Exhibit 10.12
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INTERCREDITOR AGREEMENT
This INTERCREDITOR AGREEMENT (this "AGREEMENT"), dated as of November 16,
2001, is entered into by and among Xxxxxxxx Xxxxx Xxxxxx & Xxxxx ("XXXXXXXX"),
Xxxxxxxx Xxxxxx Xxxxxxx & Xxxxxxxx LLP ("XXXXXXXX"), Xxxxxxx, Xxxxxxxx & Xxxxx
Professional Corporation ("XXXXXXX"), and O'Melveny & Xxxxx, LLP, individually
for its own benefit ("O'MELVENY," and in such individual capacity together with
Xxxxxxxx, Xxxxxxxx and Xxxxxxx, the "FIRMS") and as agent for the Firms (in such
capacity "Agent") in connection with the following:
A. Each of the Firms has provided professional services to the bankruptcy
estate of Innovative Micro Technology, a Delaware corporation (formerly known as
Applied Magnetics Corporation) ("IMT") in connection with IMT's bankruptcy case.
B. Pursuant to "Debtor's Third Amended Plan of Reorganization Under
Chapter 11 of the Bankruptcy Code Dated as of September 24, 2001, as Modified"
in Xxxx Xx. XX 00-00000-XX, as confirmed pursuant to an order dated November 5,
2001 (the "PLAN"), a copy of which is attached as Exhibit A the administrative
claims of each of the Firms (the "CLAIMS") on account of the fees and cost of
the Firms in connection with providing such services to IMT have been allowed in
the respective amounts shown on Schedule I. The Firms have agreed to receive
payment for the Claims on a deferred basis pursuant to the terms of the Plan.
C. IMT's obligation to pay the Claims pursuant to the terms of the Plan is
evidenced by (i) that certain Secured Promissory Note, dated as of the date
hereof; in the original principal amount of $1,383,777.00, executed and
delivered by IMT to Agent for the benefit Xxxxxxxx, (the "XXXXXXXX Note"); (ii)
that certain Secured Promissory Note, dated as of the date hereof, in the
original principal amount of $850,000.00, executed and delivered by IMT to Agent
for the benefit O'Melveny, (the "O'MELVENY NOTE"); (iii) that certain Secured
Promissory Note, dated as of the date hereof, in the original principal amount
of $699,580.77, executed and delivered by IMT to Agent for the benefit Xxxxxxxx,
(the "XXXXXXXX NOTE"); (iv) that certain Secured Promissory Note, dated as of
the date hereof, in the original principal amount of $1,203,560.76, executed and
delivered by IMT to Agent for the benefit Xxxxxxx (the "XXXXXXX NOTE," and
together with the Xxxxxxxx Note, the O'Melveny Note and the Xxxxxxxx Note, the
"NOTES"). Each of the Notes shall be in substantially the form of Exhibit B.
IMT's obligations under the Notes are secured by (a) that certain Deed of Trust,
Assignment of Rents and Fixture Filing (Xxxxx Xxxx Road), in substantially the
form of Exhibit C, dated as of the date hereof, from IMT to Agent for the
benefit of the Firms (the "XXXXX XXXX DEED OF TRUST") encumbering the real
property commonly known as 00 Xxxxx Xxxx Xxxx, Xxxxxx, Xxxxxxxxxx, as more
specifically described therein; (b) that certain Subordinated Deed of Trust,
Assignment of Rents and Fixture Filing (Hollister Avenue) in substantially the
form of Exhibit D, dated as of the date hereof, from IMT to Agent for the
benefit of the Firms (the "HOLLISTER DEED OF TRUST" and together with the Xxxxx
Xxxx Deed of Trust, the "DEEDS OF TRUST") encumbering the real property commonly
known as 0000 Xxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxx, as more specifically
described therein; and (c) a UCC-1 financing statement encumbering all equipment
owned by IMT (the "UCC") from IMT to Agent for the benefit of the Firms. The
Plan, to the extent applicable to the Claims, the Notes, the Xxxxx Xxxx Deed of
Trust, the Hollister Deed of Trust and the UCC are referred to herein
collectively as the "DOCUMENTS".
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E. The Firms desire to provide for the administration of the collection
and distribution of amounts due under the Notes and the enforcement of the Xxxxx
Xxxx Deed of Trust, the Hollister Deed of Trust and the UCC.
NOW, THEREFORE, in consideration of the foregoing and for other valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
1. Appointment of Agent.
(a) Appointment. Each of the Firms hereby appoints O'Melveny as Agent for
the Firms under and in connection with the Documents. The Firms
authorize Agent to act as the administrative agent of the Firms under
the Documents. Agent agrees to act as such administrative agent upon
the terms and conditions contained in this Section 1. Each Firm hereby
authorizes the Agent to take such action on its behalf under the
provisions of the Documents and to exercise such powers and to perform
such duties hereunder and thereunder as are specifically delegated to
or required of the Agent by the terms hereof and thereof and such other
powers as ale reasonably incidental thereto.
(b) Nature of Powers. Agent shall have and may exercise such powers
hereunder and under the Documents as are specifically delegated to
Agent by the terms of such documents, together with such powers as are
reasonably incidental thereto. The Agent shall have no dirties or
responsibilities except those expressly set forth in this Agreement and
the other Documents. The duties of the Agent shall be mechanical and
administrative in nature; the Agent shall not have by reason of this
Agreement and the other Documents a fiduciary relationship in respect
of any Firm; and nothing in this Agreement, expressed or implied, is
intended to or shall be so construed as to impose upon the Agent any
obligations in respect of this Agreement and the other Documents except
as expressly set forth herein.
(c) GENERAL IMMUNITY. NEITHER AGENT NOR ANY OF ITS PARTNERS, SHAREHOLDERS,
DIRECTORS, OFFICERS, AGENTS, ATTORNEYS, EXPERTS, ADVISORS, EMPLOYEES OR
SERVANTS SHALL BE LIABLE TO ANY OF THE FIRMS OR ANY OTHER PERSON OR
ENTITY FOR ANY ACTION TAKEN OR OMITTED TO BE TAKEN BY IT UNDER OR IN
CONNECTION WITH THIS AGREEMENT OR ANY OF THE DOCUMENTS EXCEPT TO THE
EXTENT OF AGENT'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, AS EVIDENCED
BY A FINAL JUDGMENT OF A COURT OF COMPETENT JURISDICTION. EACH OF THE
FIRMS HEREBY ACKNOWLEDGES THAT IT HAS, INDEPENDENT OF AND WITHOUT
RELIANCE UPON AGENT, AND BASED UPON SUCH DOCUMENTS AND INFORMATION AS
IT HAS DEEMED APPROPRIATE IN ITS SOLE JUDGMENT, MADE ITS OWN ANALYSIS
AND LEGAL AND BUSINESS DECISION TO ENTER INTO THIS AGREEMENT AND THE
DOCUMENTS AND THE TRANSACTIONS CONTEMPLATED THEREBY. EACH FIRM ALSO
ACKNOWLEDGES THAT IT WILL, INDEPENDENTLY AND WITHOUT RELIANCE UPON
AGENT, AND BASED ON SUCH DOCUMENTS AND INFORMATION AS IT SHALL DEEM
APPROPRIATE AT THE TIME, CONTINUE TO MAKE ITS OWN INDEPENDENT ANALYSIS
AND LEGAL AND BUSINESS DECISIONS IN TAKING OR OMITTING TO TAKE ACTION
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UNDER OR IN CONNECTION WITH THIS AGREEMENT AND THE DOCUMENTS. EACH
FIRM ACKNOWLEDGES THAT IT IS AND HAS BEEN REPRESENTED BY COUNSEL AND
THAT IT AND SUCH COUNSEL HAVE REVIEWED ALL OF THE DOCUMENTS AND THAT
ALL SUCH DOCUMENTS ARE IN FORM AND SUBSTANCE SATISFACTORY TO SUCH FIRM
AND ITS COUNSEL. AGENT AND EACH FIRM EACH COVENANT AND AGREE THAT NO
FIDUCIARY RELATIONSHIP OR DUTY OF ANY NATURE WHATSOEVER EXISTS (OR.
HAS EVER EXISTED) AMONG AGENT AND THE FIRMS WITH RESPECT TO: (1) THIS
AGREEMENT, (2) ANY PRESENT OR FUTURE DOCUMENTS, (3) ANY OF THE
TRANSACTIONS NOW OR HEREAFTER CONTEMPLATED WITH RESPECT TO ANY OF THE
FOREGOING, (4) THE CREATION, ATTACHMENT OR PERFECTION OF ANY PRESENT OR
FUTURE LIEN PURPORTED TO BE PURSUANT TO ANY DOCUMENT, OR (5) WITH
RESPECT TO ANY OTHER MATTER OF ANY NATURE WHATSOEVER.
(d) No Responsibility for Loans, Recitals Etc. Agent shall not be responsible
to any Firm or to any other person or entity for any recitals, reports,
statements, warranties or representations herein or in the Documents or be
bound to ascertain or inquire as to the performance or observance of any
of the terms of this Agreement or any of the Documents.
(e) INDEMNITY. TO THE EXTENT OF ITS PRO RATA SHARE (AS DEFINED IN
SECTION 2), EACH FIRM HEREBY INDEMNIFIES AND HOLDS HARMLESS AGENT AND
ITS PARTNERS, SHAREHOLDERS, DIRECTORS, OFFICERS, AGENTS, ATTORNEYS,
EXPERTS, ADVISORS, EMPLOYEES AND SERVANTS (THE "INDEMNITEES") FROM AND
AGAINST ANY AND ALL LIABILITIES, OBLIGATIONS, LOSSES, DAMAGES,
PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS, EXPENSES OR DISBURSEMENTS
OF ANY KIND OR NATURE WHATSOEVER (INCLUDING, WITHOUT LIMITATION, THE
COSTS, FEES, EXPENSES AND DISBURSEMENTS OF ALL INTERNAL AND OUTSIDE
COUNSEL AND ALL OTHER EXPERTS AND ADVISORS) WHICH MAY BE IMPOSED ON,
INCURRED BY, OR ASSERTED AGAINST ANY INDEMNITEE UNDER THIS AGREEMENT OR
ANY OF THE DOCUMENTS. IT IS THE INTENTION OF THE FIRMS THAT THIS
INDEMNITY SHALL APPLY WHETHER OR NOT ANY SUCH CLAIM ARISES FROM, IS IN
CONNECTION WITH, RELATES TO, IS A RESULT OF OR IS TO ANY EXTENT (IN
WHOLE OR IN PART) CAUSED BY ANY NEGLIGENT ACT OR OMISSION OF ANY KIND
WHATSOEVER BY OR ON BEHALF OF ANY SUCH INDEMNITEE; PROVIDED, HOWEVER,
NO INDEMNITEE SHALL BE INDEMNIFIED TO THE EXTENT ITS GROSS NEGLIGENCE
OR WILLFUL MISCONDUCT CONTRIBUTED TO SUCH CLAIM, AS EVIDENCED BY A
FINAL JUDGMENT OF A COURT OF COMPETENT JURISDICTION.
(f) Action on Instructions. Agent shall in all cases be fully protected in
acting, or in refraining from acting, hereunder or under the Documents
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if such action or inaction in accordance with written instructions
("INSTRUCTIONS") signed by Firms having an aggregate Pro Rata Share of
at least 51% (a "FIRM MAJORITY"), and such Instructions and any action
taken or any failure to act pursuant thereto shall be binding on all of
the Firms. Agent shall be fully justified in failing or refusing to
take any action under any Document unless Agent shall have first
received Instructions. Notwithstanding anything to the contrary
herein, and without limiting the forgoing, lithe event of an emergency
or otherwise where the Agent, in the exercise of Agent's good faith
judgment, believes that the interests of the Firms are in imminent
jeopardy, Agent may exercise any of the powers and perform any of the
duties granted Agent hereunder and under the Documents without first
receiving Instructions; provided, however, concurrent with the Agent
exercising any such powers or performing any such duties, Agent shall
deliver to each of the Firms written notice describing the powers
exercised or the duties performed and the events giving rise such
actions, provided farther, that neither the failure to deliver such
notice nor the contents of any such notice delivered shall give rise to
any liability on the part of Agent.
(g) Limitation on Agent's Duties. Notwithstanding anything to the contrary
herein, or any Instructions, Agent shall not be required to take any
action or refrain from taking any action which exposes Agent, in its sole
discretion, to any potential liability or which is contrary to any of the
Documents or applicable law.
(h) Employment of Advisors and Counsel. Agent may execute any of its
duties as agent under any of the Documents by or through employees,
advisors and attorneys-in-fact and shall not be answerable to the
Firms, except as to money or securities actually received by it or its
authorized agents, for the gross negligence or willful misconduct of
any such agents or attorneys-in-fact selected by it with reasonable
care. Agent shall be entitled to advice of counsel concerning all
matters pertaining to its duties under each of the Documents.
(i) Reliance on Documents; Counsel. Agent shall be entitled to rely upon any
document believed by it to be genuine and correct and to have been signed
or sent by the proper person or entity, and, in respect to legal matters,
upon the opinion of counsel selected by Agent.
(j) Reimbursement. Each Firm agrees to reimburse Agent upon demand for such
Firm's Pro Rata Share of any costs, fees or expenses incurred by Agent on
behalf of the Firms in connection with the administration and enforcement
of each of the Documents in accordance with the terms hereof.
(k) Resignation and Replacement.
(1) Agent may resign from the performance of all its functions and duties
hereunder and/or under any of the Documents at any time by giving 15 days'
prior written notice to the Firms. Such resignation shall take effect upon
the appointment of a successor Agent pursuant to clauses (3) and (4) below
or as otherwise provided below.
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(2) A Firm Majority may replace the Agent at any time by giving 15 days' prior
written notice to Agent of such replacement. Such replacement shall take
effect upon (i) payment to Agent of all amounts then due and owing Agent
under Section 1(j), and (ii) the appointment of a successor Agent pursuant
to clauses (3) and (4) below or as otherwise provided below.
(3) Upon any such notice of resignation or replacement, a Firm Majority shall
appoint a successor Agent hereunder.
(4) If a successor Agent shall not have been appointed by a Firm Majority
within such 15 day period, the then active Agent shall appoint a successor
Agent who shall serve as Agent until such time, if any, as a Firm Majority
shall appoint a successor Agent as provided above.
(5) After Agent's resignation or replacement hereunder, the provisions of this
Agreement and the Documents shall inure to its benefit as to any actions
taken or omitted to be taken by it under this Agreement or any of the
Documents.
2. Distribution of Amounts Received.
(a) Subject to Section 2(b), Agent shall distribute to each of the Firms
such Firm's pro rata share as shown on Schedule I ("PRO RATA SHARE") of
all amounts received by Agent under the Documents as soon as
practicable after receipt of such amounts by Agent Prior to such
distribution, Agent shall retain such amounts received in Agent's
client trust account for the benefit of the Firms. Agent shall have
the right to distribute any amounts received in accordance with
allocations indicated by IMT, and Agent shall have no liability to any
party for distributions in accordance with such allocations.
(b) Notwithstanding Section 2(a), (i) upon any payment of principal of the
Notes and (ii) from and after an Event of Default under, and as defined
in, the Notes or an Event of Default under, and as defined in, the
Deeds of Trust (collectively, "TRUE-UP EVENTS"), Agent shall not
distribute to Xxxxxxx, and Xxxxxxx shall have no right to receive, any
amounts received by Agent under the Documents unless and until each of
Xxxxxxxx, O'Melveny and Xxxxxxxx has received under the Documents an
amount equal to 17.35% of their respective Claim. During the period
that distributions to Xxxxxxx are tolled under this Section 2(b) the
amounts that otherwise would have been distributed to Xxxxxxx or the
amounts so returned to Agent by Xxxxxxx, as applicable, shall be
distributed to the other Firms based on what each Firm's Pro Rata Share
would have been in the absence of Xxxxxxx'x Claim, and Agent shall
provide written confirmation to all Firms of amounts so distributed.
The provisions of this Section 2(b) shall not reduce Xxxxxxx'x Claim or
Pro Rata Share. Notwithstanding anything to the contrary in this
Agreement, (x) the rights of Xxxxxxxx, Xxxxxxxx and O'Melveny under
this Section 2(b) shall be personal to Xxxxxxxx, Xxxxxxxx and O'Melveny
and shall not apply to or be for the benefit of any transferee or
assignee of Xxxxxxxx, Xxxxxxxx or O'Melveny, and (y) the provisions of
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this Section 2(b) applicable to Xxxxxxx shall apply in full to any
transferee or assignee of Xxxxxxx.
(c) Each of the Firms acknowledges and agrees that (i) each of the Notes
permit IMT to pay interest directly to the applicable Firm until the
occurrence of an Event of Default under, and as defined in, such Note,
(ii) Agent shall have no liability to include in any applicable
calculation the amount of any such payments of interest unless and unto
Agent has received written notice of such payment; together with a copy
of the payment confirmation showing the amount so paid, and (iii) all
payments of principal are to be made directly to Agent.
3. Adjustment of Pro Rata Share. In the event that any Firm elects the
Professional Person's Deferred Payment Conversion (as defined in the Plan)
at any time as permitted under the Plan, such Firm (the "ELECTING FIRM")
shall deliver written notice of such election (a "CONVERSION NOTICE") to
Agent concurrent with the delivery of written notice to IMT of such
election as required under the Plan. The Electing Firm shall forward to
Agent written evidence reasonably satisfactory to Agent of the Electing
Firm's receipt of the stock of IMT in accordance with the Conversion
Notice (the "CONVERSION CONFIRMATION") upon the receipt of such stock.
Upon Agent's receipt of the Conversion Notice, Agent shall hold in escrow
any amounts distributable hereunder to the Electing Firm until such time
as Agent shall have received the Conversion Confirmation. As soon as
practical after receipt of the Conversion Confirmation, the Agent shall
distribute to the Electing Firm such of the escrowed amounts as are
allocable to the period from the date the Agent began to hold amounts in
escrow for the Electing Firm through and including the date immediately
preceding the date the Electing Firm received the stock of IMT as shown in
the Conversion Confirmation. As of the date the Electing Firm received the
stock of IMT as shown in the Conversion Confirmation, such Electing Firm's
Claim shall be reduced by an amount equal to the amount oldie Claim so
converted as set forth in the Conversion Notice, and the Total Claims as
shown on Exhibit A and each Pro Rata Share shall be adjusted accordingly.
4. Enforcement of Documents. In the event of a default by IMT under any of.
the Documents, Agent may deliver written notice of such default (a
"DEFAULT NOTICE") to the Firms and such Default Notice may state Agent's
proposed actions to enforce the applicable Documents. Each of the Firms
shall have 5 business days from delivery of a Default Notice to deliver to
Agent and each of the other Firms an approval or disapproval of such
proposed actions. Failure timely to respond to a Default Notice shall be
deemed approval of the actions proposed in the Default Notice. If a Firm
delivers a written notice of disapproval, such notice shall contain such
Firm's proposed course of action in response to the situation underlying
the Default Notice. Other than in the event of an emergency or otherwise
where the Agent, in the exercise of Agent's good faith judgment, believes
that the interests of the Firms are in imminent jeopardy, unless and until
there exists a Firm Majority approval of the actions to be taken in
response to the situation underlying the Default Notice, Agent shall take
no action; provided, however, that each of the Firms, to the extent of
such Firm's respective Pro Rata Share, indemnify and agree to hold
harmless Agent from and against any loss, cost, damage or other liability
arising or accruing out of such inaction.
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5. Miscellaneous.
(a) Notices. All notices, consents, approvals, requests and other
communications hereunder shall be made in writing and delivered by
personal service, with a written receipt, or telecopied (with confirmation
by personal delivery or mail) or sent by reputable overnight courier,
signature required, and addressed as follows:
Agent: O'Melveny & Xxxxx, LLP, as Agent
000 Xxxxx Xxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
Facsimile: 000-000-0000
Attention: Xxxx Xxxxx, Esq.
Re: 027917-01
Houlihan: Xxxxxxxx Xxxxx Xxxxxx & Xxxxx
0000 Xxxxxxx Xxxx Xxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Facsimile: (000) 000-0000
Attention: Xx. Xxxxx XxXxxxx
O'Melveny: O'Melveny & Xxxxx, LLP
000 Xxxxx Xxxx Xxxxxx
Xxx Xxxxxxx, XX 00000
Facsimile: 000-000-0000
Attention: Xxxx Xxxxx Esq.
Re: 027917-01
Xxxxxxxx: Xxxxxxxx Xxxxxx Xxxxxxx & Xxxxxxx LLP
000 Xxxxx Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxxx X. X'Xxxxx, Esq.
Xxxxxxx: Xxxxxxx, Xxxxxxxx & Xxxxx Professional
Corporation
0000 Xxxxxxxx Xxxxxxxxx, Xxxxx Xxxxx
Xxx Xxxxxxx, XX 00000
Facsimile: 000-000-0000
Attention: Xxxxxxx X. Xxxxxxxxx, Esq.
Any such notice personally served or telecopied shall be deemed given when
received or refused and any such notice by overnight courier shall be deemed to
have been received by the addressee on the date such notice was signed for or
refused as shown on the overnight courier's delivery receipt.
(b) Time is of the Essence. Time is of the essence of each and every term,
provision, covenant and obligation of the parties under this Agreement.
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(c) Further Assurances. Each, party hereto shall execute all such instruments
and documents and take in good faith all actions necessary or convenient
to consummate the transactions herein contemplated.
(d) Waivers. No waiver of any breach of any covenant or provision of this
Agreement is a waiver of any other breach thereof or of any other covenant
or provision herein. No extension of time for performance of any
obligation or act shall extend the time for performance of any other
obligation or act.
(e) Attorneys' Fees. If any party institutes or threatens legal proceedings to
determine or enforce its legal tights under this Agreement, the
non-prevailing parties shall pay to the prevailing party its reasonable
attorneys' fees (including fees and charges of legal assistants and other
non-attorney personnel performing services under the supervision of an
attorney), court costs, cost of investigation and other expenses incurred
in connection therewith.
(f) Successors and Assigns. This Agreement shall be binding upon and shall
inure to the benefit of the successors and assigns of the parties hereto.
(g) Assignment. Any party may assign its rights and obligations hereunder upon
prior written notice to, but without the prior written consent of, the
non-assigning parties, provided that, with respect to any obligations so
assigned, the assigning party shall not be released from such obligations
unless such assignment is consented to in writing by the non-assigning
parties.
(h) Complete Agreement. No statements or conversations among the parties
hereto or their representatives, whether express or implied, occurring
either before or after the execution of this Agreement shall have any
bearing or effect upon this Agreement, it being understood that this
Agreement evidences the complete agreement between the parties hereto.
This Agreement supersedes all prior offers, contacts, agreements and
arrangements among the parties concerning the matters discussed
herein. This Agreement may not be changed, modified or rescinded
except in writing, signed by all parties hereto, and any attempt at
oral modification of this Agreement shall be void and of no effect.
(i) Counterparts. This Agreement may be executed in counterparts, each of
which shall be fully effective as an original and all of which together
shall constitute one and the same instrument.
(j) Partial Invalidity. If any term or provision of this Agreement or the
application thereof to any person or circumstance shall, to any extent, be
invalid or unenforceable, the remainder of such provision and this
Agreement shall not be affected thereby, and each other term and provision
of this Agreement shall be valid and be enforced to the fullest extent
permitted by law.
(k) Interpretation. Headings are solely for the convenience of the parties
and are not a part of this Agreement. The Recitals and any Exhibits to
this Agreement are incorporated as a part of this Agreement. Unless
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otherwise indicated, references in this Agreement to an Exhibit or
Section refer to Exhibits to or Sections of this Agreement. Whenever
required by the context of this Agreement, the singular shall include
the plural and the masculine shall include the feminine and vice
versa. The term "including" means "including without limitation".
This Agreement has been negotiated by all parties and shall not be
construed for or against any particular party. There are no third
party beneficiaries of this Agreement.
(l) Applicable Law. This Agreement and the transaction contemplated hereby
shall be construed in accordance with and governed by the laws of the
State of California.
[Signatures on following page.]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first set forth above.
O'MELVENY, INDIVIDUALLY AND AS AGENT: XXXXXXXX:
O'Melveny & Xxxxx, LLP Houlilian Xxxxx Xxxxxx & Xxxxx
By: By:
--------------------------------- ---------------------------------
Name: Name:
------------------------------- -------------------------------
Title: Title:
------------------------------ -------------------------------
XXXXXXXX: XXXXXXX:
Xxxxxxxx Xxxxxx Xxxxxxx & Xxxxxxx LLP Xxxxxxx, Xxxxxxxx & Xxxxx Professional
Corporation
By: By:
--------------------------------- ---------------------------------
Name: Name:
------------------------------- -------------------------------
Title: Title:
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Exhibit A
Plan
(Attached)
A-1
Exhibit B
Form of Note
SECURED PROMISSORY NOTE
$_______________ Los Angeles, California
November 16,2001
1. PROMISE TO PAY.
For value received, INNOVATIVE MICRO TECHNOLOGY, a Delaware corporation
(formerly known as Applied Magnetics Corporation) ("MAKER"), promises to pay to
O'MELVENY & XXXXX, LLP ('HOLDER'), AS AGENT FOR________________ (the "Firm"), or
order, $______________ together with interest thereon as set forth herein.
Reference is made to that certain 'Debtor's Third Amended Plan of
Reorganization Under Chapter 11 of the Bankruptcy Code Dated as of September
24,2001, as Modified" in Case No. ND 00-10066-RR., as confirmed pursuant to an
order dated November 5, 2001, (the 'PLAN') for a statement of the terms and
conditions under which Maker's liability for the amounts to be paid hereunder
arose and is to be repaid. No reference herein to the Plan and no provision of
this Note or the Plan shall alter or impair the obligations of Maker, which are
absolute and unconditional, to pay the principal of and interest on this Note at
the place, at the respective times, and in the currency herein prescribed.
Maker's obligations under this Note are secured by, among other things,
(a) that certain Deed of Trust, Assignment of Rents and Fixture Filing (Xxxxx
Xxxx Road), dated as of the date hereof; from Maker to Holder, as Agent (the
'XXXXX XXXX DEED OF TRUST'), encumbering the real property commonly known as 00
Xxxxx Xxxx Xxxx, Xxxxxx, Xxxxxxxxxx, as more specifically described therein; and
(b) that certain Subordinated Deed of Trust, Assignment of Rents and Fixture
Filing (Hollister Avenue), dated as of the date hereof; from Maker to Holder, as
Agent (the "HOLLISTER DEED OF TRUST" and together with the Xxxxx Xxxx Deed of
Trust, the 'Deeds of Trust'), encumbering the real property commonly known as
0000 Xxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxx, as more specifically described
therein.
All initially capitalized terms used but not defined herein shall have the
meaning given such terms in the Plan.
2. INTEREST.
From and after the date of this Note, Interest shall accrue on all
outstanding amounts hereunder at the rate of 12% per annum. All payments due
hereunder shall be made without any deduction, offset or withholdings.
B-1
3. MATURITY DATE
The then unpaid principal balance hereof; together with accrued and unpaid
interest thereon and any other amounts payable under this Note, shall be due and
payable on November 15, 2003 (the 'MATURITY DATE').
4. PAYMENTS
4.1 Accrued interest on the then outstanding principal balance
hereof for the period November l6, 2001, through March 3l, 2002, shall be
paid concurrent with the delivery of this Note to Holder and in no event
later than March 15, 2002.
4.2 Commencing on May 1, 2002, and on the first day of each
calendar month thereafter until the Note is paid in full, accrued interest
on the then outstanding principal balance hereof shall be due and payable.
4.3 Payments of principal under this Note shall be made
as follows:
(a) Upon the consummation of the sale of the real
property located at 0000 Xxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxx, all
amounts remaining after satisfaction of any liens senior to the
Hollister Deed of Trust; and
(b) The then unpaid principal balance on the Maturity
Date.
4.4 Payments shall be applied first to other amounts payable
hereunder, then to interest, then to principal.
4.5 Payments due hereunder are to be made to Holder at 000
Xxxxx Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxxxxx, Xxxxxxxxxx, 00000, or such
other address as the holder hereof shall have notified Maker of in writing
provided, however, that until the occurrence of an Event of Default
hereunder, or an Event of Default under, and as defined in, the Deeds of
Trust, payments of interest only may be made by Maker directly to the Firm
at the address shown for the Firm in Section 12 so long as written notice
of such payment together with a copy of the payment confirmation showing
the amount so paid are delivered to Holder concurrent with such payment
being made to the Firm and Maker shall not be credited with any payment of
interest hereunder unless Holder receives such written notice. All
payments of principal are to be made directly to Holder.
5. PREPAYMENT.
Maker may prepay all or any portion of this Note at any time without
premium or penalty upon not less than 3 weeks prior written notice to Holder and
to each Professional Person (as defined in the Plan).
6. REDUCTION OF PRINCIPAL AMOUNT.
In the event that the Firm elects the Professional Person's Deferred
Payment Conversion at any time as permitted under the Plan, Maker shall deliver
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to Holder a copy of the written notice of such election (a "CONVERSION NOTICE")
from the Firm promptly after Maker's receipt thereof, and Maker will deliver to
Holder written notice (the "CONVERSION Confirmation") of the delivery of Maker's
stock to the Firm in accordance with the Plan and the applicable Conversion
Notice concurrent with the delivery of such stock by Maker. Upon Holder's
receipt of the Conversion Confirmation, the principal amount of this Note shall
be reduced by the amount of the applicable Profession Person's Deferred Claim
converted pursuant to the Conversion Notice.
7. DEFAULT; WAIVER.
7.1 If Maker fails to pay when due any amounts hereunder, from
such due date until the amount is paid in full interest shall accrue on
all amounts due hereunder at the rate of interest set forth in Section 2,
plus three percentage points.
7.2 If Maker fails to timely make any payment when due
hereunder or under the Plan in respect of the Professional Person's Claim
owing to any of the Firm, or fails to timely perform any other obligation
of Maker hereunder, that failure shall be an "EVENT OF DEFAULT" under this
Note.
7.3 Maker hereby waives diligence, presentment, protest and
demand, notice of protest, dishonor and nonpayment of this Note, and
expressly agrees that, without in any way affecting the liability of Maker
hereunder, Holder may extend any maturity date or the time for payment of
any installment due hereunder, accept security, release any party liable
hereunder and release any security at any time securing this Note.
8. REMEDIES.
Upon the occurrence of an Event of Default, at the option of Holder, the
entire balance of principal and all accrued and unpaid interest thereon shall,
without demand or notice, immediately become due and payable. No delay or
omission on the part of the holder hereof in exercising any right under this
Note shall operate as a waiver of such right of acceleration.
9. SEVERABILITY.
Every provision of this Note is intended to be severable. If any term or
provision hereof is declared by a court of competent jurisdiction to be illegal
or invalid for any reason whatsoever, such illegality or invalidity shall not
affect the balance of the terms and provisions hereof which terms and provisions
shall remain binding and enforceable.
10. USURY.
The amount to be paid for the use, forbearance, or detention of the
principal amount shall not exceed the maximum amount permissible under
applicable law. If any provision hereof shall require any payment exceeding the
limits prescribed by law, then such obligation is hereby reduced to the limit of
such validity. If Holder receives as interest an amount which would exceed the
highest lawful rate, the amount which would be excessive interest shall not be
interest, but shall be applied instead to the reduction of the principal balance
owing hereunder.
B-3
11. INTERPRETATION.
Headings at the beginning of each numbered Paragraph of this Note are
intended solely for convenience and are not to be deemed or construed to be a
part of this Note. In this Note the singular shall include the plural and the
masculine shall include the feminine and neuter genders, and vice versa, if the
context so requires. THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF CALIFORNIA.
12. NOTICES.
All notices and other communications to Holder hereunder shall be made in
writing and delivered by personal service, with a written receipt, or telecopied
(with confirmation by personal delivery or mail) or sent by registered or
certified mail, in a sealed envelope, postage prepaid, return receipt requested
and addressed as follows:
Holder O'Melveny & Xxxxx, LLP, as Agent
000 Xxxxx Xxxx Xxxxxx, Xxx Xxxxxxx, XX 00000
Facsimile: 000-000-0000
Attention: Xxxx Xxxxx, Esq., Re: 027917-01.
Firm _____________________________
_____________________________
Facsimile:___________________
Attention:___________________
13. ATTORNEYS' FEES.
If this Note is not paid when due or if any Event of Default occurs,
Maker promises to pay, upon demand, all costs of enforcement and collection,
including but not limited to, reasonable attorneys' fees and costs, whether
or not any action or proceeding is brought to enforce the provisions hereof.
MAKER: INNOVATIVE MICRO TECHNOLOGY, a
Delaware corporation (formerly known as
Applied Magnetics Corporation)
By:___________________________________
Name:_________________________________
Title:________________________________
B-4
Exhibit C
Form of Xxxxx Xxxx Deed of Trust
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
O'Melveny & Xxxxx LLP, as Agent
000 Xxxxx Xxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Attn: Xxxx Xxxxx, Esq.
027917-01
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THIS SPACE ABOVE FOR RECORDER'S USE
------------------------------------------------------------------------------
DEED OF TRUST, ASSIGNMENT OF RENTS AND FIXTURE FILING
(Xxxxx Xxxx Road)
This DEED OF TRUST, ASSIGNMENT OF RENTS AND FIXTURE FILING (this "Deed of
Trust") dated as of November 16, 2001, is made by INNOVATIVE MICRO TECHNOLOGY, a
Delaware corporation (formerly known as Applied Magnetics Corporation), herein
called TRUSTOR, whose address is 00 Xxxxx Xxxx Xxxx, Xxxxxx, Xxxxxxxxxx 00000,
to CHICAGO TITLE COMPANY, a California corporation, herein called TRUSTEE, for
the benefit of O'MELVENY & XXXXX, LLP, AS AGENT for itself and the other Firms
(as defined below) pursuant to the Agreement (as defined below), herein called
BENEFICIARY, whose address is 000 Xxxxx Xxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx,
00000, Attention: Xxxx Xxxxx, Esq.
RECITALS
--------
X. Xxxxxxxx Xxxxx Xxxxxx & Xxxxx ("Xxxxxxxx"), Xxxxxxxx Xxxxxx Xxxxxxx &
Xxxxxxx LLP ("Xxxxxxxx"), Xxxxxxx, Xxxxxxxx & Xxxxx Professional Corporation
("Xxxxxxx"), and O'Melveny & Xxxxx, LLP ("O'Melveny," and together with
Xxxxxxxx, Xxxxxxxx and Xxxxxxx, the "Firms") has each provided professional
services to Trustor's bankruptcy estate in connection with Trustor's bankruptcy
case.
B. Pursuant to the "Debtor's Third Amended Plan of Reorganization Under
Chapter 11 of the Bankruptcy Code Dated as of September 24, 2001, as Modified"
in Xxxx Xx. XX 00-00000-XX, as confirmed pursuant to an order dated November 5,
2001 (the "Plan"), the administrative claims of each of the Firms (the "Claims')
on account of the fees and costs of the Firms in connection with the services
provided to Trustor's bankruptcy estate have been allowed as set forth in the
Plan. The Firms have agreed to receive payment for the Claims on a deferred
basis pursuant to the terms of the Plan.
D. As a condition to the Finns accepting deferred payment of the Claims,
and pursuant to the Plan, Trustor's obligation to pay the Claims pursuant to the
terms of the Plan is evidenced by (i) that certain Secured Promissory Note,
dated as of the date hereof, executed and delivered by IMT to Agent for the
benefit Hou1ihan, (the "Xxxxxxxx Note"), (ii) that certain Secured Promissory
Note, dated as of the date hereof, executed and delivered by IMT to Agent for
the benefit O'Melveny, (the "O'Melveny Note"); (iii) that certain Secured
Promissory Note, dated as of the date hereof, executed and delivered by IMT to
Agent for the benefit Xxxxxxxx, (the "Xxxxxxxx Note"); (iv) that certain Secured
C-1
Promissory Note, dated as of the date hereof, executed and delivered by IMT to
Agent for the benefit Xxxxxxx (the "Xxxxxxx Note," and together with the
Xxxxxxxx Note, the O'Melveny Note and the Xxxxxxxx Note, the "Notes"). Trustor's
obligations under the Notes are secured by (a) this Deed of Trust, (b) that
certain Subordinated Deed of Trust, Assignment of Rents and Fixture Filing
(Hollister Avenue), dated as of the date hereof, from Trustor to Beneficiary for
the benefit of the Firms (the "Hollister Deed of Trust) encumbering the real
property commonly known as 0000 Xxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxx, as more
specifically described therein; and (c) a UCC-1 financing statement encumbering
all equipment owned by Trustor (the "UCC") from Trustor, as debtor, to Agent for
the benefit of the Firms, as Secured Party. The Plan, to the extent applicable
to the Claims, the Notes, this Deed of Trust, the Hollister Deed of Trust and
the UCC are referred to herein collectively as the 'Documents ".
E. Concurrent herewith, the Firms are entering into that certain
Intercreditor Agreement, dated as of the date hereof, to provide for the
administration of the collection and distribution of amounts due under the Plan
and the Notes and the enforcement of this Deed of Trust and the UCC (the
"Agreement").
GRANT AND AGREEMENT
-------------------
Trustor irrevocably grants, transfers and assigns to Trustee IN TRUST, WITH
POWER OF SALE, for the benefit of Beneficiary, that real property in Santa
Xxxxxxx County, California, more particularly described on Exhibit A hereto (the
"Real Property"), together with any and all buildings and improvements now or
hereafter erected on the Real Property, all fixtures, all interests, estates or
other claims, both in law and in equity, which Trustor now has or may hereafter
acquire in the Real Property, any and all awards made for the taking by eminent
domain, or by any purchase in lieu thereof, any insurance proceeds with respect
thereto, and all easements, licenses, rights-of-way, appurtenances and other
rights now owned or hereafter acquired by Trustor with respect thereto
(collectively with the Real Property, the "Property").
Trustor absolutely assigns to Beneficiary the rents, issues and profits of the
Property, subject, however, to a license to Beneficiary to collect and apply
such rents, issues and profits for so long as no Event of Default has occurred.
As used herein, "Event of Default" shall mean any failure by Trustor timely to
make any payment or perform any other obligation of Trustor to be made or
performed under the terms of the Documents.
Some of the items of the Property are goods that are or are to become fixtures
or accounts resulting from the sale thereof, and it is intended that, as to
those goods, this Deed of Trust shall be effective as a financing statement
filed as a fixture filing and as a financing statement covering the applicable
Property or accounts resulting from the sale thereof front the date of the
filing for record of this Deed of Trust in the real estate records of the county
in which the Real Property is situated. Information concerning the security
interest created by this instrument may be obtained from Beneficiary, as secured
party, at the address of Beneficiary stated above. The mailing address of the
Trustor, as debtor, is as stated above.
This Deed of Trust is made for the purpose of securing (l) the full and prompt
payment of all amounts due and owing under the Documents, and extensions or
renewals thereof; (2) the performance of all obligations, of whatever kind or
C-2
character, whether fixed or contingent, of the Trustor under the Documents and
all extensions, amendments, modifications, supplements, increases, restatements
and renewals thereof and substitutions therefor, and (3) the payment of all sums
advanced by Beneficiary or Trustee to or for the benefit of Trustor contemplated
hereby and performance of all obligations and covenants of Trustor herein
contained.
A. To protect the security of this Deed of Trust, and with respect to the
property above described, Trustor agrees:
(1) To keep the Property in good condition and repair; not to remove or demolish
any building thereon; to complete or restore promptly and in good and
workmanlike manner any building which may be constructed, damaged or destroyed
thereon and to pay when due all claims for labor performed and materials
furnished therefor to comply with all laws affecting the Property or requiring
any alterations or improvements to be made thereon; not to commit or permit
waste thereof; not to commit, suffer or permit any act upon the Property in
violation of law; to cultivate, irrigate, fertilize, fumigate, prune and do all
other acts which from the character or use of the Property may be reasonably
necessary, the specific enumerations herein not excluding the general.
(2) To provide, maintain and deliver to Beneficiary casualty and general
commercial liability insurance satisfactory to and with loss payable to
Beneficiary. The amount collected under any insurance policy may be applied by
Beneficiary upon any indebtedness secured hereby and in such order as
Beneficiary may determine, or at option of Beneficiary the entire amount so
collected or any part thereof may be released to Trustor. Such application or
release shall not cure or waive any default or notice of default hereunder or
invalidate any act done pursuant to such notice.
(3) To appear in and defend any action or proceeding purporting to affect the
security hereof or the rights or powers of Beneficiary or Trustee; and to pay
all costs and expenses, including cost of evidence of title and money's fees in
a reasonable sum, in any action or proceeding in which Beneficiary or Trustee
may appear, and in any suit brought by Beneficiary to foreclose this Deed of
Trust.
(4) To pay: (i) at least ten days before delinquency all taxes and assessments
affecting the Property, including assessments on appurtenant water stock; (ii)
when due, all encumbrances, charges and liens, with interest, on the Property or
any part thereof, which appear to be prior to superior hereto; and (iii) all
costs, fees and expenses of this Trust.
Following an Event of Default, Beneficiary or Trustee, but without obligation so
to do and without notice to or demand upon Trustor or without releasing Trustor
from any obligation hereof, may: make or do the same in such manner and to such
extent as either may deem necessary to protect the security hereof, Beneficiary
or Trustee being authorized to enter upon the Property for such purposes; appear
in and defend any action or proceeding purporting to affect the security hereof
or the rights or powers of Beneficiary or Trustee; pay, purchase, contest or
compromise any encumbrance, charge, or lien which in the judgment of either
appears to be prior or superior hereto; and, in exercising any such powers, pay
necessary expenses, employ counsel and pay his or her reasonable fees.
C-3
(5) To pay immediately and without demand all sums so expended by Beneficiary or
Trustee, with interest from date of expenditure at the maximum amount then
allowed by law, and to pay for any statement then provided for by law regarding
the obligation secured hereby, and any amount demanded by the Beneficiary not to
exceed the maximum allowed by law at the time when said statement is demanded.
B. Trustor agrees:
(1) That any award of damages in connection with any condemnation for public use
of or injury to the Property or any part thereof is hereby assigned and shall be
paid to Beneficiary who may apply or release such moneys received by it in the
same manner and with the same effect as above provided for disposition of
proceeds of casualty or other insurance.
(2) That by accepting payment of any sum secured hereby after its due date,
Beneficiary does not waive its right either to require prompt payment when due
of all other aunts so secured or to declare default for failure so to pay.
(3) That at any time or from time to time, without liability therefor and
without notice, upon written request of Beneficiary and presentation of this
Deed of Trust, and without affecting the personal liability of any person for
payment of the indebtedness secured hereby, Trustee may: reconvey any part of
the Property consent to the making of any map or plat thereof; join in granting
any easement thereon; or join in any extension agreement or any agreement
subordinating the lien or charge hereof.
(4) That upon written request of Beneficiary stating that all sums secured
hereby have been paid, and upon surrender of this Deed of Trust to Trustee for
retention or other disposition as Trustee in its sole discretion may choose and
upon payment of its fees, Trustee shall reconvey, without warranty, the property
then held hereunder. The recitals in such reconveyance of any matters or facts
shall be conclusive proof of the truthfulness thereof. The grantee in such
reconveyance may be described as "the person or persons legally entitled
thereto."
(5) That upon any Event of Default, Beneficiary may at any time without notice,
either in person, by agent, or by a receiver to be appointed by a court, and
without regard to the adequacy of any security for the indebtedness hereby
secured, enter upon and take possession of the Property or any part thereof, in
its own name xxx for or otherwise collect such rents, issues, and profits,
including those past due and unpaid, and apply the same, less costs and expenses
of operation and collection, including reasonable attorney's fees, upon any
indebtedness secured hereby, and in such order as Beneficiary may determine. The
entering upon and taking possession of the Property, the collection of such
rents, issues and profits and the application thereof as aforesaid, shall not
cure or waive any default or notice of default hereunder or invalidate any act
done pursuant to such notice.
(6) That upon any Event of Default, Beneficiary may declare all sums secured
hereby immediately due and payable by delivery to Trustee of written declaration
of default and demand for sale and of written notice of default and of election
to cause the Property to be sold, which notice Trustee shall cause to be filed
for record. Beneficiary also shall deposit with Trustee this Deed of Trust and
all documents evidencing expenditures secured hereby.
C-4
After the lapse of such time as may then be required by law following the
recordation of said notice of default, and notice of sale having been given as
then required by law, Trustee, without demand on Trustor, shall sell the
Property at the time and place fixed by it in said notice of sale, either as a
whole or in separate parcels, and in such order as it may determine, at public
auction to the highest bidder for cash in lawful money of the United States,
payable at time of sale. Trustee may postpone sale of all or any portion of the
Property by public announcement at such time and place of sale, and from time to
time thereafter may postpone such sale by public announcement at the time fixed
by the preceding postponement. Trustee shall deliver to such purchaser its deed
conveying the Property so sold, but without any covenant or warranty, express or
implied. The recitals in such deed of any matters or facts shall be conclusive
proof of the truthfulness thereof. Any person, including Trustor, Trustee, or
Beneficiary as hereinafter defined, may purchase at such sale.
After deducting all costs, fees and expenses of Trustee and of this Trust,
including cost of evidence of title in connection with sale, Trustee shall apply
the proceeds of sale to payment of all sums expended under the terms hereof, not
then repaid, with accrued interest at the maximum amount allowed by law in
effect at the date hereof; all other sums then secured hereby, and the
remainder, if any, to the person or persons legally entitled thereto.
(7) Beneficiary, or any successor in ownership of any indebtedness secured
hereby, may from time to time, by instrument in writing, substitute a successor
or successors to any Trustee named herein or acting thereunder, which
instrument, executed by the Beneficiary and duly acknowledged and recorded in
the office of the recorder of the county where the Real Property is situated,
shall be conclusive proof of proper substitution of such successor Trustee or
Trustees, who shall, without conveyance from the Trustee predecessor, succeed to
all its title, estate, tights, powers and duties. Said instrument must contain
the name of the original Trustor, Trustee and Beneficiary hereunder, the book
and page where this Deed of Trust is recorded and the name and address of the
new Trustee.
(8) That this Deed of Trust applies to, inures to the benefit of, and binds all
parties hereto, their community property, heirs, legatees, devisees,
administrators, executors, successors, and assigns. The term Beneficiary shall
mean the owner or holder, including pledgees, of the Documents, whether or not
named as Beneficiary herein. In this Deed of Trust, whenever the context so
requires, the masculine gender includes the feminine and/or the neuter, and the
singular number includes the plural.
(9) The Trustee accepts this Trust when this Deed of Trust, duly executed and
acknowledged, is made a public record as provided by law. Trustee is not
obligated to notify any party hereto of pending sale under any other Deed of
Trust or of any action or proceeding in which Trustor, Beneficiary or Trustee
shall be a party unless brought by Trustee.
(10) That in the event of any transfer or further encumbrance of the Property or
interest therein or portion thereof or of any interest in Trustor, direct or
indirect, voluntary or involuntary, without the prior written consent of
Beneficiary, Beneficiary shall have the absolute right at its option, without
prior demand or notice, to declare all sums secured hereby immediately due and
payable. Consent to one such transaction shall not be deemed to be a waiver of
the right to require consent to future or successive transactions.
C-5
Beneficiary may charge for a statement regarding the obligation secured hereby,
which charge shall not exceed the maximum allowed by law. The undersigned
Trustor, requests that a copy of any notice of default and any notice of sale
hereunder be mailed to Trustor at its address hereinbefore set forth.
INNOVATIVE MICRO TECHNOLOGY,
a Delaware corporation (formerly known as
Applied Magnetics Corporation)
By: /s/Xxxx Xxxxxx
----------------
Name: Xxxx Xxxxxx
-------------
Title: Chief Executive Officer
-------------------------
STATE OF CALIFORNIA )
) ss.:
COUNTY OF SANTA XXXXXXX )
On March 4, 2002, before me, a Notary Public in and for said County and State,
personally appeared Xxxx Xxxxxx personally known to me (or proved to me on the
basis of satisfactory evidence) to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or the entity upon
behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
Xxxxxxx Xxxxxxxx [seal]
------------------------------
C-6
EXHIBIT A
---------
LEGAL DESCRIPTION
Parcel B as shown on Parcel Map No. 12,825 in the County of Santa
Xxxxxxx, State of California, filed in Book 22, Pages 10 and 11 of Parcel Maps
in the Office of the County Recorder of Santa Xxxxxxx County, California.
EXCEPTING therefrom one-half of any and all oil, gas and other
hydrocarbon substances within and under the above-described property more than
500 feet beneath the surface thereof and/or producible therefrom or
therethrough, without, however, any surface rights or right of surface entry
with respect thereto as reserved by Xxxxx Xxxxxxxx, Jr., as Executor of the Will
of Xxxxx X. Xxxxxxxx, deceased, in deed recorded October 20, 1961 as Instrument
No. 37444 in Book 1879, Page 144 of Official Records.
Also excepting therefrom one-half of any and all oil, gas and other
hydrocarbon substances within and under the above described property more than
500 feet beneath the surface thereof, and/or producible therefrom or
therethrough, without, however, any surface rights or right of surface entry
with respect, thereto, as reserved by Xxxxxx X. Xxxxxxx, a married man and CD.
Xxxxxxx and Xxxxx X. Xxxxxxx, husband and wife, in deed recorded October 20,
1961 as Instrument No. 37448 in Book 1879, Page 156 of Official Records.
An easement for a public utility and flood control proposes over
that portion of Parcel A as shown on said Parcel Map No. 12,825 as said easement
is shown within 20 feet of the Northerly boundary of said Parcel A and over the
remainder portion of said easement identified as "utility easement in favor of
Parcel B" on said Parcel Map No. 12,825 as reserved in document recorded March
14, 1979 as Instrument No. 79-11091 of Official Records of Santa Xxxxxxx County.
APN #00-000-00
Commonly known as:
00 Xxxxx Xxxx Xxxx, Xxxxxx, Xxxxxxxxxx 00000
C-7
Exhibit D
---------
Form of Hollister Deed of Trust
------------------------------------------
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
O'Melveny & Xxxxx LLP, as Agent
000 Xxxxx Xxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000-0000
Attn: Xxxx Xxxxx, Esq.
027917-01
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THIS SPACE ABOVE FOR RECORDER'S USE
------------------------------------------------------------------------------
SUBORDINATED DEED OF TRUST, ASSIGNMENT OF RENTS
AND FIXTURE FILING
(Hollister Avenue)
This DEED OF TRUST, ASSIGNMENT OF RENTS AND FIXTURE FILING (this "Deed of
Trust") dated as of November 16, 2001, is made by INNOVATIVE MICRO TECHNOLOGY, a
Delaware corporation (formerly known as Applied Magnetics Corporation), herein
called TRUSTOR, whose address is 00 Xxxxx Xxxx Xxxx, Xxxxxx, Xxxxxxxxxx 00000,
to CHICAGO TITLE COMPANY, a California corporation, herein called TRUSTEE, for
the benefit of O'MELVENY & XXXXX, LLP, AS AGENT for itself and the other Firms
(as defined below) pursuant to the Agreement (as defined below), herein called
BENEFICIARY, whose address is 000 Xxxxx Xxxx Xxxxxx, Xxx Xxxxxxx, Xxxxxxxxxx,
00000, Attention: Xxxx Xxxxx, Esq.
RECITALS
--------
X. Xxxxxxxx Xxxxx Xxxxxx & Xxxxx ("Xxxxxxxx"), Xxxxxxxx Xxxxxx Xxxxxxx &
Xxxxxxx LLP ("Xxxxxxxx"), Xxxxxxx, Xxxxxxxx & Xxxxx Professional Corporation
("Xxxxxxx"), and O'Melveny & Xxxxx, LLP ("O'Melveny," and together with
Xxxxxxxx, Xxxxxxxx and Xxxxxxx, the "Firms") has each provided professional
services to Trustor's bankruptcy estate in connection with Trustor's bankruptcy
case.
B. Pursuant to the "Debtor's Third Amended Plan of Reorganization Under
Chapter 11 of the Bankruptcy Code Dated as of September 24, 2001, as Modified"
in Xxxx Xx. XX 00-00000-XX, as confirmed pursuant to an order dated November 5,
2001 (the "Plan"), the administrative claims of each of the Firms (the "Claims')
on account of the fees and costs of the Firms in connection with the services
provided to Trustor's bankruptcy estate have been allowed as set forth in the
Plan. The Firms have agreed to receive payment for the Claims on a deferred
basis pursuant to the terms of the Plan.
C. As a condition to the Firms accepting deferred payment of the Claims,
and pursuant to the Plan, Trustor's obligation to pay the Claims pursuant to the
terms of the Plan is evidenced by (i) that certain Secured Promissory Note,
dated as of the date hereof, executed and delivered by IMT to Agent for the
benefit Hou1ihan, (the "Xxxxxxxx Note"), (ii) that certain Secured Promissory
Note, dated as of the date hereof, executed and delivered by IMT to Agent for
the benefit O'Melveny, (the "O'Melveny Note"); (iii) that certain Secured
D-1
Promissory Note, dated as of the date hereof, executed and delivered by IMT to
Agent for the benefit Xxxxxxxx, (the "Xxxxxxxx Note"); (iv) that certain Secured
Promissory Note, dated as of the date hereof, executed and delivered by IMT to
Agent for the benefit Xxxxxxx (the "Xxxxxxx Note," and together with the
Xxxxxxxx Note, the O'Melveny Note and the Xxxxxxxx Note, the "Notes"). Trustor's
obligations under the Notes are secured by (a) this Deed of Trust, (b) that
certain Deed of Trust, Assignment of Rents and Fixture Filing (Xxxxx Xxxx Road),
dated as of the date hereof, from Trustor to Beneficiary for the benefit of the
Firms (the "Xxxxx Xxxx Deed of Trust) encumbering the real property commonly
known as 00 Xxxxx Xxxx Xxxx, Xxxxxx, Xxxxxxxxxx, as more specifically described
therein; and (c) a UCC-1 financing statement encumbering all equipment owned by
Trustor (the "UCC") from Trustor, as debtor, to Agent for the benefit of the
Firms, as Secured Party. The Plan, to the extent applicable to the Claims, the
Notes, this Deed of Trust, the Xxxxx Xxxx Deed of Trust and the UCC are referred
to herein collectively as the "Documents".
D. Pursuant to the Plan, Trustor borrowed $5,400,000 from Xxxxx Financial
Group, Inc. ("Xxxxx") as evidenced by that certain Fixed Rate Note dated as of
January 3, 2002, executed by Trustor in favor of Xxxxx (the "Xxxxx Notes").
Trustor's obligations under the Xxxxx Note are secured by a first priority deed
of trust (the "Xxxxx Deed of Trust") encumbering the Real Property (defined
below).
E. Concurrent herewith, the Firms are entering into that certain
Intercreditor Agreement, dated as of the date hereof, to provide for the
administration of the collection and distribution of amounts due under the Plan
and the Notes and the enforcement of this Deed of Trust and the UCC (the
"Agreement").
GRANT AND AGREEMENT
-------------------
Trustor irrevocably grants, transfers and assigns to Trustee IN TRUST, WITH
POWER OF SALE, for the benefit of Beneficiary, that real property in Santa
Xxxxxxx County, California, more particularly described on Exhibit A hereto (the
"Real Property"), together with any and all buildings and improvements now or
hereafter erected on the Real Property, all fixtures, all interests, estates or
other claims, both in law and in equity, which Trustor now has or may hereafter
acquire in the Real Property, any and all awards made for the taking by eminent
domain, or by any purchase in lieu thereof, any insurance proceeds with respect
thereto, and all easements, licenses, rights-of-way, appurtenances and other
rights now owned or hereafter acquired by Trustor with respect thereto
(collectively with the Real Property, the "Property").
Trustor absolutely assigns to Beneficiary the rents, issues and profits of the
Property, subject, however, to a license to Beneficiary to collect and apply
such rents, issues and profits for so long as no Event of Default has occurred.
As used herein, "Event of Default" shall mean any failure by Trustor timely to
make any payment or perform any other obligation of Trustor to be made or
performed under the terms of the Documents.
Some of the items of the Property are goods that are or are to become fixtures
or accounts resulting from the sale thereof, and it is intended that, as to
those goods, this Deed of Trust shall be effective as a financing statement
filed as a fixture filing and as a financing statement covering the applicable
Property or accounts resulting from the sale thereof front the date of the
filing for record of this Deed of Trust in the real estate records of the county
in which the Real Property is situated. Information concerning the security
D-2
interest created by this instrument may be obtained from Beneficiary, as secured
party, at the address of Beneficiary stated above. The mailing address of the
Trustor, as debtor, is as stated above.
This Deed of Trust is made for the purpose of securing (l) the full and prompt
payment of all amounts due and owing under the Documents, and extensions or
renewals thereof; (2) the performance of all obligations, of whatever kind or
character, whether fixed or contingent, of the Trustor under the Documents and
all extensions, amendments, modifications, supplements, increases, restatements
and renewals thereof and substitutions therefor, and (3) the payment of all sums
advanced by Beneficiary or Trustee to or for the benefit of Trustor contemplated
hereby and performance of all obligations and covenants of Trustor herein
contained.
The liens and security interests of this Deed of Trust are hereby expressly
made, and by acceptance hereof are acknowledged to be, subordinate and inferior
to the liens, security interests and provisions of the Xxxxx Deed of Trust for
so long as the Xxxxx Deed of Trust and the Xxxxx Note are outstanding and in
full force and effect.
A. To protect the security of this Deed of Trust, and with respect to the
property above described, Trustor agrees:
(1) To keep the Property in good condition and repair; not to remove or demolish
any building thereon; to complete or restore promptly and in good and
workmanlike manner any building which may be constructed, damaged or destroyed
thereon and to pay when due all claims for labor performed and materials
furnished therefor to comply with all laws affecting the Property or requiring
any alterations or improvements to be made thereon; not to commit or permit
waste thereof; not to commit, suffer or permit any act upon the Property in
violation of law; to cultivate, irrigate, fertilize, fumigate, prune and do all
other acts which from the character or use of the Property may be reasonably
necessary, the specific enumerations herein not excluding the general.
(2) To provide, maintain and deliver to Beneficiary casualty and general
commercial liability insurance satisfactory to and with loss payable to
Beneficiary. The amount collected under any insurance policy may be applied by
Beneficiary upon any indebtedness secured hereby and in such order as
Beneficiary may determine, or at option of Beneficiary the entire amount so
collected or any part thereof may be released to Trustor. Such application or
release shall not cure or waive any default or notice of default hereunder or
invalidate any act done pursuant to such notice.
(3) To appear in and defend any action or proceeding purporting to affect the
security hereof or the rights or powers of Beneficiary or Trustee; and to pay
all costs and expenses, including cost of evidence of title and money's fees in
a reasonable sum, in any action or proceeding in which Beneficiary or Trustee
may appear, and in any suit brought by Beneficiary to foreclose this Deed of
Trust.
(4) To pay: (i) at least ten days before delinquency all taxes and assessments
affecting the Property, including assessments on appurtenant water stock; (ii)
D-3
when due, all encumbrances, charges and liens, with interest, on the Property or
any part thereof, which appear to be prior to superior hereto; and (iii) all
costs, fees and expenses of this Trust.
Following an Event of Default, Beneficiary or Trustee, but without obligation so
to do and without notice to or demand upon Trustor or without releasing Trustor
from any obligation hereof, may: make or do the same in such manner and to such
extent as either may deem necessary to protect the security hereof, Beneficiary
or Trustee being authorized to enter upon the Property for such purposes; appear
in and defend any action or proceeding purporting to affect the security hereof
or the rights or powers of Beneficiary or Trustee; pay, purchase, contest or
compromise any encumbrance, charge, or lien which in the judgment of either
appears to be prior or superior hereto; and, in exercising any such powers, pay
necessary expenses, employ counsel and pay his or her reasonable fees.
(5) To pay immediately and without demand all sums so expended by Beneficiary or
Trustee, with interest from date of expenditure at the maximum amount then
allowed by law, and to pay for any statement then provided for by law regarding
the obligation secured hereby, and any amount demanded by the Beneficiary not to
exceed the maximum allowed by law at the time when said statement is demanded.
B. Trustor agrees:
(1) That any award of damages in connection with any condemnation for public use
of or injury to the Property or any part thereof is hereby assigned and shall be
paid to Beneficiary who may apply or release such moneys received by it in the
same manner and with the same effect as above provided for disposition of
proceeds of casualty or other insurance.
(2) That by accepting payment of any sum secured hereby after its due date,
Beneficiary does not waive its right either to require prompt payment when due
of all other aunts so secured or to declare default for failure so to pay.
(3) That at any time or from time to time, without liability therefor and
without notice, upon written request of Beneficiary and presentation of this
Deed of Trust, and without affecting the personal liability of any person for
payment of the indebtedness secured hereby, Trustee may: reconvey any part of
the Property consent to the making of any map or plat thereof; join in granting
any easement thereon; or join in any extension agreement or any agreement
subordinating the lien or charge hereof.
(4) That upon written request of Beneficiary stating that all sums secured
hereby have been paid, and upon surrender of this Deed of Trust to Trustee for
retention or other disposition as Trustee in its sole discretion may choose and
upon payment of its fees, Trustee shall reconvey, without warranty, the property
then held hereunder. The recitals in such reconveyance of any matters or facts
shall be conclusive proof of the truthfulness thereof. The grantee in such
reconveyance may be described as "the person or persons legally entitled
thereto."
(5) That upon any Event of Default, Beneficiary may at any time without notice,
either in person, by agent, or by a receiver to be appointed by a court, and
without regard to the adequacy of any security for the indebtedness hereby
secured, enter upon and take possession of the Property or any part thereof, in
D-4
its own name xxx for or otherwise collect such rents, issues, and profits,
including those past due and unpaid, and apply the same, less costs and expenses
of operation and collection, including reasonable attorney's fees, upon any
indebtedness secured hereby, and in such order as Beneficiary may determine. The
entering upon and taking possession of the Property, the collection of such
rents, issues and profits and the application thereof as aforesaid, shall not
cure or waive any default or notice of default hereunder or invalidate any act
done pursuant to such notice.
(6) That upon any Event of Default, Beneficiary may declare all sums secured
hereby immediately due and payable by delivery to Trustee of written declaration
of default and demand for sale and of written notice of default and of election
to cause the Property to be sold, which notice Trustee shall cause to be filed
for record. Beneficiary also shall deposit with Trustee this Deed of Trust and
all documents evidencing expenditures secured hereby.
After the lapse of such time as may then be required by law following the
recordation of said notice of default, and notice of sale having been given as
then required by law, Trustee, without demand on Trustor, shall sell the
Property at the time and place fixed by it in said notice of sale, either as a
whole or in separate parcels, and in such order as it may determine, at public
auction to the highest bidder for cash in lawful money of the United States,
payable at time of sale. Trustee may postpone sale of all or any portion of the
Property by public announcement at such time and place of sale, and from time to
time thereafter may postpone such sale by public announcement at the time fixed
by the preceding postponement. Trustee shall deliver to such purchaser its deed
conveying the Property so sold, but without any covenant or warranty, express or
implied. The recitals in such deed of any matters or facts shall be conclusive
proof of the truthfulness thereof. Any person, including Trustor, Trustee, or
Beneficiary as hereinafter defined, may purchase at such sale.
After deducting all costs, fees and expenses of Trustee and of this Trust,
including cost of evidence of title in connection with sale, Trustee shall apply
the proceeds of sale to payment of all sums expended under the terms hereof, not
then repaid, with accrued interest at the maximum amount allowed by law in
effect at the date hereof; all other sums then secured hereby, and the
remainder, if any, to the person or persons legally entitled thereto.
(7) Beneficiary, or any successor in ownership of any indebtedness secured
hereby, may from time to time, by instrument in writing, substitute a successor
or successors to any Trustee named herein or acting thereunder, which
instrument, executed by the Beneficiary and duly acknowledged and recorded in
the office of the recorder of the county where the Real Property is situated,
shall be conclusive proof of proper substitution of such successor Trustee or
Trustees, who shall, without conveyance from the Trustee predecessor, succeed to
all its title, estate, tights, powers and duties. Said instrument must contain
the name of the original Trustor, Trustee and Beneficiary hereunder, the book
and page where this Deed of Trust is recorded and the name and address of the
new Trustee.
(8) That this Deed of Trust applies to, inures to the benefit of, and binds all
parties hereto, their community property, heirs, legatees, devisees,
administrators, executors, successors, and assigns. The term Beneficiary shall
mean the owner or holder, including pledgees, of the Documents, whether or not
named as Beneficiary herein. In this Deed of Trust, whenever the context so
D-5
requires, the masculine gender includes the feminine and/or the neuter, and the
singular number includes the plural.
(9) The Trustee accepts this Trust when this Deed of Trust, duly executed and
acknowledged, is made a public record as provided by law. Trustee is not
obligated to notify any party hereto of pending sale under any other Deed of
Trust or of any action or proceeding in which Trustor, Beneficiary or Trustee
shall be a party unless brought by Trustee.
(10) That in the event of any transfer or further encumbrance of the Property or
interest therein or portion thereof or of any interest in Trustor, direct or
indirect, voluntary or involuntary, without the prior written consent of
Beneficiary, Beneficiary shall have the absolute right at its option, without
prior demand or notice, to declare all sums secured hereby immediately due and
payable. Consent to one such transaction shall not be deemed to be a waiver of
the right to require consent to future or successive transactions.
Beneficiary may charge for a statement regarding the obligation secured hereby,
which charge shall not exceed the maximum allowed by law.
The undersigned Trustor, requests that a copy of any notice of default and any
notice of sale hereunder be mailed to Trustor at its address hereinbefore set
forth.
INNOVATIVE MICRO TECHNOLOGY,
A Delaware corporation (formerly known as
Applied Magnetics Corporation)
By: /s/ Xxxx Xxxxxx
-----------------
Name: Xxxx Xxxxxx
-------------
Title: Chief Executive Officer
-------------------------
STATE OF CALIFORNIA )
) ss.:
COUNTY OF SANTA XXXXXXX )
On March 14, 2002, before me, a Notary Public in and for said County and State,
personally appeared Xxxx Xxxxxx personally known to me (or proved to me on the
basis of satisfactory evidence) to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or the entity upon
behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
Xxxxxxx Xxxxxxxx [Seal]
------------------------------------
D-6
EXHIBIT A
---------
LEGAL DESCRIPTION
That portion of Ranchos Los Dos Pueblos, in the County of Santa Xxxxxxx, State
of California, described as follows:
Beginning at the Southeasterly corner of the tract of land described
in the deed to Raytheon Manufacturing Company, recorded February 28, 1957 as
Instrument No. 4219 in Book 1432, Page 370 of Official Records, records of said
County, being a point on the Northerly line of Hollister Avenue, as shown on a
map of survey filed in Book 24 at Page 52 of Record of Survey, in the Office of
the County Recorder of said County; thence leaving Northerly line of Hollister
Avenue and following along the Easterly line of said Raytheon Tract of land,
North 3 degrees 22'25" West, 507.70 feet to a point from which the Northeasterly
corner thereof bears North 3 degrees 22'25" West, 306.84 feet; thence, leaving
said Easterly line of said Raytheon Tract of land parallel with the Northerly
line of said Hollister Avenue and distant 500.00 feet Northerly therefrom
measured at right angles thereto, North 76 degrees 38' East, 70.29 feet; thence,
continuing parallel with the Northerly line of Hollister Avenue and distant
500.00 feet Northerly therefrom measured at right angles thereto, North 74
degrees 19' East at 532.75 feet the Southwesterly corner of the tract of land
described in the deed to Xxxxxx-Xxxxxxx Corporation, a Nevada Corporation,
recorded July 21,1958 as Instrument No. 17238 in Book 1541 at Page 61 of
Official Records, records of said County, 932.75 feet to the Southeasterly
corner of said last mentioned tract of land on the Westerly line of La Xxxxxx
Xxxx 00 feet in width, as described in the deed to County of Santa Xxxxxxx,
recorded in Book 39 Page 385 of Deeds, records of said County; thence along said
Westerly line of said Xx Xxxxxx Road, South 10 degrees 51'30" East, 501.78 feet
to the Northerly line of Hollister Avenue; thence along said Northerly line,
South 740.19' West, 900.65 feet to an angle point therein; thence South 76
degrees 38' West, 168.50 feet to the point of beginning.
Excepting therefrom that portion thereof described in the deed to
the County of Santa Xxxxxxx, recorded December 7, 1962 as Instrument No. 51965
in Book 1966 at Page 463 of Official Records.
Also excepting therefrom one-half of any and all oil, gas and other
hydrocarbon substances within and under the above described property more than
500 feet beneath the surface thereof and/or producible therefrom or
therethrough, without, however, any surface rights or tight of surface entry
with respect thereto, as reserved in deed from Xxxxx Xxxxxxxx, Jr., as Executor
of the Will of Xxxxx X. Xxxxxxxx, deceased, recorded January 7, 1961 as
Instrument No. 2800 in Book 1820, Page 50 of Official Records.
APN # 00-000-00
Commonly known as:
0000 Xxxxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxx 00000
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Schedule I
----------
Claims and Pro Rata Shares
--------------------------------------------------------------------------------
FIRM CLAIM PRO RATA SHARES
--------------------------------------------------------------------------------
Xxxxxxxx $1,383,777.00 33.45%
--------------------------------------------------------------------------------
O'Melveny $850,000.00 20.55%
--------------------------------------------------------------------------------
Xxxxxxxx $699,580.77 16.91%
--------------------------------------------------------------------------------
Xxxxxxx $1,203,560.76 29.09%
--------------------------------------------------------------------------------
Total Claims: $4,136,918.53 100.00%
--------------------------------------------------------------------------------
D-8
