EXHIBIT 10.18
QUICKLOGIC CORPORATION
EXPORT-IMPORT BANK
LOAN AND SECURITY AGREEMENT
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TABLE OF CONTENTS
Page
1. DEFINITIONS AND CONSTRUCTION................................... 1
1.1 Definitions............................................... 1
2. LOAN AND TERMS OF PAYMENT...................................... 3
2.1 Revolving Advances........................................ 3
2.2 Overadvances.............................................. 3
2.3 Interest Rates, Payments, and Calculations................ 3
2.4 Crediting Payments........................................ 4
2.5 Fees...................................................... 4
2.6 Increased Costs........................................... 4
2.7 Term...................................................... 5
2.8 Use of Proceeds........................................... 5
3. CONDITIONS OF LOANS............................................ 5
3.1 Conditions Precedent to Initial Advance................... 5
3.2 Conditions Precedent to all Advances...................... 5
4. CREATION OF SECURITY INTEREST.................................. 6
4.1 Grant of Security Interest................................ 6
4.2 Delivery of Additional Documentation Required............. 6
4.3 Power of Attorney......................................... 6
4.4 Right to Inspect.......................................... 6
5. REPRESENTATIONS AND WARRANTIES................................. 6
5.1 Domestic Loan Documents................................... 7
6. AFFIRMATIVE COVENANTS.......................................... 7
6.1 Domestic Loan Documents................................... 7
6.2 Terms of Sale............................................. 7
6.3 Borrower Agreement........................................ 7
6.4 Notice in Event of Filing of Action for Debtor's Relief... 7
6.5 Payment in Dollars........................................ 7
6.6 Further Assurances........................................ 7
7. NEGATIVE COVENANTS............................................. 7
7.1 Domestic Loan Documents................................... 7
7.2 Loans to Shareholders or Affiliates....................... 8
7.3 Borrower Agreement........................................ 8
7.4 Exim Guarantee............................................ 8
8. EVENTS OF DEFAULT.............................................. 8
8.1 Payment Default........................................... 8
8.2 Covenant Default; Cross Default........................... 8
8.3 Exim Guarantee............................................ 8
9. BANK'S RIGHTS AND REMEDIES..................................... 8
9.1 Rights and Remedies....................................... 8
9.2 Exim Direction............................................ 9
9.3 Exim Notification......................................... 9
9.4 Remedies Cumulative....................................... 9
10. WAIVERS; INDEMNIFICATION....................................... 10
10.1 Demand; Protest......................................... 10
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10.2 Bank's Liability for Inventory............... 10
10.3 Indemnification.............................. 10
11. NOTICES............................................. 10
12. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER.......... 10
13. GENERAL PROVISIONS.................................. 10
13.1 Successors and Assigns....................... 10
13.2 Time of Essence.............................. 11
13.3 Severability of Provisions................... 11
13.4 Amendments in Writing........................ 11
13.5 Counterparts................................. 11
13.6 Survival..................................... 11
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This EXPORT-IMPORT BANK LOAN AND SECURITY AGREEMENT (the "Exim Agreement") is
entered into as of August 8, 1996, by and between SILICON VALLEY BANK ("Bank")
and QuickLogic Corporation ("Borrower").
RECITALS
A. Borrower and Bank are parties to that certain Loan and Security
Agreement of even date herewith (the "Domestic Agreement"), together with
related documents.
B. Borrower and Bank desire in this Exim Agreement to set forth their
agreement with respect to a working capital sub-facility to be guaranteed by
Export-Import Bank of the United States.
AGREEMENT
The parties agree as follows:
1. DEFINITIONS AND CONSTRUCTION
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1.1 Definitions. Except as otherwise defined, terms that are
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capitalized in this Exim Agreement shall have the meaning assigned in the
Domestic Loan Documents. As used in this Exim Agreement, the following terms
shall have the following definitions:
"Borrower Agreement" means the Export-Import Bank of the United
States Working Capital Guarantee Program Borrower Agreement between Borrower and
Bank.
"Borrowing Base" has the meaning set forth in Section 2.1 hereof.
"Domestic Agreement" has the meaning set forth in recital
paragraph A.
"Domestic Loan Documents" means the Domestic Agreement and the
instruments and documents executed in connection with that Agreement.
"Exim Bank" means Export-Import Bank of the United States.
"Exim Bank Expenses" means all: reasonable costs or expenses
(including reasonable attorneys' fees and expenses) incurred in connection with
the preparation, negotiation, administration, and enforcement of the Loan
Documents, including any costs incurred in relation to opposing or seeking to
obtain relief from any stay or restructuring order prohibiting Bank from
exercising its rights as a secured creditor, foreclosing upon or disposing of
Collateral, or such related matters; fees that Bank pays to Exim Bank in
consideration of the issuance of the Exim Guarantee; and Bank's reasonable
attorneys' fees and expenses incurred in amending, enforcing or defending the
Loan Documents, whether or not suit is brought.
"Exim Committed Line" means One Million Dollars ($1,000,000).
"Exim Eligible Foreign Accounts" means those Accounts payable in
United States Dollars that arise in the ordinary course of Borrower's business
from Borrower's sale of Eligible Foreign Inventory (i) with respect to which the
account debtor is not a resident of the United States; and (ii) that have been
validly assigned and comply with all of Borrower's representations and
warranties to Bank; standards of eligibility may be fixed and revised from time
to time by Bank in Bank's reasonable judgment and upon notification thereof to
the Borrower in accordance with the provisions hereof. Exim Eligible Foreign
Accounts shall not include the following:
(a) Accounts with a term in excess of ninety (90) days, except
for Accounts of up to 120 days as approved by Bank in writing;
(b) Accounts that the account debtor has failed to pay within
sixty (60) calendar days of the original due date of the invoice unless such
Accounts are insured through Exim Bank export credit insurance for comprehensive
commercial
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and political risk, or through Exim Bank approved private insurers for
comparable coverage, in which case ninety (90) calendar days shall apply;
(c) Accounts with respect to an account debtor, fifty percent (50%) of
whose Accounts the account debtor has failed to pay within ninety (90) days of
the original date of invoice;
(d) Accounts evidenced by a letter of credit until the date of shipment of
the items covered by the subject letter of credit;
(e) Accounts with respect to which the account debtor is an Affiliate of
Borrower;
(f) Accounts with respect to which the account debtor is located in a
country in which Exim Bank is legally prohibited from doing business;
(g) Accounts with respect to which the account debtor is located in a
country in which Exim Bank coverage is not available for commercial reasons;
(h) Accounts with respect to which Borrower is liable to the account
debtor for goods sold or services rendered by the account debtor to Borrower,
but only to the extent of Borrower's liability to such account debtor;
(i) Accounts with respect to which the account debtor disputes liability
or makes any claim with respect thereto (but only to the extent of the amount
subject to such dispute or claim), or is subject to any Insolvency Proceeding,
or becomes insolvent, or goes out of business;
(j) Accounts with respect to an account debtor, including Subsidiaries and
Affiliates, whose total obligations to Borrower exceed twenty-five percent (25%)
of all Accounts, to the extent such obligations exceed such percentage, except
as approved in writing by Bank;
(k) Accounts generated by the sale of products purchased for military
purposes;
(l) Accounts generated by sales of Inventory which constitutes defense
articles or defense services;
(m) Accounts payable in currency other than Dollars;
(n) Accounts which are due and owing and the collection of which must be
made outside the United States;
(o) Accounts the collection of which Bank or Exim Bank determines in its
reasonable judgment to be doubtful; and
(p) Accounts that are excluded from the Borrowing Base under the Borrower
Agreement.
"Exim Eligible Foreign Inventory" means Inventory purchased or
manufactured by Borrower for resale located in the United States, other than
Inventory that is excluded under the Borrower Agreement and this Exim Agreement.
Eligible Foreign Inventory shall not include the following:
(a) any Inventory which is not located in the United States;
(b) any demonstration Inventory or Inventory sold on consignment;
(c) any Inventory consisting of proprietary software;
(d) any Inventory which is damaged, obsolete, returned, defective,
recalled or unfit for further processing;
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(e) any Inventory which has been previously exported from the United
States;
(f) any Inventory which constitutes defense articles or defense services;
(g) any Inventory which is to be incorporated into items destined for
shipment to a country in which Exim Bank is legally prohibited from doing
business;
(h) any Inventory which is to be incorporated into items destined for
shipment to a country in which Exim Bank coverage is not available for
commercial reasons, except to the extent such items are sold to such country on
terms of a letter of credit confirmed by a bank acceptable to Exim Bank; and
(i) any Inventory which is to be incorporated into items whose sale would
result in an ineligible Account Receivable.
"Exim Guarantee" means that certain Master Guarantee Agreement or other
agreement, as amended from time to time, the terms of which are incorporated by
reference into this Exim Agreement, pursuant to which Exim Bank guarantees
Borrower's obligations under this Exim Agreement.
"Exim Loan Documents" means, collectively, this Exim Agreement, the
Domestic Loan Documents, any note or notes executed by Borrower, and any other
agreement entered into between Borrower and Bank in connection with this Exim
Agreement, all as amended or extended from time to time.
"Exim Maturity Date" means the earliest of (i) the Maturity Date under the
Domestic Loan Documents, (ii) August 7, 1997 or (iii) the Initial Public
Offering.
2. LOAN AND TERMS OF PAYMENT
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2.1 Revolving Advances. Subject to the terms and conditions of this Exim
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Agreement, Bank agrees to make Advances to Borrower in an amount not to exceed
the lesser of the Exim Committed Line or the Borrowing Base. For purposes of
this Exim Agreement "Borrowing Base" shall mean an amount equal to the sum of
(i) eighty percent (80%) of the Exim Eligible Foreign Accounts plus (ii) forty
percent (40%) of the Exim Eligible Foreign Inventory.
To evidence the Advances, Borrower shall execute and deliver to Bank on the
date hereof a promissory note (the "Note") in substantially the form attached
hereto as Exhibit B.
Whenever Borrower desires an Advance, Borrower will notify Bank by facsimile
transmission or telephone no later than 3:00 p.m. California time, on the
Business Day that the Advance is to be made. Each such notification shall be
promptly confirmed by a Payment/Advance Form in substantially the form of
Exhibit C hereto. In addition to the procedure set forth in the preceding
sentence, Bank is authorized to make Advances under this Exim Agreement, based
upon written instructions received from a Responsible Officer or without
instructions if in Bank's discretion such Advances are necessary to meet
Obligations which have become due and remain unpaid. Bank will credit the
amount of Advances made under this Section 2.1 to Borrower's deposit account.
Amounts borrowed pursuant to this Section 2.1 may be repaid and re-borrowed at
any time during the term of this Exim Agreement so long as no Event of Default
has occurred and is continuing.
2.2 Overadvances. If, at any time or for any reason, the amount of
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Obligations pursuant to this Exim Agreement owed by Borrower to Bank pursuant to
Section 2.1 of this Exim Agreement is greater than the lesser of (i) the
Borrowing Base or (ii) the Exim Committed Line, at the option of Bank, Borrower
shall immediately pay to Bank, in cash, the amount of such excess.
2.3 Interest Rates, Payments, and Calculations.
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(a) Interest Rate. Except as specified to the contrary in any Loan
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Document, any Advances under this Exim Agreement shall bear interest, on the
average Daily Balance, at a rate equal to the Prime Rate.
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(b) Default Rate. All Obligations shall bear interest, from and after
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the occurrence of an Event of Default, at a rate equal to five (5) percentage
points above the rate that applied immediately prior to the occurrence of the
Event of Default.
(c) Payments. Interest hereunder shall be due and payable on the
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seventh calendar day of each calendar month during the term hereof. Bank shall,
at its option, charge such interest, all Exim Bank Expenses, and all Periodic
Payments against Borrower's deposit account or against the Exim Committed Line,
in which case those amounts shall thereafter accrue interest at the rate then
applicable hereunder. Any interest not paid when due shall be compounded by
becoming a part of the Obligations, and such interest shall thereafter accrue
interest at the rate then applicable hereunder.
(d) Computation. In the event the Prime Rate is changed from time to
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time hereafter, the applicable rate of interest hereunder shall be increased or
decreased contemporaneously with such change by an amount equal to such change
in the Prime Rate. All interest chargeable under the Exim Loan Documents shall
be computed on the basis of a three hundred sixty (360) day year for the actual
number of days elapsed.
2.4 Crediting Payments. The receipt by Bank of any wire transfer of
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funds, check, or other item of payment shall be immediately applied to
conditionally reduce Obligations, but shall not be considered a payment on
account unless such wire transfer is of immediately available federal funds and
is made to the appropriate deposit account of Bank or unless and until such
check or other item of payment is honored when presented for payment.
Notwithstanding anything to the contrary contained herein, any payment (other
than a wire transfer of immediately available funds) received by Bank after
12:00 noon California time shall be deemed to have been received by Bank as of
the opening of business on the immediately following Business Day.
2.5 Fees. Borrower shall pay to Bank the following fees:
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(a) Financial Examination and Appraisal Fees. Bank's reasonable
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fees and reasonable out-of-pocket expenses for Bank's initial audit of
Borrower's Accounts and Inventory, and for each subsequent appraisal of
Collateral and financial analysis and examination of Borrower performed from
time to time by Bank or its agents;
(b) Exim Fee. A facility fee equal to Fifteen Thousand Dollars
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($15,000), which fee shall be due and fully earned upon the Closing Date; and
(c) Exim Bank Expenses. On the Closing Date, Exim Bank Expenses
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incurred through the Closing Date and, after the Closing Date, all Exim Bank
Expenses as they become due.
2.6 Increased Costs. In case any law, regulation, treaty or official
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directive or the interpretation or application thereof by any court or any
governmental authority charged with the administration thereof or the compliance
with any guideline or request of any central bank or other governmental
authority (whether or not having the force of law):
(a) subjects Bank to any tax with respect to payments of principal
or interest or any other amounts payable hereunder by Borrower or otherwise with
respect to the transactions contemplated hereby (except for taxes on the overall
net income of Bank imposed by the United States of America or any political
subdivision thereof); or
(b) imposes, modifies or deems applicable any deposit insurance,
reserve, special deposit or similar requirement against assets held by, or
deposits in or for the account of, or loans by, Bank; or
(c) imposes upon Bank any other condition with respect to their
performance under this Exim Agreement,
and the result of any of the foregoing is to increase the cost to Bank, reduce
the income receivable by Bank or impose any expense upon Bank with respect to
any loans, Bank shall notify Borrower thereof. Borrower agrees to pay to Bank
the amount of such increase in cost, reduction in income or additional expense
as and when such cost, reduction or expense is incurred or determined, upon
presentation all in reasonable detail by Bank of a statement in the amount and
setting forth Bank's calculation thereof, which statement shall be deemed true
and correct absent manifest error.
2.7 Term. This Exim Agreement shall become effective once duly executed
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and authorized by Borrower and Bank and shall continue in full force and effect
for a term ending on the Exim Maturity Date, on which date all Obligations shall
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become immediately due and payable. Notwithstanding the foregoing, Bank shall
have the right to terminate this Exim Agreement immediately and without notice
upon the occurrence of an Event of Default and Borrower shall have the right to
terminate this Exim Agreement immediately upon payment in full of its
Obligations then outstanding hereunder. Notwithstanding any termination of this
Exim Agreement, all of Bank's security interest in all of the Collateral and all
of the terms and provisions of this Exim Agreement shall continue in full force
and effect until all Obligations have been paid and performed in full, and no
termination shall impair any right or remedy of Bank, nor shall any such
termination relieve Borrower of any Obligation to Bank until all of the
Obligations have been paid and performed in full.
2.8 Use of Proceeds. Borrower will use the proceeds of Advances only for
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the purposes specified in the Borrower Agreement. Borrower shall not use the
proceeds of the Advances for any purpose prohibited by the Borrower Agreement.
3. CONDITIONS OF LOANS
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3.1 Conditions Precedent to Initial Advance. The obligation of Bank to
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make the initial Advance is subject to the condition precedent that Bank shall
have received, in form and substance satisfactory to Bank, the following:
(a) this Exim Agreement, the Borrower Agreement and the Note, each
duly executed by Borrower;
(b) a certificate of the secretary of Borrower with respect to
incumbency and resolutions authorizing the execution and delivery of this Exim
Agreement;
(c) the Exim Guarantee;
(d) payment of the fees and Exim Bank Expenses then due and
specified in Section 2.5 hereof;
(e) documents and agreements as specified in Section 3.1 of the
Domestic Agreement; and
(f) such other documents, and completion of such other matters, as
Bank may deem reasonably necessary or appropriate.
3.2 Conditions Precedent to all Advances. The obligation of Bank to
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make each Advance, including the initial Advance, is further subject to the
following conditions:
(a) timely receipt by Bank of the Payment/Advance Form as provided
in Section 2.1;
(b) timely receipt by Bank of a copy of the executed firm written
export purchase order relating to the requested Advance, the payment terms of
which shall be acceptable to Bank;
(c) timely receipt by Bank of an Export Order and Borrowing Base
Certificate as defined in the Borrower Agreement;
(d) the Exim Guarantee shall be in full force and effect; and
(e) the representations and warranties contained in Section 5
hereof shall be true and accurate in all material respects on and as of the date
of such Payment/Advance Form and on the effective date of each Advance as though
made at and as of each such date (except to the extent they relate specifically
to an earlier date, in which case such representations and warranties shall
continue to have been true and accurate as of such date), and no Potential Event
of Default or Event of Default shall have occurred and be continuing, or would
result from such Advance.
The making of each Advance shall be deemed to be a representation and
warranty by Borrower on the date of such Advance as to the accuracy of the facts
referred to in subsection (e) of this Section 3.2.
4. CREATION OF SECURITY INTEREST
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4.1 Grant of Security Interest. Borrower hereby grants to Bank a
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continuing security interest in all presently existing and hereafter acquired or
arising Collateral in order to secure prompt repayment of any and all
Obligations and in order to secure prompt performance by Borrower of each of its
covenants and duties under the Exim Loan Documents.
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4.2 Delivery of Additional Documentation Required. Borrower shall
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from time to time execute and deliver to Bank, at the request of Bank, all
financing statements and other documents that Bank may reasonably request, in
form satisfactory to Bank, to perfect and continue perfected Bank's security
interests in the Collateral and in order to fully consummate all of the
transactions contemplated under the Exim Loan Documents.
4.3 Power of Attorney. Effective only upon the occurrence and
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during the continuance of an Event of Default, Borrower hereby irrevocably
appoints Bank (and any of Bank's designated officers, or employees) as
Borrower's true and lawful attorney, with power to: (a) send requests for
verification of Accounts; (b) endorse Borrower's name on any checks or other
forms of payment or security that may come into Bank's possession; (c) sign the
name of Borrower on any of the documents described in Section 4.2 (regardless of
whether an Event of Default has occurred); (d) sign Borrower's name on any
invoice or ▇▇▇▇ of lading relating to any Account, drafts against account
debtors, schedules and assignments of Accounts, verifications of Accounts, and
notices to account debtors; (e) make, settle, and adjust all claims under and
decisions with respect to Borrower's policies of insurance; and (f) settle and
adjust disputes and claims respecting the accounts directly with account
debtors, for amounts and upon terms which Bank determines to be reasonable. The
appointment of Bank as Borrower's attorney-in-fact, and each of Bank's rights
and powers, being coupled with an interest, is irrevocable until all of the
Obligations have been fully repaid and Bank's obligation to provide Advances
hereunder is terminated.
4.4 Right to Inspect. Each of Bank and Exim Bank (through any of
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their respective officers, employees, or agents) shall have the right, upon
reasonable prior notice, from time to time during Borrower's usual business
hours, to inspect Borrower's Books, facilities and activities, and to check,
test, and appraise the Collateral in order to verify Borrower's financial
condition or the amount, condition of, or any other matter relating to, the
Collateral. Bank shall conduct semi-annual accounts receivable audits and
physical inspections of the Inventory, the results of which audits shall be
satisfactory to Bank. Borrower will cause its officers and employees to give
their full cooperation and assistance in connection therewith.
5. REPRESENTATIONS AND WARRANTIES
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Borrower represents, warrants and covenants as follows:
5.1 Domestic Loan Documents. The representations and warranties
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contained in the Domestic Loan Documents, which are incorporated into this Exim
Agreement, are true and correct.
6. AFFIRMATIVE COVENANTS
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Borrower covenants and agrees that, until payment in full of the
Obligations, Borrower shall do all of the following:
6.1 Domestic Loan Documents. Borrower shall comply in all respects
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with the provisions of the Domestic Loan Documents, which provisions are
incorporated into this Exim Agreement.
6.2 Terms of Sale. Borrower shall cause all sales of products upon
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which Advances are based either to be (i) supported by one or more irrevocable
letters of credit in an amount and of a tenor, naming a beneficiary and issued
by a financial institution acceptable to Bank or (ii) on open account to
creditworthy buyers that have been preapproved in writing by Bank and Exim Bank.
6.3 Borrower Agreement. Borrower shall comply with all of the terms
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of the Borrower Agreement. In the event of any conflict or inconsistency between
any provision contained in the Borrower Agreement with any provision contained
in this Exim Agreement, the more strict provision, with respect to Borrower,
shall control.
6.4 Notice in Event of Filing of Action for Debtor's Relief.
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Borrower shall notify Bank in writing within five (5) days of the occurrence of
any of the following: (1) Borrower begins or consents in any manner to any
proceeding or arrangement for its liquidation in whole or in part or to any
other proceeding or arrangement whereby any of its assets are subject generally
to the payment of its liabilities or whereby any receiver, trustee, liquidator
or the like is appointed for it or any substantial part of its assets (including
without limitation the filing by Borrower of a petition for appointment as a
debtor-in-possession under Title 11 of the U.S. Code); (2) Borrower fails to
obtain the dismissal or stay on appeal within thirty (30) calendar days of the
commencement of any proceeding arrangement referred to in (1) above; (3)
Borrower begins any other procedure for the relief of financially distressed or
insolvent debtors, or such procedure has been commenced against it, whether
voluntarily or involuntarily, and such procedure has not
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been effectively terminated, dismissed or stayed within thirty (30) calendar
days after the commencement thereof, or (4) Borrower begins any procedure for
its dissolution, or a procedure therefor has been commenced against it.
6.5 Payment in Dollars. Borrower shall require payment in United States
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Dollars for the products, unless Exim Bank otherwise agrees in writing.
6.6 Further Assurances. At any time and from time to time Borrower shall
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execute and deliver such further instruments and take such further action as may
reasonably be requested by Bank to effect the purposes of this Exim Agreement.
7. NEGATIVE COVENANTS
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Borrower covenants and agrees that so long as any credit hereunder shall
be available and until payment in full of the Obligations, Borrower will not do
any of the following, or enter into any agreement to do any of the following:
7.1 Domestic Loan Documents. Violate or otherwise fail to comply with any
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provisions of the Domestic Loan Documents, which provisions are incorporated
into this Exim Agreement.
7.2 Loans to Shareholders or Affiliates. Without Exim Bank's prior written
-----------------------------------
consent, make any loans to any shareholder or entity affiliated with Borrower.
As used in this Section 7.2, the term "loan" does not include salary, rent paid
to an affiliated entity owned by the shareholders, or to other expenses incurred
in the ordinary course of Borrower's business.
7.3 Borrower Agreement. Violate or otherwise fail to comply with any
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provision of the Borrower Agreement.
7.4 Exim Guarantee. Take any action, or permit any action to be taken,
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that causes or, with the passage of time, could reasonably be expected to cause,
the Exim Guarantee to cease to be in full force and effect.
8. EVENTS OF DEFAULT
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Any one or more of the following events shall constitute an Event of
Default by Borrower under this Exim Agreement:
8.1 Payment Default. If Borrower fails to pay the principal of, or any
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interest on, any Advances when due and payable; or fails to pay any portion of
any other Obligations not constituting such principal or interest, including
without limitation Exim Bank Expenses (or any interest but for the provisions of
the United States Bankruptcy Code, would have occurred on any accounts), within
thirty (30) days of receipt by Borrower of an invoice therefor;
8.2 Covenant Default; Cross Default. If Borrower fails or neglects to
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perform, keep, or observe any material term, provision, condition, covenant, or
agreement contained in this Exim Agreement, in any of the Domestic Loan
Documents, the Borrower Agreement or the Exim Loan Documents, or an Event of
Default occurs under any of the Domestic Loan Documents or the Borrower
Agreement; or
8.3 Exim Guarantee. If the Exim Guarantee ceases for any reason to be in
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full force and effect, or if the Exim Bank declares the Exim Guarantee void or
revokes or purports to revoke any obligations under the Exim Guarantee.
9. BANK'S RIGHTS AND REMEDIES
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9.1 Rights and Remedies. Upon the occurrence of an Event of Default, Bank
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may, at is election, without notice and without demand, do any one or more of
the following:
(a) Declare all Obligations, whether evidenced by this Exim
Agreement, by any of the other Exim Loan Documents, or otherwise, immediately
due and payable;
(b) Cease advancing money or extending credit to or for the benefit
of Borrower under this Exim Agreement or under any other agreement between
Borrower and Bank;
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(c) Settle or adjust disputes and claims directly with account
debtors for amounts, upon terms and in whatever order that Bank reasonably
considers advisable;
(d) Notify customers of Borrower or other third parties to pay any
amounts owing to Borrower directly to Bank;
(e) Without notice to or demand upon Borrower, make such payments and
do such acts as Bank considers necessary or reasonable to protect its security
interest in the Collateral. Borrower agrees to assemble the Collateral if Bank
so requires, and to make the Collateral available to Bank as Bank may designate.
Borrower authorizes Bank to enter the premises where the Collateral is located,
to take and maintain possession of the Collateral, or any part of it, and to
pay, purchase, contest, or compromise any encumbrance, charge, or lien which in
Bank's determination appears to be prior or superior to its security interest
and to pay all expenses incurred in connection therewith. With respect to any of
Borrower's owned premises, Borrower hereby grants Bank a license to enter into
possession of such premises and to occupy the same, without charge, in order to
exercise any of Bank's rights or remedies provided herein, at law, in equity, or
otherwise;
(f) Set off and apply to the Obligations any and all (i) balances and
deposits of Borrower held by Bank, or (ii) indebtedness at any time owing to or
for the credit or the account of Borrower held by Bank;
(g) Ship, reclaim, recover, store, finish, maintain, repair, prepare
for sale, advertise for sale, and sell (in the manner provided for herein) the
Collateral. Bank is hereby granted a license or other right, solely pursuant to
the provisions of this section 9.1, to use, without charge, Borrower's labels,
patents, copyrights, rights of use of any name, trade secrets, trade names,
trademarks, service marks, and advertising matter, or any property of a similar
nature, as it pertains to the Collateral, in completing production of,
advertising for sale, and selling any Collateral and, in connection with Bank's
exercise of its rights under this section 9.1, Borrower's rights under all
licenses and all franchise agreements shall inure to Bank's benefit;
(h) Sell the Collateral at either a public or private sale, or both,
by way of one or more contracts or transactions, for cash or on terms, in such
manner and at such places (including Borrower's premises) as Bank determines is
commercially reasonable;
(i) Bank may credit bid and purchase at any public sale; and
(j) Any deficiency that exists after disposition of the Collateral as
provided above will be paid immediately by Borrower.
9.2 Exim Direction. Upon the occurrence of an Event of Default, Exim Bank
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shall have a right to: (i) direct Bank to exercise the remedies specified in
section 9.1 and (ii) request that Bank accelerate the maturity of any other
loans to Borrower as to which Bank has a right to accelerate.
9.3 Exim Notification. Bank shall have the right to immediately notify
-----------------
Exim Bank in writing if it has knowledge of the occurrence of any of the
following events: (1) any failure to pay any amount due under this Loan Exim
Agreement or the Note; (2) the Borrowing Base is less than the sum of
outstanding Advances hereunder; (3) any failure to pay when due any amount
payable to Bank by the Borrower under any loan(s) extended by Bank to Borrower;
(4) the filing of an action for debtor's relief by, against, or on behalf of
Borrower; or (5) any threatened or pending material litigation against Borrower,
or any material dispute involving Borrower.
In the event that it sends such a notification to Exim Bank, Bank shall have
the right to thereafter send Exim Bank a written report on the status of the
events covered by said notification on each Business Day which occurs every
thirty (30) calendar days after the date of said notification, until such time
as Bank files a claim with Exim Bank or said default or other events have been
cured. Bank shall not have any obligation to make any Advances following said
notification to Exim Bank, unless Exim Bank gives its written approval thereto.
If directed to do so by Exim Bank, Bank shall have a right promptly to exercise
any rights it may have against Borrower to demand the immediate repayment of all
amounts outstanding under the Exim Loan Documents.
9.4 Remedies Cumulative. Bank's rights and remedies under this Exim
-------------------
Agreement, the Exim Loan Documents, the Domestic Loan Documents and all other
agreements shall be cumulative. Bank shall have all other rights and remedies
not inconsistent herewith as provided under the Code, by law, or in equity. No
exercise by Bank of one right or remedy
11
shall be deemed an election, and no waiver by Bank of any Event of Default on
Borrower's part shall be deemed a continuing waiver. No delay by Bank shall
constitute a waiver, election, or acquiescence by it.
10. WAIVERS; INDEMNIFICATION
------------------------
10.1 Demand; Protest. Borrower waives demand, protest, notice of
---------------
protest, notice of dishonor, notice of payment and nonpayment, notice of any
default, nonpayment at maturity, release, compromise, settlement, extension, or
renewal of accounts, documents, instruments, chattel paper, and guarantees at
any time held by Bank on which Borrower may in any way be liable.
10.2 Bank's Liability for Inventory. Bank shall not in any way or
------------------------------
manner be liable or responsible for: (a) the safekeeping of the Collateral; (b)
any loss or damage thereto occurring or arising in any manner or fashion from
any cause; (c) any diminution in the value thereof; or (d) any act or default of
any carrier, warehouseman, bailee, forwarding agency, or other person
whomsoever. All risk of loss, damage or destruction of the Collateral shall be
borne by Borrower.
10.3 Indemnification. Borrower agrees to defend, indemnify and hold
---------------
harmless Bank and its officers, employees, and agents against: (a) all
obligations, demands, claims, and liabilities claimed or asserted by any other
party in connection with the transactions contemplated by this Exim Agreement,
and (b) all losses or Exim Bank Expenses in any way suffered, incurred, or paid
by Bank as a result of or in any way arising out of, following, or consequential
to transactions between Bank and Borrower whether under this Exim Agreement, or
otherwise (including without limitation reasonable attorneys fees and expenses),
except for losses caused by Bank's gross negligence or willful misconduct.
11. NOTICES
-------
Unless otherwise provided in this Exim Agreement, all notices or
demands by any party relating to this Exim Agreement or any other agreement
entered into in connection herewith shall be in writing and (except for
financial statements and other informational documents which may be sent by
first-class mail, postage prepaid) shall be personally delivered or sent by
certified mail, postage prepaid, return receipt requested, or by telefacsimile
to Borrower or to Bank, as the case may be, at the address set forth in the
Domestic Loan Documents. The parties hereto may change the address at which they
are to receive notices hereunder, by notice in writing in the foregoing manner
given to the other.
12. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER
------------------------------------------
This Exim Agreement shall be governed by, and construed in accordance
with, the internal laws of the State of California, without regard to principles
of conflicts of law. Each of Borrower and Bank hereby submits to the exclusive
jurisdiction of the state and Federal courts located in the County of Santa
▇▇▇▇▇, State of California. BORROWER AND BANK HEREBY WAIVE THEIR RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF ANY OF THE EXIM LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS CONTEMPLATED
THEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL
OTHER COMMON LAW OR STATUTORY CLAIMS.
13. GENERAL PROVISIONS
------------------
13.1 Successors and Assigns. This Exim Agreement shall bind and inure
----------------------
to the benefit of the respective successors and permitted assigns of each of the
parties; provided, however, that neither this Exim Agreement nor any rights
hereunder may be assigned by Borrower without Bank's prior written consent,
which consent may be granted or withheld in Bank's sole discretion. Bank shall
have the right without the consent of or notice to Borrower to sell, transfer,
negotiate, or grant participations in all or any part of, or any interest in
Bank's rights and benefits hereunder.
13.2 Time of Essence. Time is of the essence for the performance of all
---------------
obligations set forth in this Exim Agreement.
13.3 Severability of Provisions. Each provision of this Exim Agreement
--------------------------
shall be severable from every other provision of this Exim Agreement for the
purpose of determining the legal enforceability of any specific provision.
12
13.4 Amendments in Writing. This Exim Agreement cannot be changed or
---------------------
terminated orally. Without the prior written consent of Exim Bank, no material
amendment of or deviation from the terms of this Exim Agreement or the Note
shall be made that would adversely affect the interests of Exim Bank under the
Exim Guarantee, including without limitation the rescheduling of any payment
terms provided for in this Exim Agreement. All prior agreements,
understandings, representations, warranties, and negotiations between the
parties hereto with respect to the subject matter of this Exim Agreement, if
any, are merged into this Exim Agreement.
13.5 Counterparts. This Exim Agreement may be executed in any number of
------------
counterparts and by different parties on separate counterparts, each of which,
when executed and delivered, shall be deemed to be an original, and all of
which, when taken together, shall constitute but one and the same Exim
Agreement.
13.6 Survival. All covenants, representations and warranties made in
--------
this Exim Agreement shall continue in full force and effect so long as any
Obligations remain outstanding. The obligations of Borrower to indemnify Bank
with respect to the expenses, damages, losses, costs and liabilities described
in Section 10.3 shall survive until all applicable statute of limitations
periods with respect to actions that may be brought against Bank have run.
IN WITNESS WHEREOF, the parties hereto have caused this Exim Agreement
to be executed as of the date first above written .
QUICKLOGIC CORPORATION
By: /s/
------------------------------------
Title:
---------------------------------
SILICON VALLEY BANK
By: /s/
------------------------------------
Title:
---------------------------------
13
EXHIBIT A
The Collateral shall consist of all right, title and interest of Borrower
in and to the following:
14. All goods and equipment now owned or hereafter acquired, including,
without limitation, all machinery, fixtures, vehicles (including motor vehicles
and trailers), and any interest in any of the foregoing, and all attachments,
accessories, accessions, replacements, substitutions, additions, and
improvements to any of the foregoing, wherever located;
15. All inventory, now owned or hereafter acquired, including, without
limitation, all merchandise, raw materials, parts, supplies, packing and
shipping materials, work in process and finished products including such
inventory as is temporarily out of Borrower's custody or possession or in
transit and including any returns upon any accounts or other proceeds, including
insurance proceeds, resulting from the sale or disposition of any of the
foregoing and any documents of title representing any of the above, and
Borrower's Books relating to any of the foregoing;
16. All contract rights and general intangibles now owned or hereafter
acquired;
17. All now existing and hereafter arising accounts, contract rights,
royalties, license rights and all other forms of obligations owing to Borrower
arising out of the sale or lease of goods, the licensing of technology or the
rendering of services by Borrower, whether or not earned by performance, and any
and all credit insurance, guaranties, and other security therefor, as well as
all merchandise returned to or reclaimed by Borrower and Borrower's Books
relating to any of the foregoing;
18. All documents, cash, deposit accounts, securities, letters of
credit, certificates of deposit, instruments and chattel paper now owned or
hereafter acquired and Borrower's Books relating to the foregoing; and
19. Any and all claims, rights and interests in any of the above and all
substitutions for, additions and accessions to and proceeds thereof.
Notwithstanding the foregoing, the Collateral shall not include trademarks,
servicemarks, trade styles, trade names, patents, patent applications, leases,
license agreements, franchise agreements, blueprints, drawings, purchase orders,
customer lists, route lists, infringements, claims, computer programs, computer
discs, computer tapes, copyright rights, copyright applications, copyright
registrations and like protections in each work of authorship and derivative
work thereof, whether published or unpublished, now owned or hereafter acquired;
all trade secret rights, including all rights to unpatented inventions, know-
how, operating manuals, license rights and agreements and confidential
information, now owned or hereafter acquired; all mask work or similar rights
available for the protection of semiconductor chips, now owned or hereafter
acquired; all claims for damages by way of any past, present and future
infringement of any of the foregoing.
14
EXHIBIT B
Revolving Promissory Note
(Export-Import Line)
$1,000,000 Santa Clara, California
August 8, 1996
FOR VALUE RECEIVED, the undersigned, QuickLogic Corporation (the
"Borrower"), promises to pay to the order of Silicon Valley Bank ("Bank"), at
such place as the holder hereof may designate, in lawful money of the United
States of America, the aggregate unpaid principal amount of all advances
("Advances") made by Bank to Borrower under the terms of this Note, up to a
maximum principal amount of One Million Dollars ($1,000,000). Borrower shall
also pay interest on the aggregate unpaid principal amount of such Advances at
the rates and in accordance with the terms of the Export-Import Bank Loan and
Security Agreement between Borrower and Bank of even date herewith, as amended
from time to time (the "Loan Agreement") on the seventh calendar day of each
month after an Advance has been made. The entire principal amount and all
accrued interest shall be due and payable on August 7, 1997, or on such earlier
date, as provided for in the Loan Agreement.
Borrower irrevocably waives the right to direct the application of any and
all payments at any time hereafter received by Bank from or on behalf of
Borrower, and Borrower irrevocably agrees that Bank shall have the continuing
exclusive right to apply any and all such payments against the then due and
owing obligations of Borrower as Bank may deem advisable. In the absence of a
specific determination by Bank with respect thereto, all payments shall be
applied in the following order: (a) then due and payable fees and expenses; (b)
then due and payable interest payments and mandatory prepayments; and (c) then
due and payable principal payments and optional prepayments.
Bank is hereby authorized by Borrower to endorse on Bank's books and
records each Advance made by Bank under this Note and the amount of each payment
or prepayment of principal of each such Advance received by Bank; it being
understood, however, that failure to make any such endorsement (or any errors in
notation) shall not affect the obligations of Borrower with respect to Advances
made hereunder, and payments of principal by Borrower shall be credited to
Borrower notwithstanding the failure to make a notation (or any errors in
notation) thereof on such books and records.
Borrower promises to pay Bank all reasonable costs and reasonable expenses
of collection of this Note and to pay all reasonable attorneys' fees incurred in
such collection or in any suit or action to collect this Note or in any appeal
thereof. Borrower waives presentment, demand, protest, notice of protest,
notice of dishonor, notice of nonpayment, and any and all other notices and
demands in connection with the delivery, acceptance, performance, default or
enforcement of this Note, as well as any applicable statute of limitations. No
delay by Bank in exercising any power or right hereunder shall operate as a
waiver of any power or right. Time is of the essence as to all obligations
hereunder.
This Note is issued pursuant to the Loan Agreement, which shall govern the
rights and obligations of Borrower with respect to all obligations hereunder.
This Note shall be deemed to be made under, and shall be construed in
accordance with and governed by, the laws of the State of California, excluding
conflicts of laws principles.
QUICKLOGIC CORPORATION
By:
Title:
15
EXHIBIT C
LOAN PAYMENT/ADVANCE TELEPHONE REQUEST FORM
DEADLINE FOR SAME DAY PROCESSING IS 3:00 P.M., P.S.T.
TO: CENTRAL CLIENT SERVICE DIVISION DATE:
FAX#: (▇▇▇) ▇▇▇-▇▇▇▇ TIME:
FROM: QuickLogic, Inc.
--------------------------------------------------------------------
CLIENT NAME (BORROWER)
REQUESTED BY:
--------------------------------------------------------------
AUTHORIZED SIGNER'S NAME
AUTHORIZED SIGNATURE:
------------------------------------------------------
PHONE NUMBER:
--------------------------------------------------------------
FROM ACCOUNT # TO ACCOUNT #
--------------------------------- ------------
REQUESTED TRANSACTION TYPE REQUEST DOLLAR AMOUNT
-------------------------- ---------------------
PRINCIPAL INCREASE (ADVANCE) $-----------------------------------------
PRINCIPAL PAYMENT (ONLY) $-----------------------------------------
INTEREST PAYMENT (ONLY) $-----------------------------------------
PRINCIPAL AND INTEREST (PAYMENT) $-----------------------------------------
OTHER INSTRUCTIONS:
-----------------------------------------------------------
------------------------------------------------------------------------------
All representations and warranties of Borrower stated in the Loan Agreement are
true, correct and complete in all material respects as of the date of the
telephone request for and Advance confirmed by this Borrowing Certificate;
provided, however, that those representations and warranties expressly referring
to another date shall be true, correct and complete in all material respects as
of such date.
BANK USE ONLY
TELEPHONE REQUEST:
-----------------
The following person is authorized to request the loan payment transfer/loan
advance on the advance designated account and is known to me.
----------------------------- ------------------
Authorized Requester Phone #
----------------------------- ------------------
Received By (Bank) Phone #
---------------------------------
Authorized Signature (Bank)
16
Exhibit D
BORROWING BASE CERTIFICATE
COLLATERAL SCHEDULE
(FOREIGN A/R LINE OF CREDIT)
Borrower: QuickLogic Corporation Lender: Silicon Valley Bank
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇ 100A ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Commitment Amount: $1,000,000
FOREIGN ACCOUNTS RECEIVABLE FROM EXPORT ACTIVITIES
1. Foreign Accounts Receivable Book Value as of_____ $_________
2. Additions (please explain on reverse) $_________
3. TOTAL FOREIGN ACCOUNTS RECEIVABLE $_________
ACCOUNTS RECEIVABLE DEDUCTIONS
20. Term in excess of 90 days $________
21. Amounts over 90 days (unless insured, then 90 days) $_________
_6. Balance of 50% over 90 day accounts $_________
1. Excess 25% concentration $________
2. Credit Balances over 120 days
_9. Accounts not payable in the U.S. Dollars or
payable in other than U.S. Dollars $_______
3. Government and Military Accounts $_______
_11. Contra Accounts $_______
_12. Promotion, Demo or Consignment Accounts $_________
_13. Intercompany/Employee and Affiliate Accounts $_________
_14. Accounts in the form of L/Cs, if subject items
have not yet been shipped by Borrower $_________
_15. Accounts arising from Inventory not originally
located in and shipped from the U.S. $_________
_16. Accounts arising from the sale of defense articles
or items $_________
4. Accounts of buyers located in or from countries
in which shipment is prohibited or no coverage
available $_________
5. Amounts due and collectable outside U.S. $_________
6. Other exclusions $_________
7. TOTAL ACCOUNTS RECEIVABLE DEDUCTIONS $_________
8. Eligible Accounts (No. 3 - No. 20)
9. Loan Value of Accounts (80%-Advance) $_________
FOREIGN INVENTORY
1. Foreign Inventory Value as of _________ $_________
2. Additions (please explain on reverse) $_________
3. TOTAL FOREIGN INVENTORY $_________
FOREIGN INVENTORY DEDUCTIONS
17
1. Outside U.S. $______
2. Consignment $______
3. Proprietary Software $______
4. Damaged/Defective $______
5. Previously Exported $______
6. Defense Articles/Services $_______
7. Prohibited County $______
8. No Coverage County $______
9. Ineligible A/R $______
10. TOTAL DEDUCTIONS $_______
11. Eligible Inventory (No. 23 - No. 35) $______
12. Loan Value of Inventory (40% - No. 35) $______
BALANCES
13. Maximum Loan Amount $_______
14. Total Available (Lesser of (No. 22 plus No. 37) $______
15. Present balance owing on Line of Credit $______
16. Outstanding under Sublimits $______
17. RESERVE POSITION (No. 39 - (No. 40 + No. 41)) $______
The undersigned represents and warrants that the foregoing is true, complete and
correct, and that the information reflected in this Collateral Schedule complies
with the representations and warranties set forth in the Borrower Agreement,
executed by Borrower and acknowledged by Lender, and the Export-Import Bank Loan
and Security Agreement, executed by Borrower and acknowledged by Lender dated
August 9, 1996, as may be amended from time to time, as if all representations
and warranties were made as of the date hereof, and that Borrower is, and shall
remain, in full compliance with its agreements, covenants, and obligations under
such agreement. Such representations and warranties include, without
limitation, the following: Borrower is using disbursements only for the purpose
of enabling Borrower to finance the cost of manufacturing, producing, purchasing
or selling items intended for export. Borrower is not using disbursements for
the purpose of: (a) servicing any of Borrower's unrelated pre-existing or
future indebtedness; (b) acquiring fixed assets or capital goods for the use of
Borrower's business; (c) acquiring, equipping, equipping or renting commercial
space outside the United States; (d) supporting research and development, (e)
paying salaries of non-U.S. citizens or non-U.S. permanent residents who are
located in the offices of the United States, or (f) serving as a retainage or
warranty bond. Additionally, disbursements are not being used to finance the
manufacture, purchase or sale of any of the following: (a) Items to be sold to
a buyer located in a country in which the Export Import Bank of the United
States is legally prohibited from doing business; (b) that part of the cost of
the items which is not U.S. Content unless such part is not greater than fifty
percent (50%) of the cost of the items and is incorporated into the items in the
United States; (c) defense articles or defense services or items directly or
indirectly destined for use by military organizations designed primarily for
military use (regardless of the nature or actual use of the items); or (d) any
items to be used in the construction, alteration, operation or maintenance of
nuclear power, enrichment, reprocessing, research or heavy water production
facilities.
Sincerely,
QuickLogic Corporation
By:
---------------------------
Name:
-------------------------
Chief Financial Officer
Date:
-------------------------
18