, a Notary Public for the
aforesaid State and County, do hereby certify that JULIE K. GOCO (name of
Secretary) personally came before me this day and acknowledged to me that she is
the Assistant Secretary of HIGHWOODS PROPERTIES, INC., a North Carolina
Corporation, and that by authority duly given and as an act of the corporation,
the foregoing instrument was signed in its name by JOHN O. DUNN, III (name of
President), its VICE President, sealed with its corporate seal, and attested to
by JULIE K. Goco (name of Secretary), its Assistant Secretary.
Witness my hand and official seal or stamp, this the __________ day of
____________________, 199__.
My Commission Expires:
----------- -----------------------------------
Notary Public
- - --------------------------------------------------------------------------------
STATE OF ___________________ )
) ACKNOWLEDGMENT
COUNTY OF _________________ )
I, __________________________________________, a Notary Public for the
aforesaid State and County, do hereby certify that
______________________________________ (name of Secretary) personally came
before me this day and acknowledged to me that she/he is the ____________
Secretary of R.F. MICRO DEVICES, INC., A NORTH CAROLINA CORPORATION, and that by
authority duly given and as an act of the corporation, the foregoing instrument
was signed in its name by ____________________________________ (name of
President), its __________ President, sealed with its corporate seal, and
attested to by __________________________________ (name of Secretary), its
__________ Secretary.
Witness my hand and official seal or stamp, this the __________ day of
__________________, 199__.
My Commission Expires:
----------- -----------------------------------
Notary Public
<PAGE> 19
EXHIBIT "A"
LEGAL DESCRIPTION
TO BE ATTACHED
<PAGE> 20
EXHIBIT "B"
FLOOR PLAN
TO BE ATTACHED
<PAGE> 21
EXHIBIT "C"
BUILDING RULES & REGULATIONS
1. Tenant shall not do or permit anything to be done in the Premises or in the
Building which will in any way increase the rate payable, or violate any
provision, in respect of any policy of fire insurance on the Building or
Landlord's property therein; obstruct or interfere with the rights of other
tenants, or unreasonably injure or annoy them; use the Premises as sleeping
apartments; engage in or permit games of chance or any form of gambling or
immoral conduct in or about the Premises; fasten any article, drill holes,
drive nails or screws into walls, floors, doors or partitions; leave
Premises unoccupied without locking all doors, extinguishing lights and
turning off all water outlets; encumber or obstruct or deposit rubbish and
similar substances in the parking and loading areas, sidewalks or entrance
areas; bring or keep any animals, or flammable, combustible or explosive
substances, to or in the Building; violate security procedures established
by Landlord, or in any way create a nuisance.
2. Tenant shall not use the Premises or the Building for any purpose that will
damage the Premises or the Building, or the reputation thereof, or for any
purposes other than those specified in the Lease.
3. Canvassing, soliciting and peddling in and about the Building are
prohibited, and Tenant shall cooperate to prevent such activities.
4. Tenant shall not install or use in the Building and air conditioning unit,
engine, boiler, generator, machinery, heating unit, stove, water cooler,
ventilator, radiator or any other similar apparatus which will require the
use of electrical current or water without the prior written consent of
Landlord, and then only as Landlord may direct.
5. Tenant shall not use in the Building any machine, other than standard
office machines such as typewriters, calculators, copying machines and
similar machines, without the prior written approval of Landlord. All
office equipment and any other device of any electrical or mechanical
nature shall be placed by Tenant in the Premises in settings approved by
Landlord, so as to absorb or prevent any vibration, noise or annoyance.
Tenant shall not cause improper noises, vibrations or odors within the
Building.
6. Tenant shall not place a load on any floor in the Premises exceeding the
floor load limit which such floor was designed to carry, nor shall Tenant
install, operate or maintain in the Premises any heavy item or equipment
except in such manner as to achieve a proper distribution of weight.
7. Tenant shall not use scotch tape or other adhesive material for the
purposes of hanging items on the interior walls of the Premises.
8. Tenant shall not deposit any trash, refuse, cigarettes, or other substances
of any kind out of the Building, except in the refuse containers provided
therefor. In addition, if Tenant shall place or allow or cause to be placed
in the garbage dumpsters excess trash or refuse, such as boxes or cartons,
which would necessitate an additional pick-up for such garbage dumpsters,
the Tenant shall be responsible for such additional pick-up at its sole
cost and expense. Tenant shall exercise its best efforts to keep the
sidewalks, entrances in and about the Building clean and free from rubbish.
The outside areas immediately adjoining the Premises shall be kept clean
and free from snow, ice, dirt and rubbish by Tenant, and Tenant shall not
place, suffer or permit any obstruction or storage or display of goods in
such areas.
9. Tenant shall not use the washrooms, rest rooms and plumbing fixtures of the
Building, and appurtenances thereto, for any other purpose than the
purposes for which they were constructed, and Tenant shall not deposit any
sweepings, rubbish, rags or other improper substances therein. Tenant shall
not waste water by interfering or tampering with the faucets or otherwise.
If Tenant or Tenant's servants, employees, agents, contractor, jobbers,
licensees, invitees, guests or visitors cause any damage to such washrooms,
rest rooms, plumbing fixtures or appurtenances, such damage shall be
repaired at Tenant's expense, and Landlord shall not be responsible
therefor.
10. Landlord shall have the right to prohibit any publicity, advertising or use
of the name of the Building by Tenant which, in Landlord's opinion, tends
to impair the reputation of the Building or its desirability as a building
for offices, and upon written notice from Landlord, Tenant shall refrain
from or discontinue any such publicity, advertising or use of the Building
name.
11. The sashes, sash doors, skylights, windows and doors that reflect or admit
light or air into the leased area shall not be covered or obstructed by
Tenant without Landlord's prior written approval. Tenant hereby agrees to
keep the Premises at a temperature sufficiently high to prevent freezing of
water pipes and fixtures.
12. No radio or television aerial or other devise shall be erected on the roof
or exterior walls to the Premises or Building in which the Premises are
located without first obtaining in each instance the Landlord's consent in
writing. Any aerial or devise installed without written consent shall be
subject to removal by Landlord at Tenant's expense without notice at any
time. No radio, phonograph or similar devise shall be used in a manner so
as to be heard or seen outside the Premises.
13. Tenant, upon the termination of its lease, shall deliver to Landlord all
keys to doors in the Building. In the event of the loss of any key, it
shall be the sole responsibility and expense of Tenant to have the locks to
the Premises re-keyed or additional locks installed.
14. In the event Landlord provides a VIM Postal Unit, keys for such unit will
be distributed at the time of occupancy. Landlord however, will not be
responsible for: (a) the replacement of lost or damaged keys or issuance of
extra keys; (b) incorrect distribution of mail; (c) delivery schedules of
mail; or (d) mail delivery to door.
15. Tenant shall have cleaned, at its expense, not less than semiannually, the
carpet that has been provided by the Landlord for Tenant's use.
16. These Rules and Regulations are in addition to, and shall not be construed
to in any way modify or amend, in whole or in part, the agreements,
covenants, conditions and provisions of any lease of premises in the
Building.
<PAGE> 22
EXHIBIT "D"
INSURANCE REQUIREMENTS
As referenced in Section 21 herein, an insurance certificate must be provided to
Landlord within thirty (30) days of execution of this Lease showing those
coverages specified. The following information must be incorporated on all
certificates:
1) Tenant's specific leased property address;
2) Thirty (30) day cancellation notice to Landlord; and
3) Highwoods/Forsyth Limited Partnership (Landlord) specifically named as
CERTIFICATE HOLDER AND ADDITIONAL INSURED.
<PAGE> 23
EXHIBIT "E"
PARKING RULES & REGULATIONS
Tenant shall be entitled to park in common with other tenants of
Landlord on the parking areas located adjacent to the Building(s) within which
the Premises are located. Tenant agrees not to overburden such parking
facilities and agrees to cooperate with Landlord and other tenants in the use of
such parking facilities. Landlord reserves the right, in its reasonable
discretion, to determine whether parking facilities are being overburdened and,
in such event, to allocate parking spaces among Tenant and other tenants or
restrict the number of vehicles which may be parked thereon.
Parking as used herein means the use by Tenant's employees, its
visitors, invitees and customers of those portions of the parking area designed
by Landlord for the parking of motor vehicles in connection with use of and/or
visits to the Premises. There will be no assigned parking unless elected by the
Landlord in specific instances. Tenant agrees and covenants to park all trucks,
trailers or other commercial vehicles in the parking spaces at the rear of the
Building(s) within which the Premises are located or where otherwise designated
by Landlord. No vehicle, equipment or machinery may be repaired, serviced,
cleaned, steam cleaned, lubricated, sandblasted, painted or otherwise maintained
in any parking areas, roadways or service areas adjacent to or surrounding the
Building(s) in which the Premises are located, or anywhere within the parking
area. Any vehicle belonging to Tenant, or Tenant's employees, agents,
subcontractors, contractors, licensees, invitees or visitors abandoned (72 hours
without movement constitutes abandonment) or disabled or in a state of
non-operation or disrepair shall not be permitted anywhere in the parking area
and will be considered as trespassing on same, and subject to removal therefrom
by Landlord, and all cost resulting therefrom, including towing, and if
necessary, storage charges, shall be paid by Tenant to Landlord upon demand.
Tenant hereby agrees to enforce said restriction with respect to Tenant's own
vehicles and those of Tenant's employees, agents, visitors, contractors and
subcontractors, licensees and invitees. Should the Landlord determine that a
violation of this restriction has occurred, the vehicle, equipment, trailer or
machinery shall be deemed abandoned or in trespass and may be removed from the
parking area and all costs thereof shall be the obligation of the Tenant. Should
the Landlord be required to pay any towing, removal or storage charges, said
expenses or obligations shall become the debt of the identified Tenant under
this Lease and shall be reimbursed to the Landlord as additional rent when
invoiced. Landlord accepts no responsibility for theft, collision, vandalism,
fire, acts of God or any other casualty of vehicles or equipment parked or
stored in the parking area or for removal required as set forth in this
paragraph while the vehicle or equipment is under tow or otherwise stored.
Notwithstanding the foregoing, Landlord shall not be responsible to the Tenant
for the nonperformance by any other tenant to any parking rule, and Landlord
shall not be required to police said parking area or to remove vehicles or to
stop any nonconforming use.
<PAGE> 1
EXHIBIT 10.2
LICENSE AGREEMENT
BY AND BETWEEN
TRW SPACE & ELECTRONICS GROUP
ONE SPACE PARK
REDONDO BEACH, CALIFORNIA 90278
AND
RF MICRO DEVICES, INC.
7625 THORNDIKE ROAD
GREENSBORO, NORTH CAROLINA 27409
<PAGE> 2
TRW/RF Micro Devices
License Agreement
November 15, 1999
LICENSE AGREEMENT
THIS AGREEMENT, made and entered into as the 15th day of
November, 1999 by and between the Space & Electronics Group of TRW Inc., an Ohio
corporation, having offices at One Space Park, Redondo Beach, California 90278
(hereinafter "Licensor") and RF Micro Devices, Inc., a North Carolina
corporation, having offices at 7625 Thorndike Road, Greensboro, North Carolina
27410 (hereinafter "Licensee").
WHEREAS, Licensor has developed, designed and manufactured certain
kinds of gallium arsenide heterojunction bipolar transistors, and possesses
patents rights and technical information and know-how relating thereto; and
WHEREAS, Licensee has an existing license from Licensor to design,
manufacture and sell GaAs heterojunction bipolar transistors and products
incorporating such GaAs heterojunction bipolar transistors under Licensor's
patent rights and to receive technical assistance relating thereto in certain
specified fields of use; and
WHEREAS, Licensee desires to obtain from Licensor an additional license
under Licensor's patent rights and technical information relating to such GaAs
heterojunction bipolar transistors for further specified fields of use; and
WHEREAS, Licensor is willing to grant such license for additional
specified fields of use.
THEREFORE, in consideration of the mutual promises herein contained and
the mutual benefits to be derived therefrom, Licensor and Licensee agree as
follows:
ARTICLE 1
DEFINITIONS
The following words and phrases shall have the meanings set forth below
unless the context requires a different meaning:
-2-
<PAGE> 3
TRW/RF Micro Devices
License Agreement
November 15, 1999
1.1 AGREEMENT: This Agreement.
1.2 COMMERCIAL: Involving the transfer or sale of products where the
transaction does not require qualification of the product to relevant
specifications in, for example, mil-m-38510, mil-std-883, mil-i-38534,
mil-i-38535 or similar specifications and subsequent versions issued by any
agency of the United States government.
1.3 EFFECTIVE DATE: November 15, 1999.
1.4 EXISTING AGREEMENT: The License and Technical Assistance Agreement
between Licensor and Licensee dated June 6, 1996 related to the Licensor's HBT
and molecular beam epitaxy processes.
1.5 EXISTING TRW GAAS HBT PATENT RIGHTS: Licensor's presently existing
patents and filed patent applications, and any patent and patent applications
filed by Licensor after the Effective Date to protect inventions relating to
GaAs HBTs conceived or first actually reduced to practice prior to the Effective
Date, and any United States and foreign patents which issue from any
continuations, continuations-in-part, divisionals or substitutions thereof, and
all extensions, reexaminations, renewals and reissues therefrom, and all rights
to bring an action against any person to recover damages or profits resulting
from infringement of the foregoing.
1.6 FUTURE TRW GAAS HBT PATENT RIGHTS: Licensor's United States and
foreign patents and patent applications filed by Licensor to protect inventions
relating to GaAs HBTs conceived subsequent to the Effective Date, and any United
States and foreign patents which issue from any continuations,
continuations-in-part, divisionals or substitutions thereof, and all extensions,
reexaminations, renewals and reissues therefrom, and all rights to bring an
action against any person to recover damages or profits resulting from
infringement of the foregoing.
1.7 GAAS HBT: A heterojunction bipolar transistor having a base,
emitter and collector formed on a substrate of gallium arsenide, and the
manufacturing process utilized for forming such transistors on the gallium
arsenide substrate.
-3-
<PAGE> 4
TRW/RF Micro Devices
License Agreement
November 15, 1999
1.8 HBT TECHNICAL INFORMATION: All documentation, know-how, software or
other information of Licensor relating to Licensor's GaAs HBT, whether or not it
is considered proprietary or a trade secret by Licensor including, without
limitation, data and information contained in reports, documents, computer
programs, drawings and graphs, schematics, manuals, files and notes in any
medium or representation, electronic or otherwise
1.9 LICENSED FIELD: The design, development, manufacture, use, testing,
sale, marketing, service, and repair of Licensed Products, including the sale of
spare parts for or spare complete Licensed Products by Licensee, for Commercial
customers for the generation, transmission, reception, conversion, tuning or
other conditioning of voice, data or other information via coaxial cable,
twisted pair, or other wired or combination wireless and wired transmission
systems but only if the wireless transmission system operates on signals having
a frequency of less than ten (10) gigahertz. The term specifically excludes,
without limitation, the design, development, manufacture, use, testing, sale,
marketing, service and repair of Licensed Products for use in fiber optic
transmission systems.
1.10 LICENSED PRODUCTS: Any GaAs HBT products where the emitter of the
GaAs HBT has a width of between One (1) and Three (3) microns inclusive.
1.11 PATENT RIGHTS: Existing TRW GaAs HBT Patent Rights and Future TRW
GaAs HBT Patent Rights.
1.12 TRANSFER: any mortgage, pledge, transfer, sale, assignment or
other disposition, whether voluntary, by operation of law (including by merger)
or otherwise, of a party's rights hereunder.
ARTICLE 2
LICENSE
2.1 LICENSE: Licensor hereby grants to Licensee, subject to the terms
and conditions of this Agreement, a fully paid up, royalty free worldwide right
and license under Existing TRW GaAs HBT Patent Rights, Future TRW GaAs HBT
Patent Rights and to HBT Technical Information to design, develop, manufacture,
use, test, sell, market, service, and repair Licensed Products in the Licensed
Field.
-4-
<PAGE> 5
TRW/RF Micro Devices
License Agreement
November 15, 1999
2.1.1 The license granted in this Section 2.1 shall be a
non-exclusive license for Licensed Products in the Licensed Field.
2.1.2 The license granted in this Section 2.1 shall be
perpetual, subject to the provisions of Article 8 relating to
termination and Article 11 relating to default of this Agreement.
2.1.3 The license granted in this Section 2.1 is effective as
of the Effective Date.
2.1.4 Licensee shall have the right to assign the licenses to
utilize Existing TRW GaAs HBT Patent Rights, Future TRW HBT Patent
Rights and HBT Technical Information granted in this Section 2.1 to
responsible parties, but only in accordance with the provisions of
Article 13 herein.
2.1.5 Licensee shall not have the right to grant sublicenses
under the licenses to utilize Existing TRW GaAs HBT Patent Rights,
Future TRW HBT Patent Rights and HBT Technical Information granted in
this Section 2.1
2.1.6 The license granted in this Section 2.1 to utilize HBT
Technical Information in the Licensed Field is a continuing license
that extends automatically without any further action on the part of
Licensor or Licensee to (i) any modification, update, change or other
improvement to the HBT Technical Information that is made by Licensor
after the Effective Date; and (ii) any discovery, development or other
invention made by Licensor after the Effective Date that constitutes
new HBT Technical Information.
2.2 FUTURE TECHNOLOGIES: Except for the Future TRW GaAs HBT Patent
Rights, or as specified in Section 2.1.6, rights and licenses to future TRW
technologies applicable to the Licensed Products are not granted to Licensee by
this Agreement. Commencing on the Effective Date and continuing until ten (10)
years from the Effective Date, rights and licenses to the Patent Rights, the HBT
Technical Information, and other TRW future technologies applicable to the
Licensed Products not granted to Licensee by this Agreement or the Existing
Agreement shall be offered to Licensee by Licensor on the following terms and
conditions:
-5-
<PAGE> 6
TRW/RF Micro Devices
License Agreement
November 15, 1999
2.2.1 Licensor shall deliver a notice to Licensee stating its
bona fide intention to grant rights and/or licensees to a third party
for technologies applicable to the Licensed Products, and identify the
specific technology it desires to license (the "Offered Technology")
and the terms and conditions by which it proposes to license the
Offered Technology.
2.2.2 Within forty-five (45) days after the date of such
notice, Licensee shall inform Licensor whether or not it is willing to
license the Offered Technology upon the same terms and conditions which
Licensor proposes to license the Offered Technology to the third party.
If Licensor has not received Licensee's decision by the end of the
forty-five (45) day period, it will be deemed that Licensee has decided
not to license the Offered Technology.
2.2.3 If Licensee does not elect to license the Offered
Technology in accordance with Section 2.2.2, Licensor may license the
Offered Technology to any third party upon terms which in their
entirety are no more favorable to the prospective third party than
those specified to Licensee, provided that the license is consummated
within ninety (90) days of the date of the notice to Licensee. Licensor
may, at its discretion, alter the final terms of the license to the
third party from those notified to Licensee such that, though
individual terms may be more favorable to the third party, the overall
license terms and conditions are in their entirety no more favorable to
the third party than those notified. If the final terms and conditions
are, in their entirety, considered to be more favorable to the third
party than those notified to Licensee, then Licensor must offer those
terms to Licensee in accordance with Section 2.2.2, and Licensee shall
have forty-five (45) days to elect to license the Offered Technology.
2.2.4 All obligations to grant licenses to future TRW
technologies under this Section 2.2 shall terminate ten (10) years from
the Effective Date.
2.2.5 Licensor's obligation to notify Licensee of proposed
licenses under Section 2.2.1 herein, and Licensee's opportunity to
license specified in Section 2.2.2 herein, are not applicable to
-6-
<PAGE> 7
TRW/RF Micro Devices
License Agreement
November 15, 1999
licenses proposed to be granted by Licensor to its affiliated
companies.
2.3 EXCLUSION: Except as otherwise provided in this Agreement, the
license and rights granted hereunder shall not be interpreted as granting or
implying the grant of rights in any other invention or technical information of
either party.
2.4 MARKINGS: To the extent practical, Licensee shall provide on any
Licensed Product or component parts thereof manufactured, used or sold utilizing
any of the rights or licenses granted under this Agreement, or on the packaging
or data sheets related thereto so long as the marking is in accordance with
applicable marking provisions of United States or foreign patent laws, a legible
notice that such Licensed Product or component part is manufactured under a
license granted by Licensor. Licensee shall submit to Licensor prior to marking
any Licensed Product or component part thereof the full copy of such proposed
marking for written approval by Licensor, which approval will not be
unreasonably withheld and will be deemed given unless Licensor responds to the
contrary within ten (10) business days of such submission. No rights are granted
hereunder by either party to the other regarding their respective trade names or
trademarks.
2.5 LICENSOR RESERVATIONS: Licensor reserves unto itself the rights to
utilize Existing TRW GaAs HBT Patent Rights, Future TRW GaAs HBT Patent Rights,
and HBT Technical Information to manufacture, have manufactured, use, test,
sell, service, and repair Licensed Products in the Licensed Field and to grant
sublicenses to other parties to do so, subject to the provisions of Section 2.2.
2.6 MAINTENANCE OF PATENTS: Licensor shall retain the right to manage
and control the prosecution and maintenance of patent applications and patents
included in the Patent Rights on the basis provided in the Existing Agreement.
2.7 ENFORCEMENT OF PATENT RIGHTS:
2.7.1 If either party hereto learns at any time of any
infringement or threatened infringement by any other person of any
enforceable Patent Rights owned by or licensed to the other party
-7-
<PAGE> 8
TRW/RF Micro Devices
License Agreement
November 15, 1999
after the Effective Date, that party shall give notice of that
infringement or threatened infringement to the other party. The parties
shall then consult together as to the best course of action to pursue
in response to such potential infringement, but neither party shall be
obligated to institute legal action at its own expense. A good faith
failure by one party to provide such notice to the other party shall
not be deemed a breach of this Agreement and shall not give rise to a
right of action by other party.
2.7.2 In the event that the parties do not reach an agreement
as contemplated by Section 2.7.1 hereof as to the best course of action
to pursue with respect to a potential infringement (i) Licensor shall
have the right, but not the obligation, to institute legal action,
through counsel of its own choosing and at its sole expense, to
restrain any infringement or threatened infringement, or to recover
damages therefor, of its enforceable Patent Rights, and (ii) Licensee
shall have the right, but not the obligation, to institute legal
action, through counsel of its own choosing and at its sole expense, to
restrain any infringement or threatened infringement, or to recover
damages therefor, of its enforceable Patent Rights in the Licensed
Field. The party that bears the expenses of pursuing legal action
against a third party infringer shall be entitled to any damages, lost
profits or other monies recovered by judgment, decree, settlement,
arbitration or otherwise, resulting from such legal action.
2.7.3 In the event that one party elects to institute legal
action against a third party infringer, the other party shall fully
cooperate in the prosecution of such action including joining as a
party in suit when necessary to acquire standing to institute legal
action pursuant to this Section 2.7; provided, however, that such other
party shall be reimbursed for all reasonable out-of-pocket expenses
incurred in providing such cooperation including its reasonable legal
fees and expenses. The electing party shall reimburse the other party
for all such expenses within thirty (30) days after its receipt of an
invoice from the other party that describes such expenses in reasonable
detail, with supporting documentation as appropriate.
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TRW/RF Micro Devices
License Agreement
November 15, 1999
ARTICLE 3
HBT TECHNICAL INFORMATION
3.1 HBT TECHNICAL INFORMATION: Licensor shall not be obligated to
reduce to a tangible medium of expression any HBT Technical Information.
3.2 DELIVERY OF HBT TECHNICAL INFORMATION: The HBT Technical
Information related to Licensed Products shall be delivered to Licensee in
accordance with the provisions of the Existing Agreement, and no HBT Technical
Information shall be delivered as a result of this Agreement. Licensor shall
deliver to Licensee one legible copy of each issued patent and all patent
applications included in the Patent Rights as soon as practical after the
Effective Date, but only if such patents and patent applications are specific to
Licensed Products in the Licensed Field. Licensor shall also promptly furnish
Licensee a copy of all patent applications filed and patents issued after the
Effective Date that are included in the Patent Rights, but only if such patent
applications and patents are specific to Licensed Products in the Licensed
Field.
3.3 USE AND NONDISCLOSURE: Licensee shall not use or permit the use of
HBT Technical Information for any purpose not authorized by this Agreement or by
the Existing Agreement. Licensee shall hold in confidence, and shall not
disclose or communicate or permit to be disclosed or communicated to any third
person, any HBT Technical Information which is furnished to Licensee hereunder
except in accordance with the Existing Agreement. Licensee shall take or cause
to be taken all necessary precautions to the same extent that it would with its
own technical information, but in no event less than a reasonable standard of
care, to prevent the disclosure or communication of HBT Technical Information to
third persons.
3.4 UPDATES OF HBT TECHNICAL INFORMATION: Except as specified in the
Existing Agreement, Licensor shall be under no obligation to deliver to Licensee
any modifications or additions to HBT Technical Information.
3.5 RESTRICTIONS: The rights granted Licensee herein cover only
Licensed Products for use as licensed hereunder, and Licensee agrees that it
shall not, during the term of this Agreement, manufacture, sell, lease or
otherwise dispose of any Licensed Products or parts thereof embodying
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<PAGE> 10
TRW/RF Micro Devices
License Agreement
November 15, 1999
any of the Patent Rights except insofar as the application thereof is expressly
provided for under this Agreement or under the Existing Agreement.
ARTICLE 4
CONSIDERATION
In consideration of all rights, licenses, and HBT Technical Information
and benefits conferred to Licensee hereunder, Licensee has issued to Licensor
the Warrants set forth in the Cooperation Agreement between Licensor and
Licensee entered into and effective concurrently with this Agreement.
ARTICLE 5
MANUFACTURE OF LICENSED PRODUCTS
Licensee agrees to use commercially reasonable efforts to place itself
in, and to maintain, a position to manufacture, test, sell, service, repair, and
maintain Licensed Products for application in the Licensed Field in the manner
necessary to supply effectively the demand therefor.
ARTICLE 6
IMPROVEMENTS
Licensee agrees that any modifications or improvements in the Licensed
Products, Patent Rights or the HBT Technical Information made by Licensee,
including any inventions, shall be promptly made known to Licensor in the form
of drawings, written descriptions, or other data, and Licensor shall have a
royalty free, non-exclusive right to use such modifications or improvements,
including any inventions. Licensee further agrees to inform Licensor from time
to time in writing of any of Licensee's patents and patent applications relating
to such modifications, improvements or inventions. If, in countries selected by
Licensor, Licensee decides it shall not file applications for, or maintain
patents upon, Licensee's modifications, improvements or inventions, then
Licensor shall have the right to do so at its expense and such applications and
patents shall be and become its property, provided Licensee shall continue to
have
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<PAGE> 11
TRW/RF Micro Devices
License Agreement
November 15, 1999
the right to make use thereof on a non-exclusive basis in the Licensed Field.
Licensee shall use its best efforts to have executed such application papers and
assignments as Licensor may request in connection with such patents. The
provisions of this Article 6 shall survive termination or expiration of this
Agreement insofar as the rights of the parties to use such improvements,
modifications, inventions and patents are concerned.
ARTICLE 7
REPRESENTATIONS, WARRANTIES AND INDEMNIFICATION
7.1 REPRESENTATIONS AND WARRANTIES OF LICENSOR: Except as provided for
or otherwise described in this Agreement, Licensor represents and warrants to
Licensee as follows:
7.1.1 As of the Effective Date, Licensor is the owner of all
Patent Rights and HBT Technical Information licensed in this Agreement
in existence as of the Effective Date.
7.1.2 As of the Effective Date, Licensor has all requisite
power and authority to enter into and execute this Agreement, to grant
the licenses provided herein and to perform its obligations hereunder.
7.1.3 This Agreement constitutes a legal, valid and binding
obligation of Licensor, enforceable against Licensor in accordance with
its terms.
7.1.4 Licensor has not entered into any agreement with third
parties that would conflict with the terms and conditions herein.
Neither the execution and delivery of this Agreement nor the
performance by Licensor of any of its obligations hereunder will
conflict with or result in a breach of the terms, conditions or
provisions of, or constitute a default under, the Articles of
Incorporation or By-Laws of Licensor, as amended.
7.1.5 No royalties or fees have been paid by Licensor to other
persons by reason of its ownership of the Patent Rights or HBT
Technical Information.
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<PAGE> 12
TRW/RF Micro Devices
License Agreement
November 15, 1999
7.1.6 As of the Effective Date there is no pending or, to the
actual knowledge of Licensor, threatened claim, litigation or rendered
decision, judgment or holding against Licensor concerning: (i) any
claims of ownership by Licensor to any of the Patent Rights or HBT
Technical Information; (ii) the validity, registrability or
enforceability of any intellectual property rights of Licensor
associated with any of the Patent Rights or HBT Technical Information;
(iii) the license of any Patent Rights or HBT Technical Information to
Licensee; or (iv) that the Commercial manufacture, use or sale of any
Licensed Product violates the intellectual property rights of any other
person.
7.2 LICENSOR'S RIGHTS: Licensor does not make any representation or
warranty as to the validity of the Patent Rights or that the manufacture, use or
sale of Licensed Products shall not infringe the intellectual property rights of
third parties.
7.3 REPRESENTATIONS AND WARRANTIES OF LICENSEE: Except as provided for
or otherwise described in this Agreement, Licensee represents and warrants to
Licensor as follows:
7.3.1 Licensee has all requisite power and authority to enter
into and execute this Agreement and to perform its obligations
hereunder.
7.3.2 This Agreement constitutes a legal, valid and binding
obligation of Licensee, enforceable against Licensee in accordance with
its terms.
7.3.3 Licensee has not entered into any agreements with third
parties that would conflict with the terms and conditions herein.
Neither the execution and delivery of this Agreement nor the
performance by Licensee of its obligations hereunder will conflict with
or result in a breach of the terms, conditions or provisions of, or
constitute a default, under the Articles of Incorporation or By-Laws of
Licensee, as amended.
7.4 LIMITATION OF LIABILITY: Licensor does not assume any
responsibility, nor does Licensor give any warranties to Licensee, of any
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<PAGE> 13
TRW/RF Micro Devices
License Agreement
November 15, 1999
nature whatsoever, with respect to the ability of Licensee to construct
successfully Licensed Products using the HBT Technical Information or Patent
Rights. LICENSOR'S WARRANTY OBLIGATIONS AND LICENSEE'S REMEDIES THEREUNDER ARE
SOLELY AND EXCLUSIVELY AS STATED HEREIN.
7.5 EXCLUSION: THE WARRANTIES PROVIDED IN THIS ARTICLE 7 ARE IN LIEU OF
ALL OTHER WARRANTIES, WHETHER STATUTORY, EXPRESS OR IMPLIED, AT LAW OR IN
EQUITY, INCLUDING BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY OR FITNESS
FOR A PARTICULAR PURPOSE, ALL OF WHICH ARE EXPRESSLY EXCLUDED. LICENSOR'S
WARRANTY OBLIGATIONS AND LICENSEE'S REMEDIES ARE SOLELY AND EXCLUSIVELY AS
STATED IN THIS ARTICLE 7. IN NO CASE SHALL LICENSOR OR LICENSEE BE LIABLE FOR
ANY SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES, WHETHER ARISING IN
CONTRACT, WARRANTY, TORT, INCLUDING NEGLIGENCE, STRICT LIABILITY, OR OTHER LEGAL
OR EQUITABLE THEORY. LICENSOR DOES NOT MAKE ANY WARRANTY AS TO THE VALIDITY OR
ENFORCEABILITY OF THE PATENT RIGHTS.
ARTICLE 8
TERM AND TERMINATION
This Agreement shall commence on the Effective Date, and shall remain
in effect unless this Agreement is terminated for default in accordance with
Section 11.2.
ARTICLE 9
EXCUSABLE DELAY
9.1 NOTICE: If either Licensor or Licensee is unable to perform any of
their respective obligations as herein provided then the party whose performance
is prevented or delayed shall give the other party notice thereof as soon as
reasonably possible under the circumstances and information regarding the cause
or reason therefor.
9.2 EXCUSABLE DELAY: If either Licensor or Licensee is unable to
perform any of their respective obligations as herein provided due to any
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<PAGE> 14
TRW/RF Micro Devices
License Agreement
November 15, 1999
circumstances beyond its reasonable control, but not due to its negligence
(including but not limited to strikes, war, an act of God, a public enemy,
interference by any civil or military authority, inability to secure
governmental approval, materials or services or similar cause) and gives notice
to the other as provided in Section 9.1, then the time of performance of any
such obligation shall be extended for a period equal to the number of days
during which performance thereof was delayed due to such circumstances, and
during such period such party shall not be deemed in default of this Agreement.
ARTICLE 10
NOTICES AND LEGAL ADDRESSES
Except as otherwise expressly provided, all notices under this
Agreement shall be made by fax, confirmed by letter, to the fax numbers and
addresses below:
Licensee: RF Micro Devices, Inc.
7625 Thorndike Road
Greensboro, North Carolina 27409
Telecopy: 336-664-0311
Attention: Jerry Neal
Licensor: TRW Inc.
Space & Electronics Group
One Space Park
Redondo Beach, California 90278
Telecopy: 310-813-4115
Attention: Vice President and General Manager
Telecommunication Programs Division
ARTICLE 11
DEFAULT
11.1 DEFAULT: The occurrence of one or more of the following shall
constitute a default hereunder:
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<PAGE> 15
TRW/RF Micro Devices
License Agreement
November 15, 1999
11.1.1 In the event a party fails to pay any sum due and
payable hereunder within ten (10) days after same has become due and
payable and such failure continues for fifteen (15) days after written
notice from the payee;
11.1.2 In the event Licensor is unable to fulfill its
obligations under this Agreement as a result of: (a) liens, claims,
charges or encumbrances in existence as of the Effective Date or
arising as a result of Licensor's execution or performance of this
Agreement; (b) Licensor's failure to obtain all consents, approvals or
authorizations of other persons necessary as of the Effective Date in
order to grant the licenses provided for herein; (c) Licensor's failure
to make all filings, notifications and registrations with all
governmental authorities, if any, necessary as of the Effective Date in
order to grant the licenses provided for herein; or (d) any federal,
state or local judgment, writ, decree, order, statute, rule or
regulation applicable as of the Effective Date to Licensor, the Patent
Rights or HBT Technical Information, and such inability continues for a
period of thirty (30) days after written notice from Licensee
specifying such failure, provided that if the failure be such that it
cannot with due diligence be cured within such thirty (30) day period,
then Licensor shall have such longer period, not to exceed thirty (30)
additional days, as shall be reasonably necessary to cure such failure
so long as Licensor is acting in good faith and with due diligence;
11.1.3 In the event a party fails to perform any other
material covenant or obligation required to be performed by such party
hereunder and such failure continues for a period of thirty (30) days
after written notice from the nondefaulting party specifying such
failure, provided that if the failure be such that it cannot be cured
solely by the payment of money and cannot with due diligence be cured
within such thirty (30) day period, then the notified party shall have
such longer period, not to exceed thirty (30) additional days, as shall
be reasonably necessary to cure such failure so long as such party is
acting in good faith and with due diligence;
11.1.4 In the event a party (i) shall commence a voluntary
case or other proceeding seeking dissolution, liquidation or other
relief with respect to itself or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect or seeking
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<PAGE> 16
TRW/RF Micro Devices
License Agreement
November 15, 1999
the appointment of a receiver, trustee, liquidator, custodian or other
similar official, or (ii) shall consent to any such relief or to the
appointment of, or taking possession by, such official in any voluntary
case or other proceeding commenced against it; or
11.1.5 In the event any involuntary case or other proceeding
shall be commenced against a party seeking dissolution, liquidation or
other relief with respect to it or its debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect or seeking
the appointment of a receiver, trustee, liquidator, custodian or other
similar official of it or any substantial part of its property, if such
involuntary case or other proceeding shall remain undismissed and
unstayed for a period of sixty (60) days.
11.2 REMEDY: If any party is in default as specified in Section 11.1,
the party not in default may terminate this Agreement by giving the other party
thirty (30) days prior written notice of termination and pursue any other remedy
hereunder or otherwise available to it at law or in equity.
11.3 COMPENSATION: Each party hereby expressly agrees and acknowledges
that termination of this Agreement by either party for default shall not entitle
the other party to any termination compensation or to any payment in respect of
any goodwill established during the term of this Agreement or render the party
liable for damages on account of any loss of prospective profits or on account
of any expenditure, investment or obligation incurred or made by the parties, or
otherwise.
11.4 PERFORMANCE AFTER DEFAULT TERMINATION: If this Agreement is
terminated for default, whether due to the default of Licensor or otherwise,
Licensee shall discontinue the use of the Patent Rights, and HBT Technical
Information and shall return to Licensor all HBT Technical Information furnished
to or otherwise made available to Licensee hereunder.
ARTICLE 12
SURVIVAL OF OBLIGATIONS
Other provisions hereof notwithstanding, the obligations of Licensor
and Licensee under Articles 6 and 7 and Section 3.3 shall survive the
termination and expiration of this Agreement.
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<PAGE> 17
TRW/RF Micro Devices
License Agreement
November 15, 1999
ARTICLE 13
SUBLICENSES, ASSIGNMENTS AND TRANSFERS
13.1 COMPLIANCE WITH ASSIGNMENT RESTRICTIONS: Neither party may
sublicense or Transfer any of its rights or obligations under this Agreement in
whole or in part or delegate any of its obligations or duties hereunder to any
person except upon compliance with this Article 13.
13.2 LICENSEE TRANSFER OF LICENSE: Licensee may Transfer its license
rights under Section 2.1 to any person or organization but only in connection
with the sale or Transfer of substantially all of the assets of Licensee
pertaining to the use of Licensed Products in the Licensed Field. The Transfer
of the license, when permitted, shall be notified to Licensor by delivering to
Licensor a written undertaking executed by the transferee under which such
transferee acknowledges that the rights it is acquiring from Licensee are
limited to the Licensed Field in accordance with this Agreement.
13.3 EFFECT OF NON-COMPLIANCE: Any purported sublicense or Transfer in
contravention of this Agreement shall be null and void and of no force or
effect.
ARTICLE 14
MISCELLANEOUS
14.1 HEADINGS: The headings and titles to the Articles and Sections of
this Agreement are inserted for convenience only and shall not be deemed a part
hereof or affect the construction or interpretation of any provision hereof.
14.2 REMEDIES: Unless otherwise expressly provided herein, the rights
and remedies hereunder are in addition to, and not in limitation of, other
rights and remedies under the Agreement, and exercise of one right or remedy
shall not be deemed a waiver of any other right or remedy.
14.3 MODIFICATION - WAIVER: No cancellation, modification, amendment,
deletion, addition or other change in this Agreement or any provision hereof, or
waiver of any right or remedy herein provided, shall be
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<PAGE> 18
TRW/RF Micro Devices
License Agreement
November 15, 1999
effective for any purpose unless specifically set forth in a writing signed by
the party to be bound thereby and specifically referencing this Agreement. No
waiver of any right or remedy in respect of any occurrence or event on one
occasion shall be deemed a waiver of such right or remedy in respect of such
occurrence or event on any other occasion.
14.4 ENTIRE AGREEMENT: This Agreement supersedes all other agreements,
oral or written, heretofore made with respect to the subject hereof and the
transactions contemplated hereby and, in conjunction with the Existing Agreement
and the Cooperation Agreement to be executed concurrently with this Agreement,
contains the entire agreement of the parties.
14.5 CONTROLLING LAW: All questions concerning the validity and
operation of this Agreement and the performance of the obligations imposed upon
the parties hereunder shall be governed by and construed in accordance with the
laws of the State of California, United States of America applicable to
contracts entered into and wholly to be performed in the State of California.
14.6 SUCCESSORS AND ASSIGNS: The provisions of this Agreement shall be
binding upon and inure to the benefit of Licensor and Licensee and their
respective successors and assigns, but this provision shall not be deemed to
expand or otherwise affect the limitations on assignment and sublicensing set
forth in Article 13 .
14.7 COUNTERPARTS: This Agreement has been executed in several
counterparts, each of which shall be deemed to be an original copy hereof.
14.8 GOVERNMENT REGULATIONS: This Agreement is subject to all the laws
and regulations, and other administrative acts, now or hereinafter in effect, of
the United States Government and its departments and agencies. HBT Technical
Information, any Licensed Product, component, or spare part, are not authorized
to be directly or indirectly sold, leased, released, assigned, transferred,
conveyed, or in any manner disposed of in or to any country where such sale,
lease, assignment, transferal, conveyance or use, is regulated by the United
States Government without first obtaining any necessary approvals of the United
States Government.
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<PAGE> 19
TRW/RF Micro Devices
License Agreement
November 15, 1999
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year first set forth above.
TRW Inc.
Space & Electronics Group
By:
-----------------------------------
RF Micro Devices, Inc.
By:
-----------------------------------
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<PAGE> 1
EXHIBIT 10.3
COOPERATION AGREEMENT
This Cooperation Agreement (the "Agreement") is entered into as of this 15th day
of November, 1999, by and between TRW Inc. ("TRW") and RF Micro Devices, Inc.
("RFMD").
WHEREAS, TRW and RFMD have previously entered into a License and Technical
Assistance Agreement, dated as of June 6, 1996 (the "1996 Agreement"; and
WHEREAS, TRW and RFMD entered into a new License Agreement, dated the date
hereof (the "1999 Agreement"), whereby TRW has agreed to expand the scope of the
license granted under the 1996 Agreement to cover additional product
applications; and
WHEREAS, TRW and RFMD wish to reaffirm and extend the cooperative nature that
has characterized their relationship in the past; and
WHEREAS, TRW and RFMD wish to document their intentions concerning future
cooperative actions; .
NOW THEREFORE, the parties hereto agree as follows:
1. Strategic Relationship. TRW and RFMD reaffirm their historical and ongoing
strategic relationship as evidenced in the 1996 Agreement and the 1999
Agreement. More specifically, the parties agree to continue to exchange
technical information with each other concerning the Licensed Products in the
Licensed Fields (as such terms are defined in the 1996 Agreement and the 1999
Agreement). Further, during the term of this Agreement, the parties shall on a
regular basis consult with each other concerning new technologies which are
developed by either party and which could be reasonably viewed as applicable to
other party's markets.
2. License Expansion. The parties agree that, during the term of this Agreement,
TRW, upon the request of RFMD, shall enter into good faith negotiations with
RFMD concerning the further expansion of the licenses granted in the 1996
Agreement and the 1999 Agreement beyond the respective Licensed Fields for the
respective Licensed Products (as defined in the 1996 Agreement and the 1999
Agreement). Further, TRW, upon the request of RFMD, shall enter into discussions
with RFMD concerning the possible licensing of new or existing TRW technologies
that may be applicable to RFMD's markets. Neither of the parties is obligated to
enter into any new or expanded license, and the terms of any such new or
expanded license shall be subject to the mutual agreement of the parties.
<PAGE> 2
3. Supply Agreement Amendment. Upon the request of TRW, RFMD agrees to enter
into good faith negotiations with TRW concerning the extension of the Supply
Agreement, dated as of June 6, 1996, as amended (the "Supply Agreement"),
between TRW and RFMD. Neither of the parties is obligated to enter into any
amendment of the Supply Agreement, and the terms of any such amendment to the
Supply Agreement shall be subject to the mutual agreement of the parties.
4. Stock Ownership Commitment. In conjunction with the announcement referred to
in paragraph 6 hereof, TRW shall publicly state that until May 1, 2001 it
(directly and/or indirectly through its affiliated entities) will continue to
beneficially hold at least 7,941,161 shares of RFMD common stock (such number to
be adjusted for stock divisions, stock combinations, stock recapitalizations and
stock reclassifications and stock dividends). Further, TRW agrees that it shall
beneficially hold 7,941,161 shares of RFMD common stock (directly and/or
indirectly through its affiliated entities) (such number to be adjusted for
stock divisions, stock combinations, stock recapitalizations and stock
reclassifications and stock dividends) until May 1, 2001 and shall not, at any
time prior to May 1, 2001, sell, assign or otherwise transfer, dispose of, grant
any option to purchase, make any short sale of or enter into any hedging,
synthetic sale or similar transaction with the same economic effect as a sale
that would have the effect of causing its RFMD common stock ownership to fall
below such number of shares (as may be adjusted), except in conjunction with a
transaction involving a Change in Control of RFMD (as such term is defined in
paragraph 1(b) of Warrant 99-2 referred to in paragraph 5 hereof).
5. Warrant Issuance. In consideration of TRW executing the 1999 License and this
Agreement, RFMD shall issue to TRW contemporaneously herewith two warrants to
purchase an aggregate of 750,000 shares of RFMD common stock on the terms
provided in the form of warrants attached hereto as Attachment A.
6. Joint Announcement. The parties will coordinate a joint public announcement
concerning the 1999 Agreement and this Agreement as soon as possible following
execution of this Agreement.
7. Term of this Agreement. This Agreement shall become effective as of the date
written above and shall terminate on December 31, 2003.
8. Miscellaneous.
(a) Amendments This Agreement may be amended at any time by a written
agreement executed by both parties hereto.
<PAGE> 3
(b) Severability If any provision of this Agreement shall finally be
determined to be unlawful, such provision shall be deemed to be severed from
this Agreement and every other provision of this Agreement shall remain in full
force and effect.
(c) Notices All notices, requests and other communications hereunder
shall be in writing and shall be deemed to have been duly given, if delivered by
hand, at the time of receipt or, if communicated by facsimile or similar
electronic means, at the time receipt thereof has been confirmed by return
electronic communication or signal that the message has been clearly received,
or if mailed, seven (7) days after mailing, registered or certified airmail
return receipt requested, with postage prepaid:
If to RFMD, to: RF Micro Devices, Inc.
7625 Thorndike Road
Greensboro, NC 27409
Fax No. 336.664.0311
Attention: Jerry Neal
If to TRW, to: TRW INC.
One Space Park
Redondo Beach, CA 90278
Fax No. 310.813.4115
Attention: Wes Bush
provided, however, that if any party shall have designated a different address
by notice to the other given as provided above, then to the last address so
designated.
(d) Assignment This Agreement shall be binding upon and inure to the
benefit of the successors of each of the parties hereto. Neither this Agreement,
nor the rights or obligations of either party hereunder, may be assigned by
either party without the prior written consent of the other.
(e) Status This Agreement shall not in any respect constitute an
appointment of either party as the agent or legal representative of the other
for any purpose whatsoever.
(f) Third Parties This Agreement is not intended to, and shall not,
create any rights in or confer any benefits upon anyone other than the parties
hereto.
(g) Incorporation by Reference The attachment to this Agreement
constitutes an integral part of this Agreement and is hereby incorporated into
this Agreement by this reference.
<PAGE> 4
(h) Governing Law This Agreement shall be governed by and construed in
accordance with the laws of the State of California applicable to contracts
entered into and wholly to be performed in such jurisdiction.
(i) Counterparts More than one counterpart of this Agreement may be
executed by the parties hereto, and each fully executed counterpart shall be
deemed an original without production of the others.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement, which shall
be effective as of the date first set forth above.
TRW Inc.
By:
---------------------------------------
RF Micro Devices, Inc.
By:
---------------------------------------
<PAGE> 1
EXHIBIT 10.4
1997 KEY EMPLOYEES' STOCK OPTION PLAN
OF
RF MICRO DEVICES, INC.
<PAGE> 2
1997 KEY EMPLOYEES' STOCK OPTION PLAN
OF
RF MICRO DEVICES, INC.
1. PURPOSE
The purpose of the 1997 Key Employees' Stock Option Plan of RF Micro
Devices, Inc. (the "Plan") is to encourage and enable selected key employees and
independent contractors in the service of RF Micro Devices, Inc. (the
"Corporation") or its related corporations to acquire or to increase their
holdings of common stock of the Corporation (the "Common Stock") in order to
promote a closer identification of their interests with those of the Corporation
and its shareholders, thereby further stimulating their efforts to enhance the
efficiency, soundness, profitability, growth and shareholder value of the
Corporation. This purpose will be carried out through the granting of incentive
stock options ("Incentive Options") intended to qualify under Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"), and nonqualified stock
options ("Nonqualified Options"). Incentive Options and Nonqualified Options
shall be referred to herein collectively as "Options." To the extent that any
Option is designated as an Incentive Option and such option does not qualify as
an Incentive Option, it shall constitute a Nonqualified Option.
2. ADMINISTRATION OF THE PLAN
(a) The Plan shall be administered by a committee (the
"Committee") appointed by the Board of Directors of the Corporation (the
"Board") and comprised solely of members of the Board. The Committee
shall include no fewer than the minimum number of "non-employee
directors," as such term is defined in Rule 16b-3 promulgated under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), as may
be required by Rule 16b-3 or any successor rule.
(b) Any action of the Committee may be taken by a written
instrument signed by all of the members of the Committee and any action
so taken by written consent shall be as fully effective as if it had
been taken by a majority of the members at a meeting duly held and
called. Subject to the provisions of the Plan, the Committee shall have
full and final authority, in its discretion, to take any action with
respect to the Plan including, without limitation, the following: (i) to
determine the individuals to receive Options, the nature of each Option
as an Incentive Option or a Nonqualified Option, the times when Options
shall be granted, the number of shares to be subject to each Option, the
Option price (determined in accordance with Section 6), the Option
period, the time or times when each Option shall be exercisable and the
other terms, conditions, restrictions and limitations of an Option; (ii)
to prescribe the form or forms of the agreements evidencing any Options
granted under the Plan; (iii) to establish, amend and rescind rules and
regulations for the administration of the Plan; and (iv) to construe and
interpret the Plan, the rules and regulations, and the agreements
evidencing Options granted under the Plan, and to make all other
determinations deemed necessary or advisable for administering the Plan.
In addition, the Committee shall have complete authority, in its
discretion, to accelerate the date that any Option which is not
otherwise exercisable shall become exercisable in whole
<PAGE> 3
or in part, without any obligation to accelerate such date with respect
to any other Option granted to any person.
(c) Notwithstanding Section 2(b), and subject to the terms of
the Plan herein, the Committee may delegate from time to time to the
Chief Executive Officer of the Corporation the authority to grant
Options, and to make any or all of the determinations reserved for the
Committee in the Plan and summarized in Section 2(b) with respect to
Options that have been granted, to any individual who, at the time of
such grant or other determination, (i) is not an officer or director of
the Corporation subject to Section 16 of the Exchange Act and (ii) is
otherwise eligible to participate in the Plan under Section 5. The Chief
Executive Officer of the Corporation shall report to the Committee, not
less than quarterly, the material terms of all Options granted since the
time of any such immediately preceding report pursuant to authority
delegated pursuant to this Section 2(c).
3. EFFECTIVE DATE
The effective date of the Plan shall be the date of consummation of an
initial public offering (the "Public Offering Date"). Options may be granted
under the Plan on and after the effective date, but not after the tenth
anniversary of the Public Offering Date. For the purposes herein, the phrase
"consummation of an initial public offering" shall mean the closing of a firm
commitment underwritten public offering of the Corporation's Common Stock
pursuant to a registration statement on Form S-1 filed under the Securities Act
of 1933, as amended (the "Securities Act").
4. OPTIONS; SHARES OF STOCK SUBJECT TO THE PLAN
Both Incentive Options and Nonqualified Options, as designated by the
Committee, may be granted under the Plan. The shares of Common Stock that may be
issued and sold pursuant to Options shall not exceed in the aggregate 1,300,000
shares of authorized but unissued shares of the Common Stock of the Corporation.
The Corporation hereby reserves sufficient authorized shares of Common Stock to
provide for the exercise of Options granted hereunder. Any shares of Common
Stock subject to an Option which, for any reason, expires or is terminated
unexercised as to such shares may again be subject to an Option granted under
the Plan. No Optionee may be granted Options in any calendar year for more than
500,000 shares of Common Stock.
5. ELIGIBILITY
An Option may be granted only to an individual who satisfies the
following eligibility requirements on the date the Option is granted:
(a) The individual is either (i) a key employee of the
Corporation or a related corporation or (ii) an independent contractor
providing services to the Corporation or a related corporation. For this
purpose, an individual shall be considered to be an "employee" only if
there exists between the individual and the Corporation or a related
corporation the legal and bona fide relationship of employer and
employee. In determining whether such a relationship exists, the
regulations of the United States Treasury Department relating to the
determination
2
<PAGE> 4
of the employment relationship for the purpose of collection of income
tax on wages at the source shall be applied.
Also, for this purpose, a "key employee" is an employee
of the Corporation or a related corporation whom the Committee
determines qualifies as a key employee based on the nature and extent of
such employee's duties, responsibilities, personal capabilities,
performance and potential, or any combination of such factors.
(b) With respect to the grant of an Incentive Option, the
individual is an employee who does not own, immediately before the time
that the Incentive Option is granted, stock possessing more than ten
percent of the total combined voting power of all classes of stock of
the Corporation or a related corporation; provided, that an individual
owning more than ten percent of the total combined voting power of all
classes of stock of the Corporation or a related corporation may be
granted an Incentive Option if the price at which such Option may be
exercised is greater than or equal to 110% of the fair market value of
the shares on the date the Option is granted and the Option period does
not exceed five years. For this purpose, an individual will be deemed to
own stock which is attributed to him under Section 424(d) of the Code.
(c) The individual, being otherwise eligible under this Section
5, is selected by the Committee as an individual to whom an Option shall
be granted (an "Optionee").
6. OPTION PRICE
The price per share at which an Option may be exercised (the "Option
price") shall be established by the Committee at the time the Option is granted
and shall be set forth in the terms of the agreement evidencing the grant of the
Option; provided, that in the case of an Incentive Option, the Option price
shall be equal to or greater than the fair market value per share of the Common
Stock on the date the Option is granted. In addition, the following rules shall
apply:
(a) An Incentive Option shall be considered to be granted on the
date that the Committee acts to grant the Option, or on any later date
specified by the Committee as the date of grant of the Option. A
Nonqualified Option shall be considered to be granted on the date the
Committee acts to grant the Option or any other date specified by the
Committee as the date of grant of the Option.
(b) The fair market value of the shares shall be determined in
good faith by the Committee in accordance with the following provisions:
(i) if the shares of Common Stock are listed for trading on the New York
Stock Exchange or the American Stock Exchange or included in The Nasdaq
National Market, the fair market value shall be the closing sales price
of the shares on the New York Stock Exchange or the American Stock
Exchange or as reported in The Nasdaq National Market (as applicable) on
the date immediately preceding the date the Option is granted, or, if
there is no transaction on such date, then on the trading date nearest
preceding the date the Option is granted for which closing price
information is available, and, provided further, if the shares are
quoted on The Nasdaq System but are not included in The Nasdaq
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<PAGE> 5
National Market, the fair market value shall be the mean between the
high bid and low asked quotations in The Nasdaq System on the date
immediately preceding the date the Option is granted for which such
information is available; or (ii) if the shares of Common Stock are not
listed or reported in any of the foregoing, then fair market value shall
be determined by the Committee in accordance with the applicable
provisions of Section 20.2031-2 of the Federal Estate Tax Regulations,
or in any other manner consistent with the Code and accompanying
regulations.
(c) In no event shall there first become exercisable by the
Optionee in any one calendar year incentive stock Options granted by the
Corporation or any related corporation with respect to shares having an
aggregate fair market value (determined at the time an Option is
granted) greater than $100,000.
7. OPTION PERIOD AND LIMITATIONS ON THE RIGHT TO
EXERCISE OPTIONS
(a) The period during which an Option may be exercised (the
"Option period") shall be determined by the Committee when the Option is
granted and shall not extend more than ten years from the date on which
the Option is granted. An Option shall be exercisable on such date or
dates, during such period, for such number of shares, and subject to
such conditions as shall be determined by the Committee and set forth in
the agreement evidencing such Option, subject to the rights granted
herein to the Committee to accelerate the time when Options may be
exercised. Any Option or portion thereof not exercised before the
expiration of the Option period shall terminate.
(b) An Option may be exercised by giving written notice of at
least ten days to the Committee or its designee at such place as the
Committee shall direct. Such notice shall specify the number of shares
to be purchased pursuant to an Option and the aggregate purchase price
to be paid therefor, and shall be accompanied by the payment of such
purchase price. Such payment shall be in the form of (i) cash; (ii)
shares of Common Stock owned by the Optionee at the time of exercise;
(iii) shares of Common Stock withheld upon exercise; (iv) delivery of a
properly executed written notice of exercise to the Corporation and
delivery to a broker of written notice of exercise and irrevocable
instructions to promptly deliver to the Corporation the amount of sale
or loan proceeds to pay the Option price; or (v) any combination of the
foregoing methods. Shares tendered or withheld in payment upon the
exercise of an Option shall be valued at their fair market value on the
date of exercise, as determined by the Committee by applying the
provisions of Section 6(b).
(c) No Option granted to an Optionee who was an employee at the
time of grant shall be exercised unless the Optionee is, at the time of
exercise, an employee as described in Section 5(a), and has been an
employee continuously since the date the Option was granted, subject to
the following:
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<PAGE> 6
(i) An Option shall not be affected by any change in the
terms, conditions or status of the Optionee's employment,
provided that the Optionee continues to be an employee of the
Corporation or a related corporation.
(ii) The employment relationship of an Optionee shall be
treated as continuing intact for any period that the Optionee is
on military or sick leave or other bona fide leave of absence,
provided that the period of such leave does not exceed ninety
days, or, if longer, as long as the Optionee's right to
reemployment is guaranteed either by statute or by contract. The
employment relationship of an Optionee shall also be treated as
continuing intact while the Optionee is not in active service
because of disability. For purposes of this Section 7(c)(ii),
"disability" shall mean the inability of the Optionee to engage
in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected
to result in death, or which has lasted or can be expected to
last for a continuous period of not less than twelve months. The
Committee shall determine whether an Optionee is disabled within
the meaning of this paragraph.
(iii) If the employment of an Optionee is terminated
because of disability within the meaning of subparagraph (ii),
or if the Optionee dies while he is an employee or dies after
the termination of his employment because of disability, the
Option may be exercised only to the extent exercisable on the
date of the Optionee's termination of employment or death while
employed (the "termination date"), except that the Committee may
in its discretion accelerate the date for exercising all or any
part of the Option which was not otherwise exercisable on the
termination date. The Option must be exercised, if at all, prior
to the first to occur of the following, whichever shall be
applicable: (A) the close of the period of twelve months next
succeeding the termination date; or (B) the close of the Option
period. In the event of the Optionee's death, such Option shall
be exercisable by such person or persons as shall have acquired
the right to exercise the Option by will or by the laws of
intestate succession.
(iv) If the employment of the Optionee is terminated for
any reason other than disability (as defined in subparagraph
(ii)) or death or for "cause," his Option may be exercised to
the extent exercisable on the date of such termination of
employment, except that the Committee may in its discretion
accelerate the date for exercising all or any part of the Option
which was not otherwise exercisable on the date of such
termination of employment. The Option must be exercised, if at
all, prior to the first to occur of the following, whichever
shall be applicable: (A) the close of the period of 90 days next
succeeding the termination date; or (B) the close of the Option
period. If the Optionee dies following such termination of
employment and prior to the earlier of the dates specified in
(A) or (B) of this subparagraph (iv), the Optionee shall be
treated as having died while employed under subparagraph (iii)
immediately preceding (treating for this purpose the Optionee's
date of termination of employment as the termination date). In
the event of the Optionee's death, such Option shall be
exercisable by such person or persons as shall have acquired the
right to exercise the Option by will or by the laws of intestate
succession.
5
<PAGE> 7
(v) If the employment of the Optionee is terminated for
"cause," his Option shall lapse and no longer be exercisable as
of the effective time of his termination of employment, as
determined by the Committee. For purposes of this subparagraph
(v) and subparagraph (iv), the Optionee's termination shall be
for "cause" if such termination results from the Optionee's (A)
dishonesty; (B) refusal to perform his duties for the
Corporation; or (C) engaging in conduct that could be materially
damaging to the Corporation without a reasonable good faith
belief that such conduct was in the best interest of the
Corporation. The determination of "cause" shall be made by the
Committee and its determination shall be final and conclusive.
(d) An Option granted to an Optionee who was an independent
contractor of the Corporation or a related corporation at the time of
grant (and who does not thereafter become an employee, in which case he
shall be subject to the provisions of Section 7(c) herein) may be
exercised only to the extent exercisable on the date of the Optionee's
termination of service to the Corporation or a related corporation
(unless the termination was for cause), and must be exercised, if at
all, prior to the first to occur of the following, as applicable: (A)
the close of the period of 90 days next succeeding the termination date;
or (B) the close of the Option period. If the services of such an
Optionee are terminated for cause (as defined in Section 7(c)(v)
herein), his Option shall lapse and no longer be exercisable as of the
effective time of his termination of services, as determined by the
Committee. Notwithstanding the foregoing, the Committee may in its
discretion accelerate the date for exercising all or any part of an
Option which was not otherwise exercisable on the termination date or
extend the Option period, or both.
(e) An Optionee or his legal representative, legatees or
distributees shall not be deemed to be the holder of any shares subject
to an Option unless and until certificates for such shares are issued to
him or them under the Plan.
(f) Nothing in the Plan shall confer upon the Optionee any right
to continue in the service of the Corporation or a related corporation
as an employee or independent contractor, as the case may be, or to
interfere in any way with the right of the Corporation or a related
corporation to terminate the Optionee's service at any time.
8. NONTRANSFERABILITY OF OPTIONS AND SHARES
Incentive Options granted pursuant to the Plan shall not be transferable
(including by pledge or hypothecation) other than by will or the laws of
intestate succession or pursuant to a qualified domestic relations order, as
defined by the Code or Title I of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), or the rules thereunder. Nonqualified Options
granted pursuant to the Plan shall not be transferable (including by pledge or
hypothecation) other than by will or the laws of intestate succession or
pursuant to a qualified domestic relations order, as defined by the Code or
Title I of ERISA or the rules thereunder, except as may be permitted by the
Committee in a manner consistent with the registration provisions of the
Securities Act. An Option shall be exercisable during the Optionee's lifetime
only by him. To the extent required by Section 16 of the Exchange Act, shares
acquired upon the exercise of an Option shall not, without the consent of the
Committee, be transferable
6
<PAGE> 8
(including by pledge or hypothecation) until the expiration of six months after
the date the Option was granted.
9. DILUTION OR OTHER ADJUSTMENTS
If there is any change in the outstanding shares of Common Stock of the
Corporation as a result of a merger, consolidation, reorganization, stock
dividend, stock split distributable in shares, or other change in the capital
stock structure of the Corporation, the Committee shall make such adjustments to
Options, to the number of shares reserved for issuance under the Plan, and to
any provisions of this Plan as the Committee deems equitable to prevent dilution
or enlargement of Options or otherwise advisable to reflect such change.
10. WITHHOLDING
The Corporation shall require any recipient of shares pursuant to the
exercise of a Nonqualified Option to pay to the Corporation in cash the amount
of any tax or other amount required by any governmental authority to be withheld
and paid over by the Corporation to such authority for the account of such
Optionee. Notwithstanding the foregoing, the Optionee may satisfy such
obligation in whole or in part, and any other local, state or federal income tax
obligations relating to the exercise of a Nonqualified Option, by electing (the
"Election") to have the Corporation withhold shares of Common Stock from the
shares to which the Optionee is entitled. The number of shares to be withheld
shall have a fair market value (determined in accordance with Section 6(b)) as
of the date that the amount of tax to be withheld is determined (the "Tax Date")
as nearly equal as possible to (but not exceeding) the amount of such
obligations being satisfied. Each Election must be made in writing to the
Committee prior to the Tax Date.
11. CERTAIN DEFINITIONS
For purposes of the Plan, the following terms shall have the meaning
indicated:
(a) "Related corporation" means any parent, subsidiary or
predecessor of the Corporation.
(b) "Parent" or "parent corporation" shall mean any corporation
(other than the Corporation) in an unbroken chain of corporations ending
with the Corporation if, at the time that the Option is granted, each
corporation other than the Corporation owns stock possessing fifty
percent or more of the total combined voting power of all classes of
stock in another corporation in the chain.
(c) "Subsidiary" or "subsidiary corporation" means any
corporation (other than the Corporation) in an unbroken chain of
corporations beginning with the Corporation if, at the time that the
Option is granted, each corporation other than the last corporation in
the unbroken chain owns stock possessing fifty percent or more of the
total combined voting power of all classes of stock in another
corporation in the chain.
(d) "Predecessor" or "predecessor corporation" means a
corporation which was a party to a transaction described in Section
424(a) of the Code (or which would be so described
7
<PAGE> 9
if a substitution or assumption under that section had occurred) with
the Corporation, or a corporation which is a parent or subsidiary of the
Corporation, or a predecessor of any such corporation.
(e) In general, terms used in the Plan shall, where appropriate,
be given the meaning ascribed to them under the provisions of the Code
applicable to incentive stock Options.
12. STOCK OPTION AGREEMENT
The grant of any Option under the Plan shall be evidenced by the
execution of an agreement (the "Agreement") between the Corporation and the
Optionee. Such Agreement shall set forth the date of grant of the Option, the
Option price, the Option period, the designation of the Option as an Incentive
Option or a Nonqualified Option, and the time or times when and the conditions
upon the happening of which the Option shall become exercisable. Such Agreement
shall also set forth the restrictions, if any, with respect to which the shares
to be purchased thereunder shall be subject, and such other terms and conditions
as the Committee shall determine which are consistent with the provisions of the
Plan and applicable law and regulations.
13. RESTRICTIONS ON SHARES
The Corporation may impose such restrictions on any shares acquired upon
exercise of Options granted under the Plan as it may deem advisable, including,
without limitation, restrictions necessary to ensure compliance with the
Securities Act of 1933, as amended, under the requirements of any applicable
self-regulatory organization and under any blue sky or securities laws
applicable to such shares. The Corporation may cause a restrictive legend to be
placed on any certificate issued pursuant to the exercise of an Option in such
form as may be prescribed from time to time by applicable laws and regulations
or as may be advised by legal counsel.
14. AMENDMENT OR TERMINATION
The Plan may be amended or terminated by action of the Board; provided,
that:
(a) Any amendment which would (i) materially increase the
aggregate number of shares which may be issued under the Plan (other
than changes as described in Section 9), or (ii) materially change the
requirements for eligibility to receive Options under the Plan shall be
made only with the approval of the shareholders of the Corporation.
(b) No outstanding Option shall be amended or terminated (i)
without the consent of the Optionee if such amendment or termination
would adversely affect the Optionee's rights with respect to such
Option; and (ii) if the Option is an Incentive Option, without the
opinion of legal counsel to the Corporation that such amendment or
termination will not constitute a "modification" within the meaning of
Section 424 of the Code if the Committee determines such an opinion is
necessary.
15. APPLICABLE LAW
Except as otherwise provided herein, the Plan shall be construed and
enforced according to the laws of the State of North Carolina.
8
<PAGE> 10
16. SECTION 16(b) COMPLIANCE
To the extent that participants in the Plan are subject to Section 16(b)
of the Exchange Act, it is the intention of the Corporation that transactions
under the Plan shall comply with Rule 16b-3 under the Exchange Act and, if any
Plan provision is later found not to be in compliance with Section 16 of the
Exchange Act, the provision shall be deemed null and void, and in all events the
Plan shall be construed in favor of Plan transactions meeting the requirements
of Rule 16b-3 or successor rules applicable to the Plan.
9
<PAGE> 11
2000 DECLARATION OF AMENDMENT TO
1997 KEY EMPLOYEES' STOCK OPTION PLAN
OF
RF MICRO DEVICES, INC.
THIS 2000 DECLARATION OF AMENDMENT, is made this 3rd day of January,
2000, by RF MICRO DEVICES, INC. (the "Corporation"), to the Corporation's 1997
Key Employees' Stock Option Plan (the "1997 Plan").
R E C I T A L S:
WHEREAS, the Board of Directors of the Corporation has deemed it
advisable to adopt an amendment to the 1997 Plan providing for the automatic
acceleration of outstanding options granted under the 1997 Plan in the event of
certain transactions or actions constituting a change of control of the
Corporation; and
WHEREAS, the Corporation desires to evidence such amendment by this
Declaration of Amendment.
NOW, THEREFORE, IT IS DECLARED that, effective January 3, 2000, the 1997
Plan shall be and hereby is amended as follows:
1. Adoption of New Section 17. The Plan is hereby amended by adding new
Section 17 ("Change of Control") as follows:
"SECTION 17. CHANGE OF CONTROL
(a) Notwithstanding any other provision of the Plan to the
contrary, in the event of a change of control (as defined in Section
17(c) herein), all Options outstanding as of the date of such change of
control shall become fully exercisable, whether or not then otherwise
exercisable.
(b) Notwithstanding the foregoing, in the event of a merger,
share exchange, reorganization or other business combination affecting
the Corporation or a related corporation, the Committee may, in its sole
and absolute discretion, determine that any or all Options granted
pursuant to the Plan shall not become exercisable on an accelerated
basis, if the Corporation or the board of directors of the surviving or
acquiring corporation, as the case may be, shall have taken such action,
including but not limited to the assumption of Options granted under the
Plan or the grant of substitute awards (in either case, with
substantially similar terms as Options granted under the Plan), as in
the opinion of the Committee is equitable or appropriate to protect the
rights and interests of Optionees under the Plan. For the purposes of
making the determinations provided for in this Section 17(b), the
Committee shall be appointed by the Board of Directors, two-thirds of
the members of which shall have been directors of the Corporation prior
to the merger, share exchange, reorganization or other business
combinations affecting the Corporation or a related corporation.
<PAGE> 12
(c) For the purposes herein, a "change of control" shall be
deemed to have occurred on the earliest of the following dates:
(d) The date any entity or person shall have become the
beneficial owner of, or shall have obtained voting control over,
fifty-one percent (51%) or more of the outstanding Common Stock of the
Corporation;
(e) The date the shareholders of the Corporation approve a
definitive agreement (A) to merge or consolidate the Corporation with
or into another corporation, in which the Corporation is not the
continuing or surviving corporation or pursuant to which any shares of
Common Stock of the Corporation would be converted into cash,
securities or other property of another corporation, other than a
merger or consolidation of the Corporation in which holders of Common
Stock immediately prior to the merger or consolidation have the same
proportionate ownership of Common Stock of the surviving corporation
immediately after the merger as immediately before, or (B) to sell or
otherwise dispose of all or substantially all the assets of the
Corporation; or
(f) The date there shall have been a change in a majority of the
Board of Directors of the Corporation within a 12-month period unless
the nomination for election by the Corporation's shareholders of each
new director was approved by the vote of two-thirds of the directors
then still in office who were in office at the beginning of the 12-month
period.
(For purposes herein, the term "person" shall mean any individual,
corporation, partnership, group, association or other person, as such
term is defined in Section 13(d)(3) or Section 14(d)(2) of the Exchange
Act, other than the Corporation, a subsidiary of the Corporation or any
employee benefit plan(s) sponsored or maintained by the Corporation or
any subsidiary thereof, and the term "beneficial owner" shall have the
meaning given the term in Rule 13d-3 under the Exchange Act.)"
2. Continued Effect. Except as set forth herein, the 1997 Plan shall
remain in full force and effect.
IN WITNESS WHEREOF, this Declaration of Amendment is executed on behalf
of RF Micro Devices, Inc. as of the day and year first above written.
RF MICRO DEVICES, INC.
By:
----------------------------
David A. Norbury, President and
Chief Executive Officer
ATTEST:
- - ---------------------------------
Powell T. Seymour, Secretary
[Corporate Seal]
2
<PAGE> 1
EXHIBIT 10.5
1999 STOCK INCENTIVE PLAN
OF
RF MICRO DEVICES, INC.
<PAGE> 2
1999 STOCK INCENTIVE PLAN
OF
RF MICRO DEVICES, INC.
1. PURPOSE
The purpose of the 1999 Stock Incentive Plan of RF Micro Devices, Inc.
(the "Plan") is to encourage and enable selected employees, directors and
independent contractors of RF Micro Devices, Inc. (the "Corporation") and its
related corporations to acquire or to increase their holdings of common stock of
the Corporation (the "Common Stock") and other proprietary interests in the
Corporation in order to promote a closer identification of their interests with
those of the Corporation and its shareholders, thereby further stimulating their
efforts to enhance the efficiency, soundness, profitability, growth and
shareholder value of the Corporation. This purpose will be carried out through
the granting of benefits (collectively referred to herein as "awards") to
selected employees, independent contractors and directors, including the
granting of incentive stock options ("incentive options") intended to qualify
under Section 422 of the Internal Revenue Code of 1986, as amended (the "Code"),
nonqualified stock options ("nonqualified options"), stock appreciation rights
("SARs"), restricted stock awards ("restricted stock awards"), and restricted
units ("restricted units") to such participants. Incentive options and
nonqualified options shall be referred to herein collectively as "options."
Restricted stock awards and restricted units shall be referred to herein
collectively as "restricted awards."
2. ADMINISTRATION OF THE PLAN
(a) The Plan shall be administered by the Board of Directors of the
Corporation (the "Board" or the "Board of Directors") or, upon its delegation,
by the Compensation Committee of the Board of Directors (the "Committee").
Unless the Board determines otherwise, the Committee shall be comprised solely
of "non-employee directors," as such term is defined in Rule 16b-3 under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), or as may
otherwise be permitted under Rule 16b-3. Further, to the extent required by
Section 162(m) of the Code and related regulations, the Plan shall be
administered by a committee comprised of "outside directors" (as such term is
defined in Section 162(m) or related regulations) or as may otherwise be
permitted under Section 162(m) and related regulations. For the purposes herein,
the term "Administrator" shall refer to the Board and, upon its delegation to
the Committee of all or part of its authority to administer the Plan, to the
Committee.
(b) Any action of the Administrator with respect to the Plan may be
taken by a written instrument signed by all of the members of the Board or
Committee, as appropriate, and any such action so taken by written consent shall
be as fully effective as if it had been taken by a majority of the members at a
meeting duly held and called. Subject to the provisions of the Plan, the
Administrator shall have full and final authority in its discretion to take any
action with respect to the Plan including, without limitation, the authority (i)
to determine all matters relating to awards, including selection of individuals
to be granted awards, the types of awards, the number of shares of the Common
Stock, if any, subject to an award, and all terms, conditions, restrictions and
limitations of an award; (ii) to prescribe the form or forms of the agreements
evidencing any awards granted under the Plan; (iii) to establish, amend and
rescind rules and regulations for the administration of the Plan; and (iv) to
construe and interpret the Plan and agreements evidencing awards granted under
the Plan, to interpret rules and
<PAGE> 3
regulations for administering the Plan and to make all other determinations
deemed necessary or advisable for administering the Plan. The Administrator
shall also have authority, in its sole discretion, to accelerate the date that
any award which was not otherwise exercisable or vested shall become exercisable
or vested in whole or in part without any obligation to accelerate such date
with respect to any other award granted to any recipient. In addition, the
Administrator shall have the authority and discretion to establish terms and
conditions of awards as the Administrator determines to be necessary or
appropriate to conform to the applicable requirements or practices of
jurisdictions outside of the United States.
(c) Notwithstanding Section 2(b), the Administrator may delegate to the
chief executive officer of the Corporation the authority to grant awards, and to
make any or all of the determinations reserved for the Administrator in the Plan
and summarized in Section 2(b) herein with respect to such awards, to any
individual who, at the time of said grant or other determination, (i) is not
deemed to be an officer or director of the Corporation within the meaning of
Section 16 of the Exchange Act, (ii) is not deemed to be a covered employee (as
defined in Section 18(b) herein), and (iii) is otherwise eligible under Section
5. To the extent that the Administrator has delegated authority to grant awards
pursuant to this Section 2(c) to the chief executive officer, references to the
Administrator shall include references to such person, subject, however, to the
requirements of the Plan, Rule 16b-3, Section 162(m) of the Code and other
applicable law.
3. EFFECTIVE DATE
The effective date of the Plan shall be July 1, 1999 (the "Effective
Date"). Awards may be granted under the Plan on and after the effective date,
but no awards will be granted after June 30, 2009.
4. SHARES OF STOCK SUBJECT TO THE PLAN; AWARD LIMITATIONS
(a) Subject to adjustments as provided in this Section 4, the number of
shares of Common Stock that may be issued pursuant to awards shall be four
million (4,000,000) shares. Such shares shall be authorized but unissued shares
or shares purchased on the open market or by private purchase. The maximum
number of shares of Common Stock that may be issued under the Plan pursuant to
the grant of restricted awards shall not exceed 500,000 shares. No participant
may be granted awards in any 12- month period for more than 100,000 shares of
Common Stock (or the equivalent value thereof based on the fair market value per
share of the Common Stock on the date of grant of an award).
(b) The Corporation hereby reserves sufficient authorized shares of
Common Stock to meet the grant of awards hereunder. Any shares subject to an
award which is subsequently forfeited, expires or is terminated may again be the
subject of an award granted under the Plan. To the extent that any shares of
Common Stock subject to an award are not delivered to a participant (or his
beneficiary) because the award is forfeited, canceled, settled in cash or used
to satisfy applicable tax withholding obligations, such shares shall not be
deemed to have been issued for purposes of determining the maximum number of
shares of Common Stock available for issuance under the Plan. If the purchase
price of an award granted under the Plan is satisfied by tendering shares of
Common Stock, only the number of shares issued net of the shares of Common Stock
tendered shall be deemed issued for
2
<PAGE> 4
purposes of determining the maximum number of shares of Common Stock available
for issuance under the Plan.
(c) If there is any change in the outstanding shares of Common Stock
because of a merger, consolidation or reorganization involving the Corporation
or a related corporation, or if the Board of Directors of the Corporation
declares a stock dividend or stock split distributable in shares of Common
Stock, or if there is a similar change in the capital stock structure of the
Corporation or a related corporation affecting the Common Stock, the number of
shares of Common Stock reserved for issuance under the Plan shall be
correspondingly adjusted, and the Administrator shall make such adjustments to
awards or to any provisions of this Plan as the Administrator deems equitable to
prevent dilution or enlargement of awards or as may be otherwise advisable.
5. ELIGIBILITY
An award may be granted only to an individual who satisfies the
following eligibility requirements on the date the award is granted:
(a) The individual is either (i) an employee of the Corporation or a
related corporation, (ii) a director of the Corporation or a related
corporation, or (iii) an independent contractor, consultant or advisor
(collectively, "independent contractors") providing services to the Corporation
or a related corporation. For this purpose, an individual shall be considered to
be an "employee" only if there exists between the individual and the Corporation
or a related corporation the legal and bona fide relationship of employer and
employee.
(b) With respect to the grant of incentive options, the individual does
not own, immediately before the time that the incentive option is granted, stock
possessing more than 10% of the total combined voting power of all classes of
stock of the Corporation or a related corporation. Notwithstanding the
foregoing, an individual who owns more than 10% of the total combined voting
power of the Corporation or a related corporation may be granted an incentive
option if the option price is at least 110% of the fair market value of the
Common Stock (as defined in Section 6(c)(ii) herein), and the option period (as
defined in Section 6(d) herein) does not exceed five years. For this purpose, an
individual will be deemed to own stock which is attributable to him under
Section 424(d) of the Code.
(c) With respect to the grant of substitute awards or assumption of
awards in connection with a merger, reorganization or similar business
combination involving the Corporation or related corporation, the recipient is
otherwise eligible to receive the award and the terms of the award are
consistent with the Plan and applicable laws, rules and regulations (including,
to the extent necessary, the federal securities laws registration provisions and
Section 424(a) of the Code).
(d) The individual, being otherwise eligible under this Section 5, is
selected by the Administrator as an individual to whom an award shall be granted
(a "participant").
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6. OPTIONS
(a) Grant of Options: Subject to the limitations of the Plan, the
Administrator may in its sole and absolute discretion grant options to such
eligible individuals in such numbers, upon such terms and at such times as the
Administrator shall determine. Both incentive options and nonqualified options
may be granted under the Plan. To the extent that an option is designated as an
incentive option but does not qualify as such under Section 422 of the Code, the
option (or portion thereof) shall be treated as a nonqualified option.
(b) Option Price: The price per share at which an option may be
exercised (the "option price") shall be established by the Administrator and
stated in the agreement evidencing the grant of the option; provided, that (i)
in the case of an incentive option, the option price shall be no less than the
fair market value per share of the Common Stock (as determined in accordance
with Section 6(c)(ii) on the date the option is granted) and (ii) in no event
shall the option price per share of any option be less than the par value per
share of the Common Stock.
(c) Date of Grant; Fair Market Value
(i) An incentive option shall be considered to be granted on
the date that the Administrator acts to grant the option, or on any
later date specified by the Administrator as the effective date of the
option. A nonqualified option shall be considered to be granted on the
date the Administrator acts to grant the option or any other date
specified by the Administrator as the date of grant of the option.
(ii) For the purposes of the Plan, the fair market value per
share of the Common Stock shall be established in good faith by the
Administrator and, except as may otherwise be determined by the
Administrator, the fair market value shall be determined in accordance
with the following provisions: (A) if the shares of Common Stock are
listed for trading on the New York Stock Exchange or the American Stock
Exchange, the fair market value shall be the closing sales price per
share of the shares on the New York Stock Exchange or the American
Stock Exchange (as applicable) on the date immediately preceding the
date the option is granted, or, if there is no transaction on such
date, then on the trading date nearest preceding the date the option is
granted for which closing price information is available, and, provided
further, if the shares are quoted on the Nasdaq National Market or the
Nasdaq SmallCap Market of the Nasdaq Stock Market but are not listed
for trading on the New York Stock Exchange or the American Stock
Exchange, the fair market value shall be the closing sales price for
such stock (or the closing bid, if no sales were reported) as quoted on
such system on the date immediately preceding the date the option is
granted for which such information is available; or (B) if the shares
of Common Stock are not listed or reported in any of the foregoing,
then the fair market value shall be determined by the Administrator in
accordance with the applicable provisions of Section 20.2031-2 of the
Federal Estate Tax Regulations, or in any other manner consistent with
the Code and accompanying regulations.
(iii) In no event shall there first become exercisable by an
employee in any one calendar year incentive options granted by the
Corporation or any related corporation with
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respect to shares having an aggregate fair market value (determined at
the time an incentive option is granted) greater than $100,000.
(d) Option Period and Limitations on the Right to Exercise Options
(i) The term of an option (the "option period") shall be
determined by the Administrator at the time the option is granted and
stated in the individual agreement. With respect to incentive options,
the option period shall not extend more than 10 years from the date on
which the option is granted. Any option or portion thereof not
exercised before expiration of the option period shall terminate. The
period or periods during which an option may become exercisable shall
be determined by the Administrator in a manner consistent with the
terms of the Plan.
(ii) An option may be exercised by giving written notice to
the Corporation at such place as the Corporation or its designee shall
direct. Such notice shall specify the number of shares to be purchased
pursuant to an option and the aggregate purchase price to be paid
therefor, and shall be accompanied by the payment of such purchase
price. Unless the individual option agreement provides otherwise, such
payment shall be in the form of (A) cash; (B) delivery (by either
actual delivery or attestation) of shares of Common Stock owned by the
participant at the time of exercise and acceptable to the
Administrator; (C) shares of Common Stock withheld upon exercise; (D)
delivery of written notice of exercise to the Corporation and delivery
to a broker of written notice of exercise and irrevocable instructions
to promptly deliver to the Corporation the amount of sale or loan
proceeds to pay the option price; or (E) a combination of the foregoing
methods. Shares tendered or withheld in payment on the exercise of an
option shall be valued at their fair market value on the date of
exercise, as determined by the Administrator by applying the provisions
of Section 6(c)(ii).
(iii) Unless an individual option agreement provides
otherwise, no option granted to a participant who was an employee at
the time of grant shall be exercised unless the participant is, at the
time of exercise, an employee as described in Section 5(a), and has
been an employee continuously since the date the option was granted,
subject to the following:
(A) An option shall not be affected by any change in
the terms, conditions or status of the participant's
employment, provided that the participant continues to be an
employee of the Corporation or a related corporation.
(B) The employment relationship of a participant
shall be treated as continuing intact for any period that the
participant is on military or sick leave or other bona fide
leave of absence, provided that the period of such leave does
not exceed 90 days, or, if longer, as long as the
participant's right to reemployment is guaranteed either by
statute or by contract. The employment relationship of a
participant shall also be treated as continuing intact while
the participant is not in active service because of
disability. The Administrator shall
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have sole authority to determine whether a participant is
disabled and, if applicable, the date of a participant's
termination of employment or service for any reason (the
"termination date").
(C) Unless an individual option agreement provides
otherwise, if the employment of a participant is terminated
because of disability, or if the participant dies while he is
an employee, the option may be exercised only to the extent
exercisable on the participant's termination date, except that
the Administrator may in its discretion accelerate the date
for exercising all or any part of the option which was not
otherwise exercisable on the termination date. The option must
be exercised, if at all, prior to the first to occur of the
following, whichever shall be applicable: (X) the close of the
period of 12 months next succeeding the termination date; or
(Y) the close of the option period. In the event of the
participant's death, such option shall be exercisable by such
person or persons as shall have acquired the right to exercise
the option by will or by the laws of intestate succession.
(D) Unless an individual option agreement provides
otherwise, if the employment of the participant is terminated
for any reason other than disability, death or for "cause,"
his option may be exercised to the extent exercisable on his
termination date, except that the Administrator may in its
discretion accelerate the date for exercising all or any part
of the option which was not otherwise exercisable on the
termination date. The option must be exercised, if at all,
prior to the first to occur of the following, whichever shall
be applicable: (X) the close of the period of 90 days next
succeeding the termination date; or (Y) the close of the
option period. If the participant dies following such
termination of employment and prior to the earlier of the
dates specified in (X) or (Y) of this subparagraph (D), the
participant shall be treated as having died while employed
under subparagraph (C) immediately preceding (treating for
this purpose the participant's date of termination of
employment as the termination date). In the event of the
participant's death, such option shall be exercisable by such
person or persons as shall have acquired the right to exercise
the option by will or by the laws of intestate succession.
(E) Unless an individual option agreement provides
otherwise, if the employment of the participant is terminated
for "cause," his option shall lapse and no longer be
exercisable as of his termination date, as determined by the
Administrator. For purposes of this subparagraph (E) and
subparagraph (D), the participant's termination shall be for
"cause" if such termination results from the participant's (X)
dishonesty; (Y) refusal to perform his duties for the
Corporation; or (Z) engaging in conduct that could be
materially damaging to the Corporation without a reasonable
good faith belief that such conduct was in the best interest
of the Corporation. The determination of "cause" shall be made
by the Administrator and its determination shall be final and
conclusive.
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(F) Notwithstanding the foregoing, the Administrator
shall have authority, in its discretion, to extend the period
during which an option may be exercised; provided that, in the
event that any such extension shall cause an incentive option
to be designated as a nonqualified option, no such extension
shall be made without the prior written consent of the
participant.
(iv) Unless an individual option agreement provides otherwise,
an option granted to a participant who was a non-employee director of
the Corporation or a related corporation at the time of grant may be
exercised only to the extent exercisable on the date of the
participant's termination of service to the Corporation or a related
corporation (unless the termination was for cause), and must be
exercised, if at all, prior to the first to occur of the following, as
applicable: (X) the close of the period of one year next succeeding the
termination date; or (Y) the close of the option period. If the
services of such a participant are terminated for cause (as defined in
Section 6(d)(iii)(E) herein), his option shall lapse and no longer be
exercisable as of his termination date, as determined by the
Administrator. Notwithstanding the foregoing, the Administrator may in
its discretion accelerate the date for exercising all or any part of an
option which was not otherwise exercisable on the termination date or
extend the period during which an option may be exercised, or both.
(v) Unless an individual option agreement provides otherwise,
an option granted to a participant who was an independent contractor of
the Corporation or a related corporation at the time of grant (and who
does not thereafter become an employee, in which case he shall be
subject to the provisions of Section 6(d)(iii) herein) may be exercised
only to the extent exercisable on the date of the participant's
termination of service to the Corporation or a related corporation
(unless the termination was for cause), and must be exercised, if at
all, prior to the first to occur of the following, as applicable: (X)
the close of the period of 90 days next succeeding the termination
date; or (Y) the close of the option period. If the services of such a
participant are terminated for cause (as defined in Section
6(d)(iii)(E) herein), his option shall lapse and no longer be
exercisable as of his termination date, as determined by the
Administrator. Notwithstanding the foregoing, the Administrator may in
its discretion accelerate the date for exercising all or any part of an
option which was not otherwise exercisable on the termination date or
extend the period during which an option may be exercised, or both.
(vi) A participant or his legal representative, legatees or
distributees shall not be deemed to be the holder of any shares subject
to an option and shall not have any rights of a shareholder unless and
until certificates for such shares have been issued and delivered to
him or them under the Plan. A certificate or certificates for shares of
Common Stock acquired upon exercise of an option shall be issued in the
name of the participant (or his beneficiary) and distributed to the
participant (or his beneficiary) as soon as practicable following
receipt of notice of exercise and payment of the purchase price (except
as may otherwise be determined by the Corporation in the event of
payment of the option price pursuant to Section 6(d)(ii)(D) herein).
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(e) Nontransferability of Options
(i) Incentive options shall not be transferable other than by
will or the laws of intestate succession. Nonqualified options shall
not be transferable other than by will or the laws of intestate
succession, except as may be permitted by the Administrator in a manner
consistent with the registration provisions of the Securities Act of
1933, as amended (the "Securities Act"). Except as may be permitted by
the preceding sentence, an option shall be exercisable during the
participant's lifetime only by him or by his guardian or legal
representative. The designation of a beneficiary does not constitute a
transfer.
(ii) If a participant is subject to Section 16 of the Exchange
Act, shares of Common Stock acquired upon exercise of an option may
not, without the consent of the Administrator, be disposed of by the
participant until the expiration of six months after the date the
option was granted.
7. STOCK APPRECIATION RIGHTS
(a) Grant of SARs: Subject to the limitations of the Plan, the
Administrator may in its sole and absolute discretion grant SARs to such
eligible individuals, in such numbers, upon such terms and at such times as the
Administrator shall determine. SARs may be granted to an optionee of an option
(hereinafter called a "related option") with respect to all or a portion of the
shares of Common Stock subject to the related option (a "tandem SAR") or may be
granted separately to an eligible individual (a "freestanding SAR").
(b) Tandem SARs: A tandem SAR may be granted either concurrently with
the grant of the related option or (if the related option is a nonqualified
option) at any time thereafter prior to the complete exercise, termination,
expiration or cancellation of such related option. Tandem SARs shall be
exercisable only at the time and to the extent that the related option is
exercisable (and may be subject to such additional limitations on exercisability
as the Administrator may provide in the agreement), and in no event after the
complete termination or full exercise of the related option. For purposes of
determining the number of shares of Common Stock that remain subject to such
related option and for purposes of determining the number of shares of Common
Stock in respect of which other awards may be granted, a related option shall be
considered to have been surrendered upon the exercise of a tandem SAR to the
extent of the number of shares of Common Stock with respect to which such tandem
SAR is exercised. Upon the exercise or termination of a related option, the
tandem SARs with respect thereto shall be canceled automatically to the extent
of the number of shares of Common Stock with respect to which the related option
was so exercised or terminated. Subject to the limitations of the Plan, upon the
exercise of a tandem SAR, the participant shall be entitled to receive from the
Corporation, for each share of Common Stock with respect to which the tandem SAR
is being exercised, consideration equal in value to the excess of the fair
market value of a share of Common Stock on the date of exercise over the related
option price per share; provided, that the Administrator may establish a maximum
value payable for such SARs.
(c) Freestanding SARs: Unless an individual agreement provides
otherwise, the base price of a freestanding SAR shall be not less than 100% of
the fair market value of the Common Stock (as
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<PAGE> 10
determined in accordance with Section 6(c)(ii) herein) on the date of grant of
the freestanding SAR. Subject to the limitations of the Plan, upon the exercise
of a freestanding SAR, the participant shall be entitled to receive from the
Corporation, for each share of Common Stock with respect to which the
freestanding SAR is being exercised, consideration equal in value to the excess
of the fair market value of a share of Common Stock on the date of exercise over
the base price per share of such freestanding SAR; provided, that the
Administrator may establish a maximum value payable for such SARs.
(d) Exercise of SARs:
(i) Subject to the terms of the Plan, SARs shall be
exercisable in whole or in part upon such terms and conditions as may
be established by the Administrator and stated in the related
agreement. The period during which an SAR may be exercisable shall not
exceed 10 years from the date of grant or, in the case of tandem SARs,
such shorter option period as may apply to the related option. Any SAR
or portion thereof not exercised before expiration of the exercise
period established by the Administrator shall terminate.
(ii) SARs may be exercised by giving written notice to the
Corporation at such place as the Administrator or its designee shall
direct. The date of exercise of an SAR shall mean the date on which the
Corporation shall have received proper notice from the participant of
the exercise of such SAR.
(iii) No SAR may be exercised unless the participant is, at
the time of exercise, an eligible participant, as described in Section
5, and has been a participant continuously since the date the SAR was
granted, subject to the provisions of Sections 6(d)(iii), (iv) and (v)
herein.
(e) Consideration: The consideration to be received upon the exercise
of the SAR by the participant shall be paid in cash, shares of Common Stock
(valued at fair market value on the date of exercise of such SAR in accordance
with Section 6(c)(ii) herein) or a combination of cash and shares of Common
Stock, as elected by the Administrator. The Corporation's obligation arising
upon the exercise of the SAR may be paid currently or on a deferred basis with
such interest or earnings equivalent, if any, as the Administrator may
determine. A certificate or certificates for shares of Common Stock acquired
upon exercise of an SAR for shares shall be issued in the name of the
participant (or his beneficiary) and distributed to the participant (or his
beneficiary) as soon as practicable following receipt of notice of exercise. A
participant or his legal representative, legatees or distributees shall not be
deemed to be the holder of any shares subject to an SAR and shall not have any
rights as a shareholder unless and until certificates for such shares have been
issued and delivered to him or them under the Plan. No fractional shares of
Common Stock will be issuable upon exercise of the SAR and, unless otherwise
provided in the applicable agreement, the participant will receive cash in lieu
of fractional shares.
(f) Limitations: The applicable SAR agreement shall contain such terms,
conditions and limitations consistent with the Plan as may be specified by the
Administrator. Unless otherwise provided in the applicable agreement or the
Plan, any such terms, conditions or limitations relating to a tandem SAR shall
not restrict the exercisability of the related option.
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(g) Nontransferability:
(i) SARs shall not be transferable other than by will or the
laws of intestate succession. SARs may be exercised during the
participant's lifetime only by him or by his guardian or legal
representative. The designation of a beneficiary does not constitute a
transfer.
(ii) If the participant is subject to Section 16 of the
Exchange Act, shares of Common Stock acquired upon exercise of an SAR
may not, without the consent of the Administrator, be disposed of by
the participant until the expiration of six months after the date the
SAR was granted.
8. RESTRICTED AWARDS
(a) Grant of Restricted Awards: Subject to the limitations of the Plan,
the Administrator may in its sole and absolute discretion grant restricted
awards to such individuals in such numbers, upon such terms and at such times as
the Administrator shall determine. A restricted award may consist of a
restricted stock award or a restricted unit, or both. Restricted awards shall be
payable in cash or whole shares of Common Stock (including restricted stock), or
partly in cash and partly in whole shares of Common Stock, in accordance with
the terms of the Plan and the sole and absolute discretion of the Administrator.
The Administrator shall determine the nature, length and starting date of the
period, if any, during which a restricted award may be earned (the "restriction
period"), and shall determine the conditions which must be met in order for a
restricted award to be granted or to vest or be earned (in whole or in part),
which conditions may include, but are not limited to, attainment of performance
objectives, completion of the restriction period (or a combination of attainment
of performance objectives and completion of the restriction period), retirement,
displacement, disability or death, or any combination of such conditions. In the
case of restricted awards based upon performance criteria, or a combination of
performance criteria and continued service, the Administrator shall determine
the performance objectives to be used in valuing restricted awards and determine
the extent to which such awards have been earned. Performance objectives may
vary from participant to participant and between groups of participants and
shall be based upon such Corporation, business unit and/or individual
performance factors and criteria as the Administrator in its sole discretion may
deem appropriate, including, but not limited to, sales goals, earnings per
share, return on equity, return on assets or total return to shareholders. The
Administrator shall have sole authority to determine whether and to what degree
restricted awards have been earned and are payable and to interpret the terms
and conditions of restricted awards and the provisions herein. The Administrator
shall also determine the form and terms of payment of awards. The Administrator,
in its sole and absolute discretion, may accelerate the date that any restricted
award granted to the participant shall be deemed to be earned in whole or in
part, without any obligation to accelerate such date with respect to other
restricted awards.
(b) Forfeiture of Restricted Awards: Unless an individual agreement
provides otherwise, if the employment or service of a participant shall be
terminated for any reason and the participant has not yet earned all or part of
a restricted award pursuant to the terms of the Plan and the individual
agreement, such award to the extent not then earned shall be forfeited
immediately upon such termination and the participant shall have no further
rights with respect thereto.
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(c) Dividend and Voting Rights; Share Certificates: Unless an
individual agreement provides otherwise, (i) a participant shall have no
dividend rights or voting rights or other rights as a shareholder with respect
to shares subject to a restricted award that has not yet vested; and (ii) a
certificate or certificates for shares representing a restricted award payable
in shares shall be issued in the name of the participant (or his beneficiary)
and distributed to the participant (or his beneficiary) as soon as practicable
after the shares subject to the award shall be earned.
(d) Nontransferability:
(i) The recipient of a restricted award shall not sell,
transfer, assign, pledge or otherwise encumber shares subject to the
award until all conditions to vesting have been met and shares have
been issued and delivered to him.
(ii) Restricted awards shall not be transferable other than by
will or the laws of intestate succession. The designation of a
beneficiary does not constitute a transfer.
(iii) If a participant of a restricted award is subject to
Section 16 of the Exchange Act, shares of Common Stock subject to such
award may not, without the consent of the Administrator, be sold or
otherwise disposed of within six months following the date of grant of
such award.
9. WITHHOLDING
The Corporation shall withhold all required local, state and federal
taxes from any amount payable in cash with respect to an award. The Corporation
shall require any recipient of an award payable in shares of the Common Stock to
pay to the Corporation in cash the amount of any tax or other amount required by
any governmental authority to be withheld and paid over by the Corporation to
such authority for the account of such recipient. Notwithstanding the foregoing,
the Corporation may establish procedures to permit a recipient to satisfy such
obligation in whole or in part, and any other local, state or federal income tax
obligations relating to such an award, by electing (the "election") to have the
Corporation withhold shares of Common Stock from the shares to which the
recipient is entitled. The number of shares to be withheld shall have a fair
market value as of the date that the amount of tax to be withheld is determined
as nearly equal as possible to (but not exceeding) the amount of such
obligations being satisfied. Each election must be made in writing to the
Administrator in accordance with election procedures established by the
Administrator.
10. SECTION 16(b) COMPLIANCE
It is the general intent of the Corporation that transactions under the
Plan which are subject to Section 16 of the Exchange Act shall comply with Rule
16b-3 under the Exchange Act. Notwithstanding anything in the Plan to the
contrary, the Administrator, in its sole and absolute discretion, may bifurcate
the Plan so as to restrict, limit or condition the use of any provision of the
Plan to participants who are officers or directors subject to Section 16 of the
Exchange Act without so restricting, limiting or conditioning the Plan with
respect to other participants.
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11. NO RIGHT OR OBLIGATION OF CONTINUED EMPLOYMENT
Nothing in the Plan shall confer upon the participant any right to
continue in the service of the Corporation or a related corporation as an
employee, director, or independent contractor or to interfere in any way with
the right of the Corporation or a related corporation to terminate the
participant's employment or service at any time. Except as otherwise provided in
the Plan or an individual agreement, awards granted under the Plan to employees
of the Corporation or a related corporation shall not be affected by any change
in the duties or position of the participant, as long as such individual remains
an employee of, or in service to, the Corporation or a related corporation.
12. UNFUNDED PLAN; RETIREMENT PLANS
(a) Neither a participant nor any other person shall, by reason of the
Plan, acquire any right in or title to any assets, funds or property of the
Corporation or any related corporation, including, without limitation, any
specific funds, assets or other property which the Corporation or any related
corporation, in their discretion, may set aside in anticipation of a liability
under the Plan. A participant shall have only a contractual right to the Common
Stock or amounts, if any, payable under the Plan, unsecured by any assets of the
Corporation or any related corporation. Nothing contained in the Plan shall
constitute a guarantee that the assets of such corporations shall be sufficient
to pay any benefits to any person.
(b) In no event shall any amounts accrued, distributable or payable
under the Plan be treated as compensation for the purpose of determining the
amount of contributions or benefits to which any person shall be entitled under
any retirement plan sponsored by the Corporation or a related corporation that
is intended to be a qualified plan within the meaning of Section 401(a) of the
Code.
13. AMENDMENT AND TERMINATION OF THE PLAN
The Plan and any award granted under the Plan may be amended or
terminated at any time by the Board of Directors of the Corporation; provided,
that (i) approval of an amendment to the Plan by the shareholders of the
Corporation shall be required to the extent, if any, that shareholder approval
of such amendment is required by applicable law, rule or regulation; and (ii)
such amendment or termination of an award shall not, without the consent of a
recipient of an award, adversely affect the rights of the recipient with respect
to an outstanding award.
14. RESTRICTIONS ON SHARES
The Corporation may impose such restrictions on any shares representing
awards hereunder as it may deem advisable, including without limitation
restrictions under the federal securities laws, the requirements of any stock
exchange or similar organization and any blue sky or state securities laws
applicable to such shares. Notwithstanding any other Plan provision to the
contrary, the Corporation shall not be obligated to issue, deliver or transfer
shares of Common Stock under the Plan or make any other distribution of benefits
under the Plan, or take any other action, unless such delivery, distribution or
action is in compliance with all applicable laws, rules and regulations
(including but not limited to the requirements of the Securities Act). The
Corporation may cause a restrictive legend to be placed
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on any certificate issued pursuant to an award hereunder in such form as may be
prescribed from time to time by applicable laws and regulations or as may be
advised by legal counsel.
15. APPLICABLE LAW
The Plan shall be governed by and construed in accordance with the laws
of the State of North Carolina, without regard to the conflict of laws
provisions of any state.
16. SHAREHOLDER APPROVAL
The Plan is subject to approval by the shareholders of the Corporation,
which approval must occur, if at all, within 12 months of the effective date of
the Plan. Awards granted prior to such shareholder approval shall be conditioned
upon and shall be effective only upon approval of the Plan by such shareholders
on or before such date.
17. CHANGE OF CONTROL
(a) Notwithstanding any other provision of the Plan to the contrary, in
the event of a change of control (as defined in Section 17(b) herein):
(i) All options and SARs outstanding as of the date of such
change of control shall become fully exercisable, whether or not then
otherwise exercisable.
(ii) Any restrictions including but not limited to the
restriction period applicable to any restricted award shall be deemed
to have expired, and such restricted awards shall become fully vested
and payable to the fullest extent of the original grant of the
applicable award.
(iii) Notwithstanding the foregoing, in the event of a merger,
share exchange, reorganization or other business combination affecting
the Corporation or a related corporation, the Administrator may, in its
sole and absolute discretion, determine that any or all awards granted
pursuant to the Plan shall not vest or become exercisable on an
accelerated basis, if the Corporation or the board of directors of the
surviving or acquiring corporation, as the case may be, shall have
taken such action, including but not limited to the assumption of
awards granted under the Plan or the grant of substitute awards (in
either case, with substantially similar terms as awards granted under
the Plan), as in the opinion of the Administrator is equitable or
appropriate to protect the rights and interests of participants under
the Plan. For the purposes herein, if the Committee is acting as the
Administrator authorized to make the determinations provided for in
this Section 17(a)(iii), the Committee shall be appointed by the Board
of Directors, two-thirds of the members of which shall have been
directors of the Corporation prior to the merger, share exchange,
reorganization or other business combinations affecting the Corporation
or a related corporation.
(b) For the purposes herein, a "change of control" shall be deemed to
have occurred on the earliest of the following dates:
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<PAGE> 15
(i) The date any entity or person that is not a shareholder on
the effective date of the Plan shall have become the beneficial owner
of, or shall have obtained voting control over, fifty-one percent (51%)
or more of the outstanding Common Stock of the Corporation;
(ii) The date the shareholders of the Corporation approve a
definitive agreement (A) to merge or consolidate the Corporation with
or into another corporation, in which the Corporation is not the
continuing or surviving corporation or pursuant to which any shares of
Common Stock of the Corporation would be converted into cash,
securities or other property of another corporation, other than a
merger or consolidation of the Corporation in which holders of Common
Stock immediately prior to the merger or consolidation have the same
proportionate ownership of Common Stock of the surviving corporation
immediately after the merger as immediately before, or (B) to sell or
otherwise dispose of all or substantially all the assets of the
Corporation; or
(iii) The date there shall have been a change in a majority of
the Board of Directors of the Corporation within a 12-month period
unless the nomination for election by the Corporation's shareholders of
each new director was approved by the vote of two-thirds of the
directors then still in office who were in office at the beginning of
the 12-month period.
(For purposes herein, the term "person" shall mean any individual,
corporation, partnership, group, association or other person, as such
term is defined in Section 13(d)(3) or Section 14(d)(2) of the Exchange
Act, other than the Corporation, a subsidiary of the Corporation or any
employee benefit plan(s) sponsored or maintained by the Corporation or
any subsidiary thereof, and the term "beneficial owner" shall have the
meaning given the term in Rule 13d-3 under the Exchange Act.)
18. CERTAIN DEFINITIONS
In addition to other terms defined in the Plan, the following terms
shall have the meaning indicated:
(a) "Agreement" means any written agreement or agreements between the
Corporation and the recipient of an award pursuant to the Plan relating to the
terms, conditions and restrictions of options, SARs, restricted awards and any
other awards conferred herein.
(b) "Covered employee" shall have the meaning given the term in Section
162(m) of the Code or the regulations thereunder.
(c) "Disability" shall mean the inability to engage in any substantial
gainful activity by reason of any medically determinable physical or mental
impairment which can be expected to result in death, or which has lasted or can
be expected to last for a continuous period of not less than twelve months.
(d) "Parent" or "parent corporation" shall mean any corporation (other
than the Corporation) in an unbroken chain of corporations ending with the
Corporation if each corporation other than the Corporation owns stock possessing
50% or more of the total combined voting power of all classes of stock in
another corporation in the chain.
14
<PAGE> 16
(e) "Predecessor" or "predecessor corporation" means a corporation
which was a party to a transaction described in Section 424(a) of the Code (or
which would be so described if a substitution or assumption under Section 424(a)
had occurred) with the Corporation, or a corporation which is a parent or
subsidiary of the Corporation, or a predecessor of any such corporation.
(f) "Related corporation" means any parent, subsidiary or predecessor
of the Corporation.
(g) "Restricted stock" shall mean shares of Common Stock which are
subject to restricted awards payable in shares, the vesting of which is subject
to restrictions set forth in the Plan or the agreement relating to such award.
(h) "Retirement" shall mean retirement in accordance with the
retirement policies and procedures established by the Corporation, unless an
individual agreement establishes a different meaning for such term.
(i) "Subsidiary" or "subsidiary corporation" means any corporation
(other than the Corporation) in an unbroken chain of corporations beginning with
the Corporation if each corporation other than the last corporation in the
unbroken chain owns stock possessing 50% or more of the total combined voting
power of all classes of stock in another corporation in the chain.
IN WITNESS WHEREOF, this 1999 Stock Incentive Plan of RF Micro Devices,
Inc., is, by the authority of the Board of Directors of the Corporation,
executed in behalf of the Corporation, the ____ day of _______________, 1999.
RF MICRO DEVICES, INC.
By:
-----------------------------------
Name: _________________________________
Title: ________________________________
ATTEST:
- - ----------------------------------
Secretary
[Corporate Seal]
15
<PAGE> 17
2000 DECLARATION OF AMENDMENT TO
1999 STOCK INCENTIVE PLAN
OF
RF MICRO DEVICES, INC.
THIS 2000 DECLARATION OF AMENDMENT, is made this 3rd day of January,
2000, by RF MICRO DEVICES, INC. (the "Corporation"), to the Corporation's 1999
Stock Incentive Plan (the "1999 Plan").
R E C I T A L S:
WHEREAS, the Board of Directors of the Corporation has deemed it
advisable to amend Section 17(b)(i) of the 1999 Plan; and
WHEREAS, the Corporation desires to evidence such amendment by this
Declaration of Amendment.
NOW, THEREFORE, IT IS DECLARED that, effective January 3, 2000, the 1999
Plan shall be and hereby is amended as follows:
1. Amendment to Section 17. Section 17 ("Change of Control") of the 1999
Plan is hereby amended by deleting Section 17(b)(i) and inserting the following
in lieu thereof:
"(i) The date any entity or person shall have become the
beneficial owner of, or shall have obtained voting control over,
fifty-one percent (51%) or more of the outstanding Common Stock of the
Corporation;"
2. Continued Effect. Except as set forth herein, the 1999 Plan shall
remain in full force and effect.
IN WITNESS WHEREOF, this Declaration of Amendment is executed on behalf
of RF Micro Devices, Inc. as of the day and year first above written.
RF MICRO DEVICES, INC.
By:
--------------------------------
David A. Norbury, President and
Chief Executive Officer
ATTEST:
- - ---------------------------------
Powell T. Seymour, Secretary
[Corporate Seal]
<PAGE> 1
EXHIBIT 10.6
RF MICRO DEVICES, INC.
Stock Option Agreement
THIS STOCK OPTION AGREEMENT (the "Agreement"), made as of the 27th day
of October 1998, between RF MICRO DEVICES, INC., a North Carolina corporation
(the "Corporation"), and Walter H. Wilkinson, Jr. (the "Director");
R E C I T A L :
To compensate the Director for his service on the Board of Directors
and to promote a closer identification of his interests with those of the
Corporation, the Corporation and the Director hereby agree as follows:
1. The Corporation hereby grants to the Director as a matter of
separate inducement and agreement in connection with his services to the
Corporation, the right and option (the "Option") to purchase all or any part of
an aggregate of five thousand (5,000) shares of the Common Stock of the
Corporation (the "shares"), at the purchase price of $20.875 per share. The
Option is designated as a nonqualified stock option and, as such, is not
intended to qualify for treatment as an incentive stock option under Section 422
of the Internal Revenue Code of 1986, as amended. The Option will expire if not
exercised in full on or before the 26th day of October, 2008.
2. The Option shall become exercisable on the dates set forth on
Schedule A hereto. To the extent that the Option is exercisable but not
exercised, such Option shall accumulate and be exercisable by the Director in
whole or in part at any time prior to expiration of the Option. An Option shall
be exercised by giving written notice to the Secretary of the Corporation or his
designee. Such notice shall specify the number of shares to be purchased
pursuant to the Option and the aggregate purchase price to be paid therefor, and
shall be accompanied by the payment of such purchase price. Such payment shall
be in the form of (i) cash; (ii) shares of Common Stock owned by the Director at
the time of exercise; (iii) shares of Common Stock withheld upon exercise; (iv)
delivery of written notice of exercise to the Secretary and delivery to a broker
of written notice of exercise and irrevocable instructions to promptly deliver
to the Corporation the amount of sale or loan proceeds to pay the Option price;
or (v) a combination of such methods. Shares of Common Stock tendered or
withheld in payment upon the exercise of an Option shall be valued at their fair
market value on the date of exercise, as determined by the Corporation. Upon the
exercise of an Option in whole or in part and payment of the purchase price to
the Corporation in accordance with the foregoing, the Corporation shall as soon
thereafter as practicable deliver to the Director a certificate or certificates
for the shares purchased.
3. Nothing contained in this Agreement shall require the Corporation or
a related corporation to continue the services of the Director as a director for
any particular period of time, nor shall it require the Director to remain in
service to the Corporation or a related corporation as a director for any
particular period of time. Except as otherwise expressly provided below, all
rights
<PAGE> 2
of the Director under this Agreement with respect to the unexercised portion of
his Option shall terminate immediately upon termination of the services of the
Director with the Corporation as a director. Notwithstanding the foregoing, (i)
if the Director dies while serving as a director, any portion of his Option
which was exercisable immediately before his death may be exercised at any time
within 180 days of the date of death by such person or persons as shall have
acquired the right to exercise the Option by will or the laws of intestate
succession; and (ii) if the Director's service on the Board terminates for any
reason other than death, that portion of his Option which was exercisable
immediately before such termination may be exercised at any time within 30 days
following the date of such termination, and after such 30-day period such Option
shall terminate.
4. This Option shall not be transferable (including by pledge or
hypothecation) other than by will or the laws of intestate succession. To the
extent required by Rule 16b-3, shares of Common Stock acquired upon exercise of
an Option shall not, without the consent of the Corporation, be disposed of by
the Director until the expiration of six months after the date the Option was
granted. This Option shall be exercisable during the Director's lifetime only by
the Director or by his guardian or legal representative.
5. This Agreement shall be binding upon and shall inure to the benefit
of the parties hereto and their respective executors, administrators,
next-of-kin, successors and assigns.
6. The Corporation may impose such restrictions on any shares issued
pursuant to the exercise of the Option granted hereunder as it may deem
advisable, including without limitation restrictions under the Securities Act of
1933, as amended, the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and the requirements of any applicable self-regulatory organization and
any blue sky or securities laws applicable to such shares. Notwithstanding any
other provision herein to the contrary, the Corporation shall not be obligated
to issue, deliver or transfer shares of Common Stock under this Agreement or to
take any other action unless such action is in compliance with applicable laws,
rules and regulations (including but not limited to the requirements of the
federal securities laws). The Corporation may cause a restrictive legend to be
placed on any certificate issued pursuant to the exercise of an Option granted
hereunder in such form as may be prescribed from time to time by applicable laws
and regulations or as may be advised by legal counsel to the Corporation.
It is the general intent of the Corporation that this
Agreement and transactions under this Agreement shall comply in all respects
with Rule 16b-3 under the Exchange Act, and, if any provision herein is later
found not to be in compliance with Section 16 of the Exchange Act the provision
shall be deemed null and void, and in all events this Agreement shall be
construed in favor of transactions hereunder meeting the requirements of Rule
16b-3 or successor rules applicable to this Agreement.
7. Notwithstanding any other provision of this Agreement to the
contrary, in the event of a Change of Control (as defined below), the Option
outstanding as of the date of such Change of Control shall become fully
exercisable, whether or not then otherwise exercisable. Notwithstanding
2
<PAGE> 3
the foregoing, in the event of a merger, share exchange, reorganization or other
business combination affecting the Corporation or a related corporation, the
Board of Directors of the Corporation may, in its sole and absolute discretion,
determine that any or all of the Option shall not become exercisable on an
accelerated basis, if the board of directors of the surviving or acquiring
corporation, as the case may be, shall have taken such action, including but not
limited to the assumption of the Option or the grant of substitute awards (in
either case, with substantially similar terms as the Option), as in the opinion
of the Board of Directors is equitable or appropriate to protect the rights and
interests of the Director under this Agreement.
For the purposes of this Agreement, a "Change of Control"
shall be deemed to have occurred on the earliest of the following dates:
(i) The date any entity or person that is not a
shareholder on the date of this Agreement shall have become
the beneficial owner of, or shall have obtained voting control
over, fifty-one percent (51%) or more of the outstanding
Common Stock of the Corporation;
(ii) The date the shareholders of the Corporation
approve a definitive agreement (A) to merge or consolidate the
Corporation with or into another corporation, in which the
Corporation is not the continuing or surviving corporation or
pursuant to which any shares of Common Stock of the
Corporation would be converted into cash, securities or other
property of another corporation, other than a merger or
consolidation of the Corporation in which holders of Common
Stock immediately prior to the merger or consolidation have
the same proportionate ownership of Common Stock of the
surviving corporation immediately after the merger as
immediately before, or (B) to sell or otherwise dispose of all
or substantially all the assets of the Corporation; or
(iii) The date there shall have been a change in a
majority of the Board of Directors of the Corporation within a
12-month period unless the nomination for election by the
Corporation's shareholders of each new director was approved
by the vote of two-thirds of the directors then still in
office who were in office at the beginning of the 12-month
period.
For purposes herein, the term "person" shall mean any
individual, corporation, partnership, group, association or
other person, as such term is defined in Section 13(d)(3) or
Section 14(d)(2) of the Exchange Act, other than the
Corporation, a subsidiary of the Corporation or any employee
benefit plan(s) sponsored or maintained by the Corporation or
any subsidiary thereof, and the term "beneficial owner" shall
have the meaning given the term in Rule 13d-3 under the
Exchange Act.
8. This Agreement shall be governed by and construed in accordance with
the laws of the State of North Carolina.
3
<PAGE> 4
IN WITNESS WHEREOF, this Agreement has been executed in behalf of the
Corporation and by the Director on the day and year first above written.
RF MICRO DEVICES, INC.
By:
---------------------------------
David A. Norbury
President and Chief Executive Officer
Attest:
- - -----------------------------
Secretary
[Corporate Seal]
DIRECTOR
-------------------------------------
Walter H. Wilkinson, Jr.
4
<PAGE> 5
RF MICRO DEVICES, INC.
STOCK OPTION AGREEMENT
SCHEDULE A
Name of Optionee: Walter H. Wilkinson, Jr.
Date Option granted: October 27, 1998.
Date Option expires: October 26, 2008.
Number of shares subject to Option: 5,000 shares.
Option price (per share): $20.875.
Date Installment Number of Shares
First Exercisable in Installment
----------------- -----------------
October 27, 1999 1,666
October 27, 2000 1,667
October 27, 2001 1,667
<PAGE> 6
RF MICRO DEVICES, INC.
AMENDMENT TO STOCK OPTION AGREEMENT
THIS AMENDMENT TO STOCK OPTION AGREEMENT (the "Amendment"), effective
the 3rd day of January, 2000, between RF MICRO DEVICES, INC., a North Carolina
corporation (the "Corporation"), and WALTER H. WILKINSON, JR. (the "Optionee");
R E C I T A L S :
WHEREAS, the Optionee has been granted an option (the "Option") to
purchase shares of the Corporation's common stock (the "Common Stock") pursuant
to a certain Stock Option Agreement dated as of October 27, 1998 between the
Optionee and the Corporation (the "Option Agreement"), a copy of which is
attached hereto as Exhibit A; and
WHEREAS, the Corporation and the Optionee have agreed to amend the
Option Agreement as provided herein.
NOW, THEREFORE, in furtherance of the purposes of the Option Agreement
and such other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Corporation and the Optionee hereby agree as
follows:
1. Section 7 of the Option Agreement is hereby amended by amending the
second paragraph of Section 7 to delete current subparagraph (i) and insert the
following in lieu thereof:
"(i) The date any entity or person shall have become the
beneficial owner of, or shall have obtained voting control over,
fifty-one percent (51%) or more of the outstanding Common Stock of the
Corporation;"
2. By entering into this Amendment, the Optionee and the Corporation
hereby expressly agree that, except for those changes to the Option Agreement
set forth in this Amendment, the Option Agreement shall continue in full force
and effect.
3. This Amendment and the Option Agreement may be further modified,
amended or terminated only by the written consent of the parties hereto.
4. This Amendment shall be binding upon and shall inure to the benefit
of the parties hereto and their respective executors, administrators,
next-of-kin, successors and assigns.
5. This Amendment shall be construed and enforced according to the laws
of the State of North Carolina.
<PAGE> 7
IN WITNESS WHEREOF, this Amendment has been executed in behalf of the
Corporation and by the Optionee on the day and year first above written.
RF MICRO DEVICES, INC.
By:
----------------------------------
Name: ________________________________
Title: _______________________________
Attest:
- - ---------------------------------
Secretary
[Corporate Seal]
OPTIONEE
(SEAL)
-------------------------------
Walter H. Wilkinson, Jr.
2
<PAGE> 8
EXHIBIT A
RF MICRO DEVICES, INC.
STOCK OPTION AGREEMENT
<PAGE> 1
EXHIBIT 10.7
RF MICRO DEVICES, INC.
Stock Option Agreement
THIS STOCK OPTION AGREEMENT (the "Agreement"), made as of the 27th day
of October 1998, between RF MICRO DEVICES, INC., a North Carolina corporation
(the "Corporation"), and Albert E. Paladino (the "Director");
R E C I T A L :
To compensate the Director for his service on the Board of Directors
and to promote a closer identification of his interests with those of the
Corporation, the Corporation and the Director hereby agree as follows:
1. The Corporation hereby grants to the Director as a matter of
separate inducement and agreement in connection with his services to the
Corporation, the right and option (the "Option") to purchase all or any part of
an aggregate of five thousand (5,000) shares of the Common Stock of the
Corporation (the "shares"), at the purchase price of $20.875 per share. The
Option is designated as a nonqualified stock option and, as such, is not
intended to qualify for treatment as an incentive stock option under Section 422
of the Internal Revenue Code of 1986, as amended. The Option will expire if not
exercised in full on or before the 26th day of October, 2008.
2. The Option shall become exercisable on the dates set forth on
Schedule A hereto. To the extent that the Option is exercisable but not
exercised, such Option shall accumulate and be exercisable by the Director in
whole or in part at any time prior to expiration of the Option. An Option shall
be exercised by giving written notice to the Secretary of the Corporation or his
designee. Such notice shall specify the number of shares to be purchased
pursuant to the Option and the aggregate purchase price to be paid therefor, and
shall be accompanied by the payment of such purchase price. Such payment shall
be in the form of (i) cash; (ii) shares of Common Stock owned by the Director at
the time of exercise; (iii) shares of Common Stock withheld upon exercise; (iv)
delivery of written notice of exercise to the Secretary and delivery to a broker
of written notice of exercise and irrevocable instructions to promptly deliver
to the Corporation the amount of sale or loan proceeds to pay the Option price;
or (v) a combination of such methods. Shares of Common Stock tendered or
withheld in payment upon the exercise of an Option shall be valued at their fair
market value on the date of exercise, as determined by the Corporation. Upon the
exercise of an Option in whole or in part and payment of the purchase price to
the Corporation in accordance with the foregoing, the Corporation shall as soon
thereafter as practicable deliver to the Director a certificate or certificates
for the shares purchased.
3. Nothing contained in this Agreement shall require the Corporation or
a related corporation to continue the services of the Director as a director for
any particular period of time, nor shall it require the Director to remain in
service to the Corporation or a related corporation as a director for any
particular period of time. Except as otherwise expressly provided below, all
rights
<PAGE> 2
of the Director under this Agreement with respect to the unexercised portion of
his Option shall terminate immediately upon termination of the services of the
Director with the Corporation as a director. Notwithstanding the foregoing, (i)
if the Director dies while serving as a director, any portion of his Option
which was exercisable immediately before his death may be exercised at any time
within 180 days of the date of death by such person or persons as shall have
acquired the right to exercise the Option by will or the laws of intestate
succession; and (ii) if the Director's service on the Board terminates for any
reason other than death, that portion of his Option which was exercisable
immediately before such termination may be exercised at any time within 30 days
following the date of such termination, and after such 30-day period such Option
shall terminate.
4. This Option shall not be transferable (including by pledge or
hypothecation) other than by will or the laws of intestate succession. To the
extent required by Rule 16b-3, shares of Common Stock acquired upon exercise of
an Option shall not, without the consent of the Corporation, be disposed of by
the Director until the expiration of six months after the date the Option was
granted. This Option shall be exercisable during the Director's lifetime only by
the Director or by his guardian or legal representative.
5. This Agreement shall be binding upon and shall inure to the benefit
of the parties hereto and their respective executors, administrators,
next-of-kin, successors and assigns.
6. The Corporation may impose such restrictions on any shares issued
pursuant to the exercise of the Option granted hereunder as it may deem
advisable, including without limitation restrictions under the Securities Act of
1933, as amended, the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and the requirements of any applicable self-regulatory organization and
any blue sky or securities laws applicable to such shares. Notwithstanding any
other provision herein to the contrary, the Corporation shall not be obligated
to issue, deliver or transfer shares of Common Stock under this Agreement or to
take any other action unless such action is in compliance with applicable laws,
rules and regulations (including but not limited to the requirements of the
federal securities laws). The Corporation may cause a restrictive legend to be
placed on any certificate issued pursuant to the exercise of an Option granted
hereunder in such form as may be prescribed from time to time by applicable laws
and regulations or as may be advised by legal counsel to the Corporation.
It is the general intent of the Corporation that this
Agreement and transactions under this Agreement shall comply in all respects
with Rule 16b-3 under the Exchange Act, and, if any provision herein is later
found not to be in compliance with Section 16 of the Exchange Act the provision
shall be deemed null and void, and in all events this Agreement shall be
construed in favor of transactions hereunder meeting the requirements of Rule
16b-3 or successor rules applicable to this Agreement.
7. Notwithstanding any other provision of this Agreement to the
contrary, in the event of a Change of Control (as defined below), the Option
outstanding as of the date of such Change of Control shall become fully
exercisable, whether or not then otherwise exercisable. Notwithstanding
2
<PAGE> 3
the foregoing, in the event of a merger, share exchange, reorganization or other
business combination affecting the Corporation or a related corporation, the
Board of Directors of the Corporation may, in its sole and absolute discretion,
determine that any or all of the Option shall not become exercisable on an
accelerated basis, if the board of directors of the surviving or acquiring
corporation, as the case may be, shall have taken such action, including but not
limited to the assumption of the Option or the grant of substitute awards (in
either case, with substantially similar terms as the Option), as in the opinion
of the Board of Directors is equitable or appropriate to protect the rights and
interests of the Director under this Agreement.
For the purposes of this Agreement, a "Change of Control"
shall be deemed to have occurred on the earliest of the following dates:
(i) The date any entity or person that is not a
shareholder on the date of this Agreement shall have become
the beneficial owner of, or shall have obtained voting control
over, fifty-one percent (51%) or more of the outstanding
Common Stock of the Corporation;
(ii) The date the shareholders of the Corporation
approve a definitive agreement (A) to merge or consolidate the
Corporation with or into another corporation, in which the
Corporation is not the continuing or surviving corporation or
pursuant to which any shares of Common Stock of the
Corporation would be converted into cash, securities or other
property of another corporation, other than a merger or
consolidation of the Corporation in which holders of Common
Stock immediately prior to the merger or consolidation have
the same proportionate ownership of Common Stock of the
surviving corporation immediately after the merger as
immediately before, or (B) to sell or otherwise dispose of all
or substantially all the assets of the Corporation; or
(iii) The date there shall have been a change in a
majority of the Board of Directors of the Corporation within a
12-month period unless the nomination for election by the
Corporation's shareholders of each new director was approved
by the vote of two-thirds of the directors then still in
office who were in office at the beginning of the 12-month
period.
For purposes herein, the term "person" shall mean any
individual, corporation, partnership, group, association or
other person, as such term is defined in Section 13(d)(3) or
Section 14(d)(2) of the Exchange Act, other than the
Corporation, a subsidiary of the Corporation or any employee
benefit plan(s) sponsored or maintained by the Corporation or
any subsidiary thereof, and the term "beneficial owner" shall
have the meaning given the term in Rule 13d-3 under the
Exchange Act.
8. This Agreement shall be governed by and construed in accordance with
the laws of the State of North Carolina.
3
<PAGE> 4
IN WITNESS WHEREOF, this Agreement has been executed in behalf of the
Corporation and by the Director on the day and year first above written.
RF MICRO DEVICES, INC.
By:
-------------------------------
David A. Norbury
President and Chief Executive Officer
Attest:
- - -----------------------------
Secretary
[Corporate Seal]
DIRECTOR
-------------------------------------
Albert E. Paladino
4
<PAGE> 5
RF MICRO DEVICES, INC.
STOCK OPTION AGREEMENT
SCHEDULE A
Name of Optionee: Albert E. Paladino
Date Option granted: October 27, 1998.
Date Option expires: October 26, 2008.
Number of shares subject to Option: 5,000 shares.
Option price (per share): $20.875.
Date Installment Number of Shares
First Exercisable in Installment
----------------- ----------------
October 27, 1999 1,666
October 27, 2000 1,667
October 27, 2001 1,667
<PAGE> 6
RF MICRO DEVICES, INC.
AMENDMENT TO STOCK OPTION AGREEMENT
THIS AMENDMENT TO STOCK OPTION AGREEMENT (the "Amendment"), effective
the 3rd day of January, 2000, between RF MICRO DEVICES, INC., a North Carolina
corporation (the "Corporation"), and ALBERT E. PALADINO (the "Optionee");
R E C I T A L S :
WHEREAS, the Optionee has been granted an option (the "Option") to
purchase shares of the Corporation's common stock (the "Common Stock") pursuant
to a certain Stock Option Agreement dated as of October 27, 1998 between the
Optionee and the Corporation (the "Option Agreement"), a copy of which is
attached hereto as Exhibit A; and
WHEREAS, the Corporation and the Optionee have agreed to amend the
Option Agreement as provided herein.
NOW, THEREFORE, in furtherance of the purposes of the Option Agreement
and such other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Corporation and the Optionee hereby agree as
follows:
1. Section 7 of the Option Agreement is hereby amended by amending the
second paragraph of Section 7 to delete current subparagraph (i) and insert the
following in lieu thereof:
"(i) The date any entity or person shall have become the
beneficial owner of, or shall have obtained voting control over,
fifty-one percent (51%) or more of the outstanding Common Stock of the
Corporation;"
2. By entering into this Amendment, the Optionee and the Corporation
hereby expressly agree that, except for those changes to the Option Agreement
set forth in this Amendment, the Option Agreement shall continue in full force
and effect.
3. This Amendment and the Option Agreement may be further modified,
amended or terminated only by the written consent of the parties hereto.
4. This Amendment shall be binding upon and shall inure to the benefit
of the parties hereto and their respective executors, administrators,
next-of-kin, successors and assigns.
5. This Amendment shall be construed and enforced according to the laws
of the State of North Carolina.
<PAGE> 7
IN WITNESS WHEREOF, this Amendment has been executed in behalf of the
Corporation and by the Optionee on the day and year first above written.
RF MICRO DEVICES, INC.
By:
----------------------------------
Name: ________________________________
Title: _______________________________
Attest:
- - ---------------------------------
Secretary
[Corporate Seal]
OPTIONEE
(SEAL)
------------------------------
Albert E. Paladino
2
<PAGE> 8
EXHIBIT A
RF MICRO DEVICES, INC.
STOCK OPTION AGREEMENT
<PAGE> 1
EXHIBIT 10.8
RF MICRO DEVICES, INC.
Stock Option Agreement
THIS STOCK OPTION AGREEMENT (the "Agreement"), made as of the 27th day
of October 1998, between RF MICRO DEVICES, INC., a North Carolina corporation
(the "Corporation"), and Erik H. van der Kaay (the "Director");
R E C I T A L :
To compensate the Director for his service on the Board of Directors
and to promote a closer identification of his interests with those of the
Corporation, the Corporation and the Director hereby agree as follows:
1. The Corporation hereby grants to the Director as a matter of
separate inducement and agreement in connection with his services to the
Corporation, the right and option (the "Option") to purchase all or any part of
an aggregate of five thousand (5,000) shares of the Common Stock of the
Corporation (the "shares"), at the purchase price of $20.875 per share. The
Option is designated as a nonqualified stock option and, as such, is not
intended to qualify for treatment as an incentive stock option under Section 422
of the Internal Revenue Code of 1986, as amended. The Option will expire if not
exercised in full on or before the 26th day of October, 2008.
2. The Option shall become exercisable on the dates set forth on
Schedule A hereto. To the extent that the Option is exercisable but not
exercised, such Option shall accumulate and be exercisable by the Director in
whole or in part at any time prior to expiration of the Option. An Option shall
be exercised by giving written notice to the Secretary of the Corporation or his
designee. Such notice shall specify the number of shares to be purchased
pursuant to the Option and the aggregate purchase price to be paid therefor, and
shall be accompanied by the payment of such purchase price. Such payment shall
be in the form of (i) cash; (ii) shares of Common Stock owned by the Director at
the time of exercise; (iii) shares of Common Stock withheld upon exercise; (iv)
delivery of written notice of exercise to the Secretary and delivery to a broker
of written notice of exercise and irrevocable instructions to promptly deliver
to the Corporation the amount of sale or loan proceeds to pay the Option price;
or (v) a combination of such methods. Shares of Common Stock tendered or
withheld in payment upon the exercise of an Option shall be valued at their fair
market value on the date of exercise, as determined by the Corporation. Upon the
exercise of an Option in whole or in part and payment of the purchase price to
the Corporation in accordance with the foregoing, the Corporation shall as soon
thereafter as practicable deliver to the Director a certificate or certificates
for the shares purchased.
3. Nothing contained in this Agreement shall require the Corporation or
a related corporation to continue the services of the Director as a director for
any particular period of time, nor shall it require the Director to remain in
service to the Corporation or a related corporation as a director for any
particular period of time. Except as otherwise expressly provided below, all
rights
<PAGE> 2
of the Director under this Agreement with respect to the unexercised portion of
his Option shall terminate immediately upon termination of the services of the
Director with the Corporation as a director. Notwithstanding the foregoing, (i)
if the Director dies while serving as a director, any portion of his Option
which was exercisable immediately before his death may be exercised at any time
within 180 days of the date of death by such person or persons as shall have
acquired the right to exercise the Option by will or the laws of intestate
succession; and (ii) if the Director's service on the Board terminates for any
reason other than death, that portion of his Option which was exercisable
immediately before such termination may be exercised at any time within 30 days
following the date of such termination, and after such 30-day period such Option
shall terminate.
4. This Option shall not be transferable (including by pledge or
hypothecation) other than by will or the laws of intestate succession. To the
extent required by Rule 16b-3, shares of Common Stock acquired upon exercise of
an Option shall not, without the consent of the Corporation, be disposed of by
the Director until the expiration of six months after the date the Option was
granted. This Option shall be exercisable during the Director's lifetime only by
the Director or by his guardian or legal representative.
5. This Agreement shall be binding upon and shall inure to the benefit
of the parties hereto and their respective executors, administrators,
next-of-kin, successors and assigns.
6. The Corporation may impose such restrictions on any shares issued
pursuant to the exercise of the Option granted hereunder as it may deem
advisable, including without limitation restrictions under the Securities Act of
1933, as amended, the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and the requirements of any applicable self-regulatory organization and
any blue sky or securities laws applicable to such shares. Notwithstanding any
other provision herein to the contrary, the Corporation shall not be obligated
to issue, deliver or transfer shares of Common Stock under this Agreement or to
take any other action unless such action is in compliance with applicable laws,
rules and regulations (including but not limited to the requirements of the
federal securities laws). The Corporation may cause a restrictive legend to be
placed on any certificate issued pursuant to the exercise of an Option granted
hereunder in such form as may be prescribed from time to time by applicable laws
and regulations or as may be advised by legal counsel to the Corporation.
It is the general intent of the Corporation that this
Agreement and transactions under this Agreement shall comply in all respects
with Rule 16b-3 under the Exchange Act, and, if any provision herein is later
found not to be in compliance with Section 16 of the Exchange Act the provision
shall be deemed null and void, and in all events this Agreement shall be
construed in favor of transactions hereunder meeting the requirements of Rule
16b-3 or successor rules applicable to this Agreement.
7. Notwithstanding any other provision of this Agreement to the
contrary, in the event of a Change of Control (as defined below), the Option
outstanding as of the date of such Change of Control shall become fully
exercisable, whether or not then otherwise exercisable. Notwithstanding
2
<PAGE> 3
the foregoing, in the event of a merger, share exchange, reorganization or other
business combination affecting the Corporation or a related corporation, the
Board of Directors of the Corporation may, in its sole and absolute discretion,
determine that any or all of the Option shall not become exercisable on an
accelerated basis, if the board of directors of the surviving or acquiring
corporation, as the case may be, shall have taken such action, including but not
limited to the assumption of the Option or the grant of substitute awards (in
either case, with substantially similar terms as the Option), as in the opinion
of the Board of Directors is equitable or appropriate to protect the rights and
interests of the Director under this Agreement.
For the purposes of this Agreement, a "Change of Control"
shall be deemed to have occurred on the earliest of the following dates:
(i) The date any entity or person that is not a
shareholder on the date of this Agreement shall have become
the beneficial owner of, or shall have obtained voting control
over, fifty-one percent (51%) or more of the outstanding
Common Stock of the Corporation;
(ii) The date the shareholders of the Corporation
approve a definitive agreement (A) to merge or consolidate the
Corporation with or into another corporation, in which the
Corporation is not the continuing or surviving corporation or
pursuant to which any shares of Common Stock of the
Corporation would be converted into cash, securities or other
property of another corporation, other than a merger or
consolidation of the Corporation in which holders of Common
Stock immediately prior to the merger or consolidation have
the same proportionate ownership of Common Stock of the
surviving corporation immediately after the merger as
immediately before, or (B) to sell or otherwise dispose of all
or substantially all the assets of the Corporation; or
(iii) The date there shall have been a change in a
majority of the Board of Directors of the Corporation within a
12-month period unless the nomination for election by the
Corporation's shareholders of each new director was approved
by the vote of two-thirds of the directors then still in
office who were in office at the beginning of the 12-month
period.
For purposes herein, the term "person" shall mean any
individual, corporation, partnership, group, association or
other person, as such term is defined in Section 13(d)(3) or
Section 14(d)(2) of the Exchange Act, other than the
Corporation, a subsidiary of the Corporation or any employee
benefit plan(s) sponsored or maintained by the Corporation or
any subsidiary thereof, and the term "beneficial owner" shall
have the meaning given the term in Rule 13d-3 under the
Exchange Act.
8. This Agreement shall be governed by and construed in accordance with
the laws of the State of North Carolina.
3
<PAGE> 4
IN WITNESS WHEREOF, this Agreement has been executed in behalf of the
Corporation and by the Director on the day and year first above written.
RF MICRO DEVICES, INC.
By:
-------------------------------------
David A. Norbury
President and Chief Executive Officer
Attest:
- - -----------------------------
Secretary
[Corporate Seal]
DIRECTOR
-----------------------------------------
Erik H. van der Kaay
4
<PAGE> 5
RF MICRO DEVICES, INC.
STOCK OPTION AGREEMENT
SCHEDULE A
Name of Optionee: Erik H. van der Kaay
Date Option granted: October 27, 1998.
Date Option expires: October 26, 2008.
Number of shares subject to Option: 5,000 shares.
Option price (per share): $20.875.
Date Installment Number of Shares
First Exercisable in Installment
----------------- -----------------
October 27, 1999 1,666
October 27, 2000 1,667
October 27, 2001 1,667
<PAGE> 6
RF MICRO DEVICES, INC.
AMENDMENT TO STOCK OPTION AGREEMENT
THIS AMENDMENT TO STOCK OPTION AGREEMENT (the "Amendment"), effective
the 3rd day of January, 2000, between RF MICRO DEVICES, INC., a North Carolina
corporation (the "Corporation"), and ERIK H. VAN DER KAAY (the "Optionee");
R E C I T A L S :
WHEREAS, the Optionee has been granted an option (the "Option") to
purchase shares of the Corporation's common stock (the "Common Stock") pursuant
to a certain Stock Option Agreement dated as of October 27, 1998 between the
Optionee and the Corporation (the "Option Agreement"), a copy of which is
attached hereto as Exhibit A; and
WHEREAS, the Corporation and the Optionee have agreed to amend the
Option Agreement as provided herein.
NOW, THEREFORE, in furtherance of the purposes of the Option Agreement
and such other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Corporation and the Optionee hereby agree as
follows:
1. Section 7 of the Option Agreement is hereby amended by amending the
second paragraph of Section 7 to delete current subparagraph (i) and insert the
following in lieu thereof:
"(i) The date any entity or person shall have become the
beneficial owner of, or shall have obtained voting control over,
fifty-one percent (51%) or more of the outstanding Common Stock of the
Corporation;"
2. By entering into this Amendment, the Optionee and the Corporation
hereby expressly agree that, except for those changes to the Option Agreement
set forth in this Amendment, the Option Agreement shall continue in full force
and effect.
3. This Amendment and the Option Agreement may be further modified,
amended or terminated only by the written consent of the parties hereto.
4. This Amendment shall be binding upon and shall inure to the benefit
of the parties hereto and their respective executors, administrators,
next-of-kin, successors and assigns.
5. This Amendment shall be construed and enforced according to the laws
of the State of North Carolina.
<PAGE> 7
IN WITNESS WHEREOF, this Amendment has been executed in behalf of the
Corporation and by the Optionee on the day and year first above written.
RF MICRO DEVICES, INC.
By:
--------------------------------------
Name: ____________________________________
Title: ___________________________________
Attest:
- - ---------------------------------
Secretary
[Corporate Seal]
OPTIONEE
(SEAL)
-----------------------------------
Erik H. van der Kaay
2
<PAGE> 8
EXHIBIT A
RF MICRO DEVICES, INC.
STOCK OPTION AGREEMENT
<PAGE> 1
EXHIBIT 10.9
- - --------------------------------------------------------------------------------
AMENDED, RESTATED AND REPLACEMENT
PARTICIPATION AGREEMENT
Dated as of December 31, 1999
among
RF MICRO DEVICES, INC.,
as the Construction Agent and as the Lessee,
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not individually, except as expressly
stated herein, but solely as the Owner Trustee
under the RFMD Real Estate Trust 1999-1,
THE VARIOUS BANKS AND OTHER LENDING INSTITUTIONS WHICH ARE PARTIES
HERETO FROM TIME TO TIME, as the Holders,
THE VARIOUS BANKS AND OTHER LENDING INSTITUTIONS WHICH ARE PARTIES
HERETO FROM TIME TO TIME, as the Lenders,
FIRST UNION NATIONAL BANK,
as the Agent for the Lenders
and respecting the Security Documents,
as the Agent for the Lenders and the Holders,
to the extent of their interests
and
CREDIT SUISSE FIRST BOSTON,
as Syndication Agent
- - --------------------------------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
PAGE
----
SECTION 1. THE LOANS.........................................................1
SECTION 2. HOLDER ADVANCES...................................................2
SECTION 3. SUMMARY OF TRANSACTIONS...........................................2
3.1. Operative Agreements...........................................2
3.2. Property Purchase..............................................2
3.3. Construction of Improvements; Commencement of Basic Rent.......3
SECTION 4. THE CLOSINGS......................................................3
4.1. Initial Closing Date...........................................3
4.2. Initial Closing Date; Property Closing Dates;
Acquisition Advances; Construction Advances..................3
SECTION 5. FUNDING OF ADVANCES; CONDITIONS PRECEDENT; REPORTING
REQUIREMENTS ON COMPLETION DATE; THE LESSEE'S DELIVERY
OF NOTICES; RESTRICTIONS ON LIENS...............................3
5.1. General........................................................3
5.2. Procedures for Funding.........................................4
5.3. Conditions Precedent for the Lessor, the Agent, the Lenders
and the Holders Relating to the Initial Closing Date and
the Advance of Funds for the Acquisition of a Property.......6
5.4. Conditions Precedent for the Lessor, the Agent, the Lenders
and the Holders Relating to the Advance of Funds after
the Acquisition Advance.....................................12
5.5. Additional Reporting and Delivery Requirements on
Completion Date and on Construction Period Termination
Date........................................................14
5.6. The Construction Agent Delivery of Construction Budget
Modifications...............................................15
5.7. Restrictions on Liens.........................................15
5.8. Payments......................................................15
SECTION 6. REPRESENTATIONS AND WARRANTIES...................................16
6.1. Representations and Warranties of the Borrower................16
6.2. Representations and Warranties of the Construction Agent
and the Lessee..............................................18
6.3. Representations and Warranties of the Lenders and the
Holders.....................................................23
SECTION 7. PAYMENT OF CERTAIN EXPENSES......................................24
7.1. Transaction Expenses..........................................24
7.2. Brokers' Fees.................................................25
7.3. Certain Fees and Expenses.....................................25
7.4. Unused Fee....................................................25
7.5. Other Fees....................................................26
i
<PAGE> 3
SECTION 8. OTHER COVENANTS AND AGREEMENTS...................................26
8.1. Cooperation with the Construction Agent or the Lessee........26
8.2. Covenants of the Owner Trustee and the Holders...............26
8.3. The Lessee Covenants, Consent and Acknowledgment.............28
8.3.A Additional Affirmative Covenants of the Lessee...............32
8.3.B Additional Negative Covenants of the Lessee..................35
8.4. Sharing of Certain Payments..................................38
8.5. Grant of Easements, etc. ....................................38
8.6. Appointment by the Agent, the Lenders, the Holders and the
Owner Trustee..............................................38
8.7. Collection and Allocation of Payments and Other Amounts......39
8.8. Release of Properties, etc. .................................42
SECTION 9. CREDIT AGREEMENT AND TRUST AGREEMENT.............................43
9.1. The Construction Agent's and the Lessee's Credit
Agreement Rights...........................................43
9.2. The Construction Agent's and the Lessee's Trust
Agreement Rights...........................................43
SECTION 10. TRANSFER OF INTEREST............................................44
10.1. Restrictions on Transfer.....................................44
10.2. Effect of Transfer...........................................45
SECTION 11. INDEMNIFICATION.................................................45
11.1. General Indemnity............................................45
11.2. General Tax Indemnity........................................48
11.3. Increased Costs, Illegality, etc. ...........................52
11.4. Funding/Contribution Indemnity...............................54
11.5. EXPRESS INDEMNIFICATION FOR ORDINARY NEGLIGENCE, STRICT
LIABILITY, ETC. ...........................................54
11.6. Indemnity Prior to Completion Date/Construction Period
Termination Date...........................................55
SECTION 12. MISCELLANEOUS...................................................55
12.1. Survival of Agreements.......................................55
12.2. Notices......................................................56
12.3. Counterparts.................................................57
12.4. Terminations, Amendments, Waivers, Etc.; Unanimous
Vote Matters...............................................57
12.5. Headings, etc. ..............................................59
12.6. Parties in Interest..........................................59
12.7. GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF
JURY TRIAL; VENUE..........................................59
12.8. Severability.................................................60
12.9. Liability Limited............................................60
12.10. Rights of the Lessee.........................................61
12.11. Further Assurances...........................................62
12.12. Calculations under Operative Agreements......................62
12.13. Confidentiality..............................................62
12.14. Financial Reporting/Tax Characterization.....................64
ii
<PAGE> 4
12.15. Set-off....................................................64
SCHEDULES
1 - Loan Amortization for Equipment
2 - Equipment
3 - Additional Collateral Liens
EXHIBITS
A - Form of Requisition - Sections 4.2, 5.2, 5.3 and 5.4
B - Form of Outside Counsel Opinion for the Lessee - Section 5.3(j)
C - Form of Officer's Certificate - Section 5.3(z)
D - Form of Secretary's Certificate - Section 5.3(aa)
E - Form of Officer's Certificate - Section 5.3(bb)
F - Form of Secretary's Certificate - Section 5.3(cc)
G - Form of Outside Counsel Opinion for the Owner Trustee - Section 5.3(dd)
H - Form of Outside Counsel Opinion for the Lessee - Section 5.3(ee)
I - Form of Officer's Certificate - Section 5.5
J - Description of Material Litigation - Section 6.2(d)
K - Form of Officer's Financial Compliance Certificate
Appendix A - Rules of Usage and Definitions
iii
<PAGE> 5
AMENDED, RESTATED AND REPLACEMENT
PARTICIPATION AGREEMENT
THIS AMENDED, RESTATED AND REPLACEMENT PARTICIPATION AGREEMENT dated as
of December 31, 1999 (as amended, modified, extended, supplemented, restated
and/or replaced from time to time, this "Agreement") is by and among RF MICRO
DEVICES, INC., a North Carolina corporation (the "Lessee" or the "Construction
Agent"); FIRST SECURITY BANK, NATIONAL ASSOCIATION, a national banking
association, not individually (in its individual capacity, the "Trust Company"),
except as expressly stated herein, but solely as the Owner Trustee under the
RFMD Real Estate Trust 1999-1 (the "Owner Trustee", the "Borrower" or the
"Lessor"); the various banks and other lending institutions which are parties
hereto from time to time as holders of certificates issued with respect to the
RFMD Real Estate Trust 1999-1 (subject to the definition of Holders in Appendix
A hereto, individually, a "Holder" and collectively, the "Holders"); the various
banks and other lending institutions which are parties hereto from time to time
as lenders (subject to the definition of Lenders in Appendix A hereto,
individually, a "Lender" and collectively, the "Lenders"); and FIRST UNION
NATIONAL BANK, a national banking association, as the agent for the Lenders and
respecting the Security Documents, as the agent for the Lenders and the Holders,
to the extent of their interests (in such capacity, the "Agent"). Capitalized
terms used but not otherwise defined in this Agreement shall have the meanings
set forth in Appendix A hereto.
In consideration of the mutual agreements herein contained and other
good and valuable consideration, the receipt of which is hereby acknowledged,
the parties hereto hereby agree as follows:
SECTION 1. THE LOANS.
Subject to the terms and conditions of this Agreement and the other
Operative Agreements and in reliance on the representations and warranties of
each of the parties hereto contained herein or made pursuant hereto, the Lenders
have agreed to make Loans to the Lessor from time to time in an aggregate
principal amount of up to the aggregate amount of the Commitments of the Lenders
in order for the Lessor to acquire the Properties and certain Improvements, to
develop and construct certain Improvements in accordance with the Agency
Agreement and the terms and provisions hereof and for the other purposes
described herein, and in consideration of the receipt of proceeds of the Loans,
the Lessor will issue the Notes. The Loans shall be made and the Notes shall be
issued pursuant to the Credit Agreement. Pursuant to Section 5 of this Agreement
and Section 2 of the Credit Agreement, the Loans will be made to the Lessor from
time to time at the request of the Construction Agent in consideration for the
Construction Agent agreeing for the benefit of the Lessor, pursuant to the
Agency Agreement, to acquire the Properties, to acquire the Equipment, to
construct certain Improvements and to cause the Lessee to lease the Properties,
each in accordance with the Agency Agreement and the other Operative Agreements.
The Loans and the obligations of the Lessor under the Credit Agreement shall be
secured by the Collateral.
<PAGE> 6
SECTION 2. HOLDER ADVANCES.
Subject to the terms and conditions of this Agreement and the other
Operative Agreements and in reliance on the representations and warranties of
each of the parties hereto contained herein or made pursuant hereto, on each
date Advances are requested to be made in accordance with Section 5 hereof, each
Holder shall make a Holder Advance on a pro rata basis to the Lessor with
respect to the RFMD Real Estate Trust 1999-1 based on its Holder Commitment in
an amount in immediately available funds such that the aggregate of all Holder
Advances on such date shall be three percent (3%) of the amount of the Requested
Funds on such date; provided, that no Holder shall be obligated for any Holder
Advance in excess of its pro rata share of the Available Holder Commitment. The
aggregate amount of Holder Advances shall be up to the aggregate amount of the
Holder Commitments. No prepayment or any other payment with respect to any
Advance shall be permitted such that the Holder Advance with respect to such
Advance is less than three percent (3%) of the outstanding amount of such
Advance, except in connection with termination or expiration of the Term or in
connection with the exercise of remedies relating to the occurrence of a Lease
Event of Default. The representations, warranties, covenants and agreements of
the Holders herein and in the other Operative Agreements are several, and not
joint or joint and several.
SECTION 3. SUMMARY OF TRANSACTIONS.
3.1. OPERATIVE AGREEMENTS.
On the date hereof, each of the respective parties hereto and thereto
shall execute and deliver this Agreement, the Lease, each applicable Ground
Lease, the Agency Agreement, the Credit Agreement, the Notes, the Trust
Agreement, the Certificates, the Security Agreement, each applicable Mortgage
Instrument and such other documents, instruments, certificates and opinions of
counsel as agreed to by the parties hereto.
3.2. PROPERTY PURCHASE.
On each Property Closing Date and subject to the terms and conditions
of this Agreement (a) the Holders will each make a Holder Advance in accordance
with Sections 2 and 5 of this Agreement and the terms and provisions of the
Trust Agreement, (b) the Lenders will each make Loans in accordance with
Sections 1 and 5 of this Agreement and the terms and provisions of the Credit
Agreement, (c) the Lessor will purchase and acquire good and marketable title to
or ground lease pursuant to a Ground Lease, the applicable Property, each to be
within an Approved State, identified by the Construction Agent, in each case
pursuant to a Deed, Bill of Sale or Ground Lease, as the case may be, and grant
the Agent a lien on such Property by execution of the required Security
Documents, (d) the Agent, the Lessee and the Lessor shall execute and deliver a
Lease Supplement relating to such Property and (e) the Term shall commence with
respect to such Property.
2
<PAGE> 7
3.3. CONSTRUCTION OF IMPROVEMENTS; COMMENCEMENT OF BASIC RENT.
Construction Advances will be made with respect to particular
Improvements to be constructed and with respect to ongoing Work regarding the
Equipment and construction of particular Improvements, in each case, pursuant to
the terms and conditions of this Agreement and the Agency Agreement. The
Construction Agent will act as a construction agent on behalf of the Lessor
respecting the Work regarding the Equipment, the construction of such
Improvements and the expenditures of the Construction Advances related to the
foregoing. The Construction Agent shall promptly notify the Lessor upon
Completion of the Improvements and the Lessee shall commence to pay Basic Rent
as of the Rent Commencement Date.
3.4. [INTENTIONALLY RESERVED].
SECTION 4. THE CLOSINGS.
4.1. INITIAL CLOSING DATE.
All documents and instruments required to be delivered on the Initial
Closing Date shall be delivered at the offices of Moore & Van Allen, PLLC,
Charlotte, North Carolina, or at such other location as may be determined by the
Lessor, the Agent and the Lessee.
4.2. INITIAL CLOSING DATE; PROPERTY CLOSING DATES; ACQUISITION
ADVANCES; CONSTRUCTION ADVANCES.
The Construction Agent shall deliver to the Agent a requisition (a
"Requisition"), in the form attached hereto as Exhibit A or in such other form
as is satisfactory to the Agent, in its reasonable discretion, in connection
with (a) the Transaction Expenses and other fees, expenses and disbursements
payable, pursuant to Section 7.1, by the Lessor and (b) each Acquisition Advance
pursuant to Section 5.3 and (c) each Construction Advance pursuant to Section
5.4.
SECTION 5. FUNDING OF ADVANCES; CONDITIONS PRECEDENT;
REPORTING REQUIREMENTS ON COMPLETION DATE;
THE LESSEE'S DELIVERY OF NOTICES; RESTRICTIONS ON LIENS.
5.1. GENERAL.
(a) To the extent funds have been advanced to the Lessor as
Loans by the Lenders and to the Lessor as Holder Advances by the
Holders, the Lessor will use such funds from time to time in accordance
with the terms and conditions of this Agreement and the other Operative
Agreements (i) at the direction of the Construction Agent to acquire
the Properties in accordance with the terms of this Agreement, the
Agency Agreement and the other Operative Agreements, (ii) to make
Advances to the Construction Agent to permit the acquisition, testing,
engineering, installation, development, construction, modification,
design, and renovation, as applicable, of the Properties (or components
thereof) in accordance with the terms of the Agency
3
<PAGE> 8
Agreement and the other Operative Agreements, and (iii) to pay
Transaction Expenses, fees, expenses and other disbursements payable by
the Lessor under Sections 7.1(a) and 7.1(b).
(b) In lieu of the payment of interest on the Loans and Holder
Yield on the Holder Advances on any Scheduled Interest Payment Date
with respect to any Property during the period prior to the Rent
Commencement Date with respect to such Property, (i) each Lender's Loan
shall automatically be increased by the amount of interest accrued and
unpaid on such Loan for such period (except to the extent that at any
time such increase would cause such Lender's Loan to exceed such
Lender's Available Commitment, in which case the Lessee shall pay such
excess amount to such Lender in immediately available funds on the date
such Lender's Available Commitment was exceeded), and (ii) each
Holder's Holder Advance shall automatically be increased by the amount
of Holder Yield accrued and unpaid on such Holder Advance for such
period (except to the extent that at any time such increase would cause
the Holder Advance of such Holder to exceed such Holder's Available
Holder Commitment, in which case the Lessee shall pay such excess
amount to such Holder in immediately available funds on the date the
Available Holder Commitment of such Holder was exceeded). Such
increases in a Lender's Loan and a Holder's Holder Advance shall occur
without any disbursement of funds by any Person.
5.2. PROCEDURES FOR FUNDING.
(a) The Construction Agent shall designate the date for
Advances hereunder in accordance with the terms and provisions hereof;
provided, however, it is understood and agreed that no more than two
(2) Advances (excluding any conversion and/or continuation of any Loans
or Holder Advances) may be requested during any calendar month. Not
less than (i) three (3) Business Days prior to the Initial Closing Date
and (ii) three (3) Business Days prior to the date on which any
Acquisition Advance or Construction Advance is to be made, the
Construction Agent shall deliver to the Agent, (A) with respect to the
Initial Closing Date and each Acquisition Advance, a Requisition as
described in Section 4.2 hereof (including without limitation a legal
description of the Land, if any, a schedule of the Improvements, if
any, and a schedule of the Equipment, if any, acquired or to be
acquired on such date, and a schedule of the Work, if any, to be
performed, each of the foregoing in a form reasonably acceptable to the
Agent) and (B) with respect to each Construction Advance, a Requisition
identifying (among other things) the Property to which such
Construction Advance relates.
(b) Each Requisition shall: (i) be irrevocable, (ii) request
funds in an amount that is not in excess of the total aggregate of the
Available Commitments plus the Available Holder Commitments at such
time, and (iii) request that the Holders make Holder Advances and that
the Lenders make Loans to the Lessor for the payment of Transaction
Expenses, Property Acquisition Costs (in the case of an Acquisition
Advance) or other Property Costs (in the case of a Construction
Advance) that have
4
<PAGE> 9
previously been incurred or are to be incurred on the date of such
Advance to the extent such were not subject to a prior Requisition, in
each case as specified in the Requisition.
(c) Subject to the satisfaction of the conditions precedent
set forth in Sections 5.3 or 5.4, as applicable, on each Property
Closing Date or the date on which the Construction Advance is to be
made, as applicable, (i) the Lenders shall make Loans based on their
respective Lender Commitments to the Lessor in an aggregate amount
equal to ninety-seven percent (97%) of the Requested Funds specified in
any Requisition (ratably between the Tranche A Lenders and the Tranche
B Lenders with the Tranche A Lenders funding eighty-five percent (85%)
of the Requested Funds and the Tranche B Lenders funding twelve percent
(12%) of the Requested Funds), up to an aggregate principal amount
equal to the aggregate of the Available Commitments, (ii) each Holder
shall make a Holder Advance based on its Holder Commitment in an amount
such that the aggregate of all Holder Advances at such time shall be
three percent (3%) of the balance of the Requested Funds specified in
such Requisition, up to the aggregate advanced amount equal to the
aggregate of the Available Holder Commitments; and (iii) the total
amount of such Loans and Holder Advances made on such date shall (x) be
used by the Lessor to pay Property Costs including Transaction Expenses
within three (3) Business Days of the receipt by the Lessor of such
Advance or (y) be advanced by the Lessor on the date of such Advance to
the Construction Agent or the Lessee to pay Property Costs, as
applicable. Notwithstanding that the Operative Agreements state that
Advances shall be directed to the Lessor, each Advance shall in fact be
directed to the Construction Agent (for the benefit of the Lessor) and
applied by the Construction Agent (for the benefit of the Lessor)
pursuant to the requirements imposed on the Lessor under the Operative
Agreements.
(d) With respect to an Advance obtained by the Lessor to pay
for Property Costs and/or Transaction Expenses or other costs payable
under Section 7.1 hereof and not expended by the Lessor for such
purpose on the date of such Advance, such amounts shall be held by the
Lessor (or the Agent on behalf of the Lessor) until the applicable
closing date or, if such closing date does not occur within three (3)
Business Days of the date of the Lessor's receipt of such Advance,
shall be applied regarding the applicable Advance to repay the Lenders
and the Holders and, subject to the terms hereof, and of the Credit
Agreement and the Trust Agreement, shall remain available for future
Advances. Any such amounts held by the Lessor (or the Agent on behalf
of the Lessor) shall be subject to the lien of the Security Agreement.
(e) All Operative Agreements which are to be delivered to the
Lessor, the Agent, the Lenders or the Holders shall be delivered to the
Agent, on behalf of the Lessor, the Agent, the Lenders or the Holders,
and such items (except for Notes, Certificates, Bills of Sale, the
Ground Leases and chattel paper originals, with respect to which in
each case there shall be only one original) shall be delivered with
originals sufficient for the Lessor, the Agent, each Lender and each
Holder. All other items which are to be delivered to the Lessor, the
Agent, the Lenders or the Holders shall be delivered to the Agent, on
behalf of the Lessor, the Agent, the Lenders or the Holders, and such
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other items shall be held by the Agent. To the extent any such other
items are requested in writing from time to time by the Lessor, any
Lender or any Holder, the Agent shall provide a copy of such item to
the party requesting it.
(f) Notwithstanding the completion of any closing under this
Agreement pursuant to Sections 5.3 or 5.4, each condition precedent in
connection with any such closing may be subsequently enforced by the
Agent (unless such has previously been expressly waived in writing by
the Agent).
5.3. CONDITIONS PRECEDENT FOR THE LESSOR, THE AGENT, THE LENDERS
AND THE HOLDERS RELATING TO THE INITIAL CLOSING DATE AND THE
ADVANCE OF FUNDS FOR THE ACQUISITION OF A PROPERTY.
The obligations (i) on the Initial Closing Date of the Lessor, the
Agent, the Lenders and the Holders to enter into the transactions contemplated
by this Agreement, including without limitation the obligation to execute and
deliver the applicable Operative Agreements to which each is a party on the
Initial Closing Date, (ii) on the Initial Closing Date of the Holders to make
Holder Advances, and of the Lenders to make Loans in order to pay Transaction
Expenses, fees, expenses and other disbursements payable by the Lessor under
Section 7.1(a) of this Agreement and (iii) on a Property Closing Date for the
purpose of providing funds to the Lessor necessary to pay the Transaction
Expenses, fees, expenses and other disbursements payable by the Lessor under
Section 7.1(b) of this Agreement and to acquire or ground lease a Property (an
"Acquisition Advance"), in each case (with regard to the foregoing Sections
5.3(i), (ii) and (iii)) are subject to the satisfaction or waiver of the
following conditions precedent on or prior to the Initial Closing Date or the
applicable Property Closing Date, as the case may be (to the extent such
conditions precedent require the delivery of any agreement, certificate,
instrument, memorandum, legal or other opinion, appraisal, commitment, title
insurance commitment, lien report or any other document of any kind or type,
such shall be in form and substance satisfactory to the Agent, in its reasonable
discretion; notwithstanding the foregoing, the obligations of each party shall
not be subject to any conditions contained in this Section 5.3 which are
required to be performed by such party):
(a) the correctness of the representations and warranties of
the parties to this Agreement contained herein, in each of the other
Operative Agreements and each certificate delivered pursuant to any
Operative Agreement on each such date;
(b) the performance by the parties to this Agreement of their
respective agreements contained herein and in the other Operative
Agreements to be performed by them on or prior to each such date;
(c) the Agent shall have received a fully executed counterpart
copy of the Requisition, appropriately completed (along with the
appropriate schedules which shall be appropriately completed in all
material respects);
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(d) title to each such Property shall conform to the
representations and warranties set forth in Section 6.2(l) hereof;
(e) the Construction Agent shall have delivered to the Agent a
good standing certificate for the Construction Agent in the state where
each such Property is located, the Deed with respect to the Land and
existing Improvements (if any), a copy of the Ground Lease (if any),
and a copy of the Bill of Sale with respect to the Equipment (if any),
respecting such of the foregoing as are being acquired or ground leased
on each such date with the proceeds of the Loans and Holder Advances or
which have been previously acquired or ground leased with the proceeds
of the Loans and Holder Advances and such Land, existing Improvements
(if any) and Equipment (if any) shall be located in an Approved State;
(f) there shall not have occurred and be continuing any
Default or Event of Default under any of the Operative Agreements and
no Default or Event of Default under any of the Operative Agreements
will have occurred after giving effect to the Advance requested by each
such Requisition;
(g) the Construction Agent shall have delivered to the Agent
title insurance commitments to issue policies respecting each such
Property, with such endorsements as the Agent deems reasonably
necessary, in favor of the Lessor and the Agent from a title insurance
company acceptable to the Agent, but only with such title exceptions
thereto as are acceptable to the Agent;
(h) the Construction Agent shall have delivered to the Agent
an environmental site assessment respecting each such Property prepared
by an independent recognized professional acceptable to the Agent and
evidencing no pre-existing environmental condition with respect to
which there is more than a remote risk of loss;
(i) the Construction Agent shall have delivered to the Agent a
survey (with a flood hazard certification) respecting each such
Property prepared by (i) an independent recognized professional
acceptable to the Agent and (ii) in a manner and including such
information as is required by the Agent;
(j) unless such an opinion has previously been delivered with
respect to a particular state, the Construction Agent shall have caused
to be delivered to the Agent a legal opinion in the form attached
hereto as Exhibit B or in such other form as is acceptable to the Agent
with respect to local law real property issues respecting the state in
which each such Property is located addressed to the Lessor, the Agent,
the Lenders and the Holders, from counsel located in the state where
each such Property is located, prepared by counsel acceptable to the
Agent;
(k) the Agent shall be satisfied that the acquisition, ground
leasing and/or holding of each such Property and the execution of the
Mortgage Instrument and the other
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Security Documents will not materially and adversely affect the rights
of the Lessor, the Agent, the Holders or the Lenders under or with
respect to the Operative Agreements;
(l) the Construction Agent shall have delivered to the Agent
invoices for, or other reasonably satisfactory evidence of, the various
Transaction Expenses and other fees, expenses and disbursements
referenced in Sections 7.1(a) or 7.1(b) of this Agreement, as
appropriate;
(m) the Construction Agent shall have caused to be delivered
to the Agent a Mortgage Instrument (in such form as is acceptable to
the Agent, with revisions as necessary to conform to applicable state
law), Lessor Financing Statements and Lender Financing Statements
respecting each such Property, all fully executed and in recordable
form;
(n) the Lessee shall have delivered to the Agent with respect
to each such Property a Lease Supplement and a memorandum (or short
form lease) regarding the Lease and such Lease Supplement (such
memorandum or short form lease to be in the form attached to the Lease
as Exhibit B or in such other form as is acceptable to the Agent, with
modifications as necessary to conform to applicable state law, and in
form suitable for recording);
(o) with respect to each Acquisition Advance, the aggregate
Available Commitment for all Lenders plus the Available Holder
Commitment (after deducting the Unfunded Amount, if any, and after
giving effect to the Acquisition Advance for such other Properties) the
amount remaining will be sufficient to pay all amounts payable
therefrom;
(p) if any such Property is subject to a Ground Lease, the
Construction Agent shall have caused a lease memorandum (or short form
lease) to be delivered to the Agent for such Ground Lease and, if
requested by the Agent, a landlord waiver and a mortgagee waiver (in
each case, in such form as is acceptable to the Agent);
(q) counsel (acceptable to the Agent) for the ground lessor of
each such Property subject to a Ground Lease shall have issued to the
Lessor, the Agent, the Lenders and the Holders, its opinion;
(r) the Construction Agent shall have delivered to the Agent a
preliminary Construction Budget for each such Property, if applicable;
(s) the Construction Agent shall have provided evidence to the
Agent of insurance with respect to each such Property as provided in
the Lease;
(t) the Construction Agent shall have caused an Appraisal
regarding each such Property to be provided to the Agent from an
appraiser satisfactory to the Agent;
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(u) the Construction Agent shall cause (i) Uniform Commercial
Code lien searches, tax lien searches and judgment lien searches
regarding the Lessee to be conducted (and copies thereof to be
delivered to the Agent) in such jurisdictions as determined by the
Agent by a nationally recognized search company acceptable to the Agent
and (ii) the liens referenced in such lien searches which are
objectionable to the Agent to be either removed or otherwise handled in
a manner satisfactory to the Agent;
(v) all taxes, fees and other charges in connection with the
execution, delivery, recording, filing and registration of the
Operative Agreements and/or documents related thereto shall have been
paid or provisions for such payment shall have been made to the
satisfaction of the Agent;
(w) in the opinion of the Agent and its respective counsel,
the transactions contemplated by the Operative Agreements do not and
will not subject the Lessor, the Lenders, the Agent or the Holders to
any adverse regulatory prohibitions, constraints, penalties or fines;
(x) each of the Operative Agreements to be entered into on
such date shall have been duly authorized, executed and delivered by
the parties thereto, and shall be in full force and effect, and the
Agent shall have received a fully executed copy of each of the
Operative Agreements;
(y) since the date of the most recent audited financial
statements of the Lessee, there shall not have occurred any event,
condition or state of facts which shall have or could reasonably be
expected to have a Material Adverse Effect, other than as specifically
contemplated by the Operative Agreements;
(z) as of the Initial Closing Date only, the Agent shall have
received an Officer's Certificate, dated as of the Initial Closing
Date, of the Lessee in the form attached hereto as Exhibit C or in such
other form as is acceptable to the Agent stating that (i) each and
every representation and warranty of the Lessee contained in the
Operative Agreements to which it is a party is true and correct on and
as of the Initial Closing Date; (ii) no Default or Event of Default has
occurred and is continuing under any Operative Agreement; (iii) each
Operative Agreement to which the Lessee is a party is in full force and
effect with respect to it; and (iv) the Lessee has duly performed and
complied with all covenants, agreements and conditions contained herein
or in any Operative Agreement required to be performed or complied with
by it on or prior to the Initial Closing Date;
(aa) as of the Initial Closing Date only, the Agent shall have
received (i) a certificate of the Secretary or an Assistant Secretary
of the Lessee, dated as of the Initial Closing Date, in the form
attached hereto as Exhibit D or in such other form as is acceptable to
the Agent attaching and certifying as to (1) the resolutions of its
Board of Directors duly authorizing the execution, delivery and
performance by the Lessee of each of the Operative Agreements to which
it is or will be a party, (2) its articles of
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<PAGE> 14
incorporation certified as of a recent date by the Secretary of State
of its state of incorporation and its by-laws and (3) the incumbency
and signature of persons authorized to execute and deliver on its
behalf the Operative Agreements to which it is or will be a party and
(ii) a good standing certificate (or local equivalent) from the
appropriate office of the respective states where the Lessee is
incorporated and where the principal place of business of the Lessee is
located as to its good standing in each such state. To the extent the
Lessee is a partnership, a limited liability company or is otherwise
organized, such Person shall deliver to the Agent (in form and
substance satisfactory to the Agent) as of the Initial Closing Date (A)
a certificate regarding such Person and any corporate general partners
covering the matters described in EXHIBIT D and (B) a good standing
certificate, a certificate of limited partnership or a local equivalent
of either of the foregoing as applicable;
(bb) as of the Initial Closing Date only, the Agent shall have
received an Officer's Certificate of the Lessor dated as of the Initial
Closing Date in the form attached hereto as Exhibit E or in such other
form as is acceptable to the Agent, stating that (i) each and every
representation and warranty of the Lessor contained in the Operative
Agreements to which it is a party is true and correct on and as of the
Initial Closing Date, (ii) each Operative Agreement to which the Lessor
is a party is in full force and effect with respect to it and (iii) the
Lessor has duly performed and complied with all covenants, agreements
and conditions contained herein or in any Operative Agreement required
to be performed or complied with by it on or prior to the Initial
Closing Date;
(cc) as of the Initial Closing Date only, the Agent shall have
received (i) a certificate of the Secretary, an Assistant Secretary,
Trust Officer or Vice President of the Trust Company in the form
attached hereto as Exhibit F or in such other form as is acceptable to
the Agent, attaching and certifying as to (A) the signing resolutions
duly authorizing the execution, delivery and performance by the Lessor
of each of the Operative Agreements to which it is or will be a party,
(B) its articles of association or other equivalent charter documents
and its by-laws, as the case may be, certified as of a recent date by
an appropriate officer of the Trust Company and (C) the incumbency and
signature of persons authorized to execute and deliver on its behalf
the Operative Agreements to which it is a party and (ii) a good
standing certificate from the Office of the Comptroller of the
Currency;
(dd) as of the Initial Closing Date only, counsel for the
Lessor acceptable to the Agent shall have issued to the Lessee, the
Holders, the Lenders and the Agent its opinion in the form attached
hereto as Exhibit G or in such other form as is reasonably acceptable
to the Agent;
(ee) as of the Initial Closing Date only, the Construction
Agent shall have caused to be delivered to the Agent a legal opinion in
the form attached hereto as Exhibit H or in such other form as is
acceptable to the Agent, addressed to the Lessor, the Agent, the
Lenders and the Holders, from counsel acceptable to the Agent;
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(ff) the Construction Agent shall have granted and shall
maintain a perfected first priority security interest in the Additional
Collateral in accordance with Sections 8.3(r) and 8.3(s) hereof;
(gg) Loans and Holder Advances for the purchase of Equipment
shall only be available for the Equipment described on Schedule 2
hereto (or for items substituted pursuant to Sections 5.3(ii) and
5.4(p); the aggregate amount of Loans and Holder Advances, including
without limitation, Loans and Holder Advances requested in a
Requisition but not yet funded, used to purchase, acquire, install, or
test the Equipment or otherwise related to the Equipment shall not
exceed $43,000,000.00;
(hh) the aggregate amount of Loans and Holder Advances,
including without limitation, Loans and Holder Advances requested in a
Requisition but not yet funded, for Property Costs other than Equipment
shall not exceed $57,000,000.00 and the aggregate amount of Loans and
Holder Advances, including without limitation, Loans and Holder
Advances requested in a Requisition but not yet funded shall not exceed
$100,000,000.00;
(ii) Items of Equipment listed on Schedule 2 to the
Participation Agreement may be substituted for other items of
Equipment, subject to the provisions of the Operative Agreements, prior
to any amounts being expended for such Equipment provided such
substitute item of Equipment has:
(i) the same use and is of substantially similar type to the
substituted item of Equipment;
(ii) the same or greater utility;
(iii) the same or greater useful life;
(iv) the same or greater fair market value as of
the date such substitution will occur; and
(v) the same or greater estimated fair market
value as of the Expiration Date.
In addition to the foregoing conditions being met, the Lessee shall
deliver an appraisal, in form and substance reasonably acceptable to
the Agent, for such substitute item of Equipment; and
(jj) Lessee may submit Requisitions requesting funds for
deposits to be made on Equipment provided Lessee delivers a
certificate, regarding the Equipment upon which deposits are being
funded, signed by a Responsible Officer of Lessee and in form and
substance reasonably acceptable to the Agent, setting forth (i) the
amount previously funded for deposits on the Equipment, (ii) the amount
currently being requested for funding of such deposits, (iii) the
future amounts necessary to fully fund such Equipment and (iv) upon the
final funding for such Equipment, a statement that such Equipment has
been fully funded. The certificate shall also represent and warrant
that the Lessee has and covenants to maintain Available Commitments and
Available Holder Commitments, at
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all times, sufficient to fund all amounts not yet funded for all
Equipment upon which deposits are being funded with Loans or Holder
Advances.
5.4. CONDITIONS PRECEDENT FOR THE LESSOR, THE AGENT, THE LENDERS
AND THE HOLDERS RELATING TO THE ADVANCE OF FUNDS AFTER THE
ACQUISITION ADVANCE.
The obligations of the Holders to make Holder Advances, and the Lenders
to make Loans in connection with all requests for Advances subsequent to the
acquisition of a Property (and to pay the Transaction Expenses, fees, expenses
and other disbursements payable by the Lessor under Section 7.1 of this
Agreement in connection therewith) are subject to the satisfaction or waiver of
the following conditions precedent (to the extent such conditions precedent
require the delivery of any agreement, certificate, instrument, memorandum,
legal or other opinion, appraisal, commitment, title insurance commitment, lien
report or any other document of any kind or type, such shall be in form and
substance satisfactory to the Agent, in its reasonable discretion;
notwithstanding the foregoing, the obligations of each party shall not be
subject to any conditions contained in this Section 5.4 which are required to be
performed by such party):
(a) the correctness on such date of the representations and
warranties of the parties to this Agreement contained herein, in each
of the other Operative Agreements and in each certificate delivered
pursuant to any Operative Agreement;
(b) the performance by the parties to this Agreement of their
respective agreements contained herein and in the other Operative
Agreements to be performed by them on or prior to each such date;
(c) the Agent shall have received a fully executed counterpart
of the Requisition, appropriately completed;
(d) based upon the applicable Construction Budget which shall
satisfy the requirements of this Agreement, the Available Commitments
and the Available Holder Commitment (after deducting the Unfunded
Amount) will be sufficient to complete the Improvements;
(e) there shall not have occurred and be continuing any
Default or Event of Default under any of the Operative Agreements and
no Default or Event of Default under any of the Operative Agreements
will have occurred after giving effect to the Construction Advance
requested by the applicable Requisition;
(f) the title insurance policy delivered in connection with
the requirements of Section 5.3(g) shall provide for (or shall be
endorsed to provide for) insurance in an amount at least equal to the
maximum total Property Cost indicated by the Construction Budget
referred to in subparagraph (d) above and there shall be no title
change or exception objectionable to the Agent;
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(g) the Construction Agent shall have delivered to the Agent
copies of the Plans and Specifications for the applicable Improvements;
(h) the Construction Agent shall have delivered to the Agent
invoices for, or other reasonably satisfactory evidence of, any
Transaction Expenses and other fees, expenses and disbursements
referenced in Section 7.1(b) that are to be paid with the Advance;
(i) the Construction Agent shall have delivered, or caused to
be delivered to the Agent, invoices, Bills of Sale or other documents
acceptable to the Agent, in each case with regard to any Equipment or
other components of such Property then being acquired with the proceeds
of the Loans and Holder Advances and naming the Lessor as purchaser and
transferee;
(j) all taxes, fees and other charges in connection with the
execution, delivery, recording, filing and registration of the
Operative Agreements shall have been paid or provisions for such
payment shall have been made to the satisfaction of the Agent;
(k) since the date of the most recent audited financial
statements of the Lessee, there shall not have occurred any event,
condition or state of facts which shall have or could reasonably be
expected to have a Material Adverse Effect, other than as specifically
contemplated by the Operative Agreements;
(l) in the opinion of the Agent and its counsel, the
transactions contemplated by the Operative Agreements do not and will
not subject the Lessor, the Lenders, the Agent or the Holders to any
adverse regulatory prohibitions, constraints, penalties or fines;
(m) the Construction Agent shall have granted and shall
maintain a perfected first priority security interest in the Additional
Collateral in favor of the Agent for the benefit of the Financing
Parties in accordance with Sections 8.3(r) and 8.3(s) hereof;
(n) the aggregate amount of Loans and Holder Advances,
including without limitation, Loans and Holder Advances requested in a
Requisition but not yet funded, used to purchase, acquire, install, or
test the Equipment or otherwise related to the Equipment shall not
exceed $43,000,000.00;
(o) the aggregate amount of Loans and Holder Advances,
including without limitation, Loans and Holder Advances requested in a
Requisition but not yet funded, for Property Costs other than Equipment
shall not exceed $57,000,000.00 and the aggregate amount of Loans and
Holder Advances, including without limitation, Loans and Holder
Advances requested in a Requisition but not yet funded shall not exceed
$100,000,000.00;
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(p) Items of Equipment listed on Schedule 2 to the
Participation Agreement may be substituted for other items of
Equipment, subject to the provisions of the Operative Agreements, prior
to any amounts being expended for such Equipment provided such
substitute item of Equipment has:
(i) the same use and is of substantially similar
type to the substituted item of Equipment;
(ii) the same or greater utility;
(iii) the same or greater useful life;
(iv) the same or greater fair market value as of
the date such substitution will occur; and
(v) the same or greater estimated fair market
value as of the Expiration Date.
In addition to the foregoing conditions being met, the Lessee shall
deliver an appraisal, in form and substance reasonably acceptable to
the Agent, for such substitute item of Equipment; and
(q) Lessee may submit Requisitions requesting funds for
deposits to be made on Equipment provided Lessee delivers a
certificate, regarding the Equipment upon which deposits are being
funded, signed by a Responsible Officer of Lessee and in form and
substance reasonably acceptable to the Agent, setting forth the (i) the
amount previously funded for deposits on the Equipment, (ii) the amount
currently being requested for funding of such deposits, (iii) the
future amounts necessary to fully fund such Equipment and (iv) upon the
final funding for such Equipment, a statement that such Equipment has
been fully funded. The certificate shall also represent and warrant
that the Lessee has and covenants to maintain Available Commitments and
Available Holder Commitments, at all times, sufficient to fund all
amounts not yet funded for all Equipment upon which deposits are being
funded with Loans or Holder Advances.
5.5. ADDITIONAL REPORTING AND DELIVERY REQUIREMENTS ON COMPLETION
DATE AND ON CONSTRUCTION PERIOD TERMINATION DATE.
On or prior to the Completion Date for each Property, the Construction
Agent shall deliver to the Agent an Officer's Certificate in the form attached
hereto as Exhibit I or in such other form as is acceptable to the Agent
specifying (a) the address for such Property, (b) the Completion Date for such
Property, (c) the aggregate Property Cost for such Property, (d) detailed,
itemized documentation supporting the asserted Property Cost figures and (e)
that all representations and warranties of the Construction Agent and Lessee in
each of the Operative Agreements and each certificate delivered pursuant thereto
are true and correct as of the Completion Date. The Agent shall have the right
to contest the information contained in such Officer's Certificate. Furthermore,
on or prior to the Completion Date for each Property, the Construction Agent
shall deliver or cause to be delivered to the Agent (unless previously delivered
to the Agent) originals of the following, each of which shall be in form and
substance acceptable to the Agent, in its reasonable discretion: (u) a Lease
Supplement and a memorandum (or short form lease) regarding the Lease and such
Lease Supplement (such memorandum or short form lease to be in the form attached
to the Lease as Exhibit B or in such other form as is
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acceptable to the Agent, with modifications as necessary to conform to
applicable state law, and in form suitable for recording), (v) a title insurance
endorsement regarding the title insurance policy delivered in connection with
the requirements of Section 5.3(g), but only to the extent such endorsement is
necessary to provide for insurance in an amount at least equal to the maximum
total Property Cost and, if endorsed, the endorsement shall not include a title
change or exception objectionable to the Agent; (w) an as-built survey for such
Property, (x) insurance certificates respecting such Property as required
hereunder and under the Lease Agreement, (y) if requested by the Agent,
amendments to the Lessor Financing Statements executed by the appropriate
parties and (z) an Appraisal regarding such Property (including without
limitation the Equipment); provided, however, such an Appraisal shall not be
required if, as of such Completion Date, the Agent has previously received
Appraisal(s) pursuant to Section 5.3(t) for Properties that are then subject to
the Lease and that have an aggregate value (as established by such Appraisal(s))
of at least $25,000,000.00. In addition, on the Completion Date for such
Property the Construction Agent covenants and agrees that the recording fees,
documentary stamp taxes or similar amounts required to be paid in connection
with the related Mortgage Instrument shall have been paid in an amount required
by applicable law, subject, however, to the obligations of the Lenders and the
Holders to fund such costs to the extent required pursuant to Section 7.1.
5.6. THE CONSTRUCTION AGENT DELIVERY OF CONSTRUCTION BUDGET
MODIFICATIONS.
The Construction Agent covenants and agrees to deliver to the Agent
each month notification of any modification to any Construction Budget regarding
any Property if such modification increases the cost to construct such Property;
provided no Construction Budget may be increased unless (a) the title insurance
policies referenced in Section 5.3(g) are also modified or endorsed, if
necessary, to provide for insurance in an amount that satisfies the requirements
of Section 5.4(f) of this Agreement and (b) after giving effect to any such
amendment, the Construction Budget remains in compliance with the requirements
of Section 5.4(d) of this Agreement.
5.7. RESTRICTIONS ON LIENS.
On each Property Closing Date, the Construction Agent shall cause each
Property acquired by the Lessor on such date to be free and clear of all Liens
except those referenced in Sections 6.2(r)(i) and 6.2(r)(ii). On each date a
Property is either sold to a third party in accordance with the terms of the
Operative Agreements or, pursuant to Section 22.1(a) of the Lease Agreement,
retained by the Lessor, the Lessee shall cause such Property to be free and
clear of all Liens (other than Lessor Liens and such other Liens that are
expressly set forth as title exceptions on the title commitment issued under
Section 5.3(g) with respect to such Property, to the extent such title
commitment has been approved by the Agent).
5.8. PAYMENTS.
All payments of principal, interest, Holder Advances, Holder Yield and
other amounts to be made by the Construction Agent or the Lessee under this
Agreement or any other Operative
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Agreements (excluding Excepted Payments which shall be paid directly to the
party to whom such payments are owed) shall be made to the Agent at the office
designated by the Agent from time to time in Dollars and in immediately
available funds, without setoff, deduction, or counterclaim. Subject to the
definition of "Interest Period" in Appendix A attached hereto, whenever any
payment under this Agreement or any other Operative Agreements shall be stated
to be due on a day that is not a Business Day, such payment may be made on the
next succeeding Business Day, and such extension of time in such case shall be
included in the computation of interest, Holder Yield and fees payable pursuant
to the Operative Agreements, as applicable and as the case may be.
SECTION 6. REPRESENTATIONS AND WARRANTIES.
6.1. REPRESENTATIONS AND WARRANTIES OF THE BORROWER.
Effective as of the Initial Closing Date and the date of each Advance,
the Trust Company in its individual capacity and as the Borrower, as indicated,
represents and warrants to each of the other parties hereto as follows,
provided, that the representations in the following paragraphs (h), (j) and (k)
are made solely in its capacity as the Borrower:
(a) It is a national banking association and is duly organized
and validly existing and in good standing under the laws of the United
States of America and has the power and authority to enter into and
perform its obligations under the Trust Agreement and (assuming due
authorization, execution and delivery of the Trust Agreement by the
Holders) has the corporate and trust power and authority to act as the
Owner Trustee and to enter into and perform the obligations under each
of the other Operative Agreements to which the Trust Company or the
Owner Trustee, as the case may be, is or will be a party and each other
agreement, instrument and document to be executed and delivered by it
on or before such Closing Date in connection with or as contemplated by
each such Operative Agreement to which the Trust Company or the Owner
Trustee, as the case may be, is or will be a party;
(b) The execution, delivery and performance of each Operative
Agreement to which it is or will be a party, either in its individual
capacity or (assuming due authorization, execution and delivery of the
Trust Agreement by the Holders) as the Owner Trustee, as the case may
be, has been duly authorized by all necessary action on its part and
neither the execution and delivery thereof, nor the consummation of the
transactions contemplated thereby, nor compliance by it with any of the
terms and provisions thereof (i) does or will require any approval or
consent of any trustee or holders of any of its indebtedness or
obligations, (ii) does or will contravene any Legal Requirement
relating to its banking or trust powers, (iii) does or will contravene
or result in any breach of or constitute any default under, or result
in the creation of any Lien upon any of its property under, (A) its
charter or by-laws, or (B) any indenture, mortgage, chattel mortgage,
deed of trust, conditional sales contract, bank loan or credit
agreement or other agreement or instrument to which it is a party or by
which it or its properties may be bound or affected, which
contravention, breach, default or Lien under clause (B)
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would materially and adversely affect its ability, in its individual
capacity or as the Owner Trustee, to perform its obligations under the
Operative Agreements to which it is a party or (iv) does or will
require any Governmental Action by any Governmental Authority
regulating its banking or trust powers;
(c) The Trust Agreement and, assuming the Trust Agreement is
the legal, valid and binding obligation of the Holders, each other
Operative Agreement to which the Trust Company or the Owner Trustee, as
the case may be, is or will be a party have been, or on or before such
Closing Date will be, duly executed and delivered by the Trust Company
or the Owner Trustee, as the case may be, and the Trust Agreement and
each such other Operative Agreement to which the Trust Company or the
Owner Trustee, as the case may be, is a party constitutes, or upon
execution and delivery will constitute, a legal, valid and binding
obligation enforceable against the Trust Company or the Owner Trustee,
as the case may be, in accordance with the terms thereof;
(d) There is no action or proceeding pending or, to its
knowledge, threatened to which it is or will be a party, either in its
individual capacity or as the Owner Trustee, before any Governmental
Authority that, if adversely determined, would materially and adversely
affect its ability, in its individual capacity or as the Owner Trustee,
to perform its obligations under the Operative Agreements to which it
is a party or would question the validity or enforceability of any of
the Operative Agreements to which it is or will become a party;
(e) It, either in its individual capacity or as the Owner
Trustee, has not assigned or transferred any of its right, title or
interest in or under the Lease, the Agency Agreement or its interest in
any Property or any portion thereof, except in accordance with the
Operative Agreements;
(f) No Default or Event of Default under the Operative
Agreements attributable to it has occurred and is continuing;
(g) Except as otherwise contemplated in the Operative
Agreements, the proceeds of the Loans and Holder Advances shall not be
applied by the Owner Trustee, either in its individual capacity or as
the Owner Trustee, for any purpose other than the purchase and/or lease
of the Properties, the acquisition, installation and testing of the
Equipment, the construction of Improvements and the payment of
Transaction Expenses and the fees, expenses and other disbursements
referenced in Sections 7.1(a) and 7.1(b) of this Agreement, in each
case which accrue prior to the Rent Commencement Date with respect to a
particular Property;
(h) Neither the Owner Trustee nor any Person authorized by the
Owner Trustee to act on its behalf has offered or sold any interest in
the Trust Estate or the Notes, or in any similar security relating to a
Property, or in any security the offering of which for the purposes of
the Securities Act would be deemed to be part of the same offering as
the offering of the aforementioned securities to, or solicited any
offer to
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acquire any of the same from, any Person other than, in the case of the
Notes, the Agent, and neither the Owner Trustee nor any Person
authorized by the Owner Trustee to act on its behalf will take any
action which would subject, as a direct result of such action alone,
the issuance or sale of any interest in the Trust Estate or the Notes
to the provisions of Section 5 of the Securities Act or require the
qualification of any Operative Agreement under the Trust Indenture Act
of 1939, as amended;
(i) The Owner Trustee's principal place of business, chief
executive office and office where the documents, accounts and records
relating to the transactions contemplated by this Agreement and each
other Operative Agreement are kept are located at 79 South Main Street,
Salt Lake City, Utah 84111;
(j) The Owner Trustee is not engaged principally in, and does
not have as one (1) of its important activities, the business of
extending credit for the purpose of purchasing or carrying any margin
stock (within the meaning of Regulation U of the Board of Governors of
the Federal Reserve System of the United States), and no part of the
proceeds of the Loans or the Holder Advances will be used by it to
purchase or carry any margin stock or to extend credit to others for
the purpose of purchasing or carrying any such margin stock or for any
purpose that violates, or is inconsistent with, the provisions of
Regulations T, U, or X of the Board of Governors of the Federal Reserve
System of the United States;
(k) The Owner Trustee is not an "investment company" or a
company controlled by an "investment company" within the meaning of the
Investment Company Act;
(l) Each Property is free and clear of all Lessor Liens
attributable to the Owner Trustee, either in its individual capacity or
as the Owner Trustee; and
(m) The Owner Trustee, in its trust capacity, is not a party
to any documents, instruments or agreements other than the Operative
Agreements executed by the Owner Trustee, in its trust capacity.
6.2. REPRESENTATIONS AND WARRANTIES OF THE CONSTRUCTION AGENT AND
THE LESSEE.
Effective as of the Initial Closing Date, the date of each Advance and
the Rent Commencement Date, the Construction Agent and the Lessee represent and
warrant to each of the other parties hereto that:
(a) [Intentionally Reserved];
(b) The execution and delivery by each of the Construction
Agent and the Lessee of this Agreement and the other applicable
Operative Agreements as of such date and the performance by each of the
Construction Agent and the Lessee of its respective obligations under
this Agreement and the other applicable Operative Agreements are
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within the corporate, partnership or limited liability company (as the
case may be) powers of each of the Construction Agent and the Lessee,
have been duly authorized by all necessary corporate, partnership or
limited liability company (as the case may be) action on the part of
each of the Construction Agent and the Lessee (including without
limitation any necessary shareholder action), have been duly executed
and delivered, have received all necessary governmental approval, and
do not and will not (i) violate any Legal Requirement which is binding
on the Construction Agent, the Lessee or any of their Subsidiaries,
(ii) contravene or conflict with, or result in a breach of, any
provision of the Articles of Incorporation, By-Laws or other
organizational documents of any of the Construction Agent, the Lessee
or any of their Subsidiaries or of any agreement, indenture, instrument
or other document which is binding on any of the Construction Agent,
the Lessee or any of their Subsidiaries or (iii) result in, or require,
the creation or imposition of any Lien (other than pursuant to the
terms of the Operative Agreements) on any asset of any of the
Construction Agent, the Lessee or any of their Subsidiaries;
(c) This Agreement and the other applicable Operative
Agreements to which the Construction Agent or the Lessee are parties,
executed prior to and as of such date, constitute the legal, valid and
binding obligation of the Construction Agent or the Lessee, as
applicable, enforceable against the Construction Agent or the Lessee,
as applicable, in accordance with their terms. The Construction Agent
and the Lessee have each executed the various Operative Agreements
required to be executed as of such date;
(d) There are no material actions, suits or proceedings
pending or, to our knowledge, threatened against either the
Construction Agent or the Lessee in any court or before any
Governmental Authority (nor shall any order, judgment or decree have
been issued or proposed to be issued by any Governmental Authority to
set aside, restrain, enjoin or prevent the full performance of any
Operative Agreement or any transaction contemplated thereby) that (i)
concern any Property or the Lessee's interest therein, (ii) question
the validity or enforceability of any Operative Agreement or any
transaction described in the Operative Agreements or (iii) shall have
or could reasonably be expected to have a Material Adverse Effect;
provided, for purposes of disclosure, the Construction Agent and the
Lessee have described the litigation set forth on Exhibit J;
(e) No Governmental Action by any Governmental Authority or
other authorization, registration, consent, approval, waiver, notice or
other action by, to or of any other Person pursuant to any Legal
Requirement, contract, indenture, instrument or agreement or for any
other reason is required to authorize or is required in connection with
(i) the execution, delivery or performance of any Operative Agreement,
(ii) the legality, validity, binding effect or enforceability of any
Operative Agreement, (iii) the acquisition, ownership, construction,
completion, occupancy, operation, leasing or subleasing of any Property
or (iv) any Advance, in each case, except those which have been
obtained and are in full force and effect or will be obtained prior to
the time required to be in place;
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<PAGE> 24
(f) Upon the execution and delivery of each Lease Supplement
to the Lease, (i) the Lessee will have unconditionally accepted the
Property subject to the Lease Supplement and will have a valid and
subsisting leasehold interest in such Property, subject only to the
Permitted Liens, and (ii) no offset will exist with respect to any Rent
or other sums payable under the Lease;
(g) Except as otherwise contemplated by the Operative
Agreements, the Construction Agent shall not use the proceeds of any
Holder Advance or Loan for any purpose other than the purchase and/or
lease of the Properties, the acquisition, installation and testing of
the Equipment, the construction of Improvements and the payment of
Transaction Expenses and the fees, expenses and other disbursements
referenced in Sections 7.1(a) and 7.1(b) of this Agreement, in each
case which accrue prior to the Rent Commencement Date with respect to a
particular Property;
(h) All information heretofore or contemporaneously herewith
furnished by either the Construction Agent or the Lessee or any of
their Subsidiaries to the Agent, the Owner Trustee, any Lender or any
Holder for purposes of or in connection with this Agreement and the
transactions contemplated hereby is, and all information hereafter
furnished by or on behalf of the Construction Agent, the Lessee or any
of their Subsidiaries to the Agent, the Owner Trustee, any Lender or
any Holder pursuant hereto or in connection herewith will be, true and
accurate in every material respect on the date as of which such
information is dated or certified, and such information, taken as a
whole, does not and will not omit to state any material fact necessary
to make such information, taken as a whole, not misleading;
(i) The principal place of business, chief executive office
and office of the Construction Agent and the Lessee where the
documents, accounts and records relating to the transactions
contemplated by this Agreement and each other Operative Agreement are
kept are located at 7628 Thorndike Road, Greensboro, NC 27409-9421;
(j) The representations and warranties of the Construction
Agent and the Lessee set forth in any of the Operative Agreements are
true and correct in all material respects on and as of each such date
as if made on and as of such date. The Construction Agent and the
Lessee are in all material respects in compliance with their respective
obligations under the Operative Agreements and there exists no Default
or Event of Default under any of the Operative Agreements which is
continuing and which has not been cured within any cure period
expressly granted under the terms of the applicable Operative Agreement
or otherwise waived in accordance with the applicable Operative
Agreement. No Default or Event of Default will occur under any of the
Operative Agreements as a result of, or after giving effect to, the
Advance requested by the Requisition on the date of each Advance;
(k) As of each Property Closing Date, the date of each
subsequent Advance and the Rent Commencement Date only, each Property
then being financed consists of (i) unimproved Land or (ii) Land and
existing Improvements thereon which Improvements
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are either suitable for occupancy at the time of acquisition or ground
leasing or will be renovated and/or modified in accordance with the
terms of this Agreement. Each Property then being financed is located
at the location set forth on the applicable Requisition, each of which
is in one (1) of the Approved States;
(l) As of each Property Closing Date, the date of each
subsequent Advance and the Rent Commencement Date only, the Lessor has
good and marketable fee simple title to each Property, or, if any
Property is the subject of a Ground Lease, the Lessor will have a valid
ground leasehold interest enforceable against the ground lessor of such
Property in accordance with the terms of such Ground Lease, subject
only to (i) such Liens referenced in Sections 6.2(r)(i) and 6.2(r)(ii)
on the applicable Property Closing Date and (ii) subject to Section
5.7, Permitted Liens after the applicable Property Closing Date;
(m) As of each Property Closing Date, the date of each
subsequent Advance and the Rent Commencement Date only, no portion of
any Property is located in an area identified as a special flood hazard
area by the Federal Emergency Management Agency or other applicable
agency, or if any such Property is located in an area identified as a
special flood hazard area by the Federal Emergency Management Agency or
other applicable agency, then flood insurance has been obtained for
such Property in accordance with Section 14.2(b) of the Lease and in
accordance with the National Flood Insurance Act of 1968, as amended;
(n) As of each Property Closing Date, the date of each
subsequent Advance and the Rent Commencement Date only, each Property
complies with all Insurance Requirements and all standards of Lessee
with respect to similar properties owned by Lessee;
(o) As of each Property Closing Date, the date of each
subsequent Advance and the Rent Commencement Date only, each Property
complies with all Legal Requirements as of such date (including without
limitation all zoning and land use laws and Environmental Laws), except
to the extent that failure to comply therewith, individually or in the
aggregate, shall not have and could not reasonably be expected to have
a Material Adverse Effect;
(p) As of each Property Closing Date, the date of each
subsequent Advance and the Rent Commencement Date only, all utility
services and facilities necessary for the construction and operation of
the Improvements and the installation and operation of the Equipment
regarding each Property (including without limitation gas, electrical,
water and sewage services and facilities) are available at the
applicable Land and will be constructed prior to the Completion Date
for such Property;
(q) As of each Property Closing Date, the date of each
subsequent Advance and the Rent Commencement Date only, acquisition,
installation and testing of the Equipment (if any) and construction of
the Improvements (if any) to such date shall have
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been performed in a good and workmanlike manner, substantially in
accordance with the applicable Plans and Specifications;
(r) (i) The Security Documents create, as security for
the Obligations (as such term is defined in the Security
Agreement), valid and enforceable security interests in, and
Liens on, all of the Collateral (including without limitation,
the Additional Collateral), in favor of the Agent, for the
ratable benefit of the Lenders and the Holders, as their
respective interests appear in the Operative Agreements, and
such security interests and Liens are subject to no other
Liens other than Liens that are expressly set forth as title
exceptions on the title commitment issued under Section 5.3(g)
with respect to the applicable Property, to the extent such
title commitment has been approved by the Agent. Upon
recordation of the Mortgage Instrument in the real estate
recording office in the applicable Approved State identified
by the Construction Agent or the Lessee, the Lien created by
the Mortgage Instrument in the real property described therein
shall be a perfected first priority mortgage Lien on such real
property (or, in the case of a Ground Lease, the leasehold
estate under such Ground Lease) in favor of the Agent, for the
ratable benefit of the Lenders and the Holders, as their
respective interests appear in the Operative Agreements. To
the extent that the security interests in the portion of the
Collateral comprised of personal property can be perfected by
filing in the filing offices in the applicable Approved States
or elsewhere identified by the Construction Agent or the
Lessee, upon filing of the Lender Financing Statements in such
filing offices, the security interests created by the Security
Agreement shall be perfected first priority security interests
in such personal property in favor of the Agent, for the
ratable benefit of the Lenders and the Holders, as their
respective interests appear in the Operative Agreements;
(ii) The Lease Agreement creates, as security for the
obligations of the Lessee under the Lease Agreement, valid and
enforceable security interests in, and Liens on, each Property
leased thereunder, in favor of the Lessor, and such security
interests and Liens are subject to no other Liens other than
Liens that are expressly set forth as title exceptions on the
title commitment issued under Section 5.3(g) with respect to
the applicable Property, to the extent such title commitment
has been approved by the Agent. Upon recordation of the
memorandum of the Lease Agreement and the memorandum of a
Ground Lease (or, in either case, a short form lease) in the
real estate recording office in the applicable Approved State
identified by the Construction Agent or the Lessee, the Lien
created by the Lease Agreement in the real property described
therein shall be a perfected first priority mortgage Lien on
such real property (or, in the case of a Ground Lease, on the
leasehold estate under such Ground Lease) in favor of the
Agent, for the ratable benefit of the Lenders and the Holders,
as their respective interests appear in the Operative
Agreements. To the extent that the security interests in the
portion of any Property comprised of personal property can be
perfected by the filing in the filing offices in the
applicable Approved State or elsewhere identified by the
Construction Agent or the Lessee upon filing of the
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Lessor Financing Statements in such filing offices, a security
interest created by the Lease Agreement shall be perfected
first priority security interests in such personal property in
favor of the Lessor, which rights pursuant to the Lessor
Financing Statements are assigned to the Agent, for the
ratable benefit of the Lenders and the Holders, as their
respective interests appear in the Operative Agreements;
(s) The Plans and Specifications for each Property will be
prepared prior to the commencement of construction in accordance with
all applicable Legal Requirements (including without limitation all
applicable Environmental Laws and building, planning, zoning and fire
codes), except to the extent the failure to comply therewith,
individually or in the aggregate, shall not have and could not
reasonably be expected to have a Material Adverse Effect. Upon
completion of the Improvements for each Property in accordance with the
applicable Plans and Specifications, such Improvements will be within
any building restriction lines and will not encroach in any manner onto
any adjoining land (except as permitted by express written easements,
which have been approved by the Agent);
(t) As of the Rent Commencement Date only, each Property shall
be improved in accordance with the applicable Plans and Specifications
in a good and workmanlike manner and shall be operational; and
(u) [Intentionally Reserved]
6.3. REPRESENTATIONS AND WARRANTIES OF THE LENDERS AND THE HOLDERS.
Each of the Lenders, with respect to the Notes, and each of the
Holders, with respect to the Certificates, represents and warrants that such
party (a) understands that the offer and sale of the Notes and the Certificates
has not been, and will not be, registered under the Securities Act of 1933, as
amended (the "Securities Act"), or under any state securities laws, and that the
Notes and the Certificates, to the extent they may be deemed to be "securities,"
are being offered and sold in reliance upon federal and state exemptions for
transactions not involving any public offering; (b) is an "accredited investor"
as defined in Rule 501(a) promulgated under the Securities Act; (c) is acquiring
the Notes or Certificates, as the case may be, solely for its own account for
investment purposes and not with a view to the distribution of such Notes or
Certificates, and will not transfer such Notes or Certificates without
compliance with all applicable securities laws; (d) is a sophisticated investor
with sufficient knowledge and experience in financial, investment and business
affairs to permit it to evaluate the merits and risks involved in purchasing
such Notes or Certificates and is able to bear the economic risk and lack of
liquidity inherent in holding such Notes or Certificates for an indefinite
period of time; and (e) has received information concerning the issuer of such
Notes or Certificates and has had the opportunity to ask questions of, and
receive answers from, such issuer and its representatives concerning the
business of such issuer and the terms of such Notes or Certificates and to
obtain additional information as desired in order to evaluate the merits and
risks inherent in acquiring and holding such Notes or Certificates.
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SECTION 7. PAYMENT OF CERTAIN EXPENSES.
7.1. TRANSACTION EXPENSES.
(a) The Lessor agrees on the Initial Closing Date, to pay, or
cause to be paid, all Transaction Expenses arising from the Initial
Closing Date, including without limitation all reasonable fees,
expenses and disbursements of the various legal counsels for the Lessor
and the Agent in connection with the transactions contemplated by the
Operative Agreements and incurred in connection with such Initial
Closing Date, the initial fees and expenses of the Owner Trustee due
and payable on such Initial Closing Date, all fees, taxes and expenses
for the recording, registration and filing of documents and all other
reasonable fees, expenses and disbursements incurred in connection with
such Initial Closing Date; provided, however, the Lessor shall pay such
amounts described in this Section 7.1(a) only if (i) such amounts are
properly described in a Requisition delivered on or before the Initial
Closing Date, and (ii) funds are made available by the Lenders and the
Holders in connection with such Requisition in an amount sufficient to
allow such payment. On the Initial Closing Date after delivery and
receipt of the Requisition referenced in Section 4.2(a) hereof and
satisfaction of the other conditions precedent for such date, the
Holders shall make Holder Advances and the Lenders shall make Loans to
the Lessor to pay for the Transaction Expenses, fees, expenses and
other disbursements referenced in this Section 7.1(a). The Lessee
agrees to timely pay all amounts referred to in this Section 7.1(a) to
the extent not paid by the Lessor.
(b) Assuming no Default or Event of Default shall have
occurred and be continuing and only for the period prior to the Rent
Commencement Date, the Lessor agrees on each Property Closing Date, on
the date of any Construction Advance and on the Completion Date to pay,
or cause to be paid, all Transaction Expenses including without
limitation all reasonable fees, expenses and disbursements of the
various legal counsels for the Lessor and the Agent in connection with
the transactions contemplated by the Operative Agreements and billed in
connection with such Advance or such Completion Date, all amounts
described in Section 7.1(a) of this Agreement which have not been
previously paid, the annual fees and reasonable out-of-pocket expenses
of the Owner Trustee, all fees, expenses and disbursements incurred
with respect to the various items referenced in Sections 5.3, 5.4
and/or 5.5 (including without limitation any premiums for title
insurance policies and charges for any updates to such policies) and
all other reasonable fees, expenses and disbursements in connection
with such Advance or such Completion Date including without limitation
all expenses relating to and all fees, taxes and expenses for the
recording, registration and filing of documents and during the
Commitment Period, all fees, expenses and costs referenced in Sections
7.3(a), 7.3(b), 7.3(d) and 7.4; provided, however, the Lessor shall pay
such amounts described in this Section 7.1(b) only if (i) such amounts
are properly described in a Requisition delivered on the applicable
date and (ii) funds are made available by the Lenders and the Holders
in connection with such Requisition in an amount sufficient to allow
such payment. On
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<PAGE> 29
each Property Closing Date, on the date of any Construction Advance or
any Completion Date, after delivery of the applicable Requisition and
satisfaction of the other conditions precedent for such date, the
Holders shall make a Holder Advance and the Lenders shall make Loans to
the Lessor to pay for the Transaction Expenses, fees, expenses and
other disbursements referenced in this Section 7.1(b). The Lessee
agrees to timely pay all amounts referred to in this Section 7.1(b) to
the extent not paid by the Lessor.
(c) All fees payable pursuant to the Operative Agreements
shall be calculated on the basis of a year of three hundred sixty (360)
days for the actual days elapsed.
7.2. BROKERS' FEES.
The Lessee agrees to pay or cause to be paid any and all brokers' fees,
if any, including without limitation any interest and penalties thereon, which
are payable in connection with the transactions contemplated by this Agreement
and the other Operative Agreements.
7.3. CERTAIN FEES AND EXPENSES.
The Lessee agrees to pay or cause to be paid (a) the initial and annual
Owner Trustee's fee and all reasonable expenses of the Owner Trustee and any
co-trustees (including without limitation reasonable counsel fees and expenses)
or any successor owner trustee and/or co-trustee, for acting as the owner
trustee under the Trust Agreement, (b) all reasonable costs and expenses
incurred by the Construction Agent, the Lessee, the Agent, the Lenders, the
Holders or the Lessor in entering into any Lease Supplement and any future
amendments, modifications, supplements, restatements and/or replacements with
respect to any of the Operative Agreements, whether or not such Lease
Supplement, amendments, modifications, supplements, restatements and/or
replacements are ultimately entered into, or giving or withholding of waivers of
consents hereto or thereto, which have been requested by the Construction Agent,
the Lessee, the Agent, the Lenders, the Holders or the Lessor, (c) all
reasonable costs and expenses incurred by the Construction Agent, the Lessee,
the Agent, the Lenders, the Holders or the Lessor in connection with any
exercise of remedies under any Operative Agreement or any purchase of any
Property by the Construction Agent, the Lessee or any third party and (d) all
reasonable costs and expenses incurred by the Construction Agent, the Lessee,
the Agent, the Lenders, the Holders or the Lessor in connection with any
transfer or conveyance of any Property, whether or not such transfer or
conveyance is ultimately accomplished.
7.4. UNUSED FEE.
During the Commitment Period, the Lessee agrees to pay or to cause to
be paid to the Agent for the account of (a) the Lenders, respectively, an unused
fee (the "Lender Unused Fee") equal to the product of the average daily
Available Commitment of each Lender during the Commitment Period multiplied by
the rate per annum set forth as the Unused Fee in the definition of Applicable
Percentage and (b) the Holders, respectively, an unused fee (the "Holder Unused
Fee") equal to the product of the average daily Available Holder Commitment of
each Holder during the Commitment Period multiplied by the rate per annum set
forth as the Unused
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Fee in the definition of Applicable Percentage. Such Unused Fees shall be
payable quarterly in arrears on each Unused Fee Payment Date. If all or a
portion of any such Unused Fee shall not be paid when due, such overdue amount
shall bear interest, payable by the Lessee on demand, at a rate per annum equal
to the ABR plus the Applicable Percentage (or in the case of Holder Yield, the
ABR plus the Applicable Percentage for ABR Holder Advances) plus two percent
(2%) from the date of such non-payment until such amount is paid in full (as
well as before judgment).
7.5. OTHER FEES.
The Lessee shall pay or cause to paid such other fees as set forth and
on the terms and conditions provided in the engagement letter dated July 22,
1999 addressed to Mr. Dean Priddy, Chief Financial Officer & Vice President of
Administration at RF Micro Devices, Inc. 7628 Thorndike Road Greensboro, NC
27409-9421 from Peter M. Budko, Director, Corporate Real Estate & Asset Finance.
SECTION 8. OTHER COVENANTS AND AGREEMENTS.
8.1. COOPERATION WITH THE CONSTRUCTION AGENT OR THE LESSEE.
The Holders, the Lenders, the Lessor (at the direction of the Majority
Secured Parties) and the Agent shall, at the expense of and to the extent
reasonably requested by the Construction Agent or the Lessee (but without
assuming additional liabilities on account thereof and only to the extent such
is acceptable to the Holders, the Lenders, the Lessor (at the direction of the
Majority Secured Parties) and the Agent in their reasonable discretion),
cooperate with the Construction Agent or the Lessee in connection with the
Construction Agent or the Lessee satisfying its covenant obligations contained
in the Operative Agreements including without limitation at any time and from
time to time, promptly and duly executing and delivering any and all such
further instruments, documents and financing statements (and continuation
statements related thereto).
8.2. COVENANTS OF THE OWNER TRUSTEE AND THE HOLDERS.
Each of the Owner Trustee and the Holders hereby agrees that so long as
this Agreement is in effect:
(a) Neither the Owner Trustee (in its trust capacity or in its
individual capacity) nor any Holder will create or permit to exist at
any time, and each of them will, at its own cost and expense, promptly
take such action as may be necessary duly to discharge, or to cause to
be discharged, all Lessor Liens on the Properties attributable to it;
provided, however, that the Owner Trustee and the Holders shall not be
required to so discharge any such Lessor Lien while the same is being
contested in good faith by appropriate proceedings diligently
prosecuted so long as such proceedings shall not materially and
adversely affect the rights of the Lessee under the Lease and the other
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Operative Agreements or involve any material danger of impairment of
the Liens of the Security Documents or of the sale, forfeiture or loss
of, and shall not interfere with the use or disposition of, any
Property or title thereto or any interest therein or the payment of
Rent;
(b) Without prejudice to any right under the Trust Agreement
of the Owner Trustee to resign (subject to requirement set forth in the
Trust Agreement that such resignation shall not be effective until a
successor shall have agreed to accept such appointment), or the
Holders' rights under the Trust Agreement to remove the institution
acting as the Owner Trustee (after consent to such removal by the Agent
as provided in the Trust Agreement), each of the Owner Trustee and the
Holders hereby agrees with the Lessee and the Agent (i) not to
terminate or revoke the trust created by the Trust Agreement except as
permitted by Article VIII of the Trust Agreement, (ii) not to amend,
supplement, terminate or revoke or otherwise modify any provision of
the Trust Agreement in such a manner as to adversely affect the rights
of any such party without the prior written consent of such party and
(iii) to comply with all of the terms of the Trust Agreement, the
nonperformance of which would adversely affect such party;
(c) The Owner Trustee or any successor may resign or be
removed by the Holders as the Owner Trustee, a successor Owner Trustee
may be appointed and a corporation may become the Owner Trustee under
the Trust Agreement, only in accordance with the provisions of Article
IX of the Trust Agreement and, with respect to such appointment, with
the consent of the Lessee (so long as there shall be no Lease Event of
Default that shall have occurred and be continuing), which consent
shall not be unreasonably withheld or delayed;
(d) The Owner Trustee, in its capacity as the Owner Trustee
under the Trust Agreement, and not in its individual capacity, shall
not contract for, create, incur or assume any Indebtedness, or enter
into any business or other activity or enter into any contracts or
agreements, other than pursuant to or under the Operative Agreements;
(e) The Holders will not instruct the Owner Trustee to take
any action in violation of the terms of any Operative Agreement;
(f) Neither any Holder nor the Owner Trustee shall (i)
commence any case, proceeding or other action with respect to the Owner
Trustee under any existing or future law of any jurisdiction, domestic
or foreign, relating to bankruptcy, insolvency, reorganization,
arrangement, winding-up, liquidation, dissolution, composition or other
relief with respect to it or its debts, or (ii) seek appointment of a
receiver, trustee, custodian or other similar official with respect to
the Owner Trustee or for all or any substantial benefit of the
creditors of the Owner Trustee; and neither any Holder nor the Owner
Trustee shall take any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any of the acts set forth
in this paragraph;
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(g) The Owner Trustee shall give prompt notice to the Lessee,
the Holders and the Agent if the Owner Trustee's principal place of
business or chief executive office, or the office where the records
concerning the accounts or contract rights relating to any Property are
kept, shall cease to be located at 79 South Main Street, Salt Lake
City, Utah 84111, or if it shall change its name; and
(h) The Owner Trustee shall take or refrain from taking such
actions and grant or refrain from granting such approvals with respect
to the Operative Agreements and/or relating to any Property in each
case as directed in writing by the Agent (until such time as the Loans
are paid in full, and then by the Majority Holders) or, in connection
with Sections 8.5 and 9.2 hereof, the Lessee; provided, however, that
notwithstanding the foregoing provisions of this subparagraph (h) the
Owner Trustee, the Agent, the Lenders and the Holders each acknowledge,
covenant and agree that neither the Owner Trustee nor the Agent shall
act or refrain from acting, regarding each Unanimous Vote Matter, until
such party has received the approval of each Lender and each Holder
affected by such matter.
8.3. THE LESSEE COVENANTS, CONSENT AND ACKNOWLEDGMENT.
(a) The Lessee acknowledges and agrees that the Owner Trustee,
pursuant to the terms and conditions of the Security Agreement and the
Mortgage Instruments, shall create Liens respecting the various
personal property, fixtures and real property described therein in
favor of the Agent. The Lessee hereby irrevocably consents to the
creation, perfection and maintenance of such Liens. Each of the
Construction Agent and the Lessee shall, to the extent reasonably
requested by any of the other parties hereto, cooperate with the other
parties in connection with their covenants herein or in the other
Operative Agreements and shall from time to time duly execute and
deliver any and all such future instruments, documents and financing
statements (and continuation statements related thereto) as any other
party hereto may reasonably request.
(b) The Lessor hereby instructs the Lessee, and the Lessee
hereby acknowledges and agrees, that until such time as the Loans and
the Holder Advances are paid in full and the Liens evidenced by the
Security Agreement and the Mortgage Instruments have been released (i)
any and all Rent (excluding Excepted Payments which shall be payable to
each Holder or other Person as appropriate) and any and all other
amounts of any kind or type under any of the Operative Agreements due
and owing or payable to any Person shall instead be paid directly to
the Agent (excluding Excepted Payments which shall be payable to each
Holder or other Person as appropriate) or as the Agent may direct from
time to time for allocation and distribution in accordance with the
procedures set forth in Section 8.7 hereof, (ii) all rights of the
Lessor under the Lease shall be exercised by the Agent and (iii) the
Lessee shall cause all notices, certificates, financial statements,
communications and other information which are delivered, or are
required to be delivered, to the Lessor, to also be delivered at the
same time to the Agent.
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(c) The Lessee shall not consent to or permit any amendment,
supplement or other modification of the terms or provisions of any
Operative Agreement except in accordance with Section 12.4 of this
Agreement.
(d) The Lessee hereby covenants and agrees to cause an
Appraisal or reappraisal (in form and substance satisfactory to the
Agent and from an appraiser selected by the Agent) to be issued
respecting any Property as requested by the Agent from time to time (i)
at each and every time as such shall be required to satisfy any
regulatory requirements imposed on the Agent, the Lessor, the Trust
Company, any Lender and/or any Holder and (ii) after the occurrence of
an Event of Default.
(e) The Lessee hereby covenants and agrees that, except for
amounts payable as Basic Rent, any and all payment obligations owing
from time to time under the Operative Agreements by any Person to the
Agent, any Lender, any Holder or any other Person shall (without
further action) be deemed to be Supplemental Rent obligations payable
by the Lessee. Without limitation, such obligations of the Lessee shall
include, without duplication, the Supplemental Rent obligations
pursuant to this Section 8.3(e), Section 3.3 of the Lease, arrangement
fees, administrative fees, participation fees, commitment fees, unused
fees, prepayment penalties, breakage costs, indemnities, trustee fees
and transaction expenses incurred by the parties hereto in connection
with the transactions contemplated by the Operative Agreements.
(f) At any time the Lessor or the Agent is entitled under the
Operative Agreements to possession of a Property or any component
thereof, each of the Construction Agent and the Lessee hereby covenants
and agrees, at its own cost and expense, to assemble and make the same
available to the Agent (on behalf of the Lessor).
(g) [INTENTIONALLY RESERVED]
(h) [INTENTIONALLY RESERVED]
(i) The Lessee hereby covenants and agrees that it shall give
prompt notice, but in any event within five (5) Business Days, to the
Agent if the Lessee's principal place of business or chief executive
office, or the office where the records concerning the accounts or
contract rights relating to any Property are kept, shall cease to be
located at 7628 Thorndike Road, Greensboro, NC 27409-9421 or if it
shall change its name.
(j) [INTENTIONALLY RESERVED]
(k) [INTENTIONALLY RESERVED]
(l) The Lessee hereby covenants and agrees that the rights of
the Lessee under this Agreement and the Lease shall not impair or in
any way diminish the obligations of the Construction Agent and/or the
rights of the Lessor under the Agency Agreement.
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(m) The Lessee shall promptly notify the Agent, or cause the
Agent to be promptly notified, upon the Lessee gaining knowledge of the
occurrence of (i) any Default or Event of Default which is continuing
at such time or (ii) any litigation, government or environmental
proceeding which could reasonably be expected to have a Material
Adverse Effect upon the Lessee. In any event, such notice shall be
provided to the Agent within ten (10) days of when the Lessee gains
such knowledge.
(n) Until all of the obligations under the Operative
Agreements have been finally and indefeasibly paid and satisfied in
full and the Commitments and the Holder Commitments terminated unless
consent has been obtained from the Majority Secured Parties, the Lessee
will:
(i) except as permitted by the express provisions of
the Operative Agreements, preserve and maintain its separate
legal existence and all rights, franchises, licenses and
privileges necessary to the conduct of its business, and
qualify and remain qualified as a foreign corporation (or
partnership, limited liability company or other such similar
entity, as the case may be) and authorized to do business in
each jurisdiction in which the failure to so qualify would
have a Material Adverse Effect;
(ii) pay and perform all obligations of the Lessee
under the Operative Agreements and all other material
contractual obligations and pay and perform (A) all taxes,
assessments and other governmental charges that may be levied
or assessed upon it or any of its property, and (B) all other
indebtedness, obligations and liabilities in accordance with
customary trade practices, which if not paid would have a
Material Adverse Effect; provided that the Lessee may contest
any item described in this Section 8.3(n)(ii) in good faith so
long as adequate reserves are maintained with respect thereto
in accordance with GAAP;
(iii) to the extent failure to do so would have a
Material Adverse Effect, observe and remain in compliance with
all applicable Laws (including specifically without limitation
all applicable Environmental Laws and ERISA) and maintain in
full force and effect all Governmental Actions, in each case
applicable to the conduct of its business; keep in full force
and effect all licenses, certifications or accreditations
necessary for any Facility to carry on its business; and not
permit the termination of any insurance reimbursement program
available to any Facility; and
(iv) provided that the Agent, the Lenders and the
Holders use reasonable efforts to minimize disruption to the
business of the Lessee, permit representatives of the Agent or
any Lender or Holder, from time to time, to visit and inspect
its properties; inspect, audit and make extracts from its
books, records and files, including without limitation
management letters prepared by independent accountants; and
discuss with its principal officers, and its
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independent accountants, its business, assets, liabilities, financial
condition, results of operations and business prospects.
(o) Any reprogramming required to permit the proper
functioning, before, on and after January 1, 2000, of (i) Lessee's
computer-based systems and (ii) equipment containing embedded
microchips (including systems and equipment supplied by others or with
which Lessee's systems interface), and the testing of all such systems
and equipment, as so reprogrammed, will be completed by December 31,
1999. The cost to Lessee of such reprogramming and testing and of the
reasonably foreseeable consequences of the year 2000 to Lessee
(including, without limitation, reprogramming errors and the failure of
others' systems or equipment) will not result in a Default, Event of
Default or Material Adverse Effect. Except for such of the
reprogramming referred to in the preceding sentence as may be
necessary, the computer and management information systems of Lessee
are and, with ordinary course upgrading and maintenance will continue
for the term of this Agreement to be, sufficient to permit Lessee to
conduct their respective businesses without a Material Adverse Effect.
(p) Lessee shall perform any and all obligations of Lessor
under, and cause Lessor to otherwise remain in full compliance with,
the terms and provisions of each Ground Lease, if any.
(q) Promptly after obtaining any required architectural
approvals by any business park or any other applicable entity with
oversight responsibility for the applicable Improvements, the
Construction Agent shall deliver to the Agent copies of the same.
(r) Lessee shall maintain a first priority perfected security
interest on the Additional Collateral in favor of the Agent (for the
benefit of the Financing Parties), until such time as the Lessee shall
have satisfied each of the following conditions (as established by
financial statements delivered pursuant to Section 8.3.A(a)-(c)
hereof):
(i) the sum of consolidated EBITDA for the four
immediately preceding fiscal quarters is greater
than or equal to $150,000,000.00;
(ii) the ratio of Consolidated Total Funded Debt
(including all Loans and Holder Advances), as of the
date of determination, to EBITDA for the four
immediately preceding fiscal quarters period is less
than or equal to 2.00:1.00;
(iii) the ratio of Consolidated Funded Senior Debt, as of
the date of determination, to EBITDA for the four
immediately preceding fiscal quarters is less than or
equal to 1.00:1.00;
(iv) Consolidated Total Funded Debt, as of the date of
determination, is less than or equal to forty percent
(40%) of Book Capitalization, as of the date of
determination;
(v) the Completion Date for all Properties (including
without limitation the installation and delivery of
the Equipment) has occurred, Rent payments
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have commenced for each Property and Lessee shall
have caused title to all of the Equipment to be
vested in the Lessor; and
(vi) no Default or Event of Default has occurred and is
continuing.
(s) The Lessee will cause all of the owned personal property
of each member of the Consolidated Group to be subject at all times to
a first priority, perfected Lien in favor of the Agent to secure the
Obligations pursuant to the terms and conditions of the Operative
Agreements or, with respect to any such property acquired subsequent to
the Initial Closing Date, such other additional security documents as
the Agent shall reasonably request, subject in any case to Liens that
are described in Schedule 3 hereto as of the Initial Closing Date or
with respect to any such property acquired subsequent to the Initial
Closing Date Liens permitted pursuant to 8.3B(a)(iii) hereof.
If, subsequent to the Initial Closing Date, any member of the
Consolidated Group shall acquire any asset required to be pledged to the Agent
as Collateral by this Section 8.3(s), the Lessee shall promptly notify the Agent
of same and shall take such action at its own expense as requested by the Agent
to ensure that the Agent has a first priority perfected Lien in such assets to
secure the Obligations.
8.3.A ADDITIONAL AFFIRMATIVE COVENANTS OF THE LESSEE.
Lessee hereby covenants and agrees that, so long as any Operative
Agreement is in effect or any amounts payable under any Operative Agreement
shall remain outstanding, and until all of the Commitments and Holder
Commitments shall have terminated, Lessee will furnish, or cause to be
furnished, to the Agent, the Lenders and the Holders the following information
and will comply with each of the covenants set forth below:
(a) Annual Financial Statements. As soon as available, and in any event
within 90 days after the close of each fiscal year of the Lessee, a consolidated
balance sheet and income statement of the Lessee as of the end of such fiscal
year, together with related consolidated statements of operations and retained
earnings and of cash flows for such fiscal year, in each case setting forth in
comparative form consolidated figures for the preceding fiscal year, all such
financial information described above to be in reasonable form and detail and
audited by independent certified public accountants of recognized national
standing reasonably acceptable to the Agent, and whose opinion shall be to the
effect that such financial statements have been prepared in accordance with GAAP
(except for changes with which such accountants concur) and shall not be limited
as to the scope of the audit or qualified as to the status of the Lessee as a
going concern or any other material qualifications or exceptions.
(b) Quarterly Financial Statements. As soon as available, and in any
event within 45 days after the close of each fiscal quarter of the Lessee (other
than the fourth fiscal quarter, in which case 90 days after the end thereof) a
consolidated balance sheet and income statement of the Lessee as of the end of
such fiscal quarter, together with related consolidated statements of operations
and
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retained earnings and of cash flows for such fiscal quarter, in each case
setting forth in comparative form consolidated figures for the corresponding
period of the preceding fiscal year, all such financial information described
above to be in reasonable form and detail and reasonably acceptable to the
Agent, and accompanied by a certificate of a Responsible Officer of Lessee to
the effect that such quarterly financial statements fairly present in all
material respects the financial condition of the Lessee and have been prepared
in accordance with GAAP, subject to changes resulting from audit and normal
year-end audit adjustments.
(c) Officer's Financial Compliance Certificate. At the time of delivery
of the financial statements provided for in Sections 8.3.A(a) and (b) Financial
Compliance above setting forth the calculations described in Sections 8.3(r) and
8.3.A(i)-(m) hereof, a certificate of a Responsible Officer of Lessee
substantially in the form of Exhibit K, stating that no Default or Event of
Default exists, or if any Default or Event of Default does exist, specifying the
nature and extent thereof and what action Lessee proposes to take with respect
thereto.
(d) Annual Business Plan and Budgets. At least 30 days prior to the end
of each fiscal year of the Lessee, an annual business plan and budget of the
Lessee containing, among other things, pro forma financial statements for the
next fiscal year.
(e) Accountant's Certificate. Within the period for delivery of the
annual financial statements provided in Section 8.3.A(a), a certificate of the
accountants conducting the annual audit stating that they have reviewed the
Operative Agreements and stating further whether, in the course of their audit,
they have become aware of any Default or Event of Default and, if any such
Default or Event of Default exists, specifying the nature and extent thereof.
(f) Auditor's Reports. Promptly upon receipt thereof, a copy of any
other report or "management letter" submitted by independent accountants to any
member of the Lessee in connection with any annual, interim or special audit of
the books of such Person.
(g) Reports. Promptly upon transmission or receipt thereof, copies of
any filings and registrations with, and reports to or from, the Securities and
Exchange Commission, or any successor agency, and copies of all financial
statements, proxy statements, notices and reports as Lessee shall send to its
shareholders or to a holder of any Indebtedness owed by Lessee in its capacity
as such a holder.
(h) Books and Records. The Lessee and each of its Subsidiaries will
keep complete and accurate books and records of its transactions in accordance
with good accounting practices on the basis of GAAP (including the establishment
and maintenance of appropriate reserves).
(i) Other Information. With reasonable promptness upon any such
request, such other information regarding the business, properties or financial
condition of any member of the Lessee as the Agent may reasonably request.
(j) Quick Ratio. For each fiscal quarter the ratio of (a) the sum
(without duplication) of Lessee's (i) unencumbered cash, (ii) unencumbered short
term cash investments, (iii) other
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unencumbered marketable securities which are classified as short term
investments and (iv) unencumbered accounts receivable, computed net of reserves
for uncollectible amounts, each as classified in accordance with GAAP, to (b)
Lessee's current liabilities determined in accordance with GAAP (which shall
include, without limitation, that portion of the principal amount of Total
Funded Debt which is due on demand or will become due within one year after the
date on which the applicable determination of the quick ratio is required
hereunder), shall equal or exceed 1.25:1.00.
(k) Consolidated Interest Coverage Ratio. At all times, the
Consolidated Interest Coverage Ratio shall not be less than 5.0:1.0.
(l) Consolidated Total Leverage Ratio. At all times, the Consolidated
Total Leverage Ratio shall be not greater than 2.75:1.00.
(m) Consolidated Net Worth. As of the end of each fiscal quarter, the
Consolidated Net Worth shall be not less than the sum of (i) $229,048,000.00
plus (ii) as of the end of each fiscal quarter to occur after September 26,
1999, an amount equal to seventy-five (75%) of Consolidated Net Income (but not
less than zero) for such fiscal quarter, such increases to be cumulative, plus
(iii) an amount equal to one hundred percent (100%) of net proceeds from Equity
Issuances occurring after September 26, 1999.
(n) Capital Expenditures. Lessee will not make, or permit any
Subsidiary of the Lessee to make, Consolidated Capital Expenditures in any
fiscal year set forth in the table below that exceed, in the aggregate, the
amount set forth opposite such fiscal year in such table:
Fiscal Year Ending (on or about) Amount
-------------------------------- ------
March 31, 2000 $100,000,000.00
March 31, 2001 $125,000,000.00
March 31, 2002 $125,000,000.00
March 31, 2003 $175,000,000.00
March 31, 2004 $175,000,000.00
March 31, 2005 $175,000,000.00
provided, however, that, if during any fiscal year the amount of
Consolidated Capital Expenditures permitted for that fiscal year in the table
above is not so utilized, such unutilized amount may be utilized in the next
succeeding fiscal year but not in any subsequent fiscal year.
(o) Domestic Subsidiaries. As soon as practicable and in any event
within 30 days after any Person becomes a direct or indirect Domestic Subsidiary
of the Lessee, the Lessee shall (i) provide the Agent with written notice
thereof setting forth information in reasonable detail describing all of the
assets of such Person, (ii) cause such Person to provide a guaranty of the
Obligations pursuant to a guaranty agreement in form and substance satisfactory
to the Agent, (iii) cause such Person to grant a security interest to the Agent
in all of its personal property pursuant to the terms of a security agreement in
substantially the form of the Lessee's Security
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Agreement and otherwise in form and substance satisfactory to the Agent, (iv)
cause 100% of the issued and outstanding capital stock and other equity
interests of such Person to be pledged to the Agent pursuant to a pledge
agreement in form and substance satisfactory to the Agent and cause the
certificates (or other agreements or instruments), if any, representing such
capital stock or other equity interests to be delivered to the Agent (together
with undated stock powers signed in blank), and (v) deliver such other
documentation as the Agent may reasonably request in connection with the
foregoing, including, without limitation, appropriate UCC-1 financing
statements, landlord's waivers, certified resolutions and other organizational
and authorizing documents of such Person, favorable opinions of counsel to such
Person (which shall cover, among other things, the legality, validity, binding
effect and enforceability of the documentation referred to above and the
perfection of the Agent's liens thereunder), all in form, content and scope
reasonably satisfactory to the Agent.
(p) Foreign Subsidiaries. As soon as practicable and in any event
within 30 days after any Person becomes a direct or indirect Foreign Subsidiary
of the Lessee, the Lessee shall (i) provide the Agent with written notice
thereof setting forth information in reasonable detail describing all of the
assets of such Person.
8.3.B ADDITIONAL NEGATIVE COVENANTS OF THE LESSEE.
Lessee hereby covenants and agrees that, so long as any Operative
Agreement is in effect or any amounts payable under any Operative Agreement
shall remain outstanding, and until all of the Commitments and Holder
Commitments shall have terminated:
(a) Indebtedness.
Lessee will not permit any member of the Consolidated Group to
contract, create, incur, assume, guaranty or permit to exist any Indebtedness,
and Lessee will not except: contract, create, incur, assume, guaranty or permit
to exist any Indebtedness except:
(i) Indebtedness existing or arising under the Operative
Agreements;
(ii) Indebtedness consisting of unsecured Subordinated Debt
maturing after the Expiration Date not to exceed, in the aggregate, an
outstanding amount of $250,000,000.00 at any time, provided further no
cash amortization shall occur until after the Expiration Date;
(iii) Indebtedness consisting of unsecured senior Funded Debt
maturing after the Expiration Date not to exceed, in the aggregate, an
outstanding amount of $50,000,000.00 at anytime, provided further, no
amortization shall occur until after the Expiration Date;
(iv) purchase money Indebtedness (including obligations in
respect of Capitalized Leases) hereafter incurred by the Lessee to
finance the purchase price of any cost of construction of fixed assets
provided that (i) the total of all such Indebtedness for
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the Lessee taken together shall not exceed an aggregate principal
amount of $100,000,000.00 at any one time outstanding; (ii) such
Indebtedness when incurred shall not exceed the purchase price of the
asset(s) financed; and (iii) no such Indebtedness shall be refinanced
for a principal amount in excess of the principal balance outstanding
thereon at the time of such refinancing; provided, however, that such
$100,000,000.00 amount shall not include up to $17,000,000.00 to
finance the headquarters building of the Lessee which is located at
7628 Thorndike Road, Greensboro, North Carolina;
(v) Indebtedness and other obligations owing under interest
rate, commodities and foreign currency exchange protection agreements
entered into in the ordinary course of business to manage existing or
anticipated risks and not for speculative purposes;
(vi) guaranty obligations with respect to Indebtedness of
Lessee that are permitted under this Section 8.3.B.
(b) Liens.
Lessee will not permit any member of the Consolidated Group to
contract, create, incur, assume or permit to exist any Lien with respect to any
of its property (including without limitation the Property, Equipment,
Additional Collateral, whether now owned or after acquired), except for
Permitted Liens.
(c) Nature of Business.
Lessee will not permit any member of the Consolidated Group to
substantively alter the character or conduct of the business conducted by such
Person as of the Initial Closing Date.
(d) Merger and Consolidation; Dissolution.
Lessee will not permit any member of the Consolidated Group to merge
with or into or consolidate or combine with any other Person or sell, lease,
transfer or assign to any other Person or otherwise dispose of (whether in one
transaction or a series of transactions) all or substantially all its assets
(whether now owned or hereafter acquired); provided, however, that (a) any
Subsidiary (direct or indirect) of Lessee may merge with or into or consolidate
or combine with or dispose of all or substantially all of its assets to Lessee
or any other Subsidiary (direct or indirect) of Lessee, (b) any Subsidiary
(direct or indirect) of Lessee may merge, consolidate or combine with another
corporation if the surviving corporation in such transaction shall be a
wholly-owned Subsidiary (direct or indirect) of Lessee and (c) if no Default or
Event of Default shall have occurred at the time of or immediately after giving
effect to such transaction, Lessee may merge, consolidate or combine with
another corporation, if the surviving corporation shall be Lessee.
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(e) Asset Dispositions.
Lessee will not permit any member of the Consolidated Group to make any
Asset Disposition (including, without limitation, any sale/leaseback
transaction) other than (i) the sale/leaseback transaction to finance the
headquarters building of the Lessee which is located at 7628 Thorndike Road,
Greensboro, North Carolina for an amount of at least $13,000,000.00, (ii) Asset
Dispositions where the assets being disposed of are replaced, within ten (10)
days, with assets of equal or greater value and (iii) other Asset Dispositions
which in the aggregate constitute less than (A) 10% of the tangible net assets
of the Lessee (measured as of the end of the most recent fiscal quarter for
which financial statements have been delivered pursuant to Section 8.3A hereof)
and (B) 10% of Consolidated EBITDA.
(f) Investments.
Lessee will not permit any member of the Consolidated Group to make or
permit to exist Investments in or to any Person, except for Eligible
Investments.
(g) Restricted Payments.
Lessee will not permit any member of the Consolidated Group to make any
cash Restricted Payment.
(h) [Intentionally Omitted]
[(i) Transactions with Affiliates.
Lessee will not permit any member of the Consolidated Group to enter
into or permit to exist any transaction or series of transactions with any
officer, director, shareholder, Subsidiary or Affiliate of such Person other
than (a) advances of working capital to Lessee, (b) transfers of cash and assets
to Lessee, (c) transactions permitted by Sections 8.3.B(a), (d), (e), (f) and
(g) normal compensation and reimbursement of expenses of officers and directors
and (d) except as otherwise specifically limited in the Operative Agreements,
other transactions which are entered into in the ordinary course of such
Person's business on terms and conditions substantially as favorable to such
Person as would be obtainable by it in a comparable arms-length transaction with
a Person other than an officer, director, shareholder, Subsidiary or Affiliate.
(j) [Intentionally Omitted]
(k) Limitation on Restricted Actions.
Lessee will not permit any member of the Consolidated Group to,
directly or indirectly, create or otherwise cause or suffer to exist or become
effective any encumbrance or restriction on the ability of any such Person to
(a) pay dividends or make any other distributions on its capital stock or with
respect to any other interest or participation in, or measured by, its profits,
(b) pay any Indebtedness or other obligation, (c) make loans or advances, (d)
sell, lease or transfer any of its properties or assets, or (e) act as a
guarantor or pledge its assets, except for such encumbrances
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or restrictions existing under or by reason of (i) the Operative Agreements or
(ii) pursuant to the terms of any purchase money or sale/leaseback Indebtedness
(including Capitalized Leases) to the extent permitted under Section 8.3B(a)(iv)
to the extent such limitations relate only to the property which is the subject
of such financing.
(l) Ownership of Subsidiaries.
Notwithstanding any other provisions of this Agreement to the contrary,
Lessee shall not create or have any Subsidiaries except wholly owned
Subsidiaries pursuant to the terms and conditions of the Operative Agreements.
8.4. SHARING OF CERTAIN PAYMENTS.
Except for Excepted Payments, the parties hereto acknowledge and agree
that all payments due and owing by the Lessee to the Lessor under the Lease or
any of the other Operative Agreements shall be made by the Lessee directly to
the Agent as more particularly provided in Section 8.3 hereof. The Lessor, the
Holders, the Agent, the Lenders and the Lessee acknowledge the terms of Section
8.7 of this Agreement regarding the allocation of payments and other amounts
made or received from time to time under the Operative Agreements and agree,
that all such payments and amounts are to be allocated as provided in Section
8.7 of this Agreement.
8.5. GRANT OF EASEMENTS, ETC.
The Agent, the Lenders and the Holders hereby agree that, so long as no
Event of Default shall have occurred and be continuing, the Owner Trustee shall,
from time to time at the request of the Lessee (and with the prior consent of
the Agent), in connection with the transactions contemplated by the Agency
Agreement, the Lease or the other Operative Agreements, (i) grant easements and
other rights in the nature of easements with respect to any Property, (ii)
release existing easements or other rights in the nature of easements which are
for the benefit of any Property, (iii) execute and deliver to any Person any
instrument appropriate to confirm or effect such grants or releases, and (iv)
execute and deliver to any Person such other documents or materials in
connection with the acquisition, development, construction, testing or operation
of any Property, including without limitation reciprocal easement agreements,
construction contracts, operating agreements, development agreements, plats,
replats or subdivision documents; provided, that each of the agreements referred
to in this Section 8.5 shall be of the type normally executed by the Lessee in
the ordinary course of the Lessee's business and shall be on commercially
reasonable terms so as not to diminish the value of any Property in any material
respect.
8.6. APPOINTMENT BY THE AGENT, THE LENDERS, THE HOLDERS AND THE
OWNER TRUSTEE.
The Holders hereby appoint the Agent to act as collateral agent for the
Holders in connection with the Lien granted by the Security Documents to secure
the Holder Amount. The Lenders and the Holders acknowledge and agree and direct
that the rights and remedies of the
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beneficiaries of the Lien of the Security Documents shall be exercised by the
Agent on behalf of the Lenders and the Holders as directed from time to time by
the Majority Secured Parties or, pursuant to Sections 8.2(h) and 12.4, all of
the Lenders and the Holders, as the case may be; provided, in all cases, the
Agent shall allocate payments and other amounts received in accordance with
Section 8.7. The Agent is further appointed to provide notices under the
Operative Agreements on behalf of the Owner Trustee (as determined by the Agent,
in its reasonable discretion), to receive notices under the Operative Agreements
on behalf of the Owner Trustee and (subject to Sections 8.5 and 9.2) to take
such other action under the Operative Agreements on behalf of the Owner Trustee
as the Agent shall determine in its reasonable discretion from time to time. The
Agent hereby accepts such appointments. For purposes hereof, the provisions of
Section 7 of the Credit Agreement, together with such other terms and provisions
of the Credit Agreement and the other Operative Agreements as required for the
full interpretation and operation of Section 7 of the Credit Agreement are
hereby incorporated by reference as if restated herein for the mutual benefit of
the Agent and each Holder as if each Holder were a Lender thereunder.
Outstanding Holder Advances and outstanding Loans shall each be taken into
account for purposes of determining Majority Secured Parties. Further, the Agent
shall be entitled to take such action on behalf of the Owner Trustee as is
delegated to the Agent under any Operative Agreement (whether express or
implied) as may be reasonably incidental thereto. The parties hereto hereby
agree to the provisions contained in this Section 8.6. Any appointment of a
successor agent under Section 7.9 of the Credit Agreement shall also be
effective as an appointment of a successor agent for purposes of this Section
8.6.
8.7. COLLECTION AND ALLOCATION OF PAYMENTS AND OTHER AMOUNTS.
(a) The Lessee and the Construction Agent have agreed pursuant
to Section 5.8 and otherwise in accordance with the terms of this
Agreement to pay to (i) the Agent any and all Rent (excluding Excepted
Payments) and any and all other amounts of any kind or type under any
of the Operative Agreements due and owing or payable to any Person and
(ii) each Person as appropriate the Excepted Payments. Promptly after
receipt, the Agent shall apply and allocate, in accordance with the
terms of this Section 8.7, such amounts received from the Lessee or the
Construction Agent and all other payments, receipts and other
consideration of any kind whatsoever received by the Agent pursuant to
the Security Agreement or otherwise received by the Agent, the Holders
or any of the Lenders in connection with the Collateral, the Security
Documents or any of the other Operative Agreements. Ratable
distributions among the Lenders and the Holders under this Section 8.7
shall be made based on (in the case of the Lenders) the ratio of the
outstanding Loans to the aggregate Property Cost and (in the case of
the Holders) the ratio of the outstanding Holder Advances to the
aggregate Property Cost. Ratable distributions among the Tranche A
Lenders under this Section 8.7 shall be made based on the ratio of the
individual Tranche A Lender's Commitment for Tranche A Loans to the
aggregate of all the Tranche A Lenders' Commitments for Tranche A
Loans. Ratable distributions among the Tranche B Lenders under this
Section 8.7 shall be made based on the ratio of the individual Tranche
B Lender's Commitment for Tranche B Loans to the aggregate of all the
Tranche B Lenders' Commitments for Tranche B Loans. Ratable
distributions among the Lenders (in situations where the Tranche A
Lenders are
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not differentiated from the Tranche B Lenders) shall be made based on
the ratio of the individual Lender's Commitment to the aggregate of all
the Lenders' Commitments. Ratable distributions among the Holders under
this Section 8.7 shall be based on the ratio of the individual Holder's
Holder Commitment to the aggregate of all the Holders' Holder
Commitments.
(b) Payments and other amounts received by the Agent from time
to time in accordance with the terms of subparagraph (a) shall be
applied and allocated as follows (subject in all cases to Section
8.7(c)):
(i) Any such payment or amount identified as or
deemed to be Basic Rent shall be applied and allocated by the
Agent first, ratably to the Lenders and the Holders for
application and allocation to the payment of interest on the
Loans and thereafter the principal of the Loans which is due
and payable on such date and to the payment of accrued Holder
Yield with respect to the Holder Advances and thereafter the
portion of the Holder Advances which is due on such date; and
second, if no Default or Event of Default is in effect, any
excess shall be paid to such Person or Persons as the Lessee
may designate; provided, that if a Default or Event of Default
is in effect, such excess (if any) shall instead be held by
the Agent until the earlier of (I) the first date thereafter
on which no Default or Event of Default shall be in effect (in
which case such payments or returns shall then be made to such
other Person or Persons as the Lessee may designate) and (II)
the Maturity Date or the Expiration Date, as the case may be
(or, if earlier, the date of any Acceleration), in which case
such amounts shall be applied and allocated in the manner
contemplated by Section 8.7(b)(iv).
(ii) If on any date the Agent or the Lessor shall
receive any amount in respect of (A) any Casualty or
Condemnation pursuant to Sections 15.1(a) or 15.1(g) of the
Lease (excluding any payments in respect thereof which are
payable to the Lessee in accordance with the Lease), or (B)
the Termination Value in connection with the delivery of a
Termination Notice pursuant to Article XVI of the Lease, or
(C) the Termination Value in connection with the exercise of
the Purchase Option under Section 20.1 of the Lease or the
exercise of the option of the Lessor to transfer the
Properties to the Lessee pursuant to Section 20.3 of the
Lease, or (D) any payment required to be made or elected to be
made by the Construction Agent to the Lessor pursuant to the
terms of the Agency Agreement, then in each case, the Lessor
shall be required to pay such amount received (1) if no
Acceleration has occurred, to prepay the principal balance of
the Loans and the Holder Advances, on a pro rata basis, a
portion of such amount to be distributed to the Lenders and
the Holders or (2) if an Acceleration has occurred, to apply
and allocate the proceeds respecting Sections 8.7(b)(ii)(A)
through 8.7(b)(ii)(D) in accordance with Section 8.7(b)(iii)
hereof.
(iii) An amount equal to any payment identified as
proceeds of the sale or other disposition (or lease upon the
exercise of remedies) of the Properties or
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any portion thereof, whether pursuant to Article XXII of the
Lease or the exercise of remedies under the Security Documents
or otherwise, the execution of remedies set forth in the Lease
and any payment in respect of excess wear and tear pursuant to
Section 22.3 of the Lease (whether such payment relates to a
period before or after the Construction Period Termination
Date) shall be applied and allocated by the Agent first,
ratably to the payment of the principal and interest of the
Tranche B Loans then outstanding, second, ratably to the
payment to the Holders of the outstanding principal balance of
all Holder Advances plus all outstanding Holder Yield with
respect to such outstanding Holder Advances, third, to the
extent such amount exceeds the maximum amount to be returned
pursuant to the foregoing provisions of this paragraph (iii),
ratably to the payment of the principal and interest of the
Tranche A Loans then outstanding, fourth, to any and all other
amounts owing under the Operative Agreements to the Lenders
under the Tranche B Loans, fifth, to any and all other amounts
owing under the Operative Agreements to the Holders, sixth, to
any and all other amounts owing under the Operative Agreements
to the Lenders under the Tranche A Loans, and seventh, to the
extent moneys remain after application and allocation pursuant
to clauses first through sixth above, to the Owner Trustee for
application and allocation to any and all other amounts owing
to the Holders or the Owner Trustee and as the Holders shall
determine; provided, where no Event of Default shall exist and
be continuing and a prepayment is made for any reason with
respect to less than the full amount of the outstanding
principal amount of the Loans and the outstanding Holder
Advances, the proceeds shall be applied and allocated ratably
to the Lenders and to the Holders.
(iv) An amount equal to (A) any such payment
identified as a payment pursuant to Section 22.1(b) of the
Lease (or otherwise) of the Maximum Residual Guarantee Amount
(and any such lesser amount as may be required by Section
22.1(b) of the Lease) in respect of the Properties and any
such payment which derives from the Additional Collateral and
(B) any other amount payable upon any exercise of remedies
after the occurrence of an Event of Default not covered by
Sections 8.7(b)(i) or 8.7(b)(iii) above (including without
limitation any amount received in connection with an
Acceleration which does not represent proceeds from the sale
or liquidation of the Properties), shall be applied and
allocated by the Agent first, ratably, to the payment of the
principal and interest balance of Tranche A Loans then
outstanding, second, ratably to the payment of the principal
and interest balance of the Tranche B Loans then outstanding,
third, ratably to the payment of the principal balance of all
Holder Advances plus all outstanding Holder Yield with respect
to such outstanding Holder Advances, fourth, to the payment of
any other amounts owing to the Lenders hereunder or under any
of the other Operative Agreement, and fifth, to the extent
moneys remain after application and allocation pursuant to
clauses first through fourth above, to the Owner Trustee for
application and allocation to Holder Advances and Holder Yield
and any other amounts owing to the Holders or the Owner
Trustee as the Holders shall determine.
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(v) An amount equal to any such payment identified as
Supplemental Rent shall be applied and allocated by the Agent
to the payment of any amounts then owing to the Agent, the
Lenders, the Holders and the other parties to the Operative
Agreements (or any of them) (other than any such amounts
payable pursuant to the preceding provisions of this Section
8.7(b)) as shall be determined by the Agent in its reasonable
discretion; provided, however, that Supplemental Rent received
upon the exercise of remedies after the occurrence and
continuance of an Event of Default in lieu of or in
substitution of the Maximum Residual Guarantee Amount or as a
partial payment thereon shall be applied and allocated as set
forth in Section 8.7(b)(iv).
(vi) The Agent in its reasonable judgment shall
identify the nature of each payment or amount received by the
Agent and apply and allocate each such amount in the manner
specified above.
(c) Upon the payment in full of the Loans, the Holder Advances
and all other amounts then due and owing by the Owner Trustee hereunder
or under any Credit Document and the payment in full of all other
amounts then due and owing to the Lenders, the Holders, the Agent, the
Owner Trustee and the other Financing Parties pursuant to the Operative
Agreements, any moneys remaining with the Agent shall be returned to
the Lessee. In the event of an Acceleration it is agreed that, prior to
the application and allocation of amounts received by the Agent in the
order described in Section 8.7(b) above or any distribution of money to
the Lessee, any such amounts shall first be applied and allocated to
the payment of (i) any and all sums advanced by the Agent in order to
preserve the Collateral or to preserve its Lien thereon, (ii) the
expenses of retaking, holding, preparing for sale or lease, selling or
otherwise disposing or realizing on the Collateral, or of any exercise
by the Agent of its rights under the Security Documents, together with
reasonable attorneys' fees and expenses and court costs and (iii) any
and all other amounts reasonably owed to the Agent under or in
connection with the transactions contemplated by the Operative
Agreements (including without limitation any accrued and unpaid
administration fees).
8.8. RELEASE OF PROPERTIES, ETC.
If the Lessee shall at any time purchase any Property pursuant to the
Lease, or the Construction Agent shall purchase any Property pursuant to the
Agency Agreement, or if any Property shall be sold in accordance with Article
XXII of the Lease, then, upon satisfaction by the Owner Trustee of its
obligation to prepay the Loans, Holder Advances and all other amounts owing to
the Lenders and the Holders under the Operative Agreements, the Agent is hereby
authorized and directed to release such Properties from the Liens created by the
Security Documents to the extent of its interest therein. In addition, upon the
termination of the Commitments and the Holder Commitments and the payment in
full of the Loans, the Holder Advances and all other amounts owing by the Owner
Trustee and the Lessee hereunder or under any other Operative Agreement the
Agent is hereby authorized and directed to release all of the
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Properties from the Liens created by the Security Documents to the extent of its
interest therein. Upon request of the Owner Trustee following any such release,
the Agent shall, at the sole cost and expense of the Lessee, execute and deliver
to the Owner Trustee and the Lessee such documents as the Owner Trustee or the
Lessee shall reasonably request to evidence such release.
SECTION 9. CREDIT AGREEMENT AND TRUST AGREEMENT.
9.1. THE CONSTRUCTION AGENT'S AND THE LESSEE'S CREDIT AGREEMENT
RIGHTS.
Notwithstanding anything to the contrary contained in the Credit
Agreement, the Agent, the Lenders, the Holders, the Construction Agent, the
Lessee and the Owner Trustee hereby agree that, prior to the occurrence and
continuation of any Default or Event of Default, the Construction Agent or the
Lessee, as the case may be, shall have the following rights:
(a) the right to designate an account to which amounts funded
under the Operative Agreements shall be credited pursuant to Section
2.3(a) of the Credit Agreement;
(b) the right to terminate or reduce the Commitments pursuant
to Section 2.5(a) of the Credit Agreement;
(c) the right to exercise the conversion and continuation
options pursuant to Section 2.7 of the Credit Agreement;
(d) the right to receive any notice and any certificate, in
each case issued pursuant to Section 2.11(a) of the Credit Agreement;
(e) the right to replace any Lender pursuant to Section
2.11(b) of the Credit Agreement;
(f) the right to approve any successor agent pursuant to
Section 7.9 of the Credit Agreement; and
(g) the right to consent to any assignment by a Lender to
which the Lessor has the right to consent pursuant to Section 9.8 of
the Credit Agreement.
9.2. THE CONSTRUCTION AGENT'S AND THE LESSEE'S TRUST AGREEMENT
RIGHTS.
Notwithstanding anything to the contrary contained in the Trust
Agreement, the Construction Agent, the Lessee, the Owner Trustee and the Holders
hereby agree that, prior to the occurrence and continuation of any Default or
Event of Default, the Construction Agent or the Lessee, as the case may be,
shall have the following rights:
(a) the right to exercise the conversion and continuation
options pursuant to Section 3.8 of the Trust Agreement;
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(b) the right to receive any notice and any certificate, in
each case issued pursuant to Section 3.9(a) of the Trust Agreement;
(c) the right to replace any Holder pursuant to Section 3.9(b)
of the Trust Agreement;
(d) the right to exercise the removal options contained in
Section 9.1 of the Trust Agreement; provided, however, that no removal
of the Owner Trustee and appointment of a successor Owner Trustee by
the Holders pursuant to Section 9.1 of the Trust Agreement shall be
made without the prior written consent (not to be unreasonably withheld
or delayed) of the Lessee.
SECTION 10. TRANSFER OF INTEREST.
10.1. RESTRICTIONS ON TRANSFER.
Each Lender may participate, assign or transfer all or a portion of its
interest hereunder and under the other Operative Agreements in accordance with
Sections 9.7 and 9.8 of the Credit Agreement; provided, that each Lender that
participates, assigns or transfers all or a portion of its interest hereunder
and under the other Operative Agreements shall deliver to the Agent a copy of
each Assignment and Acceptance (as referenced in Section 9.8 of the Credit
Agreement) for purposes of maintaining the Register. The Holders may, directly
or indirectly, assign, convey or otherwise transfer any of their right, title or
interest in or to the Trust Estate or the Trust Agreement with the prior written
consent of the Agent and the Lessee (which consent shall not be unreasonably
withheld or delayed) and in accordance with the terms of Section 11.8(b) of the
Trust Agreement. The Owner Trustee may, subject to the rights of the Lessee
under the Lease and the other Operative Agreements and to the Lien of the
applicable Security Documents but only with the prior written consent of the
Agent (which consent may be withheld by the Agent in its sole discretion) and
(provided, no Default or Event of Default has occurred and is continuing) with
the consent of the Lessee, directly or indirectly, assign, convey, appoint an
agent with respect to enforcement of, or otherwise transfer any of its right,
title or interest in or to any Property, the Lease, the Trust Agreement and the
other Operative Agreements (including without limitation any right to
indemnification thereunder), or any other document relating to a Property or any
interest in a Property as provided in the Trust Agreement and the Lease. The
provisions of the immediately preceding sentence shall not apply to the
obligations of the Owner Trustee to transfer Property to the Lessee or a third
party purchaser pursuant to Article XXII of the Lease upon payment for such
Property in accordance with the terms and conditions of the Lease. Neither the
Lessee nor the Construction Agent may assign any of the Operative Agreements or
any of their respective rights or obligations thereunder or with respect to any
Property in whole or in part to any Person without the prior written consent of
the Agent, the Lenders, the Holders and the Lessor.
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10.2. EFFECT OF TRANSFER.
From and after any transfer effected in accordance with this Section
10, the transferor shall be released, to the extent of such transfer, from its
liability hereunder and under the other documents to which it is a party in
respect of obligations to be performed on or after the date of such transfer;
provided, however, that any transferor shall remain liable hereunder and under
such other documents to the extent that the transferee shall not have assumed
the obligations of the transferor thereunder. Upon any transfer by the Owner
Trustee, a Holder or a Lender as above provided, any such transferee shall
assume the obligations of the Owner Trustee, the Holder or the Lender, as the
case may be, and shall be deemed an "Owner Trustee", "Holder", or "Lender", as
the case may be, for all purposes of such documents and each reference herein to
the transferor shall thereafter be deemed a reference to such transferee for all
purposes, except as provided in the preceding sentence. Notwithstanding any
transfer of all or a portion of the transferor's interest as provided in this
Section 10, the transferor shall be entitled to all benefits accrued and all
rights vested prior to such transfer including without limitation rights to
indemnification under any such document.
SECTION 11. INDEMNIFICATION.
11.1. GENERAL INDEMNITY.
Whether or not any of the transactions contemplated hereby shall be
consummated, the Indemnity Provider hereby assumes liability for and agrees to
defend, indemnify and hold harmless each Indemnified Person on an After Tax
Basis from and against any Claims, which may be imposed on, incurred by or
asserted against an Indemnified Person by any third party, including without
limitation Claims arising from the negligence of an Indemnified Person (but not
to the extent such Claims arise from the gross negligence or willful misconduct
of such Indemnified Person itself, as determined by a court of competent
jurisdiction, as opposed to gross negligence or willful misconduct imputed to
such Indemnified Person) in any way relating to or arising or alleged to arise
out of the execution, delivery, performance or enforcement of this Agreement,
the Lease or any other Operative Agreement or on or with respect to any Property
or any component thereof, including without limitation Claims in any way
relating to or arising or alleged to arise out of (a) the financing,
refinancing, purchase, acceptance, rejection, ownership, design, construction,
refurbishment, development, delivery, acceptance, nondelivery, leasing,
subleasing, possession, use, occupancy, operation, maintenance repair,
modification, transportation, condition, sale, return, repossession (whether by
summary proceedings or otherwise), or any other disposition of any Property or
any part thereof, including without limitation the acquisition, holding or
disposition of any interest in the Property, lease or agreement comprising a
portion of any thereof; (b) any latent or other defects in any Property or any
portion thereof whether or not discoverable by an Indemnified Person or the
Indemnity Provider; (c) a violation of Environmental Laws, Environmental Claims
or other loss of or damage to any property or the environment relating to the
Property, the Lease, the Agency Agreement or the Indemnity Provider; (d) the
Operative Agreements, or any transaction contemplated thereby; (e) any breach by
the Indemnity Provider of any of its representations or warranties under the
Operative Agreements to which the Indemnity Provider is a party or failure
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by the Indemnity Provider to perform or observe any covenant or agreement to be
performed by it under any of the Operative Agreements; (f) the transactions
contemplated hereby or by any other Operative Agreement, in respect of the
application of Parts 4 and 5 of Subtitle B of Title I of ERISA; (g) personal
injury, death or property damage, including without limitation Claims based on
strict or absolute liability in tort; and (h) any fees, expenses and/or other
assessments by any business park or any other applicable entity with oversight
responsibility for the applicable Property.
If a written Claim is made against any Indemnified Person or if any
proceeding shall be commenced against such Indemnified Person (including without
limitation a written notice of such proceeding), for any Claim, such Indemnified
Person shall promptly notify the Indemnity Provider in writing and shall not
take action with respect to such Claim without the consent of the Indemnity
Provider for thirty (30) days after the receipt of such notice by the Indemnity
Provider; provided, however, that in the case of any such Claim, if action shall
be required by law or regulation to be taken prior to the end of such period of
thirty (30) days, such Indemnified Person shall endeavor to, in such notice to
the Indemnity Provider, inform the Indemnity Provider of such shorter period,
and no action shall be taken with respect to such Claim without the consent of
the Indemnity Provider before seven (7) days before the end of such shorter
period; provided, further, that the failure of such Indemnified Person to give
the notices referred to in this sentence shall not diminish the Indemnity
Provider's obligation hereunder except to the extent such failure precludes in
all respects the Indemnity Provider from contesting such Claim.
If, within thirty (30) days of receipt of such notice from the
Indemnified Person (or such shorter period as the Indemnified Person has
notified the Indemnity Provider is required by law or regulation for the
Indemnified Person to respond to such Claim), the Indemnity Provider shall
request in writing that such Indemnified Person respond to such Claim, the
Indemnified Person shall, at the expense of the Indemnity Provider, in good
faith conduct and control such action (including without limitation by pursuit
of appeals) (provided, however, that (A) if such Claim, in the Indemnity
Provider's reasonable discretion, can be pursued by the Indemnity Provider on
behalf of or in the name of such Indemnified Person, the Indemnified Person, at
the Indemnity Provider's request, shall allow the Indemnity Provider to conduct
and control the response to such Claim and (B) in the case of any Claim (and
notwithstanding the provisions of the foregoing subsection (A)), the Indemnified
Person may request the Indemnity Provider to conduct and control the response to
such Claim (with counsel to be selected by the Indemnity Provider and consented
to by such Indemnified Person, such consent not to be unreasonably withheld;
provided, however, that any Indemnified Person may retain separate counsel at
the expense of the Indemnity Provider in the event of a conflict of interest
between such Indemnified Person and the Indemnity Provider)) by, in the sole
discretion of the Person conducting and controlling the response to such Claim
(1) resisting payment thereof, (2) not paying the same except under protest, if
protest is necessary and proper, (3) if the payment be made, using reasonable
efforts to obtain a refund thereof in appropriate administrative and judicial
proceedings, or (4) taking such other action as is reasonably requested by the
Indemnity Provider from time to time.
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The party controlling the response to any Claim shall consult in good
faith with the non-controlling party and shall keep the non-controlling party
reasonably informed as to the conduct of the response to such Claim; provided,
that all decisions ultimately shall be made in the discretion of the controlling
party. The parties agree that an Indemnified Person may at any time decline to
take further action with respect to the response to such Claim and may settle
such Claim if such Indemnified Person shall waive its rights to any indemnity
from the Indemnity Provider that otherwise would be payable in respect of such
Claim (and any future Claim, the pursuit of which is precluded by reason of such
resolution of such Claim) and shall pay to the Indemnity Provider any amount
previously paid or advanced by the Indemnity Provider pursuant to this Section
11.1 by way of indemnification or advance for the payment of an amount regarding
such Claim.
Notwithstanding the foregoing provisions of this Section 11.1, an
Indemnified Person shall not be required to take any action and the Indemnity
Provider shall not be permitted to respond to any Claim in its own name or that
of the Indemnified Person unless (A) the Indemnity Provider shall have agreed to
pay and shall pay to such Indemnified Person on demand and on an After Tax Basis
all reasonable costs, losses and expenses that such Indemnified Person actually
incurs in connection with such Claim, including without limitation all
reasonable legal, accounting and investigatory fees and disbursements and, if
the Indemnified Person has informed the Indemnity Provider that it intends to
contest such Claim (whether or not the control of the contest is then assumed by
the Indemnity Provider), the Indemnity Provider shall have agreed that the Claim
is an indemnifiable Claim hereunder, (B) in the case of a Claim that must be
pursued in the name of an Indemnified Person (or an Affiliate thereof), the
amount of the potential indemnity (taking into account all similar or logically
related Claims that have been or could be raised for which the Indemnity
Provider may be liable to pay an indemnity under this Section 11.1) exceeds
$15,000.00 (or such lesser amount as may be subsequently agreed between the
Indemnity Provider and the Indemnified Person), (C) the Indemnified Person shall
have reasonably determined that the action to be taken will not result in any
material danger of sale, forfeiture or loss of the Property, or any part thereof
or interest therein, will not interfere with the payment of Rent, and will not
result in risk of criminal liability, (D) if such Claim shall involve the
payment of any amount prior to the resolution of such Claim, the Indemnity
Provider shall provide to the Indemnified Person an interest-free advance in an
amount equal to the amount that the Indemnified Person is required to pay (with
no additional net after-tax cost to such Indemnified Person) prior to the date
such payment is due, (E) in the case of a Claim that must be pursued in the name
of an Indemnified Person (or an Affiliate thereof), the Indemnity Provider shall
have provided to such Indemnified Person an opinion of independent counsel
selected by the Indemnity Provider and reasonably satisfactory to the
Indemnified Person stating that a reasonable basis exists to contest such Claim
(or, in the case of an appeal of an adverse determination, an opinion of such
counsel to the effect that the position asserted in such appeal will more likely
than not prevail) and (F) no Event of Default shall have occurred and be
continuing. In no event shall an Indemnified Person be required to appeal an
adverse judicial determination to the United States Supreme Court. In addition,
an Indemnified Person shall not be required to contest any Claim in its name (or
that of an Affiliate) if the subject matter thereof shall be of a continuing
nature and shall have previously been decided adversely by a court of competent
jurisdiction pursuant to the contest provisions of this Section 11.1, unless
there shall
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have been a change in law (or interpretation thereof) and the Indemnified Person
shall have received, at the Indemnity Provider's expense, an opinion of
independent counsel selected by the Indemnity Provider and reasonably acceptable
to the Indemnified Person stating that as a result of such change in law (or
interpretation thereof), it is more likely than not that the Indemnified Person
will prevail in such contest. In no event shall the Indemnity Provider be
permitted to adjust or settle any Claim without the consent of the Indemnified
Person to the extent any such adjustment or settlement involves, or is
reasonably likely to involve, any performance by or adverse admission by or with
respect to the Indemnified Person.
11.2. GENERAL TAX INDEMNITY.
(a) The Indemnity Provider shall pay and assume liability for,
and does hereby agree to indemnify, protect and defend each Property
and all Indemnified Persons, and hold them harmless against, all
Impositions on an After Tax Basis, and all payments pursuant to the
Operative Agreements shall be made free and clear of and without
deduction for any and all present and future Impositions.
(b) Notwithstanding anything to the contrary in Section
11.2(a) hereof, the following shall be excluded from the indemnity
required by Section 11.2(a):
(i) Taxes (other than Taxes that are, or are in the
nature of, sales, use, rental, value added, transfer or
property taxes) that are imposed on a Indemnified Person
(other than the Lessor, the Owner Trustee and the Trust) by
the United States federal government that are based on or
measured by the net income (including without limitation taxes
based on capital gains and minimum taxes) of such Person;
provided, that this clause (i) shall not be interpreted to
prevent a payment from being made on an After Tax Basis if
such payment is otherwise required to be so made;
(ii) Taxes (other than Taxes that are, or are in the
nature of, sales, use, rental, value added, transfer or
property taxes) that are imposed on any Indemnified Person
(other than the Lessor, the Owner Trustee and the Trust) by
any state or local jurisdiction or taxing authority within any
state or local jurisdiction and that are based upon or
measured by the net income (including without limitation taxes
based on capital gains and minimum taxes) of such Person;
provided, further, that this clause (ii) shall not be
interpreted to prevent a payment from being made on an After
Tax Basis if such payment is otherwise required to be so made;
(iii) any Tax to the extent it relates to any act,
event or omission that occurs after the termination of the
Lease and redelivery or sale of the Property in accordance
with the terms of the Lease (but not any Tax that relates to
such termination, redelivery or sale and/or to any period
prior to such termination, redelivery or sale); and
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(iv) any Taxes which are imposed on an Indemnified
Person as a result of the gross negligence or willful
misconduct of such Indemnified Person itself, as determined by
a court of competent jurisdiction (as opposed to gross
negligence or willful misconduct imputed to such Indemnified
Person), but not Taxes imposed as a result of ordinary
negligence of such Indemnified Person.
(c) (i) Subject to the terms of Section 11.2(f), the
Indemnity Provider shall pay or cause to be paid all
Impositions directly to the taxing authorities where feasible
and otherwise to the Indemnified Person, as appropriate, and
the Indemnity Provider shall at its own expense, upon such
Indemnified Person's reasonable request, furnish to such
Indemnified Person copies of official receipts or other
satisfactory proof evidencing such payment.
(ii) In the case of Impositions for which no contest
is conducted pursuant to Section 11.2(f) and which the
Indemnity Provider pays directly to the taxing authorities,
the Indemnity Provider shall pay such Impositions prior to the
latest time permitted by the relevant taxing authority for
timely payment. In the case of Impositions for which the
Indemnity Provider reimburses an Indemnified Person, the
Indemnity Provider shall do so within thirty (30) days after
receipt by the Indemnity Provider of demand by such
Indemnified Person describing in reasonable detail the nature
of the Imposition and the basis for the demand (including
without limitation the computation of the amount payable),
accompanied by receipts or other reasonable evidence of such
demand. In the case of Impositions for which a contest is
conducted pursuant to Section 11.2(f), the Indemnity Provider
shall pay such Impositions or reimburse such Indemnified
Person for such Impositions, to the extent not previously paid
or reimbursed pursuant to subsection (a), prior to the latest
time permitted by the relevant taxing authority for timely
payment after conclusion of all contests under Section
11.2(f).
(iii) At the Indemnity Provider's request, the amount
of any indemnification payment by the Indemnity Provider
pursuant to subsection (a) shall be verified and certified by
an independent public accounting firm mutually acceptable to
the Indemnity Provider and the Indemnified Person. The fees
and expenses of such independent public accounting firm shall
be paid by the Indemnity Provider unless such verification
shall result in an adjustment in the Indemnity Provider's
favor of fifteen percent (15%) or more of the payment as
computed by the Indemnified Person, in which case such fee
shall be paid by the Indemnified Person.
(d) The Indemnity Provider shall be responsible for preparing
and filing any real and personal property or ad valorem tax returns in
respect of each Property and any other tax returns required for the
Owner Trustee respecting the transactions described in the Operative
Agreements. In case any other report or tax return shall be required to
be made with respect to any obligations of the Indemnity Provider under
or arising out of subsection (a) and of which the Indemnity Provider
has knowledge or should have
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knowledge, the Indemnity Provider, at its sole cost and expense, shall
notify the relevant Indemnified Person of such requirement and (except
if such Indemnified Person notifies the Indemnity Provider that such
Indemnified Person intends to prepare and file such report or return)
(A) to the extent required or permitted by and consistent with Legal
Requirements, make and file in the Indemnity Provider's name such
return, statement or report; and (B) in the case of any other such
return, statement or report required to be made in the name of such
Indemnified Person, advise such Indemnified Person of such fact and
prepare such return, statement or report for filing by such Indemnified
Person or, where such return, statement or report shall be required to
reflect items in addition to any obligations of the Indemnity Provider
under or arising out of subsection (a), provide such Indemnified Person
at the Indemnity Provider's expense with information sufficient to
permit such return, statement or report to be properly made with
respect to any obligations of the Indemnity Provider under or arising
out of subsection (a). Such Indemnified Person shall, upon the
Indemnity Provider's request and at the Indemnity Provider's expense,
provide any data maintained by such Indemnified Person (and not
otherwise available to or within the control of the Indemnity Provider)
with respect to each Property which the Indemnity Provider may
reasonably require to prepare any required tax returns or reports.
(e) As between the Indemnity Provider on one hand, and each
Financing Party on the other hand, the Indemnity Provider shall be
responsible for, and the Indemnity Provider shall indemnify and hold
harmless each Financing Party (without duplication of any
indemnification required by subsection (a)) on an After Tax Basis
against, any obligation for United States or foreign withholding taxes
or similar levies, imposts, charges, fees, deductions or withholdings
(collectively, "Withholdings") imposed in respect of the interest
payable on the Notes, Holder Yield payable on the Certificates or with
respect to any other payments under the Operative Agreement (all such
payments being referred to herein as "Exempt Payments" to be made
without deduction, withholding or set off) (and, if any Financing Party
receives a demand for such payment from any taxing authority or a
Withholding is otherwise required with respect to any Exempt Payment,
the Indemnity Provider shall discharge such demand on behalf of such
Financing Party); provided, however, that the obligation of the
Indemnity Provider under this Section 11.2(e) shall not apply to:
(i) Withholdings on any Exempt Payment to any
Financing Party which is a non-U.S. Person unless such
Financing Party is, on the date hereof (or on the date it
becomes a Financing Party hereunder) and on the date of any
change in the principal place of business or the lending
office of such Financing Party, entitled to submit a Form 1001
(relating to such Financing Party and entitling it to a
complete exemption from Withholding on such Exempt Payment) or
Form 4224 or is otherwise subject to exemption from
Withholding with respect to such Exempt Payment (except where
the failure of the exemption results from a change in the
principal place of business of the Lessee; provided if a
failure of exemption for any Financing Party results from a
change in the principal place of business or
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lending office of any other Financing Party, then such other
Financing Party shall be liable for any Withholding or
indemnity with respect thereto), or
(ii) Any U.S. Taxes imposed solely by reason of the
failure by a non-U.S. Person to comply with applicable
certification, information, documentation or other reporting
requirements concerning the nationality, residence, identity
or connections with the United States of America of such
non-U.S. Person if such compliance is required by statute or
regulation of the United States of America as a precondition
to relief or exemption from such U.S. Taxes.
For the purposes of this Section 11.2(e), (A) "U.S. Person" shall mean
a citizen, national or resident of the United States of America, a
corporation, partnership or other entity created or organized in or
under any laws of the United States of America or any State thereof, or
any estate or trust that is subject to Federal income taxation
regardless of the source of its income, (B) "U.S. Taxes" shall mean any
present or future tax, assessment or other charge or levy imposed by or
on behalf of the United States of America or any taxing authority
thereof or therein, (C) "Form 1001" shall mean Form 1001 (Ownership,
Exemption, or Reduced Rate Certificate) of the Department of the
Treasury of the United States of America and (D) "Form 4224" shall mean
Form 4224 (Exemption from Withholding of Tax on Income Effectively
Connected with the Conduct of a Trade or Business in the United States)
of the Department of Treasury of the United States of America (or in
relation to either such Form such successor and related forms as may
from time to time be adopted by the relevant taxing authorities of the
United States of America to document a claim to which such Form
relates). Each of the Forms referred to in the foregoing clauses (C)
and (D) shall include such successor and related forms as may from time
to time be adopted by the relevant taxing authorities of the United
States of America to document a claim to which such Form relates.
If a Financing Party or an Affiliate with whom such Financing
Party files a consolidated tax return (or equivalent) subsequently
receives the benefit in any country of a tax credit or an allowance
resulting from U.S. Taxes with respect to which it has received a
payment of an additional amount under this Section 11.2(e), such
Financing Party will pay to the Indemnity Provider such part of that
benefit as in the opinion of such Financing Party will leave it (after
such payment) in a position no more and no less favorable than it would
have been in if no additional payment had been required to be paid,
provided always that (i) such Financing Party will be the sole judge of
the amount of any such benefit and of the date on which it is received,
(ii) such Financing Party will have the absolute discretion as to the
order and manner in which it employs or claims tax credits and
allowances available to it and (iii) such Financing Party will not be
obliged to disclose to the Borrower any information regarding its tax
affairs or tax computations.
Each non-U.S. Person that shall become a Financing Party after
the date hereof shall, upon the effectiveness of the related transfer
or otherwise upon becoming a Financing Party hereunder, be required to
provide all of the forms and statements referenced above or other
evidences of exemption from Withholdings.
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(f) If a written Claim is made against any Indemnified Person
or if any proceeding shall be commenced against such Indemnified Person
(including without limitation a written notice of such proceeding), for
any Impositions, the provisions in Section 11.1 relating to
notification and rights to contest shall apply; provided, however, that
the Indemnity Provider shall have the right to conduct and control such
contest only if such contest involves a Tax other than a Tax on net
income of the Indemnified Person and can be pursued independently from
any other proceeding involving a Tax liability of such Indemnified
Person.
11.3. INCREASED COSTS, ILLEGALITY, ETC.
(a) If, due to either (i) the introduction of or any change in
or in the interpretation of any law or regulation or (ii) the
compliance with any guideline or request hereafter adopted, promulgated
or made by any central bank or other governmental authority (whether or
not having the force of law), there shall be any increase in the cost
to any Financing Party of agreeing to make or making, funding or
maintaining Advances, then the Lessee shall from time to time, upon
demand by such Financing Party (with a copy of such demand to the Agent
but subject to the terms of Section 2.11 of the Credit Agreement and
3.9 of the Trust Agreement, as the case may be), pay to the Agent for
the account of such Financing Party additional amounts sufficient to
compensate such Financing Party for such increased cost. A certificate
as to the amount of such increased cost, submitted to the Lessee and
the Agent by such Financing Party, shall be conclusive and binding for
all purposes, absent manifest error.
(b) If any Financing Party determines that compliance with any
law or regulation or any guideline or request from any central bank or
other governmental authority (whether or not having the force of law,
but in each case promulgated or made after the date hereof) affects or
would affect the amount of capital required or expected to be
maintained by such Financing Party or any corporation controlling such
Financing Party and that the amount of such capital is increased by or
based upon the existence of such Financing Party's commitment to make
Advances and other commitments of this type or upon the Advances, then,
upon demand by such Financing Party (with a copy of such demand to the
Agent but subject to the terms of Section 2.11 of the Credit Agreement
and 3.9 of the Trust Agreement), the Lessee shall pay to the Agent for
the account of such Financing Party, from time to time as specified by
such Financing Party, additional amounts sufficient to compensate such
Financing Party or such corporation in the light of such circumstances,
to the extent that such Financing Party reasonably determines such
increase in capital to be allocable to the existence of such Financing
Party's commitment to make such Advances. A certificate as to such
amounts submitted to the Lessee and the Agent by such Financing Party
shall be conclusive and binding for all purposes, absent manifest
error.
(c) Without limiting the effect of the foregoing, the Lessee
shall pay to each Financing Party on the last day of the Interest
Period therefor so long as such Financing
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Party is maintaining reserves against "Eurocurrency liabilities" under
Regulation D an additional amount (determined by such Financing Party
and notified to the Lessee through the Agent) equal to the product of
the following for each Eurodollar Loan or Eurodollar Holder Advance, as
the case may be, for each day during such Interest Period:
(i) the principal amount of such Eurodollar Loan or
Eurodollar Holder Advance, as the case may be, outstanding on
such day; and
(ii) the remainder of (x) a fraction the numerator of
which is the rate (expressed as a decimal) at which interest
accrues on such Eurodollar Loan or Eurodollar Holder Advance,
as the case may be, for such Interest Period as provided in
the Credit Agreement or the Trust Agreement, as the case may
be (less the Applicable Percentage), and the denominator of
which is one (1) minus the effective rate (expressed as a
decimal) at which such reserve requirements are imposed on
such Financing Party on such day minus (y) such numerator; and
(iii) 1/360.
(d) Without affecting its rights under Sections 11.3(a),
11.3(b) or 11.3(c) or any other provision of any Operative Agreement,
each Financing Party agrees that if there is any increase in any cost
to or reduction in any amount receivable by such Financing Party with
respect to which the Lessee would be obligated to compensate such
Financing Party pursuant to Sections 11.3(a) or 11.3(b), such Financing
Party shall use reasonable efforts to select an alternative office for
Advances which would not result in any such increase in any cost to or
reduction in any amount receivable by such Financing Party; provided,
however, that no Financing Party shall be obligated to select an
alternative office for Advances if such Financing Party determines that
(i) as a result of such selection such Financing Party would be in
violation of any applicable law, regulation, treaty, or guideline, or
would incur additional costs or expenses or (ii) such selection would
be inadvisable for regulatory reasons or materially inconsistent with
the interests of such Financing Party.
(e) With reference to the obligations of the Lessee set forth
in Sections 11.3(a) through 11.3(d), the Lessee shall not have any
obligation to pay to any Financing Party amounts owing under such
Sections for any period which is more than one hundred eighty (180)
days prior to the date upon which the request for payment therefor is
delivered to the Lessee.
(f) Notwithstanding any other provision of this Agreement, if
any Financing Party shall notify the Agent that the introduction of or
any change in or in the interpretation of any law or regulation makes
it unlawful, or any central bank or other governmental authority
asserts that it is unlawful, for any Financing Party to perform its
obligations hereunder to make or maintain Eurodollar Loans or
Eurodollar Holder Advances, as the case may be, then (i) each
Eurodollar Loan or Eurodollar Holder Advance, as the case may be, will
automatically, at the earlier of the end of the Interest
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Period for such Eurodollar Loan or Eurodollar Holder Advance, as the
case may be, or the date required by law, convert into an ABR Loan or
an ABR Holder Advance, as the case may be, and (iii) the obligation of
the Financing Parties to make, convert or continue Eurodollar Loans or
Eurodollar Holder Advances, as the case may be, shall be suspended
until the Agent shall notify the Lessee that such Financing Party has
determined that the circumstances causing such suspension no longer
exist.
11.4. FUNDING/CONTRIBUTION INDEMNITY.
Subject to the provisions of Section 2.11(a) of the Credit Agreement
and 3.9(a) of the Trust Agreement, as the case may be, the Lessee agrees to
indemnify each Financing Party and to hold each Financing Party harmless from
any loss or reasonable expense which such Financing Party may sustain or incur
as a consequence of (a) any default in connection with the drawing of funds for
any Advance, (b) any default in making any prepayment after a notice thereof has
been given in accordance with the provisions of the Operative Agreements or (c)
the making of a voluntary or involuntary payment of Eurodollar Loans or
Eurodollar Holder Advances, as the case may be, on a day which is not the last
day of an Interest Period with respect thereto. Such indemnification shall be in
an amount equal to the excess, if any, of (x) the amount of interest or Holder
Yield, as the case may be, which would have accrued on the amount so paid, or
not so borrowed, accepted, converted or continued for the period from the date
of such payment or of such failure to borrow, accept, convert or continue to the
last day of such Interest Period (or, in the case of a failure to borrow,
accept, convert or continue, the Interest Period that would have commenced on
the date of such failure) in each case at the applicable Eurodollar Rate plus
the Applicable Percentage for such Loan or Holder Advance, as the case may be,
for such Interest Period over (y) the amount of interest (as determined by such
Financing Party in its reasonable discretion) which would have accrued to such
Financing Party on such amount by (i) (in the case of the Lenders) reemploying
such funds in loans of the same type and amount during the period from the date
of payment or failure to borrow to the last day of the then applicable Interest
Period (or, in the case of a failure to borrow, the Interest Period that would
have commenced on the date of such failure) and (ii) (in the case of the
Holders) placing such amount on deposit for a comparable period with leading
banks in the relevant interest rate market. This covenant shall survive the
termination of the Operative Agreements and the payment of all other amounts
payable hereunder.
11.5. EXPRESS INDEMNIFICATION FOR ORDINARY NEGLIGENCE, STRICT
LIABILITY, ETC.
WITHOUT LIMITING THE GENERALITY OF THE INDEMNIFICATION PROVISIONS OF
ANY AND ALL OF THE OPERATIVE AGREEMENTS, EACH PERSON PROVIDING INDEMNIFICATION
OF ANOTHER PERSON UNDER ANY OPERATIVE AGREEMENT HEREBY FURTHER EXPRESSLY
RELEASES EACH BENEFICIARY OF ANY SUCH INDEMNIFICATION FROM ALL CLAIMS FOR LOSS
OR DAMAGE, DESCRIBED IN ANY OPERATIVE AGREEMENT, CAUSED BY ANY ACT OR OMISSION
ON THE PART OF ANY SUCH BENEFICIARY ATTRIBUTABLE TO THE ORDINARY NEGLIGENCE
(WHETHER SOLE OR CONTRIBUTORY) OR
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STRICT LIABILITY OF ANY SUCH BENEFICIARY, AND INDEMNIFIES, EXONERATES AND HOLDS
EACH SUCH BENEFICIARY FREE AND HARMLESS FROM AND AGAINST ANY AND ALL ACTIONS,
CAUSES OF ACTION, SUITS, CLAIMS, LOSSES, COSTS, LIABILITIES, DAMAGES AND
EXPENSES (INCLUDING WITHOUT LIMITATION ATTORNEY'S FEES AND EXPENSES), DESCRIBED
ABOVE, INCURRED BY ANY SUCH BENEFICIARY (IRRESPECTIVE OF WHETHER ANY SUCH
BENEFICIARY IS A PARTY TO THE ACTION FOR WHICH INDEMNIFICATION UNDER THIS
AGREEMENT OR ANY OTHER OPERATIVE AGREEMENT IS SOUGHT) ATTRIBUTABLE TO THE
ORDINARY NEGLIGENCE (WHETHER SOLE OR CONTRIBUTORY) OR STRICT LIABILITY OF ANY
SUCH BENEFICIARY.
11.6. INDEMNITY PRIOR TO COMPLETION DATE / CONSTRUCTION PERIOD
TERMINATION DATE.
Notwithstanding the provisions of Sections 11.1, 11.2, 11.3, 11.4 and
11.5, the Owner Trustee shall be the only beneficiary of the provisions set
forth in Sections 11.1, 11.2, 11.3, 11.4 and 11.5 with respect to any Claim
arising thereunder for the period prior to the earlier to occur of the
applicable Completion Date and the Construction Period Termination Date related
to the applicable Property. Notwithstanding the foregoing, to the extent that
the Owner Trustee becomes obligated to any Indemnified Person pursuant to the
next succeeding paragraph of Section 11.6, the Owner Trustee shall be entitled
to further indemnity from the Indemnity Provider under Sections 11.1, 11.2,
11.3, 11.4 and 11.5, as applicable, with respect to all amounts owing or paid by
it under this Section 11.6.
To the extent the Indemnity Provider is not obligated to indemnify any
Indemnified Person with respect to Claims arising under Sections 11.1, 11.2,
11.3, 11.4 or 11.5, prior to the earlier to occur of the applicable Completion
Date or Construction Period Termination Date, the Owner Trustee shall provide
such indemnities in favor of such Indemnified Person in accordance with the
relevant provisions of Sections 11.1, 11.2, 11.3, 11.4 or 11.5 as the case may
be. It is acknowledged and agreed that any amount for which the Owner Trustee
becomes obligated to any Indemnified Person pursuant hereto shall become a Claim
for which the Owner Trustee is entitled to indemnity from the Indemnity
Provider.
THE INDEMNITY OBLIGATIONS UNDERTAKEN BY THE OWNER TRUSTEE PURSUANT TO
THIS SECTION 11.6 ARE IN ALL RESPECTS SUBJECT TO THE LIMITATIONS ON LIABILITY
REFERENCED IN SECTION 12.9.
SECTION 12. MISCELLANEOUS.
12.1. SURVIVAL OF AGREEMENTS.
The representations, warranties, covenants, indemnities and agreements
of the parties provided for in the Operative Agreements, and the parties'
obligations under any and all thereof,
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shall survive the execution and delivery of this Agreement, the transfer of any
Property to the Owner Trustee, the acquisition of any Property (or any of its
components), the construction of any Improvements, the Completion of any
Property, any disposition of any interest of the Owner Trustee in any Property
or any interest of the Holders in the Trust Estate, the payment of the Notes and
any disposition thereof and shall be and continue in effect notwithstanding any
investigation made by any party and the fact that any party may waive compliance
with any of the other terms, provisions or conditions of any of the Operative
Agreements. Except as otherwise expressly set forth herein or in other Operative
Agreements, the indemnities of the parties provided for in the Operative
Agreements shall survive the expiration or termination of any thereof.
12.2. NOTICES.
All notices required or permitted to be given under any Operative
Agreement shall be in writing. Notices may be served by certified or registered
mail, postage paid with return receipt requested; by private courier, prepaid;
by telex, facsimile, or other telecommunication device capable of transmitting
or creating a written record; or personally. Mailed notices shall be deemed
delivered five (5) days after mailing, properly addressed. Couriered notices
shall be deemed delivered when delivered as addressed, or if the addressee
refuses delivery, when presented for delivery notwithstanding such refusal.
Telex or telecommunicated notices shall be deemed delivered when receipt is
either confirmed by confirming transmission equipment or acknowledged by the
addressee or its office. Personal delivery shall be effective when accomplished
or if the addressee refuses delivery, when presented for delivery
notwithstanding such refusal. Unless a party changes its address by giving
notice to the other party as provided herein, notices shall be delivered to the
parties at the following addresses:
If to the Construction Agent or the Lessee, to such entity at
the following address:
7628 Thorndike Road
Greensboro, NC 27409-9421
Attention: William A. Priddy
Telephone: 336-931-7063
Telecopy: 336-664-0839
If to the Owner Trustee, to it at the following address:
First Security Bank, National Association
79 South Main Street
Third Floor
Salt Lake City, Utah 84111
Attention: Val T. Orton,
Vice President
Telephone: (801) 246-5300
Telecopy: (801) 246-5053
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If to any Holder, to each such Holder at the address set forth
for such Holder on Schedule I of the Trust Agreement.
If to the Agent, to it at the following address:
First Union National Bank
c/o First Union Securities, Inc.
DC-6
301 South College Street
Charlotte, North Carolina 28288-0166
Attention: Christy Lee Foster
Capital Markets Services
Telephone: (704) 383-5398
Telecopy: (704) 383-7989
If to any Lender, to each such Lender at the address set forth
for such Lender in Schedule 2.1 of the Credit Agreement.
From time to time any party may designate additional parties
and/or another address for notice purposes by notice to each of the
other parties hereto.
12.3. COUNTERPARTS.
This Agreement may be executed by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be an original,
but all such counterparts shall together constitute but one (1) and the same
instrument.
12.4. TERMINATIONS, AMENDMENTS, WAIVERS, ETC.; UNANIMOUS VOTE
MATTERS.
Each Basic Document may be terminated, amended, supplemented, waived or
modified only by an instrument in writing signed by, subject to Article VIII of
the Trust Agreement regarding termination of the Trust Agreement, the Majority
Secured Parties and the Lessee and/or the Construction Agent (to the extent the
Lessee and/or the Construction Agent is a party to such Basic Document);
provided, to the extent no Default or Event of Default shall have occurred and
be continuing, the Majority Secured Parties shall not amend, supplement, waive
or modify any provision of any Basic Document in such a manner as to adversely
affect the rights of the Lessee and/or the Construction Agent without the prior
written consent (not to be unreasonably withheld or delayed) of the Lessee
and/or the Construction Agent. Each Operative Agreement which is not a Basic
Document may be terminated, amended, supplemented, waived or modified only by an
instrument in writing signed by the parties thereto and (without the consent of
any other Financing Party) the Agent. In addition, the Unanimous Vote Matters
shall require the consent of each Lender and each Holder affected by such
matter.
Notwithstanding the foregoing, no such termination, amendment,
supplement, waiver or modification shall, without the consent of the Agent and,
to the extent affected thereby, each
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Lender and each Holder (collectively, the "Unanimous Vote Matters") (i) reduce
the Lender Commitments and/or the Holder Commitments except as otherwise
provided in Section 2.5 of the Credit Agreement and Section 3.1(e) of the Trust
Agreement, extend the scheduled date of maturity of any Note, extend the
scheduled Expiration Date, extend any payment date of any Note or Certificate,
reduce the stated rate of interest payable on any Note, reduce the stated Holder
Yield payable on any Certificate (other than as a result of waiving the
applicability of any post-default increase in interest rates or Holder Yields),
modify the priority of any Lien in favor of the Agent under any Security
Document, subordinate any obligation owed to such Lender or Holder, reduce any
Lender Unused Fees or any Holder Unused Fees payable to such Lender or Holder
(as the case may be) under the Participation Agreement, extend the scheduled
date of payment of any Lender Unused Fees or any Holder Unused Fees payable to
such Lender or Holder (as the case may be) or extend the expiration date of such
Lender's Commitment or the Holder Commitment of such Holder, or (ii) terminate,
amend, supplement, waive or modify any provision of this Section 12.4 or reduce
the percentages specified in the definitions of Majority Lenders, Majority
Holders or Majority Secured Parties, or consent to the assignment or transfer by
the Owner Trustee of any of its rights and obligations under any Credit Document
or release a material portion of the Collateral (except in accordance with
Section 8.8) or release the Lessee from its obligations under any Operative
Agreement or otherwise alter any payment obligations of the Lessee to the Lessor
or any Financing Party under the Operative Agreements, or (iii) terminate,
amend, supplement, waive or modify any provision of Section 7 of the Credit
Agreement, or (iv) permit Advances for Work in excess of the Construction
Budget, or (v) eliminate the automatic option under Section 5.3(b) of the Agency
Agreement requiring that the Construction Agent pay certain liquidated damages
in exchange for the conveyance of a Property to the Construction Agent. Any such
termination, amendment, supplement, waiver or modification shall apply equally
to each of the Lenders and the Holders and shall be binding upon all the parties
to this Agreement. In the case of any waiver, each party to this Agreement shall
be restored to its former position and rights under the Operative Agreements,
and any Default or Event of Default waived shall be deemed to be cured and not
continuing; but no such waiver shall extend to any subsequent or other Default
or Event of Default, or impair any right consequent thereon. The parties to this
Agreement agree that any increase in the Lender Commitment of any Lender and/or
any increase in the Holder Commitment of any Holder shall be a matter decided by
the Lenders and/or Holders providing such increase together with the Majority
Secured Parties and not as a Unanimous Vote Matter.
If at a time when the conditions precedent set forth in the Operative
Agreements to any Loan are, in the opinion of the Majority Lenders, satisfied,
any Lender shall fail to fulfill its obligations to make such Loan (any such
Lender, a "Defaulting Lender") then, for so long as such failure shall continue,
the Defaulting Lender shall (unless the Lessee and the Majority Lenders,
determined as if the Defaulting Lender were not a "Lender", shall otherwise
consent in writing) be deemed for all purposes relating to terminations,
amendments, supplements, waivers or modifications under the Operative Agreements
to have no Loans, shall not be treated as a "Lender" when performing the
computation of Majority Lenders or Majority Secured Parties, and shall have no
rights under this Section 12.4; provided that any action taken pursuant to the
second paragraph of this Section 12.4 shall not be effective as against the
Defaulting Lender.
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If at a time when the conditions precedent set forth in the Operative
Agreements to any Holder Advance are, in the opinion of the Majority Holders,
satisfied, any Holder shall fail to fulfill its obligations to make such Holder
Advance (any such Holder, a "Defaulting Holder") then, for so long as such
failure shall continue, the Defaulting Holder shall (unless the Lessee and the
Majority Holders, determined as if the Defaulting Holder were not a "Holder",
shall otherwise consent in writing) be deemed for all purposes relating to
terminations, amendments, supplements, waivers or modifications under the
Operative Agreements to have no Holder Advances, shall not be treated as a
"Holder" when performing the computation of Majority Holders or Majority Secured
Parties, and shall have no rights under this Section 12.4; provided that any
action taken pursuant to the second paragraph of this Section 12.4 shall not be
effective as against the Defaulting Holder.
12.5. HEADINGS, ETC.
The Table of Contents and headings of the various Articles and Sections
of this Agreement are for convenience of reference only and shall not modify,
define, expand or limit any of the terms or provisions hereof.
12.6. PARTIES IN INTEREST.
Except as expressly provided herein, none of the provisions of this
Agreement are intended for the benefit of any Person except the parties hereto.
12.7. GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY
TRIAL; VENUE.
(a) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED, INTERPRETED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH CAROLINA.
Any legal action or proceeding with respect to this Agreement or any
other Operative Agreement may be brought in the courts of the State of
North Carolina in Mecklenburg County or of the United States for the
Western District of North Carolina, and, by execution and delivery of
this Agreement, each of the parties to this Agreement hereby
irrevocably accepts for itself and in respect of its property,
generally and unconditionally, the nonexclusive jurisdiction of such
courts. Each of the parties to this Agreement further irrevocably
consents to the service of process out of any of the aforementioned
courts in any such action or proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, to it at the
address set out for notices pursuant to Section 12.2, such service to
become effective three (3) days after such mailing. Nothing herein
shall affect the right of any party to serve process in any other
manner permitted by Law or to commence legal proceedings or to
otherwise proceed against any party in any other jurisdiction.
(b) EACH OF THE PARTIES HERETO IRREVOCABLY AND
UNCONDITIONALLY, TO THE FULLEST EXTENT ALLOWED BY APPLICABLE
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<PAGE> 64
LAW, WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO
ANY DISPUTE OR THIS AGREEMENT, ANY OTHER OPERATIVE AGREEMENT AND FOR
ANY COUNTERCLAIM THEREIN.
(c) Each of the parties to this Agreement hereby irrevocably
waives any objection which it may now or hereafter have to the laying
of venue of any of the aforesaid actions or proceedings arising out of
or in connection with this Agreement or any other Operative Agreement
brought in the courts referred to in subsection (a) above and hereby
further irrevocably waives and agrees not to plead or claim in any such
court that any such action or proceeding brought in any such court has
been brought in an inconvenient forum.
Each party to this Agreement agrees that it shall not have a remedy of
punitive or exemplary damages against any other party in any Dispute and hereby
waive any right or claim to punitive or exemplary damages they have now or which
may arise in the future in connection with any Dispute, whether the Dispute is
resolved by arbitration or judicially.
12.8. SEVERABILITY.
Any provision of this Agreement that is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
12.9. LIABILITY LIMITED.
(a) The Lenders, the Agent, the Lessee, the Owner Trustee and
the Holders each acknowledge and agree that the Owner Trustee is
(except as otherwise expressly provided herein or therein) entering
into this Agreement and the other Operative Agreements to which it is a
party (other than the Trust Agreement and to the extent otherwise
provided in Section 6.1 of this Agreement), solely in its capacity as
trustee under the Trust Agreement and not in its individual capacity
and that the Trust Company shall not be liable or accountable under any
circumstances whatsoever in its individual capacity for or on account
of any statements, representations, warranties, covenants or
obligations stated to be those of the Owner Trustee, except for its own
gross negligence or willful misconduct and as otherwise expressly
provided herein or in the other Operative Agreements.
(b) Anything to the contrary contained in this Agreement, the
Credit Agreement, the Notes or in any other Operative Agreement
notwithstanding, no Exculpated Person shall be personally liable in any
respect for any liability or obligation arising hereunder or in any
other Operative Agreement including without limitation the payment of
the principal of, or interest on, the Notes, or for monetary damages
for the breach of performance of any of the covenants contained in the
Credit Agreement, the
60
<PAGE> 65
Notes, this Agreement, the Security Agreement or any of the other
Operative Agreements. The Lenders, the Holders and the Agent agree
that, in the event any remedies under any Operative Agreement are
pursued, neither the Lenders, the Holders nor the Agent shall have any
recourse against any Exculpated Person, for any deficiency, loss or
Claim for monetary damages or otherwise resulting therefrom and
recourse shall be had solely and exclusively against the Trust Estate
(excluding Excepted Payments) and the Lessee (with respect to the
Lessee's obligations under the Operative Agreements); but nothing
contained herein shall be taken to prevent recourse against or the
enforcement of remedies against the Trust Estate (excluding Excepted
Payments) in respect of any and all liabilities, obligations and
undertakings contained herein and/or in any other Operative Agreement.
Notwithstanding the provisions of this Section, nothing in any
Operative Agreement shall: (i) constitute a waiver, release or
discharge of any indebtedness or obligation evidenced by the Notes
and/or the Certificates arising under any Operative Agreement or
secured by any Operative Agreement, but the same shall continue until
paid or discharged; (ii) relieve any Exculpated Person from liability
and responsibility for (but only to the extent of the damages arising
by reason of): active waste knowingly committed by any Exculpated
Person with respect to any Property, any fraud, gross negligence or
willful misconduct on the part of any Exculpated Person; (iii) relieve
any Exculpated Person from liability and responsibility for (but only
to the extent of the moneys misappropriated, misapplied or not turned
over) (A) except for Excepted Payments, misappropriation or
misapplication by the Lessor (i.e., application in a manner contrary to
any of the Operative Agreements) of any insurance proceeds or
condemnation award paid or delivered to the Lessor by any Person other
than the Agent, (B) except for Excepted Payments, any deposits or any
escrows or amounts owed by the Construction Agent under the Agency
Agreement held by the Lessor or (C) except for Excepted Payments, any
rent or other income received by the Lessor from the Lessee that is not
turned over to the Agent; or (iv) affect or in any way limit the
Agent's rights and remedies under any Operative Agreement with respect
to the Rents and rights and powers of the Agent under the Operative
Agreements or to obtain a judgment against the Lessee's interest in the
Properties or the Agent's rights and powers to obtain a judgment
against the Lessor (provided, that no deficiency judgment or other
money judgment shall be enforced against any Exculpated Person except
to the extent of the Lessor's interest in the Trust Estate (excluding
Excepted Payments) or to the extent the Lessor may be liable as
otherwise contemplated in clauses (ii) and (iii) of this Section
12.9(b)).
12.10. RIGHTS OF THE LESSEE.
If at any time all obligations (i) of the Owner Trustee under the
Credit Agreement, the Security Documents and the other Operative Agreements and
(ii) of the Lessee under the Operative Agreements have in each case been
satisfied or discharged in full, then the Lessee shall be entitled to (a)
terminate the Lease and (b) receive all amounts then held under the Operative
Agreements and all proceeds with respect to any of the Properties. Upon the
termination of the Lease pursuant to the foregoing clause (a), the Lessor shall
transfer to the Lessee all of its right, title and interest free and clear of
the Lien of the Lease, the Lien of the
61
<PAGE> 66
Security Documents and all Lessor Liens in and to any Properties then subject to
the Lease and any amounts or proceeds referred to in the foregoing clause (b)
shall be paid over to the Lessee.
12.11. FURTHER ASSURANCES.
The parties hereto shall promptly cause to be taken, executed,
acknowledged or delivered, at the sole expense of the Lessee, all such further
acts, conveyances, documents and assurances as the other parties may from time
to time reasonably request in order to carry out and effectuate the intent and
purposes of this Participation Agreement, the other Operative Agreements and the
transactions contemplated hereby and thereby (including without limitation the
preparation, execution and filing of any and all Uniform Commercial Code
financing statements, filings of Mortgage Instruments and other filings or
registrations which the parties hereto may from time to time request to be filed
or effected). The Lessee, at its own expense and without need of any prior
request from any other party, shall take such action as may be necessary
(including without limitation any action specified in the preceding sentence),
or (if the Owner Trustee shall so request) as so requested, in order to maintain
and protect all security interests provided for hereunder or under any other
Operative Agreement. In addition, in connection with the sale or other
disposition of any Property or any portion thereof, the Lessee agrees to execute
such instruments of conveyance as may be reasonably required in connection
therewith.
12.12. CALCULATIONS UNDER OPERATIVE AGREEMENTS.
The parties hereto agree that all calculations and numerical
determinations to be made under the Operative Agreements by the Owner Trustee
shall be made by the Agent and that such calculations and determinations shall
be conclusive and binding on the parties hereto in the absence of manifest
error.
12.13. CONFIDENTIALITY.
Each Financing Party severally agrees to use reasonable efforts to keep
confidential all non-public information pertaining to the Lessee or any of its
Subsidiaries which is provided to it by the Lessee or any of its Subsidiaries
and which an officer of the Lessee or any of its Subsidiaries has requested in
writing be kept confidential, and shall not intentionally disclose such
information to any Person except:
(a) to the extent such information is public when received by
such Person or becomes public thereafter due to the act or omission of
any party other than such Person;
(b) to the extent such information is independently obtained
from a source other than the Lessee or any of its Subsidiaries and such
information from such source is not, to such Person's knowledge,
subject to an obligation of confidentiality or, if such information is
subject to an obligation of confidentiality, that disclosure of such
information is permitted;
62
<PAGE> 67
(c) to counsel, auditors or accountants retained by any such
Person or any Affiliates of any such Person (if such Affiliates are
permitted to receive such information pursuant to clause (f) or (g)
below), provided they agree to keep such information confidential as if
such Person or Affiliate were party to this Agreement and to financial
institution regulators, including examiners of any Financing Party or
any Affiliate thereof in the course of examinations of such Persons;
(d) in connection with any litigation or the enforcement or
preservation of the rights of any Financing Party under the Operative
Agreements;
(e) to the extent required by any applicable statute, rule or
regulation or court order (including without limitation, by way of
subpoena) or pursuant to the request of any regulatory or Governmental
Authority having jurisdiction over any such Person; provided, however,
that such Person shall endeavor (if not otherwise prohibited by Law) to
notify the Lessee prior to any disclosure made pursuant to this clause
(e), except that no such Person shall be subject to any liability
whatsoever for any failure to so notify the Lessee;
(f) any Financing Party may disclose such information to
another Financing Party or to any Affiliate of a Financing Party that
is a direct or indirect owner of any Financing Party;
(g) any Financing Party may disclose such information to an
Affiliate of any Financing Party to the extent required in connection
with the transactions contemplated hereby or to the extent such
Affiliate is involved in, or provides advice or assistance to such
Person with respect to, such transactions (provided, in each case that
such Affiliate has agreed in writing to maintain confidentiality as if
it were such Financing Party (as the case may be)); or
(h) to the extent disclosure to any other financial
institution or other Person is appropriate in connection with any
proposed or actual (i) assignment or grant of a participation by any of
the Lenders of interests in the Credit Agreement or any Note to such
other financial institution (who will in turn be required by the Agent
to agree in writing to maintain confidentiality as if it were a Lender
originally party to this Agreement) or (ii) assignment by any Holder of
interests in the Trust Agreement to another Person (who will in turn be
required by the transferring Holder to agree in writing to maintain
confidentiality as if it were a Holder originally party to this
Agreement).
Subject to the foregoing terms of Sections 12.13(a)-12.13(h), under the
terms of any one or more of which circumstances disclosure shall be permitted,
each Financing Party severally agrees to use reasonable efforts to keep
confidential all non-public information pertaining to the financing structure
described in the unrecorded Operative Agreements.
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<PAGE> 68
12.14. FINANCIAL REPORTING/TAX CHARACTERIZATION.
Lessee agrees to obtain advice from its own accountants and tax counsel
regarding the financial reporting treatment and the tax characterization of the
transactions described in the Operative Agreements. Lessee further agrees that
Lessee shall not rely upon any statement of any Financing Party or any of their
respective Affiliates and/or Subsidiaries regarding any such financial reporting
treatment and/or tax characterization.
12.15. SET-OFF.
In addition to any rights now or hereafter granted under applicable Law
and not by way of limitation of any such rights, upon and after the occurrence
of any Event of Default and during the continuance thereof, the Lenders, the
Holders, their respective Affiliates and any assignee or participant of a Lender
or a Holder in accordance with the applicable provisions of the Operative
Agreements are hereby authorized by the Lessee at any time or from time to time,
without notice to the Lessee or to any other Person, any such notice being
hereby expressly waived, to set-off and to appropriate and to apply any and all
deposits (general or special, time or demand, including without limitation
indebtedness evidenced by certificates of deposit, whether matured or unmatured)
and any other indebtedness at any time held or owing by the Lenders, the
Holders, their respective Affiliates or any assignee or participant of a Lender
or a Holder in accordance with the applicable provisions of the Operative
Agreements to or for the credit or the account of the Lessee against and on
account of the obligations of the Lessee under the Operative Agreements
irrespective of whether or not (a) the Lenders or the Holders shall have made
any demand under any Operative Agreement or (b) the Agent shall have declared
any or all of the obligations of the Lessee under the Operative Agreements to be
due and payable and although such obligations shall be contingent or unmatured.
Notwithstanding the foregoing, neither the Agent nor any other Financing Party
shall exercise, or attempt to exercise, any right of setoff, banker's lien, or
the like, against any deposit account or property of the Lessee held by the
Agent or any other Financing Party, without the prior written consent of the
Majority Secured Parties, and any Financing Party violating this provision shall
indemnify the Agent and the other Financing Parties from any and all costs,
expenses, liabilities and damages resulting therefrom. The contractual
restriction on the exercise of setoff rights provided in the foregoing sentence
is solely for the benefit of the Agent and the Financing Parties and may not be
enforced by the Lessee.
[signature pages follow]
64
<PAGE> 69
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective officers thereunto duly authorized as of the
day and year first above written.
CONSTRUCTION AGENT
AND LESSEE: RF MICRO DEVICES, INC.,
as the Construction Agent and as the Lessee
By: _______________________________________
Name: _____________________________________
Title: ____________________________________
[signature pages continue]
<PAGE> 70
OWNER TRUSTEE
AND LESSOR: FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not individually, except as expressly
stated herein, but solely as the Owner
Trustee under the RFMD Real Estate Trust
1999-1
By: _______________________________________
Name: _____________________________________
Title: ____________________________________
[signature pages continue]
<PAGE> 71
AGENT AND LENDERS: FIRST UNION NATIONAL BANK, as a Lender and
as the Agent
By: _______________________________________
Name: _____________________________________
Title: ____________________________________
[signature pages continue]
<PAGE> 72
CREDIT SUISSE FIRST BOSTON,
as a Lender
By: _______________________________________
Name: _____________________________________
Title: ____________________________________
[signature pages continue]
<PAGE> 73
COMERICA BANK, as a Lender
By: _______________________________________
Name: _____________________________________
Title: ____________________________________
[signature pages continue]
<PAGE> 74
SUNTRUST BANK, ATLANTA, as a Lender
By: _______________________________________
Name: _____________________________________
Title: ____________________________________
[signature pages continue]
<PAGE> 75
CITICORP USA, Inc., as a Lender
By: _______________________________________
Name: _____________________________________
Title: ____________________________________
[signature pages continue]
<PAGE> 76
FLEET NATIONAL BANK, as a Lender
By: _______________________________________
Name: _____________________________________
Title: ____________________________________
[signature pages continue]
<PAGE> 77
HOLDERS: FIRST UNION NATIONAL BANK, as a Holder
By: _______________________________________
Name: _____________________________________
Title: ____________________________________
[signature pages continue]
<PAGE> 78
CREDIT SUISSE LEASING 92A, LP, as a Holder
By: _______________________________________
Name: _____________________________________
Title: ____________________________________
[signature pages continue]
<PAGE> 79
FLEET NATIONAL BANK, as a Holder
By: _______________________________________
Name: _____________________________________
Title: ____________________________________
[signature pages end]
<PAGE> 80
Schedule 1
Amortization
PAYMENT DATE PERCENTAGE
------------ ----------
3/13/01 1.7111%
4/13/01 1.7111%
5/13/01 1.7111%
6/13/01 1.7111%
7/13/01 1.7111%
8/13/01 1.7111%
9/13/01 1.7111%
10/13/01 1.7111%
11/13/01 1.7111%
12/13/01 1.7111%
1/13/02 1.7111%
2/13/02 1.7111%
3/13/02 1.7111%
4/13/02 1.7111%
5/13/02 1.7111%
6/13/02 1.7111%
7/13/02 1.7111%
8/13/02 1.7111%
9/13/02 1.7111%
10/13/02 1.7111%
11/13/02 1.7111%
12/13/02 1.7111%
1/13/03 1.7111%
2/13/03 1.7111%
3/13/03 1.7111%
4/13/03 1.7111%
5/13/03 1.7111%
6/13/03 1.7111%
7/13/03 1.7111%
8/13/03 1.7111%
9/13/03 1.7111%
10/13/03 1.7111%
11/13/03 1.7111%
12/13/03 1.7111%
1/13/04 1.7111%
2/13/04 1.7111%
3/13/04 1.7111%
4/13/04 1.7111%
5/13/04 1.7111%
6/13/04 1.7111%
7/13/04 1.7111%
8/13/04 1.7111%
9/13/04 1.7111%
10/13/04 1.7111%
11/13/04 1.7111%
<PAGE> 81
Schedule 2
Equipment
See Attached
<PAGE> 82
Schedule 3
Additional Collateral Liens
<PAGE> 83
EXHIBIT A
REQUISITION FORM
(Pursuant to Sections 4.2, 5.2, 5.3 and 5.4 of the Participation Agreement)
RF MICRO DEVICES, INC., a [__________] corporation (the "Company")
hereby certifies as true and correct and delivers the following Requisition to
FIRST UNION NATIONAL BANK, as the agent for the Lenders (hereinafter defined)
and respecting the Security Documents, as the agent for the Lenders and the
Holders (hereinafter defined), to the extent of their interests (the "Agent"):
Reference is made herein to that certain Participation Agreement dated
as of [__________, 199__] (as amended, modified, extended, supplemented,
restated and/or replaced from time to time, the "Participation Agreement") among
the Company, in its capacity as the Lessee and as the Construction Agent, First
Security Bank, National Association, as the Owner Trustee, the various banks and
other lending institutions which are parties thereto from time to time, as
holders (the "Holders"), the various banks and other lending institutions which
are parties thereto from time to time, as lenders (the "Lenders"), and the
Agent. Capitalized terms used herein but not otherwise defined herein shall have
the meanings set forth therefor in the Participation Agreement.
Check one:
____ INITIAL CLOSING DATE: _________________
(three (3) Business Days prior notice required for Advance)
____ PROPERTY CLOSING DATE:_________________
(three (3) Business Days prior notice required for Advance)
____ CONSTRUCTION ADVANCE DATE:_____________
(three (3) Business Days prior notice required for Advance)
1. Transaction Expenses and other fees, expenses and disbursements under
Sections 7.1(a) or 7.1(b) of the Participation Agreement and any and
all other amounts contemplated to be financed under the Participation
Agreement including without limitation any Work, broker's fees, taxes,
recording fees and the like (with supporting invoices or closing
statement attached):
Party to Whom Amount Owed
Amount is Owed (in U.S. Dollars)
-------------- -----------------
______________ _________________
______________ _________________
______________ _________________
______________ _________________
______________ _________________
A-1
<PAGE> 84
2. Description of Land (which shall be a legal description of the Land in
connection with an Advance to pay Property Acquisition Costs): See
attached Schedule 1
3. Description of Improvements: See attached Schedule 2
4. Description of Equipment: See attached Schedule 3
5. Description of Work: See attached Schedule 4
6. Aggregate Loans and Holder Advances requested since the Initial Closing
Date with respect to each Property for which Advances are requested
under this Requisition (listed on a Property by Property basis),
including without limitation all amounts requested under this
Requisition: [IDENTIFY ON A PROPERTY BY PROPERTY BASIS]
$______________ [Property]
In connection with this Requisition, the Company hereby requests that
the Lenders make Loans to the Lessor in the amount of $______________ and that
the Holders make Holder Advances to the Lessor in the amount of
$________________. The Company hereby certifies (i) that the foregoing amounts
requested do not exceed the total aggregate of the Available Commitments plus
the Available Holder Commitments and (ii) each of the provisions of the
Participation Agreement applicable to the Loans and Holder Advances requested
hereunder have been complied with as of the date of this Requisition.
The Company shall use the amounts requested as follows:
$______________ Expenditures for Equipment
$______________ Expenditures for Property Cost
other than Equipment
The Company requests the Loans be allocated as follows:
$______________ ABR Loans
$______________ Eurodollar Loans
The Company requests the Holder Advances be allocated as follows:
$______________ ABR Holder Advances
$______________ Eurodollar Holder Advances
A-2
<PAGE> 85
The Company has caused this Requisition to the executed by its duly
authorized officer as of this _____ day of __________, ______.
RF MICRO DEVICES, INC.
By: ___________________________________
Name: _________________________________
Title: ________________________________
A-3
<PAGE> 86
Schedule 1
Description of Land
(Legal Description and Street Address)
A-4
<PAGE> 87
Schedule 2
Description of Improvements
A-5
<PAGE> 88
Schedule 3
Description of Equipment
================================================================================
General Make Model Serial Cost Equipment
Description Number Schedule
(if determined) Reference
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
================================================================================
A-6
<PAGE> 89
Schedule 4
Work
Work Performed for which the Advance is requested:
_________________________________________________________
_________________________________________________________
A-7
<PAGE> 90
EXHIBIT B
[Outside Counsel Opinion for the Lessee]
(Pursuant to Section 5.3(j) of the
Participation Agreement)
------------, ------
TO THOSE ON THE ATTACHED DISTRIBUTION LIST
Re: Synthetic Lease Financing Provided in favor of RF Micro Devices, Inc.
Dear Sirs:
We have acted as special counsel to [IF CREDIT SUPPORT FROM A PARTY OTHER THAN
THE LESSEE IS PART OF THE TRANSACTION, THIS OPINION MUST BE MODIFIED TO
REFERENCE SUCH PARTY AND THE DOCUMENTS TO WHICH IT IS A PARTY], RF Micro
Devices, Inc., a RF Micro Devices, Inc. (the "Lessee") in connection with
certain transactions contemplated by the Participation Agreement dated as of
[__________, 199__] (the "Participation Agreement"), among the Lessee, First
Security Bank, National Association, as the Owner Trustee (the "Owner Trustee"),
the various banks and other lending institutions which are parties thereto from
time to time, as holders (the "Holders"), the various banks and other lending
institutions which are parties thereto from time to time, as lenders (the
"Lenders") and First Union National Bank, as the agent for the Lenders and
respecting the Security Documents, as the agent for the Lenders and the Holders,
to the extent of their interests (the "Agent"). This opinion is delivered
pursuant to Section 5.3(j) of the Participation Agreement. All capitalized terms
used herein, and not otherwise defined herein, shall have the meanings assigned
thereto in Appendix A to the Participation Agreement.
In connection with the foregoing, we have examined originals, or copies
certified to our satisfaction, of [IDENTIFY THE APPLICABLE OPERATIVE AGREEMENTS,
INCLUDING EACH MORTGAGE INSTRUMENT, RELATED UCC FIXTURE FILINGS, ADDITIONAL UCCS
(HEREINAFTER DEFINED), DEEDS AND MEMORANDA OF LEASE] and such other corporate
documents and records of the Lessee, certificates of public officials and
representatives of the Lessee as to certain factual matters, and such other
instruments and documents which we have deemed necessary or advisable to examine
for the purpose of this opinion. With respect to such examination, we have
assumed (i) the statements of fact made in all such certificates, documents and
instruments are true, accurate and complete; (ii) the due authorization,
execution and delivery of the Operative Agreements by the parties thereto; (iii)
the genuineness of all signatures, the authenticity and completeness of all
documents, certificates, instruments, records and corporate records submitted to
us as originals and the conformity to the original instruments of all documents
submitted to us as copies, and the authenticity and completeness of the
originals of such copies; (iv) that all parties have all
B-1
<PAGE> 91
requisite corporate power and authority to execute, deliver and perform the
Operative Agreements; and (v) except as to the Lessee, the enforceability of the
Mortgage Instrument, the Memorandum of Lease and the UCC financing statements
against all parties thereto.
Based on the foregoing, and having due regard for such legal considerations as
we deem relevant, and subject to the limitations and assumptions set forth
herein, including without limitation the matters set forth in the last two (2)
paragraphs hereof, we are of the opinion that:
(a) The Mortgage Instrument and Memorandum of Lease are enforceable in
accordance with their respective terms, except as limited by laws generally
affecting the enforcement of creditors' rights, which laws will not materially
prevent the realization of the benefits intended by such documents.
(b) Each form of Mortgage Instrument and UCC fixture filing relating
thereto, attached hereto as Schedules 1 and 2, respectively, is in proper form
for filing and recording with the offices of [IDENTIFY THE RECORDING OFFICES OF
THE RESPECTIVE COUNTY CLERKS WHERE THE PROPERTIES ARE TO BE LOCATED]. Upon
filing of each Mortgage Instrument and UCC fixture filing in [IDENTIFY THE
RECORDING OFFICES OF THE RESPECTIVE COUNTY CLERKS WHERE THE PROPERTIES ARE TO BE
LOCATED], the Agent will have a valid, perfected lien and security interest in
that portion of the Collateral described in such Mortgage Instrument or UCC
fixture filing to the extent such Collateral is comprised of real property
and/or fixtures.
(c) The forms of UCC financing statements relating to the Security
Documents, attached hereto as Schedule 3 (the "Additional UCCs"), are in proper
form for filing and recording with the offices of [IDENTIFY (i) THE RECORDING
OFFICES OF THE RESPECTIVE COUNTY CLERKS WHERE THE PROPERTIES ARE TO BE LOCATED
AND (ii) THE SECRETARY OF STATE WHERE THE PROPERTIES ARE TO BE LOCATED]. Upon
filing of the Additional UCCs in [IDENTIFY (i) THE RECORDING OFFICES OF THE
RESPECTIVE COUNTY CLERKS WHERE THE PROPERTIES ARE TO BE LOCATED AND (ii) THE
SECRETARY OF STATE WHERE THE PROPERTIES ARE TO BE LOCATED], the Agent will have
a valid, perfected lien and security interest in that portion of the Collateral
which can be perfected by filing UCC-1 financing statements under Article 9 of
the UCC.
(d) Each form of Deed and Memorandum of Lease is in appropriate form
for filing and recording with the [IDENTIFY THE RECORDING OFFICES OF THE
RESPECTIVE COUNTY CLERKS FOR THE COUNTIES WHERE THE PROPERTIES ARE TO BE
LOCATED].
(e) Each Memorandum of Lease, when filed and recorded with the
[IDENTIFY THE RECORDING OFFICES OF THE RESPECTIVE COUNTY CLERKS FOR THE COUNTIES
WHERE THE PROPERTIES ARE TO BE LOCATED], will have been filed and recorded in
all public offices in the State of [__________] in which filing or recording is
necessary to provide constructive notice of the Lease to third Persons and to
establish of record the interest of the Lessor thereunder as to the Properties
described in each such Memorandum of Lease.
B-2
<PAGE> 92
(f) Title to the Properties located in the State of [___________] may
be held in the name of the Owner Trustee as follows: First Security Bank,
National Association, not individually, but solely as the Owner Trustee under
the RFMD Real Estate Trust 1999-1.
(g) The execution and delivery by First Security Bank, National
Association, individually or as the Owner Trustee, as the case may be, of the
Operative Agreements to which it is a party and compliance by First Security
Bank, National Association, individually or as the Owner Trustee, with all of
the provisions thereof do not and will not contravene any law, rule or
regulation of [IDENTIFY THE STATE].
(h) By reason of their participation in the transaction contemplated
under the Operative Agreements, none of the Agent, the Lenders, the Holders or
the Owner Trustee has to (a) qualify as a foreign corporation in [IDENTIFY THE
STATE], (b) file any application or any designation for service of process in
[IDENTIFY THE STATE] or (c) pay any franchise, income, sales, excise, stamp or
other taxes of any kind to [IDENTIFY THE STATE].
(i) The provisions in the Operative Agreements concerning Rent,
interest, fees, prepayment premiums and other similar charges do not violate the
usury laws or other similar laws regulating the use or forbearance of money of
[IDENTIFY THE STATE].
(j) If the transactions contemplated by the Operative Agreements are
characterized as a lease transaction by a court of competent jurisdiction, the
Lease and the applicable Lease Supplement shall demise to the Lessee a valid
leasehold interest in the Properties described in such Lease Supplement.
(k) If the transactions contemplated by the Operative Agreements are
characterized as a loan transaction by a court of competent jurisdiction, the
combination of the Mortgage Instruments, the Deeds, the Lease and the applicable
Lease Supplements (and the other Operative Agreements incorporated therein by
reference) are sufficient to create a valid, perfected lien or security interest
in the Properties therein described, enforceable as a mortgage in [IDENTIFY THE
STATE].
This opinion is limited to the matters stated herein and no opinion is implied
or may be inferred beyond the matters stated herein. This opinion is based on
and is limited to the laws of the State of [___________] and the federal laws of
the United States of America. Insofar as the foregoing opinion relates to
matters of law other than the foregoing, no opinion is hereby given.
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This opinion is for the sole benefit of the Lessee, the Construction Agent, the
Owner Trustee, the Holders, the Lenders, the Agent and their respective
successors and assigns and may not be relied upon by any other person other than
such parties and their respective successors and assigns without the express
written consent of the undersigned. The opinions expressed herein are as of the
date hereof and we make no undertaking to amend or supplement such opinions if
facts come to our attention or changes in the current law of the jurisdictions
mentioned herein occur which could affect such opinions.
Very truly yours,
[LESSEE'S OUTSIDE COUNSEL]
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Distribution List
First Union National Bank, as the Agent, a Holder and a Lender
The various banks and other lending institutions which are parties to the
Participation Agreement from time to time, as additional Holders
The various banks and other lending institutions which are parties to the
Participation Agreement from time to time, as additional Lenders
[_____________], as the Construction Agent and the Lessee
First Security Bank, National Association, not individually, but solely as the
Owner Trustee under the RFMD Real Estate Trust 1999-1
B-5
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Schedule 1
Form of Mortgage Instrument
B-6
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Schedule 2
Forms of UCC Fixture Filings
B-7
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Schedule 3
Forms of UCC Financing Statements
B-8
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EXHIBIT C
RF MICRO DEVICES, INC.
OFFICER'S CERTIFICATE
(Pursuant to Section 5.3(z) of the Participation Agreement)
RF Micro Devices, Inc., a [__________] corporation (the "Company"),
DOES HEREBY CERTIFY as follows:
1. Each and every representation and warranty of the Company
contained in the Operative Agreements to which it is a party
is true and correct on and as of the date hereof.
2. No Default or Event of Default has occurred and is continuing
under any Operative Agreement.
3. Each Operative Agreement to which the Company is a party is in
full force and effect with respect to it.
4. The Company has duly performed and complied with all
covenants, agreements and conditions contained in the
Participation Agreement (hereinafter defined) or in any
Operative Agreement required to be performed or complied with
by it on or prior to the date hereof.
Capitalized terms used in this Officer's Certificate and not otherwise defined
herein have the respective meanings ascribed thereto in the Participation
Agreement dated as of [__________, 199__] among the Company, as the Lessee and
as the Construction Agent, First Security Bank, National Association, as the
Owner Trustee, the various banks and other lending institutions which are
parties thereto from time to time, as holders (the "Holders"), the various banks
and other lending institutions which are parties thereto from time to time, as
lenders (the "Lenders") and First Union National Bank, as the agent for the
Lenders and respecting the Security Documents, as the agent for the Lenders and
the Holders, to the extent of their interests (the "Agent").
IN WITNESS WHEREOF, the Company has caused this Officer's Certificate to be duly
executed and delivered as of this _____ day of __________, ______.
RF MICRO DEVICES, INC.
By: ___________________________________
Name: _________________________________
Title: ________________________________
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EXHIBIT D
RF MICRO DEVICES, INC.
SECRETARY'S CERTIFICATE
(Pursuant to Section 5.3(aa) of the Participation Agreement)
RF Micro Devices, Inc., a [__________] corporation (the "Company") DOES
HEREBY CERTIFY as follows:
1. Attached hereto as Schedule 1 is a true, correct and complete
copy of the resolutions of the Board of Directors of the
Company duly adopted by the Board of Directors of the Company
on __________. Such resolutions have not been amended,
modified or rescinded since their date of adoption and remain
in full force and effect as of the date hereof.
2. Attached hereto as Schedule 2 is a true, correct and complete
copy of the Articles of Incorporation of the Company on file
in the Office of the Secretary of State of __________. Such
Articles of Incorporation have not been amended, modified or
rescinded since their date of adoption and remain in full
force and effect as of the date hereof.
3. Attached hereto as Schedule 3 is a true, correct and complete
copy of the Bylaws of the Company. Such Bylaws have not been
amended, modified or rescinded since their date of adoption
and remain in full force and effect as of the date hereof.
4. The persons named below now hold the offices set forth
opposite their names, and the signatures opposite their names
and titles are their true and correct signatures.
Name Office Signature
------------------- ------------------- --------------------
------------------- ------------------- --------------------
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IN WITNESS WHEREOF, the Company has caused this Secretary's Certificate to be
duly executed and delivered as of this _____ day of ___________, ______.
RF MICRO DEVICES, INC.
By: ___________________________________
Name: _________________________________
Title: ________________________________
D-2
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Schedule 1
Board Resolutions
D-3
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Schedule 2
Articles of Incorporation
D-4
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Schedule 3
Bylaws
D-5
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EXHIBIT E
FIRST SECURITY BANK, NATIONAL ASSOCIATION
OFFICER'S CERTIFICATE
(Pursuant to Section 5.3(bb) of the Participation Agreement)
FIRST SECURITY BANK, NATIONAL ASSOCIATION, a national banking
association, not individually (except with respect to paragraph 1 below, to the
extent any such representations and warranties are made in its individual
capacity) but solely as the owner trustee under the RFMD Real Estate Trust
1999-1 (the "Owner Trustee"), DOES HEREBY CERTIFY as follows:
1. Each and every representation and warranty of the Owner
Trustee contained in the Operative Agreements to which it is a
party is true and correct on and as of the date hereof.
2. Each Operative Agreement to which the Owner Trustee is a party
is in full force and effect with respect to it.
3. The Owner Trustee has duly performed and complied with all
covenants, agreements and conditions contained in the
Participation Agreement (hereinafter defined) or in any
Operative Agreement required to be performed or complied with
by it on or prior to the date hereof.
Capitalized terms used in this Officer's Certificate and not otherwise defined
herein have the respective meanings ascribed thereto in the Participation
Agreement dated as of [__________, 199__] among RF Micro Devices, Inc., as the
Lessee and as the Construction Agent, the Owner Trustee, the various banks and
other lending institutions which are parties thereto from time to time, as
holders (the "Holders"), the various banks and other lending institutions which
are parties thereto from time to time, as lenders (the "Lenders") and First
Union National Bank, as the agent for the Lenders and respecting the Security
Documents, as the agent for the Lenders and the Holders, to the extent of their
interests (the "Agent").
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IN WITNESS WHEREOF, the Owner Trustee has caused this Officer's Certificate to
be duly executed and delivered as of this _____ day of __________, ______.
FIRST SECURITY BANK, NATIONAL
ASSOCIATION, not individually, except
as expressly stated herein, but solely
as the Owner Trustee under the RFMD
Real Estate Trust 1999-1
By: ___________________________________
Name: _________________________________
Title: ________________________________
E-2
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EXHIBIT F
FIRST SECURITY BANK, NATIONAL ASSOCIATION
SECRETARY'S CERTIFICATE
(Pursuant to Section 5.3(cc) of the Participation Agreement)
CERTIFICATE OF ASSISTANT SECRETARY
I, ______________________, duly elected and qualified Assistant
Secretary of the Board of Directors of First Security Bank, National Association
(the "Association"), hereby certify as follows:
1. The Association is a National Banking Association duly organized,
validly existing and in good standing under the laws of the United States. With
respect thereto the following is noted:
A. Pursuant to Revised Statutes 324, et seq., as amended, 12
U.S.C. 1, et seq., the Comptroller of the Currency charters
and exercises regulatory and supervisory authority over all
National Banking Associations;
B. On December 9, 1881, the First National Bank of Ogden, Utah
was chartered as a National Banking Association under the laws
of the United States and under Charter No.
2597;
C. On October 2, 1922, in connection with a consolidation of The
First National Bank of Ogden, Ogden, Utah, and The Utah
National Bank of Ogden, Ogden, Utah, the title was changed to
"The First & Utah National Bank of Ogden"; on January 18,
1923, The First & Utah National Bank of Ogden changed its
title to "First Utah National Bank of Ogden"; on January 19,
1926, the title was changed to "First National Bank of Ogden";
on February 24, 1934, the title was changed to "First Security
Bank of Utah, National Association"; on June 21, 1996, the
title was changed to "First Security Bank, National
Association"; and
D. First Security Bank, National Association, Ogden, Utah,
continues to hold a valid certificate to do business as a
National Banking Association.
2. The Association's Articles of Association, as amended, are in full
force and effect, and a true, correct and complete copy is attached hereto as
Schedule A and incorporated herein by reference. Said Articles were last amended
October 20, 1975, as required by law on notice at a duly called special meeting
of the shareholders of the Association.
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3. The Association's By-Laws, as amended, are in full force and effect;
and a true, correct and complete copy is attached hereto as Schedule B and
incorporated herein by reference. Said By-Laws, still in full force and effect,
were adopted September 17, 1942, by resolution, after proper notice of
consideration and adoption of By-Laws was given to each and every shareholder,
at a regularly called meeting of the Board of Directors with a quorum present.
4. Pursuant to the authority vested in it by an Act of Congress
approved December 23, 1913 and known as the Federal Reserve Act, as amended, the
Federal Reserve Board (now the Board of Governors of the Federal Reserve System)
has granted to the Association now known as "First Security Bank, National
Association" of Ogden, Utah, the right to act, when not in contravention of
State or local law, as trustee, executor, administrator, registrar of stocks and
bonds, guardian of estates, assignee, receiver, committee of estates of
lunatics, or in any other fiduciary capacity in which State banks, trust
companies or other corporations which come into competition with National Banks
are permitted to act under the laws of the State of Utah; and under the
provisions of applicable law, the authority so granted remains in full force and
effect.
5. Pursuant to authority vested by Act of Congress (12 U.S.C. 92a and
12 U.S.C. 481, as amended) the Comptroller of the Currency has issued Regulation
9, as amended, dealing, in part, with the Fiduciary Powers of National Banks,
said regulation providing in subparagraph 9.7 (a) (1-2):
(1) The board of directors is responsible for the proper exercise
of fiduciary powers by the Bank. All matters pertinent
thereto, including the determination of policies, the
investment and disposition of property held in fiduciary
capacity, and the direction and review of the actions of all
officers, employees, and committees utilized by the Bank in
the exercise of its fiduciary powers, are the responsibility
of the board. In discharging this responsibility, the board of
directors may assign, by action duly entered in the minutes,
the administration of such of the Bank's fiduciary powers as
it may consider proper to assign to such director(s),
officer(s), employee(s) or committee(s) as it may designate.
(2) No fiduciary account shall be accepted without the prior
approval of the board, or of the director(s), officer(s), or
committee(s) to whom the board may have designated the
performance of that responsibility. . . .
6. A Resolution relating to Exercise of Fiduciary Powers was adopted by
the Board of Directors at a meeting held July 26, 1994 at which time there was a
quorum present; said resolution is still in full force and effect and has not
been rescinded. Said resolution is attached hereto as Schedule C and
incorporated herein by reference.
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7. A Resolution relating to the Designation of Officers and Employees
to Exercise Fiduciary Powers was adopted by the Trust Policy Committee at a
meeting held February 7, 1996 at which time a quorum was present; said
resolution is still in full force and effect and has not been rescinded. Said
resolution is attached hereto as Schedule D and is incorporated herein by
reference.
8. Attached hereto as Schedule E and incorporated herein by reference,
is a listing of facsimile signatures of persons authorized (herein "Authorized
Signatory or Signatories") on behalf of the Association and its Trust Group to
act in exercise of its fiduciary powers subject to the resolutions in Paragraphs
6 and 7, above.
9. The principal office of the First Security Bank, National
Association, Trust Group and of its departments, except for the St. George,
Utah, Ogden, Utah, and Provo, Utah, branch offices, is located at 79 South Main
Street, Salt Lake City, Utah 84111 and all records relating to fiduciary
accounts are located at such principal office of the Trust Group or in storage
facilities within Salt Lake County, Utah, except for those of the Ogden, Utah,
St. George, Utah, and Provo, Utah, branch offices, which are located at said
office.
10. Each Authorized Signatory (i) is a duly elected or appointed, duly
qualified officer or employee of the Association; (ii) holds the office or job
title set forth below his or her name on the date hereof; (iii) and the
facsimile signature appearing opposite the name of each such officer or employee
is a true replica of his or her signature.
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IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal of the
Association this __________ day of _________________, ______.
(SEAL)
----------------------------------------
R. James Steenblik
Senior Vice President
Assistant Secretary
F-4
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Schedule A
Articles of Association
F-5
<PAGE> 111
Schedule B
Bylaws
F-6
<PAGE> 112
Schedule C
Resolution Relating to
Exercise of Fiduciary Powers
F-7
<PAGE> 113
Schedule D
Resolution Relating to the
Designation of Officers and Employees
to Exercise Fiduciary Powers
F-8
<PAGE> 114
Schedule E
Authorized Signatory or Signatories
F-9
<PAGE> 115
EXHIBIT G
[Outside Counsel Opinion for the Owner Trustee]
(Pursuant to Section 5.3(dd) of the
Participation Agreement)
-----------, ------
TO THOSE ON THE ATTACHED DISTRIBUTION LIST
Re: Trust Agreement dated as of [__________, 199__]
Dear Sirs:
We have acted as special counsel for First Security Bank, National
Association, a national banking association, in its individual capacity ("FSB")
and in its capacity as trustee (the "Owner Trustee") under the Trust Agreement
dated as of [__________, 199__] (the "Trust Agreement") by and among it and the
various banks and other lending institutions which are parties thereto from time
to time, as holders (the "Holders"), in connection with the execution and
delivery by the Owner Trustee of the Operative Agreements to which it is a
party. Except as otherwise defined herein, the terms used herein shall have the
meanings set forth in Appendix A to the Participation Agreement dated as of
[__________, 199__] (the "Participation Agreement") by and among RF Micro
Devices, Inc. (the "Lessee"), First Security Bank, National Association, as the
Owner Trustee, the Holders, the various banks and other lending institutions
which are parties thereto from time to time, as lenders (the "Lenders") and
First Union National Bank, as the agent for the Lenders and respecting the
Security Documents, as the agent for the Lenders and the Holders, to the extent
of their interests (the "Agent").
We have examined originals or copies, certified or otherwise identified
to our satisfaction, of such documents, corporate records and other instruments
as we have deemed necessary or advisable for the purpose of rendering this
opinion.
Based upon the foregoing, we are of the opinion that:
1. FSB is a national banking association duly organized, validly
existing and in good standing under the laws of the United States of America and
each of FSB and the Owner Trustee has under the laws of the State of Utah and
federal banking law the power and authority to enter into and perform its
obligations under the Trust Agreement and each other Operative Agreement to
which it is a party.
2. The Owner Trustee is the duly appointed trustee under the Trust
Agreement.
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3. The Trust Agreement has been duly authorized, executed and delivered
by one (1) of the officers of FSB and, assuming due authorization, execution and
delivery by the Holders, is a legal, valid and binding obligation of the Owner
Trustee (and to the extent set forth therein, against FSB), enforceable against
the Owner Trustee (and to the extent set forth therein, against FSB) in
accordance with its terms, and the Trust Agreement creates under the laws of the
State of Utah for the Holders the beneficial interest in the Trust Estate it
purports to create and is a valid trust under the laws of the State of Utah.
4. The Operative Agreements to which it is party have been duly
authorized, executed and delivered by FSB, and, assuming due authorization,
execution and delivery by the other parties thereto, are legal, valid and
binding obligations of FSB, enforceable against FSB in accordance with their
respective terms.
5. The Operative Agreements to which it is party have been duly
authorized, executed and delivered by the Owner Trustee, and, assuming due
authorization, execution and delivery by the other parties thereto, are legal,
valid and binding obligations of the Owner Trustee, enforceable against the
Owner Trustee in accordance with their respective terms. The Notes and
Certificates have been duly issued, executed and delivered by the Owner Trustee,
pursuant to authorization contained in the Trust Agreement, and the Certificates
are entitled to the benefits and security afforded by the Trust Agreement in
accordance with its terms and the terms of the Trust Agreement.
6. The execution and delivery by each of FSB and the Owner Trustee of
the Trust Agreement and the Operative Agreements to which it is a party, and
compliance by FSB or the Owner Trustee, as the case may be, with all of the
provisions thereof do not and will not contravene any Laws applicable to or
binding on FSB, or as the Owner Trustee, or contravene the provisions of, or
constitute a default under, its charter documents or by-laws or, to our
knowledge after due inquiry, any indenture, mortgage contract or other agreement
or instrument to which FSB or Owner Trustee is a party or by which it or any of
its property may be bound or affected.
7. The execution and delivery of the Operative Agreements by each of
FSB and the Owner Trustee and the performance by each of FSB and the Owner
Trustee of their respective obligations thereunder does not require on or prior
to the date hereof the consent or approval of, the giving of notice to, the
registration or filing with, or the taking of any action in respect of any
Governmental Authority or any court.
8. Assuming that the trust created by the Trust Agreement is treated as
a grantor trust for federal income tax purposes within the contemplation of
Section 671 through 678 of the Internal Revenue Code of 1986, there are no fees,
taxes, or other charges (except taxes imposed on fees payable to the Owner
Trustee) payable to the State of Utah or any political subdivision thereof in
connection with the execution, delivery or performance by the Owner Trustee, the
Agent, the Lenders, the Lessee or the Holders, as the case may be, of the
Operative Agreements or in connection with the acquisition of any Property by
the Owner Trustee or in connection with the making by any Holder of its
investment in the Trust or its acquisition of the beneficial
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interest in the Trust Estate or in connection with the issuance and acquisition
of the Certificates, or the Notes, and neither the Owner Trustee, the Trust
Estate nor the trust created by the Trust Agreement will be subject to any fee,
tax or other governmental charge (except taxes on fees payable to the Owner
Trustee) under the laws of the State of Utah or any political subdivision
thereof on, based on or measured by, directly or indirectly, the gross receipts,
net income or value of the Trust Estate by reason of the creation or continued
existence of the trust under the terms of the Trust Agreement pursuant to the
laws of the State of Utah or the Owner Trustee's performance of its duties under
the Trust Agreement.
9. There is no fee, tax or other governmental charge under the laws of
the State of Utah or any political subdivision thereof in existence on the date
hereof on, based on or measured by any payments under the Certificates, Notes or
the beneficial interest in the Trust Estate, by reason of the creation of the
trust under the Trust Agreement pursuant to the laws of the State of Utah or the
Owner Trustee's performance of its duties under the Trust Agreement within the
State of Utah.
10. Upon the filing of the financing statement on form UCC-1 in the
form attached hereto as Schedule 1 with the Utah Division of Corporation and
Commercial Code, the Agent's security interest in the Trust Estate, for the
benefit of the Lenders and the Holders, will be perfected, to the extent that
such perfection is governed by Article 9 of the Uniform Commercial Code as in
effect in the State of Utah (the "Utah UCC").
Your attention is directed to the Utah UCC, which provides, in part,
that a filed financing statement which does not state a maturity date or which
states a maturity date of more than five (5) years is effective only for a
period of five (5) years from the date of filing, unless within six (6) months
prior to the expiration of said period a continuation statement is filed in the
same office or offices in which the original statement was filed. The
continuation statement must be signed by the secured party, identify the
original statement by file number and state that the original statement is still
effective. Upon the timely filing of a continuation statement, the effectiveness
of the original financing statement is continued for five (5) years after the
last date to which the original statement was effective. Succeeding continuation
statements may be filed in the same manner to continue the effectiveness of the
original statement.
The foregoing opinions are subject to the following assumptions, exceptions and
qualifications:
A. We are attorneys admitted to practice in the State of Utah and in
rendering the foregoing opinions we have not passed upon, or purported to pass
upon, the laws of any jurisdictions other than the State of Utah and the federal
banking law governing the banking and trust powers of FSB. In addition, without
limiting the foregoing we express no opinion with respect to (i) federal
securities laws, including the Securities Act of 1933, as amended, the
Securities Exchange Act of 1934, as amended, and the Trust Indenture Act of
1939, as amended, (ii) the Federal Aviation Act of 1958, as amended, (iii) the
Federal Communications Act of 1934, as amended, or (iv) state securities or blue
sky laws. Insofar as the foregoing opinions relate to the legality, validity,
binding effect and enforceability of the documents involved in these
transactions, which by their terms are governed by the laws of a state other
than Utah, we have
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assumed that the laws of such state (as to which we express no opinion), are in
all material aspects identical to the laws of the State of Utah.
B. The opinions set forth in paragraphs 3, 4, and 5 above are subject
to the qualification that enforceability of the Trust Agreement and the other
Operative Agreements to which FSB and the Owner Trustee are parties, in
accordance with their respective terms, may be limited by (i) bankruptcy,
insolvency, reorganization, moratorium, receivership or similar laws affecting
enforcement of creditors' rights generally, and (ii) general principles of
equity, regardless of whether such enforceability is considered in a proceeding
in equity or at law.
C. As to the documents involved in these transactions, we have assumed
that each is a legal, valid and binding obligation of each party thereto, other
than FSB or the Owner Trustee, and is enforceable against each such party in
accordance with their respective terms.
D. We have assumed that all signatures, other than those of the Owner
Trustee or FSB, on documents and instruments involved in these transactions are
genuine, that all documents and instruments submitted to us as originals are
authentic, and that all documents and instruments submitted to us as copies
conform with the originals, which facts we have not independently verified.
E. We do not purport to be experts in respect of, or express any
opinion concerning laws, rules or regulations applicable to the particular
nature of the equipment or property involved in these transactions.
F. We have made no investigation of, and we express no opinion
concerning, the nature of the title to any part of the equipment or property
involved in these transactions or the priority of any mortgage or security
interest.
G. We have assumed that the Participation Agreement and the
transactions contemplated thereby are not within the prohibitions of Section 406
of the Employee Retirement Income Security Act of 1974.
H. In addition to any other limitation by operation of law upon the
scope, meaning, or purpose of this opinion, the opinions expressed herein speak
only as of the date hereof. We have no obligation to advise the recipients of
this opinion (or any third party) and make no undertaking to amend or supplement
such opinions if facts come to our attention or changes in the current law of
the jurisdictions mentioned herein occur which could affect such opinions the
legal analysis, a legal conclusion or any information confirmation herein.
I. This opinion is for the sole benefit of the Lessee, the Construction
Agent, the Owner Trustee, the Holders, the Lenders, the Agent and their
respective successors and assigns in matters directly related to the
Participation Agreement or the transaction contemplated thereunder and may not
be relied upon by any other person other than such parties and their respective
successors and assigns without the express written consent of the undersigned.
The
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opinions expressed in this letter are limited to the matter set forth in this
letter, and no other opinions should be inferred beyond the matters expressly
stated.
Very truly yours,
RAY, QUINNEY & NEBEKER
M. John Ashton
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Distribution List
First Union National Bank, as the Agent, a Holder and a Lender
The various banks and other lending institutions which are parties to the
Participation Agreement from time to time, as additional Holders
The various banks and other lending institutions which are parties to the
Participation Agreement from time to time, as additional Lenders
[_______________], as the Construction Agent and the Lessee
First Security Bank, National Association, not individually, but solely as the
Owner Trustee under the RFMD Real Estate Trust 1999-1
G-6
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Schedule 1
Form of UCC-1 to be Filed in Owner Trustee's Principal Place of Business
G-7
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EXHIBIT H
[Outside Counsel Opinion for the Lessee]
(Pursuant to Section 5.3(ee) of the Participation Agreement)
------------, ------
TO THOSE ON THE ATTACHED DISTRIBUTION LIST
Re: Synthetic Lease Financing Provided in favor of RF Micro Devices, Inc.
Dear Sirs:
We have acted as special counsel to [IF CREDIT SUPPORT FROM A PARTY OTHER THAN
THE LESSEE IS PART OF THE TRANSACTION, THIS OPINION MUST BE MODIFIED TO
REFERENCE SUCH PARTY AND THE DOCUMENTS TO WHICH IT IS A PARTY], RF Micro
Devices, Inc., a [__________] corporation (the "Lessee") in connection with
certain transactions contemplated by the Participation Agreement dated as of
[__________, 199__] (the "Participation Agreement"), among the Lessee, First
Security Bank, National Association, as the Owner Trustee (the "Owner Trustee"),
the various banks and other lending institutions which are parties thereto from
time to time, as holders (the "Holders"), the various banks and other lending
institutions which are parties thereto from time to time, as lenders (the
"Lenders") and First Union National Bank, as the agent for the Lenders and
respecting the Security Documents, as the agent for the Lenders and the Holders,
to the extent of their interests (the "Agent"). This opinion is delivered
pursuant to Section 5.3(ee) of the Participation Agreement. All capitalized
terms used herein, and not otherwise defined herein, shall have the meanings
assigned thereto in Appendix A to the Participation Agreement.
In connection with the foregoing, we have examined originals, or copies
certified to our satisfaction, of the Operative Agreements, and such other
corporate, partnership or limited liability company documents and records of the
Lessee, certificates of public officials and representatives of the Lessee as to
certain factual matters, and such other instruments and documents which we have
deemed necessary or advisable to examine for the purpose of this opinion. With
respect to such examination, we have assumed (i) the statements of fact made in
all such certificates, documents and instruments are true, accurate and
complete; (ii) the due authorization, execution and delivery of the Operative
Agreements by the parties thereto other than the Lessee; (iii) the genuineness
of all signatures (other than the signatures of persons signing on behalf of the
Lessee), the authenticity and completeness of all documents, certificates,
instruments, records and corporate records submitted to us as originals and the
conformity to the original instruments of all documents submitted to us as
copies, and the authenticity and completeness of the originals of such copies;
(iv) that all parties other than the Lessee have all
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requisite corporate power and authority to execute, deliver and perform the
Operative Agreements; and (v) the enforceability of the Operative Agreements
against all parties thereto other than the Lessee and respecting the opinion set
forth below in section (i), First Security Bank, National Association,
individually or as the Owner Trustee, as the case may be. We have further
assumed that the laws of the States of [STATE OF LAWYER'S admission] and
[GOVERNING LAW OF PARTICIPATION AGREEMENT] are substantively identical.
Based on the foregoing, and having due regard for such legal considerations as
we deem relevant, and subject to the limitations and assumptions set forth
herein, including without limitation the matters set forth in the last two (2)
paragraphs hereof, we are of the opinion that:
(a) The Lessee is a [CORPORATION, PARTNERSHIP OR LIMITED LIABILITY
COMPANY] duly [INCORPORATED OR ORGANIZED], validly existing and in good standing
under the laws of [__________] and has the power and authority to conduct its
business as presently conducted and to execute, deliver and perform its
obligations under the Operative Agreements to which it is a party. The Lessee is
duly qualified to do business in all jurisdictions in which its failure to so
qualify would materially impair its ability to perform its obligations under the
Operative Agreements to which it is a party or its financial position or its
business as now and now proposed to be conducted.
(b) The execution, delivery and performance by the Lessee of the
Operative Agreements to which it is a party have been duly authorized by all
necessary corporate action on the part of the Lessee and the Operative
Agreements to which the Lessee is a party have been duly executed and delivered
by the Lessee.
(c) The Operative Agreements to which the Lessee is a party constitute
valid and binding obligations of the Lessee enforceable against the Lessee in
accordance with the terms thereof, subject to bankruptcy, insolvency,
liquidation, reorganization, fraudulent conveyance, and similar laws affecting
creditors' rights generally, and general principles of equity (regardless of
whether the application of such principles is considered in a proceeding in
equity or at law).
(d) The execution and delivery by the Lessee of the Operative
Agreements to which it is a party and compliance by the Lessee with all of the
provisions thereof do not and will not (i) contravene the provisions of, or
result in any breach of or constitute any default under, or result in the
creation of any Lien (other than Permitted Liens and Lessor Liens) upon any of
its property under, its [ARTICLES OF INCORPORATION BY-LAWS, OPERATING AGREEMENT,
PARTNERSHIP AGREEMENT OR OTHER SIMILAR DOCUMENT OF FORMATION] or any indenture,
mortgage, chattel mortgage, deed of trust, lease, conditional sales contract,
bank loan or credit agreement or other agreement or instrument to which the
Lessee is a party or by which it or any of its property may be bound or
affected, or (ii) contravene any Laws or any order of any Governmental Authority
applicable to or binding on the Lessee.
(e) No Governmental Action by, and no notice to or filing with, any
Governmental Authority is required for the due execution, delivery or
performance by the Lessee of any of the
H-2
<PAGE> 124
Operative Agreements to which it is a party or for the acquisition, ownership,
construction and completion of the Properties, except for those which have been
obtained.
(f) Except as set forth on Schedule 1 hereto, there are no actions,
suits or proceedings pending or to our knowledge, threatened against the Lessee
in any court or before any Governmental Authority, that concern the Properties
or the Lessee's interest therein or that question the validity or enforceability
of any Operative Agreement to which the Lessee is a party or the overall
transaction described in the Operative Agreements to which the Lessee is a
party.
(g) Neither the nature of the Properties, nor any relationship between
the Lessee and any other Person, nor any circumstance in connection with the
execution, delivery and performance of the Operative Agreements to which the
Lessee is a party is such as to require any approval of stockholders of, or
approval or consent of any trustee or holders of indebtedness of, the Lessee,
except for such approvals and consents which have been duly obtained and are in
full force and effect.
(h) The Security Documents which have been executed and delivered as of
the date of this opinion create, for the benefit of the Agent, the security
interests in the Collateral described therein which by their terms such Security
Documents purport to create. Upon filing of the UCC-1 financing statements
(attached hereto as Schedule 2) relating to the Security Documents in the
recording offices of (A) the respective county clerk where the principal place
of business of the Lessee is located and (B) the Secretary of State where the
principal place of business of the Lessee is located, the Agent will have a
valid, perfected lien and security interest in that portion of the Collateral
which can be perfected by the filing of UCC-1 financing statements under Article
9 of the UCC in [IDENTIFY THE STATE].
(i) The Operative Agreements to which First Security Bank, National
Association, individually or as the Owner Trustee, is a party constitute valid
and binding obligations of such party and are enforceable against First Security
Bank, National Association, individually or as the Owner Trustee, as the case
may be, in accordance with the terms thereof, subject to bankruptcy, insolvency,
liquidation, reorganization, fraudulent conveyance, and similar laws affecting
creditors, rights generally, and general principles of equity (regardless of
whether the application of such principles is considered in a proceeding in
equity or at law).
(j) The offer, issuance, sale and delivery of the Notes and the offer,
issuance, sale and delivery of the Certificates under the circumstances
contemplated by the Participation Agreement do not, under existing law, require
registration of the Notes or the Certificates being issued on the date hereof
under the Securities Act of 1933, as amended, or the qualification of the Loan
Agreement under the Trust Indenture Act of 1939, as amended.
This opinion is limited to the matters stated herein and no opinion is implied
or may be inferred beyond the matters stated herein. This opinion is based on
and is limited to the laws of the States of [__________], and the federal laws
of the United States of America. Insofar as the foregoing opinion relates to
matters of law other than the foregoing, no opinion is hereby given.
H-3
<PAGE> 125
This opinion is for the sole benefit of the Lessee, the Construction Agent, the
Owner Trustee, the Holders, the Lenders, the Agent and their respective
successors and assigns and may not be relied upon by any other person other than
such parties and their respective successors and assigns without the express
written consent of the undersigned. The opinions expressed herein are as of the
date hereof and we make no undertaking to amend or supplement such opinions if
facts come to our attention or changes in the current law of the jurisdictions
mentioned herein occur which could affect such opinions.
Very truly yours,
[LESSEE'S OUTSIDE COUNSEL]
H-4
<PAGE> 126
Distribution List
First Union National Bank, as the Agent, a Holder and a Lender
RF Micro Devices, Inc., as the Construction Agent and the Lessee
The various banks and other lending institutions which are parties to the
Participation Agreement from time to time, as additional Holders
The various banks and other lending institutions which are parties to the
Participation Agreement from time to time, as additional Lenders
First Security Bank, National Association, not individually, but solely as the
Owner Trustee under the RFMD Real Estate Trust 1999-1
H-5
<PAGE> 127
Schedule 1
(Litigation)
H-6
<PAGE> 128
Schedule 2
(UCC-1 Financing Statements)
H-7
<PAGE> 129
EXHIBIT I
RF MICRO DEVICES, INC.
OFFICER'S CERTIFICATE
(Pursuant to Section 5.5 of the Participation Agreement)
RF Micro Devices, Inc., a North Carolina corporation (the "Company")
DOES HEREBY CERTIFY as follows:
1. The address for the subject Property is ______________________________
______________________________________.
2. The Completion Date for the construction of Improvements at the
Property occurred on ______________.
3. The aggregate Property Cost for the Property was $___________.
4. Attached hereto as Schedule 1 is the detailed, itemized documentation
supporting the asserted Property Cost figures.
5. All representations and warranties of the Company in each Operative
Agreement and in each certificate delivered pursuant thereto are true
and correct as of the Completion Date.
Capitalized terms used in this Officer's Certificate and not otherwise defined
have the respective meanings ascribed thereto in the Participation Agreement
dated as of __________, 199__ among the Company, as the Lessee and as the
Construction Agent, First Security Bank, National Association, as the Owner
Trustee, the various banks and other lending institutions which are parties
thereto from time to time, as holders (the "Holders"), the various banks and
other lending institutions which are parties thereto from time to time, as
lenders (the "Lenders"), First Union National Bank, as the agent for the Lenders
and respecting the Security Documents, as the agent for the Lenders and the
Holders, to the extent of their interests.
[The remainder of this page has been intentionally left blank.]
I-1
<PAGE> 130
IN WITNESS WHEREOF, the Company has caused this Officer's Certificate to be duly
executed and delivered as of this ____ day of ______________, ______.
RF MICRO DEVICES, INC.
By: ___________________________________
Name: _________________________________
Title: ________________________________
I-2
<PAGE> 131
Schedule I
(Itemized Documentation in Support of Asserted Property Cost)
I-3
<PAGE> 132
EXHIBIT J
[Description of Material Litigation]
(Pursuant to Section 6.2(d) of the Participation Agreement)
J-1
<PAGE> 133
Exhibit K
Form of Officer's Financial Compliance Certificate
This Certificate is delivered in accordance with the provisions of
Section 8.3.A(c) of that Participation Agreement dated as of [_________], 1999
(as amended, modified, extended, supplemented, restated and/or replaced from
time to time, the "Participation Agreement") among the various parties thereto
from time to time, as the Lessees and as the Construction Agents, First Security
Bank, National Association, as the Owner Trustee, the various banks and other
lending institutions which are parties thereto from time to time, as holders,
the various banks and other lending institutions which are parties thereto from
time to time, as lenders, the Agent. Capitalized terms used herein but not
otherwise defined herein shall have the meanings set forth therefor in the
Participation Agreement.
The undersigned, being an Executive Officer of Lessee hereby certifies,
in my official capacity and not in my individual capacity, that:
(a) the financial statements accompanying this Certificate fairly
present the financial condition of the parties covered by such financial
statements in all material respects;
(b) the sum of consolidated EBITDA for the four immediately preceding
fiscal quarters is __________;
(c) the ratio of Consolidated Funded Senior Debt, as of the date of
determination, to EBITDA for the four immediately preceding fiscal quarters is
______:1.00;
(d) Total Consolidated Funded Debt, as of the date of determination, is
__________% of Book Capitalization, as of the date of determination.
(e) the Quick Ratio, computed in accordance with Section 8.3A(j) at the
end of the most recent fiscal quarter of the Participation Agreement is
______:1.00;
(f) the Consolidated Interest Coverage Ratio at the end of the most
recent fiscal quarter is ______:1.00;
(g) the Consolidated Total Leverage Ratio at the end of the most recent
fiscal quarter is ______:1.00;
(h) the Consolidated Net Worth at the end of the most recent fiscal
quarter is ____________;
(i) the aggregate Capital Expenditure for the fiscal year ending is
___________.
K-1
<PAGE> 134
(j) during the period covered by such financial statements, Lessee
observed or performed all of their covenants and other agreements in all
material respects, and satisfied in all material respects every material
condition, contained in the Operative Agreements to be observed, performed or
satisfied by them; and
(k) no Default or Event of Default exists.
This the _______________ day of ________________________, 199_.
RF MICRO DEVICES, INC.
By: ___________________________________
Name: _________________________________
Title: ________________________________
K-2
<PAGE> 135
- - --------------------------------------------------------------------------------
Appendix A
Rules of Usage and Definitions
- - --------------------------------------------------------------------------------
I. Rules of Usage
The following rules of usage shall apply to this Appendix A and the Operative
Agreements (and each appendix, schedule, exhibit and annex to the foregoing)
unless otherwise required by the context or unless otherwise defined therein:
(a) Except as otherwise expressly provided, any definitions set forth
herein or in any other document shall be equally applicable to the singular and
plural forms of the terms defined.
(b) Except as otherwise expressly provided, references in any document
to articles, sections, paragraphs, clauses, annexes, appendices, schedules or
exhibits are references to articles, sections, paragraphs, clauses, annexes,
appendices, schedules or exhibits in or to such document.
(c) The headings, subheadings and table of contents used in any
document are solely for convenience of reference and shall not constitute a part
of any such document nor shall they affect the meaning, construction or effect
of any provision thereof.
(d) References to any Person shall include such Person, its successors,
permitted assigns and permitted transferees.
(e) Except as otherwise expressly provided, reference to any agreement
means such agreement as amended, modified, extended, supplemented, restated
and/or replaced from time to time in accordance with the applicable provisions
thereof.
(f) Except as otherwise expressly provided, references to any law
includes any amendment or modification to such law and any rules or regulations
issued thereunder or any law enacted in substitution or replacement therefor.
(g) When used in any document, words such as "hereunder", "hereto",
"hereof" and "herein" and other words of like import shall, unless the context
clearly indicates to the contrary, refer to the whole of the applicable document
and not to any particular article, section, subsection, paragraph or clause
thereof.
(h) References to "including" means including without limiting the
generality of any description preceding such term and for purposes hereof the
rule of ejusdem generis shall not be
<PAGE> 136
applicable to limit a general statement, followed by or referable to an
enumeration of specific matters, to matters similar to those specifically
mentioned.
(i) [INTENTIONALLY RESERVED]
(j) Each of the parties to the Operative Agreements and their counsel
have reviewed and revised, or requested revisions to, the Operative Agreements,
and the usual rule of construction that any ambiguities are to be resolved
against the drafting party shall be inapplicable in the construction and
interpretation of the Operative Agreements and any amendments or exhibits
thereto.
(k) Capitalized terms used in any Operative Agreements which are not
defined in this Appendix A but are defined in another Operative Agreement shall
have the meaning so ascribed to such term in the applicable Operative Agreement.
II. Definitions
"ABR" shall mean, for any day, a rate per annum equal to the greater of
(a) the Prime Lending Rate in effect on such day, and (b) the Federal Funds
Effective Rate in effect on such day plus one-half of one percent (0.5%). For
purposes hereof: "Prime Lending Rate" shall mean the rate announced by the Agent
from time to time as its prime lending rate as in effect from time to time. The
Prime Lending Rate is a reference rate and is one of several interest rate bases
used by the Agent and does not necessarily represent the lowest or most
favorable rate offered by the Agent actually charged to any customer. Any Lender
may make commercial loans or other loans at rates of interest at, above or below
the Prime Lending Rate. The Prime Lending Rate shall change automatically and
without notice from time to time as and when the prime lending rate of the Agent
changes. "Federal Funds Effective Rate" shall mean, for any period, a
fluctuating interest rate per annum equal for each day during such period to the
weighted average of the rates on overnight Federal funds transactions with
members or 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 which is a Business Day, the average of the
quotations for such day on such transactions received by the Agent from three
(3) Federal funds brokers of recognized standing selected by it. Any change in
the ABR due to a change in the Prime Lending Rate or the Federal Funds Effective
Rate shall be effective as of the opening of business on the effective day of
such change in the Prime Lending Rate or the Federal Funds Effective Rate,
respectively.
"ABR Holder Advance" shall mean a Holder Advance bearing a Holder Yield
based on the ABR.
"ABR Loans" shall mean Loans the rate of interest applicable to which
is based upon the ABR.
Appendix A-2
<PAGE> 137
"Acceleration" shall have the meaning given to such term in Section 6
of the Credit Agreement.
"Accounts" shall have the meaning given to such term in Section 1 of
the Security Agreement.
"Acquisition Advance" shall have the meaning given to such term in
Section 5.3 of the Participation Agreement.
"Acquisition Loan" shall mean any Loan made in connection with an
Acquisition Advance.
"Additional Collateral" shall mean the assets of the Lessee pledged by
the Lessee to secure the obligations pursuant to the terms of the Lessee
Security Agreement, including without limitation, such assets pledged pursuant
to 8.3(r) or 8.3(s).
"Advance" shall mean a Construction Advance or an Acquisition Advance.
"Affiliate" shall mean, with respect to any Person, any Person or group
acting in concert in respect of the Person in question that, directly or
indirectly, controls or is controlled by or is under common control with such
Person.
"After Tax Basis" shall mean, with respect to any payment to be
received, the amount of such payment increased so that, after deduction of the
amount of all taxes required to be paid by the recipient calculated at the then
maximum marginal rates generally applicable to Persons of the same type as the
recipients with respect to the receipt by the recipient of such amounts (less
any tax savings realized as a result of the payment of the indemnified amount),
such increased payment (as so reduced) is equal to the payment otherwise
required to be made.
"Agency Agreement" shall mean the Amended, Restated and Replacement
Agency Agreement, dated on or about the Initial Closing Date between the
Construction Agent and the Lessor.
"Agency Agreement Event of Default" shall mean an "Event of Default" as
defined in Section 5.1 of the Agency Agreement.
"Agent" shall mean First Union National Bank, as agent for the Lenders
pursuant to the Credit Agreement, or any successor agent appointed in accordance
with the terms of the Credit Agreement and respecting the Security Documents,
for the Lenders and the Holders, to the extent of their interests.
"Applicable Percentage" shall mean for any day, the rate per annum set
forth below opposite the applicable Consolidated Total Funded Debt to Book
Capitalization then in effect, it being understood that the Applicable
Percentage for (i) ABR Loans shall be the percentage set forth under the column
"ABR Loans", (ii) Eurodollar Loans shall be the percentage set forth
Appendix A-3
<PAGE> 138
under the column "Eurodollar Loans", (iii) ABR Holder Advances shall be the
percentage set forth under the column "ABR Holder Advances", (iv) Eurodollar
Holder Advances shall be the percentage set forth under the column "Eurodollar
Holder Advances", and (v) the Unused Fee shall be the percentage set forth under
the applicable column, based on the percentage of Total Utilization each,
labeled "Unused Fee":
<TABLE>
<CAPTION>
=====================================================================================================================
Funded Debt to Eurodollar Eurodollar ABR Loans ABR Holder Unused Fee Unused Fee
Pricing Book Loans Holder Advances When Total When Total
Level Capitalization Advances Utilization is Utilization is
Less Than or Greater Than
Equal to 25% 25% of the
of the Total Total
Commitments Commitments
- - ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
greater than
I or = to 25% 2.250% 3.000% 1.000% 1.750% 0.750% 0.500%
- - ---------------------------------------------------------------------------------------------------------------------
greater than
II or = to 20% 2.000% 2.750% 0.750% 1.500% 0.750% 0.500%
- - ---------------------------------------------------------------------------------------------------------------------
greater than
III or = to 15% 1.750% 2.500% 0.500% 1.250% 0.625% 0.375%
- - ---------------------------------------------------------------------------------------------------------------------
less than
IV or = to 15% 1.500% 2.250% 0.250% 1.000% 0.625% 0.375%
=====================================================================================================================
</TABLE>
The Applicable Percentage shall be determined and adjusted quarterly on
the date (each a "Rate Determination Date") five (5) Business Days
after the date by which each annual and quarterly compliance
certificate and related financial statements and information are
required in accordance with the provisions of Sections 8.3.A(a) - (c)
of the Participation Agreement, as appropriate; provided that:
(i) the initial Applicable Percentages shall be based
on pricing level IV and shall remain in effect at such pricing
level until the first Rate Determination Date to occur in
connection with the delivery of the quarterly financial
statements and appropriate compliance certificate for the
fiscal quarter ending December 25, 1999, and
(ii) notwithstanding the foregoing, in the event an
annual or quarterly compliance certificate and related
financial statements and information are not delivered timely
to the Agent in accordance with Section 12.2 of the
Participation Agreement by the date required by Section
8.3.A(a) - (c) of the Participation Agreement, as appropriate,
the Applicable Percentages shall be based on pricing level I
until such time as an appropriate compliance certificate and
related financial statements and information are delivered,
whereupon the applicable pricing level shall be adjusted based
on the information contained in such compliance certificate
and related financial statements and information.
Subject to the qualifications set forth above, each Applicable
Percentage shall be effective from a Rate Determination Date until the
next such Rate Determination Date. The Agent shall determine the
appropriate Applicable Percentages in the pricing matrix promptly upon
receipt of and based on the quarterly or annual compliance certificate
and related
Appendix A-4
<PAGE> 139
financial information and shall promptly notify the Lessee, the Lenders
and the Holders of any change thereof. Such determinations by the Agent
shall be conclusive absent manifest error. Adjustments in the
Applicable Percentages shall be effective as to existing Loans and
Holder Advances as well as new Loans and Holder Advances made
thereafter.
"Appraisal" shall mean, with respect to any Property, an appraisal to
be delivered in connection with the Participation Agreement or in accordance
with the terms of the Lease, in each case prepared by a reputable appraiser
reasonably acceptable to the Agent, which in the judgment of counsel to the
Agent, complies with all of the provisions of the Financial Institutions Reform,
Recovery and Enforcement Act of 1989, as amended, the rules and regulations
adopted pursuant thereto, and all other applicable Legal Requirements.
"Appraisal Procedure" shall have the meaning given such term in Section
22.4 of the Lease.
"Approved State" shall mean each of the following: North Carolina and
any other state within the continental United States proposed by the Lessee and
consented to in writing by the Agent.
"Appurtenant Rights" shall mean (a) all agreements, easements, rights
of way or use, rights of ingress or egress, privileges, appurtenances,
tenements, hereditaments and other rights and benefits at any time belonging or
pertaining to the Land underlying the Improvements or the Improvements,
including without limitation the use of any streets, ways, alleys, vaults or
strips of land adjoining, abutting, adjacent or contiguous to the Land and (b)
all permits, licenses and rights, whether or not of record, appurtenant to such
Land or the Improvements.
"Asset Disposition" shall mean and include the sale, lease or other
disposition of any property or asset (including the capital stock of a
Subsidiary) by any member of the Consolidated Group; but for purposes hereof
shall not include, in any event, (A) the sale of inventory in the ordinary
course of business, (B) the sale or disposition of machinery and equipment no
longer used or useful in the conduct of business or (c) a sale, lease, transfer
or disposition of property or assets to any member of the Consolidated Group.
"Assignment and Acceptance" shall mean the Assignment and Acceptance in
the form attached to the Credit Agreement as Exhibit B.
"Available Commitment" shall mean, as to any Lender at any time, an
amount equal to the excess, if any, of (a) the amount of such Lender's
Commitment over (b) the aggregate principal amount of all Loans made by such
Lender as of such date after giving effect to Section 5.2(d) of the
Participation Agreement (but without giving effect to any other repayments or
prepayments of any Loans hereunder).
"Available Holder Commitments" shall mean an amount equal to the
excess, if any, of (a) the aggregate amount of the Holder Commitments over (b)
the aggregate amount of the Holder
Appendix A-5
<PAGE> 140
Advances made since the Initial Closing Date after giving effect to Section
5.2(d) of the Participation Agreement (but without giving effect to any other
repayments or prepayments of any Holder Advances).
"Bankruptcy Code" shall mean Title 11 of the U. S. Code entitled
"Bankruptcy," as now or hereafter in effect or any successor thereto.
"Basic Documents" shall mean the following: the Participation
Agreement, the Agency Agreement, the Trust Agreement, the Certificates, the
Credit Agreement, the Notes, the Lease and the Security Agreement.
"Basic Rent" shall mean, the sum of (a) the Loan Basic Rent and (b) the
Lessor Basic Rent, calculated as of the applicable date on which Basic Rent is
due.
"Benefitted Lender" shall have the meaning specified in Section 9.10(a)
of the Credit Agreement.
"Bill of Sale" shall mean a Bill of Sale regarding Equipment in form
and substance satisfactory to the Agent.
"Board" shall mean the Board of Governors of the Federal Reserve System
of the United States (or any successor).
"Book Capitalization" shall mean the sum of Consolidated Total Funded
Debt and the consolidated net shareholders equity of the Lessee and its
Subsidiaries as such amount is determined in accordance with GAAP.
"Borrower" shall mean the Owner Trustee, not in its individual capacity
but as Borrower under the Credit Agreement.
"Borrowing Date" shall mean any Business Day specified in a notice
delivered pursuant to Section 2.3 of the Credit Agreement as a date on which the
Lessor requests the Lenders to make Loans thereunder.
"Budgeted Total Property Cost" shall mean, at any date of determination
with respect to any Construction Period Property, an amount equal to the
aggregate amount which the Construction Agent in good faith expects to be
expended in order to achieve Completion with respect to such Property.
"Business Day" shall mean a day other than a Saturday, Sunday or other
day on which commercial banks in North Carolina or any other states from which
the Agent, any Lender or any Holder funds or engages in administrative
activities with respect to the transactions under the Operative Agreements are
authorized or required by law to close; provided, however, that when used in
connection with a Eurodollar Loan, the term "Business Day" shall also exclude
any day on which banks are not open for dealings in dollar deposits in the
London interbank market.
Appendix A-6
<PAGE> 141
"Capitalized Lease" shall mean, as applied to any Person, any lease of
property (whether real, personal, tangible, intangible or mixed of such Person)
by such Person as the lessee which would be capitalized on a balance sheet of
such Person prepared in accordance with GAAP.
"Capital Stock" shall mean any nonredeemable capital stock of the
Lessee or any of its Subsidiaries, whether common or preferred.
"Cash Equivalents" shall mean (a) securities issued or directly and
fully guaranteed or insured by the United States or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States is pledged in support thereof) having maturities of not more than twelve
months from the date of acquisition, (b) Dollar denominated time deposits and
certificates of deposit of (i) any Lender or any Holder, or (ii) any domestic
commercial bank of recognized standing (y) having capital and surplus in excess
of $500,000,000 and (z) whose short-term commercial paper rating from S&P is at
least A-1 or the equivalent thereof or from Moody's is at least P-1 or the
equivalent thereof (any such bank being an "Approved Bank"), in each case with
maturities of not more than 270 days from the date of acquisition, (c)
commercial paper and variable or fixed rate notes issued by any Approved Bank
(or by the parent company thereof) or any variable rate notes issued by, or
guaranteed by, any domestic corporation rated A-1 (or the equivalent thereof) or
better by S&P or P-1 (or the equivalent thereof) or better by Moody's and
maturing within six months of the date of acquisition, (d) repurchase agreements
entered into by a Person with a bank or trust company (including any Lender or
any Holder) or recognized securities dealer having capital and surplus in excess
of $500,000,000 for direct obligations issued by or fully guaranteed by the
United States in which such Person shall have a perfected first priority
security interest (subject to no other Liens) and having, on the date of
purchase thereof, a fair market value of at least 100% of the amount of the
repurchase obligations, (e) obligations of any State of the United States or any
political subdivision thereof, the interest with respect to which is exempt from
federal income taxation under Section 103 of the Code, having a long term rating
of at least AA- or Aa-3 by S&P or Moody's, respectively, and maturing within
three years from the date of acquisition thereof, (f) Investments in municipal
auction preferred stock (i) rated AAA (or the equivalent thereof) or better by
S&P or Aaa (or the equivalent thereof) or better by Moody's and (ii) with
dividends that reset at least once every 365 days, (g) Investments, classified
in accordance with GAAP as current assets, in money market investment programs
registered under the Investment Company Act of 1940, as amended, which are
administered by reputable financial institutions having capital of at least
$100,000,000 and the portfolios of which are limited to Investments of the
character described in the foregoing subdivisions (a) through (f) and (h) other
Cash Equivalents, if any, as determined in accordance with GAAP.
"Casualty" shall mean any damage or destruction of all or any portion
of the Property as a result of a fire or other casualty.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, 42 U.S.C. ss. 9601 et seq., as amended
by the Superfund Amendments and Reauthorization Act of 1986.
Appendix A-7
<PAGE> 142
"Certificate" shall mean a Certificate in favor of each Holder
regarding the Holder Commitment of such Holder issued pursuant to the terms and
conditions of the Trust Agreement in favor of each Holder.
"Chattel Paper" shall have the meaning given to such term in Section 1
of the Security Agreement.
"Claims" shall mean any and all obligations, liabilities, losses,
actions, suits, penalties, claims, demands, costs and expenses (including
without limitation reasonable attorney's fees and expenses) of any nature
whatsoever.
"Closing Date" shall mean the Initial Closing Date and each Property
Closing Date.
"Code" shall mean the Internal Revenue Code of 1986 together with rules
and regulations promulgated thereunder, as amended from time to time, or any
successor statute thereto.
"Collateral" shall mean all assets of the Lessor, the Construction
Agent and the Lessee, now owned or hereafter acquired, upon which a Lien is
purported to be created by one or more of the Security Documents.
"Commencement Date" shall have the meaning specified in Section 2.2 of
the Lease.
"Commitment" shall mean, as to any Lender, the obligation of such
Lender to make the portion of the Loans to the Lessor in an aggregate principal
amount at any time outstanding not to exceed the amount set forth opposite such
Lender's name on Schedule 2.1 of the Credit Agreement, as such amount may be
increased or reduced from time to time in accordance with the provisions of the
Operative Agreements.
"Commitment Percentage" shall mean, as to any Lender at any time, the
percentage which such Lender's Commitment then constitutes of the aggregate
Commitments (or, at any time after the Commitments shall have expired or
terminated, the percentage which the aggregate principal amount of such Lender's
Loans then outstanding constitutes of the aggregate principal amount of all of
the Loans then outstanding), and such Commitment Percentage shall take into
account both the Lender's Tranche A Commitment and the Lender's Tranche B
Commitment.
"Commitment Period" shall mean the period from and including the
Initial Closing Date to and including the Construction Period Termination Date,
or such earlier date as the Commitments shall terminate as provided in the
Credit Agreement or the Holder Commitment shall terminate as provided in the
Trust Agreement.
"Completion" shall mean, with respect to a Property, such time as the
acquisition, installation, testing and final completion of the Improvements
including, without limitation, the Equipment on such Property has been achieved
in accordance with the Plans and Specifications, the Agency Agreement and/or the
Lease, and in compliance with all Legal Requirements and Insurance Requirements
and a certificate of occupancy has been issued with respect to such
Appendix A-8
<PAGE> 143
Property by the appropriate governmental entity (except if non-compliance,
individually or in the aggregate, shall not have and could not reasonably be
expected to have a Material Adverse Effect). If the Lessor purchases a Property
that includes existing Improvements that are to be immediately occupied by the
Lessee without any improvements financed pursuant to the Operative Agreements,
the date of Completion for such Property shall be the Property Closing Date.
"Completion Date" shall mean, with respect to a Property, the date on
which Completion for such Property including, without limitation, installation
and testing of the Equipment has occurred.
"Condemnation" shall mean any taking or sale of the use, access,
occupancy, easement rights or title to any Property or any part thereof, wholly
or partially (temporarily or permanently), by or on account of any actual or
threatened eminent domain proceeding or other taking of action by any Person
having the power of eminent domain (including without limitation an action by a
Governmental Authority to change the grade of, or widen the streets adjacent to,
any Property or alter the pedestrian or vehicular traffic flow to any Property
so as to result in a change in access to such Property, or by or on account of
an eviction by paramount title or any transfer made in lieu of any such
proceeding or action).
"Consolidated Capital Expenditures" means, for any period for the
Consolidated Group, without duplication, all expenditures (whether paid in cash
or other consideration) during such period that, in accordance with GAAP, are or
should be included in additions to property, plant and equipment or similar
items reflected in the consolidated statement of cash flows for such period.
"Consolidated EBIT" shall mean for any period for the Consolidated
Group, the sum of (i) Consolidated Net Income for such period plus (ii) to the
extent deducted in determining net income for such period, (A) Consolidated
Interest Expense and (B) taxes in each case on a consolidated basis determined
in accordance with GAAP. Except as otherwise expressly provided, the applicable
period shall be for the four consecutive fiscal quarters ending as of the date
of determination.
"Consolidated EBITDA" shall mean for any period for the Consolidated
Group, the sum of (i) Consolidated Net Income for such period plus (ii) to the
extent deducted in determining net income for such period, (A) Consolidated
Interest Expense, (B) taxes and (C) depreciation and amortization, in each case
on a consolidated basis determined in accordance with GAAP. Except as otherwise
expressly provided, the applicable period shall be for the four consecutive
fiscal quarters ending as of the date of determination.
"Consolidated Funded Senior Debt" shall mean Funded Debt of the
Consolidated Group other than Subordinated Debt, determined on a consolidated
basis in accordance with GAAP.
"Consolidated Group" shall mean the Lessee and its consolidated
Subsidiaries, as determined in accordance with GAAP.
Appendix A-9
<PAGE> 144
"Consolidated Interest Coverage Ratio" shall mean as of the last day of
each fiscal quarter, the ratio of Consolidated EBIT plus Consolidated Rent
Expense for the period of four consecutive fiscal quarters ending as of such day
to Consolidated Interest Expense plus Consolidated Rent Expense for the period
of four consecutive fiscal quarters ending as of such day.
"Consolidated Interest Expense" shall mean, for any period for the
Consolidated Group, all interest expense, including the amortization of debt
discount and premium and the interest component under Capital Leases, in each
case on a consolidated basis determined in accordance with GAAP applied on a
consolidated basis. Except as expressly provided otherwise, the applicable
period shall be for the four consecutive fiscal quarters ending as of the date
of determination.
"Consolidated Net Income" shall mean, for any period for the
Consolidated Group, net income (or loss) determined on a consolidated basis in
accordance with GAAP. Except as otherwise expressly provided, the applicable
period shall be for the four consecutive fiscal quarters ending as of the date
of determination.
"Consolidated Net Worth" means, as of any date for the Consolidated
Group, consolidated shareholder's equity or net worth as determined in
accordance with GAAP.
"Consolidated Rent Expense" shall mean, for any period, with respect to
the Consolidated Group, all rent payable under Operating Leases (whether a lease
of real property, personal property or mixed), as determined in accordance with
GAAP.
"Consolidated Tangible Net Worth" shall mean, as of any date with
respect to the Consolidated Group on a consolidated basis, Consolidated Net
Worth minus intangible assets as determined in accordance with GAAP.
"Consolidated Total Funded Debt" means Funded Debt of the Consolidated
Group determined on a consolidated basis in accordance with GAAP.
"Consolidated Total Leverage Ratio" means the ratio of Consolidated
Total Funded Debt on such day to Consolidated EBITDA for the period of four
consecutive fiscal quarters ending as of such day.
"Consolidated Subsidiary" shall mean, as to any Person, any Subsidiary
of such Person which under the rules of GAAP consistently applied should have
its financial results consolidated with those of such Person for purposes of
financial accounting statements.
"Construction Advance" shall mean an advance of funds to pay Property
Costs pursuant to Section 5.4 of the Participation Agreement.
"Construction Agent" shall mean RF Micro Devices, Inc., a North
Carolina corporation, as the construction agent under the Agency Agreement.
Appendix A-10
<PAGE> 145
"Construction Budget" shall mean the cost of acquisition, installation,
testing, constructing and developing any Property as determined by the
Construction Agent in its reasonable, good faith judgment.
"Construction Commencement Date" shall mean, with respect to
Improvements, the date on which construction of such Improvements commences
pursuant to the Agency Agreement.
"Construction Contract" shall mean any contract entered into between
the Construction Agent or the Lessee with a Contractor for the construction of
Improvements or any portion thereof on the Property.
"Construction Loan" shall mean any Loan made in connection with a
Construction Advance.
"Construction Loan Property Cost" shall mean with respect to each
Construction Period Property at the date of determination, an amount equal to
(a) the aggregate principal amount of Construction Loans made on or prior to
such date with respect to the Property minus (b) the aggregate principal amount
of prepayments or repayments of the Loans allocated to reduce the Construction
Loan Property Cost of such Property pursuant to Section 2.6(c) of the Credit
Agreement.
"Construction Period" shall mean, with respect to a Property, the
period commencing on the Construction Commencement Date for such Property and
ending on the Completion Date for such Property.
"Construction Period Property" means, at any date of determination, any
Property as to which the Rent Commencement Date has not occurred on or prior to
such date.
"Construction Period Termination Date" shall mean (a) the earlier of
(i) the date that the Commitments have been terminated in their entirety in
accordance with the terms of Section 2.5(a) of the Credit Agreement, or (ii)
February 13, 2001 or (b) such later date as shall be agreed to by the Majority
Secured Parties.
"Contractor" shall mean each entity with whom the Construction Agent or
the Lessee contracts to construct any Improvements or any portion thereof on the
Property.
"Controlled Group" shall mean all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Lessee, are treated as a single employer
under Section 414 of the Code.
"Co-Owner Trustee" shall have the meaning specified in Section 9.2 of
the Trust Agreement.
Appendix A-11
<PAGE> 146
"Credit Agreement" shall mean the Amended, Restated and Replacement
Credit Agreement, dated on or about the Initial Closing Date, among the Lessor,
the Agent and the Lenders, as specified therein.
"Credit Agreement Default" shall mean any event or condition which,
with the lapse of time or the giving of notice, or both, would constitute a
Credit Agreement Event of Default.
"Credit Agreement Event of Default" shall mean any event or condition
defined as an "Event of Default" in Section 6 of the Credit Agreement.
"Credit Documents" shall mean the Participation Agreement, the Credit
Agreement, the Notes and the Security Documents.
"Deed" shall mean a warranty deed regarding the Land and/or
Improvements in form and substance satisfactory to the Agent.
"Default" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"Defaulting Holder" shall have the meaning given to such term in
Section 12.4 of the Participation Agreement.
"Defaulting Lender" shall have the meaning given to such term in
Section 12.4 of the Participation Agreement.
"Deficiency Balance" shall have the meaning given in Section 22.1(b) of
the Lease Agreement.
"Disputes" shall mean, upon demand of any party to the Participation
Agreement and/or any other Operative Agreement, whether made before or after
institution of a judicial proceeding, any claim or controversy arising out of,
or relating to the Operative Agreements between or among the parties to the
Participation Agreement.
"Documents" shall have the meaning given to such term in Section 1 of
the Security Agreement.
"Dollars" and "$" shall mean dollars in lawful currency of the United
States of America.
"Domestic Subsidiary" means any direct or indirect Subsidiary of the
Lessee which is incorporated or organized under the laws of any State of the
United States or the District of Columbia.
"Election Date" shall have the meaning given to such term in Section
20.1 of the Lease.
"Election Notice" shall have the meaning given to such term in Section
20.1 of the Lease.
Appendix A-12
<PAGE> 147
"Eligible Investments" shall mean Investments which are (i) cash and
Cash Equivalents; (ii) accounts receivable created, acquired or made in the
ordinary course of business and payable or dischargeable in accordance with
customary trade terms; (iii) Investments consisting of capital stock,
obligations, securities or other property received in settlement of accounts
receivable (created in the ordinary course of business) from bankrupt obligors;
(iv) an amount, at all times, not in excess of $25,000,000.00 Investment in
companies in the same lines of business as Lessee; and (v) an amount, at all
times, not in excess of $7,000,000.00 of Investments in wholly-owned Foreign
Subsidiaries.
"Employee Benefit Plan" or "Plan" shall mean an employee benefit plan
(within the meaning of Section 3(3) of ERISA, including without limitation any
Multiemployer Plan), or any "plan" as defined in Section 4975(e)(1) of the Code
and as interpreted by the Internal Revenue Service and the Department of Labor
in rules, regulations, releases or bulletins in effect on any Closing Date.
"Environmental Claims" shall mean any investigation, notice, violation,
demand, allegation, action, suit, injunction, judgment, order, consent decree,
penalty, fine, lien, proceeding, or claim (whether administrative, judicial, or
private in nature) arising (a) pursuant to, or in connection with, an actual or
alleged violation of, any Environmental Laws, (b) in connection with any
Hazardous Substance, (c) from any abatement, removal, remedial, corrective, or
other response action in connection with a Hazardous Substance, Environmental
Law, or other order of a Tribunal or (d) from any actual damage, injury, or harm
to the environment.
"Environmental Laws" shall mean any Law, permit, consent, approval,
license, award, or other authorization or requirement of any Tribunal relating
to emissions, discharges, releases, threatened releases of any Hazardous
Substance into ambient air, surface water, ground water, publicly owned
treatment works, septic system, or land, or otherwise relating to the handling,
storage, treatment, generation, use, or disposal of Hazardous Substances,
pollution or to the protection of health or the environment, including without
limitation CERCLA, the Resource Conservation and Recovery Act, 42 U.S.C. ss.
6901, et seq., and state statutes analogous thereto.
"Environmental Violation" shall mean any activity, occurrence or
condition that violates or threatens (if the threat requires remediation under
any Environmental Law and is not remediated during any grace period allowed
under such Environmental Law) to violate or results in or threatens (if the
threat requires remediation under any Environmental Law and is not remediated
during any grace period allowed under such Environmental Law) to result in
noncompliance with any Environmental Law.
"Equipment" shall mean the equipment referenced in Schedule 2 to the
Participation Agreement, including without limitation, equipment, apparatus,
furnishings, fittings and personal property of every kind and nature whatsoever
purchased, leased or otherwise acquired using the proceeds of the Loans or the
Holder Advances by the Construction Agent, the Lessee or the Lessor and all
improvements and modifications thereto and replacements thereof, whether or not
Appendix A-13
<PAGE> 148
now owned or hereafter acquired or now or subsequently attached to, contained in
or used or usable in any way in connection with any operation of any
Improvements, including but without limiting the generality of the foregoing,
all equipment described in the Appraisal including without limitation all
heating, electrical, and mechanical equipment, lighting, switchboards, plumbing,
ventilation, air conditioning and air-cooling apparatus, refrigerating, and
incinerating equipment, escalators, elevators, loading and unloading equipment
and systems, cleaning systems (including without limitation window cleaning
apparatus), telephones, communication systems (including without limitation
satellite dishes and antennae), televisions, computers, sprinkler systems and
other fire prevention and extinguishing apparatus and materials, security
systems, motors, engines, machinery, pipes, pumps, tanks, conduits, appliances,
fittings and fixtures of every kind and description.
"Equipment Schedule" shall mean (a) each Equipment Schedule attached to
the applicable Requisition and (b) each Equipment Schedule attached to the
applicable Lease Supplement.
"Equity Issuance" shall mean any issuance, other than in connection
with exercise by a present or former employee, officer or director under a stock
incentive plan, stock option plan or other equity-based compensation plan or
arrangement, by any member of the Consolidated Group to any Person other than to
the Lessee of (a) shares of its Capital Stock, (b) any shares of its Capital
Stock pursuant to the exercise of options or warrants, (c) any shares of its
Capital Stock pursuant to the conversion of any debt securities to equity or (d)
any options or warrants relating to its Capital Stock. The term "Equity
Issuance" shall not include any Asset Disposition.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended, and any successor statute thereto, as interpreted by the rules and
regulations thereunder, all as the same may be in effect from time to time.
References to sections of ERISA shall be construed also to refer to any
successor sections.
"ERISA Affiliate" shall mean an entity which is under common control
with Lessee within the meaning of Section 4001(a)(14) of ERISA, or is a member
of a group which includes Lessee and which is treated as a single employer under
Section 414(b) or (c) of the Code.
"ERISA Event" shall mean (i) with respect to any Plan, the occurrence
of a Reportable Event or the substantial cessation of operations (within the
meaning of Section 4062(e) of ERISA); (ii) the withdrawal by Lessee, any
Subsidiary of Lessee or any ERISA Affiliate from a Multiple Employer Plan during
a plan year in which it was a substantial employer (as such term is defined in
Section 4001(a)(2) of ERISA), or the termination of a Multiple Employer Plan;
(iii) the distribution of a notice of intent to terminate or the actual
termination of a Plan pursuant to Section 4041(a)(2) or 4041A of ERISA; (iv) the
institution of proceedings to terminate or the actual termination of a Plan by
the PBGC under Section 4042 of ERISA; (v) any event or condition which would
reasonably be expected to constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Plan; (vi)
the complete or partial withdrawal of Lessee, any Subsidiary of Lessee or any
ERISA Affiliate from a Multiemployer Plan; (vii) the conditions for imposition
of a lien under Section 302(f) of ERISA exist with respect to any Plan; or
Appendix A-14
<PAGE> 149
(viii) the adoption of an amendment to any Plan requiring the provision of
security to such Plan pursuant to Section 307 of ERISA.
"Eurocurrency Reserve Requirements" shall mean for any day as applied
to a Eurodollar Loan, the aggregate (without duplication) of the maximum rates
(expressed as a decimal) of reserve requirements in effect on such day
(including without limitation basic, supplemental, marginal and emergency
reserves under any regulations of the Board or other Governmental Authority
having jurisdiction with respect thereto) dealing with reserve requirements
prescribed on eurocurrency funding (currently referred to as "Eurocurrency
liabilities" in Regulation D) maintained by a member bank of the Federal Reserve
System.
"Eurodollar Holder Advance" shall mean a Holder Advance bearing a
Holder Yield based on the Eurodollar Rate.
"Eurodollar Loans" shall mean Loans the rate of interest applicable to
which is based upon the Eurodollar Rate.
"Eurodollar Rate" shall mean for the Interest Period for each
Eurodollar Loan or Eurodollar Holder Advance comprising part of the same
borrowing or advance (including without limitation conversions, extensions and
renewals), a per annum interest rate equal to the per annum rate determined by
the Agent on the basis of the offered rates for deposits in dollars for a period
of time corresponding to such Interest Period (and commencing on the first day
of such Interest Period), reported on Telerate page 3750 as of 11:00 a.m.
(London time) two (2) Business Days before the first day of such Interest
Period. In the event no such offered rates appear on Telerate page 3750,
"Eurodollar Rate" shall mean for the Interest Period for each Eurodollar Loan or
Eurodollar Holder Advance comprising part of the same borrowing or advance
(including without limitation conversions, extensions and renewals), a per annum
interest rate equal to the per annum rate determined by the Agent on the basis
of the offered rates for deposits in dollars for a period of time corresponding
to such Interest Period (and commencing on the first day of such Interest
Period), which appear on the Reuters Screen LIBO Page as of 11:00 a.m. (London
time) two (2) Business Days before the first day of such Interest Period
(provided that if at least two (2) such offered rates appear on the Reuters
Screen LIBO Page, the rate in respect of such Interest Period will be the
arithmetic mean of such offered rates). As used herein, "Reuters Screen LIBO
Page" means the display designated as page "LIBO" on the Reuters Monitor Money
Rates Service (or such other page as may replace the LIBO page on that service
for the purpose of displaying London interbank offered rates of major banks)
("RMMRS"). In the event the RMMRS is not then quoting such offered rates,
"Eurodollar Rate" shall mean for the Interest Period for each Eurodollar Loan or
Eurodollar Holder Advance comprising part of the same borrowing or advance
(including without limitation conversions, extensions and renewals), the average
(rounded upward to the nearest one-sixteenth (1/16) of one percent (1%)) per
annum rate of interest determined by the office of the Agent (each such
determination to be conclusive and binding) as of two (2) Business Days prior to
the first day of such Interest Period, as the effective rate at which deposits
in immediately available funds in U.S. dollars are being, have been, or would be
offered or quoted by the Agent to major banks in the applicable interbank market
for Eurodollar deposits at any time during the Business Day
Appendix A-15
<PAGE> 150
which is the second Business Day immediately preceding the first day of such
Interest Period, for a term comparable to such Interest Period and in the amount
of the requested Eurodollar Loan and/or Eurodollar Holder Advance. If no such
offers or quotes are generally available for such amount, then the Agent shall
be entitled to determine the Eurodollar Rate from another recognized service or
interbank quotation, or by estimating in its reasonable judgment the per annum
rate (as described above) that would be applicable if such quote or offers were
generally available.
"Event of Default" shall mean a Lease Event of Default, an Agency
Agreement Event of Default or a Credit Agreement Event of Default.
"Excepted Payments" shall mean:
(a) all indemnity payments (including without limitation
indemnity payments made pursuant to Section 11 of the Participation
Agreement), whether made by adjustment to Basic Rent or otherwise, to
which the Owner Trustee, any Holder or any of their respective
Affiliates, agents, officers, directors or employees is entitled;
(b) any amounts (other than Basic Rent or Termination Value)
payable under any Operative Agreement to reimburse the Owner Trustee,
any Holder or any of their respective Affiliates (including without
limitation the reasonable expenses of the Owner Trustee, the Trust
Company and the Holders incurred in connection with any such payment)
for performing or complying with any of the obligations of the Lessee
under and as permitted by any Operative Agreement;
(c) any amount payable to a Holder by any transferee of such
interest of a Holder as the purchase price of such Holder's interest in
the Trust Estate (or a portion thereof);
(d) any insurance proceeds (or payments with respect to risks
self-insured or policy deductibles) under liability policies other than
such proceeds or payments payable to the Agent or any Lender;
(e) any insurance proceeds under policies maintained by the
Owner Trustee or any Holder;
(f) Transaction Expenses or other amounts, fees, disbursements
or expenses paid or payable to or for the benefit of the Owner Trustee;
(g) any payments in respect of interest to the extent
attributable to payments referred to in clauses (a) through (f) above;
and
(h) payment obligations arising from any rights of either the
Owner Trustee or the Trust Company to demand, collect, sue for or
otherwise receive and enforce payment
Appendix A-16
<PAGE> 151
of any of the foregoing amounts, provided that such rights shall not
include the right to terminate the Lease.
"Excess Proceeds" shall mean the excess, if any, of the aggregate of
all awards, compensation or insurance proceeds payable in connection with a
Casualty or Condemnation over the Termination Value paid by the Lessee pursuant
to the Lease with respect to such Casualty or Condemnation.
"Exculpated Persons" shall mean the Trust Company (except with respect
to the representations and warranties and the other obligations of the Trust
Company pursuant to the Operative Agreements expressly undertaken in its
individual capacity, including without limitation the representations and
warranties of the Trust Company pursuant to Section 6.1 of the Participation
Agreement, the obligations of the Trust Company pursuant to Section 8.2 of the
Participation Agreement and the obligations of the Trust Company pursuant to the
Trust Agreement), the Holders (except with respect to the obligations of the
Holders pursuant to the Participation Agreement and the Trust Agreement
expressly undertaken in their respective individual capacities), their officers,
directors, shareholders and partners.
"Exempt Payments" shall have the meaning specified in Section 11.2(e)
of the Participation Agreement.
"Expiration Date" shall mean the last day of the Term; provided, in no
event shall the Expiration Date be later than November 13, 2004, unless such
later date has been expressly agreed to in writing by each of the Lessor, the
Lessee, the Agent, the Lenders and the Holders.
"Fair Market Sales Value" shall mean, with respect to any Property, the
amount, which in any event, shall not be less than zero (0), that would be paid
in cash in an arms-length transaction between an informed and willing purchaser
and an informed and willing seller, neither of whom is under any compulsion to
purchase or sell, respectively, such Property. Fair Market Sales Value of any
Property shall be determined based on the assumption that, except for purposes
of Section 17 of the Lease, such Property is in the condition and state of
repair required under Section 10.1 of the Lease and the Lessee is in compliance
with the other requirements of the Operative Agreements.
"Federal Funds Effective Rate" shall have the meaning given to such
term in the definition of ABR.
"Financing Parties" shall mean the Lessor, the Owner Trustee, in its
trust capacity, the Agent, the Holders and the Lenders.
"Fixtures" shall mean all fixtures relating to the Improvements,
including without limitation all components thereof, located in or on the
Improvements, together with all replacements, modifications, alterations and
additions thereto.
Appendix A-17
<PAGE> 152
"Force Majeure Event" shall mean any event beyond the control of the
Construction Agent, other than a Casualty or Condemnation, including without
limitation strikes, lockouts, adverse soil conditions, acts of God, adverse
weather conditions, inability to obtain labor or materials, governmental
activities, civil commotion and enemy action; but excluding any event, cause or
condition that results from the Construction Agent's financial condition.
"Foreign Subsidiary" means any direct or indirect Subsidiary of the
Lessee which is not a Domestic Subsidiary.
"Form 1001" shall have the meaning specified in Section 11.2(e) of the
Participation Agreement.
"Form 4224" shall have the meaning specified in Section 11.2(e) of the
Participation Agreement.
"Funded Debt" shall mean, with respect to any Person, without
duplication, (i) all obligations of such Person for borrowed money, (ii) all
obligations of such Person evidenced by bonds, debentures, notes or similar
instruments, or upon which interest payments are customarily made, (iii) all
obligations of such Person under conditional sale or other title retention
agreements relating to property purchased by such Person (other than customary
reservations or retentions of title under agreements with suppliers entered into
in the ordinary course of business), (iv) all obligations of such Person issued
or assumed as the deferred purchase price of property or services purchased by
such Person (other than trade debt incurred in the ordinary course of business
and due within six months of the incurrence thereof) which would appear as
liabilities on a balance sheet of such Person, (v) all Support Obligations of
such Person with respect to Funded Debt of another Person, (vi) the maximum
available amount of all standby letters of credit or acceptances issued or
created for the account of such Person, (vii) all Consolidated Total Funded Debt
of another Person secured by a Lien on any property of such Person, whether or
not such Consolidated Total Funded Debt has been assumed, provided that for
purposes hereof the amount of such Consolidated Total Funded Debt shall be
limited to the greater of (A) the amount of such Consolidated Total Funded Debt
as to which there is recourse to such Person and (B) the fair market value of
the property which is subject to such Lien, (viii) the outstanding attributed
principal amount under any securitization transaction, (ix) the principal
balance outstanding under any synthetic lease (including without limitation the
financing contemplated pursuant to the Operative Agreements), off-balance sheet
loan or similar off-balance sheet financing product to which such Person is a
party, where such transaction is considered borrowed money indebtedness for tax
purposes but is classified as an operating lease in accordance with GAAP. The
Funded Debt of any Person shall include the Funded Debt of any partnership or
joint venture in which such Person is a general partner or joint venturer, but
only to the extent to which there is recourse to such Person for the payment of
such Funded Debt, (x) all preferred stock or other ownership interests issued by
such Person and which by the terms thereof could be (at the request of the
holders thereof or otherwise) subject to mandatory sinking fund payments,
redemption or other acceleration, and (xi) all obligations of such Person to
repurchase any securities which repurchase obligation is related to the issuance
thereof, including, without limitation, obligations commonly known as residual
equity appreciation potential shares.
Appendix A-18
<PAGE> 153
"GAAP" shall mean generally accepted accounting principles set forth in
the opinions and pronouncements of the accounting principles board of the
American Institute of Certified Public Accountants, and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession, that are applicable to the circumstances as of the
date of determination.
"Governmental Action" shall mean all permits, authorizations,
registrations, consents, approvals, waivers, exceptions, variances, orders,
judgments, written interpretations, decrees, licenses, exemptions, publications,
filings, notices to and declarations of or with, or required by, any
Governmental Authority, or required by any Legal Requirement, and shall include,
without limitation, all environmental and operating permits and licenses that
are required for the full use, occupancy, zoning and operating of the Property.
"Governmental Authority" shall mean any nation or government, any state
or other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Ground Lease" shall mean a ground lease (in form and substance
satisfactory to the Agent) respecting any Property (a) owned by the Lessee (or a
parent corporation or any Subsidiary of the Lessee) and leased to the Lessor
where such lease has at least a ninety-nine (99) year term and payments set at
no more than $1.00 per year, or (b) where such lease is subject to such other
terms and conditions as are satisfactory to the Agent.
"Guarantor" means each Person which provides a guaranty of the
Obligations pursuant to a guaranty agreement in form and substance satisfactory
to the Agent in accordance with Section 8.3A(o) of the Participation Agreement.
"Hard Costs" shall mean all costs and expenses payable for supplies,
materials, labor and profit with respect to the Improvements under any
Construction Contract.
"Hazardous Substance" shall mean any of the following: (a) any
petroleum or petroleum product, explosives, radioactive materials, asbestos,
formaldehyde, polychlorinated biphenyls, lead and radon gas; (b) any substance,
material, product, derivative, compound or mixture, mineral, chemical, waste,
gas, medical waste, or pollutant, in each case whether naturally occurring,
man-made or the by-product of any process, that is defined by or listed pursuant
to any Environmental Laws.
"Holder Advance" shall mean any advance made by any Holder to the Owner
Trustee pursuant to the terms of the Trust Agreement or the Participation
Agreement.
"Holder Amount" shall mean as of any date, the aggregate amount of
Holder Advances made by each Holder to the Trust Estate pursuant to Section 2 of
the Participation Agreement
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and Section 3.1 of the Trust Agreement less any payments of any Holder Advances
received by the Holders pursuant to Section 3.4 of the Trust Agreement.
"Holder Commitments" shall mean the aggregate amount set forth in
Schedule I to the Trust Agreement, as such amount may be increased or reduced
from time to time in accordance with the provisions of the Operative Agreements;
provided, if there shall be more than one (1) Holder, the Holder Commitment of
each Holder shall be as set forth in Schedule I to the Trust Agreement as such
Schedule I may be amended and replaced from time to time.
"Holder Construction Property Cost" shall mean, with respect to each
Construction Period Property, at any date of determination, an amount equal to
the outstanding Holder Advances made with respect thereto under the Trust
Agreement.
"Holder Overdue Rate" shall mean the lesser of (a) the then current
rate of Holder Yield respecting the particular amount in question plus two
percent (2%) and (b) the highest rate permitted by applicable law.
"Holder Property Cost" shall mean with respect to a Property an amount
equal to the outstanding Holder Advances with respect thereto.
"Holder Unused Fee" shall have the meaning given to such term in
Section 7.4 of the Participation Agreement.
"Holder Yield" shall mean with respect to Holder Advances from time to
time either the Eurodollar Rate plus the Applicable Percentage or the ABR plus
the Applicable Percentage as elected by the Owner Trustee from time to time with
respect to such Holder Advances in accordance with the terms of the Trust
Agreement; provided, however, (a) upon delivery of the notice described in
Section 3.7(c) of the Trust Agreement, the outstanding Holder Advances of each
Holder shall bear a yield at the ABR plus the Applicable Percentage applicable
from time to time from and after the dates and during the periods specified in
Section 3.7(c) of the Trust Agreement, and (b) upon the delivery by a Holder of
the notice described in Section 11.3(f) of the Participation Agreement, the
Holder Advances of such Holder shall bear a yield at the ABR plus the Applicable
Percentage applicable from time to time after the dates and during the periods
specified in Section 11.3(f) of the Participation Agreement.
"Holders" shall mean First Union National Bank and shall include the
other banks and financial institutions which may be from time to time holders of
Certificates in connection with the RFMD Real Estate Trust 1999-1.
"Impositions" shall mean any and all liabilities, losses, expenses,
costs, charges and Liens of any kind whatsoever for fees, taxes, levies,
imposts, duties, charges, assessments or withholdings ("Taxes") including but
not limited to (i) real and personal property taxes, including without
limitation personal property taxes on any property covered by the Lease that is
classified by Governmental Authorities as personal property, and real estate or
ad valorem taxes in the nature of property taxes; (ii) sales taxes, use taxes
and other similar taxes (including rent
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taxes and intangibles taxes); (iii) excise taxes; (iv) real estate transfer
taxes, conveyance taxes, stamp taxes and documentary recording taxes and fees;
(v) taxes that are or are in the nature of franchise, income, value added,
privilege and doing business taxes, license and registration fees; (vi)
assessments on any Property, including without limitation all assessments for
public Improvements or benefits, whether or not such improvements are commenced
or completed within the Term; and (vii) taxes, Liens, assessments or charges
asserted, imposed or assessed by the PBGC or any governmental authority
succeeding to or performing functions similar to, the PBGC; and in each case all
interest, additions to tax and penalties thereon, which at any time prior to,
during or with respect to the Term or in respect of any period for which the
Lessee shall be obligated to pay Supplemental Rent, may be levied, assessed or
imposed by any Governmental Authority upon or with respect to (a) any Property
or any part thereof or interest therein; (b) the leasing, financing,
refinancing, demolition, construction, substitution, subleasing, assignment,
control, condition, occupancy, servicing, maintenance, repair, ownership,
possession, activity conducted on, delivery, insuring, use, operation,
improvement, sale, transfer of title, return or other disposition of such
Property or any part thereof or interest therein; (c) the Notes, other
indebtedness with respect to any Property, or the Certificates, or any part
thereof or interest therein; (d) the rentals, receipts or earnings arising from
any Property or any part thereof or interest therein; (e) the Operative
Agreements, the performance thereof, or any payment made or accrued pursuant
thereto; (f) the income or other proceeds received with respect to any Property
or any part thereof or interest therein upon the sale or disposition thereof;
(g) any contract (including the Agency Agreement) relating to the construction,
acquisition or delivery of the Improvements or any part thereof or interest
therein; (h) the issuance of the Notes or the Certificates; (i) the Owner
Trustee, the Trust or the Trust Estate; or (j) otherwise in connection with the
transactions contemplated by the Operative Agreements.
"Improvements" shall mean, with respect to the construction,
renovations and/or Modifications on any Land, all buildings, structures,
Fixtures, and other improvements of every kind existing at any time and from
time to time on or under the Land purchased or otherwise acquired using the
proceeds of the Loans or the Holder Advances or which is subject to a Ground
Lease, together with any and all appurtenances to such buildings, structures or
improvements, including without limitation sidewalks, utility pipes, conduits
and lines, parking areas and roadways, and including without limitation all
Modifications and other additions to or changes in the Improvements at any time,
including without limitation (a) any Improvements existing as of the Property
Closing Date as such Improvements may be referenced on the applicable
Requisition and (b) any Improvements made subsequent to such Property Closing
Date.
"Indebtedness" of a Person shall mean, without duplication, such
Person's:
(a) obligations for borrowed money;
(b) obligations representing the deferred purchase price of
Property (whether real, personal, tangible, intangible or mixed) or
services (other than accounts payable arising in the ordinary course of
such Person's business payable on terms customary in the trade);
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(c) obligations, whether or not assumed, secured by liens or
payable out of the proceeds or production from property now or
hereafter owned or acquired by such Person;
(d) obligations which are evidenced by notes, acceptances or
other instruments;
(e) Capitalized Lease obligations;
(f) net liabilities under interest rate swap, exchange or cap
agreements;
(g) contingent obligations;
(h) all preferred stock or other ownership interests issued by
such Person and which by the terms thereof could be (at the request of
the holders thereof or otherwise) subject to mandatory sinking fund
payments, redemption or other acceleration; and
(i) all obligations of such Person to repurchase any
securities which repurchase obligation is related to the issuance
thereof, including, without limitation, obligations commonly known as
residual equity appreciation potential shares.
"Indemnified Person" shall mean the Lessor, the Owner Trustee, in its
individual and its trust capacity, the Trust, the Trust Company, the Agent, the
Holders, the Lenders and their respective successors, assigns, directors,
shareholders, partners, officers, employees, agents and Affiliates.
"Indemnity Provider" shall mean, respecting each Property, the Lessee.
"Initial Closing Date" shall mean December 31, 1999.
"Initial Construction Advance" shall mean any initial Advance to pay
for: (a) Property Costs for construction of any Improvements; and (b) the
Property Costs of restoring or repairing any Property which is required to be
restored or repaired in accordance with Section 15.1(e) of the Lease.
"Instruments" shall have the meaning given to such term in Section 1 of
the Security Agreement.
"Insurance Requirements" shall mean all terms and conditions of any
insurance policy either required by the Lease to be maintained by the Lessee or
required by the Agency Agreement to be maintained by the Construction Agent, and
all requirements of the issuer of any such policy and, regarding self insurance,
any other requirements of the Lessee.
"Interest Period" shall mean during the Commitment Period and
thereafter as to any Eurodollar Loan or Eurodollar Holder Advance (i) with
respect to the initial Interest Period, the
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<PAGE> 157
period beginning on the date of the first Eurodollar Loan and Eurodollar Holder
Advance and ending one (1) month, two (2) months, three (3) months or (to the
extent available to all Lenders and all Holders) six (6) months thereafter, as
selected by the Lessor (in the case of a Eurodollar Loan) or the Owner Trustee
(in the case of a Eurodollar Holder Advance) in its applicable notice given with
respect thereto and (ii) thereafter, each period commencing on the last day of
the next preceding Interest Period applicable to such Eurodollar Loan or
Eurodollar Holder Advance and ending one (1) month, two (2) months, three (3)
months or (to the extent available to all Lenders and all Holders) six (6)
months thereafter, as selected by the Lessor by irrevocable notice to the Agent
(in the case of a Eurodollar Loan) or by the Owner Trustee (in the case of a
Eurodollar Holder Advance) in each case not less than three (3) Business Days
prior to the last day of the then current Interest Period with respect thereto;
provided, however, that all of the foregoing provisions relating to Interest
Periods are subject to the following: (A) if any Interest Period would end on a
day which is not a Business Day, such Interest Period shall be extended to the
next succeeding Business Day (except that where the next succeeding Business Day
falls in the next succeeding calendar month, then on the next preceding Business
Day), (B) no Interest Period shall extend beyond the Maturity Date or the
Expiration Date, as the case may be, (C) where an Interest Period begins on a
day for which there is no numerically corresponding day in the calendar month in
which the Interest Period is to end, such Interest Period shall end on the last
Business Day of such calendar month, (D) there shall not be more than four (4)
Interest Periods outstanding at any one (1) time, and (E) no Interest Period
shall extend beyond any date on which the amounts set forth in Schedule 1 to the
Participation Agreement are scheduled to be paid unless the portion of Equipment
Loans comprised of ABR Loans and Eurodollar Loans with Interest Periods expiring
prior to the date on which the amounts set forth in Schedule 1 to the
Participation Agreement are scheduled to be paid is at least equal to the amount
of principal amortization due on such date.
"Investment Company Act" shall mean the Investment Company Act of 1940,
as amended, together with the rules and regulations promulgated thereunder.
"Investments" in any Person, shall mean any loan or advance to such
Person, any purchase or other acquisition of any capital stock, warrants,
rights, options, obligations or other securities of, or equity interest in, such
Person, any capital contribution to such Person or any other investment in such
Person, including, without limitation, any guaranty obligation incurred for the
benefit of such Person or any assets transferred to such Person.
"Land" shall mean a parcel of real property described on (a) the
Requisition issued by the Construction Agent on the Property Closing Date
relating to such parcel and (b) the schedules to each applicable Lease
Supplement executed and delivered in accordance with the requirements of Section
2.4 of the Lease.
"Land Cost" shall have the meaning specified in Section 5.4 of the
Agency Agreement.
"Law" shall mean any statute, law, ordinance, regulation, rule,
directive, order, writ, injunction or decree of any Tribunal.
Appendix A-23
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"Lease" or "Lease Agreement" shall mean the Amended, Restated and
Replacement Lease Agreement dated on or about the Initial Closing Date, between
the Lessor and the Lessee, together with any Lease Supplements thereto.
"Lease Default" shall mean any event or condition which, with the lapse
of time or the giving of notice, or both, would constitute a Lease Event of
Default.
"Lease Event of Default" shall have the meaning specified in Section
17.1 of the Lease.
"Lease Supplement" shall mean each Lease Supplement substantially in
the form of Exhibit A to the Lease, together with all attachments and schedules
thereto.
"Legal Requirements" shall mean all foreign, federal, state, county,
municipal and other governmental statutes, laws, rules, orders, regulations,
ordinances, judgments, decrees and injunctions affecting the Owner Trustee, any
Holder, the Lessor, the Lessee, the Agent, any Lender or any Property, Land,
Improvement, Equipment or the taxation, demolition, construction, use or
alteration of such Improvements, whether now or hereafter enacted and in force,
including without limitation any that require repairs, modifications or
alterations in or to any Property or in any way limit the use and enjoyment
thereof (including without limitation all building, zoning and fire codes and
the Americans with Disabilities Act of 1990, 42 U.S.C. ss. 12101 et. seq., and
any other similar federal, state or local laws or ordinances and the regulations
promulgated thereunder) and any that may relate to environmental requirements
(including without limitation all Environmental Laws), and all permits,
certificates of occupancy, licenses, authorizations and regulations relating
thereto, and all covenants, agreements, restrictions and encumbrances contained
in any instruments which are either of record or known to the Lessee affecting
any Property or the Appurtenant Rights.
"Lender Commitments" shall mean the aggregate amount set forth in
Schedule 2.1 to the Credit Agreement, as such amount may be increased or reduced
from time to time in accordance with the provisions of the Operative Agreements;
provided, if there shall be more than one (1) Lender, the Lender Commitment of
each Lender shall be as set forth in Schedule 2.1 to the Credit Agreement as
such Schedule 2.1 may be amended and replaced from time to time.
"Lender Financing Statements" shall mean UCC financing statements and
fixture filings appropriately completed and executed for filing in the
applicable jurisdiction in order to procure a security interest in favor of the
Agent in the Collateral subject to the Security Documents.
"Lender Unused Fee" shall have the meaning given to such term in
Section 7.4 of the Participation Agreement.
"Lenders" shall mean First Union National Bank and shall include the
other banks and financial institutions which may be from time to time party to
the Participation Agreement and the Credit Agreement.
"Lessee" shall have the meaning set forth in the Lease.
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<PAGE> 159
"Lessee Security Agreement" shall mean that certain Security Agreement
dated on or about the Initial Closing Date granted by Lessee in favor of the
Agent, for the benefit of the Secured Parties, and accepted and agreed by the
Agent.
"Lessor" shall mean the Owner Trustee, not in its individual capacity,
but as the Lessor under the Lease.
"Lessor Basic Rent" shall mean the scheduled Holder Yield due on the
Holder Advances on any Scheduled Interest Payment Date pursuant to the Trust
Agreement (but not including interest on (a) any such scheduled Holder Yield due
on the Holder Advances prior to the Rent Commencement Date with respect to the
Property to which such Holder Advances relate or (b) overdue amounts under the
Trust Agreement or otherwise).
"Lessor Financing Statements" shall mean UCC financing statements and
fixture filings appropriately completed and executed for filing in the
applicable jurisdictions in order to protect the Lessor's interest under the
Lease to the extent the Lease is a security agreement or a mortgage.
"Lessor Lien" shall mean any Lien, true lease or sublease or
disposition of title arising as a result of (a) any claim against the Lessor or
the Trust Company, in its individual capacity, not resulting from the
transactions contemplated by the Operative Agreements, (b) any act or omission
of the Lessor or the Trust Company, in its individual capacity, which is not
required by the Operative Agreements or is in violation of any of the terms of
the Operative Agreements, (c) any claim against the Lessor or the Trust Company,
in its individual capacity, with respect to Taxes or Transaction Expenses
against which the Lessee is not required to indemnify the Lessor or the Trust
Company, in its individual capacity, pursuant to Section 11 of the Participation
Agreement or (d) any claim against the Lessor arising out of any transfer by the
Lessor of all or any portion of the interest of the Lessor in the Properties,
the Trust Estate or the Operative Agreements other than the transfer of title to
or possession of any Properties by the Lessor pursuant to and in accordance with
the Lease, the Credit Agreement, the Security Agreement or the Participation
Agreement or pursuant to the exercise of the remedies set forth in Article XVII
of the Lease.
"Lien" shall mean any mortgage, pledge, security interest, encumbrance,
lien, option or charge of any kind.
"Limited Recourse Amount" shall mean with respect to all the Properties
on an aggregate basis, an amount equal to the sum of the Termination Values with
respect to all the Properties on an aggregate basis on each Payment Date, less
the Maximum Residual Guarantee Amount as of such date with respect to all the
Properties on an aggregate basis.
"Loan Basic Rent" shall mean the scheduled interest due on the Loans on
any Scheduled Interest Payment Date pursuant to the Credit Agreement and the
scheduled principal repayments due on Loans pursuant to Section 2.6(d) of the
Credit Agreement (but not including interest on
Appendix A-25
<PAGE> 160
(a) any such Loan due prior to the Rent Commencement Date with respect to the
Property to which such Loan relates or (b) any overdue amounts under Section
2.8(b) of the Credit Agreement or otherwise).
"Loan Property Cost" shall mean, with respect to each Property at any
date of determination, an amount equal to (a) the aggregate principal amount all
Loans (including without limitation all Acquisition Loans and Construction
Loans) made on or prior to such date with respect to such Property minus (b) the
aggregate amount of prepayments or repayments as the case may be of the Loans
allocated to reduce the Loan Property Cost of such Property pursuant to Section
2.6(c) of the Credit Agreement.
"Loans" shall mean the loans extended pursuant to the Credit Agreement.
"Majority Holders" shall mean at any time, Holders whose Holder
Advances outstanding represent at least sixty-six and two thirds percent (66
2/3%) of (a) the aggregate Holder Advances outstanding or (b) to the extent
there are no Holder Advances outstanding, the aggregate Holder Commitments.
"Majority Lenders" shall mean at any time, Lenders whose Loans
outstanding represent at least sixty-six and two thirds percent (66 2/3%) of (a)
the aggregate Loans outstanding or (b) to the extent there are no Loans
outstanding, the aggregate of the Lender Commitments.
"Majority Secured Parties" shall mean at any time, Lenders and Holders
whose Loans and Holder Advances outstanding represent at least sixty-six and two
thirds percent (66 2/3%) of (a) the aggregate Advances outstanding or (b) to the
extent there are no Advances outstanding, the sum of the aggregate Holder
Commitments plus the aggregate Lender Commitments.
"Marketing Period" shall mean, if the Lessee has given a Sale Notice in
accordance with Section 20.1 of the Lease, the period commencing on the date
such Sale Notice is given and ending on the Expiration Date.
"Material Adverse Effect" shall, mean a material adverse effect on (a)
the business, condition (financial or otherwise), assets, liabilities or
operations of the Lessee, (b) the ability of the Lessee to perform its
respective obligations under any Operative Agreement to which it is a party, (c)
the validity or enforceability of any Operative Agreement or the rights and
remedies of the Agent, the Lenders, the Holders, or the Lessor thereunder, (d)
the validity, priority or enforceability of any Lien on any Property created by
any of the Operative Agreements, or (e) the value, utility or useful life of any
Property or the use, or ability of the Lessee to use, any Property for the
purpose for which it was intended.
"Materials of Environmental Concern" shall mean any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum products or
any hazardous or toxic substances, materials or wastes, defined or regulated as
such in or under any Environmental Laws, including, without limitation,
asbestos, polychlorinated biphenyls and urea-formaldehyde insulation.
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"Maturity Date" shall mean the Expiration Date.
"Maximum Residual Guarantee Amount" shall mean an amount equal to the
product of the aggregate Property Cost for all of the Properties times
eighty-five percent (85%).
"Modifications" shall have the meaning specified in Section 11.1(a) of
the Lease.
"Mortgage Instrument" shall mean any mortgage, deed of trust or any
other instrument executed by the Owner Trustee and the Lessee (or regarding any
Property subject to a Ground Lease, the applicable Affiliate of the Lessee) in
favor of the Agent (for the benefit of the Lenders and the Holders) and
evidencing a Lien on the Property, in form and substance reasonably acceptable
to the Agent.
"Multiemployer Plan" shall mean any plan described in Section
4001(a)(3) of ERISA to which contributions are or have been made or required by
the Lessee or any of its Subsidiaries or ERISA Affiliates.
"Multiple Employer Plan" shall mean a plan to which the Lessee or any
ERISA Affiliate and at least one (1) other employer other than an ERISA
Affiliate is making or accruing an obligation to make, or has made or accrued an
obligation to make, contributions.
"New Facility" shall have the meaning given to such term in Section
28.1 of the Lease.
"Notes" shall mean those notes issued to the Lenders pursuant to the
Credit Agreement and shall include both the Tranche A Notes and the Tranche B
Notes.
"Obligations" shall have the meaning given to such term in Section 1 of
the Security Agreement.
"Officer's Certificate" with respect to any person shall mean a
certificate executed on behalf of such person by a Responsible Officer who has
made or caused to be made such examination or investigation as is necessary to
enable such Responsible Officer to express an informed opinion with respect to
the subject matter of such Officer's Certificate.
"Operating Lease" shall mean, as applied to any Person, any lease
(including, without limitation, the Lease and leases which may be terminated by
the lessee at any time) of any property (whether real, personal or mixed) which
is not a capitalized lease.
"Operative Agreements" shall mean the following: the Participation
Agreement, the Agency Agreement, the Trust Agreement, the Certificates, the
Credit Agreement, the Notes, the Lease, the Lease Supplements (and memoranda of
the Lease and each Lease Supplement in a form reasonably acceptable to the
Agent), the Security Agreement, Lessee Security Agreement, the Mortgage
Instruments, the other Security Documents, the Ground Leases, the Deeds and the
Bills of Sale and any and all other agreements, documents and instruments
executed in connection with any of the foregoing.
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"Original Executed Counterpart" shall have the meaning given to such
term in Section 5 of Exhibit A to the Lease.
"Overdue Interest" shall mean any interest payable pursuant to Section
2.8(b) of the Credit Agreement.
"Overdue Rate" shall mean (a) with respect to the Loan Basic Rent, and
any other amount owed under or with respect to the Credit Agreement or the
Security Documents, the rate specified in Section 2.8(b) of the Credit
Agreement, (b) with respect to the Lessor Basic Rent, the Holder Yield and any
other amount owed under or with respect to the Trust Agreement, the Holder
Overdue Rate, and (c) with respect to any other amount, the amount referred to
in clause (y) of Section 2.8(b) of the Credit Agreement.
"Owner Trustee", "Borrower" or "Lessor" shall mean First Security Bank,
National Association, not individually, except as expressly stated in the
various Operative Agreements, but solely as the Owner Trustee under the RFMD
Real Estate Trust 1999-1, and any successor, replacement and/or additional Owner
Trustee expressly permitted under the Operative Agreements.
"Participant" shall have the meaning given to such term in Section 9.7
of the Credit Agreement.
"Participation Agreement" shall mean the Amended, Restated and
Replacement Participation Agreement dated on or about the Initial Closing Date,
among the Lessee, the Owner Trustee, not in its individual capacity except as
expressly stated therein, the Holders, the Lenders and the Agent.
"Payment Date" shall mean any Scheduled Interest Payment Date and any
date on which interest or Holder Yield in connection with a prepayment of
principal on the Loans or of the Holder Advances is due under the Credit
Agreement or the Trust Agreement.
"PBGC" shall mean the Pension Benefit Guaranty Corporation created by
Section 4002(a) of ERISA or any successor thereto.
"Pension Plan" shall mean a "pension plan", as such term is defined in
section 3(2) of ERISA, which is subject to title IV of ERISA (other than a
Multiemployer Plan), and to which the Lessee or any ERISA Affiliate may have any
liability, including without limitation any liability by reason of having been a
substantial employer within the meaning of section 4063 of ERISA at any time
during the preceding five (5) years, or by reason of being deemed to be a
contributing sponsor under section 4069 of ERISA.
"Permitted Facility" shall mean a wafer fabrication facility of the
type, size, but in any event at least 220,000 square feet, and production
capability customarily used and operated by
Appendix A-28
<PAGE> 163
the Lessee in its ordinary course of business as of the Initial Closing Date and
at all times in accordance with the Plans and Specifications.
"Permitted Liens" shall mean:
(a) the respective rights and interests of the parties to the
Operative Agreements as provided in the Operative Agreements;
(b) the rights of any sublessee or assignee under a sublease
or an assignment expressly permitted by the terms of the Lease for no
longer than the duration of the Lease;
(c) Liens for Taxes that either are not yet due or are being
contested in accordance with the provisions of Section 13.1 of the
Lease;
(d) Liens arising by operation of law, materialmen's,
mechanics', workmen's, repairmen's, employees', carriers',
warehousemen's and other like Liens relating to the construction of the
Improvements or in connection with any Modifications or arising in the
ordinary course of business for amounts that either are not more than
thirty (30) days past due or are being diligently contested in good
faith by appropriate proceedings, so long as such proceedings satisfy
the conditions for the continuation of proceedings to contest Taxes set
forth in Section 13.1 of the Lease;
(e) Liens of any of the types referred to in clause (d) above
that have been bonded for not less than the full amount in dispute (or
as to which other security arrangements satisfactory to the Lessor and
the Agent have been made), which bonding (or arrangements) shall comply
with applicable Legal Requirements, and shall have effectively stayed
any execution or enforcement of such Liens;
(f) Liens arising out of judgments or awards with respect to
which appeals or other proceedings for review are being prosecuted in
good faith and for the payment of which adequate reserves have been
provided as required by GAAP or other appropriate provisions have been
made, so long as such proceedings have the effect of staying the
execution of such judgments or awards and satisfy the conditions for
the continuation of proceedings to contest Taxes set forth in Section
13.1 of the Lease; and
(g) Liens in favor of municipalities to the extent agreed to
by the Lessor.
(h) Liens securing purchase money and sale/leaseback
Indebtedness (including Capitalized Leases) to the extent permitted
under Section 8.3.B(a), provided that any such Lien attaches only to
the Property financed or leased and such Lien attaches thereto
concurrently with or within 90 days after the acquisition thereof in
connection with the purchase money transactions and within 30 days
after the closing of any sale/leaseback transaction;
Appendix A-29
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"Person" shall mean any individual, corporation, partnership, limited
liability company, joint venture, association, joint stock company, trust,
unincorporated organization, governmental authority or any other entity.
"Plan" shall mean any employee benefit plan (as defined in Section 3(3)
of ERISA) which is covered by ERISA and with respect to which Lessee, any
Subsidiary of Lessee or any ERISA Affiliate is (or, if such plan were terminated
at such time, would under Section 4069 of ERISA be deemed to be) an "employer"
within the meaning of Section 3(5) of ERISA.
"Plans and Specifications" shall mean, with respect to Improvements,
the plans and specifications for such Improvements to be constructed or already
existing, as such Plans and Specifications may be amended, modified or
supplemented from time to time in accordance with the terms of the Operative
Agreements.
"Prime Lending Rate" shall have the meaning given to such term in the
definition of ABR.
"Property" shall mean, with respect to each Permitted Facility that is
(or is to be) acquired, constructed and/or renovated pursuant to the terms of
the Operative Agreements, the Land and each item of Equipment and the various
Improvements, in each case located on such Land, including without limitation
each Construction Period Property, each Property subject to a Ground Lease and
each Property for which the Term has commenced.
"Property Acquisition Cost" shall mean the cost to the Lessor to
purchase a Property on a Property Closing Date.
"Property Closing Date" shall mean the date on which the Lessor
purchases a Property or, with respect to the first Advance, the date on which
the Lessor seeks reimbursement for Property previously purchased by the Lessor.
"Property Cost" shall mean with respect to a Property the aggregate
amount (and/or the various items and occurrences giving rise to such amounts) of
the Loan Property Cost plus the Holder Property Cost for such Property (as such
amounts shall be increased equally among all Properties respecting the Holder
Advances and the Loans extended from time to time to pay for the Transaction
Expenses, fees, expenses and other disbursements referenced in Sections 7.1(a)
and 7.1(b) of the Participation Agreement).
"Purchase Option" shall have the meaning given to such term in Section
20.1 of the Lease.
"Purchasing Lender" shall have the meaning given to such term in
Section 9.8(a) of the Credit Agreement.
"Rate Determination Date" shall have the meaning given to such term in
the definition of Applicable Percentage.
Appendix A-30
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"Redelivery Location" shall mean, with respect to any item of
Equipment, the location or locations specified for delivery by the Lessor.
"Register" shall have the meaning given to such term in Section 9.9(a)
of the Credit Agreement.
"Regulation D" shall mean Regulation D of the Board of Governors of the
Federal Reserve System (or any successor), as the same may be modified and
supplemented and in effect from time to time.
"Release" shall mean any release, pumping, pouring, emptying,
injecting, escaping, leaching, dumping, seepage, spill, leak, flow, discharge,
disposal or emission of a Hazardous Substance.
"Rent" shall mean, collectively, the Basic Rent and the Supplemental
Rent, in each case payable under the Lease.
"Rent Commencement Date" shall mean, regarding each Property, the
Completion Date.
"Reportable Event" shall have the meaning specified in ERISA.
"Requested Funds" shall mean any funds requested by the Lessee or the
Construction Agent, as applicable, in accordance with Section 5 of the
Participation Agreement.
"Requisition" shall have the meaning specified in Section 4.2 of the
Participation Agreement.
"Reportable Event" shall mean any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the notice requirement has
been waived by regulation.
"Responsible Officer" shall mean the Chairman or Vice Chairman of the
Board of Directors, the Chairman or Vice Chairman of the Executive Committee of
the Board of Directors, the President, any Senior Vice President or Executive
Vice President, any Vice President, the Secretary, any Assistant Secretary, the
Treasurer, or any Assistant Treasurer, except that when used with respect to the
Trust Company or the Owner Trustee, "Responsible Officer" shall also include the
Cashier, any Assistant Cashier, any Trust Officer or Assistant Trust Officer,
the Controller and any Assistant Controller or any other officer of the Trust
Company or the Owner Trustee customarily performing functions similar to those
performed by any of the above designated officers and also means, with respect
to a particular corporate trust matter, any other officer to whom such matter is
referred because of his knowledge of and familiarity with the particular
subject.
"Restricted Payment" shall mean (i) any dividend or other distribution,
direct or indirect, on account of any shares of any class of stock now or
hereafter outstanding, except (A) a dividend
Appendix A-31
<PAGE> 166
payable solely in shares of that class to the holders of that class and (B)
dividends and other distributions payable to Lessee, (ii) any redemption,
retirement, sinking fund or similar payment, purchase or other acquisition for
value, direct or indirect, of any shares of any class of stock now or hereafter
outstanding and (iii) any payment made to retire, or to obtain the surrender of,
any outstanding warrants, options or other rights to acquire shares of any class
of stock now or hereafter outstanding.
"RF Micro" and "RF Micro Devices" shall mean RF Micro Devices, Inc., a
North Carolina corporation, and its successors and permitted assigns.
"RFMD Real Estate Trust 1999-1" shall mean the grantor trust created
pursuant to the terms and conditions of the Trust Agreement.
"Sale Date" shall have the meaning given to such term in Section
20.3(a) of the Lease.
"Sale Notice" shall mean a notice given to the Lessor in connection
with the election by the Lessee of its Sale Option.
"Sale Option" shall have the meaning given to such term in Section 20.1
of the Lease.
"Sale Proceeds Shortfall" shall mean the amount by which the proceeds
of a sale described in Section 22.1 of the Lease are less than the Limited
Recourse Amount with respect to the Properties if it has been determined that
the Fair Market Sales Value of the Properties at the expiration of the term of
the Lease has been impaired by greater than ordinary wear and tear during the
Term of the Lease.
"Scheduled Interest Payment Date" shall mean (a) as to any Eurodollar
Loan or Eurodollar Holder Advance, the last day of the Interest Period
applicable to such Eurodollar Loan or Eurodollar Holder Advance (or respecting
any Eurodollar Loan or Eurodollar Holder Advance having an Interest Period of
six (6) months, the three (3) month anniversary of such Interest Period), (b) as
to any ABR Loan or any ABR Holder Advance, the fifteenth day of each month,
unless such day is not a Business Day and in such case on the next occurring
Business Day and (c) as to all Loans and Holder Advances, the date of any
voluntary or involuntary payment, prepayment, return or redemption, and the
Maturity Date or the Expiration Date, as the case may be.
"Secured Parties" shall have the meaning given to such term in the
Security Agreement.
"Securities Act" shall mean the Securities Act of 1933, as amended,
together with the rules and regulations promulgated thereunder.
"Security Agreement" shall mean the Amended, Restated and Replacement
Security Agreement dated on or about the Initial Closing Date between the Lessor
and the Agent, for the benefit of the Secured Parties, and accepted and agreed
to by the Lessee.
Appendix A-32
<PAGE> 167
"Security Documents" shall mean the collective reference to the
Security Agreement, the Lessee Security Agreement, the Mortgage Instruments, (to
the extent the Lease is construed as a security instrument) the Lease, the UCC
Financing Statements and all other security documents hereafter delivered to the
Agent granting a lien on any asset or assets of any Person to secure the
obligations and liabilities of the Lessor under the Credit Agreement and/or
under any of the other Credit Documents or to secure any guarantee of any such
obligations and liabilities.
"Single Employer Plan" shall mean any Plan which is covered by Title IV
of ERISA, but which is not a Multiemployer Plan or a Multiple Employer Plan.
"Soft Costs" shall mean all costs which are ordinarily and reasonably
incurred in relation to the acquisition, development, installation,
construction, improvement and testing of the Properties other than Hard Costs,
including without limitation structuring fees, administrative fees, legal fees,
upfront fees, fees and expenses related to appraisals, title examinations, title
insurance, document recordation, surveys, environmental site assessments,
geotechnical soil investigations and similar costs and professional fees
customarily associated with a real estate closing, the Lender Unused Fee, the
Holder Unused Fee, fees and expenses of the Owner Trustee payable or
reimbursable under the Operative Agreements and costs and expenses incurred
pursuant to Sections 7.3(a) and 7.3(b) of the Participation Agreement.
"Subordinated Debt" shall mean any Indebtedness of a member of the
Consolidated Group which by its terms is expressly subordinated in right of
payment to the prior payment of the obligations of the Lessee under the
Operative Agreements on terms and conditions and evidenced by documentation
satisfactory to the Agent in its reasonable discretion.
"Subsidiary" shall mean, as to any Person, any corporation of which at
least a majority of the outstanding stock having by the terms thereof ordinary
voting power to elect a majority of the board of directors of such corporation
(irrespective of whether or not at the time stock of any other class or classes
of such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person, or by one (1)
or more Subsidiaries, or by such Person and one (1) or more Subsidiaries.
"Supplemental Amounts" shall have the meaning given to such term in
Section 9.18 of the Credit Agreement.
"Supplemental Rent" shall mean all amounts, liabilities and obligations
(other than Basic Rent) which the Lessee assumes or agrees to pay to the Lessor,
the Trust Company, the Holders, the Agent, the Lenders or any other Person under
the Lease or under any of the other Operative Agreements including without
limitation payments of the Termination Value and the Maximum Residual Guarantee
Amount and all indemnification amounts, liabilities and obligations.
"Support Obligations" shall mean, with respect to any Person, without
duplication, any obligations of such Person (other than endorsements in the
ordinary course of business of negotiable instruments for deposit or collection)
guaranteeing or intended to guarantee any Funded Debt of any other Person in any
manner, whether direct or indirect, and including without limitation
Appendix A-33
<PAGE> 168
any obligation, whether or not contingent, (i) to purchase any such Funded Debt
or any property constituting security therefor, (ii) to advance or provide funds
or other support for the payment or purchase of any such Funded Debt or to
maintain working capital, solvency or other balance sheet condition of such
other Person (including without limitation keep well agreements, maintenance
agreements, comfort letters or similar agreements or arrangements) for the
benefit of any holder of Funded Debt of such other Person, (iii) to lease or
purchase property, securities or services primarily for the purpose of assuring
the holder of such Funded Debt, or (iv) to otherwise assure or hold harmless the
holder of such Funded Debt against loss in respect thereof. The amount of any
Support Obligation hereunder shall (subject to any limitations set forth
therein) be deemed to be an amount equal to the outstanding principal amount (or
maximum principal amount, if larger) of the Funded Debt in respect of which such
Support Obligation is made.
"Taxes" shall have the meaning specified in the definition of
"Impositions".
"Term" shall have the meaning specified in Section 2.2 of the Lease.
"Termination Date" shall have the meaning specified in Section 16.2(a)
of the Lease.
"Termination Event" shall mean (a) with respect to any Pension Plan,
the occurrence of a Reportable Event or an event described in Section 4062(e) of
ERISA, (b) the withdrawal of the Lessee or any ERISA Affiliate from a Multiple
Employer Plan during a plan year in which it was a substantial employer (as such
term is defined in Section 4001(a)(2) of ERISA), or the termination of a
Multiple Employer Plan, (c) the distribution of a notice of intent to terminate
a Plan or Multiemployer Plan pursuant to Section 4041(a)(2) or 4041A of ERISA,
(d) the institution of proceedings to terminate a Plan or Multiemployer Plan by
the PBGC under Section 4042 of ERISA, (e) any other event or condition which
might constitute grounds under Section 4042 of ERISA for the termination of, or
the appointment of a trustee to administer, any Plan or Multiemployer Plan, or
(f) the complete or partial withdrawal of the Lessee or any ERISA Affiliate from
a Multiemployer Plan.
"Termination Notice" shall have the meaning specified in Section 16.1
of the Lease.
"Termination Value" shall mean the sum of (a) either (i) with respect
to all Properties, an amount equal to the aggregate outstanding Property Cost
for all the Properties, in each case as of the last occurring Payment Date, or
(ii) with respect to a particular Property, an amount equal to the Property Cost
allocable to such Property, plus (b) respecting the amounts described in each of
the foregoing subclause (i) or (ii), as applicable, any and all accrued but
unpaid interest on the Loans and any and all Holder Yield on the Holder Advances
related to the applicable Property Cost, plus (c) to the extent the same is not
duplicative of the amounts payable under clause (b) above, all other Rent and
other amounts then due and payable or accrued under the Agency Agreement, Lease
and/or under any other Operative Agreement (including without limitation amounts
under Sections 11.1 and 11.2 of the Participation Agreement and all costs and
expenses referred to in clause FIRST of Section 22.2 of the Lease).
Appendix A-34
<PAGE> 169
"Total Commitments" shall mean the sum of all Lender Commitments and
Holder Commitments.
"Total Utilization" shall mean the percentage determined by dividing
(a) the sum of all outstanding Loans and Holder Advances by (b) the Total
Commitments.
"Tranche A Commitments" shall mean the obligation of the Tranche A
Lenders to make the Tranche A Loans to the Lessor in an aggregate principal
amount at any one (1) time outstanding not to exceed the aggregate of the
amounts set forth opposite each Tranche A Lender's name on Schedule 2.1 to the
Credit Agreement, as such amount may be increased or reduced from time to time
in accordance with the provisions of the Operative Agreements; provided, no
Tranche A Lender shall be obligated to make Tranche A Loans in excess of such
Tranche A Lender's share of the Tranche A Commitments as set forth adjacent to
such Tranche A Lender's name on Schedule 2.1 to Credit Agreement.
"Tranche A Lenders" shall mean First Union National Bank and shall
include the several banks and other financial institutions from time to time
party to the Credit Agreement that commit to make the Tranche A Loans.
"Tranche A Loans" shall mean the Loans made pursuant to the Tranche A
Commitment.
"Tranche A Note" shall have the meaning given to it in Section 2.2 of
the Credit Agreement.
"Tranche B Commitments" shall mean the obligation of the Tranche B
Lenders to make the Tranche B Loans to the Lessor in an aggregate principal
amount at any one (1) time outstanding not to exceed the aggregate of the
amounts set forth opposite each Tranche B Lender's name on Schedule 2.1 to the
Credit Agreement, as such amount may be increased or reduced from time to time
in accordance with the provisions of the Operative Agreements; provided, no
Tranche B Lender shall be obligated to make Tranche B Loans in excess of such
Tranche B Lender's share of the Tranche B Commitments as set forth adjacent to
such Tranche B Lender's name on Schedule 2.1 to Credit Agreement.
"Tranche B Lenders" shall mean First Union National Bank and shall
include the several banks and other financial institutions from time to time
party to the Credit Agreement that commit to make the Tranche B Loans.
"Tranche B Loan" shall mean the Loans made pursuant to the Tranche B
Commitment.
"Tranche B Note" shall have the meaning given to it in Section 2.2 of
the Credit Agreement.
"Transaction Expenses" shall mean all Soft Costs and all other costs
and expenses incurred in connection with the preparation, execution and delivery
of the Operative Agreements
Appendix A-35
<PAGE> 170
and the transactions contemplated by the Operative Agreements including without
limitation all costs and expenses described in Section 7.1 of the Participation
Agreement and the following:
(a) the reasonable fees, out-of-pocket expenses and
disbursements of counsel in negotiating the terms of the Operative
Agreements and the other transaction documents, preparing for the
closings under, and rendering opinions in connection with, such
transactions and in rendering other services customary for counsel
representing parties to transactions of the types involved in the
transactions contemplated by the Operative Agreements;
(b) the reasonable fees, out-of-pocket expenses and
disbursements of accountants for the Lessee or the Construction Agent
in connection with the transaction contemplated by the Operative
Agreements;
(c) any and all other reasonable fees, charges or other
amounts payable to the Lenders, the Agent, the Holders, the Owner
Trustee or any broker which arises under any of the Operative
Agreements;
(d) any other reasonable fee, out-of-pocket expense,
disbursement or cost of any party to the Operative Agreements or any of
the other transaction documents; and
(e) any and all Taxes and fees incurred in recording or filing
any Operative Agreement or any other transaction document, any deed,
declaration, mortgage, security agreement, notice or financing
statement with any public office, registry or governmental agency in
connection with the transactions contemplated by the Operative
Agreement.
"Tribunal" shall mean any state, commonwealth, federal, foreign,
territorial, or other court or government body, subdivision agency, department,
commission, board, bureau or instrumentality of a governmental body.
"Trust" shall mean the RFMD Real Estate Trust 1999-1.
"Trust Agreement" shall mean the Amended, Restated and Replacement
Trust Agreement dated on or about the Initial Closing Date between the Holders
and the Owner Trustee.
"Trust Company" shall mean First Security Bank, National Association,
in its individual capacity, and any successor owner trustee under the Trust
Agreement in its individual capacity.
"Trust Estate" shall have the meaning specified in Section 2.2 of the
Trust Agreement.
"Type" shall mean, as to any Loan, whether it is an ABR Loan or a
Eurodollar Loan.
"UCC Financing Statements" shall mean collectively the Lender Financing
Statements and the Lessor Financing Statements.
Appendix A-36
<PAGE> 171
"Unanimous Vote Matters" shall have the meaning given it in Section
12.4 of the Participation Agreement.
"Unfunded Amount" shall have the meaning specified in Section 3.2 of
the Agency Agreement.
"Unfunded Liability" shall mean, with respect to any Pension Plan, at
any time, the amount (if any) by which (a) the present value of all benefits
under such Pension Plan exceeds (b) the fair market value of all Pension Plan
assets allocable to such benefits, all determined as of the then most recent
valuation date for such Pension Plan, in accordance with the actuarial
assumptions then in effect with respect to such Pension Plan (such actuarial
assumptions shall be in compliance with all applicable Legal Requirements), but
only to the extent that such excess represents a potential liability of the
Company or any member of the Controlled Group to the PBGC or such Pension Plan
under Title IV of ERISA.
"Uniform Commercial Code" and "UCC" shall mean the Uniform Commercial
Code as in effect in any applicable jurisdiction.
"United States Bankruptcy Code" shall mean Title 11 of the United
States Code.
"Unused Fee" shall mean, collectively, the Holder Unused Fee and the
Lender Unused Fee.
"Unused Fee Payment Date" shall mean the last Business Day of each
September, December, March and June and the last Business Day of the Commitment
Period, or such earlier date as the Commitments shall terminate as provided in
the Credit Agreement or the Holder Commitment shall terminate as provided in the
Trust Agreement.
"U.S. Person" shall have the meaning specified in Section 11.2(e) of
the Participation Agreement.
"U.S. Taxes" shall have the meaning specified in Section 11.2(e) of the
Participation Agreement.
"Withholdings" shall have the meaning specified in Section 11.2(e) of
the Participation Agreement.
"Work" shall mean the furnishing of labor, materials, components,
furniture, furnishings, fixtures, appliances, machinery, equipment, tools,
power, water, fuel, lubricants, supplies, goods and/or services with respect to
any Property.
"Year 2000" shall mean the calendar year beginning January 1, 2000 and
ending December 31, 2000.
Appendix A-37
<PAGE> 1
EXHIBIT 10.10
- - --------------------------------------------------------------------------------
AMENDED, RESTATED AND REPLACEMENT
LEASE AGREEMENT
Dated as of December 31, 1999
between
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not individually,
but solely as the Owner Trustee
under the RFMD Real Estate Trust 1999-1,
as Lessor
and
RF MICRO DEVICES, INC.,
as Lessee
- - --------------------------------------------------------------------------------
This Lease Agreement is subject to a security interest in favor of First Union
National Bank, as the agent for the Lenders and respecting the Security
Documents, as the agent for the Lenders and the Holders, to the extent of their
interests (the "Agent") under an Amended, Restated and Replacement Security
Agreement dated as of December 31, 1999, between First Security Bank, National
Association, not individually, but solely as the Owner Trustee under the RFMD
Real Estate Trust 1999-1 and the Agent, as amended, modified, extended,
supplemented, restated and/or replaced from time to time in accordance with the
applicable provisions thereof. This Lease Agreement has been executed in several
counterparts. To the extent, if any, that this Lease Agreement constitutes
chattel paper (as such term is defined in the Uniform Commercial Code as in
effect in any applicable jurisdiction), no security interest in this Lease
Agreement may be created through the transfer or possession of any counterpart
other than the original counterpart containing the receipt therefor executed by
the Agent on the signature page hereof.
<PAGE> 2
TABLE OF CONTENTS
ARTICLE I......................................................................1
1.1 Definitions.......................................................1
1.2 Interpretation....................................................2
ARTICLE II.....................................................................2
2.1 Property..........................................................2
2.2 Lease Term........................................................2
2.3 Title.............................................................2
2.4 Lease Supplements.................................................2
ARTICLE III....................................................................3
3.1 Rent..............................................................3
3.2 Payment of Basic Rent.............................................3
3.3 Supplemental Rent.................................................3
3.4 Performance on a Non-Business Day.................................4
3.5 Rent Payment Provisions...........................................4
ARTICLE IV.....................................................................4
4.1 Taxes; Utility Charges............................................4
ARTICLE V......................................................................5
5.1 Quiet Enjoyment...................................................5
ARTICLE VI.....................................................................5
6.1 Net Lease.........................................................5
6.2 No Termination or Abatement.......................................6
ARTICLE VII....................................................................6
7.1 Ownership of the Properties.......................................6
ARTICLE VIII...................................................................7
8.1 Condition of the Properties.......................................7
8.2 Possession and Use of the Properties..............................8
8.3 Integrated Properties.............................................9
ARTICLE IX....................................................................10
9.1 Compliance With Legal Requirements, Insurance Requirements and
Manufacturer's Specifications and Standards..........................10
ARTICLE X.....................................................................10
10.1 Maintenance and Repair; Return..................................10
10.2 Environmental Inspection........................................13
ARTICLE XI....................................................................14
11.1 Modifications...................................................14
ARTICLE XII...................................................................15
12.1 Warranty of Title...............................................15
ARTICLE XIII..................................................................16
13.1 Permitted Contests Other Than in Respect of Indemnities.........16
13.2 Impositions, Utility Charges, Other Matters; Compliance
with Legal Requirements..............................................16
ARTICLE XIV...................................................................16
14.1 Public Liability and Workers'Compensation Insurance.............16
14.2 Permanent Hazard and Other Insurance............................17
i
<PAGE> 3
14.3 Coverage........................................................18
ARTICLE XV....................................................................19
15.1 Casualty and Condemnation.......................................19
15.2 Environmental Matters...........................................21
15.3 Notice of Environmental Matters.................................22
ARTICLE XVI...................................................................22
16.1 Termination Upon Certain Events.................................22
16.2 Procedures......................................................22
ARTICLE XVII..................................................................22
17.1 Lease Events of Default.........................................22
17.2 Surrender of Possession.........................................26
17.3 Reletting.......................................................26
17.4 Damages.........................................................26
17.5 Power of Sale...................................................27
17.6 Final Liquidated Damages........................................27
17.7 Environmental Costs.............................................28
17.8 Waiver of Certain Rights........................................28
17.9 Assignment of Rights Under Contracts............................28
17.10 Remedies Cumulative............................................29
ARTICLE XVIII.................................................................29
18.1 Lessor's Right to Cure Lessee's Lease Defaults..................29
ARTICLE XIX...................................................................29
19.1 Provisions Relating to Lessee's Exercise of its Purchase
Option...............................................................29
19.2 No Purchase or Termination With Respect to Less than All of
a Property...........................................................29
ARTICLE XX....................................................................30
20.1 Purchase Option or Sale Option-General Provisions...............30
20.2 Lessee Purchase Option..........................................30
20.3 Third Party Sale Option.........................................31
ARTICLE XXI...................................................................32
21.1 [Intentionally Reserved]........................................32
ARTICLE XXII..................................................................32
22.1 Sale Procedure..................................................32
22.2 Application of Proceeds of Sale.................................34
22.3 Indemnity for Excessive Wear....................................35
22.4 Appraisal Procedure.............................................35
22.5 Certain Obligations Continue....................................35
ARTICLE XXIII.................................................................36
23.1 Holding Over....................................................36
ARTICLE XXIV..................................................................36
24.1 Risk of Loss....................................................36
ARTICLE XXV...................................................................37
25.1 Assignment......................................................37
25.2 Subleases.......................................................37
ARTICLE XXVI..................................................................38
26.1 No Waiver.......................................................38
ii
<PAGE> 4
ARTICLE XXVII.................................................................38
27.1 Acceptance of Surrender.........................................38
27.2 No Merger of Title..............................................38
ARTICLE XXVIII................................................................38
28.1 [Intentionally Reserved]........................................38
ARTICLE XXIX..................................................................38
29.1 Notices.........................................................38
ARTICLE XXX...................................................................39
30.1 Miscellaneous...................................................39
30.2 Amendments and Modifications....................................39
30.3 Successors and Assigns..........................................39
30.4 Headings and Table of Contents..................................39
30.5 Counterparts....................................................39
30.6 GOVERNING LAW...................................................39
30.7 Calculation of Rent.............................................39
30.8 Memoranda of Lease and Lease Supplements........................40
30.9 Allocations between the Lenders and the Holders.................40
30.10 Limitations on Recourse........................................40
30.11 WAIVERS OF JURY TRIAL..........................................40
30.12 Exercise of Lessor Rights......................................40
30.13 SUBMISSION TO JURISDICTION; VENUE; ARBITRATION.................41
30.14 USURY SAVINGS PROVISION........................................41
EXHIBITS
- - --------
EXHIBIT A - Lease Supplement No. ____
EXHIBIT B - Memorandum of Lease and Lease Supplement No. ____
iii
<PAGE> 5
AMENDED, RESTATED AND REPLACEMENT
LEASE AGREEMENT
THIS AMENDED, RESTATED AND REPLACEMENT LEASE AGREEMENT dated as of
December 31, 1999 (as amended, modified, extended, supplemented, restated and/or
replaced from time to time, this "Lease") is between FIRST SECURITY BANK,
NATIONAL ASSOCIATION, a national banking association, having its principal
office at 79 South Main Street, Salt Lake City, Utah 84111, not individually,
but solely as the Owner Trustee under the RFMD Real Estate Trust 1999-1, as
lessor (the "Lessor"), and RF MICRO DEVICES, INC., a North Carolina corporation,
having its principal place of business at 7628 Thorndike Road, Greensboro, North
Carolina 27409-9421, as lessee (the "Lessee").
W I T N E S S E T H:
A. WHEREAS, subject to the terms and conditions of the Participation
Agreement and the Agency Agreement, Lessor will (i) purchase or ground lease
various parcels of real property, some of which will (or may) have existing
Improvements thereon, from one (1) or more third parties designated by Lessee
and (ii) fund the acquisition, installation, testing, use, development,
construction, operation, maintenance, repair, refurbishment and restoration of
the Properties by the Construction Agent; and
B. WHEREAS, the Term shall commence with respect to each Property upon
the Commencement Date with respect thereto; Basic Rent with respect thereto
shall not be payable until the applicable Rent Commencement Date; and
C. WHEREAS, Lessor desires to lease to Lessee, and Lessee desires to
lease from Lessor, each Property;
NOW, THEREFORE, in consideration of the foregoing, and of other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
1.1 DEFINITIONS.
For purposes of this Lease, capitalized terms used in this Lease and
not otherwise defined herein shall have the meanings assigned to them in
Appendix A to that certain Amended, Restated and Replacement Participation
Agreement dated as of December 31, 1999 (as amended, modified, extended,
supplemented, restated and/or replaced from time to time in accordance with the
applicable provisions thereof, the "Participation Agreement") among Lessee,
Lessor, the various banks and other lending institutions which are parties
thereto from time to time, as the
<PAGE> 6
Holders, the various banks and other lending institutions which are parties
thereto from time to time, as the Lenders, and First Union National Bank, as
agent for the Lenders and respecting the Security Documents, as the agent for
the Lenders and the Holders, to the extent of their interests. Unless otherwise
indicated, references in this Lease to articles, sections, paragraphs, clauses,
appendices, schedules and exhibits are to the same contained in this Lease.
1.2 INTERPRETATION.
The rules of usage set forth in Appendix A to the Participation
Agreement shall apply to this Lease.
ARTICLE II
2.1 PROPERTY.
Subject to the terms and conditions hereinafter set forth and contained
in the respective Lease Supplement relating to each Property, Lessor hereby
leases to Lessee and Lessee hereby leases from Lessor, each Property.
2.2 LEASE TERM.
The term of this Lease with respect to each Property (the "Term") shall
begin upon the earlier of (i) the Completion Date for such Property or (ii) the
date any Agency Event of Default shall occur (in each case the "Commencement
Date") and shall end on November 13, 2004, unless the Term is earlier
terminated. Notwithstanding the foregoing, Lessee shall not be obligated to pay
Basic Rent until the Rent Commencement Date with respect to such Property.
2.3 TITLE.
Each Property is leased to Lessee without any representation or
warranty, express or implied, by Lessor and subject to the rights of parties in
possession (if any), the existing state of title (including without limitation
the Permitted Liens) and all applicable Legal Requirements. Lessee shall in no
event have any recourse against Lessor for any defect in Lessor's title to any
Property or any interest of Lessee therein other than for Lessor Liens.
2.4 LEASE SUPPLEMENTS.
On or prior to each Commencement Date, Lessee and Lessor shall each
execute and deliver a Lease Supplement for the Property to be leased effective
as of such Commencement Date in substantially the form of Exhibit A hereto.
2
<PAGE> 7
ARTICLE III
3.1 RENT.
(a) Lessee shall pay Basic Rent in arrears on each Payment
Date, and on any date on which this Lease shall terminate with respect
to any or all Properties during the Term; provided, however, with
respect to each individual Property, Lessee shall have no obligation to
pay Basic Rent with respect to such Property until the Rent
Commencement Date with respect to such Property (notwithstanding that
Basic Rent for such Property shall accrue from and including the
Scheduled Interest Payment Date immediately preceding such Rent
Commencement Date).
(b) Basic Rent shall be due and payable in lawful money of the
United States and shall be paid by wire transfer of immediately
available funds on the due date therefor (or within the applicable
grace period) to such account or accounts at such bank or banks as
Lessor shall from time to time direct.
(c) Lessee's inability or failure to take possession of all or
any portion of any Property when delivered by Lessor, whether or not
attributable to any act or omission of Lessor, the Construction Agent,
Lessee or any other Person or for any other reason whatsoever, shall
not delay or otherwise affect Lessee's obligation to pay Rent for such
Property in accordance with the terms of this Lease.
(d) Lessee shall make all payments of Rent prior to 12:00
Noon, New York time, on the applicable date for payment of such amount.
3.2 PAYMENT OF BASIC RENT.
Basic Rent shall be paid absolutely net to Lessor or its designee, so
that this Lease shall yield to Lessor the full amount thereof, without setoff,
deduction or reduction.
3.3 SUPPLEMENTAL RENT.
Lessee shall pay to the Person entitled thereto any and all
Supplemental Rent when and as the same shall become due and payable, and if
Lessee fails to pay any Supplemental Rent within three (3) days after the same
is due, Lessor shall have all rights, powers and remedies provided for herein or
by law or equity or otherwise in the case of nonpayment of Basic Rent. All such
payments of Supplemental Rent shall be in the full amount thereof, without
setoff, deduction or reduction. Lessee shall pay to the appropriate Person, as
Supplemental Rent due and owing to such Person, among other things, on demand,
(a) any and all payment obligations (except for amounts payable as Basic Rent)
owing from time to time under the Operative Agreements by any Person to the
Agent, any Lender, any Holder or any other Person, (b) interest at the
applicable Overdue Rate on any installment of Basic Rent not paid when due
(subject to the applicable grace period) for the period for which the same shall
be overdue and on any payment of Supplemental Rent not paid when due or demanded
by the appropriate Person (subject to any
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applicable grace period) for the period from the due date or the date of any
such demand, as the case may be, until the same shall be paid and (c) amounts
referenced as Supplemental Rent obligations pursuant to Section 8.3 of the
Participation Agreement. It shall be an additional Supplemental Rent obligation
of Lessee to pay to the appropriate Person all rent and other amounts when such
become due and owing from time to time under each Ground Lease and without the
necessity of any notice from Lessor with regard thereto. The expiration or other
termination of Lessee's obligations to pay Basic Rent hereunder shall not limit
or modify the obligations of Lessee with respect to Supplemental Rent. Unless
expressly provided otherwise in this Lease, in the event of any failure on the
part of Lessee to pay and discharge any Supplemental Rent as and when due,
Lessee shall also promptly pay and discharge any fine, penalty, interest or cost
which may be assessed or added for nonpayment or late payment of such
Supplemental Rent, all of which shall also constitute Supplemental Rent.
3.4 PERFORMANCE ON A NON-BUSINESS DAY.
If any Basic Rent is required hereunder on a day that is not a Business
Day, then such Basic Rent shall be due on the corresponding Scheduled Interest
Payment Date or the date any amounts specified in Schedule 1 to the
Participation Agreement are due, as the case may be. If any Supplemental Rent is
required hereunder on a day that is not a Business Day, then such Supplemental
Rent shall be due on the next succeeding Business Day.
3.5 RENT PAYMENT PROVISIONS.
Lessee shall make payment of all Basic Rent and Supplemental Rent when
due (subject to the applicable grace periods) regardless of whether any of the
Operative Agreements pursuant to which same is calculated and is owing shall
have been rejected, avoided or disavowed in any bankruptcy or insolvency
proceeding involving any of the parties to any of the Operative Agreements. Such
provisions of such Operative Agreements and their related definitions are
incorporated herein by reference and shall survive any termination, amendment or
rejection of any such Operative Agreements.
ARTICLE IV
4.1 TAXES; UTILITY CHARGES.
Lessee shall pay or cause to be paid all Impositions with respect to
the Properties and/or the use, occupancy, operation, repair, access, maintenance
or operation thereof and all charges for electricity, power, gas, oil, water,
telephone, sanitary sewer service and all other rents, utilities and operating
expenses of any kind or type used in or on any Property and related real
property during the Term. Upon Lessor's request, Lessee shall provide from time
to time Lessor with evidence of all such payments referenced in the foregoing
sentence. Lessee shall be entitled to receive any credit or refund with respect
to any Imposition or utility charge paid by Lessee. Unless an Event of Default
shall have occurred and be continuing, the amount of any credit or refund
received by Lessor on account of any Imposition or utility charge paid by
Lessee, net of
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the costs and expenses incurred by Lessor in obtaining such credit or refund,
shall be promptly paid over to Lessee. All charges for Impositions or utilities
imposed with respect to any Property for a period during which this Lease
expires or terminates shall be adjusted and prorated on a daily basis between
Lessor and Lessee, and each party shall pay or reimburse the other for such
party's pro rata share thereof.
ARTICLE V
5.1 QUIET ENJOYMENT.
Subject to the rights of Lessor contained in Sections 17.2, 17.3 and
20.3 and the other terms of this Lease and the other Operative Agreements and so
long as no Event of Default shall have occurred and be continuing, Lessee shall
peaceably and quietly have, hold and enjoy each Property for the applicable
Term, free of any claim or other action by Lessor or anyone rightfully claiming
by, through or under Lessor (other than Lessee) with respect to any matters
arising from and after the applicable Commencement Date.
ARTICLE VI
6.1 NET LEASE.
This Lease shall constitute a net lease, and the obligations of Lessee
hereunder are absolute and unconditional. Lessee shall pay all operating
expenses arising out of the use, operation and/or occupancy of each Property.
Any present or future law to the contrary notwithstanding, this Lease shall not
terminate, nor shall Lessee be entitled to any abatement, suspension, deferment,
reduction, setoff, counterclaim, or defense with respect to the Rent, nor shall
the obligations of Lessee hereunder be affected (except as expressly herein
permitted and by performance of the obligations in connection therewith) for any
reason whatsoever, including without limitation by reason of: (a) any damage to
or destruction of any Property or any part thereof; (b) any taking of any
Property or any part thereof or interest therein by Condemnation or otherwise;
(c) any prohibition, limitation, restriction or prevention of Lessee's use,
occupancy or enjoyment of any Property or any part thereof, or any interference
with such use, occupancy or enjoyment by any Person or for any other reason; (d)
any title defect, Lien or any matter affecting title to any Property; (e) any
eviction by paramount title or otherwise; (f) any default by Lessor hereunder;
(g) any action for bankruptcy, insolvency, reorganization, liquidation,
dissolution or other proceeding relating to or affecting the Agent, any Lender,
Lessor, Lessee, any Holder or any Governmental Authority; (h) the impossibility
or illegality of performance by Lessor, Lessee or both; (i) any action of any
Governmental Authority or any other Person; (j) Lessee's acquisition of
ownership of all or part of any Property; (k) breach of any warranty or
representation with respect to any Property or any Operative Agreement; (l) any
defect in the condition, quality or fitness for use of any Property or any part
thereof; or (m) any other cause or circumstance whether similar or dissimilar to
the foregoing and whether or not Lessee shall have notice or knowledge of any of
the foregoing. The parties intend that the obligations of Lessee
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hereunder shall be covenants, agreements and obligations that are separate and
independent from any obligations of Lessor hereunder and shall continue
unaffected unless such covenants, agreements and obligations shall have been
modified or terminated in accordance with an express provision of this Lease.
Lessor and Lessee acknowledge and agree that the provisions of this Section 6.1
have been specifically reviewed and subject to negotiation.
6.2 NO TERMINATION OR ABATEMENT.
Lessee shall remain obligated under this Lease in accordance with its
terms and shall not take any action to terminate, rescind or avoid this Lease,
notwithstanding any action for bankruptcy, insolvency, reorganization,
liquidation, dissolution, or other proceeding affecting any Person or any
Governmental Authority, or any action with respect to this Lease or any
Operative Agreement which may be taken by any trustee, receiver or liquidator of
any Person or any Governmental Authority or by any court with respect to any
Person, or any Governmental Authority. Lessee hereby waives all right (a) to
terminate or surrender this Lease (except as permitted under the terms of the
Operative Agreements) or (b) to avail itself of any abatement, suspension,
deferment, reduction, setoff, counterclaim or defense with respect to any Rent.
Lessee shall remain obligated under this Lease in accordance with its terms and
Lessee hereby waives any and all rights now or hereafter conferred by statute or
otherwise to modify or to avoid strict compliance with its obligations under
this Lease. Notwithstanding any such statute or otherwise, Lessee shall be bound
by all of the terms and conditions contained in this Lease.
ARTICLE VII
7.1 OWNERSHIP OF THE PROPERTIES.
(a) Lessor and Lessee intend that (i) for financial accounting
purposes with respect to Lessee (A) this Lease will be treated as an
"operating lease" pursuant to Statement of Financial Accounting
Standards No. 13, as amended, (B) Lessor will be treated as the owner
and lessor of each Property and (C) Lessee will be treated as the
lessee of each Property, but (ii) for federal and all state and local
income tax purposes, bankruptcy purposes, regulatory purposes,
commercial law and real estate purposes and all other purposes (A) this
Lease will be treated as a financing arrangement and (B) Lessee will be
treated as the owner of the Properties and will be entitled to all tax
benefits ordinarily available to owners of property similar to the
Properties for such tax purposes. Notwithstanding the foregoing,
neither party hereto has made, or shall be deemed to have made, any
representation or warranty as to the availability of any of the
foregoing treatments under applicable accounting rules, tax,
bankruptcy, regulatory, commercial or real estate law or under any
other set of rules. Lessee shall claim the cost recovery deductions
associated with each Property, and Lessor shall not, to the extent not
prohibited by Law, take on its tax return a position inconsistent with
Lessee's claim of such deductions.
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(b) For all purposes other than as set forth in Section
7.1(a)(i), Lessor and Lessee intend this Lease to constitute a finance
lease and not a true lease. In order to secure the obligations of
Lessee now existing or hereafter arising under any and all Operative
Agreements, Lessee hereby conveys, grants, assigns, transfers,
hypothecates, mortgages and sets over to Lessor, for the benefit of all
Financing Parties, a first priority security interest (but subject to
the security interest in the assets granted by Lessee in favor of the
Agent in accordance with the Security Agreement) in and lien on all
right, title and interest of Lessee (now owned or hereafter acquired)
in and to all Properties, to the extent such is personal property and
irrevocably grants and conveys a lien and deed of trust on all right,
title and interest of Lessee (now owned or hereafter acquired) in and
to all Properties to the extent such is real property. Lessor and
Lessee further intend and agree that, for the purpose of securing the
obligations of Lessee and/or the Construction Agent now existing or
hereafter arising under the Operative Agreements, (i) this Lease shall
be a security agreement and financing statement within the meaning of
Article 9 of the Uniform Commercial Code respecting each of the
Properties and all proceeds (including without limitation insurance
proceeds thereof) to the extent such is personal property and an
irrevocable grant and conveyance of a lien, and deed of trust on each
of the Properties and all proceeds (including without limitation
insurance proceeds thereof) to the extent such is real property; (ii)
the acquisition of title by Lessor (or to the extent applicable, a
leasehold interest pursuant to a Ground Lease) in each Property
referenced in Article II constitutes a grant by Lessee to Lessor of a
security interest, lien, deed of trust and mortgage in all of Lessee's
right, title and interest in and to each Property and all proceeds
(including without limitation insurance proceeds thereof) of the
conversion, voluntary or involuntary, of the foregoing into cash,
investments, securities or other property, whether in the form of cash,
investments, securities or other property, and an assignment of all
rents, profits and income produced by each Property; and (iii)
notifications to Persons holding such property, and acknowledgments,
receipts or confirmations from financial intermediaries, bankers or
agents (as applicable) of Lessee shall be deemed to have been given for
the purpose of perfecting such lien, security interest, mortgage lien
and deed of trust under applicable law. Lessee shall promptly take such
actions as necessary (including without limitation the filing of
Uniform Commercial Code Financing Statements, Uniform Commercial Code
Fixture Filings and memoranda (or short forms) of this Lease and the
various Lease Supplements) to ensure that the lien, security interest,
mortgage lien and deed of trust in each Property and the other items
referenced above will be deemed to be a perfected lien, security
interest, mortgage lien and deed of trust of first priority under
applicable law and will be maintained as such throughout the Term.
ARTICLE VIII
8.1 CONDITION OF THE PROPERTIES.
LESSEE ACKNOWLEDGES AND AGREES THAT IT IS LEASING EACH PROPERTY "AS-IS
WHERE-IS" WITHOUT REPRESENTATION, WARRANTY OR
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COVENANT (EXPRESS OR IMPLIED) BY LESSOR (EXCEPT THAT LESSOR SHALL KEEP EACH
PROPERTY FREE AND CLEAR OF LESSOR LIENS) AND IN EACH CASE SUBJECT TO (A) THE
EXISTING STATE OF TITLE, (B) THE RIGHTS OF ANY PARTIES IN POSSESSION THEREOF (IF
ANY), (C) ANY STATE OF FACTS REGARDING ITS PHYSICAL CONDITION OR WHICH AN
ACCURATE SURVEY MIGHT SHOW, (D) ALL APPLICABLE LEGAL REQUIREMENTS AND (E)
VIOLATIONS OF LEGAL REQUIREMENTS WHICH MAY EXIST ON THE DATE HEREOF AND/OR THE
DATE OF THE APPLICABLE LEASE SUPPLEMENT. NEITHER LESSOR NOR THE AGENT NOR ANY
LENDER NOR ANY HOLDER HAS MADE OR SHALL BE DEEMED TO HAVE MADE ANY
REPRESENTATION, WARRANTY OR COVENANT (EXPRESS OR IMPLIED) (EXCEPT THAT LESSOR
SHALL KEEP EACH PROPERTY FREE AND CLEAR OF LESSOR LIENS) OR SHALL BE DEEMED TO
HAVE ANY LIABILITY WHATSOEVER AS TO THE TITLE, VALUE, HABITABILITY, USE,
CONDITION, DESIGN, OPERATION, MERCHANTABILITY OR FITNESS FOR USE OF ANY PROPERTY
(OR ANY PART THEREOF), OR ANY OTHER REPRESENTATION, WARRANTY OR COVENANT
WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO ANY PROPERTY (OR ANY PART
THEREOF), AND NEITHER LESSOR NOR THE AGENT NOR ANY LENDER NOR ANY HOLDER SHALL
BE LIABLE FOR ANY LATENT, HIDDEN, OR PATENT DEFECT THEREON OR THE FAILURE OF ANY
PROPERTY, OR ANY PART THEREOF, TO COMPLY WITH ANY LEGAL REQUIREMENT. LESSEE HAS
OR PRIOR TO THE COMMENCEMENT DATE WILL HAVE BEEN AFFORDED FULL OPPORTUNITY TO
INSPECT EACH PROPERTY AND THE IMPROVEMENTS THEREON (IF ANY), IS OR WILL BE
(INSOFAR AS LESSOR, THE AGENT, EACH LENDER AND EACH HOLDER ARE CONCERNED)
SATISFIED WITH THE RESULTS OF ITS INSPECTIONS AND IS ENTERING INTO THIS LEASE
SOLELY ON THE BASIS OF THE RESULTS OF ITS OWN INSPECTIONS, AND ALL RISKS
INCIDENT TO THE MATTERS DESCRIBED IN THE PRECEDING SENTENCE, AS BETWEEN LESSOR,
THE AGENT, THE LENDERS AND THE HOLDERS, ON THE ONE HAND, AND LESSEE, ON THE
OTHER HAND, ARE TO BE BORNE BY LESSEE.
8.2 POSSESSION AND USE OF THE PROPERTIES.
(a) At all times during the Term with respect to each
Property, such Property shall be a Permitted Facility and shall be used
by Lessee in the ordinary course of its business. Lessee shall pay, or
cause to be paid, all charges and costs required in connection with the
use of the Properties as contemplated by this Lease. Lessee shall not
commit or permit any waste of the Properties or any part thereof.
(b) The address stated in Section 29.1 of this Lease is the
principal place of business and chief executive office of Lessee (as
such terms are used in Section 9-103(3) of the Uniform Commercial Code
of any applicable jurisdiction), and Lessee will provide Lessor with
prior written notice of any change of location of its principal place
of business or chief executive office. Regarding a particular Property,
each Lease Supplement correctly identifies the initial location of the
related Equipment (if any) and Improvements (if any) and contains an
accurate legal description for the related parcel of
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Land or a copy of the Ground Lease (if any). The Equipment and
Improvements respecting each particular Property will be located only
at the location identified in the applicable Lease Supplement.
(c) Lessee will not attach or incorporate any item of
Equipment to or in any other item of equipment or personal property or
to or in any real property in a manner that could give rise to the
assertion of any Lien on such item of Equipment by reason of such
attachment or the assertion of a claim that such item of Equipment has
become a fixture and is subject to a Lien in favor of a third party
that is prior to the Liens thereon created by the Operative Agreements.
(d) On the Commencement Date for each Property, Lessor and
Lessee shall execute a Lease Supplement in regard to such Property
which shall contain an Equipment Schedule that has a general
description of the Equipment which shall comprise the Property, an
Improvement Schedule that has a general description of the Improvements
which shall comprise the Property and a legal description of the Land
to be leased hereunder (or in the case of any Property subject to a
Ground Lease to be subleased hereunder) as of such date. Each Property
subject to a Ground Lease shall be deemed to be ground subleased from
Lessor to Lessee as of the Commencement Date, and such ground sublease
shall be in effect until this Lease is terminated or expires, in each
case in accordance with the terms and provisions hereof. Lessee shall
satisfy and perform all obligations imposed on Lessor under each Ground
Lease. Simultaneously with the execution and delivery of each Lease
Supplement, such Equipment, Improvements, Land, ground subleasehold
interest, all additional Equipment and all additional Improvements
which are financed under the Operative Agreements after the
Commencement Date and the remainder of such Property shall be deemed to
have been accepted by Lessee for all purposes of this Lease and to be
subject to this Lease (but subject to all rights Lessee, Construction
Agent or Lessor may have against vendors, manufacturers, contractors
and other third parties with respect to any such Equipment or
Improvements).
(e) At all times during the Term with respect to each
Property, Lessee will comply with all obligations under and (to the
extent no Event of Default exists and provided that such exercise will
not impair the value, utility or remaining useful life of such
Property) shall be permitted to exercise all rights and remedies under,
all operation and easement agreements and related or similar agreements
applicable to such Property.
8.3 INTEGRATED PROPERTIES.
On the Rent Commencement Date for each Property, Lessee shall, at its
sole cost and expense, cause such Property and the applicable property subject
to a Ground Lease to constitute (and for the duration of the Term shall continue
to constitute) all of the equipment, facilities, rights, other personal property
and other real property necessary or appropriate to operate, utilize, maintain
and control a Permitted Facility in a commercially reasonable manner.
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ARTICLE IX
9.1 COMPLIANCE WITH LEGAL REQUIREMENTS, INSURANCE REQUIREMENTS AND
MANUFACTURER'S SPECIFICATIONS AND STANDARDS.
Subject to the terms of Article XIII relating to permitted contests,
Lessee, at its sole cost and expense, shall (a) comply with all applicable Legal
Requirements (including without limitation all Environmental Laws) and all
Insurance Requirements relating to the Properties, (b) procure, maintain and
comply with all licenses, permits, orders, approvals, consents and other
authorizations required for the acquisition, installation, testing, use,
development, construction, operation, maintenance, repair, refurbishment and
restoration of the Properties, and (c) comply with all manufacturer's
specifications and standards, including without limitation the acquisition,
installation, testing, use, development, construction, operation, maintenance,
repair, refurbishment and restoration of the Properties, whether or not
compliance therewith shall require structural or extraordinary changes in any
Property or interfere with the use and enjoyment of any Property unless the
failure to procure, maintain and comply with Legal Requirements relating to the
Properties other than Environmental Laws or such items identified in
subparagraphs (b) and (c), individually or in the aggregate, shall not and could
not reasonably be expected to have a Material Adverse Effect. Lessor agrees to
take such actions as may be reasonably requested by Lessee in connection with
the compliance by Lessee of its obligations under this Section 9.1.
ARTICLE X
10.1 MAINTENANCE AND REPAIR; RETURN.
(a) Lessee, at its sole cost and expense, shall maintain each
Property in good condition, repair and working order (ordinary wear and
tear excepted) and in the repair and condition as when originally
delivered to Lessor and make all necessary repairs thereto and
replacements thereof, of every kind and nature whatsoever, whether
interior or exterior, ordinary or extraordinary, structural or
nonstructural or foreseen or unforeseen, in each case as required by
Section 9.1 and on a basis consistent with the operation and
maintenance of properties or equipment comparable in type and function
to the applicable Property, such that such Property is capable of being
immediately utilized by a third party and in compliance with standard
industry practice subject, however, to the provisions of Article XV
with respect to Casualty and Condemnation.
(b) Lessee shall not use or locate any component of any
Property outside of the Approved State therefor. Lessee shall not move
or relocate any component of any Property beyond the boundaries of the
Land (comprising part of such Property) described in the applicable
Lease Supplement, except for the temporary removal of Equipment and
other personal property for repair or replacement.
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(c) If any component of any Property becomes worn out, lost,
destroyed, damaged beyond repair or otherwise permanently rendered
unfit for use, Lessee, at its own expense, will within a reasonable
time replace such component with a replacement component which is free
and clear of all Liens (other than Permitted Liens and Lessor Liens)
and has a value, utility and useful life at least equal to the
component replaced (assuming the component replaced had been maintained
and repaired in accordance with the requirements of this Lease). All
components which are added to any Property shall immediately become the
property of (and title thereto shall vest in) Lessor and shall be
deemed incorporated in such Property and subject to the terms of this
Lease as if originally leased hereunder.
(d) Upon reasonable advance notice, Lessor and its agents
shall have the right to inspect each Property and all maintenance
records with respect thereto at any reasonable time during normal
business hours but shall not, in the absence of an Event of Default,
materially disrupt the business of Lessee.
(e) If, at any time, the aggregate appraised value of
Properties then subject to this Lease for which the Agent has received
an Appraisal pursuant to the terms of Section 5.3 of the Participation
Agreement is less than twenty-five percent (25%) of the aggregate
Property Cost at such time (the "Base Amount"), then Lessee will cause
an additional. Appraisal or Appraisals to be immediately delivered to
Lessor in an amount sufficient to cause such aggregate appraised value
to equal or exceed the Base Amount. In addition, Lessee shall cause to
be delivered to Lessor (at Lessee's sole expense) one (1) or more
Appraisals (or reappraisals of Property) as Lessor may request if any
one (1) of Lessor, the Agent, the Trust Company, any Lender or any
Holder is required pursuant to any applicable Legal Requirement to
obtain such Appraisals (or reappraisals) and upon the occurrence of any
Event of Default.
(f) Lessor shall under no circumstances be required to build
any improvements or install any equipment on any Property, make any
repairs, replacements, alterations or renewals of any nature or
description to any Property, make any expenditure whatsoever in
connection with this Lease or maintain any Property in any way. Lessor
shall not be required to maintain, repair or rebuild all or any part of
any Property, and Lessee waives the right to (i) require Lessor to
maintain, repair, or rebuild all or any part of any Property, or (ii)
make repairs at the expense of Lessor pursuant to any Legal
Requirement, Insurance Requirement, contract, agreement, covenant,
condition or restriction at any time in effect.
(g) Lessee shall, upon the expiration or earlier termination
of this Lease with respect to a Property, if Lessee shall not have
exercised its Purchase Option with respect to such Property and
purchased such Property, surrender such Property (i) to Lessor pursuant
to the exercise of the applicable remedies upon the occurrence of a
Lease Event of Default or (ii) pursuant to the second paragraph of
Section 22.1(a) hereof, to Lessor or the third party purchaser, as the
case may be, subject to Lessee's obligations under this
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Lease (including without limitation the obligations of Lessee at the
time of such surrender under Sections 9.1, 10.1(a) through (f), 10.2,
11.1, 12.1, 22.1 and 23.1).
In any event, regarding the surrender of such Property Lessee
will at its expense, dismantle, surrender and deliver possession of each item of
Equipment to Lessor at the Redelivery Location with a certificate executed by a
Responsible Officer of Lessee certifying that the item of Equipment is in the
condition required hereunder, a copy of an inventory list for each item of
Equipment, all then current plans, specifications and operating, maintenance,
and repair manuals and logs relating to each item of Equipment that have been
prepared or received by Lessee, and with respect to any item of Equipment which
qualifies for or is subject to any manufacturer's maintenance, repair or
warranty policy, to the extent reasonably available, a statement or certificate
that has been signed by an authorized representative of the manufacturer
attesting to such condition. At the time of such return to Lessor, each item of
Equipment (and each part or component thereof) shall (a) meet the original
design specifications and operating standards of such item, (b) all software
shall be the latest version available, (c) all Equipment shall operate to the
highest tolerances and specifications, (d) be in as good operating condition,
state of repair and appearance as when delivered to Lessee hereunder, ordinary
wear and tear excepted, and in the condition required pursuant to the Lease, (e)
have no missing or damaged components such that its value, utility or remaining
useful life will be reduced, (f) comply with all laws and rules referred to in
Sections 9.1, 10.1, 10.2 hereof and any other applicable provision of any
Operative Agreement, (g) have attached or affixed thereto any addition,
modification or improvement considered an accession thereto as provided in
Section 11.1 hereof and (h) have had removed therefrom in a workmanlike manner,
(i) at Lessee's option, any addition, modification or improvement which, as
provided in Section 11.1 hereof, is owned by Lessee, and (ii) any insignia or
marking permitted pursuant to Section 13 hereof, and (g) be free and clear of
all Liens, other than a Lien granted or placed thereon by the Lessor or the
Agent. With respect to any item of Equipment which has an hour meter or similar
device affixed to or relating to such Equipment, Lessee must provide evidence of
the total operating hours on such item at redelivery, as evidenced by such meter
or similar device. All operating licenses and agreements, including without
limitation all software licenses pertinent to operation of each Item of
Equipment, which are capable of being transferred, shall be fully transferable
upon the expiration of the Term to Lessor or its designee. Lessee shall transfer
all operating licenses or agreements, including without limitation all software
licenses, upon return of the item of Equipment at Lessee's cost and expense.
Each item of Equipment that qualified for or is subject to any manufacturer's
maintenance, repair or warranty policy must be properly deinstalled in a manner
consistent with such policy and in such a way that the item remains eligible for
or subject to such policy, as appropriate, and Lessee shall, to the extent
reasonably practicable, provide or shall cause a representative of the
manufacturer of such item to provide a certificate certifying that each item of
Equipment was deinstalled in a manner consistent with such policy and remains
eligible for or subject to such policy, as appropriate. All disassembly and
deinstallation of each item of Equipment shall be done in a clean-room
environment and each item of Equipment shall be decontaminated and safe for
travel pursuant to all Legal Requirements. Upon deinstallation each item of
Equipment shall be secured properly for air or overland transport. Each item of
Equipment originally delivered to Lessee, secured for shock proof and minimum
vibration travel or delivered via air ride van shall be redelivered in a similar
manner, and each other item of
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Equipment shall be delivered in the manner in which it was delivered to Lessee
or such other manner as is customary for such item of Equipment. Lessee shall
pay for any repairs necessary to restore any item of Equipment to the condition
required by this Section 10.1. The term "ordinary wear and tear" as used herein
shall not be construed as permitting any material broken, damaged or missing
items or components of any item of Equipment. Upon redelivery, Lessee shall
provide any additional documentation reasonably requested by Lessor, at Lessee's
cost, relating to the redelivery of or Lessor's interest in each item of
Equipment.
(h) For the purpose of delivering possession of any item of Equipment
to Lessor as above required, Lessee shall at its own cost, expense and risk
cause each such item of Equipment to be insured, including insurance during
transport, in an amount equal to or in excess of the greater of (i) the
Termination Value and (ii) the Fair Market Sales Value and in accordance with
Article XIV hereof and stored at the Redelivery Location identified therefor by
Lessor at the risk of Lessee without charge to Lessor or any Assignee for
insurance, rent or storage until all such items of Equipment have been sold,
leased or otherwise disposed of by Lessor; provided however, Lessee's
obligations under this Section 10.1(h) shall terminate with respect to each item
of Equipment on the 90th day after delivery of such item to the Redelivery
Location in the condition required by Section 10.1 hereof.
(i) Each item of Equipment shall be deemed redelivered upon
satisfaction of the obligations and conditions set forth in Section 10.1 hereof.
Until each such item of Equipment has been returned to Lessor in the condition
and as otherwise provided in this Section 10.1, Lessee shall continue to pay
Lessor, on the same dates on which an Equipment Payment for such item was
payable during the Term thereof 125% of the Equipment Payment for such item that
was payable on the last Payment Date of the Term thereof; provided, that during
such holdover period, Lessee shall use its best efforts to secure the return of
the Equipment as required under this Section 10.1. The provision for payment
pursuant to this Section 10.1 shall not abrogate Lessor's right under this
Section 10.1 to have such Equipment returned to it hereunder.
(j) The provisions of this Section 10.1 are essential to this Lease,
and upon application to any court of equity having jurisdiction in the premises,
Lessor shall be entitled to a decree against Lessee requiring specific
performance of the covenants of Lessee set forth in this Section 10.1.
10.2 ENVIRONMENTAL INSPECTION.
If Lessee has not given notice of exercise of its Purchase Option on
the Expiration Date pursuant to Section 20.1 or for whatever reason Lessee does
not purchase a Property in accordance with the terms of this Lease, then not
more than one hundred twenty (120) days nor less than sixty (60) days prior to
the Expiration Date, Lessee at its expense shall cause to be delivered to Lessor
a Phase I environmental site assessment recently prepared (no more than thirty
(30) days prior to the date of delivery) by an independent recognized
professional
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reasonably acceptable to Lessor, and in form, scope and content reasonably
satisfactory to Lessor.
ARTICLE XI
11.1 MODIFICATIONS.
(a) Lessee at its sole cost and expense, at any time and from
time to time without the consent of Lessor may make modifications,
alterations, renovations, improvements and additions to any Property or
any part thereof and substitutions and replacements therefor
(collectively, "Modifications"), and Lessee shall make any and all
Modifications required to be made pursuant to all Legal Requirements,
Insurance Requirements and manufacturer's specifications and standards;
provided, that: (i) no Modification shall materially impair the value,
utility or useful life of any Property from that which existed
immediately prior to such Modification; (ii) each Modification shall be
done expeditiously and in a good and workmanlike manner; (iii) no
Modification shall adversely affect the structural integrity of any
Property; (iv) to the extent required by Section 14.2(a), Lessee shall
maintain builders' risk insurance at all times when a Modification is
in progress; (v) subject to the terms of Article XIII relating to
permitted contests, Lessee shall pay all costs and expenses and
discharge any Liens arising with respect to any Modification; (vi) each
Modification shall comply with the requirements of this Lease
(including without limitation Sections 8.2 and 10.1); and (vii) no
Improvement shall be demolished or otherwise rendered unfit for use
unless Lessee shall finance the proposed replacement Modification
outside of this lease facility; provided, further, Lessee shall not
make any Modification (unless required by any Legal Requirement) to the
extent any such Modification, individually or in the aggregate, shall
or could reasonably be expected to have a Material Adverse Effect. All
Modifications shall immediately and without further action upon their
incorporation into the applicable Property (1) become property of
Lessor, (2) be subject to this Lease and (3) be titled in the name of
Lessor. Lessee shall not remove or attempt to remove any Modification
from any Property. Each Ground Lease for a Property shall expressly
provide for the provisions of the foregoing sentence. Lessee, at its
own cost and expense, will pay for the repairs of any damage to any
Property caused by the removal or attempted removal of any
Modification. Upon redelivery of any item of Equipment Lessee shall, if
instructed by Lessor, remove any Modification and repair such item of
Equipment to comply with the provisions of Section 9.1, 10.1 and any
other applicable provisions in any Operative Agreement.
(b) The construction process provided for in the Agency
Agreement is acknowledged by Lessor to be consistent with and in
compliance with the terms and provisions of this Article XI.
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ARTICLE XII
12.1 WARRANTY OF TITLE.
(a) Lessee hereby acknowledges and shall cause title in each
Property (including without limitation all Equipment, all Improvements,
all replacement components to each Property and all Modifications)
immediately and without further action to vest in and become the
property of Lessor and to be subject to the terms of this Lease
(provided, respecting each Property subject to a Ground Lease, Lessor's
interest therein is acknowledged to be a leasehold interest pursuant to
such Ground Lease) from and after the date hereof or such date of
incorporation into any Property. Lessee agrees that, subject to the
terms of Article XIII relating to permitted contests, Lessee shall not
directly or indirectly create or allow to remain, and shall promptly
discharge at its sole cost and expense, any Lien, defect, attachment,
levy, title retention agreement or claim upon any Property, any
component thereof or any Modifications or any Lien, attachment, levy or
claim with respect to the Rent or with respect to any amounts held by
Lessor, the Agent, any Lender or any Holder pursuant to any Operative
Agreement, other than Permitted Liens and Lessor Liens. Lessee shall
promptly notify Lessor in the event it receives actual knowledge that a
Lien other than a Permitted Lien or Lessor Lien has occurred with
respect to a Property, the Rent or any other such amounts, and Lessee
represents and warrants to, and covenants with, Lessor that the Liens
in favor of Lessor and/or the Agent created by the Operative Agreements
are (and until the Financing Parties under the Operative Agreements
have been paid in full shall remain) first priority perfected Liens
subject only to Permitted Liens and Lessor Liens. At all times
subsequent to the Commencement Date respecting a Property, Lessee shall
(i) cause a valid, perfected, first priority Lien on each applicable
Property to be in place in favor of the Agent (for the benefit of the
Lenders and the Holders) and (ii) file, or cause to be filed, all
necessary documents under the applicable real property law and Article
9 of the Uniform Commercial Code to perfect such title and Liens.
(b) Nothing contained in this Lease shall be construed as
constituting the consent or request of Lessor, expressed or implied, to
or for the performance by any contractor, mechanic, laborer,
materialman, supplier or vendor of any labor or services or for the
furnishing of any materials for any construction, alteration, addition,
repair or demolition of or to any Property or any part thereof. NOTICE
IS HEREBY GIVEN THAT LESSOR IS NOT AND SHALL NOT BE LIABLE FOR ANY
LABOR, SERVICES OR MATERIALS FURNISHED OR TO BE FURNISHED TO LESSEE, OR
TO ANYONE HOLDING A PROPERTY OR ANY PART THEREOF THROUGH OR UNDER
LESSEE, AND THAT NO MECHANIC'S OR OTHER LIENS FOR ANY SUCH LABOR,
SERVICES OR MATERIALS SHALL ATTACH TO OR AFFECT THE INTEREST OF LESSOR
IN AND TO ANY PROPERTY.
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ARTICLE XIII
13.1 PERMITTED CONTESTS OTHER THAN IN RESPECT OF INDEMNITIES.
Except to the extent otherwise provided for in Section 11 of the
Participation Agreement, Lessee, on its own or on Lessor's behalf but at
Lessee's sole cost and expense, may contest, by appropriate administrative or
judicial proceedings conducted in good faith and with due diligence, the amount,
validity or application, in whole or in part, of any Legal Requirement,
Imposition or utility charge payable pursuant to Section 4.1 or any Lien,
attachment, levy, encumbrance or encroachment, and Lessor agrees not to pay,
settle or otherwise compromise any such item, provided, that (a) the
commencement and continuation of such proceedings shall suspend the collection
of any such contested amount from, and suspend the enforcement thereof against,
the applicable Properties, Lessor, each Holder, the Agent and each Lender; (b)
there shall not be imposed a Lien (other than Permitted Liens and Lessor Liens)
on any Property and no part of any Property nor any Rent would be in any danger
of being sold, forfeited, lost or deferred; (c) at no time during the permitted
contest shall there be a risk of the imposition of criminal liability or
material civil liability on Lessor, any Holder, the Agent or any Lender for
failure to comply therewith; and (d) in the event that, at any time, there shall
be a material risk of extending the application of such item beyond the end of
the Term, then Lessee shall deliver to Lessor an Officer's Certificate
certifying as to the matters set forth in clauses (a), (b) and (c) of this
Section 13.1. Lessor, at Lessee's sole cost and expense, shall execute and
deliver to Lessee such authorizations and other documents as may reasonably be
required in connection with any such contest and, if reasonably requested by
Lessee, shall join as a party therein at Lessee's sole cost and expense.
13.2 IMPOSITIONS, UTILITY CHARGES, OTHER MATTERS; COMPLIANCE WITH LEGAL
REQUIREMENTS.
Except with respect to Impositions, Legal Requirements, utility charges
and such other matters referenced in Section 13.1 which are the subject of
ongoing proceedings contesting the same in a manner consistent with the
requirements of Section 13.1, Lessee shall cause (a) all Impositions, utility
charges and such other matters to be timely paid, settled or compromised, as
appropriate, with respect to each Property and (b) each Property to comply with
all applicable Legal Requirements.
ARTICLE XIV
14.1 PUBLIC LIABILITY AND WORKERS' COMPENSATION INSURANCE.
During the Term for each Property, Lessee shall procure and carry, at
Lessee's sole cost and expense, commercial general liability and umbrella
liability insurance for claims for injuries or death sustained by persons or
damage to property while on such Property or respecting the Equipment and such
other public liability coverages as are then customarily carried by similarly
situated companies conducting business similar to that conducted by Lessee. Such
insurance
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shall be on terms and in amounts that are no less favorable than insurance
maintained by Lessee with respect to similar properties and equipment that it
owns and are then carried by similarly situated companies conducting business
similar to that conducted by Lessee, and in no event shall have a minimum
combined single limit per occurrence coverage (i) for commercial general
liability of less than $1,000,000.00 and (ii) for umbrella liability of less
than $30,000,000.00. The policies shall name Lessee as the insured and shall be
endorsed to name Lessor, the Holders, the Agent and the Lenders as additional
insureds. The policies shall also specifically provide that such policies shall
be considered primary insurance which shall apply to any loss or claim before
any contribution by any insurance which Lessor, any Holder, the Agent or any
Lender may have in force. In the operation of the Properties, Lessee shall
comply with applicable workers' compensation laws and protect Lessor, each
Holder, the Agent and each Lender against any liability under such laws.
14.2 PERMANENT HAZARD AND OTHER INSURANCE.
(a) During the Term for each Property, Lessee shall keep such
Property insured against all risk of physical loss or damage by fire
and other risks and shall maintain builders' risk insurance during
construction of any Improvements or Modifications in each case in
amounts no less than the Property Cost of such Property from time to
time and on terms that (i) are no less favorable than insurance
covering other similar properties owned by Lessee and (ii) are then
carried by similarly situated companies conducting business similar to
that conducted by Lessee. The policies shall name Lessee as the insured
and shall be endorsed to name Lessor and the Agent (on behalf of the
Lenders and the Holders) as a named additional insured and loss payee,
to the extent of their respective interests; provided, so long as no
Event of Default exists, any loss payable under the insurance policies
required by this Section for losses up to $2,000,000.00 will be paid to
Lessee.
(b) If, during the Term with respect to a Property the area in
which such Property is located is designated a "flood-prone" area
pursuant to the Flood Disaster Protection Act of 1973, or any
amendments or supplements thereto or is in a zone designated A or V,
then Lessee shall comply with the National Flood Insurance Program as
set forth in the Flood Disaster Protection Act of 1973. In addition,
Lessee will fully comply with the requirements of the National Flood
Insurance Act of 1968 and the Flood Disaster Protection Act of 1973, as
each may be amended from time to time, and with any other Legal
Requirement, concerning flood insurance to the extent that it applies
to any such Property. During the Term, Lessee shall, in the operation
and use of each Property, maintain workers' compensation insurance
consistent with that carried by similarly situated companies conducting
business similar to that conducted by Lessee and containing minimum
liability limits of no less than $100,000.00. In the operation of each
Property, Lessee shall comply with workers' compensation laws
applicable to Lessee, and protect Lessor, each Holder, the Agent and
each Lender against any liability under such laws.
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14.3 COVERAGE.
(a) As of the date of this Lease and annually thereafter
during the Term, Lessee shall furnish the Agent (on behalf of Lessor
and the other beneficiaries of such insurance coverage) with
certificates prepared by the insurers or insurance broker of Lessee
showing the insurance required under Sections 14.1 and 14.2 to be in
effect, naming (to the extent of their respective interests) Lessor,
the Holders, the Agent and the Lenders as additional insureds and loss
payees and evidencing the other requirements of this Article XIV. All
such insurance shall be at the cost and expense of Lessee and provided
by nationally recognized, financially sound insurance companies having
an A+ or better rating by A.M. Best's Key Rating Guide. Lessee shall
cause such certificates to include a provision for thirty (30) days'
advance written notice by the insurer to the Agent (on behalf of Lessor
and the other beneficiaries of such insurance coverage) in the event of
cancellation or material alteration of such insurance. If an Event of
Default has occurred and is continuing and the Agent (on behalf of
Lessor and the other beneficiaries of such insurance coverage) so
requests, Lessee shall deliver to the Agent (on behalf of Lessor and
the other beneficiaries of such insurance coverage) copies of all
insurance policies required by Sections 14.1 and 14.2.
(b) Lessee agrees that the insurance policy or policies
required by Sections 14.1, 14.2(a) and 14.2(b) shall include an
appropriate clause pursuant to which any such policy shall provide that
it will not be invalidated should Lessee or any Contractor, as the case
may be, waive, at any time, any or all rights of recovery against any
party for losses covered by such policy or due to any breach of
warranty, fraud, action, inaction or misrepresentation by Lessee or any
Person acting on behalf of Lessee. Lessee hereby waives any and all
such rights against Lessor, the Holders, the Agent and the Lenders to
the extent of payments made to any such Person under any such policy.
(c) Neither Lessor nor Lessee shall carry separate insurance
concurrent in kind or form or contributing in the event of loss with
any insurance required under this Article XIV, except that Lessor may
carry separate liability insurance at Lessor's sole cost so long as (i)
Lessee's insurance is designated as primary and in no event excess or
contributory to any insurance Lessor may have in force which would
apply to a loss covered under Lessee's policy and (ii) each such
insurance policy will not cause Lessee's insurance required under this
Article XIV to be subject to a coinsurance exception of any kind.
(d) Lessee shall pay as they become due all premiums for the
insurance required by Section 14.1 and Section 14.2, shall renew or
replace each policy prior to the expiration date thereof or otherwise
maintain the coverage required by such Sections without any lapse in
coverage.
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ARTICLE XV
15.1 CASUALTY AND CONDEMNATION.
(a) Subject to the provisions of the Agency Agreement and this
Article XV and Article XVI (in the event Lessee delivers, or is
obligated to deliver or is deemed to have delivered, a Termination
Notice), and prior to the occurrence and continuation of a Default or
an Event of Default, Lessee shall be entitled to receive (and Lessor
hereby irrevocably assigns to Lessee all of Lessor's right, title and
interest in) any condemnation proceeds, award, compensation or
insurance proceeds under Sections 14.2(a) or 14.2(b) hereof to which
Lessee or Lessor may become entitled by reason of their respective
interests in a Property (i) if all or a portion of such Property is
damaged or destroyed in whole or in part by a Casualty or (ii) if the
use, access, occupancy, easement rights or title to such Property or
any part thereof is the subject of a Condemnation; provided, however,
if a Default or an Event of Default shall have occurred and be
continuing or if such award, compensation or insurance proceeds shall
exceed $2,000,000.00, then such award, compensation or insurance
proceeds shall be paid directly to Lessor or, if received by Lessee,
shall be held in trust for Lessor, and shall be paid over by Lessee to
Lessor and held in accordance with the terms of this paragraph (a). All
amounts held by Lessor hereunder on account of any award, compensation
or insurance proceeds either paid directly to Lessor or turned over to
Lessor shall be held as security for the performance of Lessee's
obligations hereunder and under the other Operative Agreements and (i)
to the extent no Default or Event of Default shall have occurred and be
continuing at such time, Lessor shall pay such amounts so held by
Lessor (A) from time to time as Lessee either restores and repairs such
Property pursuant to Section 15.1(e) and gives Lessor reasonable
evidence of such restoration and repair work or (b) promptly to Lessee
upon Lessee's payment in full of the Termination Value for such
Property pursuant to Article XVI or (ii) to the extent a Default or
Event of Default shall have occurred and be continuing at such time,
all amounts so held by Lessor shall be paid over to Lessee when all
such obligations of Lessee with respect to such matters (and all other
obligations of Lessee which should have been satisfied pursuant to the
Operative Agreements as of such date) have been satisfied and no
Default or Event of Default is then continuing.
(b) Lessee may appear in any proceeding or action to
negotiate, prosecute, adjust or appeal any claim for any award,
compensation or insurance payment on account of any such Casualty or
Condemnation and shall pay all expenses thereof. At Lessee's reasonable
request, and at Lessee's sole cost and expense, Lessor and the Agent
shall participate in any such proceeding, action, negotiation,
prosecution or adjustment. Lessor and Lessee agree that this Lease
shall control the rights of Lessor and Lessee in and to any such award,
compensation or insurance payment.
(c) If Lessee shall receive notice of a Casualty or a
Condemnation of a Property or any interest therein where damage to the
affected Property is estimated to equal or exceed fifty percent (50%)
of the Property Cost of such Property, Lessee shall give notice thereof
to Lessor promptly after Lessee's receipt of such notice. In the event
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such a Casualty or Condemnation occurs (regardless of whether Lessee
gives notice thereof), then Lessee shall be deemed to have delivered a
Termination Notice to Lessor and the provisions of Sections 16.1 and
16.2 shall apply.
(d) In the event of a Casualty or a Condemnation (regardless
of whether notice thereof must be given pursuant to paragraph (c)),
this Lease shall terminate with respect to the applicable Property in
accordance with Section 16.1 if Lessee, within thirty (30) days after
such occurrence, delivers to Lessor a notice to such effect.
(e) If pursuant to this Section 15.1 this Lease shall continue
in full force and effect following a Casualty or Condemnation with
respect to the affected Property, Lessee shall, at its sole cost and
expense (subject to reimbursement in accordance with Section 15.1(a))
promptly and diligently repair any damage to the applicable Property
caused by such Casualty or Condemnation in conformity with the
requirements of Sections 10.1 and 11.1, using the as-built Plans and
Specifications or manufacturer's specifications for the applicable
Improvements, Equipment or other components of the applicable Property
(as modified to give effect to any subsequent Modifications, any
Condemnation affecting the applicable Property and all applicable Legal
Requirements), so as to restore the applicable Property to the same or
a greater remaining economic value, useful life, utility, condition,
operation and function as existed immediately prior to such Casualty or
Condemnation (assuming all maintenance and repair standards have been
satisfied). In such event, title to the applicable Property shall
remain with Lessor.
(f) In no event shall a Casualty or Condemnation affect
Lessee's obligations to pay Rent pursuant to Article III unless the
Lease is terminated and Lessee has paid all amounts then due and owing.
(g) Notwithstanding anything to the contrary set forth in
Section 15.1(a) or Section 15.1(e), if during the Term with respect to
a Property a Casualty occurs with respect to such Property or Lessee
receives notice of a Condemnation with respect to such Property, and
following such Casualty or Condemnation, the applicable Property cannot
reasonably be restored, repaired or replaced on or before the day one
hundred eighty (180) days prior to the Expiration Date or the date nine
(9) months after the occurrence of such Casualty or Condemnation (if
such Casualty or Condemnation occurs during the Term) to the same or a
greater remaining economic value, useful life, utility, condition,
operation and function as existed immediately prior to such Casualty or
Condemnation (assuming all maintenance and repair standards have been
satisfied) or on or before such day such Property is not in fact so
restored, repaired or replaced, then Lessee shall be required to
exercise its Purchase Option for such Property on the next Payment Date
(notwithstanding the limits on such exercise contained in Section 20.2)
and pay Lessor the Termination Value for such Property; provided, if
any Default or Event of Default has occurred and is continuing, Lessee
shall also promptly (and in any event within three (3) Business Days)
pay Lessor any award, compensation or insurance proceeds received on
account of any Casualty or Condemnation with respect to any Property;
provided, further, that if no Default or Event of Default has occurred
and is continuing, any Excess
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Proceeds shall be paid to Lessee. If a Default or an Event of Default
has occurred and is continuing and any Loans, Holder Advances or other
amounts are owing with respect thereto, then any Excess Proceeds (to
the extent of any such Loans, Holder Advances or other amounts owing
with respect thereto) shall be paid to Lessor, held as security for the
performance of Lessee's obligations hereunder and under the other
Operative Agreements and applied to such obligations upon the exercise
of remedies in connection with the occurrence of an Event of Default,
with the remainder of such Excess Proceeds in excess of such Loans,
Holder Advances and other amounts owing with respect thereto being
distributed to the Lessee.
15.2 ENVIRONMENTAL MATTERS.
Within five (5) Business Days of the date any Responsible Officer of
Lessee initially had actual knowledge or should have known of the presence of
Hazardous Substances in any portion of any Property or Properties in
concentrations and conditions that constitute an Environmental Violation and
which, in the reasonable opinion of Lessee, the cost to undertake any legally
required response, clean up, remedial or other action will or might result in a
cost to Lessee of more than $25,000.00, Lessee shall notify Lessor in writing of
such condition. In the event of any Environmental Violation (regardless of
whether notice thereof must be given), Lessee shall, not later than thirty (30)
days after Lessee has actual knowledge of such Environmental Violation, either
deliver to Lessor a Termination Notice with respect to the applicable Property
or Properties pursuant to Section 16.1, if applicable, or, at Lessee's sole cost
and expense, promptly and diligently undertake and diligently complete any
response, clean up, remedial or other action (including without limitation the
pursuit by Lessee of appropriate action against any off-site or third party
source for contamination) necessary to remove, cleanup or remediate the
Environmental Violation in accordance with all applicable Environmental Laws.
Any such undertaking shall be timely completed in accordance with prudent
industry standards. If Lessee does not deliver a Termination Notice with respect
to such Property pursuant to Section 16.1, Lessee shall, upon completion of
remedial action by Lessee, cause to be prepared by a reputable environmental
consultant acceptable to Lessor a report describing the Environmental Violation
and the actions taken by Lessee (or its agents) in response to such
Environmental Violation, and a statement by the consultant that the
Environmental Violation has been remedied in full compliance with applicable
Environmental Law. Not less than sixty (60) days prior to any time that Lessee
elects to cease operations with respect to any Property or to remarket any
Property pursuant to Section 20.1 hereof or any other provision of any Operative
Agreement, Lessee at its expense shall cause to be delivered to Lessor a Phase I
environmental site assessment respecting such Property recently prepared (no
more than thirty (30) days prior to the date of delivery) by an independent
recognized professional acceptable to Lessor in its reasonable discretion and in
form, scope and content satisfactory to Lessor in its reasonable discretion.
Notwithstanding any other provision of any Operative Agreement, if Lessee fails
to comply with the foregoing obligation regarding the Phase I environmental site
assessment, Lessee shall be obligated to purchase such Property for its
Termination Value and shall not be permitted to exercise (and Lessor shall have
no obligation to honor any such exercise) any rights under any Operative
Agreement regarding a sale of such Property to a Person other than Lessee or any
Affiliate of Lessee.
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15.3 NOTICE OF ENVIRONMENTAL MATTERS.
Promptly, but in any event within five (5) Business Days from the date
a Responsible Officer of the Lessee has actual knowledge or should have known
thereof, Lessee shall provide to Lessor written notice of any pending or
threatened claim, action or proceeding involving any Environmental Law or any
Release on or in connection with any Property or Properties. All such notices
shall describe in reasonable detail the nature of the claim, action or
proceeding and Lessee's proposed response thereto. In addition, Lessee shall
provide to Lessor, within five (5) Business Days of receipt, copies of all
material written communications with any Governmental Authority relating to any
Environmental Law in connection with any Property. Lessee shall also provide,
within a reasonable amount of time after Lessor's request, such detailed reports
of any such material environmental claims as may reasonably be requested by
Lessor.
ARTICLE XVI
16.1 TERMINATION UPON CERTAIN EVENTS.
If Lessee has delivered, or is deemed to have delivered, written notice
of a termination of this Lease with respect to the applicable Property to Lessor
in the form described in Section 16.2(a) (a "Termination Notice") pursuant to
the provisions of this Lease, then following the applicable Casualty,
Condemnation or Environmental Violation, this Lease shall terminate with respect
to the affected Property on the applicable Termination Date.
16.2 PROCEDURES.
(a) A Termination Notice shall contain: (i) notice of
termination of this Lease with respect to the affected Property on a
Payment Date not more than sixty (60) days after Lessor's receipt of
such Termination Notice (the "Termination Date"); and (ii) a binding
and irrevocable agreement of Lessee to pay the Termination Value for
the applicable Property and purchase such Property on such Termination
Date.
(b) On each Termination Date, Lessee shall pay to Lessor the
Termination Value for the applicable Property, and Lessor shall convey
such Property or the remaining portion thereof, if any, to Lessee (or
Lessee's designee), all in accordance with Section 20.2.
ARTICLE XVII
17.1 LEASE EVENTS OF DEFAULT.
If any one (1) or more of the following events (each a "Lease Event of
Default") shall occur:
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(a) Lessee shall fail to make payment of (i) any Basic Rent
(except as set forth in clause (ii)) within three (3) Business Days
after the same has become due and payable or (ii) any Termination
Value, on the date any such payment is due and payable, or any payment
of Basic Rent or Supplemental Rent due on the due date of any such
payment of Termination Value, or any amount due on the Expiration Date;
(b) Lessee shall fail to make payment of any Supplemental Rent
(other than Supplemental Rent referred to in Section 17.1(a)(ii)) which
has become due and payable within three (3) Business Days after receipt
of notice that such payment is due;
(c) Lessee shall fail to maintain insurance as required by
Article XIV of this Lease or to deliver any requisite annual
certificate with respect thereto within ten (10) days of the date such
certificate is due under the terms hereof;
(d) (i) Lessee shall fail to observe or perform any term,
covenant, obligation or condition of Lessee under this Lease or any
other Operative Agreement to which Lessee is a party other than those
set forth in Sections 17.1(a), (b) or (c) hereof, and such failure
shall continue for fifteen (15) days after notice thereof to the
Lessee, provided if any such failure other than those set forth in
Sections 17.1(a), (b) or (c) hereof is not capable of remedy within
such fifteen (15) day period but can be remedied with further diligence
and if the Lessee has and continues to pursue diligently such remedy,
then the Lessee shall be granted additional time to pursue such remedy
but in no event more than an additional fifteen (15) days or (ii) any
representation or warranty made by Lessee set forth in this Lease or in
any other Operative Agreement or in any document entered into in
connection herewith or therewith or in any document, certificate or
financial or other statement delivered in connection herewith or
therewith shall be false or inaccurate in any material way when made;
(e) An Agency Agreement Event of Default shall have occurred
and be continuing;
(f) Lessee or any of its Subsidiaries shall default (beyond
applicable periods of grace and/or notice and cure) in the payment when
due of any principal of or interest on any Indebtedness having an
outstanding principal amount of at least $10,000,000.00; or any other
event or condition shall occur which results in a default of any such
Indebtedness or enables the holder of any such Indebtedness or any
Person acting on such holder's behalf to accelerate the maturity
thereof;
(g) The liquidation or dissolution of Lessee, or the
suspension of the business of Lessee, or the filing by Lessee of a
voluntary petition or an answer seeking reorganization, arrangement,
readjustment of its debts or for any other relief under the United
States Bankruptcy Code, as amended, or under any other insolvency act
or law, state or federal, now or hereafter existing, or any other
action of Lessee indicating its consent to, approval of or acquiescence
in, any such petition or proceeding; the
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application by Lessee for, or the appointment by consent or
acquiescence of Lessee of a receiver, a trustee or a custodian of
Lessee for all or a substantial part of its property; the making by
Lessee of any assignment for the benefit of creditors; the admission by
Lessee in writing of its inability to pay its debts as they mature or
Lessee is generally not paying its debts and other financial
obligations as they become due and payable; or Lessee taking any
corporate action to authorize any of the foregoing;
(h) The filing of an involuntary petition against Lessee in
bankruptcy or seeking reorganization, arrangement, readjustment of its
debts or for any other relief under the United States Bankruptcy Code,
as amended, or under any other insolvency act or law, state or federal,
now or hereafter existing; or the involuntary appointment of a
receiver, a trustee or a custodian of Lessee for all or a substantial
part of its property; or the issuance of a warrant of attachment,
execution or similar process against any substantial part of the
property of Lessee, and the continuance of any of such events for
ninety (90) days undismissed or undischarged;
(i) The adjudication of Lessee as bankrupt or insolvent;
(j) The entering of any order in any proceedings against
Lessee or any Subsidiary decreeing the dissolution, divestiture or
split-up of Lessee or any Subsidiary, and such order remains in effect
for more than sixty (60) days;
(k) Any report, certificate, financial statement or other
instrument delivered to Lessor by or on behalf of Lessee pursuant to
the terms of this Lease or any other Operative Agreement is false or
misleading in any material respect when made or delivered;
(l) [INTENTIONALLY RESERVED];
(m) A final judgment or judgments for the payment of money
shall be rendered by a court or courts against Lessee or any of its
Subsidiaries or any of their assets in excess of $2,000,000.00 in the
aggregate, and (i) the same shall not be discharged (or provision shall
not be made for such discharge), or a stay of execution thereof shall
not be procured, within thirty (30) days from the date of entry
thereof, or (ii) Lessee or such Subsidiary shall not, within said
period of thirty (30) days, or such longer period during which
execution of the same shall have been stayed, appeal therefrom and
cause the execution thereof to be stayed during such appeal, or (iii)
such judgment or judgments shall not be discharged (or provisions shall
not be made for such discharge) within thirty (30) days after a
decision has been reached with respect to such appeal and the related
stay has been lifted;
(n) Lessee or any member of the Controlled Group shall fail to
pay when due an amount or amounts aggregating in excess of
$2,000,000.00 which it shall have become liable to pay to the PBGC or
to a Pension Plan under Title IV of ERISA; or notice of intent to
terminate a Pension Plan or Pension Plans having aggregate Unfunded
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Liabilities in excess of $2,000,000.00 shall be filed under Title IV of
ERISA by Lessee or any member of the Controlled Group, any plan
administrator or any combination of the foregoing; or the PBGC shall
institute proceedings under Title IV of ERISA to terminate or to cause
a trustee to be appointed to administer any such Pension Plan or
Pension Plans or a proceeding shall be instituted by a fiduciary of any
such Pension Plan or Pension Plans against Lessee or any member of the
Controlled Group to enforce Section 515 or 4219(c)(5) of ERISA; or a
condition shall exist by reason of which the PBGC would be entitled to
obtain a decree adjudicating that any such Pension Plan or Pension
Plans must be terminated;
(o) (i) As a result of one (1) or more transactions after the
date of this Lease, any "person" or "group" of persons, shall have
"beneficial ownership" (within the meaning of Section 13(d) or 14(d) of
the Securities Exchange Act of 1934, as amended, and the applicable
rules and regulations thereunder) of thirty percent (30%) or more of
the outstanding common stock of Lessee (excluding any such instances of
beneficial ownership arising as a direct result of the solicitation of
revocable proxies by or on behalf of the board of directors of Lessee)
provided, however, it is agreed that TRW, Inc. shall be permitted to
have "beneficial ownership" of up to forty-one percent (41%) of the
outstanding common stock of Lessee; or (ii) without limiting the
generality of the foregoing, during any period of twelve (12)
consecutive months, commencing after the date of this Lease,
individuals who at the beginning of such period of twelve (12) months
were directors of Lessee shall cease for any reason to constitute a
majority of the board of directors of Lessee, provided, that the
relationships among the respective shareholders of Lessee on the
Initial Closing Date shall not be deemed to constitute all or any
combination of them as a "group" for purposes of clause (o)(i); or
(p) Any Operative Agreement shall cease to be in full force
and effect;
then, in any such event, Lessor may, in addition to the other rights and
remedies provided for in this Article XVII and in Section 18.1, terminate this
Lease by giving Lessee five (5) days notice of such termination (provided,
notwithstanding the foregoing, this Lease shall be deemed to be automatically
terminated without the giving of notice upon the occurrence of a Lease Event of
Default under Sections 17.1(g), (h) or (i)), and this Lease shall terminate, and
all rights of Lessee under this Lease shall cease. Lessee shall, to the fullest
extent permitted by law, pay as Supplemental Rent all costs and expenses
incurred by or on behalf of Lessor or any other Financing Party, including
without limitation reasonable fees and expenses of counsel, as a result of any
Lease Event of Default hereunder.
A POWER OF SALE HAS BEEN GRANTED IN THIS LEASE. A POWER OF SALE MAY
ALLOW LEA STROMIRE JOHNSON OR HER SUCCESSORS OR ASSIGNEE, AS TRUSTEE FOR THE
BENEFIT OF LESSOR, TO TAKE THE PROPERTIES AND SELL THE PROPERTIES WITHOUT GOING
TO COURT IN A FORECLOSURE ACTION UPON THE OCCURRENCE OF A LEASE EVENT OF
DEFAULT.
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17.2 SURRENDER OF POSSESSION.
If a Lease Event of Default shall have occurred and be continuing, and
whether or not this Lease shall have been terminated pursuant to Section 17.1,
Lessee shall, upon thirty (30) days written notice, surrender to Lessor
possession of the Properties. Lessor may enter upon and repossess the Properties
by such means as are available at law or in equity, and may remove Lessee and
all other Persons and any and all personal property and Lessee's equipment and
personalty and severable Modifications from the Properties. Lessor shall have no
liability by reason of any such entry, repossession or removal performed in
accordance with applicable law. Upon the written demand of Lessor, Lessee shall
return the Properties promptly to Lessor, in the manner and condition required
by, and otherwise in accordance with the provisions of, Section 22.1(c) hereof.
17.3 RELETTING.
If a Lease Event of Default shall have occurred and be continuing, and
whether or not this Lease shall have been terminated pursuant to Section 17.1,
Lessor may, but shall be under no obligation to, relet any or all of the
Properties, for the account of Lessee or otherwise, for such term or terms
(which may be greater or less than the period which would otherwise have
constituted the balance of the Term) and on such conditions (which may include
concessions or free rent) and for such purposes as Lessor may determine, and
Lessor may collect, receive and retain the rents resulting from such reletting.
Lessor shall not be liable to Lessee for any failure to relet any Property or
for any failure to collect any rent due upon such reletting.
17.4 DAMAGES.
Neither (a) the termination of this Lease as to all or any of the
Properties pursuant to Section 17.1; (b) the repossession of all or any of the
Properties; nor (c) the failure of Lessor to relet all or any of the Properties,
the reletting of all or any portion thereof, nor the failure of Lessor to
collect or receive any rentals due upon any such reletting, shall relieve Lessee
of its liabilities and obligations hereunder, all of which shall survive any
such termination, repossession or reletting. If any Lease Event of Default shall
have occurred and be continuing and notwithstanding any termination of this
Lease pursuant to Section 17.1, Lessee shall forthwith pay to Lessor all Rent
and other sums due and payable hereunder to and including without limitation the
date of such termination. Thereafter, on the days on which the Basic Rent or
Supplemental Rent, as applicable, are payable under this Lease or would have
been payable under this Lease if the same had not been terminated pursuant to
Section 17.1 and until the end of the Term hereof or what would have been the
Term in the absence of such termination, Lessee shall pay Lessor, as current
liquidated damages (it being agreed that it would be impossible accurately to
determine actual damages) an amount equal to the Basic Rent and Supplemental
Rent that are payable under this Lease or would have been payable by Lessee
hereunder if this Lease had not been terminated pursuant to Section 17.1, less
the net proceeds, if any, which are actually received by Lessor with respect to
the period in question of any reletting of any Property or any portion thereof;
provided, that Lessee's obligation to make payments of Basic Rent and
Supplemental Rent under this Section 17.4 shall continue only so long as Lessor
shall not have
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received the amounts specified in Section 17.6. In calculating the amount of
such net proceeds from reletting, there shall be deducted all of Lessor's, any
Holder's, the Agent's and any Lender's reasonable expenses in connection
therewith, including without limitation repossession costs, brokerage or sales
commissions, fees and expenses for counsel and any necessary repair or
alteration costs and expenses incurred in preparation for such reletting. To the
extent Lessor receives any damages pursuant to this Section 17.4, such amounts
shall be regarded as amounts paid on account of Rent. Lessee specifically
acknowledges and agrees that its obligations under this Section 17.4 shall be
absolute and unconditional under any and all circumstances and shall be paid
and/or performed, as the case may be, without notice or demand and without any
abatement, reduction, diminution, setoff, defense, counterclaim or recoupment
whatsoever.
17.5 POWER OF SALE.
Without limiting any other remedies set forth in this Lease, Lessor and
Lessee agree that Lessee has granted, pursuant to Section 7.1(b) hereof and each
Lease Supplement, a Lien against the Properties WITH POWER OF SALE, and that,
upon the occurrence and during the continuance of any Lease Event of Default,
Lea Stromire Johnson, or her successors or assignee, as trustee for the benefit
of Lessor, shall have the power and authority, to the extent provided by law,
after prior notice and lapse of such time as may be required by law, to
foreclose its interest (or cause such interest to be foreclosed) in all or any
part of the Properties.
17.6 FINAL LIQUIDATED DAMAGES.
If a Lease Event of Default shall have occurred and be continuing,
whether or not this Lease shall have been terminated pursuant to Section 17.1
and whether or not Lessor shall have collected any current liquidated damages
pursuant to Section 17.4, Lessor shall have the right to recover, by demand to
Lessee and at Lessor's election, and Lessee shall pay to Lessor, as and for
final liquidated damages, but exclusive of the indemnities payable under Section
11 of the Participation Agreement (which, if requested, shall be paid
concurrently), and in lieu of all current liquidated damages beyond the date of
such demand (it being agreed that it would be impossible accurately to determine
actual damages) the Termination Value. Upon payment of the amount specified
pursuant to the first sentence of this Section 17.6, Lessee shall be entitled to
receive from Lessor, either at Lessee's request or upon Lessor's election, in
either case at Lessee's cost, an assignment of Lessor's entire right, title and
interest in and to the Properties, Improvements, Fixtures, Modifications,
Equipment and all components thereof, in each case in recordable form and
otherwise in conformity with local custom and free and clear of the Lien of this
Lease (including without limitation the release of any memoranda of Lease and/or
the Lease Supplement recorded in connection therewith) and any Lessor Liens. The
Properties shall be conveyed to Lessee "AS-IS, WHERE-IS" and in their then
present physical condition. If any statute or rule of law shall limit the amount
of such final liquidated damages to less than the amount agreed upon, Lessor
shall be entitled to the maximum amount allowable under such statute or rule of
law; provided, however, Lessee shall not be entitled to receive an assignment of
Lessor's interest in the Properties, the Improvements, Fixtures, Modifications,
Equipment or the components thereof unless Lessee shall have paid in full the
Termination Value. Lessee specifically acknowledges and agrees that its
obligations under this Section 17.6 shall be
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absolute and unconditional under any and all circumstances and shall be paid
and/or performed, as the case may be, without notice or demand and without any
abatement, reduction, diminution, setoff, defense, counterclaim or recoupment
whatsoever.
17.7 ENVIRONMENTAL COSTS.
If a Lease Event of Default shall have occurred and be continuing, and
whether or not this Lease shall have been terminated pursuant to Section 17.1,
Lessee shall pay directly to a reputable environmental consultant selected by
the Agent and reasonably acceptable to the Lessee, such acceptance by Lessee
shall not be unreasonably withheld, for the cost of any environmental testing
and/or remediation work undertaken respecting any Property, as such testing or
work is deemed appropriate in the reasonable judgment of Lessor in consultation
with an environmental consultant, and shall indemnify and hold harmless Lessor
and each other Indemnified Person therefrom for the costs of the testing or
remediation work (the foregoing shall not limit Lessee's obligations pursuant to
Section 11 of the Participation Agreement). Lessee shall pay all amounts
referenced in the immediately preceding sentence within fifteen (15) days of any
written request by Lessor for such payment. The provisions of this Section 17.7
shall not limit the obligations of Lessee under any Operative Agreement
regarding indemnification obligations, environmental testing, remediation and/or
work.
17.8 WAIVER OF CERTAIN RIGHTS.
If this Lease shall be terminated pursuant to Section 17.1, Lessee
waives, to the fullest extent permitted by Law, (a) any notice of re-entry or
the institution of legal proceedings to obtain re-entry or possession; (b) any
right of redemption, re-entry or possession; (c) the benefit of any laws now or
hereafter in force exempting property from liability for rent or for debt; and
(d) any other rights which might otherwise limit or modify any of Lessor's
rights or remedies under this Article XVII.
17.9 ASSIGNMENT OF RIGHTS UNDER CONTRACTS.
If a Lease Event of Default shall have occurred and be continuing, and
whether or not this Lease shall have been terminated pursuant to Section 17.1,
Lessee shall upon Lessor's demand immediately assign, transfer and set over to
Lessor all of Lessee's right, title and interest in and to each agreement
executed by Lessee in connection with the acquisition, installation, testing,
use, development, construction, operation, maintenance, repair, refurbishment
and restoration of the Properties (including without limitation all right, title
and interest of Lessee with respect to all warranty, performance, service and
indemnity provisions), as and to the extent that the same relate to the
acquisition, installation, testing, use, development, construction, operation,
maintenance, repair, refurbishment and restoration of the Properties or any of
them.
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17.10 REMEDIES CUMULATIVE.
The remedies herein provided shall be cumulative and in addition to
(and not in limitation of) any other remedies available at law, equity or
otherwise, including without limitation any mortgage foreclosure remedies.
ARTICLE XVIII
18.1 LESSOR'S RIGHT TO CURE LESSEE'S LEASE DEFAULTS.
Lessor, without waiving or releasing any obligation or Lease Event of
Default, may (but shall be under no obligation to) remedy any Lease Event of
Default for the account and at the sole cost and expense of Lessee, including
without limitation the failure by Lessee to maintain the insurance required by
Article XIV, and may, to the fullest extent permitted by law, and
notwithstanding any right of quiet enjoyment in favor of Lessee, enter upon any
Property, and take all such action thereon as may be necessary or appropriate
therefor. No such entry shall be deemed an eviction of any lessee. All
out-of-pocket costs and expenses so incurred (including without limitation fees
and expenses of counsel), together with interest thereon at the Overdue Rate
from the date on which such sums or expenses are paid by Lessor, shall be paid
by Lessee to Lessor on demand.
ARTICLE XIX
19.1 PROVISIONS RELATING TO LESSEE'S EXERCISE OF ITS PURCHASE OPTION.
Subject to Section 19.2, in connection with any termination of this
Lease with respect to any Property pursuant to the terms of Section 16.2, or in
connection with Lessee's exercise of its Purchase Option, upon the date on which
this Lease is to terminate with respect to any Property, and upon tender by
Lessee of the amounts set forth in Sections 16.2(b) or 20.2, as applicable,
Lessor shall execute and deliver to Lessee (or to Lessee's designee) at Lessee's
cost and expense an assignment (by deed or other appropriate instrument) of
Lessor's entire interest in such Property, in each case in recordable form and
otherwise in conformity with local custom and free and clear of any Lessor Liens
attributable to Lessor but without any other warranties (of title or otherwise)
from Lessor. Such Property shall be conveyed to Lessee "AS-IS, "WHERE-IS" and in
then present physical condition.
19.2 NO PURCHASE OR TERMINATION WITH RESPECT TO LESS THAN ALL OF A
PROPERTY.
Lessee shall not be entitled to exercise its Purchase Option or the
Sale Option separately with respect to a portion of any Property consisting of
Land, Equipment, Improvements and/or any interest pursuant to a Ground Lease but
shall be required to exercise its Purchase Option or the Sale Option with
respect to an entire Property.
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ARTICLE XX
20.1 PURCHASE OPTION OR SALE OPTION-GENERAL PROVISIONS.
Not less than one hundred eighty (180) days and no more than two
hundred forty (240) days prior to the Expiration Date or, respecting the
Purchase Option only, not less than sixty (60) days and no more than ninety (90)
days prior to any Payment Date occurring after August 13, 2001 (such Expiration
Date or, respecting the Purchase Option only, any such Payment Date occurring
after August 13, 2001 being hereinafter referred to as the "Election Date"),
Lessee may give Lessor irrevocable written notice (the "Election Notice") that
Lessee is electing to exercise either (a) the option to purchase all, but not
less than all, the Properties on the applicable Election Date (the "Purchase
Option") or (b) with respect to an Election Notice given in connection with the
Expiration Date only, the option to remarket all, but not less than all, the
Properties to a Person other than Lessee or any Affiliate of Lessee and cause a
sale of such Properties to occur on the applicable Election Date pursuant to the
terms of Section 22.1 (the "Sale Option"). If Lessee does not give an Election
Notice indicating the Purchase Option or the Sale Option at least one hundred
eighty (180) days and not more than two hundred forty (240) days prior to the
Expiration Date then Lessee shall be deemed to have elected for the Purchase
Option to apply on the Expiration Date. If Lessee shall either (i) elect (or be
deemed to have elected) to exercise the Purchase Option or (ii) elect the Sale
Option and fail to cause all, but not less than all, the Properties to be sold
in accordance with the terms of Section 22.1 on the applicable Election Date,
then in either case Lessee shall pay to Lessor on the date on which such
purchase or sale is scheduled to occur an amount equal to the Termination Value
for all, but not less than all, the Properties (which the parties do not intend
to be a "bargain" purchase price) and, upon receipt of such amounts and
satisfaction of such obligations, Lessor shall transfer to Lessee all of
Lessor's right, title and interest in and to all, but not less than all, the
Properties in accordance with Section 20.2.
20.2 LESSEE PURCHASE OPTION.
Provided, no Default or Event of Default shall have occurred and be
continuing (other than those that will be cured by the payment of the
Termination Value for all the Properties) and provided, that the Election Notice
has been appropriately given specifying the Purchase Option, Lessee shall
purchase all the Properties on the applicable Election Date at a price equal to
the Termination Value for such Properties (which the parties do not intend to be
a "bargain" purchase price).
Subject to Section 19.2, in connection with any termination of this
Lease with respect to any Property pursuant to the terms of Section 16.2, or in
connection with Lessee's exercise of its Purchase Option, upon the date on which
this Lease is to terminate with respect to a Property or all of the Properties,
and upon tender by Lessee of the amounts set forth in Section 16.2(b) or this
Section 20.2, as applicable, Lessor shall execute, acknowledge (where required)
and deliver to Lessee, at Lessee's cost and expense, each of the following: (a)
a termination or assignment (as requested by the Lessee) of each applicable
Ground Lease and special or limited warranty Deeds
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conveying each Property (to the extent it is real property not subject to a
Ground Lease) to Lessee free and clear of the Lien of this Lease, the Lien of
the Credit Documents and any Lessor Liens; (b) a Bill of Sale conveying each
Property (to the extent it is personal property) to Lessee free and clear of the
Lien of this Lease, the Lien of the Credit Documents and any Lessor Liens; (c)
any real estate tax affidavit or other document required by law to be executed
and filed in order to record the applicable Deed and/or the applicable Ground
Lease termination; and (d) FIRPTA affidavits. All of the foregoing documentation
must be in form and substance reasonably satisfactory to Lessor. The applicable
Property shall be conveyed to Lessee "AS-IS, WHERE-IS" and in then present
physical condition.
If any Property is the subject of remediation efforts respecting
Hazardous Substances at the applicable Election Date which could materially and
adversely impact the Fair Market Sales Value of such Property (with materiality
determined in Lessor's discretion), then Lessee shall be obligated to purchase
each such Property pursuant to Section 20.2.
On the applicable Election Date on which Lessee has elected to exercise
its Purchase Option, Lessee shall pay (or cause to be paid) to Lessor, the Agent
and all other parties, as appropriate, the sum of all costs and expenses
incurred by any such party in connection with the election by Lessee to exercise
its Purchase Option and all Rent and all other amounts then due and payable or
accrued under this Lease and/or any other Operative Agreement.
20.3 THIRD PARTY SALE OPTION.
(a) Provided, that (i) no Default or Event of Default shall
have occurred and be continuing and (ii) the Election Notice has been
appropriately given specifying the Sale Option, Lessee shall undertake
to cause a sale of the Properties on the applicable Election Date (all
as specified in the Election Notice), in accordance with the provisions
of Section 22.1 hereof. Such Election Date on which a sale is required
may be hereafter referred to as the "Sale Date".
(b) In the event Lessee exercises the Sale Option then, as
soon as practicable and in all events not less than sixty (60) days and
not more than ninety (90) days prior to the Sale Date, Lessee at its
expense shall cause to be delivered to Lessor a Phase I environmental
site assessment for each of the Properties recently prepared (no more
than thirty (30) days old prior to the delivery date) by an independent
recognized professional reasonably acceptable to Lessor and in form,
scope and content reasonably satisfactory to Lessor. In the event that
Lessor shall not have received such environmental site assessment by
the date sixty (60) days prior to the Sale Date or in the event that
such environmental assessment shall reveal the existence of any
material violation of Environmental Laws, other material Environmental
Violation or potential material Environmental Violation (with
materiality determined in each case by Lessor in its reasonable
discretion), then Lessee on the Sale Date shall pay to Lessor an amount
equal to the Termination Value for all the Properties and any and all
other amounts due and owing hereunder. Upon receipt of such payment and
all other amounts due under the
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Operative Agreements, Lessor shall transfer to Lessee all of Lessor's
right, title and interest in and to all the Properties in accordance
with Section 19.1.
ARTICLE XXI
21.1 [INTENTIONALLY RESERVED].
ARTICLE XXII
22.1 SALE PROCEDURE.
(a) During the Marketing Period, Lessee, on behalf of Lessor,
shall obtain bids for the cash purchase of all the Properties in
connection with a sale to one (1) or more third party purchasers to be
consummated on the Sale Date for the highest price available, shall
notify Lessor promptly of the name and address of each prospective
purchaser and the cash price which each prospective purchaser shall
have offered to pay for each such Property and shall provide Lessor
with such additional information about the bids and the bid
solicitation procedure as Lessor may reasonably request from time to
time. All such prospective purchasers must be Persons other than Lessee
or any Affiliate of Lessee. On the Sale Date, Lessee shall pay (or
cause to be paid) to Lessor and all other parties, as appropriate, the
sum of all costs and expenses incurred by Lessor and/or the Agent (as
the case may be) in connection with such sale of one or more
Properties, all Rent and all other amounts then due and payable or
accrued under this Lease and/or any other Operative Agreement.
Lessor may reject any and all bids and may solicit and obtain
bids by giving Lessee written notice to that effect; provided, however,
that notwithstanding the foregoing, Lessor may not reject the bids
submitted by Lessee if such bids, in the aggregate, are greater than or
equal to the sum of the Limited Recourse Amount for all the Properties,
and represent bona fide offers from one (1) or more third party
purchasers. If the highest price which a prospective purchaser or the
prospective purchasers shall have offered to pay for all the Properties
on the Sale Date is less than the sum of the Limited Recourse Amount
for all the Properties or if such bids do not represent bona fide
offers from one (1) or more third parties or if there are no bids,
Lessor may elect to retain one or more of the Properties by giving
Lessee prior written notice of Lessor's election to retain the same,
and promptly upon receipt of such notice, Lessee shall surrender, or
cause to be surrendered, each of the Properties specified in such
notice in accordance with the terms and conditions of Section 10.1.
Upon acceptance of any bid, Lessor agrees, at Lessee's request and
expense, to execute a contract of sale with respect to such sale, so
long as the same is consistent with the terms of this Article 22 and
provides by its terms that it is nonrecourse to Lessor.
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Unless Lessor shall have elected to retain one or more of the
Properties pursuant to the provisions of the preceding paragraph,
Lessee shall arrange for Lessor to sell all the Properties free and
clear of the Lien of this Lease and any Lessor Liens attributable to
Lessor, without recourse or warranty (of title or otherwise), for cash
on the Sale Date to the purchaser or purchasers offering the highest
cash sales price, as identified by Lessee or Lessor, as the case may
be; provided, however, solely as to Lessor or the Trust Company, in its
individual capacity, any Lessor Lien shall not constitute a Lessor Lien
so long as Lessor or the Trust Company, in its individual capacity, is
diligently and in good faith contesting, at the cost and expense of
Lessor or the Trust Company, in its individual capacity, such Lessor
Lien by appropriate proceedings in which event the applicable Sale
Date, all without penalty or cost to Lessee, shall be delayed for the
period of such contest. To effect such transfer and assignment, Lessor
shall execute, acknowledge (where required) and deliver to the
appropriate purchaser each of the following: (a) special or limited
warranty Deeds conveying each such Property (to the extent it is real
property titled to Lessor) and an assignment of the Ground Lease
conveying the leasehold interest of Lessor in each such Property (to
the extent it is real property and subject to a Ground Lease) to the
appropriate purchaser free and clear of the Lien of this Lease, the
Lien of the Credit Documents and any Lessor Liens; (b) a Bill of Sale
conveying each such Property (to the extent it is personal property)
titled to Lessor to the appropriate purchaser free and clear of the
Lien of this Lease, the Lien of the Credit Documents and any Lessor
Liens; (c) any real estate tax affidavit or other document required by
law to be executed and filed in order to record each Deed and/or each
Ground Lease assignment; and (d) FIRPTA affidavits, as appropriate. All
of the foregoing documentation must be in form and substance reasonably
satisfactory to Lessor. Lessee shall surrender the Properties so sold
or subject to such documents to each purchaser in the condition
specified in Section 10.1, or in such other condition as may be agreed
between Lessee and such purchaser. Lessee shall not take or fail to
take any action which would have the effect of unreasonably
discouraging bona fide third party bids for any Property. If each of
the Properties is not either (i) sold on the Sale Date in accordance
with the terms of this Section 22.1, or (ii) retained by Lessor
pursuant to an affirmative election made by Lessor pursuant to the
second sentence of the second paragraph of this Section 22.1(a), then
(x) Lessee shall be obligated to pay Lessor on the Sale Date an amount
equal to the aggregate Termination Value for all the Properties less
any sales proceeds received, and (y) Lessor shall transfer each
applicable Property to Lessee in accordance with Section 20.2.
(b) If the Properties are sold on a Sale Date to one (1) or
more third party purchasers in accordance with the terms of Section
22.1(a) and the aggregate purchase price paid for all the Properties is
less than the sum of the aggregate Property Cost for all the Properties
plus all Rent and all other amounts then due and owing pursuant to the
Operative Agreements (hereinafter such difference shall be referred to
as the "Deficiency Balance"), then Lessee hereby unconditionally
promises to pay to Lessor on the Sale Date the lesser of (i) the
Deficiency Balance, or (ii) the Maximum Residual Guarantee Amount for
all the Properties. On a Sale Date if (x) Lessor receives the aggregate
Termination Value for all the Properties from one (1) or more third
party purchasers, (y) Lessor and such other parties receive all other
amounts specified in the last sentence of the first
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paragraph of Section 22.1(a) and (z) the aggregate purchase price paid
for all the Properties on such date exceeds the sum of the aggregate
Property Cost for all the Properties, then Lessee may retain such
excess. If one or more of the Properties are retained by Lessor
pursuant to an affirmative election made by Lessor pursuant to the
provisions of Section 22.1(a), then Lessee hereby unconditionally
promises to pay to Lessor on the Sale Date all Rent and all other
amounts then due and owing pursuant to the Operative Agreements and an
amount equal to the Maximum Residual Guarantee Amount for the
Properties so retained. Any payment of the foregoing amounts described
in this Section 22.1(b) shall be made together with a payment of all
other amounts referenced in the last sentence of the first paragraph of
Section 22.1(a) (without duplication).
(c) In the event that all the Properties are either sold to
one (1) or more third party purchasers on the Sale Date or retained by
Lessor in connection with an affirmative election made by Lessor
pursuant to the provisions of Section 22.1(a), then in either case on
the applicable Sale Date Lessee shall provide Lessor or such third
party purchaser (unless otherwise agreed by such third party purchaser)
with (i) to the extent permitted by applicable Legal Requirements, all
permits, certificates of occupancy, governmental licenses and
authorizations necessary to use, operate, repair, access and maintain
each such Property for the purpose it is being used by Lessee, and (ii)
such manuals, permits, easements, licenses, intellectual property,
know-how, rights-of-way and other rights and privileges in the nature
of an easement as are reasonably necessary or desirable in connection
with the use, operation, repair, access to or maintenance of each such
Property for its intended purpose or otherwise as Lessor or such third
party purchaser(s) shall reasonably request (and a royalty-free license
or similar agreement to effectuate the foregoing on terms reasonably
agreeable to Lessor or such third party purchaser(s), as applicable).
All assignments, licenses, easements, agreements and other deliveries
required by clauses (i) and (ii) of this paragraph (c) shall be in form
reasonably satisfactory to Lessor or such third party purchaser(s), as
applicable, and shall be fully assignable (including without limitation
both primary assignments and assignments given in the nature of
security) without payment of any fee, cost or other charge. Lessee
shall also execute any documentation requested by Lessor or such third
party purchaser(s), as applicable, evidencing the continuation or
assignment of each Ground Lease.
22.2 APPLICATION OF PROCEEDS OF SALE.
Lessor shall apply the proceeds of sale of any Property in the
following order of priority:
(a) FIRST, to pay or to reimburse Lessor (and/or the Agent, as
the case may be) for the payment of all reasonable costs and expenses
incurred by Lessor (and/or the Agent, as the case may be) in connection
with the sale (to the extent Lessee has not satisfied its obligation to
pay such costs and expenses);
(b) SECOND, so long as the Credit Agreement is in effect and
any Loans or Holder Advances or any amount is owing to the Financing
Parties under any Operative
34
<PAGE> 39
Agreement, to the Agent to be applied pursuant to intercreditor
provisions among Lessor, the Lenders and the Holders contained in the
Operative Agreements; and
(c) THIRD, to Lessee.
22.3 INDEMNITY FOR EXCESSIVE WEAR.
If the proceeds of the sale described in Section 22.1 with respect to
the Properties shall be less than the Limited Recourse Amount with respect to
the Properties, and at the time of such sale it shall have been reasonably
determined (pursuant to the Appraisal Procedure) that the Fair Market Sales
Value of the Properties shall have been impaired by greater than expected wear
and tear during the term of the Lease, Lessee shall pay to Lessor within ten
(10) days after receipt of Lessor's written statement (i) the amount of such
excess wear and tear determined by the Appraisal Procedure or (ii) the amount of
the Sale Proceeds Shortfall, whichever amount is less.
22.4 APPRAISAL PROCEDURE.
For determining the Fair Market Sales Value of the Properties or any
other amount which may, pursuant to any provision of any Operative Agreement, be
determined by an appraisal procedure, Lessor and Lessee shall use the following
procedure (the "Appraisal Procedure"). Lessor and Lessee shall endeavor to reach
a mutual agreement as to such amount for a period of ten (10) days from
commencement of the Appraisal Procedure under the applicable section of the
Lease, and if they cannot agree within ten (10) days, then two (2) qualified
appraisers, one (1) chosen by Lessee and one (1) chosen by Lessor, shall
mutually agree thereupon, but if either party shall fail to choose an appraiser
within twenty (20) days after notice from the other party of the selection of
its appraiser, then the appraisal by such appointed appraiser shall be binding
on Lessee and Lessor. If the two (2) appraisers cannot agree within twenty (20)
days after both shall have been appointed, then a third appraiser shall be
selected by the two (2) appraisers or, failing agreement as to such third
appraiser within thirty (30) days after both shall have been appointed, by the
American Arbitration Association. The decisions of the three (3) appraisers
shall be given within twenty (20) days of the appointment of the third appraiser
and the decision of the appraiser most different from the average of the other
two (2) shall be discarded and such average shall be binding on Lessor and
Lessee; provided, that if the highest appraisal and the lowest appraisal are
equidistant from the third appraisal, the third appraisal shall be binding on
Lessor and Lessee. The fees and expenses of the appraiser appointed by Lessee
shall be paid by Lessee; the fees and expenses of the appraiser appointed by
Lessor shall be paid by Lessor (such fees and expenses not being indemnified
pursuant to Section 11 of the Participation Agreement); and the fees and
expenses of the third appraiser shall be divided equally between Lessee and
Lessor.
22.5 CERTAIN OBLIGATIONS CONTINUE.
During the Marketing Period, the obligation of Lessee to pay Rent with
respect to the Properties (including without limitation the installment of Basic
Rent due on the Sale Date) shall continue undiminished until payment in full to
Lessor of the sale proceeds, if any, the Maximum
35
<PAGE> 40
Residual Guarantee Amount, the amount due under Section 22.3, if any, and all
other amounts due to Lessor or any other Person with respect to all Properties
or any Operative Agreement. Lessor shall have the right, but shall be under no
duty, to solicit bids, to inquire into the efforts of Lessee to obtain bids or
otherwise to take action in connection with any such sale, other than as
expressly provided in this Article XXII.
ARTICLE XXIII
23.1 HOLDING OVER.
If Lessee shall for any reason remain in possession of a Property after
the expiration or earlier termination of this Lease as to such Property (unless
such Property is conveyed to Lessee), such possession shall be as a tenancy at
sufferance during which time Lessee shall continue to pay Supplemental Rent that
would be payable by Lessee hereunder were the Lease then in full force and
effect with respect to such Property and Lessee shall continue to pay Basic Rent
at the lesser of the highest lawful rate and one hundred ten percent (110%) of
the last payment of Basic Rent due with respect to such Property prior to such
expiration or earlier termination of this Lease. Such Basic Rent shall be
payable from time to time upon demand by Lessor and such additional amount of
Basic Rent shall be applied by Lessor ratably to the Lenders and the Holders
based on their relative amounts of the then outstanding aggregate Property Cost
for all Properties. During any period of tenancy at sufferance, Lessee shall,
subject to the second preceding sentence, be obligated to perform and observe
all of the terms, covenants and conditions of this Lease, but shall have no
rights hereunder other than the right, to the extent given by law to tenants at
sufferance, to continue their occupancy and use of such Property. Nothing
contained in this Article XXIII shall constitute the consent, express or
implied, of Lessor to the holding over of Lessee after the expiration or earlier
termination of this Lease as to any Property (unless such Property is conveyed
to Lessee) and nothing contained herein shall be read or construed as preventing
Lessor from maintaining a suit for possession of such Property or exercising any
other remedy available to Lessor at law or in equity.
ARTICLE XXIV
24.1 RISK OF LOSS.
During the Term, unless Lessee shall not be in actual possession of any
Property in question solely by reason of Lessor's exercise of its remedies of
dispossession under Article XVII, the risk of loss or decrease in the enjoyment
and beneficial use of such Property as a result of the damage or destruction
thereof by fire, the elements, casualties, thefts, riots, wars or otherwise is
assumed by Lessee, and Lessor shall in no event be answerable or accountable
therefor.
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<PAGE> 41
ARTICLE XXV
25.1 ASSIGNMENT.
(a) Lessee may not assign this Lease or any of its rights or
obligations hereunder or with respect to any Property in whole or in
part to any Person without the prior written consent of the Agent, the
Lenders, the Holders and Lessor.
(b) No assignment by Lessee (referenced in this Section 25.1
or otherwise) or other relinquishment of possession to any Property
shall in any way discharge or diminish any of the obligations of Lessee
to Lessor hereunder and Lessee shall remain directly and primarily
liable under the Operative Agreements as to any rights or obligations
assigned by Lessee or regarding any Property in which rights or
obligations have been assigned or otherwise transferred.
25.2 SUBLEASES.
(a) Promptly, but in any event within five (5) Business Days,
following the execution and delivery of any sublease permitted by this
Article XXV, Lessee shall notify Lessor of the execution of such
sublease. As of the date of each Lease Supplement, Lessee shall lease
the respective Property described in such Lease Supplement from Lessor,
and any existing tenant respecting such Property shall automatically be
deemed to be a subtenant of Lessee and not a tenant of Lessor.
(b) Without the prior written consent of the Agent, any
Lender, any Holder or Lessor and subject to the other provisions of
this Section 25.2, Lessee may sublet any Property or portion thereof to
any wholly-owned Subsidiary of Lessee. Except as referenced in the
immediately preceding sentence, no other subleases shall be permitted
unless consented to in writing by Lessor. All subleasing shall be done
on market terms and shall in no way diminish the fair market value or
useful life of any applicable Property.
(c) No sublease (referenced in this Section 25.2 or otherwise)
or other relinquishment of possession to any Property shall in any way
discharge or diminish any of Lessee's obligations to Lessor hereunder
and Lessee shall remain directly and primarily liable under this Lease
as to such Property, or portion thereof, so sublet. The term of any
such sublease shall not extend beyond the Term. Each sublease shall be
expressly subject and subordinate to this Lease.
37
<PAGE> 42
ARTICLE XXVI
26.1 NO WAIVER.
No failure by Lessor or Lessee to insist upon the strict performance of
any term hereof or to exercise any right, power or remedy upon a default
hereunder, and no acceptance of full or partial payment of Rent during the
continuance of any such default, shall constitute a waiver of any such default
or of any such term. To the fullest extent permitted by law, no waiver of any
default shall affect or alter this Lease, and this Lease shall continue in full
force and effect with respect to any other then existing or subsequent default.
ARTICLE XXVII
27.1 ACCEPTANCE OF SURRENDER.
No surrender to Lessor of this Lease or of all or any portion of any
Property or of any part of any thereof or of any interest therein shall be valid
or effective unless agreed to and accepted in writing by Lessor and no act by
Lessor or the Agent or any representative or agent of Lessor or the Agent, other
than a written acceptance, shall constitute an acceptance of any such surrender.
27.2 NO MERGER OF TITLE.
There shall be no merger of this Lease or of the leasehold estate
created hereby by reason of the fact that the same Person may acquire, own or
hold, directly or indirectly, in whole or in part, (a) this Lease or the
leasehold estate created hereby or any interest in this Lease or such leasehold
estate, (b) any right, title or interest in any Property, (c) any Notes, or (d)
a beneficial interest in Lessor.
ARTICLE XXVIII
28.1 [INTENTIONALLY RESERVED]
ARTICLE XXIX
29.1 NOTICES.
All notices required or permitted to be given under this Lease shall be
in writing and delivered as provided in the Participation Agreement.
38
<PAGE> 43
ARTICLE XXX
30.1 MISCELLANEOUS.
Anything contained in this Lease to the contrary notwithstanding, all
claims against and liabilities of Lessee or Lessor arising from events
commencing prior to the expiration or earlier termination of this Lease shall
survive such expiration or earlier termination. If any provision of this Lease
shall be held to be unenforceable in any jurisdiction, such unenforceability
shall not affect the enforceability of any other provision of this Lease and
such jurisdiction or of such provision or of any other provision hereof in any
other jurisdiction.
30.2 AMENDMENTS AND MODIFICATIONS.
Neither this Lease nor any Lease Supplement may be amended, waived,
discharged or terminated except in accordance with the provisions of Section
12.4 of the Participation Agreement.
30.3 SUCCESSORS AND ASSIGNS.
All the terms and provisions of this Lease shall inure to the benefit
of the parties hereto and their respective successors and permitted assigns.
30.4 HEADINGS AND TABLE OF CONTENTS.
The headings and table of contents in this Lease are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
30.5 COUNTERPARTS.
This Lease may be executed in any number of counterparts, each of which
shall be an original, but all of which shall together constitute one (1) and the
same instrument.
30.6 GOVERNING LAW.
THIS LEASE SHALL BE GOVERNED BY AND CONSTRUED, INTERPRETED AND ENFORCED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH CAROLINA, EXCEPT TO THE EXTENT
THE LAWS OF THE STATE WHERE A PARTICULAR PROPERTY IS LOCATED ARE REQUIRED TO
APPLY.
30.7 CALCULATION OF RENT.
All calculation of Rent payable hereunder shall be computed based on
the actual number of days elapsed over a year of three hundred sixty (360) days
or, to the extent such Rent is based on the Prime Lending Rate, three hundred
sixty-five (365) (or three hundred sixty-six (366), as applicable) days.
39
<PAGE> 44
30.8 MEMORANDA OF LEASE AND LEASE SUPPLEMENTS.
This Lease shall not be recorded; provided, Lessor and Lessee shall
promptly record (a) a memorandum of this Lease and the applicable Lease
Supplement (in substantially the form of Exhibit B attached hereto) or a short
form lease (in form and substance reasonably satisfactory to Lessor) regarding
each Property promptly after the acquisition thereof in the local filing office
with respect thereto, in all cases at Lessee's cost and expense, and as required
under applicable law to sufficiently evidence this Lease and any such Lease
Supplement in the applicable real estate filing records.
30.9 ALLOCATIONS BETWEEN THE LENDERS AND THE HOLDERS.
Notwithstanding any other term or provision of this Lease to the
contrary, the allocations of the proceeds of the Properties and any and all
other Rent and other amounts received hereunder shall be subject to the
inter-creditor provisions between the Lenders and the Holders contained in the
Operative Agreements (or as otherwise agreed among the Lenders and the Holders
from time to time).
30.10 LIMITATIONS ON RECOURSE.
Notwithstanding anything contained in this Lease to the contrary,
Lessee agrees to look solely to Lessor's estate and interest in the Properties
(and in no circumstance to the Agent, the Lenders, the Holders or otherwise to
Lessor) for the collection of any judgment requiring the payment of money by
Lessor in the event of liability by Lessor, and no other property or assets of
Lessor or any shareholder, owner or partner (direct or indirect) in or of
Lessor, or any director, officer, employee, beneficiary, Affiliate of any of the
foregoing shall be subject to levy, execution or other enforcement procedure for
the satisfaction of the remedies of Lessee under or with respect to this Lease,
the relationship of Lessor and Lessee hereunder or Lessee's use of the
Properties or any other liability of Lessor to Lessee. Nothing in this Section
shall be interpreted so as to limit the terms of Sections 6.1 or 6.2 or the
provisions of Section 12.9 of the Participation Agreement.
30.11 WAIVERS OF JURY TRIAL.
EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY, TO THE
FULLEST EXTENT ALLOWED BY APPLICABLE LAW, WAIVE TRIAL BY JURY IN ANY LEGAL
ACTION OR PROCEEDING RELATING TO THIS LEASE AND FOR ANY COUNTERCLAIM THEREIN.
30.12 EXERCISE OF LESSOR RIGHTS.
Lessee hereby acknowledges and agrees that the rights and powers of
Lessor under this Lease have been assigned to the Agent pursuant to the terms of
the Security Agreement and the other Operative Agreements. Lessor and Lessee
hereby acknowledge and agree that (a) the
40
<PAGE> 45
Agent shall, in its discretion, direct and/or act on behalf of Lessor pursuant
to the provisions of Sections 8.2(h) and 8.6 of the Participation Agreement, (b)
all notices to be given to Lessor shall be given to the Agent and (c) all
notices to be given by Lessor may be given by the Agent, at its election.
30.13 SUBMISSION TO JURISDICTION; VENUE; ARBITRATION.
THE PROVISIONS OF THE PARTICIPATION AGREEMENT RELATING TO SUBMISSION TO
JURISDICTION, VENUE AND ARBITRATION ARE HEREBY INCORPORATED BY REFERENCE HEREIN,
MUTATIS MUTANDIS.
30.14 USURY SAVINGS PROVISION.
IT IS THE INTENT OF THE PARTIES HERETO TO CONFORM TO AND CONTRACT IN
STRICT COMPLIANCE WITH APPLICABLE USURY LAW FROM TIME TO TIME IN EFFECT. TO THE
EXTENT ANY RENT OR PAYMENTS HEREUNDER ARE HEREINAFTER CHARACTERIZED BY ANY COURT
OF COMPETENT JURISDICTION AS THE REPAYMENT OF PRINCIPAL AND INTEREST THEREON,
THIS SECTION 30.14 SHALL APPLY. ANY SUCH RENT OR PAYMENTS SO CHARACTERIZED AS
INTEREST MAY BE REFERRED TO HEREIN AS "INTEREST." ALL AGREEMENTS AMONG THE
PARTIES HERETO ARE HEREBY LIMITED BY THE PROVISIONS OF THIS PARAGRAPH WHICH
SHALL OVERRIDE AND CONTROL ALL SUCH AGREEMENTS, WHETHER NOW EXISTING OR
HEREAFTER ARISING AND WHETHER WRITTEN OR ORAL. IN NO WAY, NOR IN ANY EVENT OR
CONTINGENCY (INCLUDING WITHOUT LIMITATION PREPAYMENT OR ACCELERATION OF THE
MATURITY OF ANY OBLIGATION), SHALL ANY INTEREST TAKEN, RESERVED, CONTRACTED FOR,
CHARGED, OR RECEIVED UNDER THIS LEASE OR OTHERWISE, EXCEED THE MAXIMUM
NONUSURIOUS AMOUNT PERMISSIBLE UNDER APPLICABLE LAW. IF, FROM ANY POSSIBLE
CONSTRUCTION OF ANY OF THE OPERATIVE AGREEMENTS OR ANY OTHER DOCUMENT OR
AGREEMENT, INTEREST WOULD OTHERWISE BE PAYABLE IN EXCESS OF THE MAXIMUM
NONUSURIOUS AMOUNT, ANY SUCH CONSTRUCTION SHALL BE SUBJECT TO THE PROVISIONS OF
THIS PARAGRAPH AND SUCH AMOUNTS UNDER SUCH DOCUMENTS OR AGREEMENTS SHALL BE
AUTOMATICALLY REDUCED TO THE MAXIMUM NONUSURIOUS AMOUNT PERMITTED UNDER
APPLICABLE LAW, WITHOUT THE NECESSITY OF EXECUTION OF ANY AMENDMENT OR NEW
DOCUMENT OR AGREEMENT. IF LESSOR SHALL EVER RECEIVE ANYTHING OF VALUE WHICH IS
CHARACTERIZED AS INTEREST WITH RESPECT TO THE OBLIGATIONS OWED HEREUNDER OR
UNDER APPLICABLE LAW AND WHICH WOULD, APART FROM THIS PROVISION, BE IN EXCESS OF
THE MAXIMUM LAWFUL AMOUNT, AN AMOUNT EQUAL TO THE AMOUNT WHICH WOULD HAVE BEEN
EXCESSIVE INTEREST SHALL, WITHOUT PENALTY, BE APPLIED TO THE REDUCTION OF THE
COMPONENT OF PAYMENTS DEEMED TO BE PRINCIPAL AND NOT TO THE PAYMENT OF INTEREST,
OR REFUNDED TO LESSEE OR ANY OTHER PAYOR THEREOF, IF AND TO THE EXTENT
41
<PAGE> 46
SUCH AMOUNT WHICH WOULD HAVE BEEN EXCESSIVE EXCEEDS THE COMPONENT OF PAYMENTS
DEEMED TO BE PRINCIPAL. THE RIGHT TO DEMAND PAYMENT OF ANY AMOUNTS EVIDENCED BY
ANY OF THE OPERATIVE AGREEMENTS DOES NOT INCLUDE THE RIGHT TO RECEIVE ANY
INTEREST WHICH HAS NOT OTHERWISE ACCRUED ON THE DATE OF SUCH DEMAND, AND LESSOR
DOES NOT INTEND TO CHARGE OR RECEIVE ANY UNEARNED INTEREST IN THE EVENT OF SUCH
DEMAND. ALL INTEREST PAID OR AGREED TO BE PAID TO LESSOR SHALL, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, BE AMORTIZED, PRORATED, ALLOCATED, AND SPREAD
THROUGHOUT THE FULL STATED TERM (INCLUDING WITHOUT LIMITATION ANY RENEWAL OR
EXTENSION) OF THIS LEASE SO THAT THE AMOUNT OF INTEREST ON ACCOUNT OF SUCH
PAYMENTS DOES NOT EXCEED THE MAXIMUM NONUSURIOUS AMOUNT PERMITTED BY APPLICABLE
LAW.
[signature pages follow]
42
<PAGE> 47
IN WITNESS WHEREOF, the parties have caused this Lease to be duly
executed and delivered as of the date first above written.
FIRST SECURITY BANK, NATIONAL
ASSOCIATION, not individually, but solely as
the Owner Trustee under the RFMD Real Estate
Trust 1999-1, as Lessor
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
[signature pages continue]
Lease Agreement
RFMD Real Estate Trust 1999-1
<PAGE> 48
RF MICRO DEVICES, INC., as Lessee
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
[signature pages continue]
Lease Agreement
RFMD Real Estate Trust 1999-1
<PAGE> 49
Receipt of this original
counterpart of the foregoing
Lease is hereby acknowledged
as the date hereof
FIRST UNION NATIONAL BANK,
as the Agent
By:
-------------------------------------
Name:
-----------------------------------
Title:
-----------------------------------
[signature pages end]
Lease Agreement
RFMD Real Estate Trust 1999-1
<PAGE> 50
EXHIBIT A TO THE LEASE
LEASE SUPPLEMENT NO. ___
THIS LEASE SUPPLEMENT NO. ___ (this "Lease Supplement") dated as of
August __, 1999 between FIRST SECURITY BANK, NATIONAL ASSOCIATION, a national
banking association, not individually, but solely as the Owner Trustee under the
RFMD Real Estate Trust 1999-1, as lessor (the "Lessor"), and RF MICRO DEVICES,
INC., a [____________] corporation, as lessee (the "Lessee").
WHEREAS, Lessor is the owner or will be the owner of the Property
described on Schedule 1 hereto (the "Leased Property") and wishes to lease the
same to Lessee;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
SECTION 1. DEFINITIONS; RULES OF USAGE. For purposes of this Lease
Supplement, capitalized terms used herein and not otherwise defined herein shall
have the meanings assigned to them in Appendix A to the Participation Agreement,
dated as of August __, 1999, among Lessee, Lessor, not individually, except as
expressly stated therein, but solely as the Owner Trustee under the RFMD Real
Estate Trust 1999-1, the various banks and other lending institutions which are
parties thereto from time to time, as the Holders, the various banks and other
lending institutions which are parties thereto from time to time, as the
Lenders, and First Union National Bank, as the Agent for the Lenders and
respecting the Security Documents, as the Agent for the Lenders and Holders, to
the extent of their interests, as such may be amended, modified, extended,
supplemented, restated and/or replaced from time to time.
SECTION 2. THE PROPERTIES. Attached hereto as Schedule 1 is the
description of the Leased Property, with an Equipment Schedule attached hereto
as Schedule 1-A, an Improvement Schedule attached hereto as Schedule 1-B and [A
LEGAL DESCRIPTION OF THE LAND / A COPY OF THE GROUND LEASE] attached hereto as
Schedule 1-C. Effective upon the execution and delivery of this Lease Supplement
by Lessor and Lessee, the Leased Property shall be subject to the terms and
provisions of the Lease. Without further action, any and all additional
Equipment funded under the Operative Agreements and any and all additional
Improvements made to the Land shall be deemed to be titled to the Lessor and
subject to the terms and conditions of the Lease and this Lease Supplement.
This Lease Supplement shall constitute a mortgage, deed of trust,
security agreement and financing statement under the laws of the state in which
the Leased Property is situated. The maturity date of the obligations secured
hereby shall be [___________] unless extended to not later than [___________].
<PAGE> 51
For purposes of provisions of the Lease and this Lease Supplement
related to the creation and enforcement of the Lease and this Lease Supplement
as a security agreement and a fixture filing, Lessee is the debtor and Lessor is
the secured party. The mailing addresses of the debtor (Lessee herein) and of
the secured party (Lessor herein) from which information concerning security
interests hereunder may be obtained are set forth on the signature pages hereto.
A carbon, photographic or other reproduction of the Lease and this Lease
Supplement or of any financing statement related to the Lease and this Lease
Supplement shall be sufficient as a financing statement for any of the purposes
referenced herein.
SECTION 3. USE OF PROPERTY. At all times during the Term with respect
to each Property, Lessee will comply with all obligations under and (to the
extent no Event of Default exists and provided, that such exercise will not
impair the value of such Property) shall be permitted to exercise all rights and
remedies under, all operation and easement agreements and related or similar
agreements applicable to such Property.
SECTION 4. RATIFICATION; INCORPORATION BY REFERENCE. Except as
specifically modified hereby, the terms and provisions of the Lease and the
Operative Agreements are hereby ratified and confirmed and remain in full force
and effect. The Lease is hereby incorporated herein by reference as though
restated herein in its entirety.
SECTION 5. ORIGINAL LEASE SUPPLEMENT. The single executed original of
this Lease Supplement marked "THIS COUNTERPART IS THE ORIGINAL EXECUTED
COUNTERPART" on the signature page thereof and containing the receipt of the
Agent therefor on or following the signature page thereof shall be the original
executed counterpart of this Lease Supplement (the "Original Executed
Counterpart"). To the extent that this Lease Supplement constitutes chattel
paper, as such term is defined in the Uniform Commercial Code as in effect in
any applicable jurisdiction, no security interest in this Lease Supplement may
be created through the transfer or possession of any counterpart other than the
Original Executed Counterpart.
SECTION 6. GOVERNING LAW. THIS LEASE SUPPLEMENT SHALL BE GOVERNED BY
AND CONSTRUED, INTERPRETED TO AND ENFORCED IN ACCORDANCE WITH THE LAW OF THE
STATE OF [__________], EXCEPT TO THE EXTENT THE LAWS OF THE STATE WHERE A
PARTICULAR PROPERTY IS LOCATED ARE REQUIRED TO APPLY.
SECTION 7. MORTGAGE; POWER OF SALE. Without limiting any other remedies
set forth in the Lease, in the event that a court of competent jurisdiction
rules that the Lease constitutes a mortgage, deed of trust or other secured
financing as is the intent of the parties, then Lessor and Lessee agree that
Lessee hereby grants a Lien against the Leased Property WITH POWER OF SALE, and
that, upon the occurrence of any Lease Event of Default, Lessor shall have the
power and authority, to the extent provided by law, after prior notice and lapse
of such time as may be required by law, to foreclose its interest (or cause such
interest to be foreclosed) in all or any part of the Leased Property.
A-2
<PAGE> 52
SECTION 8. COUNTERPART EXECUTION. This Lease Supplement may be executed
in any number of counterparts and by each of the parties hereto in separate
counterparts, all such counterparts together constituting but one (1) and the
same instrument.
For purposes of the provisions of this Lease Supplement concerning this
Lease Supplement constituting a security agreement and fixture filing, the
addresses of the debtor (Lessee herein) and the secured party (Lessor herein),
from whom information may be obtained about this Lease Supplement, are as set
forth on the signature pages hereto.
[The remainder of this page has been intentionally left blank.]
A-3
<PAGE> 53
IN WITNESS WHEREOF, each of the parties hereto has caused this Lease
Supplement to be duly executed by an officer thereunto duly authorized as of the
date and year first above written.
FIRST SECURITY BANK, NATIONAL
ASSOCIATION, not individually, but solely as
the Owner Trustee under the RFMD Real Estate
Trust 1999-1, as Lessor
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
First Security Bank, National Association
79 South Main Street
Third Floor
Salt Lake City, Utah 84111
Attn: Val T. Orton
Vice President
RF MICRO DEVICES, INC., as Lessee
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
[LESSEE ADDRESS]
--------------------------------------------
--------------------------------------------
Attn:
Receipt of this original counterpart of the foregoing Lease Supplement is hereby
acknowledged as the date hereof.
FIRST UNION NATIONAL BANK, as
the Agent
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
First Union National Bank
c/o First Union Securities, Inc.
301 South College Street, DC-6
Charlotte, North Carolina 28288-0166
A-4
<PAGE> 54
[CONFORM TO STATE LAW REQUIREMENTS]
STATE OF _______________ )
) ss:
COUNTY OF ______________ )
The foregoing Lease Supplement was acknowledged before me, the
undersigned Notary Public, in the County of _________________ this _____ day of
______________, by ________________, as __________________ of FIRST SECURITY
BANK, NATIONAL ASSOCIATION, a national banking association, not individually,
but solely as the Owner Trustee under the RFMD Real Estate Trust 1999-1, on
behalf of the Owner Trustee.
[Notarial Seal]
-----------------------------------
Notary Public
My commission expires: ____________
STATE OF _______________ )
) ss:
COUNTY OF ______________ )
The foregoing Lease Supplement was acknowledged before me, the
undersigned Notary Public, in the County of _________________ this _____ day of
______________, by ________________, as __________________ of [_______________,
a ________________] corporation, on behalf of the corporation.
[Notarial Seal]
-----------------------------------
Notary Public
My commission expires: ____________
STATE OF _______________ )
) ss:
COUNTY OF ______________ )
The foregoing Lease Supplement was acknowledged before me, the
undersigned Notary Public, in the County of ________________ this ____ day of
___________, by _____________, as __________________ of FIRST UNION NATIONAL
BANK, a national banking association, as the Agent.
[Notarial Seal]
-----------------------------------
Notary Public
My commission expires: ____________
A-5
<PAGE> 55
SCHEDULE 1
TO LEASE SUPPLEMENT NO. ____
(Description of the Leased Property)
A-6
<PAGE> 56
SCHEDULE 1-A
TO LEASE SUPPLEMENT NO. ____
(Equipment)
A-7
<PAGE> 57
SCHEDULE 1-B
TO LEASE SUPPLEMENT NO. ____
(Improvements)
A-8
<PAGE> 58
SCHEDULE 1-C
TO LEASE SUPPLEMENT NO. ____
[(LAND)/
(GROUND LEASE)]
A-9
<PAGE> 59
EXHIBIT B TO THE LEASE
[MODIFY OR SUBSTITUTE SHORT FORM LEASE AS
NECESSARY FOR LOCAL LAW REQUIREMENTS]
Recordation requested by:
Moore & Van Allen, PLLC
After recordation return to:
Moore & Van Allen, PLLC (WMA)
100 North Tryon Street, Floor 47
Charlotte, NC 28202-4003
Space above this line for Recorder's use
- - --------------------------------------------------------------------------------
MEMORANDUM OF LEASE AGREEMENT,
LEASE SUPPLEMENT NO. ____ AND DEED OF TRUST
THIS MEMORANDUM OF LEASE AGREEMENT AND LEASE SUPPLEMENT NO. ____
("Memorandum"), dated as of [_____________, 199___], is by and between FIRST
SECURITY BANK, NATIONAL ASSOCIATION, a national banking association, not
individually, but solely as the Owner Trustee under the RFMD Real Estate Trust
1999-1, with an office at 79 South Main Street, Salt Lake City, Utah 84111
(hereinafter referred to as "Lessor") and [_______________, a __________]
corporation, with an office at [___________________] (hereinafter referred to as
"Lessee").
WITNESSETH:
That for value received, Lessor and Lessee do hereby covenant, promise
and agree as follows:
1. DEMISED PREMISES AND DATE OF LEASE. Lessor has leased to Lessee, and
Lessee has leased from Lessor, for the Term (as hereinafter defined), certain
real property and other property located in [________________], which is
described in the attached Schedule 1 (the "Property"), pursuant to the terms of
a Lease Agreement between Lessor and Lessee dated as of [__________, 199__] (as
such may be amended, modified, extended, supplemented, restated and/or replaced
from time to time, "Lease") and a Lease Supplement No. _____ between Lessor and
Lessee dated as of ______________ (the "Lease Supplement").
<PAGE> 60
The Lease and the Lease Supplement shall constitute a mortgage, deed of
trust and security agreement and financing statement under the laws of the state
in which the Property is situated. The maturity date of the obligations secured
thereby shall be ___________, unless extended to not later than ___________.
For purposes of provisions of the Lease and the Lease Supplement
related to the creation and enforcement of the Lease and the Lease Supplement as
a security agreement and a fixture filing, Lessee is the debtor and Lessor is
the secured party. The mailing addresses of the debtor (Lessee herein) and of
the secured party (Lessor herein) from which information concerning security
interests hereunder may be obtained are as set forth on the signature pages
hereof. A carbon, photographic or other reproduction of this Memorandum or of
any financing statement related to the Lease and the Lease Supplement shall be
sufficient as a financing statement for any of the purposes referenced herein.
2. TERM, RENEWAL, EXTENSION AND PURCHASE OPTION. The term of the Lease
for the Property ("Term") commenced as of __________, 19__ and shall end as of
_________, 19__, unless the Term is extended or earlier terminated in accordance
with the provisions of the Lease. The Lease contains provisions for renewal and
extension. The tenant has a purchase option under the Lease.
3. TAX PAYER NUMBERS.
Lessor's tax payer number: __________________.
Lessee's tax payer number: __________________.
4. MORTGAGE; POWER OF SALE. Without limiting any other remedies set
forth in the Lease, in the event that a court of competent jurisdiction rules
that the Lease constitutes a mortgage, deed of trust or other secured financing
as is the intent of the parties, then Lessor and Lessee agree that Lessee has
granted, pursuant to the terms of the Lease and the Lease Supplement, a Lien
against the Property WITH POWER OF SALE, and that, upon the occurrence and
during the continuance of any Lease Event of Default, Lessor shall have the
power and authority, to the extent provided by law, after prior notice and lapse
of such time as may be required by law, to foreclose its interest (or cause such
interest to be foreclosed) in all or any part of the Property.
5. EFFECT OF MEMORANDUM. The purpose of this instrument is to give
notice of the Lease and the Lease Supplement and their respective terms,
covenants and conditions to the same extent as if the Lease and the Lease
Supplement were fully set forth herein. This Memorandum shall not modify in any
manner the terms, conditions or intent of the Lease or the Lease Supplement and
the parties agree that this Memorandum is not intended nor shall it be used to
interpret the Lease or the Lease Supplement or determine the intent of the
parties under the Lease or the Lease Supplement.
B-2
<PAGE> 61
[The remainder of this page has been intentionally left blank.]
B-3
<PAGE> 62
IN WITNESS WHEREOF, the parties hereto have duly executed this
instrument as of the day and year first written.
LESSOR:
FIRST SECURITY BANK, NATIONAL
ASSOCIATION, not individually, but solely as
the Owner Trustee under the RFMD Real Estate
Trust 1999-1
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
First Security Bank, National Association
79 South Main Street
Third Floor
Salt Lake City, Utah 84111
Attn: Val T. Orton
Vice President
LESSEE:
RF MICRO DEVICES, INC.
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
[LESSEE ADDRESS]
--------------------------------------------
--------------------------------------------
Attn:
B-4
<PAGE> 63
SCHEDULE 1
(Description of Property)
B-5
<PAGE> 64
[CONFORM TO STATE LAW REQUIREMENTS]
STATE OF _______________ )
) ss:
COUNTY OF ______________ )
The foregoing Memorandum of Lease Agreement and Lease Supplement No.
_____ was acknowledged before me, the undersigned Notary Public, in the County
of _________________ this _____ day of ______________, by ________________, as
__________________ of FIRST SECURITY BANK, NATIONAL ASSOCIATION, a national
banking association, not individually, but solely as the Owner Trustee under the
[_____ Real Estate Trust _____], on behalf of the Owner Trustee.
[Notarial Seal]
------------------------------------
Notary Public
My commission expires: ____________
STATE OF _______________ )
) ss:
COUNTY OF ______________ )
The foregoing Memorandum of Lease Agreement and Lease Supplement No.
_____ was acknowledged before me, the undersigned Notary Public, in the County
of _________________ this _____ day of ______________, by ________________, as
__________________ of [_______________, a __________] corporation, on behalf of
the corporation.
[Notarial Seal]
------------------------------------
Notary Public
My commission expires: ____________
B-6
<PAGE> 1
EXHIBIT 10.11
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AMENDED, RESTATED AND REPLACEMENT
CREDIT AGREEMENT
Dated as of December 31, 1999
among
FIRST SECURITY BANK, NATIONAL ASSOCIATION,
not individually, except as
expressly stated herein,
but solely as the Owner Trustee
under the RFMD Real Estate Trust 1999-1,
as the Borrower,
The Several Lenders
from Time to Time Parties Hereto,
and
FIRST UNION NATIONAL BANK,
as the Agent
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<PAGE> 2
TABLE OF CONTENTS
Page
SECTION 1. DEFINITIONS........................................................1
1.1 Definitions.......................................................1
1.2 Interpretation....................................................1
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS....................................1
2.1 Commitments.......................................................1
2.2 Notes.............................................................2
2.3 Procedure for Borrowing...........................................2
2.4 Lender Unused Fees................................................3
2.5 Termination or Reduction of Commitments...........................3
2.6 Prepayments and Payments..........................................4
2.7 Conversion and Continuation Options...............................5
2.8 Interest Rates and Payment Dates..................................6
2.9 Computation of Interest...........................................6
2.10 Pro Rata Treatment and Payments..................................7
2.11 Notice of Amounts Payable; Mandatory Assignment..................8
SECTION 3. REPRESENTATIONS AND WARRANTIES.....................................9
SECTION 4. CONDITIONS PRECEDENT...............................................9
4.1 Conditions to Effectiveness.......................................9
4.2 Conditions to Each Loan...........................................9
SECTION 5. COVENANTS..........................................................9
5.1 Other Activities..................................................9
5.2 Ownership of Properties, Indebtedness............................10
5.3 Disposition of Assets............................................10
5.4 Compliance with Operative Agreements.............................10
5.5 Further Assurances...............................................10
5.6 Notices..........................................................10
5.7 Discharge of Liens...............................................10
5.8 Trust Agreement..................................................11
SECTION 6. EVENTS OF DEFAULT.................................................11
SECTION 7. THE AGENT.........................................................14
7.1 Appointment......................................................14
7.2 Delegation of Duties.............................................14
7.3 Exculpatory Provisions...........................................14
7.4 Reliance by the Agent............................................15
7.5 Notice of Default................................................15
7.6 Non-Reliance on the Agent and Other Lenders......................16
7.7 Indemnification..................................................16
7.8 The Agent in Its Individual Capacity.............................17
7.9 Successor Agent..................................................17
7.10 Actions of the Agent on Behalf of Holders.......................17
7.11 The Agent's Duty of Care........................................17
i
<PAGE> 3
SECTION 8. MATTERS RELATING TO PAYMENT AND COLLATERAL........................18
8.1 Collection and Allocation of Payments and Other Amounts..........18
8.2 Certain Remedial Matters.........................................18
8.3 Excepted Payments................................................18
SECTION 9. MISCELLANEOUS.....................................................19
9.1 Amendments and Waivers...........................................19
9.2 Notices..........................................................19
9.3 No Waiver; Cumulative Remedies...................................19
9.4 Survival of Representations and Warranties.......................19
9.5 Payment of Expenses and Taxes....................................19
9.6 Successors and Assigns; Participations and Assignments...........20
9.7 Participations...................................................20
9.8 Assignments......................................................21
9.9 The Register; Disclosure; Pledges to Federal Reserve Banks.......23
9.10 Adjustments; Set-off............................................23
9.11 Counterparts....................................................24
9.12 Severability....................................................24
9.13 Integration.....................................................24
9.14 GOVERNING LAW...................................................25
9.15 SUBMISSION TO JURISDICTION; VENUE; ARBITRATION..................25
9.16 Acknowledgments.................................................25
9.17 WAIVERS OF JURY TRIAL...........................................25
9.18 Nonrecourse.....................................................25
9.19 USURY SAVINGS PROVISION.........................................26
SCHEDULES
Schedule 2.1 Commitments and Addresses of Lenders
EXHIBITS
Exhibit A-1 Form of Tranche A Note
Exhibit A-2 Form of Tranche B Note
Exhibit B Form of Assignment and Acceptance
ii
<PAGE> 4
AMENDED, RESTATED AND REPLACEMENT
CREDIT AGREEMENT
THIS AMENDED, RESTATED AND REPLACEMENT CREDIT AGREEMENT, dated as of
December 31, 1999 (as amended, modified, extended, supplemented, restated and/or
replaced from time to time, the "Agreement") is among FIRST SECURITY BANK,
NATIONAL ASSOCIATION, not individually, except as expressly stated herein, but
solely as the Owner Trustee under the RFMD Real Estate Trust 1999-1 (the "Owner
Trustee" or the "Borrower"), the several banks and other financial institutions
from time to time parties to this Agreement (the "Lenders") and FIRST UNION
NATIONAL BANK, a national banking association, as a Lender and as the agent for
the Lenders (the "Agent").
The parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 DEFINITIONS.
For purposes of this Agreement, capitalized terms used in this
Agreement and not otherwise defined herein shall have the meanings assigned to
them in Appendix A to that certain Amended, Restated and Replacement
Participation Agreement dated as of December 31, 1999 (as amended, modified,
extended, supplemented, restated and/or replaced from time to time in accordance
with the applicable provisions thereof, the "Participation Agreement") among RF
Micro Devices, Inc., the Borrower, the various banks and other lending
institutions which are parties thereto from time to time, as the Holders, the
various banks and other lending institutions which are parties thereto from time
to time, as the Lenders, and First Union National Bank, as agent for the Lenders
and respecting the Security Documents, as the agent for the Lenders and the
Holders, to the extent of their interests. Unless otherwise indicated,
references in this Agreement to articles, sections, paragraphs, clauses,
appendices, schedules and exhibits are to the same contained in this Agreement.
1.2 INTERPRETATION.
The rules of usage set forth in Appendix A to the Participation
Agreement shall apply to this Agreement.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 COMMITMENTS.
(a) Subject to the terms and conditions hereof, each of the
Lenders severally agrees to make the portion of the Tranche A Loans and
the Tranche B Loans to the Borrower from time to time during the
Commitment Period in an amount up to such Lender's Commitment as is set
forth adjacent to such Lender's name in Schedule 2.1
<PAGE> 5
hereto for the purpose of enabling the Borrower to purchase the
Properties and to pay Property Acquisition Costs, Property Costs and
Transaction Expenses, provided, that the aggregate principal amount at
any one (1) time outstanding with respect to each of the Tranche A
Loans and the Tranche B Loans shall not exceed the amount of the
Tranche A Commitments and the Tranche B Commitments respectively. Any
prepayments of the Loans, whether mandatory or at the Borrower's
election, shall not be subject to reborrowing except as set forth in
Section 5.2(d) of the Participation Agreement.
(b) The Loans may from time to time be (i) Eurodollar Loans,
(ii) ABR Loans, or (iii) a combination thereof, as determined by the
Borrower and notified to the Agent in accordance with Sections 2.3 and
2.7. In the event the Borrower fails to provide notice pursuant to
Section 2.3, the Loan shall be an ABR Loan. Further, any Loans by the
Lenders on a given date in an aggregate amount less than $100,000.00
shall be ABR Loans, unless the remaining Available Commitment for the
Lenders in the aggregate is less than $100,000.00, in which case, the
Borrower may elect a Eurodollar Loan for such remaining amount.
(c) The Commitment of each Lender to make Tranche A Loans and
Tranche B Loans shall be pro rata.
2.2 NOTES.
The Loans made by each Lender shall be evidenced by promissory notes of
the Borrower, substantially in the form of Exhibit A-1 in the case of the
Tranche A Loans (each, a "Tranche A Note") or Exhibit A-2 in the case of the
Tranche B Loans (each, a "Tranche B Note," and with the Tranche A Notes, the
"Notes"), with appropriate insertions as to payee and date, payable to the order
of such Lender and in a principal amount up to the Tranche A Commitment or
Tranche B Commitment, as the case may be, of such Lender. Each Lender is hereby
authorized to record the date, Type and amount of each Loan made by such Lender,
each continuation thereof, each conversion of all or a portion thereof to
another Type, and the date and amount of each payment or prepayment of principal
thereof on the schedule annexed to and constituting a part of its Note, and any
such recordation shall constitute prima facie evidence of the accuracy of the
information so recorded, provided, that the failure to make any such recordation
or any error in such recordation shall not affect the Borrower's obligations
hereunder or under such Note. Each Note shall (i) be dated the Initial Closing
Date, (ii) be stated to mature on the Maturity Date and (iii) provide for the
payment of principal in accordance with Section 2.6(d) and the payment of
interest in accordance with Section 2.8.
2.3 PROCEDURE FOR BORROWING.
(a) The Borrower may borrow under the Commitments during the
Commitment Period on any Business Day that an Advance may be requested
pursuant to the terms of Section 5.2 of the Participation Agreement,
provided, that the Borrower shall give the Agent irrevocable notice
(which must be received by the Agent prior to 12:00 Noon, New York
time, at least three (3) Business Days prior to the requested Borrowing
2
<PAGE> 6
Date specifying (i) the amount to be borrowed (which on any date shall
not be in excess of the then Available Commitments), (ii) the requested
Borrowing Date, (iii) whether the borrowing is to be of Eurodollar
Loans, ABR Loans or a combination thereof, (iv) if the borrowing is to
be a combination of Eurodollar Loans and ABR Loans, the respective
amounts of each Type of Loan and (v) the Interest Period applicable to
each Eurodollar Loan. Pursuant to the terms of the Participation
Agreement, the Borrower shall be deemed to have delivered such notice
upon the delivery of a notice by the Construction Agent or the Lessee
containing such required information. Upon receipt of any such notice
from the Borrower, the Agent shall promptly notify each Lender thereof.
Each Lender will make the amount of its pro rata share of each
borrowing available to the Agent for the account of the Borrower at the
office of the Agent specified in Section 9.2 prior to 12:00 Noon, New
York time, on the Borrowing Date requested by the Borrower in funds
immediately available to the Agent. Such borrowing will then be made
available to the Borrower by the Agent crediting an account designated,
subject to Section 9.1 of the Participation Agreement, by the Borrower
on the books of such office with the aggregate of the amounts made
available to the Agent by the Lenders and in like funds as received by
the Agent. No amount of any Loan which is repaid or prepaid by the
Borrower may be reborrowed hereunder, except as set forth in Section
5.2(d) of the Participation Agreement.
(b) Interest accruing on each Loan during the Construction
Period with respect to any Property shall, subject to the limitations
set forth in Section 5.1(b) of the Participation Agreement be added to
the principal amount of such Loan on the relevant Scheduled Interest
Payment Date. On each such Scheduled Interest Payment Date, the Loan
Property Cost and Construction Loan Property Cost shall be increased by
the amount of interest added to the Loans.
2.4 LENDER UNUSED FEES.
Promptly after receipt from the Lessee of the payment of the Lender
Unused Fee payable pursuant to Section 7.4 of the Participation Agreement, the
Agent shall distribute such payments to the Lenders pro rata in accordance with
their respective Commitments.
2.5 TERMINATION OR REDUCTION OF COMMITMENTS.
(a) The Borrower shall have the right, upon not less than
three (3) Business Days' written notice to the Agent, to terminate the
Commitments or, from time to time, to reduce the amount of the
Commitments, provided, that (i) after giving effect to such reduction,
the aggregate outstanding principal amount of the Loans shall not
exceed the aggregate Commitments and (ii) such notice shall be
accompanied by a certificate of the Construction Agent stating that the
amount equal to ninety-seven percent (97%) of aggregate Budgeted Total
Property Costs as of the date of such reduction does not exceed the
aggregate amount of Available Commitments as of such date after giving
effect to such reduction. Any such reduction (A) shall be in an amount
equal to the lesser of (1) $1,000,000.00 (or a positive integer
multiple thereof) or (2) the remaining Available
3
<PAGE> 7
Commitments, (B) shall reduce permanently the Commitments then in
effect and (C) shall be pro rata for the Commitments of all Lenders and
pro rata between the Tranche A Loans and the Tranche B Loans.
(b) The Commitments respecting any particular Property shall
automatically be reduced to zero (0) upon the occurrence of the Rent
Commencement Date respecting such Property. On any date on which the
Commitments shall automatically be reduced to zero (0) pursuant to
Section 6, the Borrower shall prepay all outstanding Loans, together
with accrued unpaid interest thereon and all other amounts owing
thereunder.
2.6 PREPAYMENTS AND PAYMENTS.
(a) Subject to Sections 11.2(e), 11.3 and 11.4 of the
Participation Agreement, the Borrower may at any time and from time to
time prepay the Loans, in whole or in part, without premium or penalty,
upon at least three (3) Business Days' irrevocable notice to the Agent,
specifying the date and amount of prepayment and whether the prepayment
is of Eurodollar Loans, ABR Loans or a combination thereof, and, if a
combination thereof, the amount allocable to each. Upon receipt of any
such notice the Agent shall promptly notify each Lender thereof. If any
such notice is given, the amount specified in such notice shall be due
and payable on the date specified therein. Amounts prepaid may not be
reborrowed, and shall reduce the Commitments and the Available
Commitments, except in each case as set forth in Section 5.2(d) of the
Participation Agreement. All Loans outstanding shall be due and payable
in full on the Maturity Date.
(b) If on any date the Agent or the Lessor shall receive any
payment in respect of (i) any Casualty, Condemnation or Environmental
Violation pursuant to Sections 15.1(a) or 15.1(g) or Article XVI of the
Lease (excluding any payments in respect thereof which are payable to
the Lessee in accordance with the Lease), or (ii) the Termination Value
of any Property in connection with the delivery of a Termination Notice
pursuant to Article XVI of the Lease, or (iii) the Termination Value of
any Property in connection with the exercise of the Purchase Option
under Article XX of the Lease or the exercise of the option of the
Lessor to transfer the Properties to the Lessee pursuant to Section
20.3 of the Lease, or (iv) any payment required to be made or elected
to be made by the Construction Agent to the Lessor pursuant to the
terms of the Agency Agreement, then in each case, the Borrower shall
pay such amounts to the Agent and the Agent shall be required to apply
and pay such amounts in accordance with the provisions of Section
8.7(b)(ii) of the Participation Agreement.
(c) Each prepayment of the Loans pursuant to Section 2.6(a)
shall be allocated to reduce the respective Loan Property Costs of all
Properties pro rata according to the Loan Property Costs of such
Properties immediately before giving effect to such prepayment. Each
prepayment of the Loans pursuant to Section 2.6(b) shall be allocated
to reduce the Loan Property Cost of the Property or Properties subject
to the respective Casualty, Condemnation, Environmental Violation,
termination, purchase, transfer or other circumstance giving rise to
such prepayment. Any amounts applied to reduce the
4
<PAGE> 8
Loan Property Cost of any Construction Period Property pursuant to this
paragraph (c) shall also be applied to reduce the Construction Loan
Property Cost of such Property until such Construction Loan Property
Cost has been reduced to zero (0).
(d) On each date set forth on Schedule 1 to the Participation
Agreement, the Borrower shall repay the outstanding principal balance
of the Tranche A Loans in part in an amount equal to the product of (i)
the percentage set forth beside such date on such Schedule 1 to the
Participation Agreement multiplied by (ii) the aggregate principal
amount of Loans and Holder Advances expended for Equipment as set forth
in the Completion Certificate. In the event the Rent Commencement Date
occurs prior to February 13, 2001, then Schedule 1 to the Participation
Agreement shall be amended to provide for a straight amortization of
seventy-seven percent (77%) of Tranche A Loans expended for Equipment
as such amendments are reasonably acceptable to the Agent. All such
partial repayments of the principal balance of the Tranche A Loans
pursuant to this Section 2.6(d) shall be applied to reduce the Loan
Property Cost regarding the Tranche A Loans. If any such principal
payment is required on a day that is not a Business Day, then such
principal payment shall be due on the next succeeding Business Day.
2.7 CONVERSION AND CONTINUATION OPTIONS.
(a) The Borrower may elect from time to time to convert
Eurodollar Loans to ABR Loans by giving the Agent at least three (3)
Business Days' prior irrevocable notice of such election, provided,
that any such conversion of Eurodollar Loans may only be made on the
last day of an Interest Period with respect thereto, and provided,
further, to the extent an Event of Default has occurred and is
continuing on the last day of any such Interest Period, the applicable
Eurodollar Loan shall automatically be converted to an ABR Loan. The
Borrower may elect from time to time to convert ABR Loans to Eurodollar
Loans by giving the Agent at least three (3) Business Days' prior
irrevocable notice of such election. Upon receipt of any such notice,
the Agent shall promptly notify each Lender thereof. All or any part of
outstanding Eurodollar Loans or ABR Loans may be converted as provided
herein, provided, that (i) no ABR Loan may be converted into a
Eurodollar Loan after the date that is one (1) month prior to the
Maturity Date and (ii) such notice of conversion regarding any
Eurodollar Loan shall contain an election by the Borrower of an
Interest Period for such Eurodollar Loan to be created by such
conversion and such Interest Period shall be in accordance with the
terms of the definition of the term "Interest Period" including without
limitation subparagraphs (A) through (D) thereof.
(b) Subject to the restrictions set forth in Section 2.3
hereof, any Eurodollar Loan may be continued as such upon the
expiration of the current Interest Period with respect thereto by the
Borrower giving irrevocable notice to the Agent, in accordance with the
applicable notice provision for the conversion of ABR Loans to
Eurodollar Loans set forth herein, of the length of the next Interest
Period to be applicable to such Loans, provided, that no Eurodollar
Loan may be continued as such after the date that is one (1) month
prior to the Maturity Date, provided, further, no Eurodollar Loans may
be
5
<PAGE> 9
continued as such if an Event of Default has occurred and is continuing
as of the last day of the Interest Period for such Eurodollar Loan, and
provided, further, that if the Borrower shall fail to give any required
notice as described above or otherwise herein, or if such continuation
is not permitted pursuant to the proceeding proviso, such Loan shall
automatically be converted to an ABR Loan on the last day of such then
expiring Interest Period.
2.8 INTEREST RATES AND PAYMENT DATES.
(a) The Loans outstanding hereunder from time to time shall
bear interest at a rate per annum equal to either (i) with respect to a
Eurodollar Loan, the Eurodollar Rate determined for the applicable
Interest Period plus the Applicable Percentage or (ii) with respect to
an ABR Loan, the ABR plus the Applicable Percentage, as selected by the
Borrower in accordance with the provisions hereof; provided, however,
(A) upon delivery by the Agent of the notice described in Section
2.9(c), the Loans of each of the Lenders shall bear interest at the ABR
plus the Applicable Percentage applicable from time to time from and
after the dates and during the periods specified in Section 2.9(c), (B)
upon the delivery by a Lender of the notice described in Section
11.3(f) of the Participation Agreement, the Loans of such Lender shall
bear interest at the ABR plus the Applicable Percentage applicable from
time to time from and after the dates and during the periods specified
in Section 11.3(f) of the Participation Agreement and (C) in such other
circumstances as expressly provided herein, the Loans shall bear
interest at the ABR plus the Applicable Percentage.
(b) If all or a portion of (i) the principal amount of any
Loan, (ii) any interest payable thereon or (iii) any other amount
payable hereunder shall not be paid when due (whether at the stated
maturity, by acceleration or otherwise), such overdue amount shall bear
interest at a rate per annum which is the lesser of (x) the then
current rate of interest respecting such payment plus two percent (2%)
and (y) the highest interest rate permitted by applicable law, in each
case from the date of such non-payment until such amount is paid in
full (whether after or before judgment).
(c) Interest shall be payable in arrears on the applicable
Scheduled Interest Payment Date, provided, that (i) interest accruing
pursuant to paragraph (b) of this Section 2.8 shall be payable from
time to time on demand and (ii) each prepayment of the Loans shall be
accompanied by accrued interest to the date of such prepayment on the
amount prepaid.
2.9 COMPUTATION OF INTEREST.
(a) Whenever it is calculated on the basis of the Prime
Lending Rate, interest shall be calculated on the basis of a year of
three hundred sixty-five (365) days (or three hundred sixty-six (366)
days, as the case may be) for the actual days elapsed; and, otherwise,
interest shall be calculated on the basis of a year of three hundred
sixty (360) days for the actual days elapsed. The Agent shall as soon
as practicable notify the
6
<PAGE> 10
Borrower and the Lenders of each determination of a Eurodollar Rate.
Any change in the interest rate on a Loan resulting from a change in
the ABR or the Eurocurrency Reserve Requirements shall become effective
as of the day on which such change becomes effective. The Agent shall
as soon as practicable notify the Borrower and the Lenders of the
effective date and the amount of each such change in interest rate.
(b) Each determination of an interest rate by the Agent
pursuant to any provision of this Agreement shall be conclusive and
binding on the Borrower and the Lenders in the absence of manifest
error.
(c) If the Eurodollar Rate cannot be determined by the Agent
in the manner specified in the definition of the term "Eurodollar
Rate", the Agent shall give telecopy or telephonic notice thereof to
the Borrower and the Lenders as soon as practicable thereafter. Until
such time as the Eurodollar Rate can be determined by the Agent in the
manner specified in the definition of such term, no further Eurodollar
Loans shall be made or shall be continued as such at the end of the
then current Interest Period nor shall the Borrower have the right to
convert ABR Loans to Eurodollar Loans.
2.10 PRO RATA TREATMENT AND PAYMENTS.
(a) Each borrowing by the Borrower from the Lenders hereunder
and any reduction of the Commitments of the Lenders shall be made pro
rata according to their respective Commitments. Subject to the
provisions of Section 8.7 of the Participation Agreement and Section
2.11(b) hereof, each payment (including without limitation each
prepayment) by the Borrower on account of principal of and interest on
the Loans shall be made pro rata according to the respective
outstanding principal amounts on the Loans then held by the Lenders.
All payments (including without limitation prepayments) to be made by
the Borrower hereunder and under the Notes, whether on account of
principal, interest or otherwise, shall be made without setoff or
counterclaim and shall be made prior to 12:00 Noon, New York time, on
the due date thereof to the Agent, for the account of the Lenders, at
the Agent's office specified in Section 9.2, in Dollars and in
immediately available funds. The Agent shall distribute such payments
to the Lenders promptly upon receipt in like funds as received. If any
payment hereunder becomes due and payable on a day other than a
Business Day, such payment shall be extended to the next succeeding
Business Day; provided, however, if such payment includes an amount of
interest calculated with reference to the Eurodollar Rate and the
result of such extension would be to extend such payment into another
calendar month, then such payment shall be made on the immediately
preceding Business Day. In the case of any extension of any payment of
principal pursuant to the preceding two (2) sentences, interest thereon
shall be payable at the then applicable rate during such extension.
(b) Unless the Agent shall have been notified in writing by
any Lender prior to a borrowing that such Lender will not make its
share of such borrowing available to the Agent, the Agent may assume
that such Lender is making such amount available to the Agent, and the
Agent may, in reliance upon such assumption, make available to the
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Borrower a corresponding amount. If such amount is not made available
to the Agent by the required time on the Borrowing Date therefor, such
Lender shall pay to the Agent, on demand, such amount with interest
thereon at a rate equal to the daily average Federal Funds Effective
Rate for the period until such Lender makes such amount immediately
available to the Agent. A certificate of the Agent submitted to any
Lender with respect to any amounts owing under this Section 2.10(b)
shall be conclusive in the absence of manifest error. If such Lender's
share of such borrowing is not made available to the Agent by such
Lender within three (3) Business Days of such Borrowing Date, the Agent
shall also be entitled to recover such amount with interest thereon at
the rate as set forth above on demand from the Borrower.
2.11 NOTICE OF AMOUNTS PAYABLE; MANDATORY ASSIGNMENT.
(a) In the event that any Lender becomes aware that any
amounts are or will be owed to it pursuant to Sections 11.2(e) or 11.3
of the Participation Agreement or that it is unable to make Eurodollar
Loans, then it shall promptly notify the Borrower, the Lessee and the
Agent thereof and, as soon as possible thereafter, such Lender shall
submit to the Borrower (with a copy to the Agent) a certificate
indicating the amount owing to it and the calculation thereof. The
amounts set forth in such certificate shall be prima facie evidence of
the obligations of the Borrower hereunder.
(b) In the event that any Lender delivers to the Borrower a
certificate in accordance with Section 2.11(a) in connection with
amounts payable pursuant to Sections 11.2(e) or 11.3 of the
Participation Agreement or such Lender is required to make Loans as ABR
Loans in accordance with Section 11.3(d) of the Participation Agreement
then, subject to Section 9.1 of the Participation Agreement, the
Borrower may, at its own expense (provided, such amounts shall be
reimbursed or paid entirely (as elected by the Borrower) by the Lessee,
as Supplemental Rent) and in the discretion of the Borrower, (i)
require such Lender to transfer or assign, in whole or (with such
Lender's consent) in part, without recourse (in accordance with Section
9.8), all or (with such Lender's consent) part of its interests, rights
(except for rights to be indemnified for actions taken while a party
hereunder) and obligations under this Agreement to a replacement bank
or institution if the Borrower (subject to Section 9.1 of the
Participation Agreement), with the full cooperation of such Lender, can
identify a Person who is ready, willing and able to be such replacement
bank or institution with respect thereto and such replacement bank or
institution (which may be another Lender) shall assume such assigned
obligations, or (ii) during such time as no Default or Event of Default
has occurred and is continuing, terminate the Commitment of such Lender
and prepay all outstanding Loans of such Lender; provided, however,
that (x) subject to Section 9.1 of the Participation Agreement, the
Borrower or such replacement bank or institution, as the case may be,
shall have paid to such Lender in immediately available funds the
principal of and interest accrued to the date of such payment on the
Loans made by it hereunder and all other amounts owed to it hereunder
(and, if such Lender is also a Holder, all Holder Advances and Holder
Yield accrued and unpaid thereon), (y) any termination of Commitments
shall be subject to the terms of Section 2.5(a) and (z) such assignment
or termination of the Commitment of
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such Lender and prepayment of Loans does not conflict with any law,
rule or regulation or order of any court or Governmental Authority.
SECTION 3. REPRESENTATIONS AND WARRANTIES
To induce the Agent and the Lenders to enter into this Agreement and to
make the Loans, each of the Trust Company and the Owner Trustee hereby makes and
affirms the representations and warranties set forth in Section 6.1 of the
Participation Agreement to the same extent as if such representations and
warranties were set forth in this Agreement in their entirety.
SECTION 4. CONDITIONS PRECEDENT
4.1 CONDITIONS TO EFFECTIVENESS.
The effectiveness of this Agreement is subject to the satisfaction of
all conditions precedent set forth in Section 5.3 of the Participation Agreement
required by said Section to be satisfied on or prior to the Initial Closing
Date.
4.2 CONDITIONS TO EACH LOAN.
The agreement of each Lender to make any Loan requested to be made by
it on any date is subject to the satisfaction of all conditions precedent set
forth in Section 5.3 and 5.4 of the Participation Agreement required by said
Sections to be satisfied on or prior to the date of the applicable Loan.
Each borrowing by the Borrower hereunder shall constitute a
representation and warranty by the Borrower as of the date of such Loan that the
conditions contained in this Section 4.2 have been satisfied.
SECTION 5. COVENANTS
Unless the Agent and each Lender has otherwise given its express
written consent during such period that any Loan or Note remains outstanding and
unpaid or any other amount is owing to any Lender or the Agent hereunder:
5.1 OTHER ACTIVITIES.
The Borrower shall not conduct, transact or otherwise engage in, or
commit to transact, conduct or otherwise engage in, any business or operations
other than the entry into, and exercise of rights and performance of obligations
in respect of, the Operative Agreements and other activities incidental or
related to the foregoing.
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5.2 OWNERSHIP OF PROPERTIES, INDEBTEDNESS.
The Borrower shall not own, lease, manage or otherwise operate any
properties or assets other than in connection with the activities described in
Section 5.1, or incur, create, assume or suffer to exist any Indebtedness or
other consensual liabilities or financial obligations other than as may be
incurred, created or assumed or as may exist in connection with the activities
described in Section 5.1 (including without limitation the Loans and other
obligations incurred by the Borrower hereunder).
5.3 DISPOSITION OF ASSETS.
The Borrower shall not convey, sell, lease, assign, transfer or
otherwise dispose of any of its property, business or assets, whether now owned
or hereafter acquired, except to the extent expressly contemplated by the
Operative Agreements.
5.4 COMPLIANCE WITH OPERATIVE AGREEMENTS.
The Borrower shall at all times (a) observe and perform all of the
covenants, conditions and obligations required to be performed by it (whether in
its capacity as the Lessor, the Owner Trustee or otherwise) under each Operative
Agreement to which it is a party and (b) observe and perform, or cause to be
observed and performed, all of the covenants, conditions and obligations of the
Lessor under the Lease, even in the event that the Lease is terminated at stated
expiration following a Lease Event of Default or otherwise.
5.5 FURTHER ASSURANCES.
At any time and from time to time, upon the written request of the
Agent, and at the expense of the Borrower (provided, such amounts shall be
reimbursed or paid entirely (as elected by the Borrower) by the Lessee, as
Supplemental Rent), the Borrower will promptly and duly execute and deliver such
further instruments and documents and take such further action as the Agent or
the Majority Lenders may reasonably request for the purpose of obtaining or
preserving the full benefits of this Agreement and the other Operative
Agreements and of the rights and powers herein or therein granted.
5.6 NOTICES.
If on any date, a Responsible Officer of the Borrower shall obtain
actual knowledge of the occurrence of a Default or Event of Default, the
Borrower will give written notice thereof to the Agent within five (5) Business
Days after such date.
5.7 DISCHARGE OF LIENS.
Neither the Borrower nor the Trust Company will create or permit to
exist at any time, and will, at its own expense, promptly take such action as
may be necessary duly to discharge, or cause to be discharged, all Lessor Liens
attributable to it, provided, that the Borrower and the
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Trust Company shall not be required to discharge any Lessor Lien while the same
is being contested in good faith by appropriate proceedings diligently
prosecuted so long as such proceedings shall not involve any material danger of
impairment of any of the Liens contemplated by the Security Documents or of the
sale, forfeiture or loss of, and shall not materially interfere with the
disposition of, any Property or title thereto or any interest therein or the
payment of Rent.
5.8 TRUST AGREEMENT.
Without prejudice to any right under the Trust Agreement of the Owner
Trustee to resign, the Owner Trustee (a) agrees not to terminate or revoke the
trust created by the Trust Agreement except as permitted by Article VIII of the
Trust Agreement, (b) agrees not to amend, supplement, terminate, revoke or
otherwise modify any provision of the Trust Agreement in any manner which could
reasonably be expected to have an adverse effect on the rights or interests of
the Agent or the Lenders hereunder or under the other Operative Agreements and
(c) agrees to comply with all of the terms of the Trust Agreement.
SECTION 6. EVENTS OF DEFAULT
Upon the occurrence of any of the following specified events (each an
"Event of Default"):
(a) Except as provided in Sections 6(c), the Borrower shall
default in the payment when due of any principal on the Loans or
default in the payment when due of any interest on the Loans, and in
either such case, such default shall continue for three (3) or more
days; or
(b) Except as provided in Sections 6(a) and 6(c), the Borrower
shall default, and such default shall continue for three (3) or more
days, in the payment of any amount owing under any Credit Document; or
(c) (i) The Borrower shall default in the payment of any
amount due on the Maturity Date owing under any Credit Document or (ii)
the Borrower shall default in the payment when due of any principal or
interest on the Loans payable with regard to any obligation of Lessee
to pay Termination Value when due or to pay Basic Rent or Supplemental
Rent at such time as any Termination Value is due; or
(d) The Borrower shall default in the due performance or
observance by it of any term, covenant or agreement contained in any
Credit Document to which it is a party (other than those referred to in
paragraphs (a), (b) and (c) above), provided, that in the case of any
such default under Sections 5.4, 5.5 or 5.8(c), such default shall have
continued unremedied for a period of at least fifteen (15) days after
notice to the Borrower by the Agent or the Majority Lenders, provided,
further, if any such default under Sections 5.4, 5.5 or 5.8(c) is not
capable of remedy within such fifteen (15) day period but may be
remedied with further diligence and if the Borrower has and continues
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to pursue diligently such remedy, then the Borrower shall be granted
additional time to pursue such remedy but in no event more than an
additional thirty (30) days.
(e) Any representation, warranty or statement made or deemed
made by the Borrower herein or in any other Credit Document or by the
Borrower or the Lessee in the Participation Agreement, or in any
statement or certificate delivered or required to be delivered pursuant
hereto or thereto, shall prove to be untrue in any material respect on
the date as of which made or deemed made; or
(f) (i) Any Lease Event of Default shall have occurred and be
continuing, or (ii) the Owner Trustee shall default in the due
performance or observance by it of any term, covenant or agreement
contained in the Participation Agreement or in the Trust Agreement to
or for the benefit of the Agent or a Lender, provided, that in the case
of this clause (ii) such default shall have continued unremedied for a
period of at least fifteen (15) days after notice to the Owner Trustee
and Lessee by the Agent or the Majority Lenders, provided, further,
that in the case of this clause (ii), such default is not capable of
remedy within such fifteen (15) day period but may be remedied with
further diligence and if the Borrower has and continues to pursue
diligently such remedy, then the Borrower shall be granted additional
time to pursue such remedy but in no event more than an additional
thirty (30) days; or
(g) The Borrower shall commence a voluntary case concerning
itself under the Bankruptcy Code or an involuntary case is commenced
against the Borrower and the petition is not contravened within ten
(10) days after commencement of the case or an involuntary case is
commenced against the Borrower and the petition is not dismissed within
sixty (60) days after commencement of the case; or a custodian (as
defined in the Bankruptcy Code) is appointed for, or takes charge of,
all or substantially all of the property of the Borrower; or the
Borrower commences any other proceeding under any reorganization,
arrangement, adjustment of debt, relief of debtors, dissolution,
insolvency or liquidation or similar law of any jurisdiction whether
now or hereafter in effect relating to the Borrower, or there is
commenced against the Borrower any such proceeding which remains
undismissed for a period of sixty (60) days; or the Borrower is
adjudicated insolvent or bankrupt, or any order of relief or other
order approving any such case or proceeding is entered; or the Borrower
suffers any appointment of any custodian or the like for it or any
substantial part of its property to continue undischarged or unstayed
for a period of sixty (60) days; or the Borrower makes a general
assignment for the benefit of creditors; or any corporate or
partnership action is taken by the Borrower for the purpose of
effecting any of the foregoing; or
(h) Any Security Document shall cease to be in full force and
effect, or shall cease to give the Agent the Liens, rights, powers and
privileges purported to be created thereby (including without
limitation a first priority perfected security interest in, and Lien
on, all of the Properties), in favor of the Agent on behalf of the
Lenders and the Holders, superior to and prior to the rights of all
third Persons and subject to no other
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Liens (except in each case to the extent expressly permitted herein or
in any Operative Agreement) other than any Ground Lease; or
(i) The Lease shall cease to be enforceable against the
Lessee; or
(j) One (1) or more judgments or decrees shall be entered
against the Borrower involving a liability of $100,000.00 or more in
the aggregate for all such judgments and decrees for the Borrower and
any such judgments or decrees shall not have been vacated, discharged
or stayed or bonded pending appeal within sixty (60) days from the
entry thereof,
then, and in any such event, (A) if such event is an Event of Default specified
in paragraph (g) above with respect to the Borrower, automatically the
Commitments shall immediately terminate and the Loans hereunder (with accrued
interest thereon) and all other amounts owing under this Agreement and the Notes
shall immediately become due and payable, and (B) if such event is any other
Event of Default, either or both of the following actions may be taken: (i) with
the consent of the Majority Lenders, the Agent may, or upon the request of the
Majority Lenders, the Agent shall, by notice to the Borrower declare the
Commitments to be terminated forthwith, whereupon the Commitments shall
immediately terminate; and (ii) with the consent of the Majority Lenders, the
Agent may, or upon the request of the Majority Lenders, the Agent shall, by
notice to the Borrower, declare the Loans hereunder (with accrued interest
thereon) and all other amounts owing under this Agreement and the Notes to be
due and payable forthwith, whereupon the same shall immediately become due and
payable (any of the foregoing occurrences or actions referred to in clause (A)
or (B) above, an "Acceleration"). Except as expressly provided above in this
Section 6, presentment, demand, protest and all other notices of any kind are
hereby expressly waived.
Upon the occurrence of any Event of Default and at any time thereafter
so long as any Event of Default shall be continuing, the Agent shall, upon the
written instructions of the Majority Secured Parties, exercise any or all of the
rights and powers and pursue any and all of the remedies available to it
hereunder and (subject to the terms thereof) under the other Credit Documents,
the Lease and the other Operative Agreements and shall have any and all rights
and remedies available under the Uniform Commercial Code or any provision of
law.
Upon the occurrence of any Event of Default and at any time thereafter
so long as any Event of Default shall be continuing, the Agent may, and upon
request of the Majority Secured Parties shall, proceed to protect and enforce
this Agreement, the Notes, the other Credit Documents and the Lease by suit or
suits or proceedings in equity, at law or in bankruptcy, and whether for the
specific performance of any covenant or agreement herein contained or in
execution or aid of any power herein granted, or for foreclosure hereunder, or
for the appointment of a receiver or receivers for the Property or for the
recovery of judgment for the indebtedness secured thereby or for the enforcement
of any other proper, legal or equitable remedy available under applicable laws.
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The Borrower shall be liable for any and all accrued and unpaid amounts
due hereunder before, after or during the exercise of any of the foregoing
remedies, including without limitation all reasonable legal fees and other
reasonable costs and expenses incurred by the Agent or any Lender by reason of
the occurrence of any Event of Default or the exercise of remedies with respect
thereto.
SECTION 7. THE AGENT
7.1 APPOINTMENT.
Each Lender hereby irrevocably designates and appoints the Agent as the
agent of such Lender under this Agreement and the other Operative Agreements,
and each such Lender irrevocably authorizes the Agent, in such capacity, to
execute the Operative Agreements as agent for and on behalf of such Lender, to
take such action on behalf of such Lender under the provisions of this Agreement
and the other Operative Agreements and to exercise such powers and perform such
duties as are expressly delegated to the Agent by the terms of this Agreement
and other Operative Agreements, together with such other powers as are
reasonably incidental thereto. Without limiting the generality of the foregoing,
each of the Lenders hereby specifically acknowledges the terms and provisions of
the Participation Agreement and directs the Agent to exercise such powers, make
such decisions and otherwise perform such duties as are delegated to the Agent
thereunder without being required to obtain any specific consent with respect
thereto from any Lender, unless the matter under consideration is a Unanimous
Vote Matter or otherwise requires the consent of the Majority Lenders and/or the
Majority Secured Parties. Notwithstanding any provision to the contrary
elsewhere in this Agreement, the Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Operative Agreement or otherwise exist against the Agent.
7.2 DELEGATION OF DUTIES.
The Agent may execute any of its duties under this Agreement and the
other Operative Agreements by or through agents or attorneys-in-fact and shall
be entitled to advice of counsel concerning all matters pertaining to such
duties. The Agent shall not be responsible for the negligence or misconduct of
any agents or attorneys-in-fact selected by it with reasonable care.
7.3 EXCULPATORY PROVISIONS.
Neither the Agent nor any of its officers, directors, employees,
agents, attorneys-in-fact or Affiliates shall be (a) liable for any action
lawfully taken or omitted to be taken by it or such Person under or in
connection with this Agreement or any other Operative Agreement (except for its
or such Person's own gross negligence or willful misconduct) or (b) responsible
in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by the Borrower or the Lessee or any officer
thereof contained in this Agreement or any other Operative Agreement or in any
certificate, report, statement or other document referred to or
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provided for in, or received by the Agent under or in connection with, this
Agreement or any other Operative Agreement or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Operative Agreement or for any failure of the Borrower or the Lessee
to perform its obligations hereunder or thereunder. The Agent shall not be under
any obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Operative Agreement, or to inspect the properties, books
or records of the Borrower or the Lessee.
7.4 RELIANCE BY THE AGENT.
The Agent shall be entitled to rely, and shall be fully protected in
relying, upon any Note, writing, resolution, notice, consent, certificate,
affidavit, letter, telecopy, telex or teletype message, statement, order or
other document or conversation 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 (including without limitation counsel to the
Borrower or the Lessee), independent accountants and other experts selected by
the Agent. The Agent may deem and treat the payee of any Note as the owner
thereof for all purposes unless a written notice of assignment, negotiation or
transfer thereof shall have been filed with the Agent. The Agent shall be fully
justified in failing or refusing to take any action under this Agreement or any
other Operative Agreement unless it shall first receive such advice or
concurrence of the Majority Lenders, the Majority Secured Parties or all Secured
Parties, as the case may be, as it deems appropriate or it shall first be
indemnified to its satisfaction by the Lenders 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 Agreement and the other Operative
Agreements in accordance with a request of the Majority Lenders, the Majority
Secured Parties or all Secured Parties, as the case may be, and such and any
action taken or failure to act pursuant thereto shall be binding upon all the
Lenders and all future holders of the Notes (or all Secured Parties, as the case
may be).
7.5 NOTICE OF DEFAULT.
The Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default hereunder unless the Agent has
received written notice from a Lender or the Borrower referring to this
Agreement, describing such Default or Event of Default and stating that such
notice is a "notice of default". In the event that the Agent receives such a
notice, the Agent shall give notice thereof to the Lenders. The Agent shall take
such action with respect to such Default or Event of Default as shall be
reasonably directed by the Majority Secured Parties; provided, that unless and
until the Agent shall have received such directions, the Agent may (but shall
not be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable in the
best interests of the Secured Parties; provided, further, the foregoing shall
not limit (a) the rights of the Majority Secured Parties to elect remedies as
set forth in Section 6 and/or (b) the rights of the Majority Secured Parties or
all Secured Parties, as the case may be, as described in the Participation
Agreement (including without limitation Sections 8.2(h) and 8.6 of the
Participation Agreement).
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7.6 NON-RELIANCE ON THE AGENT AND OTHER LENDERS.
Each Lender expressly acknowledges that neither the Agent nor any of
its officers, directors, employees, agents, attorneys-in-fact or Affiliates has
made any representations or warranties to it and that no act by the Agent
hereinafter taken, including without limitation any review of the affairs of the
Borrower or the Lessee, shall be deemed to constitute any representation or
warranty by the Agent to any Lender. Each Lender represents to the Agent that it
has, independently and without reliance upon the Agent or any other Lender, and
based on such documents and information as it has deemed appropriate, made its
own appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Borrower and the
Lessee and made its own decision to make its Loans hereunder and enter into this
Agreement. Each Lender also represents that it will, independently and without
reliance upon the Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Operative Agreements, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Borrower and the Lessee. Except for notices, reports and other documents
expressly required to be furnished to the Lenders by the Agent hereunder, the
Agent shall not have any duty or responsibility to provide any Lender with any
credit or other information concerning the business, operations, property,
condition (financial or otherwise), prospects or creditworthiness of the
Borrower or the Lessee which may come into the possession of the Agent or any of
its officers, directors, employees, agents, attorneys-in-fact or Affiliates.
7.7 INDEMNIFICATION.
The Lenders agree to indemnify the Agent, in its capacity as such (to
the extent not reimbursed by the Borrower and without limiting the obligation of
the Borrower to do so), ratably according to their respective Commitment
Percentages in effect on the date on which indemnification is sought under this
Section 7.7 (or, if indemnification is sought after the date upon which the
Commitments shall have terminated and the Loans shall have been paid in full,
ratably in accordance with their Commitment Percentages immediately prior to
such date), from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind whatsoever which may at any time (including without limitation at
any time following the payment of the Notes) be imposed on, incurred by or
asserted against any of them in any way relating to or arising out of, the
Commitments, this Agreement, any of the other Operative Agreements or any
documents contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by any of them
under or in connection with any of the foregoing; provided, that no Lender shall
be liable for the payment of any portion of such liabilities, obligations,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting solely from the gross negligence or willful misconduct of the Agent.
The agreements in this Section 7.7 shall survive the payment of the Notes and
all other amounts payable hereunder.
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7.8 THE AGENT IN ITS INDIVIDUAL CAPACITY.
The Agent and its Affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Borrower or the Lessee as
though the Agent were not the Agent hereunder and under the other Operative
Agreements. With respect to its Loans made or renewed by it and any Note issued
to it, the Agent shall have the same rights and powers under this Agreement and
the other Operative Agreements as any Lender and may exercise the same as though
it were not the Agent, and the terms "Lender" and "Lenders" shall include the
Agent in its individual capacity.
7.9 SUCCESSOR AGENT.
The Agent may resign at any time as the Agent upon thirty (30) days'
notice to the Lenders, the Borrower and, so long as no Lease Event of Default
shall have occurred and be continuing, the Lessee. If the Agent shall resign as
the Agent under this Agreement, the Majority Lenders shall appoint from among
the Lenders a successor Agent which successor Agent shall be subject to the
approval of the Borrower and, so long as no Lease Event of Default shall have
occurred and be continuing, the Lessee, such approval not to be unreasonably
withheld or delayed. If no successor Agent is appointed prior to the effective
date of the resignation of the resigning Agent, the Agent may appoint, after
consulting with the Lenders and subject to the approval of the Borrower and, so
long as no Lease Event of Default shall have occurred and be continuing, the
Lessee, such approval not to be unreasonably withheld or delayed, a successor
Agent from among the Lenders. If no successor Agent has accepted appointment as
the Agent by the date which is thirty (30) days following a retiring Agent's
notice of resignation, the retiring Agent's notice of resignation shall
nevertheless thereupon become effective and the Lenders shall perform all of the
duties of the Agent until such time, if any, as the Majority Lenders appoint a
successor Agent, as provided for above. Upon the effective date of such
resignation, only such successor Agent shall succeed to all the rights, powers
and duties of the retiring Agent and the term "Agent" shall mean such successor
agent and the retiring Agent's rights, powers and duties in such capacity shall
be terminated. After any retiring Agent resigns hereunder as the Agent, the
provisions of this Article VII and Section 9.5 shall inure to their respective
benefit as to any actions taken or omitted to be taken by it while it was the
Agent under this Agreement.
7.10 ACTIONS OF THE AGENT ON BEHALF OF HOLDERS.
The parties hereto specifically acknowledge and consent to the Agent's
acting on behalf of the Holders as provided in the Participation Agreement, and,
in any such case, the Lenders acknowledge that the Holders shall be entitled to
vote as "Secured Parties" hereunder to the extent required or permitted by the
Operative Agreements (including without limitation Sections 8.2(h) and 8.6 of
the Participation Agreement).
7.11 THE AGENT'S DUTY OF CARE.
Other than the exercise of reasonable care to assure the safe custody
of the Collateral while being held by the Agent hereunder or under any other
Operative Agreement, the Agent
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shall have no duty or liability to preserve rights pertaining thereto, it being
understood and agreed that the Lessee shall be responsible for preservation of
all rights in the Collateral, and the Agent shall be relieved of all
responsibility for the Collateral upon surrendering it or tendering the
surrender of it to the Lessee. The Agent shall be deemed to have exercised
reasonable care in the custody and preservation of the Collateral in its
possession if the Collateral is accorded treatment substantially equal to that
which the Agent accords its own property, which shall be no less than the
treatment employed by a reasonable and prudent agent in the industry, it being
understood that the Agent shall not have responsibility for taking any necessary
steps to preserve rights against any parties with respect to any of the
Collateral.
SECTION 8. MATTERS RELATING TO PAYMENT AND COLLATERAL
8.1 COLLECTION AND ALLOCATION OF PAYMENTS AND OTHER AMOUNTS.
The Lessee, the Construction Agent, the Agent, the Lenders, the Holders
and the Borrower have agreed pursuant to the terms of Section 8.7 of the
Participation Agreement to a procedure for the allocation and distribution of
certain payments and distributions, including without limitation the proceeds of
Collateral.
8.2 CERTAIN REMEDIAL MATTERS.
Notwithstanding any other provision of this Agreement or any other
Credit Document:
(a) the Borrower shall at all times retain to the exclusion of
all other parties, all rights to Excepted Payments payable to it and to
demand, collect or commence an action at law to obtain such payments
and to enforce any judgment with respect thereto; and
(b) the Borrower and each Holder shall at all times retain the
right, but not to the exclusion of the Agent, (i) to retain all rights
with respect to insurance that Article XIV of the Lease specifically
confers upon the "Lessor", (ii) to provide such insurance as the Lessee
shall have failed to maintain or as the Borrower or any Holder may
desire, and (iii) to enforce compliance by the Lessee with the
provisions of Articles VIII, IX, X, XI, XIV and XVII of the Lease.
8.3 EXCEPTED PAYMENTS.
Notwithstanding any other provision of this Agreement or the Security
Documents, any Excepted Payment received at any time by the Agent shall be
distributed promptly to the Person entitled to receive such Excepted Payment.
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SECTION 9. MISCELLANEOUS
9.1 AMENDMENTS AND WAIVERS.
None of the terms or provisions of this Agreement may be terminated,
amended, supplemented, waived or modified except in accordance with the terms of
Section 12.4 of the Participation Agreement.
9.2 NOTICES.
All notices required or permitted to be given under this Agreement
shall be given in accordance with Section 12.2 of the Participation Agreement.
9.3 NO WAIVER; CUMULATIVE REMEDIES.
No failure to exercise and no delay in exercising, on the part of the
Agent or any Lender, any right, remedy, power or privilege hereunder or under
the other Credit Documents shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, remedy, power or privilege hereunder
preclude any other or future exercise thereof or the exercise of any other
right, remedy, power or privilege. The rights, remedies, powers and privileges
herein provided are cumulative and not exclusive of any rights, remedies, powers
and privileges provided by law.
9.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
All representations and warranties made by the Borrower under the
Operative Agreements shall survive the execution and delivery of this Agreement
and the Notes and the making of the Loans hereunder.
9.5 PAYMENT OF EXPENSES AND TAXES.
The Borrower agrees to (with funds provided by the Lessee as
Supplemental Rent): (a) pay all reasonable out-of-pocket costs and expenses of
(i) the Agent whether or not the transactions herein contemplated are
consummated, in connection with the negotiation, preparation, execution and
delivery of the Operative Agreements and the documents and instruments referred
to therein (including without limitation the reasonable fees and disbursements
of Moore & Van Allen, PLLC) and any amendment, waiver or consent relating
thereto (including without limitation the reasonable fees and disbursements of
counsel to the Agent) and (ii) the Agent and each of the Lenders in connection
with the enforcement of the Operative Agreements and the documents and
instruments referred to therein (including without limitation the reasonable
fees and disbursements of counsel for the Agent and for each of the Lenders) and
(b) pay and hold each of the Lenders harmless from and against any and all
present and future stamp and other similar taxes with respect to the foregoing
matters and save each of the Lenders harmless from and against any and all
liabilities with respect to or resulting from any delay or omission (other than
to the extent attributable to such Lender) to pay such taxes.
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9.6 SUCCESSORS AND ASSIGNS; PARTICIPATIONS AND ASSIGNMENTS.
This Agreement shall be binding upon and inure to the benefit of the
Borrower, the Lenders, the Agent, all future holders of the Notes and their
respective successors and assigns, except that the Borrower may not assign or
transfer any of its rights or obligations under this Agreement without the prior
written consent of each Lender.
9.7 PARTICIPATIONS.
Subject to and in accordance with Section 10.1 of the Participation
Agreement, any Lender may, in the ordinary course of its business and in
accordance with applicable law, at any time sell to one (1) or more banks,
financial institutions or other entities (each, a "Participant") participating
interests in any Loan owing to such Lender, any Note held by such Lender, any
Commitment of such Lender or any other interest of such Lender hereunder and
under the other Operative Agreements; provided, that any such sale of a
participating interest shall be in a principal amount of at least $2,000,000.00
or such lesser amount constituting such Lender's entire interest in this
Agreement and the Notes. In the event of any such sale by a Lender of a
participating interest to a Participant, such Lender's obligations under this
Agreement to the other parties to this Agreement shall remain unchanged, such
Lender shall remain solely responsible for the performance thereof, such Lender
shall remain the holder of any such Note for all purposes under this Agreement
and the Notes, and the Borrower and the Agent shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and the Notes. In no event shall any
Participant have any right to approve any amendment or waiver of any provision
of this Agreement or any other Operative Agreement, or any consent to any
departure by the Borrower or any other Person therefrom, except to the extent
that such amendment, waiver or consent would (a) reduce the principal of, or
interest on, any Loan or Note, or postpone the date of the final maturity of any
Loan or Note, or reduce the amount of any Lender Unused Fee, in each case to the
extent subject to such participation or (b) release all or substantially all of
the Collateral. The Borrower agrees that, while an Event of Default shall have
occurred and be continuing, if amounts outstanding under this Agreement and the
Notes are due or unpaid, or shall have become due and payable upon the
occurrence of an Event of Default, each Participant shall, to the maximum extent
permitted by applicable law, be deemed to have the right of setoff in respect of
its participating interests in amounts owing directly to it as a Lender under
this Agreement or any Note, provided, that in purchasing such participating
interest, such Participant shall be deemed to have agreed to share with the
Lenders the proceeds thereof as provided in Section 9.10(a) as fully as if it
were a Lender hereunder. The Borrower also agrees that each Participant shall be
entitled to the benefits of Sections 11.2(e), 11.3 and 11.4 of the Participation
Agreement with respect to its participation in the Commitments and the Loans
outstanding from time to time as if it was a Lender; provided, that such
Participant shall have complied with the requirements of said Sections and
provided, further, that no Participant shall be entitled to receive any greater
amount pursuant to any such Section than the transferor Lender would have been
entitled to receive in respect of the amount of the participation transferred by
such transferor Lender to such Participant had no such transfer occurred.
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9.8 ASSIGNMENTS.
(a) Subject to and in accordance with Section 10.1 of the
Participation Agreement, any Lender may, in the ordinary course of its
business and in accordance with applicable law, at any time and from
time to time assign to any Lender or any affiliate of any Lender or,
with the consent, subject to Section 9.1 of the Participation
Agreement, of the Borrower and the Agent (which in each case shall not
be unreasonably withheld or delayed and which consent of the Borrower
shall not be required during the continuation of any Event of Default),
to an additional bank, financial institution or other entity that is
either organized under the laws of the United States or any state
thereof or is a foreign bank that operates a branch office in the
United States, (each, a "Purchasing Lender") all or any part of its
rights and obligations under this Agreement and the other Operative
Agreements pursuant to an Assignment and Acceptance, substantially in
the form of Exhibit B, executed by such Purchasing Lender, such
assigning Lender (and, in the case of a Purchasing Lender that is not a
Lender or an affiliate thereof, subject to Section 9.1 of the
Participation Agreement, by the Borrower and the Agent) and delivered
to the Agent for its acceptance and recording in the Register;
provided, that no such assignment to a Purchasing Lender (other than
any Lender or any affiliate thereof) shall be in an aggregate principal
amount less than $5,000,000.00 (other than in the case of an assignment
of all of a Lender's interests under this Agreement and the Notes).
Upon such execution, delivery, acceptance and recording, from and after
the effective date determined pursuant to such Assignment and
Acceptance, (x) the Purchasing Lender thereunder shall be a party
hereto and, to the extent provided in such Assignment and Acceptance,
have the rights and obligations of a Lender hereunder with a Commitment
as set forth therein, and (y) the assigning Lender thereunder shall, to
the extent provided in such Assignment and Acceptance, be released from
its obligations under this Agreement (and, in the case of an Assignment
and Acceptance covering all of the remaining portion of an assigning
Lender's rights and obligations under this Agreement, such assigning
Lender shall cease to be a party hereto). Notwithstanding anything to
the contrary in this Agreement, the consent of the Borrower shall not
be required, and, unless requested by the relevant Purchasing Lender
and/or assigning Lender, new Notes shall not be required to be executed
and delivered by the Borrower, for any assignment which occurs at any
time when any of the events described in Section 6(g) shall have
occurred and be continuing.
(b) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender and a Purchasing Lender (and, in the case of a
Purchasing Lender that is not a Lender or an affiliate thereof, by the
Borrower and the Agent) together with payment to the Agent of a
registration and processing fee of $2,500.00 (which shall not be
payable by the Borrower or the Lessee, except as otherwise provided in
connection with an assignment requested in accordance with Section
2.11(b)), the Agent shall (i) promptly accept such Assignment and
Acceptance and (ii) promptly after the effective date determined
pursuant thereto, record the information contained therein in the
Register and give notice of such acceptance and recordation to the
Lenders and the Borrower. On or prior to such effective date, the
Borrower, at its own expense, shall execute and deliver
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<PAGE> 25
to the Agent new Notes (in exchange for the Notes of the assigning
Lender), each in an amount equal to the Commitment assumed or Loans
purchased by the relevant Purchasing Lender pursuant to such Assignment
and Acceptance, and, if the assigning Lender has retained a Commitment
or any Loan hereunder, new Notes to the order of the assigning Lender,
each in an amount equal to the Commitment or Loans retained by it
hereunder. Such new Notes shall be dated the effective date of the
applicable Assignment and Acceptance and shall otherwise be in the form
of the Notes replaced thereby.
(c) Each Purchasing Lender (other than any Lender organized
and existing under the laws of the U.S. or any political subdivision in
or of the U.S.), by executing and delivering an Assignment and
Acceptance,
(i) agrees to execute and deliver to the Agent, as
promptly as practicable, four (4) signed copies (two (2) for
the Agent and two (2) for delivery by the Agent to the
Borrower) of Form 1001 or Form 4224 (or any successor form or
comparable form) (it being understood that if the applicable
form is not so delivered, payments under or in respect of this
Agreement may be subject to withholding and deduction);
(ii) represents and warrants to the Borrower and the
Agent that the form so delivered is true and accurate and
that, as of the effective date of the applicable Assignment
and Acceptance, each of such Purchasing Lender's lending
offices is entitled to receive payments of principal and
interest under or in respect of this Agreement without
withholding or deduction for or on account of any taxes
imposed by the U.S. Federal government;
(iii) agrees to annually hereafter deliver to each of
the Borrower and the Agent not later than December 31 of the
year preceding the year to which it will apply, two (2)
further properly completed signed copies of Form 1001 or Form
4224 (or any successor form or comparable form), as
appropriate, unless an event has occurred which renders the
relevant form inapplicable (it being understood that if the
applicable form is not so delivered, payments under or in
respect of this Agreement may be subject to withholding and
deduction);
(iv) agrees to promptly notify the Borrower and the
Agent in writing if it ceases to be entitled to receive
payments of principal and interest under or in respect of this
Agreement without withholding or deduction for or on account
of any taxes imposed by the U.S. or any political subdivision
in or of the U.S. (it being understood that payments under or
in respect of this Agreement may be subject to withholding and
deduction in such event);
(v) acknowledges that in the event it ceases to be
exempt from withholding and/or deduction of such taxes, the
Agent may withhold and/or deduct the applicable amount from
any payments to which such assignee Lender
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would otherwise be entitled, without any liability to such
assignee Lender therefor; and
(vi) agrees to indemnify the Borrower and the Agent
from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs or
expenses that result from such assignee Lender's breach of any
such representation, warranty or agreement.
(d) Any Lender party to this Agreement may, from time to time
and without the consent of the Borrower or any other Person, pledge or
assign for security purposes any portion of its Loans or any other
interests in this Agreement and the other Credit Documents to any
Federal Reserve Bank.
9.9 THE REGISTER; DISCLOSURE; PLEDGES TO FEDERAL RESERVE BANKS.
(a) The Agent shall maintain for the benefit of the Lenders at
its address referred to in Section 9.2 a copy of each Assignment and
Acceptance delivered to it and a register (the "Register") for the
recordation of the names and addresses of the Lenders, the Commitments
of the Lenders, and the principal amount of the Loans owing to each
Lender from time to time. The entries in the Register shall be
conclusive, in the absence of clearly demonstrable error, and the
Borrower, the Agent and the Lenders may treat each Person whose name is
recorded in the Register as the owner of the Loan recorded therein for
all purposes of this Agreement. The Register shall be available for
inspection by the Borrower or any Lender at any reasonable time and
from time to time upon reasonable notice.
(b) Nothing herein shall prohibit any Lender from pledging or
assigning any Note to any Federal Reserve Bank in accordance with
applicable law.
9.10 ADJUSTMENTS; SET-OFF.
(a) Except as otherwise expressly provided in Section 8.1
hereof and Section 8.7 of the Participation Agreement where, and to the
extent, one (1) Lender is entitled to payments prior to other Lenders,
if any Lender (a "Benefitted Lender") shall at any time receive any
payment of all or part of its Loans, or interest thereon, or receive
any collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, pursuant to events or proceedings of the
nature referred to in Section 6(g), or otherwise), in a greater
proportion than any such payment to or collateral received by any other
Lender, if any, in respect of such other Lender's Loans, or interest
thereon, such Benefitted Lender shall purchase for cash from the other
Lenders a participating interest in such portion of each such other
Lender's Loan, or shall provide such other Lenders with the benefits of
any such collateral, or the proceeds thereof, as shall be necessary to
cause such Benefitted Lender to share the excess payment or benefits of
such collateral or proceeds ratably with each of the Lenders; provided,
however, that if all or any portion of such excess payment or benefits
is thereafter recovered from such Benefitted Lender, such purchase
shall be
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rescinded, and the purchase price and benefits returned, to the event
of such recovery, but without interest.
(b) In addition to any rights now or hereafter granted under
applicable law or otherwise, and not by way of limitation of any such
rights, upon the occurrence of an Event of Default, the Agent and each
Lender is hereby authorized at any time or from time to time, without
presentment, demand, protest or other notice of any kind to the
Borrower or to any other Person, any such notice being hereby expressly
waived, to set off and to appropriate and apply any and all deposits
(general or special) and any other Indebtedness at any time held or
owing by the Agent or such Lender (including without limitation by
branches and agencies of the Agent or such Lender wherever located) or
any affiliate of such Lender to or for the credit or the account of the
Borrower against and on account of the obligations and liabilities of
the Borrower to the Agent or such Lender under this Agreement or under
any of the other Operative Agreements, including without limitation all
interests in obligations of the Borrower purchased by any such Lender
pursuant to Section 9.10(a), and all other claims of any nature or
description arising out of or connected with this Agreement or any
other Operative Agreement, irrespective or whether or not the Agent or
such Lender shall have made any demand and although said obligations,
liabilities or claims, or any of them, shall be contingent or
unmatured.
9.11 COUNTERPARTS.
This Agreement may be executed by one (1) or more of the parties to
this Agreement on any number of separate counterparts (including without
limitation by telecopy), and all of said counterparts taken together shall be
deemed to constitute one (1) and the same instrument. A set of the copies of
this Agreement signed by all the parties shall be lodged with the Borrower and
the Agent.
9.12 SEVERABILITY.
Any provision of this Agreement which is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
9.13 INTEGRATION.
This Agreement and the other Credit Documents represent the agreement
of the Borrower, the Agent, and the Lenders with respect to the subject matter
hereof and thereof, and there are no promises, undertakings, representations or
warranties by the Agent or any Lender relative to subject matter hereof not
expressly set forth or referred to herein or in the other Credit Documents.
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9.14 GOVERNING LAW.
THIS AGREEMENT AND THE NOTES AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES UNDER THIS AGREEMENT AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED,
INTERPRETED AND ENFORCED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NORTH
CAROLINA.
9.15 SUBMISSION TO JURISDICTION; VENUE; ARBITRATION.
THE PROVISIONS OF THE PARTICIPATION AGREEMENT RELATING TO SUBMISSION TO
JURISDICTION, VENUE AND ARBITRATION ARE HEREBY INCORPORATED BY REFERENCE HEREIN,
MUTATIS MUTANDIS.
9.16 ACKNOWLEDGMENTS.
The Borrower hereby acknowledges that:
(a) neither the Agent nor any Lender has any fiduciary
relationship with or duty to the Borrower arising out of or in
connection with this Agreement or any of the other Credit Documents,
and the relationship between the Agent and the Lenders, on one (1)
hand, and the Borrower, on the other hand, in connection herewith or
therewith is solely that of debtor and creditor; and
(b) no joint venture is created hereby or by the other Credit
Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Lenders or among the Borrower and the
Lenders.
9.17 WAIVERS OF JURY TRIAL.
THE BORROWER, THE AGENT AND THE LENDERS HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVE, TO THE FULLEST EXTENT ALLOWED BY APPLICABLE LAW, TRIAL BY
JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER
CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
9.18 NONRECOURSE.
In addition to and not in limitation of Section 12.9 of the
Participation Agreement, anything to the contrary contained in this Agreement or
in any other Operative Agreement notwithstanding, no Exculpated Person shall be
personally liable in any respect for any liability or obligation hereunder or
under any other Operative Agreement including without limitation the payment of
the principal of, or interest on, the Notes, or for monetary damages for the
breach of performance of any of the covenants contained in this Agreement, the
Notes or any of the other Operative Agreements. The Agent and the Lenders agree
that, in the event any of them pursues any remedies available to them under this
Agreement, the Notes or any other Operative
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Agreement, neither the Agent nor the Lenders shall have any recourse against the
Borrower, nor any other Exculpated Person, for any deficiency, loss or claim for
monetary damages or otherwise resulting therefrom and recourse shall be had
solely and exclusively against the Trust Estate and the Lessee; but nothing
contained herein shall be taken to prevent recourse against or the enforcement
of remedies against the Trust Estate in respect of any and all liabilities,
obligations and undertakings contained in this Agreement, the Notes or any other
Operative Agreement. The Agent and the Lenders further agree that the Borrower
shall not be responsible for the payment of any amounts owing hereunder
(excluding principal and interest (other than Overdue Interest) in respect of
the Loans) (such non-excluded amounts, "Supplemental Amounts") except to the
extent that payments of Supplemental Rent designated by the Lessee for
application to such Supplemental Amounts shall have been paid by the Lessee
pursuant to the Lease (it being understood that the failure by the Lessee for
any reason to pay any Supplemental Rent in respect of such Supplemental Amounts
shall nevertheless be deemed to constitute a default by the Borrower for the
purposes of Section 6). Notwithstanding the foregoing provisions of this Section
9.18, nothing in this Agreement or any other Operative Agreement shall (a)
constitute a waiver, release or discharge of any obligation evidenced or secured
by this Agreement or any other Credit Document, (b) limit the right of the Agent
or any Lender to name the Borrower as a party defendant in any action or suit
for judicial foreclosure and sale under any Security Document, or (c) affect in
any way the validity or enforceability of any guaranty (whether of payment
and/or performance) given to the Lessor, the Agent or the Lenders, or of any
indemnity agreement given by the Borrower, in connection with the Loans made
hereunder.
9.19 USURY SAVINGS PROVISION.
IT IS THE INTENT OF THE PARTIES HERETO TO CONFORM TO AND CONTRACT IN
STRICT COMPLIANCE WITH APPLICABLE USURY LAW FROM TIME TO TIME IN EFFECT AND THAT
N.C. GEN. STAT. ss. 24-9 SHALL APPLY WITH RESPECT TO THIS AGREEMENT. TO THE
EXTENT N.C. GEN. STAT. ss. 24-9 IS HEREAFTER DEEMED NOT TO APPLY BY A COURT OF
COMPETENT JURISDICTION AND ANY PAYMENTS HEREUNDER ARE HEREINAFTER CHARACTERIZED
BY ANY COURT OF COMPETENT JURISDICTION AS THE REPAYMENT OF PRINCIPAL AND
INTEREST THEREON, THE FOLLOWING PROVISIONS OF THIS SECTION 9.19 SHALL APPLY. ANY
SUCH PAYMENTS SO CHARACTERIZED AS INTEREST MAY BE REFERRED TO HEREIN AS
"INTEREST." ALL AGREEMENTS AMONG THE PARTIES HERETO ARE HEREBY LIMITED BY THE
PROVISIONS OF THIS PARAGRAPH WHICH SHALL OVERRIDE AND CONTROL ALL SUCH
AGREEMENTS, WHETHER NOW EXISTING OR HEREAFTER ARISING AND WHETHER WRITTEN OR
ORAL. IN NO WAY, NOR IN ANY EVENT OR CONTINGENCY (INCLUDING WITHOUT LIMITATION
PREPAYMENT OR ACCELERATION OF THE MATURITY OF ANY OBLIGATION), SHALL ANY
INTEREST TAKEN, RESERVED, CONTRACTED FOR, CHARGED, OR RECEIVED UNDER THIS
AGREEMENT OR OTHERWISE, EXCEED THE MAXIMUM NONUSURIOUS AMOUNT PERMISSIBLE UNDER
APPLICABLE LAW. IF, FROM ANY POSSIBLE CONSTRUCTION OF ANY OF THE OPERATIVE
AGREEMENTS OR ANY OTHER DOCUMENT OR AGREEMENT, INTEREST WOULD OTHERWISE BE
PAYABLE IN EXCESS OF THE MAXIMUM NONUSURIOUS AMOUNT, ANY SUCH
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CONSTRUCTION SHALL BE SUBJECT TO THE PROVISIONS OF THIS PARAGRAPH AND SUCH
AMOUNTS UNDER SUCH DOCUMENTS OR AGREEMENTS SHALL BE AUTOMATICALLY REDUCED TO THE
MAXIMUM NONUSURIOUS AMOUNT PERMITTED UNDER APPLICABLE LAW, WITHOUT THE NECESSITY
OF EXECUTION OF ANY AMENDMENT OR NEW DOCUMENT OR AGREEMENT. IF THE AGENT OR ANY
LENDER SHALL EVER RECEIVE ANYTHING OF VALUE WHICH IS CHARACTERIZED AS INTEREST
WITH RESPECT TO THE OBLIGATIONS OWED HEREUNDER OR UNDER APPLICABLE LAW AND WHICH
WOULD, APART FROM THIS PROVISION, BE IN EXCESS OF THE MAXIMUM LAWFUL AMOUNT, AN
AMOUNT EQUAL TO THE AMOUNT WHICH WOULD HAVE BEEN EXCESSIVE INTEREST SHALL,
WITHOUT PENALTY, BE APPLIED TO THE REDUCTION OF THE COMPONENT OF PAYMENTS DEEMED
TO BE PRINCIPAL AND NOT TO THE PAYMENT OF INTEREST, OR REFUNDED TO THE BORROWER
OR ANY OTHER PAYOR THEREOF, IF AND TO THE EXTENT SUCH AMOUNT WHICH WOULD HAVE
BEEN EXCESSIVE EXCEEDS THE COMPONENT OF PAYMENTS DEEMED TO BE PRINCIPAL. THE
RIGHT TO DEMAND PAYMENT OF ANY AMOUNTS EVIDENCED BY ANY OF THE OPERATIVE
AGREEMENTS DOES NOT INCLUDE THE RIGHT TO RECEIVE ANY INTEREST WHICH HAS NOT
OTHERWISE ACCRUED ON THE DATE OF SUCH DEMAND, AND NEITHER THE AGENT NOR ANY
LENDER INTENDS TO CHARGE OR RECEIVE ANY UNEARNED INTEREST IN THE EVENT OF SUCH
DEMAND. ALL INTEREST PAID OR AGREED TO BE PAID TO THE AGENT OR ANY LENDER SHALL,
TO THE EXTENT PERMITTED BY APPLICABLE LAW, BE AMORTIZED, PRORATED, ALLOCATED,
AND SPREAD THROUGHOUT THE FULL STATED TERM (INCLUDING WITHOUT LIMITATION ANY
RENEWAL OR EXTENSION) OF THIS AGREEMENT SO THAT THE AMOUNT OF INTEREST ON
ACCOUNT OF SUCH PAYMENTS DOES NOT EXCEED THE MAXIMUM NONUSURIOUS AMOUNT
PERMITTED BY APPLICABLE LAW.
[signature pages follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and delivered by their proper and duly authorized officers
as of the day and year first above written.
FIRST SECURITY BANK, NATIONAL
ASSOCIATION, not individually, except as
expressly stated herein, but solely as
the Owner Trustee under the RFMD Real
Estate Trust 1999-1
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
[signature pages continue]
Credit Agreement
RFMD Real Estate Trust 1999-1
<PAGE> 32
FIRST UNION NATIONAL BANK, as the Agent
and a Lender
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Credit Agreement
RFMD Real Estate Trust 1999-1
<PAGE> 33
CREDIT SUISSE FIRST BOSTON, as a Lender
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
[signature pages continue]
Credit Agreement
RFMD Real Estate Trust 1999-1
<PAGE> 34
COMERICA BANK, as a Lender
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
[signature pages continue]
Credit Agreement
RFMD Real Estate Trust 1999-1
<PAGE> 35
SUNTRUST BANK, ATLANTA, as a Lender
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
[signature pages continue]
Credit Agreement
RFMD Real Estate Trust 1999-1
<PAGE> 36
CITICORP USA, Inc., as a Lender
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
[signature pages continue]
Credit Agreement
RFMD Real Estate Trust 1999-1
<PAGE> 37
FLEET NATIONAL BANK, as a Lender
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
[signature pages end]
Credit Agreement
RFMD Real Estate Trust 1999-1
<PAGE> 38
Schedule 2.1
------------
Tranche A Tranche B
Commitment Commitment
---------- ----------
Name and Address of Lenders Amount Percentage Amount Percentage
- - --------------------------- ------ ---------- ------ ----------
First Union National Bank $21,250,000.00 25.0000% $2,400,000.00 20.0000%
First Union Securities, Inc.
301 South College Street, DC6
Charlotte, NC 28288-0166
Attn: Christy Lee Foster
Phone: 704-383-5398
Fax: 704-383-7989
Credit Suisse First Boston $17,000,000.00 20.0000% $1,650,000.00 3.7500%
Eleven Madison Avenue
New York, New York 10010
Attn: Chris Horgan
Phone: 212-325-9157
Fax: 212-325-8309
Comerica Bank $14,875,000.00 17.5000% $2,625,000.00 21.8750%
U.S. Banking East
500 Woodward Avenue, 9th Floor, MC 3280
Detroit, MI 48275-3280
Attn: Dan M. Roman
Phone: 313-222-3803
Fax: 313-222-3330
SunTrust Bank, Atlanta $14,875,000.00 17.5000% $2,625,000.00 21.8750%
200 South Orange Avenue, 11th Floor
Orlando, FL 32801
Attn: Andrew J. Hines
Phone: 407-237-4839
Fax: 407-237-6894
Citicorp USA, Inc. $8,500,000.00 10.0000% 1,500,000.00 12.5000%
390 Greenwich Street
1st Floor
New York, NY 10013
Attn: Nicolas Erni
Phone: 212-723-6560
Fax: 212-723-8547
Fleet National Bank $8,500,000.00 10.0000% $1,200,000.00 10.0000%
100 Federal Street
MA BOS 01-08-08
Boston, MA 02110
Attn: David Crane
Phone: 617-434-5584
Fax: 617-434-0819
TOTAL $85,000,000.00 100% $12,000,000.00 100%
<PAGE> 39
Exhibit A-1
TRANCHE A NOTE
(RFMD Real Estate Trust 1999-1)
December 31, 1999
FOR VALUE RECEIVED, the undersigned, FIRST SECURITY BANK, NATIONAL
ASSOCIATION, not in its individual capacity, but solely as the Owner Trustee
under the RFMD Real Estate Trust 1999-1 (the "Borrower"), hereby unconditionally
promises to pay to the order of [LENDER] (the "Lender"), at the office of First
Union National Bank, located at c/o First Union Securities, Inc., DC-6, 301
South College Street, Charlotte, North Carolina 28288-0166 or at such other
address as may be specified by First Union National Bank, in lawful money of the
United States of America and in immediately available funds, the respective
dates specified in Schedule 1 to the Participation Agreement, the amounts
described in such Schedule 1 and on the Maturity Date, the aggregate unpaid
principal amount of all Tranche A Loans made by the Lender to the Borrower
pursuant to Section 2.1 of the Credit Agreement (as defined below). The Borrower
agrees to pay interest in like money at such office on the unpaid principal
amount hereof from time to time outstanding at the rates and on the dates
specified in Section 2.8 of such Credit Agreement.
The holder of this Note is authorized to endorse on the schedules
annexed hereto and made a part hereof or on a continuation thereof which shall
be attached hereto and made a part hereof the date, Type and amount of each
Tranche A Loan made pursuant to the Credit Agreement and the date and amount of
each payment or prepayment of principal thereof, each continuation thereof and
each conversion of all or a portion thereof to another Type. Each such
endorsement shall constitute prima facie evidence of the accuracy of the
information endorsed. The failure to make any such endorsement or any error in
such endorsement shall not affect the obligations of the Borrower in respect of
such Loan.
This Note (a) is one (1) of the Notes referred to in the Credit
Agreement dated as of December 31, 1999 (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"), among the Borrower, the
Lender, the other banks and financial institutions from time to time parties
thereto and First Union National Bank, as the Agent, (b) is subject to the
provisions of the Credit Agreement (including without limitation Section 9.18
thereof) and (c) is subject to optional and mandatory prepayment in whole or in
part as provided in the Credit Agreement. Reference is hereby made to the Credit
Documents for a description of the properties and assets in which a security
interest has been granted, the nature and extent of the security and the
guarantees, the terms and conditions upon which the security interests and each
guarantee were granted and the rights of the holder of this Note in respect
thereof.
A1-1
<PAGE> 40
Upon the occurrence of any one (1) or more of the Events of Default,
all amounts then remaining unpaid on this Note shall become, or may be declared
to be, immediately due and payable, all as provided in the Credit Agreement.
All parties now and hereafter liable with respect to this Note, whether
maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind.
Unless otherwise defined herein, terms defined in the Credit Agreement
and used herein shall have the meanings given to them in the Credit Agreement.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED, INTERPRETED AND ENFORCED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NORTH CAROLINA.
IN WITNESS WHEREOF, THE UNDERSIGNED AUTHORIZED OFFICER OF THE BORROWER
HAS EXECUTED THIS NOTE AS OF THE DATE FIRST SET FORTH ABOVE.
FIRST SECURITY BANK, NATIONAL
ASSOCIATION, not individually, but
solely as the Owner Trustee under the
RFMD Real Estate Trust 1999-1
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
A1-2
<PAGE> 41
Exhibit A-2
TRANCHE B NOTE
(RFMD Real Estate Trust 1999-1)
December 31, 1999
FOR VALUE RECEIVED, the undersigned, FIRST SECURITY BANK, NATIONAL
ASSOCIATION, not in its individual capacity, but solely as the Owner Trustee
under the RFMD Real Estate Trust 1999-1 (the "Borrower"), hereby unconditionally
promises to pay to the order of [LENDER] (the "Lender") at the office of First
Union National Bank located at c/o First Union Securities, Inc., DC-6, 301 South
College Street, Charlotte, North Carolina 28288-0166 or at such other address as
may be specified by First Union National Bank, in lawful money of the United
States of America and in immediately available funds, on the Maturity Date, the
aggregate unpaid principal amount of all Tranche B Loans made by the Lender to
the Borrower pursuant to Section 2.1 of the Credit Agreement (as defined below).
The Borrower agrees to pay interest in like money at such office on the unpaid
principal amount hereof from time to time outstanding at the rates and on the
dates specified in Section 2.8 of such Credit Agreement.
The holder of this Note is authorized to endorse on the schedules
annexed hereto and made a part hereof or on a continuation thereof which shall
be attached hereto and made a part hereof the date, Type and amount of each
Tranche B Loan made pursuant to the Credit Agreement and the date and amount of
each payment or prepayment of principal thereof, each continuation thereof and
each conversion of all or a portion thereof to another Type. Each such
endorsement shall constitute prima facie evidence of the accuracy of the
information endorsed. The failure to make any such endorsement or any error in
such endorsement shall not affect the obligations of the Borrower in respect of
such Loan.
This Note (a) is one (1) of the Notes referred to in the Credit
Agreement dated as of December __, 1999 (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement"), among the Borrower, the
Lender, the other banks and financial institutions from time to time parties
thereto and First Union National Bank, as the Agent, (b) is subject to the
provisions of the Credit Agreement (including without limitation Section 9.18
thereof) and (c) is subject to optional and mandatory prepayment in whole or in
part as provided in the Credit Agreement. Reference is hereby made to the Credit
Documents for a description of the properties and assets in which a security
interest has been granted, the nature and extent of the security and the
guarantees, the terms and conditions upon which the security interests and each
guarantee were granted and the rights of the holder of this Note in respect
thereof.
Upon the occurrence of any one (1) or more of the Events of Default,
all amounts then remaining unpaid on this Note shall become, or may be declared
to be, immediately due and payable, all as provided in the Credit Agreement.
A2-1
<PAGE> 42
All parties now and hereafter liable with respect to this Note, whether
maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind.
Unless otherwise defined herein, terms defined in the Credit Agreement
and used herein shall have the meanings given to them in the Credit Agreement.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED, INTERPRETED AND ENFORCED
IN ACCORDANCE WITH, THE LAW OF THE STATE OF NORTH CAROLINA.
IN WITNESS WHEREOF, THE UNDERSIGNED AUTHORIZED OFFICER OF THE BORROWER
HAS EXECUTED THIS NOTE AS OF THE DATE FIRST SET FORTH ABOVE.
FIRST SECURITY BANK, NATIONAL
ASSOCIATION, not individually, but
solely as the Owner Trustee under the
RFMD Real Estate Trust 1999-1
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
A2-2
<PAGE> 43
Exhibit B
ASSIGNMENT AND ACCEPTANCE
THIS ASSIGNMENT AND ACCEPTANCE dated as of ____________, 1999 (as
amended, modified, supplemented, restated and/or replaced from time to time, the
"Assignment and Acceptance") is between [____________________] (the "Assignor")
and [_______________] (the "Assignee").
Reference is made to the Credit Agreement, dated as of August ____,
1999 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among FIRST SECURITY BANK, NATIONAL ASSOCIATION, not in its
individual capacity, but solely as the Owner Trustee under the RFMD Real Estate
Trust 1999-1 (the "Owner Trustee" or the "Borrower"), the Lenders named therein
and FIRST UNION NATIONAL BANK, as the Agent. Unless otherwise defined herein,
terms defined in the Credit Agreement (or pursuant to Section 1 of the Credit
Agreement, defined in other agreements) and used herein shall have the meanings
given to them in or pursuant to the Credit Agreement.
The Assignor and the Assignee agree as follows:
1. The Assignor hereby irrevocably sells and assigns to the Assignee
without recourse to the Assignor, and the Assignee hereby irrevocably purchases
and assumes from the Assignor without recourse to the Assignor, as of the
Effective Date (as defined below), a [___%] interest (the "Assigned Interest")
in and to the Assignor's rights and obligations under the Credit Agreement with
respect to the credit facility contained in the Credit Agreement as are set
forth on Schedule 1 hereto (the "Assigned Facility"), in a principal amount for
the Assigned Facility as set forth on Schedule 1.
2. The Assignor (a) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or any other Operative
Agreement or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Credit Agreement, any other Operative Agreement or
any other instrument or document furnished pursuant thereto, other than that it
has not created any adverse claim upon the interest being assigned by it
hereunder and that such interest is free and clear of any such adverse claim;
(b) makes no representation or warranty and assumes no responsibility with
respect to the financial condition of the Borrower, or any other obligor or the
performance or observance by the Borrower, or any other obligor of any of their
respective obligations under the Credit Agreement or any other Operative
Agreement or any other instrument or document furnished pursuant hereto or
thereto; and (c) attaches the Note held by it evidencing the Assigned Facility
and requests that the Agent exchange such Note for a new Note payable to the
Assignee and (if the Assignor has retained any interest in the Assigned
Facility) a new Note payable to the Assignor in the respective amounts
B-1
<PAGE> 44
which reflect the assignment being made hereby (and after giving effect to any
other assignments which have become effective on the Effective Date).
3. The Assignee (a) represents and warrants that it is legally
authorized to enter into this Assignment and Acceptance; (b) confirms that it
has received copies of the Operative Agreements, and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Acceptance; (c) agrees that it will,
independently and without reliance upon the Assignor, the Agent or any other
Lender 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 the Credit Agreement, the other Operative Agreements or any other
instrument or document furnished pursuant hereto or thereto; (d) appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers and discretion under the Credit Agreement, the other Operative
Agreements or any other instrument or document furnished pursuant hereto or
thereto as are delegated to the Agent by the terms thereof, together with such
powers as are incidental thereto; and (e) agrees that it will be bound by the
provisions of the Credit Agreement and the other Operative Agreements to which
Assignee is a party and will perform in accordance herewith all the obligations
which by the terms of the Credit Agreement and the other Operative Agreements to
which Assignee is a party are required to be performed by it as a Lender
including without limitation, if it is organized under the laws of a
jurisdiction outside the U.S., its obligation pursuant to Section 11.2(e) of the
Participation Agreement.
4. The effective date of this Assignment and Acceptance shall be
[________, 19__] (the "Effective Date"). Following the execution of this
Assignment and Acceptance, it will be delivered to the Agent for acceptance by
it and recording by the Agent pursuant to Section 9.9 of the Credit Agreement,
effective as of the Effective Date (which shall not, unless otherwise agreed to
by the Agent, be earlier than five (5) Business Days after the date of such
acceptance and recording by the Agent).
5. Upon such acceptance and recording, from and after the Effective
Date, the Agent shall make all payments in respect of the Assigned Interest
(including without limitation payments of principal, interest, fees and other
amounts) to the Assignee whether such amounts have accrued prior to the
Effective Date or accrue subsequent to the Effective Date. The Assignor and the
Assignee shall make all appropriate adjustments in payments by the Agent for
periods prior to the Effective Date or with respect to the making of this
assignment directly between themselves.
6. From and after the Effective Date, (a) the Assignee shall be a party
to the Credit Agreement and, to the extent provided in this Assignment and
Acceptance, have the rights and obligations of a Lender thereunder and under the
other Operative Agreements and shall be bound by the provisions thereof and (b)
the Assignor shall, to the extent provided in this Assignment and Acceptance,
relinquish its rights and be released from its obligations under the Credit
Agreement and the other Operative Agreements.
B-2
<PAGE> 45
7. THIS ASSIGNMENT AND ACCEPTANCE SHALL BE GOVERNED BY, AND CONSTRUED,
INTERPRETED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH
CAROLINA.
B-3
<PAGE> 46
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance to be executed as of the date first above written by their respective
duly authorized officers on Schedule 1 hereto.
[Name of Assignor]
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
[Name of Assignee]
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
Consented To:
FIRST SECURITY BANK, NATIONAL
ASSOCIATION, not individually, but
solely as the Owner Trustee under the
RFMD Real Estate Trust 1999-1
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
FIRST UNION NATIONAL BANK, as the Agent
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
[consents required only to the extent expressly provided in Section 9.8 of the
Credit Agreement]
B-4
<PAGE> 47
SCHEDULE 1
TO ASSIGNMENT AND ACCEPTANCE
RELATING TO THE CREDIT AGREEMENT,
DATED AS OF AUGUST __, 1999,
AMONG
FIRST SECURITY BANK, NATIONAL ASSOCIATION
NOT INDIVIDUALLY,
BUT SOLELY AS THE OWNER TRUSTEE,
THE LENDERS NAMED THEREIN
AND
FIRST UNION NATIONAL BANK, AS THE AGENT
FOR THE LENDERS (IN SUCH CAPACITY, THE "AGENT")
Name of Assignor:
-------------------------------
Name of Assignee:
-------------------------------
Effective Date of Assignment:
-------------------
Credit Principal Commitment
Facility Assigned Amount Assigned Percentage Assigned
----------------- --------------- -------------------
$ %
----------------- ------------ ------------
[Name of Assignor]
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
[Name of Assignee]
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
B-5
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED BALANCE SHEET AS OF DECEMBER 31,1 999 AND THE CONDENSED
CONSOLIDATED STATEMENT OF OPERATIONS FOR THE NINE MONTHS ENDED DECEMBER 31, 1999
AND IS QUALIFIED IN ITS ENTIRETY BY REFERERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-25-2000
<PERIOD-START> MAR-28-1999
<PERIOD-END> DEC-25-1999
<CASH> 30,351
<SECURITIES> 0
<RECEIVABLES> 46,797
<ALLOWANCES> 0
<INVENTORY> 39,991
<CURRENT-ASSETS> 163,301
<PP&E> 157,377
<DEPRECIATION> (16,683)
<TOTAL-ASSETS> 327,981
<CURRENT-LIABILITIES> 42,085
<BONDS> 0
0
0
<COMMON> 234,279
<OTHER-SE> 41,789
<TOTAL-LIABILITY-AND-EQUITY> 327,981
<SALES> 204,131
<TOTAL-REVENUES> 204,131
<CGS> 110,004
<TOTAL-COSTS> 152,720
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (1,087)
<INCOME-PRETAX> 54,558
<INCOME-TAX> 19,095
<INCOME-CONTINUING> 35,463
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 35,463
<EPS-BASIC> 0.45
<EPS-DILUTED> 0.42
</TABLE>
