Exhibit 10.20
BUILD TO SUIT LEASE
BY AND BETWEEN
MICRON TECHNOLOGY, INC., a Delaware corporation,
as landlord
AND
PHOTRONICS, INC., a Connecticut corporation,
as tenant
BUILD TO SUIT LEASE
BY AND BETWEEN
MICRON TECHNOLOGY, INC., a Delaware corporation,
------------------------------------------------
as landlord
AND
PHOTRONICS, INC. a Connecticut corporation,
as tenant
Dated: May ____, 2006
INDEX
Page
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ARTICLE I. DEFINITIONS.........................................................1
ARTICLE II. DEMISE.............................................................8
ARTICLE III. PREMISES..........................................................8
Section 3.1 Premises Defined...........................................8
Section 3.2 Reservation of Oil, Gas, Mineral and Water Rights..........9
Section 3.3 Permitted Exceptions.......................................9
ARTICLE IV. TERM..............................................................10
Section 4.1 Length of Term............................................10
Section 4.2 Lease Commencement Date and Rent Commencement Date........11
Section 4.3 Conveyance to Photronics Upon Expiration of Lease
Term or Prepayment; Micron Right of First Refusal..............11
ARTICLE V. RENT...............................................................11
Section 5.1 Base Rent.................................................11
Section 5.2 Rent Defined; Additional Rent.............................12
Section 5.3 Lease Prepayment; Principal Reduction Payments............13
ARTICLE VI. TAXES.............................................................15
Section 6.1 Real Property Taxes.......................................15
Section 6.2 Separate Tax Parcel.......................................16
Section 6.3 Other Taxes...............................................17
Section 6.4 Right to Contest..........................................17
ARTICLE VII. CONDUCT OF BUSINESS BY PHOTRONICS................................17
Section 7.1 Use of Premises...........................................17
Section 7.2 Restrictions on Use.......................................18
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Section 7.3 Contest of Requirements...................................19
Section 7.4 Exterior Signs and Sign Monument(s).......................19
ARTICLE VIII. MAINTENANCE, REPAIRS AND ALTERATIONS............................20
Section 8.1 Micron's Obligations......................................20
Section 8.2 Photronics' Obligations...................................20
Section 8.3 Alterations and Additions.................................21
ARTICLE IX. INSURANCE; INDEMNITY..............................................22
Section 9.1 Liability Insurance.......................................22
Section 9.2 Casualty Insurance - Fixtures, Mask Shop Equipment,
Personal Property and Photronics' Improvements.................23
Section 9.3 Insurance Policies........................................24
Section 9.4 Waiver of Subrogation.....................................24
Section 9.5 Indemnity.................................................25
Section 9.6 Exemption of Micron.......................................25
Section 9.7 Notices...................................................26
Section 9.8 Builder's Risk Insurance to be Maintained by Micron.......26
ARTICLE X. DAMAGE OR DESTRUCTION AND APPROPRIATION............................26
Section 10.1 Damage or Destruction....................................26
Section 10.2 Appropriation............................................28
Section 10.3 Termination of Lease upon Substantial Casualty
or Substantial Appropriation...................................29
Section 10.4 No Micron Liability for Casualty or Appropriation........30
ARTICLE XI. ASSIGNMENT AND SUBLETTING.........................................30
Section 11.1 Micron's Rights..........................................31
Section 11.2 No Release of Photronics.................................31
ARTICLE XII. RESERVED.........................................................32
ARTICLE XIII. UTILITY SERVICES................................................32
Section 13.1 Utility Charges..........................................32
Section 13.2 Interruption of Service..................................32
ARTICLE XIV. DEFAULTS AND REMEDIES............................................32
Section 14.1 Defaults.................................................32
Section 14.2 Remedies.................................................33
Section 14.3 Determination of Rent....................................34
Section 14.4 Default by Micron........................................35
Section 14.5 Expense of Litigation....................................35
Section 14.6 Holding Over.............................................35
Section 14.7 Micron's Rights..........................................35
Section 14.8 Third-Party Litigation...................................36
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ARTICLE XV. HAZARDOUS MATERIALS...............................................36
ARTICLE XVI. IMPROVEMENT OF THE PREMISES......................................40
Section 16.1 Timeline; Commitment for Equipment Financing;
Coordination...................................................40
Section 16.2 Micron's Work............................................40
Section 16.3 Photronics' Work.........................................42
Section 16.4 Warranties and Guaranties................................42
ARTICLE XVII. MISCELLANEOUS...................................................43
Section 17.1 Offset Statement.........................................43
Section 17.2 Micron's Right of Access.................................43
Section 17.3 Transfer of Micron's Interest............................44
Section 17.4 Separability.............................................44
Section 17.5 Interest on Past Due Obligations.........................44
Section 17.6 Time of Essence..........................................45
Section 17.7 Construction; Interpretation.............................45
Section 17.8 Incorporation of Prior Agreements; Amendments............46
Section 17.9 Notices..................................................46
Section 17.10 Brokers.................................................47
Section 17.11 Waivers.................................................47
Section 17.12 Liens...................................................47
Section 17.13 Subordination...........................................48
Section 17.14 Force Majeure...........................................49
Section 17.15 Yield Up Premises; Quitclaim............................49
Section 17.16 Survival of Indemnities.................................50
Section 17.17 Security Deposit........................................50
Section 17.18 No Option...............................................50
Section 17.19 Micron Liability........................................50
Section 17.20 Termination.............................................51
Section 17.21 Accord and Satisfaction.................................52
Section 17.22 Counterparts............................................52
Section 17.23 Building Security.......................................53
Section 17.24 Publicity...............................................53
Section 17.25 Governing Law...........................................53
Section 17.26 Rights and Remedies Cumulative..........................53
Section 17.27 Dispute Resolution......................................54
Section 17.28 Third-Party Beneficiaries...............................54
Section 17.29 No Recording............................................54
Section 17.30 Quiet Enjoyment.........................................54
EXHIBIT A - Plot Plan of Land EXHIBIT B - Legal Description of Land EXHIBIT C - Form of Special Warranty Deed EXHIBIT D-1 - Form of Lease Payment Schedule EXHIBIT D-2 - Sample Lease Payment Schedule (for Illustrative Purposes Only) EXHIBIT E - Timeline
iii
EXHIBIT F - Reserved EXHIBIT G - Core and Shell Work and Related Work EXHIBIT H - Form of Memorandum of Lease EXHIBIT I - Form ofMemorandum of Cancellation of Lease
iv
BUILD TO SUIT LEASE
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THIS BUILD TO SUIT LEASE ("Lease") is made and entered into as of May ___, 2006, by and between MICRON TECHNOLOGY, INC., a Delaware corporation ("Micron") and PHOTRONICS, INC., a Connecticut corporation ("Photronics") (each a "Party" and collectively the "Parties").
RECITALS
(a) Micron and Photronics are each in the business of the development, fabrication and sale of photomasks.
(b) Pursuant to certain Transaction Documents (defined in Article I hereof), Micron and Photronics have entered into certain contracts with each other with respect formation and operation of the Company dedicated to the development, fabrication and sale of advanced photomasks for Micron and Photronics.
(c) In order for Photronics to obtain a facility qualified to produce the advanced photomasks for Micron pursuant to the requirements of said Transaction Documents, Micron and Photronics desire to enter into this Lease for the development, construction, leasing, equipping and ultimate conveyance to Photronics of a qualified "mask shop" production facility, subject and pursuant to the terms and conditions herein set forth.
ARTICLE I.
DEFINITIONS
"additional rent" shall have the meaning set forth in Section 5.2.
"Affiliate" of any specified Person means any other Person Controlling or Controlled by or under common Control with such specified Person.
"Alterations" shall have the meaning set forth in Section 8.3(a).
"Applicable Laws" shall mean all present and future laws, ordinances, orders, rules, regulations and requirements of all governmental authorities having jurisdiction over the Premises, Micron or Photronics and the requirements of any applicable insurance underwriters, all of the foregoing applicable to the ownership, development, use, occupancy and maintenance of the Premises and any certificates of occupancy issued for the Premises.
"Applicable Lease Prepayment Date" shall have the meaning set forth in Section 5.3(a)(ii).
"Appropriation" shall mean any taking of or damage to all or any part of the Premises by reason of any exercise of the power of eminent domain, whether by condemnation proceedings or otherwise, or any transfer of all or any part of the Premises made in avoidance of an exercise of the power of eminent domain.
1
"Appropriation Award" means any award(s) paid or payable (whether or not in a separate award) to either Party after the Lease Commencement Date because of or as compensation for any Appropriation, including: (1) any award made for any improvements that are the subject of the Appropriation; (2) the full amount paid or payable by the condemning authority for the estate that is the subject of the Appropriation, as determined in Appropriation; (3) any interest on such award; and (4) any other sums payable on account of such Appropriation.
"Appropriation Effective Date" shall mean, for any Appropriation, the first date when the condemning authority has acquired title to or possession of any Premises subject to the Appropriation.
"Base Rent" shall have the meaning set forth in Section 5.1(a).
"Building" shall mean a single building (unless otherwise mutually approved by the Parties) containing approximately [****] of rentable floor area and functionally similar to Micron's Existing Mask Shop.
"Business Day" shall mean any weekday on which State-chartered banks are open to conduct regular business with bank personnel.
"Capacity Commitment" shall have the meaning ascribed in the Photronics to Micron Supply Agreement.
"Casualty" shall mean any damage or destruction of any kind or nature, ordinary or extraordinary, foreseen or unforeseen, affecting the Building, leasehold improvements and Photronics' Improvements, whether or not insured or insurable.
"City" shall mean the city or municipality in which the Land is located.
"Closing Documents" shall have the meaning set forth in Section 4.3(a).
"Code" shall mean the United States Bankruptcy Code (11 U.S.C., Sec. 101 et seq.).
"Company" shall mean MP Mask Technology Center, LLC, a Delaware limited liability company.
"Company Operating Agreement" shall mean that certain Limited Liability Company Operating Agreement of MP Mask Technology Center, LLC dated of even date herewith between Micron and Photronics.
"Contribution and Purchase Agreement" shall mean that certain Contribution and Units Purchase Agreement of even date herewith between the Parties.
2 **** Material omitted pursuant to a request for confidential treatment under Rule 24b-2 of the Exchange Act of 1934. Material filed separately with the Securities and Exchange Commission.
"Control" shall mean the possession, directly or indirectly, of either: (a) at least fifty-one percent (51%) direct or indirect ownership of the equity interests of a Person; or (b) the power to direct or cause the direction of the management and policies of such Person, whether by ownership of equity interests, by contract, or otherwise.
"Copy Exact" shall have the meaning ascribed in the Technology License Agreement.
"Core and Shell Work" shall have the meaning set forth in Section 16.2(b).
"Default" shall have the meaning set forth in Section 14.1.
"Default Rate" shall mean the maximum rate of interest then permitted to be charged pursuant to applicable usury laws but not to exceed fifteen percent (15%) per annum simple interest.
"Default Termination Security" shall have the meaning set forth in Section 5.3(a)(iii).
"Depository" shall mean the escrow services department of a nationally recognized title insurance company such as Chicago Title Insurance Company.
"Development Costs" shall have the meaning set forth in Section 5.1(a).
"Development Cost Notice" shall have the meaning set forth in Section 5.1(c).
"DEQ" shall have the meaning set forth in Section 16.2(d).
"Environmental Law" shall mean any Applicable Law about the following at, in, under, above, or upon the Premises: (a) air, water, land, ground water, or soil conditions; or (b) clean-up, control, disposal, generation, storage, release, transportation, or use of, or liability or standards of conduct concerning hazardous materials.
"Existing Mask Shop" shall mean the Company's mask shop facility located in Boise, Idaho as originally constructed, which current facility is being contributed to the Company by Micron pursuant to the Contribution and Purchase Agreement.
"Form of Special Warranty Deed" shall mean the Form of Special Warranty Deed attached hereto as Exhibit "C".
"hazardous materials" shall mean (a) asbestos, radioactive materials, polychlorinated biphenyls, urea formaldehyde, and all petroleum substances, and (b) all hazardous materials, hazardous wastes and hazardous or toxic substances defined in or subject to control or regulation by the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (42 U.S.C., Sec. 9601 et seq.) ("CERCLA"), the Resource Conservation and Recovery Act, as amended (42 U.S.C., Sec. 6901 et seq.), the Toxic
3 **** Material omitted pursuant to a request for confidential treatment under Rule 24b-2 of the Exchange Act of 1934. Material filed separately with the Securities and Exchange Commission.
Substances Control Act, as amended (15 U.S.C. Sec. 2601 et seq.), the Clean Water Act (33 U.S.C. Sections 1321 et seq.), the Clean Air Act (42 U.S.C. Sections 7412, et seq.), the Emergency Planning and Community Right-to-Know Act (42 U.S.C. Sections 11001 et seq.), the Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. Sections B6 et seq.), the Occupational Safety and Health Act (29 U.S.C. Sections 651 et seq.) or the Safe Drinking Water Act (42 U.S.C. Sections 300f et seq.) and analogous state laws.
"Improvements" shall mean collectively the Micron Improvements and the Photronics' Improvements.
"Land" shall mean the real property located in the Boise, Idaho area, as shall be reasonably determined by Micron (subject to Photronics' approval rights pursuant to Section 16.2(e)), together with all easements, rights and other appurtenances thereto.
"Lease" shall have the meaning set forth in the Preamble.
"Lease Commencement Date" shall have the meaning set forth in Section 4.2(a).
"Lease Payment Schedule" shall have the meaning set forth in Section 5.1(a).
"Lease Prepayment" shall have the meaning set forth in Section 5.3(a).
"leasehold improvements" means collectively, the Building and all Alterations (inclusive of applicable Micron Improvements and Photronics' Improvements) which may be made or installed in, on, under or upon the Premises or any improvements thereon and which are attached to the floor, walls or ceiling of any improvements on the Premises and cannot be removed without material damage to the Building, and any floor covering which is cemented or otherwise affixed to the floor of any improvements on the Premises and cannot be removed without material damage to the Building.
"Liabilities" shall have the meaning set forth in Section 9.5.
"Loss" means any Casualty or Appropriation.
"Mask Shop Equipment" shall have the meaning set forth in Section 16.3(b).
"Micron" shall have the meaning set forth in the Preamble.
"Micron Improvements" shall mean the improvements to be constructed upon the Land pursuant to Article XVI hereof consisting of the Building, together with all landscaping, lighting, parking, and other improvements constructed by Micron pursuant to Article XVI below as a part of the Premises. As used herein, the term "Micron Improvements" shall not include any Photronics' Improvements constructed by Photronics pursuant to Article XVI, any alterations made or constructed by Photronics pursuant to Section 8.3, or any furniture, fixtures, equipment (including without limitation the Mask Shop Equipment) and/or miscellaneous personal property of Photronics.
4 **** Material omitted pursuant to a request for confidential treatment under Rule 24b-2 of the Exchange Act of 1934. Material filed separately with the Securities and Exchange Commission.
"Micron Party" and "Micron Parties" shall have the meaning set forth in Article XV.
"Micron Retained Rights" shall have the meaning set forth in Section 3.2.
"Micron's Work" shall have the meaning set forth in Section 16.2(a).
"No Default Lease Prepayment Date" shall have the meaning set forth in Section 5.3(a)(i).
"Non-Restricted Default" shall mean any Default which (a) can be cured by the payment of money alone (and which is so cured) AND the nature of the breach giving rise to the Default is not such that potential residual liability to Micron might reasonably be expected to arise after transfer to Photronics of fee title to the Premises, or (b) [****].
"Non-Restricted Prepayment Date" shall have the meaning set forth in Section 5.3(a)(ii).
"Party" or "Parties" shall have the meaning set forth in the Preamble.
"Permitted Alterations" shall have the meaning set forth in
Section 8.3(a). "Permitted Change in Control Transfer" shall have
the meaning set forth in Section 11.1(b)(i).
"Permitted Development Easements" shall have the meaning set forth in Section 3.3(b).
"Permitted Exceptions" shall have the meaning set forth in Section 3.3(a).
"Permitted Photronics Change in Control" shall have the meaning ascribed in the Company Operating Agreement.
"Permitted Use" shall mean the operation of a facility dedicated to the fabrication of advanced photomasks, in compliance with the Transaction Documents and activities directly ancillary thereto, all in accordance with all Applicable Laws.
"Person" means any association, corporation, Government, individual, joint venture, joint-stock company, limited liability company, partnership, trust, unincorporated organization, or other entity of any kind. (This does not limit any Transfer restriction).
"Photronics" shall have the meaning set forth in the Preamble.
"Photronics' Improvements" shall have the meaning set forth in Section 16.3(b).
"Photronics to Micron Supply Agreement" shall mean that certain Photronics to Micron Supply Agreement of even date herewith by and between the Parties.
5 **** Material omitted pursuant to a request for confidential treatment under Rule 24b-2 of the Exchange Act of 1934. Material filed separately with the Securities and Exchange Commission.
"Photronics' Party" and "Photronics' Parties" shall have the meaning set forth in Article XV.
"Photronics' Property" shall have the meaning set forth in Section 8.3(b).
"Photronics' Signage" shall have the meaning set forth in Section 7.4(a).
"Photronics' Work" shall have the meaning set forth in Section 16.3(b).
"Premises" shall have the meaning set forth in Section 3.1.
"Prepayment Restricted Default" shall mean any Default which is not a Non-Restricted Default.
"Principal Reduction Payment" shall mean the partial prepayment of a portion of the outstanding principal balance of the Base Rent pursuant to the terms and conditions of Section 5.3(b).
"Prohibited Lien" means any mechanic's, vendor's, laborer's, or material supplier's statutory lien or other similar lien arising from work, labor, services, equipment, or materials supplied, or claimed to have been supplied, to Photronics or any subtenant (or anyone claiming through either), which lien attaches to the fee estate.
"Property Insurance Proceeds" means proceeds of insurance to be maintained by Photronics pursuant to Section 9.2 and, prior to the date of Substantial Completion for Rent Commencement, proceeds of insurance to be maintained by Micron pursuant to Section 9.8.
"Qual Period End Date" means [****].
"Qualification" and "Qualified" shall have the meaning of the term "Qualified" set forth in the Photronics to Micron Supply Agreement. "Re-qualification" and "Re-qualified" shall have the same meaning.
"real property taxes" shall mean (i) all taxes, assessments and governmental charges and surcharges, (including, without limitation, assessments for public improvements or benefits whether or not commenced or completed during the term, water, sewer, storm drains and other rents, rates and charges, excises, levies, license fees, use fees, permit fees and other authorization fees) and all other charges (in each case whether general or special, ordinary or extraordinary, foreseen or unforeseen) of every kind and character (including all penalties and interest thereon), levied upon or with respect to the Premises, during the term, (ii) any tax or excise on or measured by rents, and (iii) any other tax, however described, levied against Micron on account of the rent reserved hereunder or on the business of renting the Premises. Provided, however, that the term "real property taxes" shall not include any franchise, estate, inheritance, succession, capital levy, net income or excess profits taxes imposed upon Micron except that in the event that real property taxes are withdrawn in whole or in part or any substitute tax is made therefor or for any increase therein, such tax shall in any event for the purpose of this Lease be
6 **** Material omitted pursuant to a request for confidential treatment under Rule 24b-2 of the Exchange Act of 1934. Material filed separately with the Securities and Exchange Commission.
considered a real property tax regardless of how denominated or the source from which it is collected.
"Related Work" shall have the meaning set forth in Section 16.2(a).
"Release" means any accidental or intentional spilling, leaking, pumping, pouring, emitting, discharging, injecting, escaping, leaching, migrating, dumping or disposing in, over, on, under, through, or about the air, land, surface water, ground water, or the environment (including without limitation the abandonment or discarding of receptacles containing any hazardous materials), unless and to the extent permitted or authorized by a governmental agency.
"rent" shall have the meaning set forth in Section 5.2.
"Rent Commencement ...
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