Exhibit 10.44
AMENDED AND RESTATED LOAN AND
SECURITY
AGREEMENT
BY AND BETWEEN
CYPRESS SEMICONDUCTOR
CORPORATION
AND
SILICON VALLEY
BANK
DATED AS OF M ARCH 2, 2009
T HIS A MENDED AND R ESTATED L OAN AND S ECURITY A GREEMENT , dated as of March 2, 2009 (this “
Agreement ” or this “Loan
Agreement” ), is by and between S
ILICON V ALLEY B ANK (“ Bank ”), whose
address is 3003 Tasman Drive, Santa Clara, California, 95054, and
C YPRESS
S EMICONDUCTOR C ORPORATION (“ Borrower ”), whose
address is 198 Champion Court, Building 6, 3rd Floor, San Jose,
California, 95134, amends and restates in its entirety that Loan
and Security Agreement between the parties hereto dated as of
September 25, 2003, and provides the terms on which Bank will
lend to Borrower and Borrower will repay Bank. The parties hereto
agree as follows:
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1.
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D
EFINITIONS
; A CCOUNTING AND O THER T ERMS
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Capitalized terms used herein shall
have the meanings given to such terms in Section 13 of this
Agreement and in Appendix A hereto. Accounting terms
not defined in this Agreement will be construed following GAAP.
Calculations and determinations must be made following GAAP. The
term “financial statements” includes the notes and
schedules thereto. The terms “including” and
“includes” always mean “including (or includes)
without limitation,” in this or any Loan Document.
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2.
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L
OAN A ND T ERMS O F P AYMENT
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Borrower promises to pay Bank the
unpaid principal amount of all Advances and interest on the unpaid
principal amount of the Advances.
2.1.1 Advances.
(a) Bank will make Advances not exceeding the
Committed Revolving Line minus (i) the outstanding principal
balance of the Advances (including drawn but unreimbursed Letters
of Credit that are deemed to be Advances pursuant to
Section 2.1.2(c)), minus (ii) the amount of all
outstanding Letters of Credit (excluding drawn but unreimbursed
Letters of Credit that are deemed to be Advances pursuant to
Section 2.1.2(c)) minus (iii) all amounts for services
utilized for Cash Management Services that Borrower and Bank agree
to in writing pursuant to Section 2.1.4. Amounts borrowed
hereunder that remain available for borrowing under this Agreement
may be repaid and reborrowed prior to the Maturity Date, without
penalty or premium.
(b) To obtain an Advance, Borrower must notify Bank
pursuant to the terms set for in Section 2 of Appendix
A . Borrower must promptly confirm the notification by
delivering to Bank a Loan Payment/Advance Request Form (the “
Payment/Advance Form ”). Bank will credit
Advances to Borrower’s deposit account. Bank may make
Advances under this Agreement based on instructions from a
Responsible Officer or his or her designee or without instructions
if the Advances are necessary to meet Obligations which have become
due. Bank may rely on any telephone notice given by a person whom
Bank believes is a Responsible Officer or designee. Borrower will
indemnify Bank for any loss Bank suffers due to such
reliance.
1.
(c) The Committed Revolving Line shall terminate on
the Maturity Date, and all Advances are immediately due and payable
on the Maturity Date.
2.1.2 Letters of
Credit.
(a) Bank will issue or have issued documentary or
standby Letters of Credit for Borrower’s account not
exceeding the amount available under the Committed Revolving Line
(each, a “ Letter of Credit ”). Each
Letter of Credit will have an expiry date of no later than 180 days
after the Maturity Date, but Borrower’s reimbursement
obligation will be secured by cash on terms acceptable to Bank at
any time after the Maturity Date if such Maturity Date is not
extended by Bank or if an Event of Default occurs and continues.
Borrower agrees to execute any further documentation in connection
with the Letters of Credit as Bank may reasonably
request.
(b) Prior to or simultaneously with the opening of
each Letter of Credit, Borrower shall pay to Bank Bank’s
customary fees in connection with the opening of a letter of credit
(the “ Letter of Credit Fees ”). The
Letter of Credit Fees shall be paid upon the opening of each Letter
of Credit and upon each anniversary thereof, if required. In
addition, Borrower shall pay to Bank, for its own account, any and
all additional issuance, negotiation, processing, transfer or other
fees to the extent and as and when required by the provisions of
any application for Letters of Credit. All Letter of Credit Fees
shall be part of the Obligations.
(c) If any Letter of Credit is drawn upon, such
amount shall constitute an Advance and shall initially accrue
interest at the Prime Rate, provided that Borrower shall have the
right, from time to time, to elect an Interest Rate based on the
LIBOR Rate pursuant to the terms of Appendix A . If
such amount is not paid immediately, then the full amount thereof
shall accrue interest at the rate set forth in
Section 2.3.1.
2.1.3 Intentionally
Omitted.
2.1.4 Cash Management
Services.
Borrower may use the availability
under the Committed Revolving Line for Bank’s cash management
services, which may include merchant services, direct deposit of
payroll, business credit cards, automated clearing house
transactions, controlled disbursement accounts and check cashing
services identified in various cash management services agreements
related to such services (the “ Cash Management
Services ”). Such aggregate amounts utilized for Cash
Management Services will reduce the amount otherwise available to
be borrowed under the Committed Revolving Line, provided that
Borrower and Bank shall enter into a written agreement with respect
to any such Cash Management Services that sets forth (i) the
amount of availability under the Committed Revolving Line that will
be reduced with respect to such Cash Management Services or the
methodology for calculating such amounts and (ii) the terms
and conditions governing such Cash Management Services, including,
without limitation, the treatment of any credit extended by Bank to
Borrower under such Cash Management Services as Advances
hereunder.
2.
If, at any time, Borrower’s
Obligations hereunder exceed the Committed Revolving Line, Borrower
shall immediately pay Bank the excess.
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2.3
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Interest
Rate, Payments.
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2.3.1 Interest Rate. Advances accrue interest
on the outstanding principal balance thereof at the Interest Rate
(as defined in Appendix A hereto). Borrower may elect
to borrow Prime Rate Loans or LIBOR Rate Loans, all as more
particularly set forth in Appendix A hereto. During
the existence of an Event of Default, Obligations shall accrue
interest at a rate per annum equal to two percent (2%) above
the rate effective immediately before the Event of Default. The
Interest Rate applicable to Prime Rate Loans increases or decreases
when the Prime Rate changes. Interest is computed on a 365 day year
for the actual number of days elapsed.
2.3.2 Payments. Interest due on the Advances is
payable on the first day of each month. Bank may debit any of
Borrower’s deposit accounts, including account number, for
principal and interest payments owing or any amounts Borrower owes
Bank. Bank will promptly notify Borrower when it debits
Borrower’s accounts. These debits are not a set-off. Payments
received after 12:00 noon Pacific Time are considered received at
the opening of business on the next Business Day. When a payment is
due on a day that is not a Business Day, the payment is due the
next Business Day and additional fees or interest
accrue.
Borrower will pay:
(a) Commitment Fee.
A fully earned, non-refundable loan
fee Line is due on or before the Restatement Date.
(b) Bank Expenses.
All Bank Expenses (including
reasonable attorneys’ fees and expenses) incurred as of the
Restatement Date shall be paid by Borrower upon demand. All Bank
Expenses (including reasonable attorneys’ fees) incurred
after the date of this Agreement are payable within 30 days after
receipt by Borrower of an invoice therefor.
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3.
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C
ONDITIONS
O F L OANS
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3.1
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Conditions
Precedent to Initial Advance.
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Bank’s obligation to make the
initial Advance is subject to the condition precedent that it shall
have received, in form and substance satisfactory to it, the
following:
(a) this Agreement;
(b) the reaffirmation of Guaranty of Cypress
Semiconductor (Minnesota) Inc.;
(c) [intentionally omitted];
3.
(d) [intentionally omitted];
(e) the resolutions of Borrower’s Board of
Directors adopted December 7, 2004, shall be in full force and
effect and shall not have been modified or revoked;
(f) [intentionally deleted];
(g) evidence of insurance;
(h) payment of the fees and Bank Expenses then due
specified in Section 2.4; and
(i) such other documents, and completion of such
other matters, as Bank may reasonably deem necessary or
appropriate.
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3.2
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Conditions
Precedent to all Advances.
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Bank’s obligation to make each
Advance, including the initial Advance, is subject to the
following:
(a) timely receipt of any Payment/Advance Form for a
Prime Rate Loan or a LIBOR Rate Borrowing Certificate for a LIBOR
Rate Loan;
(b) the representations and warranties in
Section 5 must be true in all material respects on the date of
the Payment/Advance Form or the LIBOR Rate Borrowing Certificate
and on the effective date of each Advance (except that, in each
case, representations and warranties in Section 5 made as of a
specified earlier date shall be true in all material respects as of
such specified earlier date) and no Event of Default may have
occurred and be continuing, or result from such Advance. Each
Advance is Borrower’s representation and warranty on that
date that the representations and warranties of Section 5
remain true in all material respects (except that representations
and warranties in Section 5 made as of a specified earlier
date shall be true in all material respects as of such specified
earlier date); and
(c) there has not been, in Bank’s sole
discretion, a material adverse change in the general affairs,
management, results of operation, condition (financial or
otherwise) or the prospect of repayment of the Obligations (a
“Material Adverse Change” ).
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4.
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C
REATION O F S ECURITY I NTEREST
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4.1
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Grant of
Security Interest.
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Borrower grants Bank a continuing
security interest in all presently existing and later acquired
Collateral to secure all Obligations and performance of each of
Borrower’s duties under the Loan Documents. Any security
interest will be a first priority security interest in the
Collateral. If this Agreement is terminated, Bank’s lien and
security interest in the Collateral will continue until Borrower
fully satisfies its Obligations (other than inchoate indemnity
obligations).
4.
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4.2
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Authorization to File; Delivery of Additional
Documentation.
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Borrower authorizes Bank to file
financing statements (Form UCC-1) without notice to Borrower, with
all appropriate jurisdictions, as Bank deems appropriate, in order
to perfect or protect Bank’s security interest in the
Collateral. Borrower shall execute and deliver to Bank, at the
request of Bank, all documents that Bank may reasonably request, in
form satisfactory to Bank, to perfect and continue perfected
Bank’s security interest in the Collateral and in order to
fully consummate all of the transactions contemplated under the
Loan Documents.
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5.
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R
EPRESENTATIONS
A ND W ARRANTIES
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Except as set forth in the
Disclosure Letter, Borrower represents and warrants as
follows:
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5.1
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Due
Organization; Organizational Structure;
Authorization.
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Borrower and each Guarantor is duly
existing and in good standing in its state of formation and
qualified and licensed to do business in, and in good standing in,
any state in which the conduct of its business or its ownership of
property requires that it be qualified, except where the failure to
do so would not reasonably be expected to cause a Material Adverse
Change.
Borrower has not changed its state
of formation or organizational structure or type or any
organizational number assigned by its jurisdiction of formation in
the past five (5) years.
The execution, delivery and
performance of the Loan Documents have been duly authorized, and do
not contravene Borrower’s formation documents, nor constitute
an event of default under any material agreement by which Borrower
is bound. Borrower is not in default under any agreement to which
or by which it is bound in which the default would reasonably be
expected to cause a Material Adverse Change.
Borrower has good title to the
Collateral, free of Liens except Permitted Liens.
Except as disclosed in
Borrower’s public filings with the SEC, there are no actions
or proceedings pending or, to the knowledge of Borrower’s
Responsible Officers, overtly threatened by or against Borrower or
any Subsidiary in which a likely adverse decision would reasonably
be expected to cause a Material Adverse Change.
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5.4
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No Material
Adverse Change in Financial Statements.
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All consolidated financial
statements for Borrower delivered to Bank fairly present in all
material respects Borrower’s consolidated financial condition
and Borrower’s consolidated results of operations. There has
not been any deterioration in Borrower’s consolidated
financial condition since the date of the most recent financial
statements submitted to Bank that would reasonably be expected to
cause a Material Adverse Change.
5.
The fair salable value of
Borrower’s assets (including goodwill minus disposition
costs) exceeds the fair value of its liabilities; the Borrower is
not left with unreasonably small capital after the transactions in
this Agreement; and Borrower is able to pay its debts (including
trade debts) as they mature.
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5.6
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Regulatory
Compliance.
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Borrower is not an “investment
company” or a company “controlled” by an
“investment company” under the Investment Company Act.
Except for loans extended to Borrower’s employees in
connection with Borrower’s employee stock purchase assistance
plan, Borrower is not engaged as one of its important activities in
extending credit for margin stock (under Regulations T and U of the
Federal Reserve Board of Governors). Borrower has complied in all
material respects with the Federal Fair Labor Standards Act.
Borrower has not violated any laws, ordinances or rules, the
violation of which would reasonably be expected to cause a Material
Adverse Change. None of Borrower’s or any Subsidiary’s
properties or assets has been used by Borrower or any Subsidiary
or, to the best of Borrower’s knowledge, by previous Persons,
in disposing, producing, storing, treating, or transporting any
hazardous substance other than legally, except to the extent that
noncompliance would not reasonably be expected to result in a
Material Adverse Change. Borrower and each Subsidiary has timely
filed all required tax returns and paid, or made adequate provision
to pay, all material taxes, except those being contested in good
faith with adequate reserves under GAAP. Borrower and each
Subsidiary has obtained all consents, approvals and authorizations
of, made all declarations or filings with, and given all notices
to, all government authorities that are necessary to continue its
business as currently conducted, except where the failure to do so
would not reasonably be expected to cause a Material Adverse
Change.
Borrower does not own any stock,
partnership interest or other equity securities except for
Permitted Investments.
No written representation, warranty
or other statement of Borrower in any certificate or written
statement given to Bank (taken together with all such written
certificates and written statements to Bank) contains any untrue
statement of a material fact or omits to state a material fact
necessary to make the statements contained in the certificates or
statements not misleading (it being recognized by Bank that the
projections and forecasts provided by Borrower in good faith and
based upon reasonable assumptions are not viewed as facts and that
actual results during the period or periods covered by such
projections and forecasts may differ from the projected and
forecasted results).
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5.9
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Designation
of Indebtedness under this Agreement as Senior
Indebtedness.
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All principal of, interest
(including all interest accruing after the commencement of any
bankruptcy or similar proceeding, whether or not a claim for
post-petition interest is allowable as a claim in any such
proceeding), and all fees, costs, expenses and other amounts
accrued or due under this Agreement shall constitute
“Designated Senior Indebtedness” under the terms of the
2000 Indenture and the 2003 Indenture, respectively.
6.
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6.
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A
FFIRMATIVE
C OVENANTS
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Borrower will do all of the
following for so long as Bank has an obligation to lend, or there
are outstanding Obligations (other than inchoate indemnity
obligations):
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6.1
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Designated
Senior Indebtedness.
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Borrower shall designate all
principal of, interest (including all interest accruing after the
commencement of any bankruptcy or similar proceeding, whether or
not a claim for post-petition interest is allowable as a claim in
any such proceeding), and all fees, costs, expenses and other
amounts accrued or due under this Agreement as “Designated
Senior Indebtedness”, or such similar term, in any future
Subordinated Debt incurred by Borrower after the date hereof, if
such Subordinated Debt contains such term or similar term and if
the effect of such designation is to grant to Bank the same or
similar rights as granted to Bank as a holder of “Designated
Senior Indebtedness” under the 2000 Indenture or the 2003
Indenture.
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6.2
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Government
Compliance.
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Borrower shall, and shall cause each
of its Subsidiaries to, maintain its legal existence and good
standing in its jurisdiction of formation and each jurisdiction in
which the nature of its business requires them to be so qualified,
except where the failure to take such action would not reasonably
be expected to have a material adverse effect on Borrower’s
and its Subsidiaries’ business or operations, taken as a
whole; provided , that (a) the legal existence of any
Subsidiary that is not a Guarantor may be terminated or permitted
to lapse, and any qualification of such Subsidiary to do business
may be terminated or permitted to lapse, if, in the good faith
judgment of Borrower, such termination or lapse is in the best
interests of Borrower and its Subsidiaries, taken as a whole, and
(b) Borrower may not permit its qualification to do business
in the jurisdiction of its chief executive office to terminate or
lapse; and provided , further , that this
Section 6.2 shall not be construed to prohibit any other
transaction that is otherwise permitted in Section 7 of this
Agreement.
Borrower will comply, and have each
Subsidiary comply, with all laws, ordinances and regulations to
which it is subject, noncompliance with which could have a material
adverse effect on Borrower’s business or operations or would
reasonably be expected to cause a Material Adverse
Change.
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6.3
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Financial
Statements, Reports, Certificates.
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(a) Borrower will deliver to Bank: (i) as soon
as available, but no later than 5 days after filing with the SEC
and in no event later than 50 days after the end of each fiscal
quarter and 95 days after the end of each fiscal year, the
Borrower’s 10K and 10Q reports; (ii) a Compliance
Certificate together with delivery of the 10K and 10Q reports;
(iii) within 50 days after the end of each fiscal year, annual
financial projections for the following fiscal year (on a quarterly
basis) as approved by Borrower’s board of directors, together
with any related
7.
business forecasts used in the
preparation of such annual financial projections; (iv) a
prompt report of any legal actions pending or threatened against
Borrower or any Subsidiary that could result in damages or costs to
Borrower or any Subsidiary of $10,000,000 or more; and
(v) budgets, sales projections, operating plans or other
financial information Bank reasonably requests.
Borrower’s 10K and 10Q reports
required to be delivered pursuant to Section 6.3(a)(i) shall
be deemed to have been delivered on the date on which Borrower
posts such report or provides a link thereto on Borrower’s
website on the Internet; provided , that Borrower shall
provide paper copies to Bank of the Compliance Certificates
required by Section 6.3(a)(ii).
(b) Within 45 days after the last day of each
quarter, Borrower will deliver to Bank (i) a cash balance
report, including account statements detailing cash management
types of investments held and maturity dates, and (ii) an
accounts receivable aging report, by invoice date.
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6.4
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Intentionally Omitted.
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Borrower will make, and cause each
Subsidiary to make, timely payment of all material federal, state,
and local taxes or assessments (other than taxes and assessments
which Borrower is contesting in good faith, with adequate reserves
maintained in accordance with GAAP) and will deliver to Bank, on
demand, appropriate certificates attesting to the
payment.
Borrower shall maintain in full
force and effect insurance of the types customarily carried in its
line of business, including, without limitation,
self-insurance.
Borrower will maintain, on a
consolidated basis, the following as of the last day of each fiscal
quarter:
(a) Tangible Net
Worth. A Tangible Net
Worth of not less than Four Hundred Sixty Million Dollars
($460,000,000), and increasing by (i) fifty percent
(50%) of net income (calculated in accordance with GAAP) but
without effect for any loss, and (ii) fifty percent of the net
proceeds of the issuance of new equity, in each case for each
fiscal quarter ending after the Restatement Date.
(b) Adjusted Quick
Ratio. A ratio of
(A) unrestricted cash, cash equivalents, short and long term
Investments and accounts receivable net of reserves to
(B) Current Liabilities less the current portion of deferred
revenue, of not less than 1.00:1.00.
8.
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6.8
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Intentionally Omitted.
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Borrower shall use the Advances
(including Advances constituting Letters of Credit) only for its
general working capital requirements, including, without
limitation, capital expenditures, and for any other purpose not
expressly prohibited hereunder.
Borrower will execute any further
instruments and take further action as Bank reasonably requests to
perfect or continue Bank’s security interest in the
Collateral or to effect the purposes of this Agreement.
Borrower will not, and will not
permit any of its Subsidiaries to, do any of the following without
Bank’s prior written consent for so long as Bank has an
obligation to lend or there are any outstanding Obligations (other
than inchoate indemnity obligations):
Convey, sell, lease, transfer or
otherwise dispose of (collectively “ Transfer
”), or permit any of its Subsidiaries to Transfer, all or any
part of its business or property, except for:
(a) Transfers in the ordinary course of
business;
(b) Transfers to Borrower or any of its Subsidiaries
from Borrower or any of its Subsidiaries;
(c) Transfers of property for fair market
value;
(d) Transfers of property in connection with
sale-leaseback transactions;
(e) Transfers of property to the extent such
property is exchanged for credit against, or proceeds are promptly
applied to, the purchase price of other property used or useful in
the business of Borrower or its Subsidiaries;
(f) Transfers constituting (i) non-exclusive
licenses, (ii) exclusive licenses with respect to geographic
locations, or fields of use, or custom products developed for a
particular customer;
(g) Transfers otherwise permitted by the Loan
Documents;
(h) sales or discounting of delinquent
accounts;
(i) Transfers of used, worn-out or obsolete
property, or of surplus property for fair market value;
(j) Transfers associated with the making or
disposition of a Permitted Investment;
9.
(k) Transfers in connection with a permitted
acquisition of a portion of the assets or rights acquired;
and
(l) Transfers not otherwise permitted in this
Section 7.1, provided , that the aggregate book value
of all such Transfers by Borrower and its Subsidiaries, together,
shall not exceed in any fiscal year, 10% of Borrower’s
consolidated total assets as of the last day of the fiscal year
immediately preceding the date of determination.
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7.2
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Changes in
Business, Ownership, or Business Locations.
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Engage in any material line of
business other than those lines of business conducted by Borrower
and its Subsidiaries on the date hereof and any businesses
reasonably related, complementary or incidental thereto or
reasonable extensions thereof. Borrower will not, without prior
written notice, change its state of incorporation.
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7.3
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Mergers or
Acquisitions.
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Merge or consolidate, or permit any
of its Subsidiaries to merge or consolidate, with any Person other
than with Borrower or any Subsidiary, or acquire, or permit any of
its Subsidiaries to acquire, all or substantially all of the
capital stock or property of a Person other than Borrower or any
Subsidiary, except where no Event of Default has occurred and is
continuing or would result from such action during the term of this
Agreement and (a) Borrower is the surviving entity or
(b) such merger or consolidation is a Transfer otherwise
permitted pursuant to Section 7.1 hereof.
Create, incur, assume, or be liable
for any Indebtedness, or permit any Subsidiary to do so, other than
Permitted Indebtedness.
Create, incur, or allow any Lien on
any of its property, or assign or convey any right to receive
income, including the sale of any Accounts, or permit any of its
Subsidiaries to do so, except for Permitted Liens, or permit any
Collateral not to be subject to the first priority security
interest granted hereunder.
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7.6
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Distributions; Investments.
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Directly or indirectly acquire or
own any Person, or make any Investment in any Person, other than
Permitted Investments. Pay any dividends or make any distribution
or payment or redeem, retire or purchase any capital stock, except
for Permitted Distributions.
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7.7
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Transactions
with Affiliates.
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Directly or indirectly enter into or
permit to exist any material transaction with any Affiliate of
Borrower except for:
(a) transactions that are in the ordinary course of
Borrower’s business, upon fair and reasonable terms (when
viewed in the context of any series of transactions of which it may
be a part, if applicable); or
10.
(b) transactions among Borrower and its Subsidiaries
and among Borrower’s Subsidiaries.
Make or permit any payment on or
amendments of any Subordinated Debt, except:
(a) payments under the terms of the Subordinated
Debt;
(b) payments made with Borrower’s capital
stock or other Subordinated Debt;
(c) amendments to Subordinated Debt so long as such
Subordinated Debt remains subordinated in right of payment to this
Agreement; or
(d) payments or prepayments of Subordinated Debt
owing pursuant to the 2007 Indenture, provided that no Event of
Default then exists or will result from such payment or
prepayment.
Become an “investment
company” or a company controlled by an “investment
company,” under the Investment Company Act of 1940, as
amended, or use the proceeds of any Advance for the purpose of
purchasing or carrying margin stock; fail to meet the minimum
funding requirements of ERISA, permit a Reportable Event or
Prohibited Transaction, as defined in ERISA, to occur; fail to
comply with the Federal Fair Labor Standards Act or violate any
other law or regulation, if the violation could reasonably be
expected to have a material adverse effect on Borrower’s
business or operations or would reasonably be expected to cause a
Material Adverse Change, or permit any of its Subsidiaries to do
so.
Any one of the following is an Event
of Default:
If Borrower fails to pay
(a) principal hereunder when due; (b) interest hereunder
within 3 Business Days of when due; and (c) any other
Obligations hereunder within 30 days of receipt by Borrower of an
invoice therefor. During the additional period the failure to cure
the default is not an Event of Default (but no Advance will be made
during the cure period);
11.
(a) If Borrower does not perform any obligation in
Section 6.6 or 6.7 or violates any covenant in Section 7;
or
(b) If Borrower does not perform or observe any
other material covenant in this Agreement, any Loan Documents, or
in any agreement between Borrower and Bank and has not cured the
default within 20 days after a Responsible Officer has knowledge of
such default;
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8.3
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Intentionally Omitted.
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If a Change of Control
occurs;
If 20% or more of consolidated total
assets of Borrower is attached, seized, levied on, or comes into
possession of a trustee or receiver and the attachment, seizure or
levy is not removed in 10 days, or if Borrower is enjoined,
restrained, or prevented by court order from conducting a material
part of its business or if a judgment or other claim becomes a Lien
on a material portion of Borrower’s assets, or if a notice of
lien, levy, or assessment is filed against any of Borrower’s
assets by any government agency and not paid within 10 days after
Borrower receives notice. These are not Events of Default if stayed
or if a bond is posted pending contest by Borrower (but no Advances
will be made during the cure period);
If Borrower becomes insolvent or if
Borrower begins an Insolvency Proceeding or an Insolvency
Proceeding is begun against Borrower and not dismissed or stayed
within 60 days (but no Advances will be made before any Insolvency
Proceeding is dismissed);
If Borrower fails to (a) make
any payment exceeding $10,000,000 of Indebtedness when due and such
failure continues after the applicable grace or notice period, if
any, specified in the agreement or instrument relating thereto, or
(b) perform or observe any other condition or covenant, or any
other event shall occur or condition exist under any agreement or
instrument relating to any Indebtedness exceeding $10,000,000, and
such failure continues after the applicable grace or notice period,
if any, specified in the agreement or instrument relating thereto
and the effect of such failure, event or condition is to cause the
holder or holders of such Indebtedness to accelerate the maturity
of such Indebtedness or cause the mandatory repurchase of any
Indebtedness exceeding $10,000,000;
12.
If a money judgment(s) in the
aggregate of at least $10,000,000 (not covered by insurance) is
rendered against Borrower and is unsatisfied and unstayed for 30
days (but no Advances will be made before the judgment is stayed or
satisfied);
If Borrower or any Person acting for
Borrower makes any material misrepresentation or material
misstatement in any warranty or representation in this Agreement or
in any writing delivered to Bank or to induce Bank to enter this
Agreement or any Loan Document; or
Any guaranty of any Obligations
ceases for any reason to be in full force or any Guarantor does not
perform any material obligation under any guaranty of the
Obligations, or any material misrepresentation or material
misstatement exists as of the date made or deemed made in any
warranty or representation in any guaranty of the Obligations or in
any certificate delivered to Bank by a Guarantor in connection with
any guaranty, or any circumstance described in Sections 8.4, 8.6 or
8.8 occurs to any Guarantor.
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9.
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B
ANK ’ S R IGHTS A ND R EMEDIES
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When an Event of Default occurs and
continues Bank may, without notice or demand, do any or all of the
following:
(a) Declare all Obligations immediately due and
payable (but if an Event of Default described in Section 8.6
occurs all Obligations are immediately due and payable without any
action by Bank);
(b) Stop advancing money or extending credit for
Borrower’s benefit under this Agreement or under any other
agreement between Borrower and Bank;
(c) Make any payments and do any acts it considers
necessary or reasonable to protect its security interest in the
Collateral;
(d) Apply to the Obligations any (i) balances
and deposits of Borrower it holds, or (ii) any amount held by
Bank owing to or for the credit or the account of Borrower;
and
(e) Dispose of the Collateral according to the
Code.
13.
Effective only when an Event of
Default occurs and continues, Borrower irrevocably appoints Bank as
its lawful attorney to (a) endorse Borrower’s name on
any checks or other forms of payment or security relating to the
Collateral and (b) transfer the Collateral into the name of
Bank or a third party as the Code permits. Bank may exercise the
power of attorney to sign Borrower’s name on any documents
necessary to perfect or continue the perfection of any security
interest regardless of whether an Event of Default has occurred.
Bank’s appointment as Borrower’s attorney in fact, and
all of Bank’s rights and powers, coupled with an interest,
are irrevocable until all Obligations (other than inchoate
indemnity obligations) have been fully repaid and performed and
Bank’s obligation to provide Advances terminates.
Any amounts paid by Bank in
connection with this Agreement are Bank Expenses and immediately
due and payable, bearing interest at the then applicable rate and
secured by the Collateral. No payments by Bank are deemed an
agreement to make similar payments in the future or Bank’s
waiver of any Event of Default.
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9.4
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Bank’s
Liability for Collateral.
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If Bank complies with reasonable
banking practices and the Code, it is not liable for: (a) the
safekeeping of the Collateral; (b) any loss or damage to the
Collateral; or (c) any diminution in the value of the
Collateral.
Bank’s rights and remedies
under this Agreement, the Loan Documents, and all other agreements
are cumulative. Bank has all rights and remedies provided under the
Code, by law, or in equity. Bank’s exercise of one right or
remedy is not an election, and Bank’s waiver of any Event of
Default is not a continuing waiver. Bank’s delay is not a
waiver, election, or acquiescence. No waiver is effective unless
signed by Bank and then is only effective for the specific instance
and purpose for which it was given.
Except as otherwise required in this
Agreement, Borrower waives demand, notice of default or dishonor,
notice of payment and nonpayment, notice of any default, nonpayment
at maturity, or release.
All notices or demands by any party
about this Agreement or any other related agreement must be in
writing and be personally delivered or sent by an overnight
delivery service, by certified mail, postage prepaid, return
receipt requested, or by facsimile to the addresses set forth at
the beginning of this Agreement. A party may change its notice
address by giving the other party written notice.
14.
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11.
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C
HOICE O F L AW ,
V ENUE
A ND J URY T RIAL W AIVER
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California law governs the Loan
Documents without regard to principles of conflicts of law.
Borrower and Bank each submit to the exclusive jurisdiction of the
State and Federal courts in Santa Clara County,
California.
TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, BORROWER AND BANK EACH WAIVE THEIR RIGHT TO A
JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION ARISING OUT OF ANY OF
THE LOAN DOCUMENTS OR ANY CONTEMPLATED TRANSACTION, INCLUDING
CONTRACT, TORT, BREACH OF DUTY AND ALL OTHER CLAIMS. THIS WAIVER IS
A MATERIAL INDUCEMENT FOR BOTH PARTIES TO ENTER INTO THIS
AGREEMENT. EACH PARTY HAS REVIEWED THIS WAIVER WITH ITS
COUNSEL.
WITHOUT INTENDING IN ANY WAY TO
LIMIT THE PARTIES’ AGREEMENT TO WAIVE THEIR RESPECTIVE RIGHT
TO A TRIAL BY JURY, if the above waiver of the right to a trial by
jury is not enforceable, the parties hereto agree that any and all
disputes or controversies of any nature between them arising at any
time shall be decided by a reference to a private judge, mutually
selected by the parties (or, if they cannot agree, by the Presiding
Judge of the Santa Clara County, California Superior Court)
appointed in accordance with California Code of Civil Procedure
Section 638 (or pursuant to comparable provisions of federal
law if the dispute falls within the exclusive jurisdiction of the
federal courts), sitting without a jury, in Santa Clara County,
California; and the parties hereby submit to the jurisdiction of
such court. The reference proceedings shall be conducted pursuant
to and in accordance with the provisions of California Code of
Civil Procedure §§ 638 through 645.1, inclusive. The
private judge shall have the power, among others, to grant
provisional relief, including without limitation, entering
temporary restraining orders, issuing preliminary and permanent
injunctions and appointing receivers. All such proceedings shall be
closed to the public and confidential and all records relating
thereto shall be permanently sealed. If during the course of any
dispute, a party desires to seek provisional relief, but a judge
has not been appointed at that point pursuant to the judicial
reference procedures, then such party may apply to the Santa Clara
County, California Superior Court for such relief. The proceeding
before the private judge shall be conducted in the same manner as
it would be before a court under the rules of evidence applicable
to judicial proceedings. The parties shall be entitled to discovery
which shall be conducted in the same manner as it would be before a
court under the rules of discovery applicable to judicial
proceedings. The private judge shall oversee discovery and may
enforce all discovery rules and order applicable to judicial
proceedings in the same manner as a trial court judge. The parties
agree that the selected or appointed private judge shall have the
power to decide all issues in the action or proceeding, whether of
fact or of law, and shall report a statement of decision thereon
pursuant to the California Code of Civil Procedure § 644(a).
Nothing in this paragraph shall limit the right of any party at any
time to exercise self-help remedies, foreclose against collateral,
or obtain provisional remedies as permitted under the Code. The
private judge shall also determine all issues relating to the
applicability, interpretation, and enforceability of this
paragraph.
15.
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12.1
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Successors
and Assigns.
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This Agreement binds and is for the
benefit of the successors and permitted assigns of each party.
Borrower may not assign this Agreement or any rights under it
without Bank’s prior written consent which may be granted or
withheld in Bank’s discretion. Bank has the right, without
the consent of or prior notice to Borrower, to sell, transfer,
negotiate, or grant participation in all or any part of, or any
interest in, Bank’s obligations, rights and benefits under
this Agreement to any other bank or financial
institution.
Borrower will indemnify, defend and
hold harmless Bank and its officers, employees, and agents against:
(a) all obligations, demands, claims, and liabilities asserted
by any other party in connection with the transactions contemplated
by the Loan Documents; and (b) all losses or Bank Expenses
incurred, or paid by Bank from, following, or consequential to
transactions between Bank and Borrower (including reasonable
attorneys fees and expenses), except with respect to (a) and
(b) above, for losses caused by Bank’s and its
officers’, employees’, and agents’ gross
negligence or willful misconduct.
Time is of the essence for the
performance of all obligations in this Agreement.
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12.4
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Severability
of Provision.
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Each provision of this Agreement is
severable from every other provision in determining the
enforceability of any provision.
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12.5
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Amendments
in Writing; Integration.
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All amendments to this Agreement
must be in writing and signed by Borrower and Bank. This Agreement
represents the entire agreement about this subject matter, and
supersedes prior negotiations or agreements. All prior agreements,
understandings, representations, warranties, and negotiations
between the parties about the subject matter of this Agreement are
superseded by this Agreement and the Loan Documents.
This Agreement may be executed in
any number of counterparts and by different parties on separate
counterparts, each of which, when executed and delivered, are an
original, and all taken together, constitute one
Agreement.
All covenants, representations and
warranties made in this Agreement continue in full force while any
Obligations (other than inchoate indemnity obligations) remain
outstanding. The obligations of Borrower in Section 12.2 to
indemnify Bank will survive until all statutes of limitations for
actions that may be brought against Bank have run.
16.
In handling any confidential or
non-public information concerning the Borrower and its
Sub
