AMENDMENT TO LOAN AGREEMENT
This Amendment to Loan Agreement is made as of September 13, 1993 by and
between Chips and Technologies, Inc. (the "Borrower") and Silicon Valley Bank
("Silicon" or "Bank"). The parties agree to amend the Loan and Security
Agreement between them, dated December 19, 1991 (the "Loan Agreement")
further modified by that certain Amendment to Loan Agreement dated September
30, 1992, as follows, effective on the date hereof. (Capitalized terms used
but not defined in this Amendment, shall have the meanings set forth in the
Loan Agreement).
1. MODIFICATION OF CREDIT LIMIT. The first sentence of the section of
the Schedule to Loan Agreement entitled "Credit Limit (Section 1.1)" is
hereby deleted and replaced with the following:
Credit Limit
(Section 1.1) $5,000,000.00; the Credit Limit shall be the lesser of (i)
$5,000,000.00 at any one time outstanding; or (ii) 75% of
the Net Amount of Borrower's accounts, which Bank in its
discretion deems eligible for borrowing.
2. MODIFICATION OF LOAN ORIGINATION FEE. The section of the Schedule
to Loan Agreement entitled "Loan Origination Fee (Section 1.3)" is hereby
deleted and replaced with the following:
Loan Fee
(Section 1.3) $25,000.00 per annum
3. MODIFICATION OF MATURITY DATE. The section of the Schedule to Loan
Agreement entitled "Maturity Date (Section 5.1)" is hereby deleted and
replaced with the following:
Maturity Date
(Section 5.1) October 5, 1994
4. MODIFICATION TO INTEREST RATE. The section of the Schedule to Loan
Agreement entitled "Interest Rate (Section 1.2)" is hereby deleted and
replaced with the following:
Interest Rate
(Section 1.2) A rate equal to 1.000 percentage point over the "Prime Rate"
in effect from time to time. Interest shall be calculated
in the basis of a 360-day year for the actual number of days
elapsed. "Prime Rate" means the rate announced from time to
time by Bank as its "prime rate"; it is a base rate upon
which other rate charged by Bank are
based, and it is not necessarily the best rate available at
Bank. The interest rate applicable to the Obligations shall
change on each date there is a change in the Prime Rate.
5. MODIFICATION OF FINANCIAL COVENANTS. The section of the Schedule
to Loan Agreement entitled "Financial Covenants (Section 4.1)" is hereby
deleted and replaced with the following:
Financial
Covenants
(Section 4.1) Borrower shall comply with all of the following covenants.
Compliance shall be determined as of the end of each month,
except as otherwise specifically provided below:
QUICK ASSET RATIO: Borrower shall maintain a ratio of
"Quick Assets" to current liabilities of not less than .9 to
1.00.
CURRENT ASSET RATIO: Borrower shall maintain a ratio of
"Current Assets" to current liabilities of not less than
1.25 to 1.0.
TANGIBLE NET WORTH: Borrower shall maintain a tangible net
worth of not less than $20,000,000.00.
DEBT TO TANGIBLE NET WORTH RATIO: Borrower shall maintain a
ratio of total liabilities to tangible net worth of not more
than 1.25 to 1.00.
PROFITABILITY: Borrower shall not incur a loss (after
taxes) for the fiscal quarter ending September 30, 1993 in
excess of $4,500,000.00 nor shall Borrower incur a loss
(after taxes) for the fiscal quarter ending December 31,
1993 in excess of $250,000.00, ending March 31, 1994 of
$700,000.00. Borrower shall maintain a minimum profit for
the fiscal quarter ending June 30, 1994 of $800,000.00.
MINIMUM CASH. Borrower shall maintain minimum cash, for the
fiscal quarter ending September 30, 1993 of $12,000,000.00,
for the quarter ending December 31, 1993 of $9,000,000.00,
for the quarter ending March 31, 1993 of $8,000,000.00, and
for the quarter ending June 30, 1994 of $8,000,000.00.
DEFINITIONS: "Current Assets" means cash, accounts
receivable, inventory and other assets likely to be
converted into cash within one calendar year.
6. MODIFICATIONS TO EVENTS OF DEFAULT. The section of the Loan and
Security Agreement entitled "Events of Default (Section 6.1)" is hereby
amended as follows:
Events of
Defaults
(Section 6.1) (b) the Borrower shall fail to pay when due any Loan or any
interest thereon or any other monetary Obligations;
(e) the Borrower shall fail to pay or perform any other non-
monetary Obligation;
(f) any levy, assessment, seizure, lien or encumbrance is
made on all or any part of the Collateral;
All other terms and conditions shall remain the same.
7. OTHER COVENANTS. Paragraph 4 of the section entitled "Other
Covenants (Section 4.1) of the Amendment to Loan Agreement dated September
30, 1992, is hereby deleted and replaced with the following and a new
paragraph 5 as set forth below is hereby added hereto after the current
paragraph 4:
4. REQUIRED BALANCES. Borrower agrees to maintain the following
balances with the Bank: (a) average money
market balance of not less than $1,500,000.00
at all times, and (b) an average net free
collected demand deposit balance of not less
than $500,000.00 at all times.
5. REQUEST TO DEBIT Borrower will regularly deposit all funds
ACCOUNT received from its business activities in
accounts maintain by Borrower at Silicon
Valley Bank. Borrower hereby requests and
authorizes Bank to debit any of Borrower
accounts with Bank, specifically, without
limitation, Account Number __________________,
for payments of interest and principal due on
the loan and any other obligations owing by
Borrower to Bank. Bank will notify Borrower
of all debits which Bank makes against
Borrower's accounts. Any such debits against
Borrower's accounts in no way shall be deemed
a setoff.
8. LINE OF CREDIT FOR ISSUANCE OF LETTERS OF CREDIT. Bank has issued
to Borrower a new line of credit in the amount of $3,000,000.00 (the "LC
Credit Limit") to be utilized for standby and commercial letters of credit
(the "New Letters of Credit") issued by Silicon or other banks by Silicon
(the "Issuer") for the account of the Borrower. In no event may the total
New Letters of Credit outstanding at anytime exceed $3,000,000.00. The LC
Credit Limit available at any time shall be reduced by the total amount of
all outstanding New Letters of Credit; provided, that the total amount of all
outstanding New Letters of Credit shall not affect the Credit Limit.
The Borrower shall execute all standard form letter of credit
applications and agreements of the Issuer in connection with the New Letters
of Credit, and without limiting any of the terms of such applications and
agreements, the Borrower shall pay all standard fees and amounts drawn on any
New Letters of Credit prior to the day the Issuer is required to make payment
under the New Letter of Credit. The New Letters of Credit shall have
expiration dates no later than the Maturity Date (October 5,1994).
9. GENERAL PROVISIONS. This Amendment, the Loan Agreement, any prior
written amendments to the Loan Agreement signed by Bank and the Borrower, and
the other written documents and agreements between Bank and the Borrower set
forth in full of the representations and agreements of the parties with
respect to the subject matter hereof and supersede all prior discussions,
representations, agreements and understandings between the parties with
respect to the subject hereof. Except as herein expressly amended, all of
the terms and provisions of the Loan Agreement, and all other documents and
agreements between Bank and the Borrower shall continue in full force and
effect and the same are hereby ratified and confirmed. Capitalized terms
used herein shall have the definitions given them in the Loan Agreement
unless otherwise defined herein.
CHIPS AND TECHNOLOGIES, INC. SILICON VALLEY BANK
By:____________________ By:____________________
Name:_________________ Name:__________________
Title:__________________ Title:___________________
PROMISSORY NOTE
=============================================================================
BORROWER: CHIPS AND TECHNOLOGIES, INC. LENDER: Silicon Valley Bank
3050 Zanker Road 3000 Lakeside Drive
San Jose, CA 95134 P.O. Box 3762
Santa Clara, CA 95054
=============================================================================
PRINCIPAL AMOUNT: $3,000,000.00 INITIAL RATE: 6.000% DATE OF
NOTE: SEPTEMBER 13, 1993
PROMISE TO PAY. CHIPS AND TECHNOLOGIES, INC. ("Borrower") promises to pay
Silicon Valley Bank ("Lender"), or order, in lawful money of the United
States of America, the principal amount of Three Million & 00/100 Dollars
($3,000,000.00) or so much as may be outstanding, together with interest on
the unpaid outstanding principal balance of each advance. Interest shall be
calculated from the date off each advance until repayment of each advance.
PAYMENT. Borrower will pay this loan in one payment of all outstanding
principal plus all accrued unpaid interest on October 5, 1994. In addition,
Borrower will pay regular monthly payments of accrued unpaid interest
beginning October 5, 1993, and all subsequent interest payments are due on
the same day of each month after that. Interest on this note is computed on
a 365/360 simple interest basis; that is, by applying the ratio of the annual
interest rate over a year of 360 days, times the outstanding principal
balance, times the actual number of days the principal balance is
outstanding. Borrower will pay Lender at Lender's address shown above or at
such other place as Lender may designate in writing. Unless otherwise agreed
or required by applicable law, payments will be applied first to accrued
unpaid interest, then to principal, and any remaining amount to any unpaid
collection costs and late charges.
VARIABLE INTEREST RATE. The interest rate on this Note is subject to change
from time to time based on changes in an index which is Lender's Prime Rate
(the "Index"). This is the rate Lender charges, or would charge, on 90-day
unsecured loans to the most creditworthy corporate customers. This rate may
or may not be the lowest rate available from Lender at any given time.
Lender will tell Borrower the current Index rate upon Borrower's request.
Borrower understands that Lender may make loans based on other rates as well.
The interest rate change will not occur more often than each time the prime
rate is adjusted by Silicon Valley Bank. The Index currently is 6.000% per
annum. the interest rate to be applied to the unpaid principal balance of
this Note will be at a rate equal to the Index, resulting in an initial rate
of 6.000% per annum. NOTICE: Under no circumstances will the interest rate
on this Note be more than the maximum rate allowed by applicable law.
PREPAYMENT. Borrower may pay without penalty all or a portion of the amount
owed earlier than it is due. Early payments will not, unless agreed to by
Lender in writing, relieve Borrower of Borrower's obligation to continue to
make payments under the payment schedule. Rather, they will reduce the
principal balance due and may result in the Borrower's making fewer payments.
DEFAULT. Borrower will be in default if any of the following happens: (a)
Borrower fails to make any payment when due. (b) Borrower breaks any
promise Borrower has made to Lender, or Borrower fails to perform promptly at
the time and strictly in the manner provided in this Note or any agreement
related to this Note, or in any other agreement or loan Borrower has with
Lender. (c) Any representation or statement made or furnished to Lender by
Borrower or on Borrower's behalf is false or misleading in any material
respect. (d) Borrower becomes insolvent, a receiver is appointed for any
part of Borrower's property, Borrower makes an assignment for the benefit of
creditors, or any proceeding is commenced either by Borrower or against
Borrower under any bankruptcy or insolvency laws. (e) Any creditor tries to
take any of Borrower's property on or in which Lender has a lien or security
interest. This includes a garnishment of any of Borrower's accounts with
Lender. (f) Any of the events described in this default section occurs with
respect to any guarantor of this Note.
LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid
principal balance on this Note and all accrued unpaid interest immediately
due, without notice, and then Borrower will pay the amount. Upon Borrower's
failure to pay all amounts declared due pursuant to this section, including
failure to pay upon maturity, Lender at its option, may also, if permitted
under applicable law, do one or both of the following: (a) Increase the
variable interest rate on this Note to 5.000 percentage points over the
Index, and (b) add any unpaid accrued interest to principal and such sum will
bear interest therefrom until paid at the rate provided in this Note
(including any increased rate). Lender may hire or pay someone else to help
collect this Note if Borrower does not pay. Borrower also will pay Lender
that amount. This includes, subject to any limits under applicable law,
Lenders' attorneys' fees and Lender's legal expenses whether or not there is
a lawsuit, including attorneys' fees and legal expenses for bankruptcy
proceedings (including efforts to modify or vacate any automatic stay or
injunction), appeals, and any anticipated post-judgment collection services.
Borrower also will pay any court costs, in addition to all other sums
provided by law. This Note has been delivered to Lender and accepted by
Lender in the State of California. If there is a lawsuit, Borrower agrees
upon Lender's request to submit to the jurisdiction of the courts of Santa
Clara County, the State of California. This Note shall be governed by and
construed in accordance with the laws of the State of California.
LINE OF CREDIT. This Note evidences a revolving line of credit. Advances
under this Note, as well as directions for payment from Borrower's accounts,
may be requested orally or in writing by Borrower or by an authorized person.
Lender may, but need not, require that all oral requests be confirmed in
writing. Borrower agrees to be liable for al sums either: (a) advanced in
accordance with the instructions of an authorized person or (b) credited to
any Borrower's accounts with Lender. The unpaid principal balance owing on
this Note at any time may be evidenced by endorsements on this note or by
Lenders internal records, including daily computer print-outs. Lender will
have no obligation to advance funds under this Note if: (a) Borrower or any
guarantor is in default under the terms of this Note or any agreement that
Borrower or any guarantor has with Lender, including any agreement made in
connection with the signing of this Note; (b) Borrower or any guarantor
ceases doing business or is insolvent; (c) any guarantor seeks, claims or
otherwise attempts to limit, modify or revoke such guarantor's guarantee of
this Note or any other loan with Lender; or (d) Borrower has applied funds
provided pursuant to this Note for purposes other than those authorized by
Lender.
REQUEST TO DEBIT ACCOUNTS. Borrower will regularly deposit all funds
received from its business activities in accounts maintained by Borrower at
SILICON VALLEY BANK. Borrower hereby requests and authorizes Lender to debit
any of Borrower's accounts with Lender, specifically, without limitation,
Account Number ________________, for payments of interest and principal due
on the loan and any other obligations owing by Borrower to Lender. Lender
will notify Borrower of all debits which Lender makes against Borrower's
accounts. Any such debits against Borrower's accounts in no way shall be
deemed a setoff.
BUSINESS LOAN AGREEMENT. This note is subject to and shall be governed by
all the terms and conditions of the Loan and Security Agreement dated
December 19, 1991, as amended from time to time, between Lender and Borrower,
which Loan and Security Agreement is incorporated herein by referenced.
ADDITIONAL PROVISIONS. This Promissory Note evidences a Letter of Credit
facility. Accordingly, advances under this Note shall be used for issuance
of Letters of Credit.
GENERAL PROVISIONS. Lender may delay or forgo enforcing any of its rights or
remedies under this Note without losing them. Borrower and any other person
who signs, guarantees or endorses this Note, to the extent allowed by law,
waive any applicable statute of limitations, presentment, demand for payment,
protest and notice of dishonor. Upon any change in the terms of this Note,
and unless otherwise expressly stated in writing, no party who signs this
Note, whether as maker, guarantor, accommodation maker or endorser, shall be
released from liability. All such parties agree that Lender may renew or
extend (repeatedly and for any length of time) this loan, or release any
party or guarantor or collateral; or impair, fail to realize upon or perfect
Lender's security interest in the collateral; and take any action deemed
necessary by Lender without the consent of or notice to anyone. All such
parties also agree that Lender may modify this loan without the consent of or
notice to anyone other than the party with whom the modification is made.
PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS
OF THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. BORROWER
AGREES TO THE TERMS OF THE NOTE AND ACKNOWLEDGES RECEIPT OF A COMPLETED COPY
OF THE NOTE.
BORROWER:
CHIPS AND TECHNOLOGIES, INC.
By:______________________
Name: ___________________
Title: _____________________
REQUEST FOR HOLD ON ACCOUNT
BORROWER: CHIPS AND TECHNOLOGIES, INC.
GRANTOR: SAME
LOAN OFFICER: DAVID JACKSON
COLLATERAL
TYPE ACCOUNT NUMBER AMOUNT MATURITY
- -----------------------------------------------------------------------------
AUTHORIZED BY: _____________________
DATE: ______________________
_____________________________________________________________________________
RELEASE OF HOLD
You are hereby authorized to release the proceeds in the amount of
$____________ under the above referenced account to pay Loan No.
_____________________.
_____________________________________________________________________________
For Lender's Use Only
APPROVED BY:_____________________
DATE: ______________________________
COMMENTS:
ASSIGNMENT OF DEPOSIT ACCOUNT
=============================================================================
BORROWER: CHIPS AND TECHNOLOGIES, INC. LENDER: Silicon Valley Bank
3050 Zanker Road 3000 Lakeside Drive
San Jose, CA 95134 P.O. Box 3762
Santa Clara, CA 95054
=============================================================================
THIS ASSIGNMENT OF DEPOSIT ACCOUNT is entered into between CHIPS AND
TECHNOLOGIES, INC. (referred to below as "Grantor"); and Silicon Valley Bank
(referred to below as "Lender").
ASSIGNMENT. For valuable consideration, Grantor assigns and grants to Lender
a security interest in the Collateral, including without limitation the
deposit accounts described below, to secure the indebtedness and agrees that
Lender shall have the rights stated in this Agreement with respect to the
Collateral, in addition to all other rights which Lender may have by law.
DEFINITIONS. The following words shall have the following meanings when used
in this Agreement. Terms not otherwise defined in this Agreement shall have
the meanings attributed to such terms in the Uniform Commercial Code. All
references to dollar amounts shall mean amounts in lawful money of the United
States of America.
ACCOUNT. The word "Account" means the deposit account described below
in the definition for "Collateral."
AGREEMENT. The word "Agreement" means this Assignment of Deposit
Account, as this Assignment of Deposit Account may be amended or
modified from time to time, together with all exhibits and schedules
attached to this Assignment of Deposit Account from time to time.
COLLATERAL. The word "Collateral" means the following described deposit
account:
SILICON VALLEY BANK CERTIFICATE OF DEPOSIT, CERTIFICATE NO.
_______, ACCOUNT NO. _________________ ISSUED BY LENDER IN AN
AMOUNT NOT LESS THAN $3,000,000.00
together with (a) all interest, whether now accrued or hereafter
accruing; (b) all additional deposits hereafter made to the Account; and
(c) all renewals, replacements and substitutions for any of the
foregoing.
(A) ALL PROPERTY TO WHICH LENDER ACQUIRES TITLE OR DOCUMENTS OF
TITLE.
(B) ALL PROPERTY ASSIGNED TO LENDER.
(C) ALL PROMISSORY NOTES, BILLS OF EXCHANGE, STOCK CERTIFICATES,
BONDS, SAVINGS PASSBOOKS, TIME CERTIFICATES OF DEPOSIT, INSURANCE
POLICIES, AND ALL OTHER INSTRUMENTS AND EVIDENCES OF AN OBLIGATION.
(D) ALL RECORDS RELATING TO ANY OF THE PROPERTY DESCRIBED IN THIS
COLLATERAL SECTION, WHETHER IN THE FORM OF WRITING, MICROFILM,
MICROFICHE, OR ELECTRONIC MEDIA.
EVENT OF DEFAULT. The words "Event of Default" mean and include any of
the Events of Default set forth below in the section entitled "Events of
Default."
GRANTOR. The word "Grantor" means CHIPS AND TECHNOLOGIES, INC., its
successors and assigns
GUARANTOR. The word "Guarantor" means and includes without limitation,
each and all of the guarantors, sureties, and accommodation parties in
connection with the indebtedness.
INDEBTEDNESS. The word "Indebtedness" means indebtedness evidenced by
any and all notes or credit agreements or letters of credit, including
all principal and interest, together with all other indebtedness and
costs and expenses for which Grantor is responsible under this Agreement
or under any of the Related Documents.
LENDER. The word "Lender" means Silicon Valley Bank, it successors and
assigns
NOTE. The word "Note" means the notes or credit agreements or letter of
credit, in any principal amount from Borrower to Lender, together with
all renewals of, extensions of, modifications of, refinancings of,
consolidations of and substitutions for the notes or credit agreements.
RELATED DOCUMENTS. The words "Related Documents" mean and include
without limitation all promissory notes, credit agreements, loan
agreements, guaranties, security agreements, mortgages, deeds of trust,
and all other instruments, agreements and documents, whether now or
hereafter existing, executed in connection with the indebtedness.
GRANTOR'S REPRESENTATIONS AND WARRANTIES WITH RESPECT TO THE COLLATERAL.
With respect to the Collateral, Grantor represents and warrants to Lender
that:
OWNERSHIP. Grantor is the lawful owner of the Collateral free and clear
of all loans, liens, encumbrances, and claims except as disclosed to and
accepted by Lender in writing.
RIGHT TO GRANT SECURITY INTEREST. Grantor has the full right, power,
and authority to enter into this Agreement and to assign the Collateral
to Lender.
NO FURTHER TRANSFER. Grantor will not sell, assign, encumber, or
otherwise dispose of any of Grantor's rights in the Collateral except as
provided in this Agreement.
NO DEFAULTS. There are no defaults relating to the Collateral, and
there are no offsets or counterclaims to the same. Grantor will
strictly and promptly do everything required of Grantor under the terms,
conditions, promises, and agreements contained in or relating to the
Collateral.
PROCEEDS. Any and all replacement or renewal certificates, instruments,
or other benefits or proceeds related to the Collateral that are
received by Grantor shall be held by Grantor under the terms,
conditions, promises, and agreements contained in or relating to the
Collateral
LENDER'S RIGHTS AND OBLIGATIONS WITH RESPECT TO THE COLLATERAL. While this
Agreement is in effect, Lender may retain the rights to possession of the
Collateral, together with any and all evidence of the Collateral, such as
certificates or passbooks. This Agreement will remain in effect until (a)
there no longer is any indebtedness owing to Lender; (b) all other
obligations secured by this Agreement have been fulfilled; (c) Grantor, in
writing, has requested from Lender a release of this Agreement.
EXPENDITURES BY LENDER. If not discharged or paid when due, Lender may (but
shall not be obligated to) discharge or pay any amounts required to be
discharged or paid by Grantor under this Agreement, including without
limitation all taxes, liens, security interests, encumbrances, and other
claims, at any time levied or placed on the Collateral. Lender also may (but
shall not be obligated to) pay all costs for insuring, maintaining and
preserving the Collateral. All such expenditures incurred or paid by Lender
for such purposes will then bear interest at the rate charged under the Note
from the date incurred or paid by the Lender to the date of repayment by
Grantor. All such expenses shall become a part of the indebtedness and, at
Lender's option, will (a) be payable on demand, (b) be added to the balance
of the Note and be apportioned among and be payable with any installment
payments to become due during either (i) the term of any applicable insurance
policy or (ii) the remaining term of the Note, or (c) be treated as a balloon
payment which will be due and payable at the Note's maturity. This Agreement
also will secure payment of these amounts. Such right shall be in addition
to all other rights and remedies to which Lender may be entitled upon the
occurrence of an Event of Default.
LIMITATIONS ON OBLIGATIONS OF LENDER. Lender shall use ordinary reasonable
care in the physical preservation and custody of any certificate or passbook
for the Collateral but shall have no other obligation to protect the
Collateral or its value. In particular, but without limitation, Lender shall
have no responsibility (a) for the collection or protection of any income on
the Collateral, (b) for the preservation of rights against issuers of the
Collateral or against third persons; (c) for ascertaining any maturities,
conversions, exchanges, offers, tenders, or similar matters relating to the
collateral; nor (d) for informing the Grantor about any of the above,
whether or not Lender has or is deemed to have knowledge of such matters.
EVENTS OF DEFAULT. Each of the following shall constitute an Event of
Default under this Agreement:
DEFAULT ON INDEBTEDNESS. Failure of Grantor to make any payment when
due on the Indebtedness.
OTHER DEFAULTS. Failure of Grantor to comply with or to perform any
other term, obligation, covenant or condition contained in this
Agreement or in any of the other Related Documents or in any other
agreement between Lender and Grantor.
INSOLVENCY. The dissolution or termination of Grantor's existence as a
going business, the insolvency of Grantor, the appointment of a receiver
for any part of Grantor's property, any assignment for the benefit of
creditors, or the commencement of any proceeding under and bankruptcy or
insolvency laws by or against Grantor.
CREDITOR OR FORFEITURE PROCEEDINGS. Commencement of foreclosure or
forfeiture proceedings, whether by judicial proceeding, self-help,
repossession or any other method, by any creditor of Grantor or by any
governmental agency against the Collateral or any other collateral
securing the Indebtedness. This includes a garnishment of any Grantor's
deposit accounts with Lender.
EVENTS AFFECTING GUARANTOR. Any of the preceding events occurs with
respect to any Guarantor of any of the Indebtedness or such Guarantor
dies or becomes incompetent.
RIGHTS AND REMEDIES ON DEFAULT. Upon the occurrence of any Event of Default,
or at any time thereafter, Lender may exercise any one or more of the
following rights and remedies, in addition to any rights or remedies that may
be available at law, in equity, or otherwise:
ACCELERATE INDEBTEDNESS. Lender may declare all Indebtedness of Grantor
to Lender immediately due and payable, without notice of any kind to
Guarantor.
APPLICATION OF ACCOUNT PROCEEDS. Lender may obtain all funds in the
Account from the Issuer of the Account and apply them to the
Indebtedness in the same manner as if the Account had been issued by
Lender. If the Account is subject to an early withdrawl penalty, that
penalty shall be deducted from the Account before its application to the
Indebtedness, whether the Account is with Lender or some other
institution. Any excess funds remaining after application of the
Account proceeds to the Indebtedness will be paid to Grantor as the
interests of Grantor may appear. Grantor agrees, to the extent
permitted by law, to pay any deficiency after application of the
proceeds of the Account to the Indebtedness. Lender also shall have all
the rights of a secured party under the California Uniform Commercial
Code, even if the Account is not otherwise subject to such code
concerning security interests, and the parties to this Agreement agree
that the provisions of the code giving rights to a secured party shall
nonetheless be a part of this Agreement.
COLLECT THE COLLATERAL. Lender may collect any of the Collateral and,
at Lender's option and to the extent permitted by applicable law, may
retain possession of the Collateral while suing on the Indebtedness.
SELL THE COLLATERAL. Lender may sell the Collateral, at Lender's
discretion, as a unit or in parcels, at one or more public or private
sales. Unless the Collateral is perishable or threatens to decline
speedily in value, Lender shall give or mail to Grantor, or any of them,
notice at least ten (10) days in advance of the time and place of public
sale, or of the date after which private sale may be made. Grantor
agrees that any requirement of days in advance of the time and place of
public sale, or of the date after which private sale may be made.
Grantor agrees that any requirements of reasonable notice is satisfied
if Lender mails notice by ordinary mail addressed to Grantor, or any of
them, at the last address Grantor has given Lender in writing. If
public sale is held, there shall be sufficient compliance with all
requirements of notice to the public by a single publication in any
newspaper of general circulation in the county where the Collateral is
located, setting forth the time and place of sale and a brief
description of the property to be sold. Lender may be a purchaser at
any public sale.
REGISTER SECURITIES. Lender may sell any securities included in the
Collateral in a manner consistent with applicable federal and state
securities laws, notwithstanding any other provision of this or any
other agreement. If, because of restrictions under such laws, Lender is
or believes it is unable to sell the securities in an open market
transaction, Grantor agrees that (a) Lender shall have no obligation to
delay sale until the securities can be registered, (b) Lender may make a
private sale to a single person or restricted group of persons, even
though such sale may result in a price that is less favorable than might
be obtained in an open market transaction, and (c) such a sale shall be
considered commercially reasonable. If any securities held as
Collateral are "restricted securities" as defined in the Rules of the
Securities and Exchange Commission (such as Regulation D or Rule 144) or
state securities departments under state "Blue Sky" laws, or if Grantor,
or any of them (if more than one), is an affiliate of the issuer of the
securities, Grantor agrees that Grantor will neither sell nor dispose of
any securities of such issuer without obtaining Lender's prior written
consent.
TRANSFER TITLE. Lender may effect transfer of title upon sale of all or
part of the Collateral. For this purpose, Grantor irrevocably appoints
Lender as its attorney-in-fact to execute endorsements, assignments and
instruments in the name of the Grantor and each of them (if more than
one) as shall be necessary or reasonable.
APPLICATION OF PROCEEDS. Lender may apply any cash which is part of the
Collateral, or which is received from the collection or sale of the
Collateral, to (a) reimbursement of any expenses, including any costs of
any securities registration, commissions incurred in connection with a
sale, attorney fees as provided below and court costs, whether or not
there is a lawsuit and including any fees on appeal, incurred by Lender
in connection with the collection and sale of such Collateral, and (b)
to the payment of the Indebtedness of Grantor to Lender, with any excess
funds to be paid to Grantor as the interests of Grantor may appear.
OTHER RIGHTS AND REMEDIES. Lender shall have and may exercise any or
all of the rights and remedies of a secured creditor under the
provisions of the California Uniform Commercial Code, at law, in equity,
or otherwise.
DEFICIENCY JUDGMENT. If permitted by applicable law, Lender may obtain
a judgment for any deficiency remaining in the Indebtedness due to
Lender after application of all amounts received from the exercise of
the rights provided in this section.
CUMULATIVE REMEDIES. All of Lender's rights and remedies, whether
evidenced by this Agreement or by any other writing, shall be cumulative
and may be exercised singularly or concurrently. Election by Lender to
pursue any remedy shall not exclude pursuit of any other remedy, and an
election to make expenditures or to take action to perform an obligation
of Grantor under this Agreement, after Grantor's failure to perform,
shall not affect Lender's right to declare a default and to exercise its
remedies.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part
of this Agreement:
AMENDMENTS. This Agreement, together with any Related Documents,
constitutes the entire understanding and agreement of the parties as to
the matters set forth in this Agreement. No alteration of or amendment
to this Agreement shall be effective unless given in writing and signed
by the party or parties sought to be charged or bound by the alteration
or amendment.
APPLICABLE LAW. This Agreement has been delivered to Lender and
accepted by Lender in the State of California. If there is a lawsuit,
Grantor agrees upon Lender's request to submit to the jurisdiction of
the courts of Santa Clara County, State of California. This Agreement
shall be governed by and construed in accordance with the laws of the
State of California.
ATTORNEY'S FEES; EXPENSES. Grantor agrees to pay upon demand all of
Lender's costs and expenses, including attorneys' fees and Lender's
legal expenses, incurred in connection with the enforcement of this
Agreement. Lender may pay someone else to help enforce this Agreement
and Grantor shall pay the costs and expenses of such enforcement. Costs
and expenses shall include Lender's attorneys' fees and legal expenses
whether or not there is a lawsuit, including attorneys' fees and legal
expenses for bankruptcy proceedings (and including efforts to modify or
vacate any automatic stay or injunction), appeals, and any anticipated
post-judgment collection services. Grantor also shall pay all court
costs and such additional fees as may be directed by the court.
MULTIPLE PARTIES; CORPORATE AUTHORITY. All obligations of Grantor under
this Agreement shall be joint and several, and all references to Grantor
shall mean each and every Grantor. This means that each of the persons
signing below is responsible for all obligations in this Agreement.
NOTICES. All notices required to be given under this Agreement shall be
given in writing and shall be effective when actually delivered or when
deposited in the United States mail, first class, postage prepaid,
addressed to the party to whom the notice is to be given at the address
shown above. Any party may change its address for notices under this
Agreement by giving formal written notice to the other parties,
specifying that the purpose of the notice is to change the party's
address. To the extent permitted by applicable law, if there is more
than one Grantor, notice to any Grantor will constitute notice to all
Grantors. For notice purposes, Grantor ;agrees to keep Lender informed
at all times of Grantor's current address(es).
POWER OF ATTORNEY. Grantor hereby appoints Lender as its true and
lawful attorney-in-fact, irrevocably, with full power of substitution to
do the following: (a) demand, collect, receive, receipt for, sue and
recover all sums of money or the property which may now or hereafter
become due, owing or payable from the Collateral; (b) execute, sign and
endorse any and all claims, instruments, receipts, checks, drafts or
warrants issued in payment for the Collateral; (c) to settle or
compromise any and all claims arising under the Collateral, and in the
place and stead of Grantor, to execute and deliver its release and
settlement for the claim; and (d) to file any claim or claims or to take
any action or institute or take part in any proceedings, either in its
own name or in the name of Grantor, or otherwise, which in the
discretion of Lender may seem to be necessary or advisable. This power
is given as security for the Indebtedness, and the authority hereby
conferred is and shall be irrevocable and shall remain in full force and
effect until renounced by Lender.
SERVERABILITY. If a court of competent jurisdiction finds any provision
of this Agreement to be invalid or unenforceable as to any person or
circumstance, such finding shall not render that provision invlaid or
unenforceable as to any other persons or circumstances. If feasible,
any such offending provision shall be deemded to be modified to be
within the limits of enforceability or validity; however, if the
offending provision cannot be so modified, it shall be stricken and all
other provisions of this Agreement in all other respects shall remain
valid and enfoceable.
SUCCESSOR INTERESTS. Subject to the limitations set forth above on
transfer of the Collateral, this Agreement shall be binding upon and
inure to the benefit of the partiies, their successors and assigns.
WAIVER. Lender shall not be deemed to have wiaved any rights under this
Agreement unless such waiver is given in writing and signed by Lender.
No delay or omission on the part of Lender in exercising any right shall
operate as a waiver of such right or any other right. A waiver by
Lender of a provision of this Agreement shall not prejudice or consitute
a waiver of Lender's right otherwise to demand strict compliance with
that provision or any other provision of this Agreement. No prior
waiver by Lender, nor any course of dealing between Lender and Grantor,
shall constitute a waiver of any of Lender's rights or of any of
Grantor's obligations as to any future transactions. Whenever the
consent of Lender is required under this Agreement, the granting of such
consent by Lender in any isntance shall not constitute continuing
consent to subsequent instances where such consent is required and in
all cases such consent may be granted or withheld in the sole discretion
of Lender.
ADDITIONAL PROVISIONS. If any law is passed that requires additional action
on the part of the Lender, Borrower shall fully cooperate with Lender in
complying with the law and accordingly, shall reimburse Lender for all costs
and expenses which Lender incurs to comply with the law.
GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS ASSIGNMENT OF
DEPOSIT ACCOUNT AND AGREES TO ITS TERMS. THIS AGREEMENT IS DATED SEPTMEBER
13, 1993.
GRANTOR:
CHIPS AND TECHNOLOGIES, INC.
By:______________________
Name: ___________________
Title: _____________________
COLLATERAL RECEIPT
=============================================================================
BORROWER: CHIPS AND TECHNOLOGIES, INC. LENDER: Silicon Valley Bank
3050 Zanker Road 3000 Lakeside Drive
San Jose, CA 95134 P.O. Box 3762
Santa Clara, CA 95054
=============================================================================
DESCRIPTION OF COLLATERAL CUSTODY CONTROL DATE RELEASED
SIGNATURES
Silicon Valley Bank Certificate of Deposit,
Certificate No._____________, Account No.
___________________ in approximate amount
of $3,000,000.00
INITIAL DELIVERY RETURN RECEIPT INSTRUCTIONS FOR
ACKNOWLEDGMENTS: ACKNOWLEDGMENT: RETURNING COLLATERAL
AND DISPOSITION OF
Grantor acknowledges the COUPONS: _________
Grantor:___________________ receipt of all
_ collateral, including __________________
all unmatured coupons,
(Grantor's Signature) if any. __________________
Silicon Valley Bank X_______________________ __________________
____
By:________________________
(Grantor's Signature)
(Authorized Officer)
DISBURSEMENT REQUEST AND AUTHORIZATION
=============================================================================
BORROWER: CHIPS AND TECHNOLOGIES, INC. LENDER: Silicon Valley Bank
3050 Zanker Road 3000 Lakeside Drive
San Jose, CA 95134 P.O. Box 3762
Santa Clara, CA 95054
=============================================================================
LOAN TYPE. This is a Variable Rate (at SILICON VALLEY BANK PRIME RATE),
making an initial rate of 6.000%). Revolving Line of Credit Loan to a
Corporation for $3,000,000.00 due on October 5, 1994.
PRIMARY PURPOSE OF LOAN. The primary purpose of this loan is for (please
initial):
---
| | ______ Personal, Family or Household Purposes or Personal Investment
---
|X| ______ Business (Including Real Estate Investment).
---
SPECIFIC PURPOSE. The specific purpose of this loan is: Guarantee payments
to suppliers.
DISBURSEMENT INSTRUCTIONS. Borrower understands that no loan proceeds will
be disbursed until all of Lender's conditions for making the loan have been
satisfied. Please disburse the loan proceeds of $3,000,000.00 as follows:
Undisbursed Funds: $3,000,000.00
-------------
Note Principal: $3,000,000.00
AUTOMATIC PAYMENTS. Borrower hereby authorizes Lender automatically to
deduct from Borrower's account numbered __________ the amount of any loan
payment. If the funds in the account are insufficient to cover any payment,
Lender shall not be obligated to advance funds to cover the payment. At any
time and for any reason, Borrower or Lender may voluntarily terminate
Automatic Payments.
FINANCIAL CONDITION. BY SIGNING THIS AUTHORIZATION, BORROWER REPRESENTS AND
WARRANTS TO LENDER THAT THE INFORMATION PROVIDED ABOVE IS TRUE AND CORRECT
AND THAT THERE HAS BEEN NO ADVERSE CHANGE IN BORROWER'S FINANCIAL CONDITION
AS DISCLOSED IN BORROWER'S MOST RECENT FINANCIAL STATEMENT TO LENDER. THIS
AUTHORIZATION IS DATED SEPTEMBER 13,1993.
BORROWER:
CHIPS AND TECHNOLOGIES, INC.
By:______________________
Name: ___________________
Title: _____________________
=============================================================================
BOARDING DATA
=============================================================================
The information contained on this Boarding Data Sheet is for Lender's use
only.
=============================================================================
BORROWER: CHIPS AND TECHNOLOGIES, INC. LENDER: Silicon Valley Bank
3050 Zanker Road 3000 Lakeside Drive
San Jose, CA 95134 P.O. Box 3762
Santa Clara, CA 95054
COUNTY: Santa Clara
TIN: 77-0047943
OFFICERS: ADDRESS:
___________________ , __________________
___________________ , __________________
___________________ , __________________
___________________ , __________________
OTHER SIGNER(S): Name:_________________________, Title:_________________
ACCOUNT/CUSTOMER NUMBER: BUS. PHONE: (408) 434-0600
LOAN DESCRIPTION: This is a Variable Rate (at SILICON VALLEY BANK PRIME RATE,
making an initial rate of 6.000%). Nondisclosable Revolving Line of Credit
Loan to a Corporation for $3,000,000.00 due on October 5, 1994.
=============================================================================
FEES AND CHARGES:
Undisbursed Funds: $3,000,000.00
Note Principal: $3,000,000.00
Prepaid Finance Charges: $0.00
Amount Financed: $3,000,000.00
=============================================================================
Payment Information:
NO. OF PAYMENTS AMOUNT DUE
1 $3,000,000.00 Monthly interest payments beginning
10-05-1993
10-05-1994 plus all accrued unpaid
interest.
APR: 6.083
INT. RATE: 6.000 @ 365/360 at SILICON VALLEY BANK PRIME RATE adjusted each
time the prime rate is adjusted by Silicon Valley Bank
CURRENT INDEX: 6.000
NOT ROUNDED
RATE IN DEFAULT: Note Rate + 5.000%
TOTAL PAYMENTS: $3,096,750.00 (estimate)
LOAN TYPE: Line of Credit / Multiple Advance
AUTOMATIC PAYMENTS: Account Number ______________________
TYPE(S) OF INSURANCE PURCHASED: No Insurance Purchased.
=============================================================================
CLASSIFICATION DATA: Non Disclosable Corporation
LOAN LOAN DATE: 09-13-93 Department/ SC
NUMBER: Branch:
CALL CODE: DISBURSEMENT 09-13-93 Officer DJ
DATE:
PURPOSE MATURITY 10-05-94 Last Edit: MDG
CODE: DATE:
COLLATERAL Portfolio: TECH
CODE:
LOAN NAME: CHIPSTEC (renewable)
STD. LOAN: CORPORATE LINE OF
CREDIT
PURPOSE: Guarantee payments to
suppliers
=============================================================================
COLLATERAL INFORMATION:
OWNER INSURANCE COVERAGE
DESCRIPTION CODE AMOUNT BASIS DEDUCTIBLE
Silicon Valley Bank Certificate 2
of Deposit, Certificate
No. ________________, Account
No. _____________
(Amount $3,000,000.000)
=============================================================================